Data analytics company NICE Systems Ltd. (Nasdaq: NICE; TASE: NICE) beat the analysts' consensus estimate in its results for the first quarter of this year. The company provided mixed guidance for the second quarter, and has withdrawn its annual guidance because of the uncertainty over the coronavirus pandemic and the changing economic environment.
Nice Systems' share price is currently down 1.87% in New York, at $166.14, giving the company a market cap of $10.42 billion.
Nice provides solutions for customer relations and risk management. Its first quarter revenue grew 8.9% in comparison with the first quarter of 2019, to $410 million. Cloud revenue now accounts for 42% of the company's revenue, after growing 26.9% in comparison with the corresponding quarter to $173 million. Revenue from services rose 1.3% to $173 million, while revenue from product sales fell 7% to $64.6 million.
On a GAAP basis, net profit rose 24.4% in comparison with the corresponding quarter to $46.1 million. On a non-GAAP basis, net profit was $87.9 million, representing a rise of 16.3% over the corresponding quarter. Non-GAAP earnings per share were $1.34, $0.03 ahead of the consensus estimate.
First quarter 2020 operating cash flow was $155 million, down from $182 million in the corresponding quarter. At the end of the quarter, Nice Systems had total cash and cash equivalents, short and long term investments, of $1,035.4 million, and total debt was $467.2 million.
For the second quarter of 2020, non-GAAP total revenue ise expected to be in a range of $387-397 million, which is lower than the consensus estimate of $408 million, and which compares with $381 in the corresponding quarter of 2019. The non-GAAP earnings per share forecast for the quarter, of $1.28-1.38, is similar to the consensus estimate.
"We are pleased to report strong first quarter results driven by an accelerated 27% growth in cloud revenue. We also delivered double-digit growth in operating income and earnings per share with further expansion of our operating margin," said Nice Systems CEO Barak Eilam. "In light of the current environment, these strong results demonstrate the mission critical nature of our solutions and the strength of our cloud business driven by our three market leading cloud platforms, CXone for Customer Experience, X-Sight for Financial Crime and Compliance, and NICE Investigate for Public Safety.
"At the onset of COVID-19, we took immediate action, responding with solutions to provide customers the help they needed to quickly overcome the challenges they faced in this new environment, specifically their ability to move rapidly to the cloud and transform to digital. In fact, we signed up dozens of customers with thousands of agents for our CXone@home offering aimed at helping these customers shift their agents to work from home. I am pleased to see that we have witnessed great response to our offerings across all our business segments that provided the agility these organizations needed.
"At the same time, these organizations are preparing for the next phase - the transformation to cloud and digital. Furthermore, their ability to respond very rapidly in the last few months and manage changes that they thought would take years instead of days is giving them confidence that they have the ability to transform quickly. While we are faced with some unpredictability in the short term due to the economic environment, we continue to experience strong growth in our cloud business. As the clear leader in both cloud and digital in our markets, along with a strong balance sheet, strong cash generation and a keen focus on execution and profitability, we are clearly in the best competitive position to provide the platforms that these organizations need to transform their operations," Eilam concluded.
Published by Globes, Israel business news - en.globes.co.il - on May 14, 2020
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