NICE recorded a 375 percent increase in bookings for its CX AI product, Enlighten, in its latest earnings call.
In its Q4 FY 2023 earnings call, the CX business reported that total revenue for the quarter was $623.2 million, a quarterly increase of 10 percent. While NICE’s cloud business continued to be generally responsible for the majority of NICE’s sales — $429 million this quarter, a 20 percent increase — Barak Eilam, NICE CEO, highlighted its AI investments specifically as being critical to both its year-over-year revenue growth and long-term financial strategy.
“AI is now turbocharging our differentiation, further expanding our win rates,” Eilam said.
Eilam suggests that the complexity of AI technologies for enterprises, in particular CX tech, has seen customers seek out specialists like NICE to leverage their expertise and advanced solutions for their own AI-driven use cases, with “each contributing to an incremental revenue opportunity”.
“We are experiencing a spike in the number of customers and prospects approaching us after trying to leverage general purpose generative AI technologies unsuccessfully,” Eilam said during the call.
They come to us with a clear realization that Enlighten, with thousands of CX-specific models that are constantly expanding and evolving from billions of interactions, is the only viable option. We are defining how AI is adopted for CX as demonstrated by an astounding 375 percent increase in Enlighten bookings in Q4.”
As well as AI use cases, NICE also credited AI platformitisation as integral to its finances. The company noted that in Q4, bookings from new customers adopting CXone as a platform increased to 100 percent. Eilam underlined that in these deals, customers selected CXone with three or more apps, “displacing at least two incumbent point solutions”.
Eilam didn’t explicate which customers had leveraged NICE’s AI services but cited anonymous examples, including an AI-driven platform win featuring a seven-digit ACV deal with a global provider of technology for commercial real estate. He also highlighted seven-digit CXone deals with a financial services provider, a large pharmacy provider and an international airline last quarter.
“CXone is the only platform in the CX market that was built on these principles from day one, and we have seen the fruits of that investment significantly materialize,” Eilam enthused. “AI now adds a new tailwind for customers and prospects to standardize on CXone.”
2023 — A Momentous Year For NICE
It’s been a positive year for NICE, with total revenues growing by nine percent to $2,377.5 million as supported by its growing cloud business, which was reported at $1,581.8 million for the full FY 2023, an increase of 22 percent. Eilam said that its cloud growth is the highest in its industry and illustrates its “accelerating market share expansion”.
To demonstrate that market share expansion, NICE said it added 1,000 new customers in 2023, with 75 percent of NICE’s business closed with new partners.
As well as its AI products and platform, NICE underlined its complementary digital engagements strategy as contributing towards its healthy year, with 2023 seeing a 53 percent increase in digital bookings.
“The momentum to our ongoing innovation accelerated dramatically in 2023 as we infused the digital engagement capabilities with AI,” Eilam stated. “This is now the fastest expanding part of our business, reflected by an astonishing 6x growth in the volume of digital engagements managed by CXone daily.”
Other key figures from the call include the minor growth of services revenue, which comprised 26 percent of total revenue. This was reported as $162 million, an increase of 1 percent year-over-year “given higher professional services revenue resulting from large enterprise adoption,” as explained by Beth Gaspich, NICE CFO.
As NICE continues to focus on cloud growth, product revenue from on-premise sales decreased to $32 million. On-prem sales comprised five percent of total revenue in Q4, compared to nine percent of total revenue in 2023.
In Q4, Gaspich noted the cloud revenue growth was offset by a decline in cost and services, but Gaspich expects to “see this cloud growth materialized in the revenue stream for financial crime and compliance in future periods and for the segment to return to growth as the cloud revenue becomes more meaningful”.
NICE’s LiveVox acquisition, announced in October in a deal worth a reported $350 million, wasn’t factored into the Q4 Fy 2023 call and will contribute to NICE’s accounts beginning in FY 2024.
