NICE has achieved $1 billion in cloud revenues over the course of 2021.
After securing $285 million in Q4, NICE cloud offerings accounted for over 53% of overall annual revenues.
As businesses move away from on-premise systems, this is perhaps little surprise. After all, NICE CXone is a highly regarded contact centre as a solution (CCaaS) offering, with Gartner pinpointing the solution as one of just two market leaders in a competitive space.
These positive reviews seem to be translating into rising revenues, which Beth Gaspich, Chief Financial Officer at NICE, discussed on an earnings call:
The Q4 top-line was driven by another stellar quarter in the cloud with 28% year-over-year cloud revenue growth coupled with an outstanding performance in our product revenue, which grew 54% year-over-year.
NICE highlighted many other positives, including a 260% growth in the number of digital-first deals within the past year.
CEO Barak Eilam was also keen to highlight its progress in the AI space. “AI bookings increased fivefold, quickly transforming NICE from an analytics leader to an AI powerhouse,” he said.
However, on the day of the Q4 results release, NICE share prices dropped by over eight percent, from $261.62 to $239.25.
A temporary blip perhaps. Nevertheless, the Q4 results show an operating income of $65 million, the same figure as last year. Meanwhile, its operating margin was 12.6%, compared to 15.0% last year.
Increasing competition and intensification at the lower tiers of the market are possible explanations. Yet, Eilam emphasised the significant potential of migrating existing NICE on-premise clients to the cloud. He said:
Most of our cloud business to date is not a conversion of existing customers. So, there is still a very, very healthy runway moving forward as we start to convert those customers.
“I’ll remind you that as we go and convert those customers, there is a great upside. If you just look at it for a like-for-like, there is potentially a 2x increase in annual revenue from such a customer.”
In addition, NICE will continue to evolve its proposition, entering into many new strategic partnerships to further innovation and worldwide growth in Q4.
For example, the company signed a strategic partnership with Google for CXone optimisation in November. It also joined forces with Etisalat to bring CXone to the Middle East and Deutsche Telecom to further penetrate the European market.
Thanks in part to this expansion and continued technology advancement, NICE estimate full year 2022, non-GAAP total revenues to be in a range of $2.14 billion to $2.16 billion. While this represents 12% growth, it is notably down by more than 5% from the non-GAAP revenue growth in 2021.
