EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
Exhibit 99.1


NICE Reports Growth of 12% in Total Revenue and 26% in Cloud Revenue for
the Third Quarter of 2022


 •
Double-Digit Growth in Operating Income and EPS Driven by Further Significant Expansion in Cloud Gross Margin

•
Constant Currency Year-over-Year Total Revenue Growth of 14% and 27% in Cloud Revenue

•
Company Announces New Share Buyback Program of $250 million

Hoboken, New Jersey, November 10, 2022 - NICE (NASDAQ: NICE) today announced results for the third quarter ended September 30, 2022.

Third Quarter 2022 Financial Highlights

GAAP
Non-GAAP
Total revenue of $554.7 million, growth of 12.3% year-over-year
Total revenue of $554.7 million, growth of 12.2% year-over-year
Cloud revenue of $330.5 million, growth of 26.2% year-over-year
Cloud revenue of $330.5 million, growth of 26.0% year-over-year
Cloud gross margin of 64.1% compared to 59.6% last year
Cloud gross margin of 70.4% compared to 67.1% last year
Total gross margin of 69.2% compared to 67.4% last year
Total gross margin of 73.5% compared to 72.3% last year
Operating income of $90.3 million compared to $67.6 million last year, growth of 33.6% year-over-year
Operating income of $159.3 million compared to $140.0 million last year, growth of 13.8% year-over-year
Operating margin of 16.3% compared to 13.7% last year
Operating margin of 28.7%, compared to 28.3% last year
Diluted EPS of $1.07 versus $0.75 last year, growth of 42.7%
Diluted EPS of $1.92 versus $1.68 last year, growth of 14.3%

“We continue to thrive and are pushing full steam ahead as evidenced by another quarter of solid results across the board,” said Barak Eilam, CEO NICE.  “We reported double-digit growth in total revenue driven by another excellent quarter in cloud revenue, which grew 27% at constant currency. We delivered another quarter of strong profitability, and we expect to continue to deliver profitable growth with operating income and earnings per share growing at double-digits moving forward.”

Mr. Eilam continued, “We are witnessing a dramatic shift in the enterprise software landscape that is creating massive opportunities for some, and unbridgeable gaps for others. At NICE, we see great opportunities accentuated by the mission critical nature of our solutions used by thousands of customers, and by being the go-to market leader for AI driven automation solutions that are critical for enterprises to overcome shortages and costs of labor in the current environment.  Moreover, we have, by far, the strongest financial profile in our space, including a substantial net cash position. Our long-standing investment in innovation, which continues to deliver the most complete and highly differentiated platforms in our industry, along with our seasoned and committed leadership team, empowers us to continue to outpace the market.”


GAAP Financial Highlights for the Third Quarter Ended September 30:

Revenues: Third quarter 2022 total revenues increased 12.3% to $554.7 million compared to $493.8 million for the third quarter of 2021.

Gross Profit: Third quarter 2022 gross profit was $383.9 million compared to $333.0 million for the third quarter of 2021. Third quarter 2022 gross margin was 69.2% compared to 67.4% for the third quarter of 2021.

Operating Income: Third quarter 2022 operating income was $90.3 million compared to $67.6 million for the third quarter of 2021. Third quarter 2022 operating margin was 16.3% compared to 13.7% for the third quarter of 2021.

Net Income: Third quarter 2022 net income was $71.2 million compared to $50.7 million for the third quarter of 2021. Third quarter 2022 net income margin was 12.8% compared to 10.3% for the third quarter of 2021.

Fully Diluted Earnings Per Share: Fully diluted earnings per share for the third quarter of 2022 increased 42.7% to $1.07 compared to $0.75 in the third quarter of 2021.

Operating Cash Flow and Cash Balance: Third quarter 2022 operating cash flow was $94.3 million.

In the third quarter, $22.5 million was used for share repurchases. As of September 30, 2022, total cash and cash equivalents, and short-term investments were $1,461.2 million. Our debt, net of a hedge instrument, was $541.2 million, resulting in net cash and investments of $920.0 million.
 
Non-GAAP Financial Highlights for the Third Quarter Ended September 30:
 
Revenues: Third quarter 2022 total revenues increased 12.2% (13.8% at constant currency) to $554.7 million compared to $494.4 million for the third quarter of 2021.

Gross Profit: Third quarter 2022 Non-GAAP gross profit increased to $408.0 million compared to $357.5 million for the third quarter of 2021. Third quarter 2022 Non-GAAP gross margin was 73.5% compared to 72.3% for the third quarter of 2021.

Operating Income: Third quarter 2022 Non-GAAP operating income increased to $159.3 million compared to $140.0 million for the third quarter of 2021. Third quarter 2022 Non-GAAP operating margin was 28.7% compared to 28.3% for the third quarter of 2021.

Net Income: Third quarter 2022 Non-GAAP net income increased to $127.8 million compared to $112.6 million for the third quarter of 2021. Third quarter 2022 Non-GAAP net income margin totaled 23.0% compared to 22.8% for the third quarter of 2021.

Fully Diluted Earnings Per Share: Third quarter 2022 Non-GAAP fully diluted earnings per share increased 14.3% (16.7% at constant currency) to $1.92 compared to $1.68 for the third quarter of 2021.
 
Full Year 2022 Guidance:
 
The Company is raising its 2022 Non-GAAP full year total revenue and fully diluted earnings per share guidance based on constant currency. The Company is providing additional disclosure of full year guidance in constant currency resulting from stronger than expected foreign exchange headwinds.

Excluding these headwinds, full year 2022 Non-GAAP total revenue guidance would be $15 million higher and 2022 Non-GAAP fully diluted earnings per share would be $0.04 higher.

The following table summarizes our guidance for the full-year 2022:

 
Full-Year 2022 Non-GAAP Guidance*
 
 
Range Amount
Year/Year Growth at Midpoint
Constant Currency
Year/Year Growth at Midpoint
 
Revenue ($ in millions)
$2,168 - $2,188
13.1%
13.8%
 
EPS
$7.40 - $7.60
15.0%
15.6%

*The impact of foreign exchange for the fourth quarter is based on September 2022 foreign exchange rates in comparison with average exchange rates in Q4/2021.


Quarterly Results Conference Call

NICE management will host its earnings conference call today November 10, 2022, at 8:30 AM ET, 13:30 GMT, 15:30 Israel, to discuss the results and the company's outlook. To participate in the call, please dial into the following numbers: United States 1-877-407-4018 or +1-201-689-8471, United Kingdom 0-800-756-3429, Israel 1-809-406-247.

The call will be webcast live on the Company’s website at https://www.nice.com/investor-relations/upcoming-event.

Explanation of Non-GAAP measures
Non-GAAP financial measures are included in this press release. Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude share-based compensation, amortization of acquired intangible assets, acquisition related expenses, amortization of discount on debt and loss from extinguishment of debt and the tax effect of the Non-GAAP adjustments. FASB issued an accounting update, ASU2021-08, Business Combinations, in the fourth quarter of 2021.  The amendments in ASU 2021-08 require acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. Before this guidance and through December 31, 2020, business combination accounting rules required recognizing a legal performance obligation related to a revenue arrangement of an acquired entity as a liability. The amount assigned to such liability was based on its fair value at the date of acquisition. Effective January 1, 2021, the Company early adopted the new guidance retroactively to the start of the year. The Company has applied the new guidance retrospectively to all business combinations for which the acquisition date occurred on or after January 1, 2021, and therefore comparative financials for periods during 2021 have been adjusted accordingly to recognize the full amount of revenue associated with acquisitions.
The Company believes that these Non-GAAP financial measures, used in conjunction with the corresponding GAAP measures, provide investors with useful supplemental information about the financial performance of our business. We believe Non-GAAP financial measures are useful to investors as a measure of the ongoing performance of our business. Our management regularly uses our supplemental Non-GAAP financial measures internally to understand, manage and evaluate our business and to make financial, strategic and operating decisions. These Non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Our Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. These Non-GAAP financial measures may differ materially from the Non-GAAP financial measures used by other companies. Reconciliation between results on a GAAP and Non-GAAP basis is provided in a table immediately following the Consolidated Statements of Income. The Company provides guidance only on a Non-GAAP basis. A reconciliation of guidance from a GAAP to Non-GAAP basis is not available due to the unpredictability and uncertainty associated with future events that would be reported in GAAP results and would require adjustments between GAAP and Non-GAAP financial measures, including the impact of future possible business acquisitions. Accordingly, a reconciliation of the guidance based on Non-GAAP financial measures to corresponding GAAP financial measures for future periods is not available without unreasonable effort.

Explanation of Constant Currency
NICE presents constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current results for transactions in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the current period.

Future expected results for transactions in currencies other than United States dollars are converted into United States dollars using the exchange rates in effect in the last month of the reporting period. NICE has provided this financial information to aid investors in better understanding our performance. These constant currency financial measures presented in this release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

About NICE
NICE (Nasdaq: NICE) is the worldwide leading provider of both cloud and on-premises enterprise software solutions that empower organizations to make smarter decisions based on advanced analytics of structured and unstructured data. NICE helps organizations of all sizes deliver better customer service, ensure compliance, combat fraud and safeguard citizens. Over 25,000 organizations in more than 150 countries, including over 85 of the Fortune 100 companies, are using NICE solutions. www.nice.com.

Investors
Marty Cohen, +1 551 256 5354, ir@nice.com, ET
Omri Arens, +972 3 763-0127, ir@nice.com, CET

Media Contact
Chris Irwin-Dudek, +1 (551) 256-5140, Chris.Irwin-Dudek@nice.com          

Trademark Note: NICE and the NICE logo are trademarks or registered trademarks of NICE. All other marks are trademarks of their respective owners. For a full list of NICE' marks, please see: http://www.nice.com/nice-trademarks.


Forward-Looking Statements
This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements may be identified by words such as “believe,” “expect,” “seek,” “may,” “will,” “intend,” “should,” “project,” “anticipate,” “plan,” and similar expressions. Forward-looking statements are based on the current beliefs, expectations and assumptions of the Company’s management regarding the future of the Company’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Examples of forward-looking statements include guidance regarding the Company’s revenue and earnings and the growth of our cloud, analytics and artificial intelligence business.
 
Forward looking statements are inherently subject to significant economic, competitive and other uncertainties and contingencies, many of which are beyond the control of management. The Company cautions that these statements are not guarantees of future performance, and investors should not place undue reliance on them. There are or will be important known and unknown factors and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements.  These factors, include, but are not limited to, risks associated with changes in economic and business conditions, competition, successful execution of the Company’s growth strategy, success and growth of the Company’s cloud Software-as-a-Service business, difficulties in making additional acquisitions or effectively integrating acquired operations, products, technologies and personnel, the Company’s dependency on third-party cloud computing platform providers, hosting facilities and service partners, rapidly changing technology, cyber security attacks or other security breaches against the Company, privacy concerns and legislation impacting the Company’s business, changes in currency exchange rates and interest rates, the effects of additional tax liabilities resulting from our global operations, uncertainty related to COVID-19 and various other factors and uncertainties discussed in our filings with the U.S. Securities and Exchange Commission (the “SEC”).
 
You are encouraged to carefully review the section entitled “Risk Factors” in our latest Annual Report on Form 20-F and our other filings with the SEC for additional information regarding these and other factors and uncertainties that could affect our future performance. The forward-looking statements contained in this press release speak only as of the date hereof, and the Company undertakes no obligation to update or revise them, whether as a result of new information, future developments or otherwise, except as required by law.
 
###
 


NICE LTD. AND SUBSIDIARIES
            
CONDENSED CONSOLIDATED BALANCE SHEETS
            
U.S. dollars in thousands
            

   
September 30,
    
December 31,
  
   
2022
    
2021
  
   
Unaudited
    
Audited
  
ASSETS
            
             
CURRENT ASSETS:
            
Cash and cash equivalents
  
$
423,032
    
$
378,656
  
Short-term investments
    
1,038,160
      
1,046,095
  
Trade receivables
    
469,230
      
395,583
  
Debt hedge option
    
118,694
      
292,940
  
Prepaid expenses and other current assets
    
192,105
      
184,604
  
                 
Total current assets
    
2,241,221
      
2,297,878
  
                 
LONG-TERM ASSETS:
                
Property and equipment, net
    
157,992
      
145,654
  
Deferred tax assets
    
83,457
      
55,246
  
Other intangible assets, net
    
211,200
      
295,378
  
Operating lease right-of-use assets
    
105,317
      
85,055
  
Goodwill
    
1,577,871
      
1,606,756
  
Prepaid expenses and other long-term assets
    
246,110
      
224,445
  
                 
Total long-term assets
    
2,381,947
      
2,412,534
  
                 
TOTAL ASSETS
  
$
4,623,168
    
$
4,710,412
  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                
                 
CURRENT LIABILITIES:
                
Trade payables
  
$
37,373
    
$
36,121
  
Deferred revenues and advances from customers
    
329,203
      
330,459
  
Current maturities of operating leases
    
14,531
      
19,514
  
Debt
    
204,943
      
395,946
  
Accrued expenses and other liabilities
    
477,033
      
487,547
  
                 
Total current liabilities
    
1,063,083
      
1,269,587
  
                 
LONG-TERM LIABILITIES:
                
Deferred revenues and advances from customers
    
55,142
      
66,606
  
Operating leases
    
100,757
      
81,185
  
Deferred tax liabilities
    
4,165
      
7,429
  
Debt
    
454,954
      
429,267
  
Other long-term liabilities
    
17,067
      
18,379
  
                 
Total long-term liabilities
    
632,085
      
602,866
  
                 
SHAREHOLDERS' EQUITY
                
Nice Ltd's equity
    
2,915,076
      
2,825,085
  
Non-controlling interests
    
12,924
      
12,874
  
                 
Total shareholders' equity
    
2,928,000
      
2,837,959
  
                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
  
$
4,623,168
    
$
4,710,412
  



NICE LTD. AND SUBSIDIARIES
                        
CONSOLIDATED STATEMENTS OF INCOME
                    
U.S. dollars in thousands (except per share amounts)
                    

   
Quarter ended
    
Year to date
  
   
September 30,
    
September 30,
  
   
2022
    
2021
    
2022
    
2021
  
   
Unaudited
    
Unaudited
    
Unaudited
    
Unaudited
  
                         
Revenue:
                        
Cloud
  
$
330,487
    
$
261,823
    
$
936,472
    
$
733,424
  
Services
    
165,202
      
164,783
      
488,909
      
493,707
  
Product
    
59,035
      
67,223
      
187,353
      
178,546
  
Total revenue
    
554,724
      
493,829
      
1,612,734
      
1,405,677
  
                                 
Cost of revenue:
                                
Cloud
    
118,706
      
105,790
      
345,497
      
298,544
  
Services
    
45,697
      
47,980
      
137,598
      
143,796
  
Product
    
6,379
      
7,073
      
19,613
      
16,872
  
Total cost of revenue
    
170,782
      
160,843
      
502,708
      
459,212
  
                                 
Gross profit
    
383,942
      
332,986
      
1,110,026
      
946,465
  
                                 
Operating expenses:
                                
Research and development, net
    
74,048
      
74,482
      
224,108
      
195,855
  
Selling and marketing
    
158,608
      
131,776
      
461,636
      
386,530
  
General and administrative
    
60,991
      
59,134
      
176,933
      
165,239
  
Total operating expenses
    
293,647
      
265,392
      
862,677
      
747,624
  
                                 
Operating income
    
90,295
      
67,594
      
247,349
      
198,841
  
                                 
Financial and other expense/(income), net
    
(596
)
    
3,138
      
(1,032
)
    
15,594
  
                                 
Income before tax
    
90,891
      
64,456
      
248,381
      
183,247
  
Taxes on income
    
19,645
      
13,803
      
53,622
      
35,186
  
Net income
  
$
71,246
    
$
50,653
    
$
194,759
    
$
148,061
  
                                 
Earnings per share:
                                
Basic
  
$
1.12
    
$
0.80
    
$
3.05
    
$
2.35
  
Diluted
  
$
1.07
    
$
0.75
    
$
2.93
    
$
2.22
  
                                 
Weighted average shares outstanding:
                                
Basic
    
63,739
      
63,182
      
63,763
      
63,125
  
Diluted
    
66,446
      
67,101
      
66,524
      
66,779
  



NICE LTD. AND SUBSIDIARIES
                        
CONSOLIDATED CASH FLOW STATEMENTS
                        
U.S. dollars in thousands
                        

   
Quarter ended
    
Year to date
  
   
September 30,
    
September 30,
  
   
2022
    
2021
    
2022
    
2021
  
   
Unaudited
    
Unaudited
    
Unaudited
    
Unaudited
  
                         
Operating Activities
                        
                         
Net income
  
$
71,246
    
$
50,653
    
$
194,759
    
$
148,061
  
Adjustments to reconcile net income to net cash provided by operating activities
                                
Depreciation and amortization
    
42,594
      
45,907
      
129,077
      
136,742
  
Stock based compensation
    
42,396
      
40,628
      
133,689
      
103,062
  
Amortization of premium and discount and accrued interest on marketable securities
    
2,090
      
4,015
      
7,162
      
10,012
  
Deferred taxes, net
    
(11,582
)
    
(13,137
)
    
(23,626
)
    
(30,202
)
Changes in operating assets and liabilities:
                                
Trade Receivables
    
(14,780
)
    
(23,161
)
    
(85,635
)
    
(45,628
)
Prepaid expenses and other assets
    
137
      
(11,255
)
    
(40,273
)
    
(36,218
)
Trade payables
    
(22,789
)
    
(14,435
)
    
1,643
      
(9,643
)
Accrued expenses and other current liabilities
    
24,048
      
35,030
      
(10,283
)
    
22,601
  
Operating lease right-of-use assets
    
3,494
      
3,394
      
16,814
      
12,317
  
Deferred revenue
    
(38,963
)
    
(14,218
)
    
(2,332
)
    
33,046
  
Operating lease liabilities
    
(5,057
)
    
(4,330
)
    
(22,488
)
    
(14,805
)
Amortization of discount on debt
    
1,143
      
3,911
      
3,431
      
11,523
  
Loss from extinguishment of debt
    
1
      
778
      
1,206
      
8,076
  
Other
    
289
      
(302
)
    
(135
)
    
214
  
  Net cash provided by operating activities
    
94,267
      
103,478
      
303,009
      
349,158
  
                                 
Investing Activities
                                
                                 
Purchase of property and equipment
    
(6,067
)
    
(8,153
)
    
(20,952
)
    
(21,113
)
Purchase of Investments
    
(143,655
)
    
(58,148
)
    
(365,457
)
    
(281,896
)
Proceeds from Investments
    
140,814
      
58,860
      
322,404
      
225,964
  
Capitalization of software development costs
    
(13,427
)
    
(10,712
)
    
(37,171
)
    
(31,987
)
Other
    
-
      
-
      
276
      
-
  
Payments for business and asset acquisitions, net of cash acquired
    
-
      
(14,302
)
    
-
      
(143,164
)
  Net cash used in investing activities
    
(22,335
)
    
(32,455
)
    
(100,900
)
    
(252,196
)
                                 
Financing Activities
                                
                                 
Proceeds from issuance of shares upon exercise of share options
    
151
      
1,109
      
424
      
3,484
  
Purchase of treasury shares
    
(22,489
)
    
(4,346
)
    
(120,401
)
    
(48,908
)
Dividends paid to noncontrolling interest
    
-
      
-
      
(376
)
    
(801
)
Repayment of debt
    
(18
)
    
(10,501
)
    
(20,128
)
    
(93,315
)
 Net cash provided by/(used in) financing activities
    
(22,356
)
    
(13,738
)
    
(140,481
)
    
(139,540
)
                                 
Effect of exchange rates on cash and cash equivalents
    
(5,663
)
    
(3,041
)
    
(12,302
)
    
(1,993
)
                                 
Net change in cash, cash equivalents and restricted cash
    
43,913
      
54,244
      
49,326
      
(44,571
)
Cash, cash equivalents and restricted cash, beginning of period
  
$
384,069
    
$
343,452
    
$
378,656
    
$
442,267
  
                                 
Cash, cash equivalents and restricted cash, end of period
  
$
427,982
    
$
397,696
    
$
427,982
    
$
397,696
  




NICE LTD. AND SUBSIDIARIES
                        
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
                        
U.S. dollars in thousands (except per share amounts)
                        

   
Quarter ended
    
Year to date
  
   
September 30,
    
September 30,
  
   
2022
    
2021
    
2022
    
2021
  
GAAP revenues
  
$
554,724
    
$
493,829
    
$
1,612,734
    
$
1,405,677
  
Valuation adjustment on acquired deferred cloud revenue
    
-
      
570
      
-
      
4,372
  
Valuation adjustment on acquired deferred services revenue
    
-
      
10
      
-
      
175
  
Non-GAAP revenues
  
$
554,724
    
$
494,409
    
$
1,612,734
    
$
1,410,224
  
                                 
GAAP cost of revenue
  
$
170,782
    
$
160,843
    
$
502,708
    
$
459,212
  
Amortization of acquired intangible assets on cost of cloud
    
(18,564
)
    
(17,493
)
    
(55,851
)
    
(53,220
)
Amortization of acquired intangible assets on cost of services
    
-
      
(1,107
)
    
(377
)
    
(3,558
)
Amortization of acquired intangible assets on cost of product
    
(242
)
    
(283
)
    
(776
)
    
(853
)
Valuation adjustment on acquired deferred cost of cloud
    
13
      
25
      
41
      
76
  
Cost of cloud revenue adjustment (1)
    
(2,319
)
    
(2,117
)
    
(6,389
)
    
(5,287
)
Cost of services revenue adjustment (1)
    
(2,778
)
    
(2,835
)
    
(8,264
)
    
(6,916
)
Cost of product revenue adjustment (1)
    
(135
)
    
(159
)
    
(401
)
    
(410
)
Non-GAAP cost of revenue
  
$
146,757
    
$
136,874
    
$
430,691
    
$
389,044
  
                                 
GAAP gross profit
  
$
383,942
    
$
332,986
    
$
1,110,026
    
$
946,465
  
Gross profit adjustments
    
24,025
      
24,549
      
72,017
      
74,715
  
Non-GAAP gross profit
  
$
407,967
    
$
357,535
    
$
1,182,043
    
$
1,021,180
  
                                 
GAAP operating expenses
  
$
293,647
    
$
265,392
    
$
862,677
    
$
747,624
  
Research and development (1)
    
(7,424
)
    
(7,073
)
    
(23,825
)
    
(15,241
)
Sales and marketing (1)
    
(13,723
)
    
(9,707
)
    
(43,121
)
    
(27,526
)
General and administrative (1)
    
(16,505
)
    
(19,998
)
    
(52,991
)
    
(51,373
)
Amortization of acquired intangible assets
    
(7,379
)
    
(11,109
)
    
(23,153
)
    
(30,769
)
Valuation adjustment on acquired deferred commission
    
48
      
53
      
153
      
161
  
Non-GAAP operating expenses
  
$
248,664
    
$
217,558
    
$
719,740
    
$
622,876
  
                                 
GAAP financial and other expense (income), net
  
$
(596
)
  
$
3,138
    
$
(1,032
)
  
$
15,594
  
Amortization of discount on debt and loss from extinguishment of debt
    
(1,144
)
    
(4,469
)
    
(4,637
)
    
(19,406
)
Non-GAAP financial and other income, net
  
$
(1,740
)
  
$
(1,331
)
  
$
(5,669
)
  
$
(3,812
)
                                 
GAAP taxes on income
  
$
19,645
    
$
13,803
    
$
53,622
    
$
35,186
  
Tax adjustments re non-GAAP adjustments
    
13,598
      
14,916
      
42,860
      
47,259
  
Non-GAAP taxes on income
  
$
33,243
    
$
28,719
    
$
96,482
    
$
82,445
  
                                 
GAAP net income
  
$
71,246
    
$
50,653
    
$
194,759
    
$
148,061
  
Valuation adjustment on acquired deferred revenue
    
-
      
580
      
-
      
4,547
  
Valuation adjustment on acquired deferred cost of cloud revenue
    
(13
)
    
(25
)
    
(41
)
    
(76
)
Amortization of acquired intangible assets
    
26,185
      
29,992
      
80,157
      
88,400
  
Valuation adjustment on acquired deferred commission
    
(48
)
    
(53
)
    
(153
)
    
(161
)
Share-based compensation (1)
    
42,884
      
40,934
      
134,991
      
103,891
  
Acquisition related expenses (2)
    
-
      
955
      
-
      
2,862
  
Amortization of discount on debt and loss from extinguishment of debt
    
1,144
      
4,469
      
4,637
      
19,406
  
Tax adjustments re non-GAAP adjustments
    
(13,598
)
    
(14,916
)
    
(42,860
)
    
(47,259
)
Non-GAAP net income
  
$
127,800
    
$
112,589
    
$
371,490
    
$
319,671
  
                                 
GAAP diluted earnings per share
  
$
1.07
    
$
0.75
    
$
2.93
    
$
2.22
  
                                 
Non-GAAP diluted earnings per share
  
$
1.92
    
$
1.68
    
$
5.58
    
$
4.79
  
                                 
Shares used in computing GAAP diluted earnings per share
    
66,446
      
67,101
      
66,524
      
66,779
  
                                 
Shares used in computing non-GAAP diluted earnings per share
    
66,446
      
67,101
      
66,524
      
66,779
  



NICE LTD. AND SUBSIDIARIES
                        
RECONCILIATION OF GAAP TO NON-GAAP RESULTS (continued)
                        
U.S. dollars in thousands
                        

 
(1
)
Share-based Compensation
                        
          
Quarter ended
    
Year to date
  
          
September 30,
    
September 30,
  
           
2022
      
2021
      
2022
      
2021
  
                                       
     
Cost of cloud revenue
  
$
2,319
    
$
2,117
    
$
6,389
    
$
5,287
  
     
Cost of services revenue
    
2,778
      
2,835
      
8,264
      
6,916
  
     
Cost of product revenue
    
135
      
159
      
401
      
410
  
     
Research and development
    
7,424
      
7,073
      
23,825
      
15,241
  
     
Sales and marketing
    
13,723
      
9,707
      
43,121
      
27,526
  
     
General and administrative
    
16,505
      
19,043
      
52,991
      
48,511
  
          
$
42,884
    
$
40,934
    
$
134,991
    
$
103,891
  

 
(2
)
Acquisition related expenses
                                
                                       
          
Quarter ended
    
Year to date
  
          
September 30,
    
September 30,
  
           
2022
      
2021
      
2022
      
2021
  
                                       
     
Research and development
    
-
      
-
      
-
      
-
  
     
Sales and marketing
    
-
      
-
      
-
      
-
  
     
General and administrative
    
-
      
955
      
-
      
2,862
  
           
-
      
955
      
-
      
2,862