NICE · NICE Ltd.

NICE delivered a solid Q1 2026 with $768.6 million in revenue (+9.8% YoY), driven by robust cloud growth (14.6% YoY to $603.4 million) and accelerating AI adoption—AI ARR surged 66% YoY and is embedded in all CXone enterprise deals. Gross margin declined slightly to 64.4% (GAAP) from 66.9% in Q1 2025, reflecting ongoing investments in AI-native platform development and integration of Cognigy, which closed eight months prior. Operating income fell to $126.8 million (16.5% margin) from $148.2 million (21.2% margin) due to higher R&D and SG&A spend, consistent with strategic expansion. Net income dropped sharply to $46.8 million (6.1% margin) from $129.3 million (18.5% margin), primarily due to $99.3 million in taxes on income—more than double the prior-year tax expense—highlighting elevated effective tax rate pressure. Despite lower GAAP EPS ($0.77 vs. $2.01), non-GAAP EPS of $2.64 remained strong, and management raised full-year non-GAAP EPS guidance to $10.98–$11.18, implying ~7% YoY growth at the midpoint, supported by continued cloud momentum (13–15% YoY cloud revenue growth now expected) and international strength (30% YoY revenue growth). The $253.3 million in share repurchases signals capital discipline, and the company’s debt-free balance sheet ($304.1 million in cash/investments as of March 31, 2026) provides flexibility for further M&A or investment. CEO Scott Russell emphasized that the combined NICE–Cognigy platform is the only fully AI-native CX solution unifying voice, digital, and agentic AI at scale—positioning the company to expand beyond the contact center into broader enterprise workflows.