- Wednesday, October 16, 2024
Nice, a leading call-center-systems provider, recently announced their first-quarter financial results, exceeding expectations. The company also provided robust guidance for both the March quarter and all of 2024. This positive outlook comes as Nice continues to drive more customers towards their cloud-based software solutions.
AI Opening Doors for Growth Opportunities
Similar to many other software companies, Nice is capitalizing on new opportunities with the integration of artificial intelligence into their core offerings. This strategic move is proving to be beneficial, as evidenced by the impressive financial results.
Strong Financial Results and Guidance
Nice reported a revenue of $623.2 million for the fourth quarter, showing a 10% increase. Cloud revenue alone reached $429 million, marking a 20% growth. Moreover, non-GAAP profits surpassed expectations at $2.36 per share.
Looking ahead, Nice is expecting continued growth with non-GAAP revenue projected to reach $650 million to $660 million for the March quarter, showcasing a 15% increase at the midpoint. Additionally, adjusted profit per share is anticipated to be between $2.40 and $2.50, which exceeds market expectations.
The company's CEO, Barak Eilam, expressed excitement about the transformative impact of AI on their business: “it is now clear that AI has become an overarching catalyst unlocking multiple vectors of growth." Eilam further emphasized how AI, combined with their unique data assets, has been driving success in cloud adoption and new AI-based solutions.
As a result of their strong performance and promising outlook, Nice shares rose by 10% to $249.16. This positive momentum reflects investor confidence in Nice’s continued growth trajectory and strategic vision.
Nice Sees Revenue Growth Amid Shift to Cloud-Based Software
Nice is expecting full-year revenue of $2.715 billion to $2.735 billion, showing a 15% increase at the midpoint, along with profits per share ranging from $10.40 to $10.60 on an adjusted basis. This beats consensus estimates of revenue at $2.653 billion and adjusted profits per share at $9.97.
Cloud-Based Software Adoption on the Rise
Nice has been actively driving customers towards embracing cloud-based versions of its call-center software. As Elam mentions in an interview, approximately 80% of call-center operators are still using software within their data centers traditionally. The rapid expansion of AI technology, promising improved end-user experiences and reduced labor costs, is triggering fresh interest.
Harnessing Competitive Edge with AI Technology
Elam asserts that AI technology provides a significant competitive advantage for Nice. Customers are drawn to the company's platform approach, moving away from a scattered collection of narrow software applications towards a more integrated solution. Elam states, "The only way to make AI work is to deploy it over a platform," emphasizing the importance of having all data in one central location.
Long-Term Vision: Reduced Labor Costs and Enhanced Service
The ultimate goal for call-center operators, according to Elam, is to cut down on labor costs significantly. He estimates that 90% of call-center costs are related to staffing rather than technology. Nice aims to deliver more automated customer service systems while maintaining an exceptional level of service quality. The company is experiencing an uptick in interest from large corporations seeking to leverage their AI-driven services following unsuccessful attempts with generic AI tools.
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