NiCE NASDAQ: NICE reported first-quarter 2026 results that exceeded its guidance on both revenue and earnings, driven by continued cloud growth, record new cloud annual contract value (ACV) bookings, and accelerating adoption of AI across its CXone platform. Management also discussed commercial actions taken with a small number of large customers to “lock in” longer-term AI commitments—moves that are expected to create near-term revenue phasing effects, particularly in the second quarter.
Quarterly results exceed guidance as cloud and AI grow
CEO Scott Russell said the company delivered total revenue of $769 million and non-GAAP EPS of $2.64, “both above the high end of our guidance ranges,” alongside 14.6% year-over-year cloud revenue growth. CFO Beth Gaspich characterized the quarter as showing “strong 10% revenue growth, healthy profitability, and growing backlog.” She added that foreign exchange contributed approximately 1% to year-over-year growth.
Cloud revenue was $603 million, representing 79% of total revenue. Gaspich said cloud revenue grew 14.6% year-over-year (about 12% excluding Cognigy). Within cloud, CXAi and self-service ARR reached $345 million, up 66% year-over-year and accounting for 14% of cloud revenue. Russell said AI ARR increased 66% year-over-year and AI backlog grew 78%, while cloud backlog grew 27% including Cognigy (and 24% excluding it).
Gaspich reported cloud net revenue retention of 107%, describing it as healthy but noting “some near-term pressure on NRR as we continue to transition our portfolio towards AI-driven capabilities,” which can compress certain CX components.
Record cloud ACV bookings and Cognigy integration progress
Russell said NICE delivered a “record first quarter for new cloud ACV bookings,” both including and excluding Cognigy. Eight months after the acquisition closed, he said integration is “ahead of schedule,” adding that Cognigy is now “tightly integrated into CXone,” enabling NICE to sell and deploy Cognigy as part of a unified platform offering.
Russell highlighted “Automated Insights,” which he said analyzes structured and unstructured data across voice, digital, self-service, and workflows to identify high-impact AI opportunities, quantify ROI upfront, and “automatically generates production-ready NICE Cognigy AI agents within the same platform.” He also said NICE introduced advanced testing for AI performance, expanded multimodal and proactive engagement across channels, and “deeper MCP integration” to help the platform operate within broader enterprise AI environments.
Management pointed to analyst recognition as well. Russell said Forrester named NICE Cognigy a leader in its conversational AI platforms for customer service Wave, and noted recognition at Enterprise Connect for customer experience innovation.
Customer examples and deal activity highlight AI focus
Russell cited customer outcomes for early adopters of NICE Cognigy’s agentic AI, including “approximately 20% improvements in CSAT,” “over 80% containment rates for tier one inquiries,” and “double-digit reductions in cost per contact.” He also described deployments at Openreach and Lufthansa, emphasizing production-scale usage and cost savings.
On enterprise wins, Russell said NICE closed multiple seven-figure ACV deals, including:
- A seven-figure ACV expansion with a longtime U.S. healthcare services customer adding NICE Cognigy for agentic AI automation and Copilot for real-time agent guidance.
- A seven-figure ACV win with the U.K.’s leading roadside assistance provider using CXone including Cognigy as an AI-powered engagement hub.
- A competitive seven-figure ACV enterprise win in core CCaaS with a global healthcare and life sciences company consolidating vendors and replacing a “large enterprise CRM based contact center solution,” according to Russell.
In response to a question about AI agent funding rounds in the market, Russell argued that enterprise needs go beyond “simple flows” and require “security, the observability, the guardrails,” and the ability to operate across channels at scale. He said the company’s AI pipeline, backlog, and bookings are growing at record levels.
International growth, segment performance, and margins
International performance was a key theme. Russell said international revenue grew 30%, and Gaspich provided regional details: EMEA revenue (13% of total) grew 34% year-over-year (or 26% constant currency), while APAC (6% of total) grew 23% (or 19% constant currency). She said international cloud revenue grew “over 50% year-over-year on a constant currency basis,” and described international markets as underpenetrated with a “huge runway.”
By segment, Gaspich said customer engagement revenue was $636 million (83% of total), up 7% year-over-year, with cloud growth offsetting declines in on-premise product and services. Financial Crime and Compliance (FCC) revenue was $133 million (17% of total), up 23%, supported by premise-based term renewals and continued cloud revenue growth in that segment.
Profitability reflected planned investments. Gaspich reported a gross margin of 68.4% and operating income of $200 million for an operating margin of 26%. She said the quarter included higher R&D and sales and marketing spend to support go-to-market and AI innovation, while internal AI deployments are contributing to efficiency gains that partly offset increased investment.
Cash flow, buybacks, and guidance shaped by renewal-related actions
Operating cash flow in Q1 was $179 million and free cash flow was $149 million. Gaspich said year-over-year cash flow comparisons were affected by bonus payment timing and planned increased investments, including Cognigy. NICE ended the quarter with $304 million in cash and short-term investments.
Share repurchases were a major capital allocation highlight. Gaspich said NICE repurchased a record $253 million of shares in Q1, representing 3.5% of market capitalization, with shares outstanding ending March at about 58.5 million, down 5% year-over-year. The company exited the quarter with $745 million of remaining buyback authorization and reiterated its intent for repurchases to exceed 50% of free cash flow for the year.
For guidance, NICE reiterated its full-year revenue outlook while raising EPS guidance. Full-year 2026 revenue is expected to be $3.17 billion to $3.19 billion, and non-GAAP diluted EPS is expected to be $10.98 to $11.18. The company now expects 2026 cloud revenue growth of 13% to 15%.
Second-quarter guidance calls for revenue of $761 million to $771 million and EPS of $2.60 to $2.70. Management said Q2 cloud growth is expected to be “slightly below” the full-year range due to the timing impact of renewal-related commercial actions.
Russell and Gaspich said NICE worked with “a small number of existing marquee customers” on renewal-specific actions designed to accelerate AI adoption and secure long-term commitments. Russell described the approach as “a short-term trade-off for a long-term success,” noting that in one example the company provided attractive pricing on certain existing CX products while securing a broader Cognigy automation commitment and extending the term by an additional year. He said the AI deployment would begin contributing later in 2026 and more significantly in 2027, while the discount impact is immediate.
Separately, Russell said NICE is exploring options for its non-CX assets—Financial Crime and Compliance and Public Safety—after working with advisors for several months, emphasizing that it is “an exploration” and that “no decisions have been made.”
About NiCE NASDAQ: NICE
NiCE Ltd is a global software provider specializing in solutions for customer engagement, financial crime prevention, public safety, workforce optimization and border security. Its product offerings include cloud-native and on-premises platforms that leverage advanced analytics, artificial intelligence and automation to help organizations enhance customer experiences, streamline operations and ensure regulatory compliance. NiCE’s portfolio addresses the needs of contact centers, financial institutions, government agencies and enterprises across a broad range of industries.
In customer engagement, NiCE delivers tools for omnichannel interaction management, real-time and historical analytics, workforce management, and quality management.
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