NICE Beats Q4 Earnings Expectations with Strong Revenue Growth
NICE reported adjusted earnings of $3.02 per share for the fourth quarter of 2024, surpassing the Zacks Consensus Estimate by 2.03% and reflecting a 28% increase from the previous year.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Non-GAAP revenues totaled $721.6 million, slightly above the consensus estimate by 1.20%, and represented a 16% year-over-year growth. This increase was mainly fueled by a robust cloud business and an expanding customer base.
Regional Revenue Highlights
Revenues from the Americas reached $614 million, marking a 17% increase year over year. In EMEA, revenues were $72 million, up 11% from last year. Meanwhile, revenues from APAC climbed by 4% year over year to $36 million.
NICE Price, Consensus, and EPS Surprise
Following these impressive results, NICE shares rose by 0.17% in after-hours trading, bringing the price to $153.85 on February 20, 2025. This increase likely stemmed from the strong revenue growth and product innovation within the company.
NICE’s Revenue Breakdown
Cloud revenues, which account for 74% of total revenues, stood at $533.9 million. Although this fell short of the Zacks Consensus Estimate by 0.06%, it still represented a 24% increase compared to the previous year.
The solid growth in cloud revenues underscores NICE’s market position, as the company now boasts over 400 enterprise cloud customers with annual recurring revenue (ARR) exceeding $1 million.
Service revenues, about 20.7% of total revenues, reached $149.7 million, missing the consensus expectation by 0.98% and declining by 7.8% year over year. This drop reflects a trend of large enterprises moving from on-premise to the cloud platform.
Product revenues, which make up 5.3% of revenues, totaled $38 million. This exceeded the consensus estimate by an impressive 37.61% and increased by 19.4% from last year, driven by strong demand for on-premise solutions and growth in the financial crime and compliance segment.
NICE is focusing on its cloud solutions, particularly the CXone Mpower platform, enhancing customer experiences through their AI capabilities.
Operating Performance Metrics
On a non-GAAP basis, the gross margin contracted 50 basis points (bps) to 71.4% in this quarter.
Research and development expenses increased by 10 bps year over year to 13.1% of revenues. In contrast, sales and marketing expenses decreased by 30 bps to 24.5% of revenues. General and administrative expenses dropped significantly by 150 bps to 8.8%.
Overall, operating expenses as a percentage of revenue fell by 200 bps to 39.9%. Consequently, the non-GAAP operating margin improved by 150 bps to 31.5%, and the EBITDA margin also expanded by 150 bps to 34.5%.
NICE’s Financial Position
As of December 31, 2024, NICE’s cash and cash equivalents, including short-term investments, totaled $1.62 billion, up from $1.52 billion as of September 30, 2024. Additionally, the company’s long-term debt rose slightly to $458.8 million.
The cash flow from operations in the fourth quarter was $249.5 million, a notable increase from $159 million in the previous quarter. During the fourth quarter, NICE also allocated $95.2 million for share repurchases.
2025 Forecast and Guidance
Looking ahead to the first quarter of 2025, NICE anticipates non-GAAP revenues between $693 million and $703 million, implying a 6% year-over-year growth at the midpoint. Non-GAAP earnings are expected to be between $2.78 and $2.88 per share, suggesting a 10% increase at the midpoint.
For the entire year, NICE projects non-GAAP revenues ranging from $2.92 billion to $2.94 billion, indicating a 7% year-over-year growth at the midpoint. The forecast for non-GAAP earnings is between $12.13 and $12.33 per share, which also suggests 10% year-over-year growth at the midpoint.
NICE’s Market Position and Competitors
Currently, NICE has a Zacks Rank #4 (Sell). In contrast, Broadcom (AVGO), Marvell Technology (MRVL), and NVIDIA (NVDA) hold a more favorable Zacks Rank of #2 (Buy).
Broadcom shares are down 2.5% year-to-date and are due to announce their first-quarter fiscal 2025 results on March 6. Marvell Technology has seen a 1.7% decline this year, with their fourth-quarter results expected on March 5. Meanwhile, NVIDIA shares have gained 4.1% year-to-date and will report their fourth-quarter results on February 26.
Explore 7 Top Stocks for Potential Growth
Recent analysis has highlighted 7 elite stocks from a larger list of 220 Zacks Rank #1 Strong Buys. These stocks are considered “Most Likely for Early Price Pops.”
Since 1988, this selection has outperformed the market by more than double, averaging a gain of +24.3% each year. Be sure to take a closer look at these top picks.
Want the latest recommendations from Zacks Investment Research? You can download the report on the 7 Best Stocks for the Next 30 Days now.
NVIDIA Corporation (NVDA): Free Stock Analysis Report
Marvell Technology, Inc. (MRVL): Free Stock Analysis Report
Broadcom Inc. (AVGO): Free Stock Analysis Report
NICE (NICE): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
