EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1

Exhibit 99.1

NICE Reports Strong Finish to 2022 With 26% Cloud Revenue Growth for the Fourth Quarter


Full-year cloud revenue growth of 27% at constant currency

Full-year total revenue growth of 14% at constant currency, exceeding high end of guidance range

Non-GAAP full year earnings per share growth of 17%, exceeding high end of guidance range

Hoboken, New Jersey, February 23, 2023 - NICE (NASDAQ: NICE) today announced results for the fourth quarter and full year ended December 31, 2022, as compared to the corresponding period of the previous year.

Fourth Quarter 2022 Financial Highlights

GAAP
Non-GAAP
Total revenue was $568.6 million and increased 10%
Total revenue was $568.6 million and increased 10% ($575.8 million in constant currency, up 12%)
Cloud revenue was $358.9 million and increased 26%
Cloud revenue was $358.9 million and increased 26% ($361.4 million in constant currency, up 27%)
Cloud gross margin was 64.5% compared to 60.7% last year
Cloud gross margin was 70.5% compared to 68.2% last year
Total gross margin was 68.2% compared to 67.9% last year
Total gross margin was 72.6% compared to 73.0% last year
Operating income was $87.8 million and increased 35%
Operating income was $162.8 million and increased 12%
Operating margin was 15.4% compared to 12.6% last year
Operating margin was 28.6%, compared to 28.2% last year
Diluted EPS was $1.07 and increased 41%
Diluted EPS was $2.04 and increased 18%
Operating cash flow increased 57% to $176.7 million
 

Full Year 2022 Financial Highlights

GAAP
Non-GAAP
Total revenue was $2,181.3 million, and increased 14%
Total revenue was $2,181.3 million, and increased 13% ($2,204.1 million in constant currency, up 14%)
Cloud revenue was $1,295.3 million and increased 27%
Cloud revenue was $1,295.3 million and increased 27% ($1,303.0 million in constant currency, up 27%)
Cloud gross margin was 63.5% compared to 59.7% last year
Cloud gross margin was 70.0% compared to 67.7% last year
Total gross margin was 68.7% compared to 67.5% last year
Total gross margin was 73.1% compared to 72.6% last year
Operating income was $335.2 million and increased 27%
Operating income was $625.1 million and increased 15%
Operating margin was 15.4% compared to 13.7% last year
Operating margin was 28.7%, compared to 28.2% last year
Diluted EPS was $4.00 and increased 34%
Diluted EPS was $7.62 versus and increased 17%
Operating cash flow increased 4% to $479.7 million
 


“2022 was another landmark year for NICE capped off by strong fourth quarter results as we exceeded the high end of our guidance range with full-year total revenue growth of 14% at constant currency, as well as full-year earnings per share growth of 17%. These excellent results, together with further growth in profitability, strong free cash flow and a rock-solid balance sheet, provides us the industry-leading financial position to continue to grow our business, increase profitability and further expand our competitive lead in our markets,” said Barak Eilam, CEO, NICE.

Mr. Eilam continued, “We are in a winning competitive position operationally, innovatively, and financially, and this provides us significant opportunities ahead to capture a large and expanding market. These opportunities include cloud expansion in a vastly underpenetrated enterprise market, accelerating demand for a complete platform as the market standard, the rise of AI, and a favorable competitive landscape.”

GAAP Financial Highlights for the Fourth Quarter and Full Year Ended December 31:

Revenues: Fourth quarter 2022 total revenues increased 10% to $568.6 million compared to $515.5 million for the fourth quarter of 2021.
Full year 2022 total revenues increased 14% to $2,181.3 million compared to $1,921.2 million for the full year 2021.

Gross Profit: Fourth quarter 2022 gross profit was $387.6 million compared to $350.2 million for the fourth quarter of 2021. Fourth quarter 2022 gross margin was 68.2% compared to 67.9% for the fourth quarter of 2021.
Full year 2022 gross profit was $1,497.6 million compared to $1,296.7 million for the full year 2021. Full year 2022 gross margin was 68.7% compared to 67.5% for the full year 2021.

Operating Income: Fourth quarter 2022 operating income was $87.8 million compared to $65.1 million for the fourth quarter of 2021. Fourth quarter 2022 operating margin was 15.4% compared to 12.6% for the fourth quarter of 2021.
Full year 2022 operating income was $335.2 million compared to $263.9 million for the full year 2021. Full year 2022 operating margin was 15.4% compared to 13.7% for the full year 2021.

Net Income: Fourth quarter 2022 net income was $71.2 million compared to $51.2 million for the fourth quarter of 2021. Fourth quarter 2022 net income margin was 12.5% compared to 9.9% for the fourth quarter of 2021.
Full year 2022 net income was $265.9 million compared to $199.2 million for the full year 2021. Full year 2022 net income margin was 12.2% compared to 10.4% for the full year 2021.

Fully Diluted Earnings Per Share: Fully diluted earnings per share for the fourth quarter of 2022 increased 41% to $1.07 compared to $0.76 in the fourth quarter of 2021.
Fully diluted earnings per share for the full year 2022 increased 34% to $4.00 compared to $2.98 for the full year 2021.

Operating Cash Flow and Cash Balance: Fourth quarter 2022 operating cash flow was $176.7 million and full year 2022 operating cash flow was $479.7 million.
In the fourth quarter 2022, $24.5 million was used for share repurchases and for the full year 2022, $144.9 million were used for share repurchases.
As of December 31, 2022, total cash and cash equivalents, and short-term investments were $1,571.5 million. Our debt, net of a hedge instrument, was $542.4 million, resulting in net cash and investments of $1,029.1 million.
 
Non-GAAP Financial Highlights for the Fourth Quarter and Full Year Ended December 31:
 
Revenues: Fourth quarter 2022 total revenues increased 10% to $568.6 million (up 12% in constant currency to $575.8 million) compared to $515.5 million for the fourth quarter of 2021.
Full year 2022 total revenues increased 13% to $2,181.3 million (up 14% in constant currency to $2,204.1 million) compared to $1,925.7 million for the full year 2021.

Gross Profit: Fourth quarter 2022 Non-GAAP gross profit increased to $412.6 million compared to $376.4 million for the fourth quarter of 2021. Fourth quarter 2022 Non-GAAP gross margin was 72.6% compared to 73.0% for the fourth quarter of 2021.
Full year 2022 gross profit was $1,594.6 million compared to $1,397.6 million for the full year 2021. Full year 2022 gross margin was 73.1% compared to 72.6% for the full year 2021.

Operating Income: Fourth quarter 2022 Non-GAAP operating income increased to $162.8 million compared to $145.6 million for the fourth quarter of 2021. Fourth quarter 2022 Non-GAAP operating margin was 28.6% compared to 28.2% for the fourth quarter of 2021.
Full year 2022 operating income was $625.1 million compared to $543.9 million for the full year 2021. Full year 2022 operating margin was 28.7% compared to 28.2% for the full year 2021.


Net Income: Fourth quarter 2022 Non-GAAP net income increased to $135.3 million compared to $116.7 million for the fourth quarter of 2021. Fourth quarter 2022 Non-GAAP net income margin totaled 23.8% compared to 22.6% for the fourth quarter of 2021.
Full year 2022 net income was $506.8 million compared to $436.3 million for the full year 2021. Full year 2022 net income margin was 23.2% compared to 22.7% for the full year 2021.

Fully Diluted Earnings Per Share: Fourth quarter 2022 Non-GAAP fully diluted earnings per share increased 18% to $2.04 compared to $1.73 for the fourth quarter of 2021.
Fully diluted earnings per share for the full year 2022 increased 17% to $7.62 compared to $6.52 for the full year 2021.

First Quarter and Full Year 2023 Guidance:
 
The Company plans to fully execute the $250 million share repurchase program announced last quarter in its entirety by the end of 2023.
 
With year-over-year cloud revenue growth expected to be in a range of 22% to 25% for the full year 2023, the Company is providing the following total revenue and EPS guidance:
 
First Quarter 2023:
First quarter 2023 Non-GAAP total revenues are expected to be in a range of $559 million to $569 million, representing 7% growth year over year at the midpoint.

First quarter 2023 Non-GAAP fully diluted earnings per share are expected to be in a range of $1.92 to $2.02, representing 9% growth year over year at the midpoint.

Full Year 2023:
Full year 2023 Non-GAAP total revenues are expected to be in a range of $2,345 million to $2,365 million, representing 8% growth at the midpoint compared to full year 2022.

Full year 2023 Non-GAAP fully diluted earnings per share are expected to be in a range of $8.28 to $8.48, representing 10% growth at the midpoint compared to full year 2022.


Quarterly Results Conference Call

NICE management will host its earnings conference call today February 23, 2023, 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.

Investor Relations Contact
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, the effect of unexpected events or geo-political conditions, such as the COVID-19 pandemic, that may disrupt our business and the global economy 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
       

   
December 31,
   
December 31,
 
   
2022
   
2021
 
   
Unaudited
   
Audited
 
             
ASSETS
           
             
CURRENT ASSETS:
           
Cash and cash equivalents
 
$
529,596
   
$
378,656
 
Short-term investments
   
1,041,943
     
1,046,095
 
Trade receivables
   
515,730
     
395,583
 
Debt hedge option
   
122,323
     
292,940
 
Prepaid expenses and other current assets
   
206,372
     
184,604
 
                 
Total current assets
   
2,415,964
     
2,297,878
 
                 
LONG-TERM ASSETS:
               
Property and equipment, net
   
159,284
     
145,654
 
Deferred tax assets
   
119,821
     
55,246
 
Other intangible assets, net
   
209,605
     
295,378
 
Operating lease right-of-use assets
   
102,893
     
85,055
 
Goodwill
   
1,617,118
     
1,606,756
 
Prepaid expenses and other long-term assets
   
231,496
     
224,445
 
                 
Total long-term assets
   
2,440,217
     
2,412,534
 
                 
TOTAL ASSETS
 
$
4,856,181
   
$
4,710,412
 
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
               
                 
CURRENT LIABILITIES:
               
Trade payables
 
$
56,019
   
$
36,121
 
Deferred revenues and advances from customers
   
338,930
     
330,459
 
Current maturities of operating leases
   
13,525
     
19,514
 
Debt
   
209,292
     
395,946
 
Accrued expenses and other liabilities
   
526,527
     
487,547
 
                 
Total current liabilities
   
1,144,293
     
1,269,587
 
                 
LONG-TERM LIABILITIES:
               
Deferred revenues and advances from customers
   
57,211
     
66,606
 
Operating leases
   
99,261
     
81,185
 
Deferred tax liabilities
   
6,024
     
7,429
 
Debt
   
455,382
     
429,267
 
Other long-term liabilities
   
38,587
     
18,379
 
                 
Total long-term liabilities
   
656,465
     
602,866
 
                 
SHAREHOLDERS' EQUITY
               
Nice Ltd's equity
   
3,042,085
     
2,825,085
 
Non-controlling interests
   
13,338
     
12,874
 
                 
Total shareholders' equity
   
3,055,423
     
2,837,959
 
                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
 
$
4,856,181
   
$
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
 
   
December 31,
   
December 31,
 
   
2022
   
2021
   
2022
   
2021
 
   
Unaudited
   
Audited
   
Unaudited
   
Audited
 
                         
Revenue:
                       
Cloud
 
$
358,850
   
$
285,201
   
$
1,295,323
   
$
1,018,624
 
Services
   
161,208
     
166,376
     
650,116
     
660,083
 
Product
   
48,502
     
63,896
     
235,855
     
242,443
 
Total revenue
   
568,560
     
515,473
     
2,181,294
     
1,921,150
 
                                 
Cost of revenue:
                               
Cloud
   
127,309
     
112,127
     
472,805
     
410,671
 
Services
   
46,339
     
47,341
     
183,938
     
191,137
 
Product
   
7,332
     
5,777
     
26,945
     
22,648
 
Total cost of revenue
   
180,980
     
165,245
     
683,688
     
624,456
 
                                 
Gross profit
   
387,580
     
350,228
     
1,497,606
     
1,296,694
 
                                 
Operating expenses:
                               
Research and development, net
   
81,964
     
75,332
     
306,073
     
271,187
 
Selling and marketing
   
148,198
     
149,662
     
609,833
     
536,192
 
General and administrative
   
69,594
     
60,167
     
246,527
     
225,406
 
Total operating expenses
   
299,756
     
285,161
     
1,162,433
     
1,032,785
 
                                 
Operating income
   
87,824
     
65,067
     
335,173
     
263,909
 
                                 
Financial and other expense (income), net
   
(9,127
)
   
7,696
     
(10,159
)
   
23,290
 
                                 
Income before tax
   
96,951
     
57,371
     
345,332
     
240,619
 
Taxes on income
   
25,765
     
6,210
     
79,387
     
41,396
 
Net income
 
$
71,186
   
$
51,161
   
$
265,945
   
$
199,223
 
                                 
Earnings per share:
                               
Basic
 
$
1.11
   
$
0.81
   
$
4.17
   
$
3.15
 
Diluted
 
$
1.07
   
$
0.76
   
$
4.00
   
$
2.98
 
                                 
Weighted average shares outstanding:
                               
Basic
   
63,961
     
63,382
     
63,790
     
63,189
 
Diluted
   
66,285
     
67,245
     
66,465
     
66,896
 



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

   
Quarter ended
   
Year to date
 
   
December 31,
   
December 31,
 
   
2022
   
2021
   
2022
   
2021
 
   
Unaudited
   
Audited
   
Unaudited
   
Audited
 
                         
Operating Activities
                       
                         
Net income
 
$
71,186
   
$
51,161
   
$
265,945
   
$
199,223
 
Adjustments to reconcile net income to net cash provided by operating activities
                               
Depreciation and amortization
   
47,469
     
47,350
     
176,546
     
184,092
 
Stock based compensation
   
49,015
     
49,968
     
182,704
     
153,030
 
Amortization of premium and discount and accrued interest on marketable securities
   
1,160
     
1,855
     
8,322
     
11,867
 
Deferred taxes, net
   
(33,236
)
   
(9,114
)
   
(56,862
)
   
(39,316
)
Changes in operating assets and liabilities:
                               
Trade Receivables
   
(41,290
)
   
(40,149
)
   
(126,925
)
   
(85,778
)
Prepaid expenses and other assets
   
6,983
     
(43,405
)
   
(33,290
)
   
(79,624
)
Trade payables
   
18,280
     
9,254
     
19,923
     
(389
)
Accrued expenses and other liabilities
   
47,041
     
41,578
     
36,758
     
64,179
 
Operating lease right-of-use assets
   
3,579
     
2,758
     
20,393
     
15,075
 
Deferred revenues
   
8,749
     
(2,276
)
   
6,417
     
30,770
 
Operating lease liabilities
   
(3,703
)
   
(3,206
)
   
(26,191
)
   
(18,011
)
Amortization of discount on debt
   
1,151
     
2,946
     
4,582
     
14,469
 
Loss in respect of debt extinguishment
   
-
     
5,893
     
1,206
     
13,969
 
Other
   
322
     
(1,955
)
   
187
     
(1,740
)
  Net cash provided by operating activities
   
176,706
     
112,658
     
479,715
     
461,816
 
                                 
Investing Activities
                               
                                 
Purchase of property and equipment
   
(10,941
)
   
(3,658
)
   
(31,893
)
   
(24,771
)
Purchase of Investments
   
(30,840
)
   
(40,233
)
   
(396,297
)
   
(322,129
)
Proceeds from Investments
   
33,156
     
44,681
     
355,560
     
270,645
 
Capitalization of internal use software costs
   
(12,826
)
   
(10,453
)
   
(49,997
)
   
(42,440
)
Other
   
-
     
-
     
276
     
-
 
Payments for business and asset acquisitions, net of cash acquired
   
(30,000
)
   
360
     
(30,000
)
   
(142,804
)
  Net cash used in investing activities
   
(51,451
)
   
(9,303
)
   
(152,351
)
   
(261,499
)
                                 
Financing Activities
                               
                                 
Proceeds from issuance of shares upon exercise of options
   
529
     
942
     
953
     
4,426
 
Purchase of treasury shares
   
(24,543
)
   
(24,272
)
   
(144,944
)
   
(73,180
)
Dividends paid to noncontrolling interest
   
-
     
(953
)
   
(376
)
   
(1,754
)
Purchase of subsidiaries shares from non-controlling interest
   
-
     
(14,000
)
   
-
     
(14,000
)
Repayment of debt
   
(4
)
   
(83,993
)
   
(20,132
)
   
(177,308
)
 Net cash used in financing activities
   
(24,018
)
   
(122,276
)
   
(164,499
)
   
(261,816
)
                                 
Effect of exchange rates on cash and cash equivalents
   
3,877
     
(119
)
   
(8,425
)
   
(2,112
)
                                 
Net change in cash, cash equivalents and restricted cash
   
105,114
     
(19,040
)
   
154,440
     
(63,611
)
Cash, cash equivalents and restricted cash, beginning of period
 
$
427,982
   
$
397,696
   
$
378,656
   
$
442,267
 
                                 
Cash, cash equivalents and restricted cash, end of period
 
$
533,096
   
$
378,656
   
$
533,096
   
$
378,656
 



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
 
   
December 31,
   
December 31,
 
   
2022
   
2021
   
2022
   
2021
 
GAAP revenues
 
$
568,560
   
$
515,473
   
$
2,181,294
   
$
1,921,150
 
Valuation adjustment on acquired deferred cloud revenue
   
-
     
-
     
-
     
4,372
 
Valuation adjustment on acquired deferred services revenue
   
-
     
-
     
-
     
175
 
Non-GAAP revenues
 
$
568,560
   
$
515,473
   
$
2,181,294
   
$
1,925,697
 
                                 
GAAP cost of revenue
 
$
180,980
   
$
165,245
   
$
683,688
   
$
624,456
 
Amortization of acquired intangible assets on cost of cloud
   
(18,940
)
   
(18,796
)
   
(74,791
)
   
(72,015
)
Amortization of acquired intangible assets on cost of services
   
-
     
(669
)
   
(377
)
   
(4,228
)
Amortization of acquired intangible assets on cost of product
   
(241
)
   
(277
)
   
(1,017
)
   
(1,130
)
Valuation adjustment on acquired deferred cost of cloud
   
13
     
21
     
54
     
97
 
Cost of cloud revenue adjustment (1)
   
(2,451
)
   
(2,661
)
   
(8,840
)
   
(7,949
)
Cost of services revenue adjustment (1)
   
(3,233
)
   
(3,597
)
   
(11,497
)
   
(10,513
)
Cost of product revenue adjustment (1)
   
(147
)
   
(185
)
   
(548
)
   
(595
)
Non-GAAP cost of revenue
 
$
155,981
   
$
139,081
   
$
586,672
   
$
528,123
 
                                 
GAAP gross profit
 
$
387,580
   
$
350,228
   
$
1,497,606
   
$
1,296,694
 
Gross profit adjustments
   
24,999
     
26,164
     
97,016
     
100,880
 
Non-GAAP gross profit
 
$
412,579
   
$
376,392
   
$
1,594,622
   
$
1,397,574
 
                                 
GAAP operating expenses
 
$
299,756
   
$
285,161
   
$
1,162,433
   
$
1,032,785
 
Research and development (1)
   
(9,736
)
   
(9,980
)
   
(33,561
)
   
(25,221
)
Sales and marketing (1)
   
(13,993
)
   
(14,495
)
   
(57,114
)
   
(42,021
)
General and administrative (1)
   
(20,549
)
   
(19,403
)
   
(73,540
)
   
(70,776
)
Amortization of acquired intangible assets
   
(5,748
)
   
(10,538
)
   
(28,901
)
   
(41,308
)
Valuation adjustment on acquired deferred commission
   
43
     
54
     
196
     
215
 
Non-GAAP operating expenses
 
$
249,773
   
$
230,799
   
$
969,513
   
$
853,674
 
                                 
GAAP financial and other expense (income), net
 
$
(9,127
)
 
$
7,696
   
$
(10,159
)
 
$
23,290
 
Amortization of discount on debt and loss from extinguishment of debt
   
(1,151
)
   
(8,874
)
   
(5,788
)
   
(28,279
)
Non-GAAP financial and other income, net
 
$
(10,278
)
 
$
(1,178
)
 
$
(15,947
)
 
$
(4,989
)
                                 
                                 
GAAP taxes on income
 
$
25,765
   
$
6,210
   
$
79,387
   
$
41,396
 
Tax adjustments re non-GAAP adjustments
   
12,037
     
23,898
     
54,897
     
71,157
 
Non-GAAP taxes on income
 
$
37,802
   
$
30,108
   
$
134,284
   
$
112,553
 
                                 
GAAP net income
 
$
71,186
   
$
51,161
   
$
265,945
   
$
199,223
 
Valuation adjustment on acquired deferred revenue
   
-
     
-
     
-
     
4,547
 
Valuation adjustment on acquired deferred cost of cloud revenue
   
(13
)
   
(21
)
   
(54
)
   
(97
)
Amortization of acquired intangible assets
   
24,929
     
30,280
     
105,086
     
118,681
 
Valuation adjustment on acquired deferred commission
   
(43
)
   
(54
)
   
(196
)
   
(215
)
Share-based compensation (1)
   
50,061
     
50,321
     
185,052
     
154,213
 
Acquisition related expenses (2)
   
48
     
-
     
48
     
2,862
 
Amortization of discount on debt and loss from extinguishment of debt
   
1,151
     
8,874
     
5,788
     
28,279
 
Tax adjustments re non-GAAP adjustments
   
(12,037
)
   
(23,898
)
   
(54,897
)
   
(71,157
)
Non-GAAP net income
 
$
135,282
   
$
116,663
   
$
506,772
   
$
436,336
 
                                 
GAAP diluted earnings per share
 
$
1.07
   
$
0.76
   
$
4.00
   
$
2.98
 
                                 
Non-GAAP diluted earnings per share
 
$
2.04
   
$
1.73
   
$
7.62
   
$
6.52
 
                                 
Shares used in computing GAAP diluted earnings per share
   
66,285
     
67,245
     
66,465
     
66,896
 
                                 
Shares used in computing non-GAAP diluted earnings per share
   
66,285
     
67,245
     
66,465
     
66,896
 



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
 
     
December 31,
   
December 31,
 
     
2022
   
2021
   
2022
   
2021
 
                           
 
Cost of cloud revenue
 
$
2,451
   
$
2,661
   
$
8,840
   
$
7,949
 
 
Cost of services revenue
   
3,233
     
3,597
     
11,497
     
10,513
 
 
Cost of product revenue
   
147
     
185
     
548
     
595
 
 
Research and development
   
9,736
     
9,980
     
33,561
     
25,221
 
 
Sales and marketing
   
13,993
     
14,495
     
57,114
     
42,021
 
 
General and administrative
   
20,501
     
19,403
     
73,492
     
67,914
 
     
$
50,061
   
$
50,321
   
$
185,052
   
$
154,213
 

(2)
Acquisition related expenses

     
Quarter ended
   
Year to date
 
     
December 31,
   
December 31,
 
     
2022
   
2021
   
2022
   
2021
 
                           
 
Research and development
   
-
     
-
     
-
     
-
 
 
Sales and marketing
   
-
     
-
     
-
     
-
 
 
General and administrative
   
48
     
-
     
48
     
2,862
 
       
48
     
-
     
48
     
2,862