NICE Ltd. Q1 FY2026 earnings call

• Scott mentioned the company is seizing the CXAI opportunity with strong Q1 results, including record new cloud ACV bookings. - Highlighted examples of customer success with Openreach and Lufthansa using NICE Cognigy's AI solutions. - Cognigy integration is ahead of schedule and tightly integrated into CX1. - Introduced capabilities like advanced testing and expanded multimodal engagement. - Closed several significant enterprise deals in various sectors. - AI is changing how NICE operates, accelerating product development and productivity. - Discussed the broader portfolio including financial crime and compliance and public safety, with an exploratory process for non-CX assets.

Total revenue for Q1 was $769 million. Cloud revenue totaled $603 million, representing 79% of total revenue and growing 14.6% year-over-year. Customer engagement revenue was $636 million, representing 83% of total revenue and increasing 7% year-over-year. Financial crime and compliance revenue totaled $133 million, representing 17% of total revenue and increasing 23% year-over-year. AI, ARR increased 66% year over year and now represents 14% of cloud revenue. International revenue grew 30% with EMEA revenue growing 34% year-over-year and APAC revenue growing 23% year-over-year. Cloud net revenue retention was 107%.

• Full year 2026 total revenue guidance is $3 billion and $170 million to $3 billion and $190 million, up 8% at midpoint. - 2026 cloud revenue growth expected 13% to 15%. - Full-year diluted EPS expected $10.98 to $11.18. - Q2 2026 total revenue expected $761 million to $771 million, 5.5% growth at midpoint. - Q2 fully diluted EPS expected $2.60 to $2.70. - Operating margins for full year 2026 expected at higher end of 25% to 26% range.

Q: Curious about Sierra raising $950 million for AI agents and its impact on NICE.

A: Validates market, NICE offers end-to-end platform vs AI point solutions.

Q: About Q2 revenue guidance and cloud growth variability.

A: Due to commercial actions to drive AI growth, deliberate decisions with marquee customers.

Q: About Cognigy customer base trends.

A: Expect 200 bps contribution, strong pipeline and cross-sell opportunity.

Q: About financial crimes and public safety exploratory process.

A: Focused on long-term growth and maximizing shareholder value.

Q: About AI contracting dynamics.

A: Short-term trade-off for long-term success, locking in AI with long-term commitments.

Q: About AI backlog to revenue timeline and partnerships.

A: AI backlog grows, deployment involves data and guardrail checks, partnerships with AI players and MCP integration.

Q: About international growth durability.

A: Strong pipeline, bookings, and local capability drive durable growth.

Q: About product stabilization and recurring revenue.

A: CX is cloud-driven, recurring revenue around 90%, term renewals in FCC business.

Q: About process mining and AI impact.

A: Seizing spend on AI, forward indicators show positive trends, data and platform enable production-grade AI.

Q: About components under pressure in early renewals.

A: Very small percentage of products under slight compression, not significant pressure.