Q2 2024 NICE Ltd Earnings Call

August 15, 2024

Management's formal presentation instructions will be given for the question and answer session.

As a reminder, this conference is being recorded August 15th 2024.

Speaker Change: Moreover, the number of deals greater than $1 million ACV that included AI jumped 100% compared to the same period last year.

Barak Eilam: With the most comprehensive CX platform in CX-1, rapid innovation in AI that is experiencing significant enterprise adoption and revenue goals and a flexibility afforded by our rock solid financial position where positions for continued market leadership expansion and long-term growth.

Speaker Change: I would now like to turn the call over to Mr. Marty Cohen, Vice President Investor Relations at Nice. Please go ahead.

Speaker Change: Thank you operator with me on the call today are Barak eight long Chief Executive Officer, Beth <unk> Chief Financial Officer.

Beth Gaspich: I will now turn the call over to Beth. Thank you, Brock. Q2 highlights the Healthy Fundamentals demonstrated by our financial results, stemming from the impressive execution we continue to deliver each and every quarter. We surpassed our expectations across our key financial metrics, including strong total revenue growth, excellent profitability, robust cash flow generation, and the acceleration of our share buyback program. In fact, this quarter saw the largest share repurchases that we have ever executed, totaling $146 million, evidencing the confidence we have as a continued leader in all the markets where we operate. Total revenue was a record $664 million of 14% a year over year, outperforming the midpoint of our guidance.

Speaker Change: Before we start I'd like to point out that some of the statements made on this call will constitute forward looking statements in accordance with the Safe Harbor provisions of the private Securities Litigation Reform Act of 1995.

Beth Gaspich: I will now turn the call over to Beth. Thank you, Brock. Q2 highlights the Healthy Fundamentals demonstrated by our financial results stemming from the impressive execution we continue to deliver each and every quarter. We surpassed our expectations across our key financial metrics, including strong total revenue growth, excellent profitability, robust cash flow generation, and the acceleration of our share buyback program. In fact, this quarter saw the largest share repurchases that we have ever executed totaling $146 million evidencing the confidence we have as a continued leader in all the markets where we operate.

Speaker Change: Please be advised that the company's actual results could differ materially.

Speaker Change: From these forward looking statements.

Speaker Change: Music

Speaker Change: Additional information regarding the factors that could cause actual results or performance of the company to differ materially.

Speaker Change: Contained in the.

Speaker Change: Section entitled Risk factors in item three of the company's 2023 annual report on form 20-F as filed with the Securities and Exchange Commission on March seven 2024.

Speaker Change: During today's call we'll present the more detailed discussion of second quarter of 2024 results and the Companys guidance for the third quarter and full year 2024.

Beth Gaspich: Total revenue was a record $664 million of 14% a year over year outperforming the midpoint of our guidance. Non-gap EPS of $2.64 exceeded the high end of our guidance range. We have always been laser focused on ongoing expansion of our profitability as a general operating guideline at Nice. This quarter was yet another testament to the success with record EPS as well as our outstanding operating cash, where we have generated nearly three quarters of a billion dollars over the last 12 months.

Speaker Change: You can find our press release as well as the Pds of our financial results on <unk> Investor Relations website.

Speaker Change: Welcome to the NICE conference call discussing second quarter 2024 results and thank you all for holding.

Speaker Change: Following our comments there will be an opportunity for questions let.

Speaker Change: All participants are at present in a listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session.

Beth Gaspich: Non-GAAP EPS of $2.64 exceeded the high end of our guidance range. We have always been laser-focused on ongoing expansion of our profitability as a general operating guideline at Nice. This quarter was yet another testament to the success with record EPS as well as our outstanding operating cash, where we have generated nearly three quarters of a billion dollars over the last 12 months. With the ongoing expansion of cloud across both our business segments, our recurring revenue further increased to a record 89% of total revenue in the first quarter, compared to 86% last year. Recurring revenue is comprised primarily of a combination of cloud revenue and maintenance revenue, which is a component in our services revenue.

Speaker Change: Let me remind you that unless otherwise noted on this call we will be commenting on our adjusted results of operations, which differ in certain respects from generally accepted accounting principles as reflected mainly in accounting for share based compensation amortization of acquired intangible assets acquisition related and other expenses.

Speaker Change: As a reminder, this conference is being recorded August 15th, 2024.

Speaker Change: I would now like to turn the call over to Mr. Marty Cohen, Vice President Investment Relations at NICE. Please go ahead.

Speaker Change: Amortization of discount on debt and loss from extinguishment of debt and the tax effect of the non-GAAP adjustments.

Marty Cohen: Thank you, Operator. With me on the call today are Barak Eilam, Chief Executive Officer, and Beth Gaspich, Chief Financial Officer.

Speaker Change: The differences between the non-GAAP adjusted results and the equivalent GAAP figures are detailed in today's press release.

Beth Gaspich: With the ongoing expansion of cloud across both our business segments, our recurring revenue further increased to a record 89% of total revenue in the first quarter, compared to 86% last year. Recurring revenue is comprised primarily of a combination of cloud revenue and maintenance revenue, which is a component in our services revenue. Cloud revenue, which now represents a record 73% of our total revenue compared to 66% last year, increased 26% year over year to a record $482 million.

Marty Cohen: Before we start, I'd like to point out that some of the statements made on this call will constitute forward-looking statements in accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Speaker Change: The information in some of our comments discussed on this call may contain forward looking statements that are subject to risks uncertainties and assumptions and I will now turn the call over to Brook.

Marty Cohen: Please be advised that the company's actual results could differ materially from these following statements.

Brook: Thank you Marty and welcome everyone.

Happy to be with all of you. This morning, and shell are great Q2 results as well as some exciting news.

Marty Cohen: Additional information regarding the factors that could cause actual results or performance of the company to differ materially is contained in the

Beth Gaspich: Cloud revenue, which now represents a record 73% of our total revenue compared to 66% last year, increased 26% year over year to a record $482 million. This growth is driven predominantly by CX1, where we see the number of users on our platforms continue to expand as we further penetrate the large enterprise market and continue to upsell and cross-sell our leading digital and AI solutions into our existing customer base. Services revenue was $148 million, represented 22% of total revenue, and decreased 7% year over year, mainly due to our transition to the cloud, where we are adding less new maintenance revenue associated with our premise-based solutions.

Speaker Change: Today, we announced the appointment of Scott Russell is the next seals nice Scott will join us and step into his role at the start of 2025.

Marty Cohen: section entitled Risk Factors and item 3 of the company's 2023 Annual Report on Form 20-F as filed at the Securities and Exchange Commission on March 7, 2024.

Speaker Change: I will continue to lead the company through the end of this year and support scope for a smooth transition.

Beth Gaspich: This growth is driven predominantly by CX1, where we see the number of users on our platforms continue to expand as we further penetrate the large enterprise market and continue to upsell and crosssell our leading digital and AI solutions into our existing customer base. Services revenue was $148 million, represented 22% of total revenue, and decreased 7% year over year, mainly due to our transition to the cloud, where we are adding less new maintenance revenue associated with our premise-based solutions.

Marty Cohen: During today's call we'll present the more detailed discussion of second quarter 2024 results and the company's guidance for the third quarter and four-year 2024.

Speaker Change: Scott's appointment follows a thorough search conducted by our board of directors to look for the best candidate to lead <unk> to its next phase of growth and transformation.

Marty Cohen: You can find our press release as well as the PDFs of our financial results on NYSE's Investor Relations website.

Speaker Change: Scott brings azeem 25 years of experience in enterprise software and most recently as global Chief revenue Officer, and member of the Executive Board of SAP.

Marty Cohen: Following our comments, there will be an opportunity for questions.

Speaker Change: Let me remind you that unless otherwise noted on this call, we will be commenting on or adjusting the results of operations, which differ in certain respects from generally accepted accounting principles, as reflected mainly in accounting for share-based compensation, amortization of acquired and tangible assets, acquisition-related, and other expenses.

Speaker Change: Scott also served as chairman of SAP in North America, and chairman of multiple business units of the FCB portfolio.

Speaker Change: I would like to take this opportunity and give a warm welcome to Scot to nice and I look forward to working with him.

Beth Gaspich: Accordingly, product revenue from on-premise sales, which represented 5% of total revenue in the quarter, decreased 13% year over year as expected, primarily coming from the financial crime and compliance segment. From a geographic breakdown, the Americans region, which represented 85% of total revenue in Q2, grew 16% year over year. The American region has continued to excel as customers' transition from multiple legacy third-party solutions onto our CX1 offering. The industry's only seamlessly integrated comprehensive CX platform. The AMIA Region, which represents 10% of our total revenue, increased 16% euro-rear. The A-PAC region, which represents 5% of total revenue, decreased 9% year-over-year as a result of the positive ongoing transition to the cloud that is accompanied by a reduction in upfront, premium-based product revenue.

Speaker Change: Amortization of discount on debt and loss from extinguishment of debt and the tax effect of the non-GAAP adjustments.

Speaker Change: Now to Q2 results.

Speaker Change: The differences between the non-GAAP-adjusted results and the equivalent GAAP figures are detailed in today's press release.

Speaker Change: The momentum we built in Q1 carried through to Q2, evidenced by strong results across the board.

Speaker Change: The information and some of our comments discussed on this call may contain forward-looking statements that are subject to risks, uncertainties, and assumptions.

Speaker Change: The growing adoption of our AI, along with the unmatched power plus platform cloud of six one are thriving.

Speaker Change: and I'll now turn the call over to Barak.

Speaker Change: We reported total revenue of $664 million in Q2, representing.

Barak Eilam: and Mike Gossett, and I'm sure that you'll be able to find a lot more information. So, thank you very much. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye.

Barak Eilam: Thank You Marty and welcome everyone. I'm happy to be with all of you this morning and share our great Q2 results as well as some exciting news.

Speaker Change: Representing an increase of 14% compared to the same quarter last year with cloud revenue growing 26% to $482 million.

Speaker Change: Earlier today, we announced the appointment of Scott Russell as the next CEO of Nice.

Beth Gaspich: The AMIA Region, which represents 10% of our total revenue, increased 16% euro-rear. The A-PAC Region, which represents 5% of total revenue, decreased 9% euro-rear as a result of the positive ongoing transition to the cloud that is accompanied by reduction in upfront, premium-based product revenue. We continue to see great adoption across the globe of our cloud platforms, and we are extremely excited about some of our recent wins, including our largest ever international CX-1 deal, finding Q2 in the Asia-Pacific Region with an estimated TCB of over $100 million.

These robust topline results continued to outpace the market and are also resulting in impressive market, beating profitability gains.

Speaker Change: Scott will join us and step into his role at the start of 2025.

Speaker Change: I will continue to lead the company through the end of this year and support Scott for a smooth transition.

Speaker Change: Topping the list is our industry, leading cloud gross margin of 72% aided by our highly profitable AI solutions.

Speaker Change: Scott's appointment follows a thorough search conducted by our board of directors to look for the best candidate to lead Knife to its next phase of growth and transformation.

Beth Gaspich: We continue to see great adoption across the globe of our cloud platforms, and we are extremely excited about some of our recent wins, including our largest ever international CX-1 deal, finding Q2 in the Asia-Pacific region with an estimated TCB of over $100 million. This large win is another indication of the positive momentum and market share expansion we see globally, thanks to the depth and breadth of our platform, together with our broad network of channel partners. We are only just getting started with a huge runway still ahead of us and highly under-penetrated large enterprise and international segments of our markets.

Speaker Change: The AI deals signed in Q2 backed up the strong results. We signed a seven-digit deal with one of the world's largest IT companies, replacing the incumbents with TX1.

Speaker Change: Other strong profitability metrics included operating income growth of 19% to $202 million and an increase in operating margin of 120 basis points to 34%.

Speaker Change: Scott brings with him 25 years of experience in enterprise software, most recently as Global Chief Revenue Officer and member of the Executive Board of SAP.

Speaker Change: Scott also served as the chairman of SAP North America and chairman of multiple business units of the SAP portfolio. I would like to take this opportunity and give a warm welcome to Scott tonight and I look forward to working with him.

Speaker Change: We exceeded the high end of our guidance range on EPS coming getting $2 64 for Q2, which was an increase of 24% compared to the same quarter last year.

Speaker Change: A key driver for the win was our clear advantage in functionally AI in head-to-head comparisons against other vendors, leading them to select nights for its proven AI portfolio.

Beth Gaspich: This large win is another indication of the positive momentum and market share expansion we see globally, thanks to the depth and breadth of our platform, together with our broad network of channel partners. We are only just getting started with a huge runway still ahead of us and highly under-penetrated large enterprise and international segments of our markets. We delivered fantastic results across both our business segments, customer engagement revenues, which represented 84% of our total revenue in Q2, where a record $556 million, a 15% euro-rear increase.

Speaker Change: Building, an exceptional first quarter cash flow generation. The momentum continued into Q2, as we generated $170 million of operating cash, which represent an increase of 160% compared to Q2 last year.

Speaker Change: In another seven-digit AI deal, a loud global hotel chain is seeking to enhance its digital transformation and require exceptional accuracy in identifying consumer intent. They value our extensive data repository and thousands of CXI models which provided the precision they needed.

Speaker Change: Now, to Q2 results.

Speaker Change: The momentum we built in Q1 carried through to Q2, evidenced by strong results across the board.

Beth Gaspich: We delivered fantastic results across both our business segments, customer engagement revenues, which represented 84% of our total revenue in Q2, were a record $556 million, a 15% year-over-year increase. The growth in customer engagement is driven prominently by the success of CX-1, both with new and existing customers of all sizes, and our unparalleled ability to deliver CX at scale to the enterprise market to meet their advanced digital and AMAs for a holistic CX experience. Revenues from financial crime and compliance, which represented 16% of our total revenue in Q2, and totaled a record $109 million, increase 9% year-over-year, driven by the increase in cloud revenue.

Speaker Change: The growing adoption of RAI, along with the unmatched platform power of CX-One, are thriving.

Speaker Change: The market leadership gap between <unk> and the rest of the industry continues to significantly widened we are winning displacing the competition and increasing our market share.

Speaker Change: We reported total revenue of $664 million in Q2, representing an increase of 14% compared to the same quarter last year, with cloud revenue growing 26% to $482 million.

Speaker Change: Consequently, they purchased CX-1 autopilot to help ensure the future digital success. In this 7-digit deal, they are standardizing on CX-1 for its seamless AI architecture and comprehensive portfolio of AI solutions, capabilities that AI points providers could not match.

Beth Gaspich: The growth in customer engagement is driven prominently by success of CX-1, both with new and existing customers of all sizes, and our unparalleled ability to deliver CX at scale to the enterprise market to meet their advanced digital and AMAs for a holistic CX experience. Revenues from financial crime and compliance, which represented 16% of our total revenue in Q2, and totaled a record $109 million increase 9% euro-rear, driven by the increase in cloud revenue.

Speaker Change: In fact Q2 bookings were extremely strong throughout the period driven by all time high bookings for six one.

Speaker Change: These robust top-line results continue to outpace the market and are also resulting in impressive market-beating profitability gains.

Speaker Change: This booking strength was evident in all market segments, and especially with large enterprises lending multiple seven and eight figure deals.

Speaker Change: Topping the list is our industry-leading cloud goals margin of 70.2% aided by our highly profitable AI solutions.

Speaker Change: In another deal, where both functional AI and the platform were pivotal and major UK-based telecom provider is replacing 10 different point solutions, including two large incumbent on premise providers. They are consolidating on CX-1 to advance their digital transformation supported by NICE's advanced AI.

Speaker Change: Furthermore, nice turns out not only by the scale of our business, but also for the ongoing rapid expansion of our profitability.

Speaker Change: Other strong profitability metrics included operating income growth of 19% to 202 million dollars and an increase in operating margin of 120 basis points to 30.4%.

Our superior gross margin continues to further accelerate our free cash flow with a record of $639 million over the last 12 months.

Beth Gaspich: Moving to profitability, our cloud growth margin totaled 70.2% in Q2, similar to last year, as we continue to invest in the global expansion of our cloud platforms that is driving our strong international cloud revenue growth. We remain steadfast in our expectations to reach our 75% cloud growth margin target in the medium term. In Q2, operating income increased 19% year-over-year to an all-time high of $202 million, and our healthy operating margin increased 120 basis points to 30.4% compared to 29.2% last year. This is the fourth consecutive quarter of 30% plus operating margins, and we reiterate our expectation of an operating margin between 30.5 to 31% for the full year of 2024, as I shared at our recent Investor Day.

Speaker Change: The platform power of CX-1 is unrivaled in our industry. Designed as the first and only customer-centric platform, it natively integrates all touch points and interactions.

Beth Gaspich: Moving to profitability, our cloud growth margin totaled 70.2% in Q2, similar to last year, as we continue to invest in global expansion of our cloud platforms that is driving our strong international cloud revenue growth. We remain steadfast in our expectations to reach our 75% cloud growth margin target in the medium term. In Q2, operating income increased 19% euro-rear to an all-time high of $202 million, and our healthy operating margin increased 120 basis points to 30.4% compared to 29.2% last year.

Speaker Change: This unique financial strength allows us the flexibility to continue investing in R&D, expanding our go to market and seeking potential acquisitions to further our knowledge our opportunities for growth.

Speaker Change: We exceeded the high end of our guidance range on EPS, coming at in $2.64 for Q2, which was an increase of 24% compared to the same quarter last year.

Speaker Change: Building on exceptional first quarter cash flow generation, the momentum continued into Q2 as we generated $170 million of operating cash, which represents an increase of 160% compared to Q2 last year.

Speaker Change: We are approaching the two year anniversary of the introduction of Gen AI that swiftly changed the semiconductor infrastructure and software landscape.

Speaker Change: Companies of all sizes worldwide, along with consumers investors and analysts are all striving to understand the implications of AI in various aspects of work and life.

Beth Gaspich: This is the fourth consecutive quarter of 30% plus operating margins, and we reiterate our expectation of an operating margin between 30.5 to 31% for the full year of 2024, as I shared at our recent investor day. Earnings for shares for the second quarter far exceeded our expectations, coming in above our guidance range at $2.64, a 24% increase compared to Q2 last year. Cash flow from operations in Q2 was $170 million in increase of 160% euro-rear.

Speaker Change: The market leadership gap between Nice and the rest of the industry continues to significantly widen. We are winning, displacing the competition and increasing our market share.

Speaker Change: I believe that like.

Speaker Change: Many others technological waves, we're getting closer to the point of shifting from the dramatic to the pragmatic.

Speaker Change: In fact, Q2 bookings were extremely strong throughout the period, driven by all-time high bookings for CX-1.

Beth Gaspich: Earnings for shares for the second quarter far exceeded our expectations, coming in above our guidance range at $2.64, a 24% increase compared to Q2 last year. Cash flow from operations in Q2 was $170 million, an increase of 160% year-over-year. Our industry-leading operating cash flow has yielded an exceptional 28.5% operating cash flow margin over the last 12 months. Due to the strength of our first half cash flow generation, we are increasing our expectation of free cash flow generation for the year of 2024 to be in excess of $700 million, employing 47% euro-rear growth. In Q2, we re-purchase shares totaling $146 million.

Speaker Change: Enterprises in particular after exploring initial ways to leverage <unk> to boost productivity and reduced costs are now adopting a more mature and systematic approach.

Speaker Change: This booking strength was evident in all market segments and especially with large enterprises, lending multiple 7 and 8 figure deals.

Speaker Change: They recognize the importance of partnering with leading vendor in each specific business function.

Speaker Change: Furthermore, NAI stands out not only by the scale of our business, but also for the ongoing rapid expansion of our profitability.

Speaker Change: <unk> possesses deep domain expertise relevant proprietary data end to end workflows in a Basel and robust platform designed to fully harness the potential of AI for the enterprise.

Beth Gaspich: Our industry leading operating cash flow has yielded an exceptional 28.5% operating cash flow margin over the last 12 months. Due to the strength of our first half cash flow generation, we are increasing our expectation of free cash flow generation for the year of 2024 to be in excess of $700 million, employing 47% euro-rear growth. In Q2, we re-purchase shares, totaling $146 million. We are executing well on our plan to accelerate and complete our current 300 million share buyback program by the end of Q3.

Speaker Change: Our superior gross margin continues to further accelerate our free cash flow with a record of $639 million over the last 12 months.

Speaker Change: This recognition is especially evident for the function of customer service, where the expectations for significant cost savings and productivity gains are very high.

Speaker Change: This unique financial strength allows us the flexibility to continue investing in R&D, expanding our go-to market, and seeking potential acquisitions to further enlarge our opportunities for growth.

Speaker Change: However, initial efforts to deploy generic genii spend to deliver the desired results.

Speaker Change: We are approaching the two-year anniversary of the introduction of Gen-AI that swiftly changed the semiconductor infrastructure and software landscape.

Beth Gaspich: We are executing well on our plan to accelerate and complete our current 300 million share buyback program by the end of Q3. After completing the current plan, we will begin implementing our even larger share buyback program of $500 million. The acceleration and expansion of the buyback plans are a demonstration of the continued confidence in the growth of our business and our solid financial profile. Total cash and investments at the end of June totaled $1,504 million. Our debt stands at $48 million, resulting in net cash and investments exceed $1,446 million.

Speaker Change: This disillusionment in disillusionment is transitioning the customer service market from height to reality.

Speaker Change: Ultimate time for nice the two leader in functional AI for customer service.

Beth Gaspich: After completing the current plan, we will begin implementing our even larger share buyback program of $500 million. The acceleration and expansion of the buyback plans are a demonstration of the continued confidence in the growth of our business and our solid financial profile. Total cash and investments at the end of June totaled $1,504 million. Our debt stands at $48 million, resulting in net cash and investments exceed $1,446 million.

Speaker Change: Companies of all sizes worldwide, along with consumers, investors and analysts, are all striving to understand the implications of AI in various aspects of work and life.

Speaker Change: We've already experienced the shift and it continues to accelerate.

Speaker Change: The depth of the desert conversations the speed of adoption and the sheer number of use cases are growing rapidly.

Speaker Change: I believe that like many other technological waves, we are getting closer to the point of shifting from the dramatic to the pragmatic.

Speaker Change: Six one is the go to platform for enterprises looking to standardize on a platform that not only transition them to the cloud, but also converges all customer service workflows, while infusing AI for end to end automation and orchestration.

Speaker Change: Enterprises, in particular, after exploring initial ways to leverage NAI to boost productivity and reduce costs, are now adopting a more mature and systematic approach.

Speaker Change: From day 1, CX-1 was built on these principles, offering the largest seamlessly integrated portfolio of CX solutions and the most robust CX infrastructure in the market.

Beth Gaspich: In conclusion, we consistently demonstrate clear industry leadership through our best-in-class cloud platforms, the comprehensive breadth and depth of our solutions portfolio, and our robust financial profile, much by exceptional profitability, scalability, strong balance sheet, and impressive cash generation. Now, I'll close with our total revenue and non-GAP EPS guidance for the third quarter and full year 2024. For the third quarter of 2024, we expect total revenue to be in the range of $676 million to $686 million, representing 13% year-over-year growth at the midpoint.

Speaker Change: They recognize the importance of partnering with leading vendors in each specific business function.

Speaker Change: It's the result of our decade long strategy to build six one is a comprehensive cloud platform that covers all customer service touch points and workflows combined with unmatched data assets.

Speaker Change: One that possesses deep domain expertise, relevant proprietary data, end-to-end workflows, and above all, a robust platform designed to fully harness the potential of AI for the enterprise.

Speaker Change: This approach is the only viable way to truly unlock the benefits of AI in customer service.

Beth Gaspich: Now, I'll close with our total revenue and non-GAAP EPS guidance for the third quarter and full year 2024. For the third quarter of 2024, we expect total revenue to be in the range of $676 million to $686 million, representing 13% year-over-year growth at the midpoint. We expect the third quarter 2024, fully-diluted earnings per share, to be in a range of $2.62 to $2.72 for representing 18% year-over-year growth at the midpoint. For raising our EPS guidance, we reiterate our full year 2024 total revenue guidance, which is expected to be in the range of $2.715 million to $2.735 million, an increase of 15% at the midpoint.

Speaker Change: While the platform value proposition is well-recognized, its adoption is now significantly accelerating because it provides the only viable way to implement effective AI.

Beth Gaspich: Now, I'll close with our total revenue and non-GAP EPS guidance for the third quarter and full year 2024. For the third quarter of 2024, we expect total revenue to be in the range of $676 million to $686 million, representing 13% year-over-year growth at the midpoint. We expect the third quarter 2024, fully-deluted earnings per share, to be in a range of $2.62 to $2.72 for representing 18% year-over-year growth at the midpoint. For raising our EPS guidance, we reiterate our full year 2024 total revenue guidance, which is expected to be in the range of $2.715 million to $2.735 million, an increase of 15% at the midpoint. We now expect full year 2024, fully-deluted earnings per share to increase to a range of $10.60 to $10.80, which represents an increase of 22% at the midpoint.

Speaker Change: This recognition is especially evident for the function of customer service, where the expectations for significant cost savings and productivity gains are very high.

Speaker Change: In Q2 <unk>.

Speaker Change: Every quarter, more enterprises are consolidating onto CX-1 as evidenced by the rise, rising value of portfolio deals, those involving three or more of our solutions, along with an overall increase in large deals.

Speaker Change: Revenues surged, 38%.

Speaker Change: Furthermore, demand for AI solution and Scribing.

Speaker Change: However, initial efforts to deploy generic Gen-AI failed to deliver the desired results.

Speaker Change: It was just one year ago at interactions our annual user conference when we introduced copilot autopilot and actions.

nice: This disillusionment is transitioning the customer service market from hype to reality. The ultimate time for Nice, the true leader in functional AI for customer service.

Speaker Change: These typically large portfolio deals tend to be very sticky, rising long-term value for NICE, as enterprises continue to expand their use of our portfolio over time. In Q2, we needness as surge in the booking of portfolio deals, increasing 71% compared to the same quarter last year. Additionally, bookings of portfolio deals from new customers jumped 150%.

Beth Gaspich: We expect the third quarter 2024, fully-deluted earnings per share, to be in a range of $2.62 to $2.72 for representing 18% year-over-year growth at the midpoint. For raising our EPS guidance, we reiterate our full year 2024 total revenue guidance, which is expected to be in the range of $2.715 million to $2.735 million, an increase of 15% at the midpoint. We now expect full year 2024, fully-deluted earnings per share to increase to a range of $10.60 to $10.80, which represents an increase of 22% at the midpoint.

Speaker Change: One year later adoption has been stunning with bookings for auto pilot and copilot together soaring 134% in Q2.

nice: We've already experienced the shift and it continues to accelerate.

Speaker Change: Moreover, the number of deals greater than $1 million ACB that included the I jumped 100% compared to the same period last year.

Speaker Change: The depth of conversations, the speed of adoption, and the sheer number of use cases are growing rapidly.

Speaker Change: Convincingly, demonstrating the demand for CX-1 to replace both incumbent on premise and cloud providers that are unable to deliver a two platform at scale.

Speaker Change: The <unk> deal signed in Q2 desktop. These strong results, we signed a seven digit deal with one of the world's largest IC company, replacing the incumbent with six one.

Speaker Change: Tx1 is the go-to platform for enterprises looking to standardize on a platform that not only transitions them to the cloud.

Speaker Change: but also converges all customer service workflows.

Speaker Change: The key driver for the win was a clear advantage in functional AI in.

Beth Gaspich: We now expect full year 2024, fully-diluted earnings per share to increase to a range of $10.60 to $10.80, which represents an increase of 22% at the midpoint.

Speaker Change: Also, deals are getting larger.

Speaker Change: while infusing AI for end-to-end automation and orchestration.

Speaker Change: In head to head comparisons against other vendors, leading them to select nice points proven AI portfolio.

Speaker Change: It's the result of our decade-long strategy to build CX-1 as a comprehensive cloud platform that covers all customer service touchpoints and workflows.

Speaker Change: In another seven digit deal a large global hotel chain is taking to enhance it enhances digital transformation and required exceptional accuracy in identifying consumer intense.

Operator: I will now turn the call over to the operator for questions. Thank you. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: I will now turn the call over to the operator for questions. Thank you.

Speaker Change: combined with unmatched data assets

Operator: At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: This approach is the only viable way to truly unlock the benefits of AI in customer service.

Speaker Change: The value of our extensive data repository and thousands of <unk> models.

Speaker Change: Which provided the precision they needed.

Speaker Change: In Q2, AIE revenues surged 38%.

Speaker Change: Consequentially the purchase six one autopilot to help ensure the future digital success.

Speaker Change: Furthermore, demand for our AI solutions is thriving.

Speaker Change: A large regional energy company is advancing its AI strategy and recognize that their existing on premise non integrated infrastructure and solutions would not suffice.

Speaker Change: It was just one year ago at Interactions, our annual user conference, when we introduced Copilot, Autopilot, and Actions.

Samad Samana: Our first question comes from the line of Samad Samana with Jeffreys. Please proceed with your question. Hi, good morning, and thanks for taking my questions. I get to see the strong execution in a tough environment. So, maybe first question.

Samad Samana: Our first question comes from the line of Samad Samana with Jeffreys. Please proceed with your question. Hi, good morning and thanks for taking my questions. I get to see the strong execution in a tough environment. So, maybe first question. I think about the second quarter, Beth, could you help us understand? I know you're not specifically breaking out live loss, but just how should we think about the core business versus how live loss is performing versus your initial expectations for the year?

Speaker Change: One year later, adoption has been stunning, with bookings for autopilot and copilot together soaring 134% in Q2.

Speaker Change: In the seven digit deal Theyre standardizing on six one for a seamless AA architecture and comprehensive portfolio of AI solutions capabilities that they are AI points providers could not match.

Beth Gaspich: I think about the second quarter, Beth. Could you help us understand? I know you're not specifically breaking out live loss, but just how should we think about the core business versus how live loss is performing versus your initial expectations for the year? Is there anything worth calling out, especially as you're now several months into the acquisition being with the company? Are you starting to see more traction and cross-selling or harvesting the value from revenue, a revenue synergy perspective in that?

Speaker Change: We signed five A-digit DCV deals in Q2.

Speaker Change: These deals will power your durable value for NICE over the long periods due to the platoon sickness and its ability to drive long-term absence and crossroads owed to the breadth and depth of the CX-1 portfolio.

Speaker Change: In another deal where both functionally and the platform were pivotal and major UK based telecom provider is replacing 10 different point solutions, including two large incumbent on premise providers.

Speaker Change: We signed an A-digit ACV deal with a very large organization in the APA region.

Samad Samana: Is there anything worth calling out, especially as you're now several months into the acquisition being with the company? Are you starting to see more traction and cross-selling or harvesting the value from revenue, a revenue synergy perspective in that?

Speaker Change: We are consolidating on fix one to advance their digital transformation supported by <unk> advanced AI.

Beth Gaspich: I have a Thank you for the questions, Samad. And what we're seeing from the live-ox is performance as expected. I think we've been off to a great start this year. I may have mentioned at the last earnings call that they actually joined us at our sales kickoff this year. So really, right out of the gate, we had a great process integrating them into the company. They are performing as we expected, and we're quite pleased with how things are going. We continue to see an increasing pipeline building of cross-selling and upselling opportunities that are happening. And we are seeing already that we are cross-selling into each other's customer base, which was part of the underlying strategy.

Beth Gaspich: I have a Thank you for the questions, Samad. And what we're seeing from the live-ox is performance as as expected. I think we've been off to a great start this year. I may have mentioned at the last earnings call that they actually joined us at our sales kickoff this year. So really right out of the gate, we had a great process integrating them into the company. They are performing as we expected and we're quite pleased with how things are going.

Speaker Change: The platform power of six one is unrivaled in our industry design.

Speaker Change: They were the largest on-premise customer in the region of one of our direct competitors.

Speaker Change: Designed as the first and only customer centric platform. It natively integrate all touch points and interactions Tom.

Speaker Change: Douglas.

Speaker Change: From day 161 was built on these principles offering the largest seamlessly integrated portfolio of <unk> solutions and the most robust six infrastructure in the market.

Speaker Change: This is a great example of the power and scale of CX-1 as a platform by consolidating multiple legacy on premise providers.

Beth Gaspich: We continue to see an increasing pipeline building of cross-selling and upselling opportunities that are happening. And we are seeing already that we are cross-selling into each other's customer base, which was part of the underlying strategy. So very much aligned and expected with what we had really targeted as part of the strategy of the acquisition.

Speaker Change: While the platform value proposition is one recognized each adoption is now significantly accelerating because it provides the only viable way to implement effective AI.

Speaker Change: It allows regional energy company is advancing its AI strategy and recognize that their existing on premise non integrated infrastructure and solutions would not suffice.

Beth Gaspich: So very much aligned and expected with what we had really targeted as part of the strategy of the acquisition.

Speaker Change: Every quarter more enterprises are consolidating onto six one is.

Speaker Change: In these seven digit deal Theyre standardizing on six one for a seamless architecture and comprehensive portfolio of AI solutions keeps your ability that they are AI points providers could not match.

Speaker Change: Evidenced by the rise rising value of portfolio deals.

Tyler Radke: Great. And then maybe just as I look to the guidance, it implies an acceleration as the year progresses.

Beth Gaspich: Great. And then maybe just as I look to the guidance, it implies an acceleration as the year progresses. I know the comp's got a little bit easier, but I think just based on what we're seeing, maybe in other areas of software and some of your competitors, it'd be great if you could help us understand where you're getting comfort around a back-hack acceleration and how confident are you? I know there's still a lot of year left to go, but perhaps do we think about the back-hack acceleration?

Speaker Change: Those involving three or more of our solutions along with an overall increase in large deals.

Beth Gaspich: I know the comp's got a little bit easier, but I think just based on what we're seeing, maybe in other areas of software and some of your competitors, it'd be great if you could help us understand where you're getting comfort around a back-hack acceleration and how confident are you? I know there's still a lot of year left to go, but perhaps do we think about the back-hack acceleration? Yeah. Thank you for the question. I mean, we're looking on the second half. And I think as we look at the quarterly distribution of our revenue and how we will see further execution from that standpoint throughout the year, it looks quite consistent with what we've seen in past years.

Speaker Change: These typically large portfolio deals tend to be very sticky driving long term value for months as enterprises continue to expand their use of our portfolio over time.

Speaker Change: In another deal where both functionally eye and the platform where people have done a major UK based telecom provider.

Speaker Change: Replacing 10 different point solutions, including two large incumbent on premise providers.

Speaker Change: In Q2, we witnessed a surge in the booking of portfolio deals increasing 71% compared to the same quarter last year.

Speaker Change: Consolidated England fix one to advance their digital transformation supported by nice is invincible.

Beth Gaspich: Yeah. Thank you for the question. I mean, we're looking on the second half. And I think as we look at the quarterly distribution of our revenue and how we will see further execution from that standpoint throughout the year, it looks quite consistent with what we've seen in past years. And in terms of the confidence, it comes from a combination of course first from the area that Brock highlighted just a few minutes ago, which is we had record bookings, of course, of CX-1 during Q2.

Additionally, bookings of portfolio deals from new customers.

Speaker Change: They brought some power of six one is unrivaled in our industry.

Speaker Change: <unk>, 150% convincingly.

Speaker Change: Convincingly demonstrating the demand for six one to replace both incumbent on premise and cloud providers that are unable to deliver the two a two platform at scale.

Speaker Change: Designed as the first and only customer centric platform. It natively integrate all touch points into rock shoes.

Beth Gaspich: And in terms of the confidence, it comes from a combination of course first from the area that Brock highlighted just a few minutes ago, which is we had record bookings, of course, of CX-1 during Q2. So that was quite exciting, and combined with that. I think just the general backlog we've seen, the stabilization generally in our customer base, and healthy metrics across the board gives us the confidence that we're continuing to be excited about the continued execution of our business. Great.

Speaker Change: They opted for CX-1 to manage the 1 billion online transactions and 55 billion calls annually.

Speaker Change: From day 161 was built on these principles offering the largest seamlessly integrated audio solutions and the most robust infrastructure in the market.

Also deals are getting larger we signed five eight digit DCP deals in Q2.

Speaker Change: These deals will powered dual durable value for nice over a long period due to the platform stickiness and its ability to drive long term upsells and cross sells owed to the breadth and depth of the fix on portfolio.

Speaker Change: While the platform value proposition is one recognized each adoption is now significantly accelerating because it provides the only viable way to implement effective V I.

Beth Gaspich: So that was quite exciting and combined with that. I think just the general backlog we've seen, the stabilization generally in our customer base and healthy metrics across the board gives us the confidence that we're continuing to be excited about the continued execution of our business. Great.

Samad Samana: Great.

Speaker Change: Every quarter more enterprises are consolidating onto six one.

We signed an eight digit ACB deal with a very large organization in the east.

Speaker Change: Evidenced by the rise rising value of portfolio deals.

Samad Samana: In Baroque and Scott, if you're listening, I'd like to congratulate you both in Baroque and Graff on navigating the transition in Scott report to working with you when you're officially on board. Just take care, everybody. Thank you. Appreciate that someone. Thank you.

Samad Samana: In Baroque and Scott, if you're listening, I'd like to congratulate you both in Baroque and Graff on navigating the transition in Scott report to working with you when you're officially on board. Just take care everybody. Thank you. Appreciate that someone. Thank you.

Speaker Change: Accretion.

There were the largest on premise customer in the region of one of other our competitors.

Involving seal more of our solutions along with an overall increase in large deals.

Speaker Change: This is a great example of the power and scale of six one as a platform.

Speaker Change: These typically large portfolio deals tend to be very sticky driving long term value for months as enterprises continue to expand their use of thorough portfolio overtime.

Speaker Change: By consolidating multiple legacy on premise providers.

Speaker Change: For six one to manage their 1 billion online transactions and 55 million calls annually.

Meta Marshall: Our next question comes from the line of Mehta Marshall with Morgan Stanley. Please thank. Brock, you guys have always been very good about kind of starting with a core win and then kind of expanding customers over time through various parts of the platform. Just wanted to get a sense of are you seeing kind of bigger deals up front, smaller deals up front, has any of the motion of selling kind of additional parts of the portfolio or the timelines of that changed. And then just maybe, as a second question, I know as far just kind of talked about it in the second half, but just for Beth, any change.

Meta Marshall: Our next question comes from the line of Mehta Marshall with Morgan Stanley. Please thanks. Brock, you guys have always been very good about kind of starting with a core win and then kind of expanding customers over time through various parts of the platform. Just wanted to get a sense of are you seeing kind of bigger deals up front, smaller deals up front, has any of the motion of selling kind of additional parts of the portfolio or the timelines of that changed. And then just maybe as a second question, I know as far just kind of talked about it in the second half, but just for Beth, any change, and seasonality of the customer. Thanks.

Speaker Change: In Q2, we witnessed a surge in the booking of portfolio deals increasing 71% compared to the same quarter last year.

Speaker Change: <unk> stood out as the only platform capable of meeting the extent is the extensive CX operational requirements and work scope of such a large organization, while also providing the capabilities to meet all future digital and AI needs.

Speaker Change: Additionally, bookings those portfolio deals from new customers.

Speaker Change: <unk>, 150% convincingly.

Speaker Change: Convincingly demonstrating the demand for six one so we placed both incumbent on premise and cloud providers that are unable to deliver the two two platform at scale.

The power of the platform also secured a seven digit deal with one of the world's largest cruise lines.

Speaker Change: Replace several longstanding incumbents and outperformed other cloud providers delivering the comprehensive and seamless capabilities of a single platform like six one.

Speaker Change: Also deals are getting larger we signed five H D. D. C V deals in Q2.

Meta Marshall: and seasonality of the customer. Thanks.

Speaker Change: These deals will powered dual durable value for nice over a long period due to the platform stickiness and its ability to drive long term options and cross sells owed to the breadth and depth of the <unk> portfolio.

Speaker Change: Six one was the only platform to help them eliminate the need for multiple point solutions, while also future proofing their ability to add digital and self service capabilities down the road.

Barak Eilam: So I'll take the first question, then Beth will take the second one. So the answer is yes; we are seeing bigger deals, as I mentioned in my open remarks. We are winning. Win rate is increasing. We believe we're taking market from the competition. You see it in our growth. We are growing much faster than the competition. And on a much larger scale. And it's a combination of more deals that we are winning, but also, as you hint at, the fact that we have such a wide portfolio and customers either adopt the wider portfolio in day one or actually expand down the road.

Barak Eilam: So I'll take the first question then Beth will take the second one. So the answer is yes, we are seeing bigger deals as I mentioned in my open remarks. We are winning. Win rate is increasing. We believe we're taking market from the competition. You see it in our growth. We are growing much faster than the competition. And on a much larger scale. And it's a combination of more deals that we are winning, but also as you hint at the fact that we have such a wide portfolio and customer either adopt the wider portfolio in day one or actually expand down the road. And AI plays a significant role in this strategy.

Speaker Change: The power of the platform also secured a 7-digit deal with one of the world's largest cruise lines.

Speaker Change: We replaced several long-standing incumbents and outperformed other cloud providers delivering the comprehensive and seamless capabilities of a single platform like CX-1.

Speaker Change: We signed an eight digit deal with a very large organization in the APAC region.

Speaker Change: CX-1 was the only platform to help them eliminate the need for multiple point solutions while also future-proving their ability to add digital and self-service capabilities down the road.

Speaker Change: We signed a seven digit deal with a leading healthcare company, replacing the on premise incumbent solutions.

Speaker Change: We signed a 7-digit deal with a leading healthcare company replacing their own premise incumbent solutions. The goal is to consolidate onto a single cloud platform to provide a modern experience for the partners, customers, and agents. We secured the deal with CX-1 thanks to the flexibility of the platform, which allows for gradual adoption of advanced functionalities, including advanced AI and the foundation for the digital transformation.

Speaker Change: These consistent quarter-astor-quarter-megadiles signing highlights our ongoing success in the large enterprise market where our achievements are unparalleled.

Speaker Change: The largest on premise customer in the region one of the other competitors.

Speaker Change: Our momentum is further accelerated by our expanding global ecosystem as partners are drawn to our success and by the adoption of our recent innovations, including our disruptive use.

Speaker Change: The goal is to consolidate onto a single cloud platform to provide a modern experience for their partners customers and agents.

Speaker Change: We have a new solution, one CX.

Speaker Change: This is a great example of the power and scale of six one as a platform.

Speaker Change: By consolidating multiple legacy on premise providers the options for six one to manage their 1 billion online transactions and 55 million calls annually.

Speaker Change: We secured the dilutes the X one thanks to the flexibility of the platform, which allows for gradual adoption of advanced functionality, including advanced AI is the foundation for their digital transformation.

Barak Eilam: And AI plays a significant role in this strategy.

Speaker Change: Additionally, we recently launched Empower, which brings together the entirety of CX-1 with our AI solutions to create the world's first and only CX-aware AI platform. This platform, harnesses continuous experience memory and CX awareness, a feat possible only with a comprehensive platform like CX-1.

Speaker Change: Six one stood out.

Speaker Change: Only platform capable of meeting the extent of the extensive CX operational requirements and walks knows of such a large organization, while also providing capabilities to meet all future digital and AI needs.

Speaker Change: In summary, our market leadership continues to widen, as demonstrated by our consistently strong quarterly results.

Beth Gaspich: We see that we are winning those cloud transformation, not just because customers want to move to the cloud or not just because the desire to integrate digital into that, but AI now plays a very significant part in our win rate and are taking the market share from the competition and best will have the second question. Yeah, thank you, Barack. On the seasonality front, what we expected to be quite similar to what we've seen in years past, generally Q4 typically has a bit more positive seasonality impact on what we would see in the third quarter.

Speaker Change: These consistent quarter after quarter Mega deals signing highlights our ongoing success in the large enterprise market with our achievements are unparalleled.

Speaker Change: Our momentum is further accelerated by our expanding global ecosystem partners are drawn to our success and.

Speaker Change: The power of the platform also secured a seven digit deal with one of the world's largest cruise lines.

Beth Gaspich: Yeah, thank you, Barack. On the seasonality front, what we expected to be quite similar to what we've seen in years past. Generally, Q4 typically has a bit more positive seasonality impact on what we would see in the third quarter. And that's typical where you typically see the sequential cloud growth is also picking up towards the end of the year.

Speaker Change: We replaced several longstanding incumbents and outperform other cloud providers delivering the comprehensive and seamless capabilities all the single platform like six one.

Speaker Change: And by the adoption of a recent innovations, including our disruptive Ucas solution one six.

Speaker Change: Additionally, we recently launched empower which brings together the entirety of six one with our AI solutions to create the world's first and only <unk> AI platform.

Beth Gaspich: And that's typical where you typically see the sequential cloud growth is also picking up towards the end of the year. Of course, you know, we are operating across multiple verticals, but we do have verticals that tend to bring that seasonality. It includes insurance and health care, retail. So we expect here to see that again in the course of this year. And I mentioned that the kind of the consistent quarterly distribution is on trend with what we've seen in years past.

Beth Gaspich: Of course, you know, we are operating across multiple verticals, but we do have verticals that tend to bring that seasonality. It includes insurance and health care, retail. So we expect here to see that again in the course of this year. And I mentioned that the kind of the consistent quarterly distribution is on trend with what we've seen in years past.

Barak Eilam: Great, thank you. Thank you.

Beth Gaspich: Great, thank you. Thank you.

Speaker Change: This platform harnesses continuous experienced memory and CX awareness.

Speaker Change: We signed a seven digit deal with a leading healthcare company, replacing the on premise incumbent solutions.

Speaker Change: Fifth possible only with a comprehensive platform like six one.

Speaker Change: In summary, our market leadership continues to widen as demonstrated by our consistently strong quarterly results.

Speaker Change: The goal is to consolidate onto a single cloud platform to provide a modern experience for their partners customers and agents.

Beth Gaspich: Great, thank you. Thank you.

Speaker Change: A record six on bookings in Q2 highlight our exceptional cloud revenue growth, which far outpaces our competitors, while our profitability is at the upper echelon of the enterprise software industry.

Speaker Change: We secure the deal with the X one thanks to the flexibility of the platform, which allows for gradual adoption of advanced functionality, including advanced the eye is the foundation for their digital transformation.

Tyler Radke: Our next question comes from the line of Tyler Radke with City. Please proceed with your question. Yeah, thank you for taking the question, and congrats on the CEO hire. It sounded like it was a really strong quarter from an enterprise bookings perspective, but I was wondering if you could talk about the non-enterprise side of the business. It did look like the sequential cloud growth was some of the smallest you've seen just in terms of a dollar percentage basis for the second quarter in a few years. Was SMB a greater headwind than you thought and maybe offsetting some of that enterprise strength?

Tyler Radke: Our next question comes from the line of Tyler Radke with city. Please proceed with your question. Yeah, thank you for taking the question and congrats on the CEO higher. It sounded like it was a really strong quarter from an enterprise bookings perspective, but I was wondering if you could talk about the non enterprise side of the business. It did look like the sequential cloud growth was some of the smallest you've seen just in terms of a dollar percentage basis for the second quarter in a few years was SMB, a greater headwind than you thought and maybe offsetting some of that enterprise strength.

Speaker Change: With the most comprehensive six platform in six one rapid innovation and AI that is experiencing significant enterprise adoption and revenue growth.

Speaker Change: These consistent quarter after quarter Mega deals signing highlights our ongoing success in the large enterprise market we are in.

Speaker Change: Our record CX-1 bookings in Q2 highlight our exceptional cloud revenue goals, which far outpaces our competitors, while our profitability is at the upper echelon of the enterprise software industry.

Speaker Change: With the most comprehensive CX platform in CX-1, rapid innovation in AI that is experiencing significant enterprise adoption and revenue goals and a flexibility afforded by our rock solid financial position where positions for continued market leadership expansion and long-term growth.

And the flexibility afforded by our rock solid financial position, we are positioned for continued market leadership expansion and long term growth.

Speaker Change: She has meant on Poland.

Speaker Change: Our momentum is further accelerated by our expanding global ecosystem.

Speaker Change: Partners are drawn to our success.

Speaker Change: I will now turn the call over to Beth.

Speaker Change: And by the adoption of a recent innovations, including all disruptive Ucas solution one CX.

Beth: Thank you Barak Q2 highlights the healthy fundamentals demonstrate entire financial results stemming from the impressive execution, we can continue to deliver each and every quarter.

Beth Gaspich: And then, if you could just help us understand, are you still targeting 18% organic cloud growth for the year? Thank you. Yeah, thank you for the question, Tyler. So I'll start off with the ladder question first, which is yes. So, you know, we still continue to expect to see the 18% growth in the cloud, excluding the live oxygen revenue contribution from the cloud this year. In terms of kind of the sequential change in cloud between quarters, we did see some lightness in the second quarter. And I would say it was less attributed to the SMB, where we've seen really stabilization.

Speaker Change: I will now turn the call over to Beth.

Tyler Radke: And then if you could just help us understand are you still targeting 18% organic cloud growth for the year? Thank you. Yeah, thank you for the question, Tyler. So I'll start off with the ladder question first, which is yes. So, you know, we still continue to expect to see the 18% growth in the cloud, excluding the live oxygen revenue contribution from the cloud this year. In terms of kind of the sequential change in cloud between quarters, we did see some some lightness in the second quarter.

Speaker Change: Additionally, we recently launched empower which brings together the entirety of six one we far AI solutions to create the world's first and only <unk> platform.

Brock: Thank you, Brock.

Speaker Change: Q2 highlights the Healthy Fundamentals demonstrated by our financial results stemming from the impressive execution we continue to deliver each and every quarter. We surpassed our expectations across our key financial metrics, including strong total revenue growth, excellent profitability, robust cash flow generation, and the acceleration of our share buyback program. In fact, this quarter saw the largest share repurchases that we have ever executed totaling $146 million evidencing the confidence we have as a continued leader in all the markets where we operate.

Beth: We surpassed our expectations across our key financial metrics, including strong total revenue growth excellent profitability robust cash flow generation and the acceleration of our share buyback program. In fact, this quarter saw the largest share repurchases that we have ever executed totaling.

Speaker Change: Total revenue was a record $664 million of 14% a year over year outperforming the midpoint of our guidance.

Speaker Change: Non-gap EPS of $2.64 exceeded the high end of our guidance range.

Speaker Change: This platform harnessing this continuous experienced memory and CX awareness.

Speaker Change: Fifth possible only with a comprehensive platform like six one.

Speaker Change: We have always been laser focused on ongoing expansion of our profitability as a general operating guideline at Nice. This quarter was yet another testament to the success with record EPS as well as our outstanding operating cash, where we have generated nearly three quarters of a billion dollars over the last 12 months. With the ongoing expansion of cloud across both our business segments, our recurring revenue further increased to a record 89% of total revenue in the first quarter, compared to 86% last year.

Beth: $146 million evidence of the confidence we have as a continued leader in all the markets where we operate.

Speaker Change: In summary, our market leadership continues to widen as demonstrated by our consistently strong quarterly results.

Speaker Change: Recurring revenue is comprised primarily of a combination of cloud revenue and maintenance revenue, which is a component in our services revenue. Cloud revenue, which now represents a record 73% of our total revenue compared to 66% last year, increased 26% year over year to a record $482 million.

Tyler Radke: And I would say it was less attributed to the SMB where we've seen really stabilization. And it really is attributed more to what we're seeing with wins and the large enterprise. You know, we've talked about the significant number of large deals that we continue to sign and investor they actually share that more than half of our cloud revenue is now coming from organizations that have ARR of 1 million or more. And likewise, that's what we're seeing from the new logos and new bookings generally that we're signing this year as well.

Beth: Total revenue was a record $664 million up 14% year over year outperforming the midpoint of our guidance.

Beth Gaspich: And it really is attributed more to what we're seeing with wins and the large enterprise. You know, we've talked about the significant number of large deals that we continue to sign, and investor they actually share that more than half of our cloud revenue is now coming from organizations that have ARR of 1 million or more. And likewise, that's what we're seeing from the new logos and new bookings generally that we're signing this year as well. So, as a result of that, there is more of an elongated ramp into the revenue. These organizations tend to be multinational, highly complex.

Speaker Change: This growth is driven predominantly by CX1, where we see the number of users on our platforms continue to expand as we further penetrate the large enterprise market and continue to upsell and crosssell our leading digital and AI solutions into our existing customer base.

Speaker Change: Services revenue was $148 million, represented 22% of total revenue, and decreased 7% year over year, mainly due to our transition to the cloud, where we are adding less new maintenance revenue associated with our premise-based solutions. Accordingly, product revenue from on-premise sales, which represented 5% of total revenue in the quarter, decreased 13% year over year as expected, primarily coming from the financial crime and compliance segment.

Beth: non-GAAP EPS of $2 64 exceeded the high end of our guidance range.

Beth: We have always been laser focused on ongoing expansion of our profitability as a general operating guideline at nice.

Speaker Change: With the most comprehensive six platform in six one rapid innovation you need to do that.

Speaker Change: <unk> significant enterprise adoption and revenue growth.

Speaker Change: From a geographic breakdown, the Americans region, which represented 85% of total revenue in Q2, grew 16% year over year. The American region has continued to excel as customers' transition from multiple legacy third-party solutions onto our CX1 offering.

Beth: This quarter was yet another testament to the success with record EPS as well as our outstanding operating cash where we have generated nearly three quarters of $1 billion over the last 12 months.

Speaker Change: And the flexibility afforded by our rock solid financial position, we are positioned for continued market leadership expansion and long term goal.

Tyler Radke: So as a result of that, there is more of an elongated ramp into the revenue. These organizations tend to be multinational, highly complex. So we know that they generally are buying portfolio deals for us. That means they're buying three or more solutions off the platform. So it takes some time for the delivery to ramp to the full recurring revenue base that we'll have. So we saw that play out a little bit in Q2.

Speaker Change: I will now turn the call over to Beth.

Beth: With the ongoing expansion of cloud across both our business segments are recurring revenue further increased to a record 89% of total revenue in the first quarter compared to 86% last year.

Beth Gaspich: Thank you Barak here two highlights the healthy fundamentals demonstrate entire financial results stemming from the impressive execution. We can continue to deliver each and every quarter, we surpassed our expectations across our key financial metrics, including strong total revenue growth.

Beth Gaspich: So we know that they generally are buying portfolio deals for us. That means they're buying three or more solutions off the platform. So it takes some time for the delivery to ramp to the full recurring revenue base that we'll have. So we saw that play out a little bit in Q2. And of course, we're keeping that in consideration as we look at the full year as well. That being said, I think again, we feel confident based on all of the indications of the strength of our business to deliver on the 18% that we've previously given a guidance for on the cloud.

Beth: Recurring revenue is comprised primarily of a combination of cloud revenue and maintenance revenue, which is a component in our services revenue.

Tyler Radke: And of course, we're keeping that in consideration as we look at the full year as well. That being said, I think again, we feel confident based on all of the indications of the strength of our business to deliver on the 18% that we've previously given a guidance for on the cloud. May be just to add one more thing on the SMB, it's less for the immediate revenue, this quarter, but most about the potential down the road.

Beth Gaspich: With excellent profitability robust cash flow generation and the acceleration of our share buyback program. In fact, this quarter saw the largest share repurchases that we have ever executed totaling $146 million evidence of the confidence we have as a continued leader in all the mark.

Beth: Cloud revenue, which now represents a record 63% of our total revenue compared to 66% last year increased 26% year over year to a record $482 million.

Beth: This growth is driven predominantly by CX, one where we see the number of users on our platforms continue to expand as we further penetrate the large enterprise market and continue to upsell and cross sell our leading digital and AI solutions into our existing customer base.

Barak Eilam: May be just to add one more thing on the SMB, it's less for the immediate revenue, this quarter, but most about the potential down the road. We announced about a quarter and a half ago, the one CX, the $5 Eucas, which is very disruptive, it's fully functional, very rich offering the Eucas, fully integrated to CX, and we see that we are disrupting this market. And more and more deals than the SMB were winning with this offering, so it's still early days, but from the many, many deals you already won, and the pipe can see there is great potential for them.

Speaker Change: It's where we operate.

Speaker Change: Total revenue was a record $664 million up 14% year over year outperforming the midpoint of our guidance non-GAAP EPS of $2.64 exceeded the high end of our guidance range. We have always been laser focused on all.

Speaker Change: The industry's only seamlessly integrated comprehensive CX platform.

Tyler Radke: We announced about a quarter and a half ago, the one CX, the $5 Eucas, which is very disruptive, it's fully functional, very rich offering the Eucas, fully integrated to CX, and we see that we are disrupting this market. And more and more deals than the SMB were winning with this offering, so it's still early days, but from the many, many deals you already won, and the the pipe can see there is great potential for them.

Beth: Services revenue was $148 million represented 22% of total revenue and decreased 7% year over year, mainly due to our transition to the cloud, where we're adding less new maintenance revenue associated with our premise based solutions accordingly product revenue.

Speaker Change: Going expansion of our profitability as a general operating guideline at nice.

Speaker Change: The AMIA Region, which represents 10% of our total revenue, increased 16% euro-rear.

This quarter was yet another testament to the success with record EPS as well as our outstanding operating cash where we have generated nearly three quarters of $1 billion over the last 12 months.

Beth: From on premise sales, which represented 5% of total revenue in the quarter decreased 13% year over year as expected primarily coming from the financial crime and compliance segment.

Beth Gaspich: Great, thank you for all that color, and maybe follow up for your best, just as you think about the timing and the ramp of those large enterprise deals that you referenced. How far away are we from cloud revenue growth, re-accelerating? I think you would have to see growth step up to hit 18% for the full year, so is that going to be more of a Q4 event? Just help us understand kind of the timing of the large enterprise ramps in terms of re-accelerating the total cloud growth. Yeah, sure, you know, it's kind of alluded to.

Tyler Radke: Great, thank you for all that color, and maybe follow up for you best, just as you think about the timing and the ramp of those large enterprise deals that you referenced. How far away are we from cloud revenue growth, re-accelerating? I think you would have to see growth step up to hit 18% for the full year, so is that going to be more of a Q4 event, just help us understand kind of the timing of the large enterprise ramps in terms of re-accelerating the total cloud growth?

Speaker Change: With the ongoing expansion of cloud across both our business segments. Our recurring revenues further increased to a record 89% of total revenue in the first quarter compared to 86% last year.

Beth: From a geographic breakdown, the Americas region, which represented 85% of total revenue in Q2 grew 16% year over year.

Speaker Change: Recurring revenue is comprised primarily of the combination of cloud revenue and maintenance revenue, which is a component in our services revenue.

Beth: The American region has continued to excel as customers transition from multiple legacy third party solutions onto our CX, one offering the industry's only seamlessly integrated comprehensive CX platform.

Speaker Change: Cloud revenue, which now represents a record 73% of our total revenue compared to 66% last year increased 26% year over year to a record $482 million.

Tyler Radke: Yeah, sure, you know, it's kind of alluded to. I think the distribution of our revenue looks very similar to what we have seen in years past, and that does mean that we'll see, you know, the greatest kind of sequential input expected in the fourth quarter that's coming from the seasonality. So we'll see it again picking up in the back half generally, but more so in the fourth quarter, which is generally on-trend with what we've seen and experienced in years past as well. Thank you.

Beth: The EMEA region, which represented 10% of our total revenue increased 16% year over year.

Beth Gaspich: I think the distribution of our revenue looks very similar to what we have seen in years past, and that does mean that we'll see, you know, the greatest kind of sequential input expected in the fourth quarter that's coming from the seasonality. So we'll see it again picking up in the back half generally, but more so in the fourth quarter, which is generally on-trend with what we've seen and experienced in years past as well.

Speaker Change: This growth is driven predominantly by CX, one where we see the number of users on our platforms continue to expand as we further penetrate the large enterprise market and continue to upsell and cross sell our leading digital and AI solutions into our existing customer base.

Beth: The APAC region, which represented 5% of our total revenue decreased 9% year over year as a result of the positive ongoing transition to the cloud that is accompanied by a reduction in upfront premise based product revenue.

Beth: We continue to see great adoption across the globe of our cloud platforms and we are extremely excited about some of our recent wins, including our largest ever international CX. One deal signed in Q2, and the Asia Pacific region, with an estimated PCV of over $100 million.

Speaker Change: Services revenue was $148 million represented 22% of total revenue and decreased 7% year over year, mainly due to our transition to the cloud, where we're adding less new maintenance revenue associated with our premise space solutions Accordingly product revenue.

Tyler Radke: Thank you.

James Fish: Our next question comes from the line of James Fish with my persona. Please proceed with your question. Hey guys, I actually want to turn over to the FCC side of the business. You know, every three years we see a cyclical uplift. It was kind of a stronger part of the quarter, really. Why wouldn't this quarter be kind of that start of a trend of the cyclical uplift, given what happened if I look back three years ago? And if so, how should we expect the balance between that perpetual product adoption versus term adoption versus the migrations to the cloud as kind of Tyler's point, no cloud revenue and aggregate came a little bit weaker than we were all expecting in terms of net new.

Tyler Radke: Our next question comes from the line of James Fish with my persona. Please proceed with your question. Hey guys, I actually want to turn over to the FCC side of the business. You know, every three years we see a cyclical uplift. It was kind of a stronger part of the quarter, really. Why wouldn't this quarter be kind of that start of a trend of the cyclical uplift, given what happened if I look back three years ago?

Beth: This large win is another indication of the positive momentum and market share expansion, we see globally. Thanks to the depth and breadth of our platform together with our broad network of channel partners. We are only just getting started with a huge runway still ahead of us and highly underpenetrated large enterprise and.

Speaker Change: From on premise sales, which represented 5% of total revenue in the quarter decreased 13% year over year as expected primarily coming from the financial crime and compliance segment.

James Fish: And if so, how should we expect the balance between that perpetual product adoption versus term adoption versus the migrations to the cloud as kind of Tyler's point, no cloud revenue and aggregate came a little bit weaker than we were all expecting in terms of net new. And so we're just wondering if you're seeing a little bit more of a state in product adoption on the FCC side as opposed to that migration of a cloud.

Tyler Radke: And if so, how should we expect the balance between that perpetual product adoption versus term adoption versus the migrations to the cloud as kind of Tyler's point, no cloud revenue and aggregate came a little bit weaker than we were all expecting in terms of net new. And so we're just wondering if you're seeing a little bit more of a state in product adoption on the FCC side as opposed to that migration of a cloud.

Speaker Change: From a geographic breakdown, the Americas region, which represented 85% of total revenue in Q2 grew 16% year over year. The American region has continued to excel as customers transitioned from multiple legacy third party solutions onto our CX one offering.

Beth: All segments of our markets.

Beth: We delivered fantastic results across both our business segments customer engagement revenues, which represented 84% of our total revenue in Q2 were a record $556 million.

James Fish: And so we're just wondering if you're seeing a little bit more of a state in product adoption on the FCC side as opposed to that migration of a cloud.

Beth: 15% year over year increase the growth in customer engagement is driven predominantly by the success of <unk>, TX one both with new and existing customers of all sizes and our unparalleled ability to deliver CX at scale to the enterprise market to meet their advanced digital and AI needs for a whole.

Speaker Change: Industries, one seamlessly integrated comprehensive CX platform.

Speaker Change: The EMEA region, which represented 10% of our total revenue increased 16% year over year.

Barak Eilam: Well, thanks for the thanks for the question. You know, you're right to feel observation that historically this business had some element of seasonality or cyclical element to eat. Obviously, somewhat aligned with upcoming regulations and things like that, haven't said that it's going for a very interesting transformation and solid one. It is shifting to the cloud, and the team is doing it in a phenomenal and great way. Best mentioned that in one of the reasons why we see some fluctuation in product revenues is predominantly coming from that reason. So we'll continue to see some of those fluctuations on the product revenues, but by and large, we think that if you look on the next few years, it will be a great contributor to our cloud revenue, but it's a process we're managing.

Barak Eilam: Well, thanks for the thanks for the question. You know, you're right to feel observation that historically this business had some element of seasonality or cyclical element to eat. Obviously, somewhat aligned with upcoming regulations and things like that haven't said that it's going for a very interesting transformation and solid one. It is shifting to the cloud and the team is doing it in a phenomenal and great way best mentioned that in one of the reason why we see some fluctuation in product revenues is predominantly coming from that reason.

Speaker Change: The APAC region, which represented 5% of total revenue decreased 9% year over year as a result of the pause this ongoing transition to the cloud that is accompanied by a reduction in upfront premise based product revenue.

Beth: <unk> CX experience.

Beth: Revenues from financial crime, and compliance, which represented 16% of our total revenue in Q2 and totaled a record $109 million increased 9% year over year, driven by the increase in cloud revenue move.

Speaker Change: We continue to see great adoption across the globe of our cloud platforms and we are extremely excited about some of our recent wins, including our largest ever international CX. One deal signed in Q2, and the Asia Pacific region with an estimated T. C V of over $100 million. This law.

Beth: Moving to profitability, our cloud gross margin totaled 72% in Q2 similar to last year as we continue to invest in global expansion of our cloud platforms that is driving our strong international cloud revenue growth, we remain steadfast in our expectations to reach our 75% cloud grew.

Speaker Change: The A-PAC Region, which represents 5% of total revenue, decreased 9% euro-rear as a result of the positive ongoing transition to the cloud that is accompanied by reduction in upfront, premium-based product revenue.

Barak Eilam: So we'll continue to see some of those fluctuation on the product revenues, but by and large, we think that if you look on the next few years, it will be a great contributor to our cloud revenue, but it's a process we're managing. And you know, one of the important thing about this business, the loyalty and the stickiness of customers over there. This is the area of the business of customers still with us for, you know, decade or two decades. So that's what we really like about this business and obviously it's profitability.

Speaker Change: Large win is another indication of the positive momentum and market share expansion, we see globally. Thanks to the depth and breadth of our platform together with our broad network of channel partners. We are only just getting started with a huge runway still ahead of us and highly underpenetrated in large enterprise and international segments.

Beth: Margin target in the medium term.

Beth: In Q2 operating income increased 19% year over year to an all time high of $202 million and our healthy operating margin increased 120 basis points to 34% compared to 29, 2% last year. This is the fourth consecutive quarter of <unk>.

Barak Eilam: And you know, one of the important things about this business, the loyalty and the stickiness of customers over there. This is the area of the business of customers still with us for, you know, a decade or two decades. So that's what we really like about this business, and obviously it's profitability.

Speaker Change: We continue to see great adoption across the globe of our cloud platforms, and we are extremely excited about some of our recent wins, including our largest ever international CX-1 deal, finding Q2 in the Asia-Pacific Region with an estimated TCB of over $100 million. This large win is another indication of the positive momentum and market share expansion we see globally, thanks to the depth and breadth of our platform, together with our broad network of channel partners.

Speaker Change: Many of our markets.

Speaker Change: We are only just getting started with a huge runway still ahead of us and highly under-penetrated large enterprise and international segments of our markets.

We delivered fantastic results across both our business segments customer engagement revenues, which represented 84% of our total revenue in Q2 were a record $556 million, a 15% year over year increase.

Speaker Change: We delivered fantastic results across both our business segments, customer engagement revenues, which represented 84% of our total revenue in Q2, where a record $556 million, a 15% euro-rear increase.

Beth: 30%, plus operating margins and we reiterate our expectation of an operating margin between $30.

Barak Eilam: Yeah, and just as a follow-up, Barak and customer engagement side, what are you hearing or seeing from customers with the desire to migrate within the base or even that new kind of customers, given conversations around return on investments in this space can be, you know, year or more? Are you seeing any sort of pause just as customers kind of hold their budget a little bit tighter, or are you starting to see does migrating to cloud really pick up and we're now at an inflection point. I don't see customers debating or questioning whether they need to move to the clouds.

Speaker Change: The growth in customer engagement is driven prominently by success of CX-1, both with new and existing customers of all sizes, and our unparalleled ability to deliver CX at scale to the enterprise market to meet their advanced digital and AMAs for a holistic CX experience.

Barak Eilam: Yeah, and just as a follow up Barak and customer engagement side, what are you hearing or seeing from customers with the desire to migrate within the base or even that new kind of customers given conversations around return on investments in this space can be, you know, year or more? Are you seeing any sort of pause just as customers kind of hold their budget a little bit tighter or are you starting to see does migrating to cloud really pick up and we're now at an inflection point.

Speaker Change: Growth in customer engagement is driven predominantly by the success of CX, one both with new and existing customers of all sizes and our unparalleled ability to deliver CX at scale to the enterprise market to meet their advanced digital and AI needs for a holistic CX experience.

Beth: Five $2, 31% for the full year of 2024 as I shared at our recent Investor day.

Speaker Change: Earnings per share for the second quarter far exceeded our expectations coming in above our guidance range at $2 64.

Speaker Change: A 24% increase compared to Q2 last year.

Speaker Change: Revenues from financial crime, and compliance, which represented 16% of our total revenue in Q2 and totaled a record $109 million increased 9% year over year, driven by the increase in cloud revenue move.

Speaker Change: Cash flow from operations in Q2 was $170 million, an increase of 160% year over year, our industry, leading operating cash flow has yielded an exceptional 28, 5% operating cash flow margin over the last 12 months.

Barak Eilam: I don't see customer debating or questioning whether they need to move to the clouds. That's not that that's that's no longer happening that belongs to several years ago. So today it's all about yes, they want to move to the cloud is you go to the larger enterprises that shift is not a one day thing. It takes time. It's pretty complicated. They need to select a vendor, a partner that they can actually manage this transformation.

Speaker Change: Moving to profitability, our cloud gross margin totaled 72% in Q2 similar to last year as we continue to invest in global expansion of our cloud platforms that is driving our strong international cloud revenue growth, we remain steadfast in our expectations to reach our 75% cloud.

Barak Eilam: That's not that, that's that's no longer happening; that belongs to several years ago. So today it's all about yes, they want to move to the cloud. Is you go to the larger enterprises, that shift is not a one day thing. It takes time. It's pretty complicated. They need to select a vendor, a partner that they can actually manage this transformation. Eventually, see X is a highly complicated environment, a lot of integration, a lot of legacy processes. And when you go to the large enterprises, when we lend them, we like very much to lend them because, as Beth mentioned before, when those enterprises sign up with us, they stay for many, many years, sometimes decades, and they expand with us.

Speaker Change: The strength of our first half cash flow generation, we are increasing our expectation of free cash flow generation for the store all year 2024 to be in excess of $700 million, implying 47% year over year growth.

Speaker Change: Margin target in the medium term.

Speaker Change: In Q2 operating income increased 19% year over year to an all time high of $202 million and our healthy operating margin increased 120 basis points to 34% compared to 29, 2% last year. This is the fourth consecutive quarter of <unk>.

Speaker Change: In Q2, we repurchased shares totaling $146 million.

Barak Eilam: Eventually see X is a highly complicated environment, a lot of integration, a lot of legacy processes. And when you go to the large enterprises when we lend them, we like very much to lend them because as Beth mentioned before, when those enterprises sign up with us, they stay for for many, many years, sometimes decades and they expand with us. The ramp takes time takes time, not on us, but most like most in most cases takes time on the enterprise side.

We're executing well on our plan to accelerate and complete our current 300 million share buyback program by the end of Q3. After completing the current plan. We will begin implementing are even larger share buyback program of $500 million.

Speaker Change: 30% plus operating margins and we reiterate our expectation of an operating margin between 30 point.

Speaker Change: The acceleration and expansion of the buyback plans are a demonstration of the continued confidence in the growth of our business and our solid financial profile.

Barak Eilam: The ramp takes time, takes time, not on us, but most like most in most cases takes time on the enterprise side. But when it happens, it happens for the long run. So we don't see a delay in desire to move to the cloud. It's not delay on how fast they can style the project and ramp up the deployment. And the second reason why there is desire to do that, they understand they need to move to the cloud in order to really benefit from AI. And as they choose the AI, they choose the right platform. If they choose the right platform, they want to have the right cloud provider, so it's all tied together.

5% to 31% for the full year of 2024 as I shared at our recent Investor day.

Barak Eilam: But when it happens, it happens for the long run. So we don't see a delay in desire to move to the cloud. It's not delay on how fast they can style the project and ramp up the deployment. And the second reason why there is desire to do that, they understand they need to move to the cloud in order to really benefit from AI. And as they choose the AI, they choose the right platform. If they choose the right platform, they want to have the right cloud provider so it's all tied together. And I think that I will increase in green rate and marketer expansion sticks to that. Thank you.

Speaker Change: Total cash and investments at the end of June totaled $1 billion and $504 million, our debt stands at $438 million, resulting in net cash and investments exceed $1 billion and $446 million.

Barak Eilam: Thank you.

Speaker Change: Earnings per share for the second quarter far exceeded our expectations coming in above our guidance range at $2.64, a 24% increase compared to Q2 last year.

Speaker Change: Cash flow from operations in Q2 was $117 million, an increase of 160% year over year.

Speaker Change: In conclusion, we consistently demonstrate clear industry leadership through our best in class cloud platforms, the comprehensive breadth and depth of our solutions portfolio and our robust financial profile.

Speaker Change: Our industry, leading operating cash flow has yielded an exceptional 28, 5% operating cash flow margin over the last 12 months.

Barak Eilam: And I think that I will increase in green rate and marketer expansion sticks to that.

Speaker Change: Exceptional profitability scalability strong balance sheet and impressive cash generation.

Speaker Change: Now I'll close with our total revenue and non-GAAP EPS guidance for the third quarter and full year 2024.

Timothy Horan: Thank you. Our next question comes from the line of Tim Horin with Oppenheimer and Company. Please proceed with your question. Thanks, guys. Can you give us maybe a little bit more color in how the bookings look this quarter, maybe versus last year, or we, you know, 10% above, you know, 20% above. And sending for implementations that, you know, it is taking like 10, 20% longer to implement these large contracts or any type of color there.

Speaker Change: Revenues from financial crime and compliance, which represented 16% of our total revenue in Q2, and totaled a record $109 million increase 9% euro-rear, driven by the increase in cloud revenue.

Timothy Horan: Our next question comes from the line of Tim Horin with Oppenheimer and Company. Please proceed with your question. Thanks, guys. Can you give us maybe a little bit more color in how the bookings look this quarter, maybe versus last year, or we, you know, 10% above, you know, 20% above. And sending for implementations that, you know, it is taking like 10, 20% longer to implement these large contracts or any type of color there. And then lastly, well, and then I had to follow up things.

Speaker Change: For the third quarter of 2024, we expect total revenue to be in the range of $676 million to $686 million, representing 13% year over year growth at the midpoint. We expect the third quarter 2024 fully diluted earnings per share to be in a range of.

Speaker Change: In Q2, we repurchased shares totaling $146 million, we are executing well on our plan to accelerate and complete our current 300 million share buyback program by the end of Q3. After completing the current plan. We will begin implementing are even larger share buyback.

Speaker Change: $2 62.

Barak Eilam: And then lastly, well, and then I had to follow up things. So I started this first of all, as we've mentioned, Q2 booking, we're extremely strong and specifically CX1 booking work at, you know, all time high compared to every quarter that we've seen before in a significant way. I can also show you that this was not just one of phenomena as we stand here at the middle of Q3, and although Q2 was so strong, even the booking for the first six months, six weeks, I'm sorry. All the first months and a half of Q3 are also very strong across the board and also for CX1, so that's what we see right now in the bookings, and those bookings eventually will convert into revenues either later this year or most likely next year.

Speaker Change: $2 72, representing 18% year over year growth at the midpoint.

Speaker Change: A $500 million.

Speaker Change: Moving to profitability, our cloud growth margin totaled 70.2% in Q2, similar to last year, as we continue to invest in global expansion of our cloud platforms that is driving our strong international cloud revenue growth.

Barak Eilam: So I started this first of all, as we've mentioned, Q2 booking, we're extremely strong and specifically CX1 booking work at, you know, all time high compared to every quarter that we've seen before in a significant way. I can also show you that this was not just one of phenomena as we stand here at the middle of Q3 and although Q2 was so strong, even the booking for the first six months, six weeks, I'm sorry.

Speaker Change: The acceleration and expansion of the buyback plans are a demonstration of the continued confidence in the growth of our business and our solid financial profile.

Speaker Change: For the full year 2024, we are maintaining our previous revenue guidance and raising our EPS guidance.

Speaker Change: Reiterate our full year 2024, total revenue guidance, which is expected to be in the range of $2 billion and $715 million to $2 billion and $735 million, an increase of 15% at the midpoint.

Speaker Change: Total cash and investments at the end of June totaled 1 billion and $504 million, our debt stands at $458 million, resulting in net cash and investments exceed $1 billion and $446 million.

Speaker Change: We remain steadfast in our expectations to reach our 75% cloud growth margin target in the medium term. In Q2, operating income increased 19% euro-rear to an all-time high of $202 million, and our healthy operating margin increased 120 basis points to 30.4% compared to 29.2% last year. This is the fourth consecutive quarter of 30% plus operating margins, and we reiterate our expectation of an operating margin between 30.5 to 31% for the full year of 2024, as I shared at our recent investor day.

Speaker Change: We now expect full year 2024 fully diluted earnings per share to increase to a range of $10 60.

Barak Eilam: All the first months and a half of Q3 are also very strong across the board and also for CX1 so that's what we see right now in the bookings and those bookings eventually will convert into revenues either later this year or most likely next year. We respect to the conversion from booking to revenue, as we've mentioned before, sometime it takes longer, as we win those very large deals. They will guarantee revenue for the long run, but the ramp takes a bit longer than winning a smaller customer, but the beauty, as we said, the opportunity for cross sell and larger customer also tend to be much more sticky due to the notion of integration. And how embedded the platform is with larger customer.

Speaker Change: To $10 80.

Speaker Change: Which was an increase of 22% at the midpoint I will now turn the call over to the operator for questions.

Speaker Change: Exceptional profitability scalability strong balance sheet and impressive cash generation.

Thank you.

Speaker Change: Now I'll close with our total revenue and non-GAAP EPS guidance for the third quarter and full year 2024.

Barak Eilam: We respect to the conversion from booking to revenue, as we've mentioned before. Sometime it takes longer, as we win those very large deals. They will guarantee revenue for the long run, but the ramp takes a bit longer than winning a smaller customer. But the beauty, as we said, the opportunity for cross sell and larger customer also tend to be much more sticky due to the notion of integration. And how embedded the platform is with larger customers.

Speaker Change: At this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.

Speaker Change: For the third quarter of 'twenty 'twenty four we expect total revenue to be in the range of $676 million to $686 million, representing 13% year over year growth at the midpoint. We expect the third quarter 2024 fully diluted earnings per share to be in a range of.

Speaker Change: Formation tone will indicate your line is in the question queue.

You May press star two if you'd like to remove your question from the queue.

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Speaker Change: Our first question comes from the line of Samad Samana with Jefferies. Please proceed with your question.

Speaker Change: $2 62.

Samad Samana: Hi, good morning, and thanks for taking my questions you get to see the strong execution in.

Speaker Change: The $2.72, representing 18% year over year growth at the midpoint.

Barak Eilam: Thanks, maybe just on the AI. Can you talk about how rapidly the products are improving, how much innovation you're seeing, and what's changing in the payback period for the customers, you know, any kind of productivity improvements that the customers are experiencing to quality improvements would be great. Yes, thanks, thanks for that. I would say, you know, I've been in the tech sector for 25 years or more, and I've seen past technological waves all the way from proprietary houses, software, Internet, mobile, cloud, et cetera, and I haven't experienced in my career any technology that shift from ideation to production in adoption.

Speaker Change: In a tough environment so <unk>.

Speaker Change: For the full year 2024, we are maintaining our previous revenue guidance and raising our EPS guidance.

Samad Samana: Maybe first question just as I think about the second quarter Beth could you help us understand I know you are not specifically breaking out wide box, but just how should we think about the core business versus how wide box was performing versus your initial expectations for the year and is there anything worth calling out, especially in here now several months into the acquisition.

Speaker Change: We reiterate our full year 2024, total revenue guidance, which is expected to be in the range of $2 billion and $715 million to 2 billion and $735 million, an increase of 15% at the midpoint.

Barak Eilam: I would say, you know, I've been in the tech sector for 25 years or more, and I've seen past technological waves all the way from proprietary houses, software, Internet, mobile, cloud, et cetera, and I haven't experienced in my career any technology that shifts from ideation to production in adoption. So fast as AI, this is the cycle is so fast and I will separate between two things that I see right now, the first the early days of AI I talked about a year ago. We've seen very specific use cases converting for my ideation to adoption extremely fast or give you one example, we launched, if I'm not mistaken, it was October of last year, auto summary.

Speaker Change: Being with the company are you starting to see more traction in cross selling or are harvesting the value from revenue a revenue synergy perspective.

Speaker Change: We now expect full year 2020 for fully diluted earnings per share to increase to a range of $10 60 to $10 80, which represents an increase of 22% at the midpoint I will now turn the call over to the operator for questions.

Speaker Change: It falls off.

Beth: Thank you for the questions to Mod and what we're seeing from the live access performance says as expected I think we've been off to a great start this year as I may have mentioned at the last earnings call that they actually joined us at our sales kickoff. This year, so really right out of the gate we had.

Barak Eilam: So fast as AI, this is the cycle is so fast and I will separate between two things that I see right now, the first the early days of AI I talked about a year ago, we've seen very specific use cases converting for my ideation to adoption extremely fast or give you one example, we launched, if I'm not mistaken, it was October of last year, auto summary. Auto summary done by AI specialized in CX, it was launching October of last year, today we have more than 80 customers and growing that have adopted either purchase or adopted auto summary as we see the immediate value.

Speaker Change: Thank you.

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Beth: A great process integrating them into the company. They are performing as we expected and we're quite pleased with how things are going we continue to see an increasing pipeline building of cross selling and upselling opportunities that are happening and we are seeing already that we are cross selling into to each.

Speaker Change: You May press star two if you'd like to remove your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys are.

Samana: Our first question comes from the line of some odd Samana with Jefferies. Please proceed with your question.

Beth: Others are customer base, which was part of the underlying strategy. So very much aligned than expected with what we had really targeted as part of the strategy of the acquisition.

Barak Eilam: Auto summary done by AI specialized in CX, it was launching October of last year. Today we have more than 80 customers and growing that have adopted either purchase or adopted auto summary as we see the immediate value. So this is a very specific use case, great use case, great ROI, immediate ROI in that, but what I see right now, which I believe will be the trend moving forward, is a broader adoption of what I call functional AI for the purpose of customer service. This comes out of the early trials of customers trying to just take generic, generic and disappointment with that, and then of course they come to us and understand how the value, the relevant proprietary data, the integration to workflow, the ability to work scale, and the functional AI was deep domain expertise and over there, the speed of innovation and how much we are investing, by the way, is just by the ring.

Samad Samana: Hi, good morning, and thanks for taking my questions you get to see the strong execution.

Speaker Change: In a tough environment so.

Speaker Change: Great and then maybe just as I as I look to the guidance.

Samana: Maybe first question just as I think about the second quarter Beth could you help us understand I know you are not specifically breaking out wide box, but just how should we think about the core business versus how wide box is performing versus your initial expectations for the year and is there anything worth calling out, especially in here now several months into the acquisition.

Speaker Change: Implies.

Speaker Change: Acceleration as the year progresses, I know the comps get a little bit easier, but I think just based on what we're seeing maybe in other areas of software and some of your competitors. It would be great. If you could help us understand where youre getting comfort around our back half acceleration and how confident are you I know, there's still a lot of year left to go but partially.

Barak Eilam: So this is a very specific use case, great use case, great ROI, immediate ROI in that, but what I see right now, which I believe will be the trend moving forward is a broader adoption of what I call functional AI for the purpose of customer service. This comes out of the early trials of customers trying to just take generic, generic and disappointment with that, and then of course they come to us and understand how the value, the relevant proprietary data, the integration to workflow, the ability to work scale, and the functional AI was deep domain expertise and over there, the speed of innovation and how much we are investing, by the way, is just by the ring.

Speaker Change: Being with the company are you starting to see more traction in cross selling or are harvesting the value from revenue a revenue synergy perspective and alcohol.

Barak Eilam: Thank you.

Speaker Change: We think about that in the back half acceleration.

Speaker Change: Yeah, Yeah. Thank you for the question I mean, we're looking on the second half and.

Beth Gaspich: Thank you for the question some odd and what we're seeing from the live access performance says as expected I think we've been off to a great start this year as I may have mentioned at the last earnings call that they actually joined us at our sales kickoff. This year, so really right out of the gates are we had a you know a great.

Speaker Change: I think as we look at the quarterly distribution of our revenue and how we will see a further execution from that standpoint throughout the year it looks quite consistent with what we've seen.

Speaker Change: Past years and in terms of the confidence that comes from a combination of of course first from the area that Barack highlighted just a few minutes ago, which is we had record bookings of course end of CX one.

Beth Gaspich: Process integrating them into the company are they are performing as we expected and we're quite pleased with how things are going well, we continue to see an increasing pipeline building of cross selling and upselling opportunities are that are happening and we are seeing already that we are cross selling into our to each others trust them.

Barak Eilam: Thank you.

Patrick Walravens: Our next question comes from the line of Patrick Wall Ravens with Citizens JMP. Please proceed with your question. Oh, great. Thank you. And we congratulate you on the results this quarter. So Barack Scott seems like an amazing hire.

Patrick Walravens: Our next question comes from the line of Patrick Wall Ravens with Citizens JMP, please proceed with your question. Oh, great. Thank you.

Speaker Change: During Q2, so that was quite exciting and combined with that I think just the general backlog, we are seeing the stabilization generally and our customer base and healthy metrics across the board gives us the confidence that we're continuing to be excited about the continued execution of our business.

Speaker Change: Earnings for shares for the second quarter far exceeded our expectations, coming in above our guidance range at $2.64, a 24% increase compared to Q2 last year.

Barak Eilam: And we congratulate you on the results this quarter. So Barack Scott seems like an amazing hire. Could you walk us through how the search process unfolded and then what is it exactly about Scott that made him rise to the top for you, the board and the search committee? We're happy to do that. So, you know, as soon as I announce my desire to step down in mid-May, the board immediately hired an executive search skirm, a very good one, Spencer Stewart, and immediately started the search.

Beth Gaspich: Base, which was part of the underlying strategy, so very much aligned and expected with the what we had really targeted as part of the strategy of the acquisition.

Speaker Change: Cash flow from operations in Q2 was $170 million in increase of 160% euro-rear.

Barak Eilam: Could you walk us through how the search process unfolded and then what is it exactly about Scott that made him rise to the top for you, the board and the search committee? We're happy to do that. So, you know, as soon as I announce my desire to step down in mid-May, the board immediately hired an executive search firm, a very good one, Spencer Stuart, and immediately started the search. They have defined what are the critical criteria for the next leader of Nice, and they've done a very extensive and a very thorough search, interviewing and looking for multiple candidates.

Speaker Change: Our industry leading operating cash flow has yielded an exceptional 28.5% operating cash flow margin over the last 12 months.

Bracken: Great and Bracken, Scott you're listening I would like to congratulate you button and Brad Congrats on navigating the transition and Scott look forward to working with you. When you officially onboard Jeff took care of any thank you.

Speaker Change: Great and then maybe just as a as I am looking at the guidance it implies.

Speaker Change: Celebration as the year progresses, I know the comps get a little bit easier, but I think just based on what we're seeing maybe in other areas of software and some of your competitors that'd be great. If you could help us understand where you're getting comfort around our back half acceleration and how confident are you I know, there's still a lot of year left to go but how should.

Speaker Change: Due to the strength of our first half cash flow generation, we are increasing our expectation of free cash flow generation for the year of 2024 to be in excess of $700 million, employing 47% euro-rear growth.

Speaker Change: In Q2, we re-purchase shares, totaling $146 million. We are executing well on our plan to accelerate and complete our current 300 million share buyback program by the end of Q3. After completing the current plan, we will begin implementing our even larger share buyback program of $500 million. The acceleration and expansion of the buyback plans are a demonstration of the continued confidence in the growth of our business and our solid financial profile. Total cash and investments at the end of June totaled $1,504 million. Our debt stands at $48 million, resulting in net cash and investments exceed $1,446 million.

Scott: I appreciate it thank you.

Meta Marshall: Thank you. Our next question comes from the line of meta Marshall with Morgan Stanley. Please proceed with your question.

Meta Marshall: Great. Thanks.

Meta Marshall: You know Barack you guys have always been very good about the kind of starting with a core win that then kind of expanding customers over time through various parts of the platform just wanted to get a sense of you know.

Speaker Change: In conclusion, we consistently demonstrate clear industry leadership through our best-in-class cloud platforms, the comprehensive breadth and depth of our solutions portfolio, and our robust financial profile, much by exceptional profitability, scalability, strong balance sheet, and impressive cash generation.

Barak Eilam: They have defined what are the critical criteria for the next leader of Nice and they've done a very extensive and a very thorough search interviewing and looking for multiple candidates. And Scott definitely came up on top with his vast experience and enterprise software coming from a company that operated scale as Nice would like to scale further and can and shoot and will scale further. He's global experience. He's based in New Jersey, but in his past career, he've seen different markets and the fact that he also spearheaded a transformation of the company to the cloud.

Speaker Change: We think about the back half acceleration.

Speaker Change: Yeah, Yeah. Thank you for the question I mean, we're looking on the second half and.

Speaker Change: I think as we look at the quarterly distribution of our revenue and how we will see a further execution from that standpoint throughout the year.

Speaker Change: Are you seeing kind of bigger deals upfront smaller deals upfront has any of the motion of selling.

Barak Eilam: And Scott definitely came up on top with his vast experience and enterprise software coming from a company that operated scale as Nice would like to scale further and can and shoot and will scale further. He's global experience. He's based in New Jersey, but in his past career, he's seen different markets and the fact that he also spearheaded a transformation of the company to the cloud. All of those classes personality, the cultural speech were part of the decision criteria for the board of director and eventually they have decided to go with Scott and we're very happy to give him a warm welcome into Nice, starting generally first as he'll start and take over the world for me.

Speaker Change: Now, I'll close with our total revenue and non-GAP EPS guidance for the third quarter and full year 2024.

Kurt: It's quite consistent with what we've seen in past years and in terms of the confidence that comes from a combination of Kurt of course first from the area that Barack highlighted just a few minutes ago, which is we had record bookings of course N of CX. One during Q2, so that was.

Speaker Change: Kind of additional parts of the portfolio or the timelines of that changed and then just maybe as a second question.

Speaker Change: I know, it's not just kind of talked about it in the second half, but just for breath I mean changes in seasonality.

Speaker Change: For the third quarter of 2024, we expect total revenue to be in the range of $676 million to $686 million, representing 13% year-over-year growth at the midpoint.

Speaker Change: We expect the third quarter 2024, fully-deluted earnings per share, to be in a range of $2.62 to $2.72 for representing 18% year-over-year growth at the midpoint.

Speaker Change: Of the customers.

Speaker Change: Get exciting and combined with that you know I think just the general backlog we've seen the stabilization generally are in our customer base and healthy metrics across the board gives us the confidence that we're continuing to be excited about the continued execution of our business.

Speaker Change: So I'll take the first question and then Beth will take the second one.

Beth: So the answer is yes, we are seeing bigger deals as I mentioned in my opening open remarks, we are winning our win rate is increasing we believe we're taking market share from the competition.

Speaker Change: For raising our EPS guidance, we reiterate our full year 2024 total revenue guidance, which is expected to be in the range of $2.715 million to $2.735 million, an increase of 15% at the midpoint. We now expect full year 2024, fully-deluted earnings per share to increase to a range of $10.60 to $10.80, which represents an increase of 22% at the midpoint.

Barak Eilam: All of those classes personality, the cultural speech were part of the decision criteria for the board of director and eventually they have decided to go with Scott and we're very happy to give him a warm welcome into Nice, starting generally first as he'll start and take over the world for me.

Beth Gaspich: All of those classes personality, the cultural speech were part of the decision criteria for the board of director and eventually they have decided to go with Scott and we're very happy to give him a warm welcome into Nice, starting generally first as he'll start and take over the world for me. Thank you. Yeah, congratulations. And if I could ask a follow-up bet you mentioned that APAC was down, God, I see his Australian.

Speaker Change: Great and Barack and Scott.

Beth: And although we are growing.

Jeff: I'd like to congratulate you button and Brad Congrats on navigating the transition and Scott look forward to working with you. When you officially on board, Jeff take care of any thank you.

Beth: Much faster than the competition and known them much.

Beth: Larger scale.

Beth: It's a combination of more deals that we're winning but also as you.

Barak Eilam: Thank you.

Speaker Change: I will now turn the call over to the operator for questions.

Beth Gaspich: Thank you. Yeah, congratulations. And if I could ask a follow-up bet you mentioned that APAC was down, God, I see his Australian. What's going on in APAC? And is it something that he can help with? So APAC had from a bookings perspective, probably the best quarter ever in terms of bookings. You know, we had this as I mentioned, you know, $100 million dollars TCV deal that was originated out of our APAC region.

Jeff: I appreciate that some of them. Thank you.

Beth: The fact is we have such a wide portfolio and customer either adopt to the wider portfolio and day, one or actually expand.

Beth Gaspich: Yeah, congratulations. And if I could ask a follow-up, bet you mentioned that APAC was down. God, I see his Australian.

Speaker Change: Thank you.

Speaker Change: At this time, we'll be conducting a question and answer session.

Thank you. Our next question comes from the line of meta Marshall with Morgan Stanley. Please proceed with your question.

Beth Gaspich: What's going on in APAC? And is it something that he can help with? So APAC had, from a bookings perspective, probably the best quarter ever in terms of bookings. You know, we had this, as I mentioned, you know, $100 million dollars TCV deal that was originated out of our APAC region. So very strong quarter performance with respect to what you see in the revenue.

Speaker Change: If you'd like to ask a question, please press star one on your telephone keypad.

Beth Gaspich: What's going on in APAC? And is it something that he can help with? So APAC had from a bookings perspective, probably the best quarter ever in terms of bookings. You know, we had this as I mentioned, you know, $100 million dollars TCV deal that was originated out of our APAC region. So very strong quarter performance with respect to what you see in the revenue. It's really an apples to oranges comparison. The cloud growth in APAC is continuing to pick up.

Beth: Down the road.

Meta Marshall: Great. Thanks, you know Barack you guys have always been very good about kind of starting with a core win that then kind of expanding customers over time through various parts of the platform just wanted to get a sense of you know are you seeing kind of bigger deals upfront.

Speaker Change: A confirmation tone will indicate your line is in the question queue.

Beth: In AI plays a significant role in this strategy.

Speaker Change: You may press star two if you'd like to remove your question from the queue.

Beth: <unk>.

Beth: We see that we are winning those cloud transformation not just because customers want to move to the cloud or not just because of the desire to.

Beth: <unk>.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Beth: Great digital.

Beth: Into that but AI now plays a very significant part in our win rate and all in us taking market share from the competition and best will cover the second question.

Speaker Change: Smaller deals upfront has any of the motion of selling kind of additional parts of the portfolio or the timelines of that changed and then just maybe as a second question.

Speaker Change: Our first question comes from the line of Samad Samana with Jeffreys.

Beth Gaspich: So very strong quarter performance with respect to what you see in the revenue. It's really an apples to oranges comparison. The cloud growth in APAC is continuing to pick up. It's in the devil digits and it looks very nice. The comparison to the prior year was that they had some large premise base deals last year where they took the revenue immediately into their revenue stream. So, you know, really across both our business segments and all our regions were moving more and more towards higher recurring revenue, more linearity.

Beth Gaspich: It's really an apples-to-oranges comparison. The cloud growth in APAC is continuing to pick up. It's in the devil digits, and it looks very nice. The comparison to the prior year was that they had some large premise base deals last year, where they took the revenue immediately into their revenue stream. So, you know, really across both our business segments and all our regions, we're moving more and more towards higher recurring revenue, more linearity. Of course, you will see some continued variability in FCC and some of the regions as they make that transition, as they still are early days in terms of penetration to the cloud.

Speaker Change: Please proceed with your question.

Beth: Yeah. Thank you Barak on the seasonality front, we expect it to be quite similar to what we've.

Speaker Change: Hi, good morning and thanks for taking my questions.

Speaker Change: I get to see the strong execution in a tough environment.

Beth Gaspich: It's in the devil digits and it looks very nice. The comparison to the prior year was that they had some large premise base deals last year where they took the revenue immediately into their revenue stream. So, you know, really across both our business segments and all our regions were moving more and more towards higher recurring revenue, more linearity. Of course, you will see some continued variability in FCC and some of the regions as they make that transition as they still are early days in terms of penetration to the cloud. But good things happening. So, a little bit masked by the apples to oranges comparison and APAC, but really a strong quarter there under the covers.

Speaker Change: I know, it's not just kind of talked about it in the second half, but just for breath any changes in seasonality and our customers.

As seen in years past generally Q4, typically has a bit more positive seasonality impact in what we would see in the third quarter and Thats typical where you typically see the sequential cloud growth is also picking up.

Speaker Change: So, maybe first question.

Daniel Wang: Thank you.

Speaker Change: So I'll take the first question and then Beth will take the second one so the answer is yes, we are a seeing a bigger deals as I mentioned in my opening open remarks, well winning our win rate is increasing we believe we're taking market share from the competition, you'll see it in a low.

Speaker Change: I think about the second quarter, Beth, could you help us understand?

Beth: Towards the end of the year.

Of course, you know we are operating across multiple verticals, but we do have verticals that tend to bring that seasonality. It includes insurance and health care retail. So we expect to see that again in the course of this year and I mentioned that the kind of the consistent quarterly distribution is on trend with what we've seen in years past.

Speaker Change: I know you're not specifically breaking out live loss, but just how should we think about the core business versus how live loss is performing versus your initial expectations for the year?

Beth Gaspich: Of course, you will see some continued variability in FCC and some of the regions as they make that transition as they still are early days in terms of penetration to the cloud. But good things happening. So, a little bit masked by the apples to oranges comparison and APAC, but really a strong quarter there under the covers.

Beth Gaspich: We are growing.

Beth Gaspich: Much faster than the competition and on a much larger scale.

Beth Gaspich: But good things are happening. So, a little bit masked by the apples to oranges comparison and APAC, but really a strong quarter there under the covers.

Speaker Change: Is there anything worth calling out, especially as you're now several months into the acquisition being with the company?

Catherine Trebnick: Thank you.

Beth Gaspich: And it's a combination of more deals are to a winning but also as you are into the fact that as we have such a wide portfolio and customer either adopt the wider portfolio and day, one or actually expand.

Beth: Yes.

Beth: Great. Thank you.

Arjun Bhatia: Thank you.

Speaker Change: Thank you. Our next question comes from the line of Tyler Radke with Citi. Please proceed with your question.

Daniel Wang: Our next question comes from the line, every year, with RBC Capital Markets. Please proceed with your question. Oh, wonderful. Thanks so much for taking my question. Maybe I want to start diving a little bit deeper on to the AI front. When we think about your customers who are live and using especially generative AI today, can you maybe talk about how much of that is internal? Which would include use cases like call logging and summarization versus anything external or actually customer facing. And then I have a follow up. Great question. I'm not sure I have the exact mix in the top of my head, but if I look on both Q2 booking and Q1, I would say that it's half half.

Barak Eilam: Our next question comes from the line every year with RBC capital markets. Please proceed with your question. Oh, wonderful. Thanks so much for taking my question. Maybe I want to start diving a little bit deeper on to the AI front. When we think about your customers who are live and using especially generative AI today, can you maybe talk about how much of that is internal? Which would include use cases like call logging and summarization versus anything external or actually customer facing and then I have a follow up.

Beth Gaspich: Down the road and AI plays a significant role in this strategy.

Yes. Thank you for taking the question and congrats on the CEO hire.

Beth Gaspich: That's a winning those cloud transformation not just because customers want to move to the cloud or not just because of the desire to.

Speaker Change: Are you starting to see more traction and cross-selling or harvesting the value from revenue, a revenue synergy perspective in that?

Speaker Change: It sounded like it was a really strong quarter from an enterprise bookings perspective.

Speaker Change: I have a Thank you for the questions, Samad.

Beth Gaspich: Integrate digital.

Speaker Change: But I was wondering if you could talk about the non enterprise side of the business. It did look like the sequential cloud growth was.

Beth Gaspich: Into that but I know it plays a very significant fall in our win rate and all in us taking the market share from the competition and Beth will cover the second question.

Speaker Change: And what we're seeing from the live-ox is performance as as expected.

Speaker Change: Some of the smallest you've seen just in terms of a dollar or percentage basis for the second quarter in a few years.

Beth Gaspich: Yeah. Thank you Barak on the seasonality front are we expected to be quite similar to what we've.

Speaker Change: With SMB, a greater headwind than you thought and maybe offsetting some of that enterprise strength.

Speaker Change: I think we've been off to a great start this year.

Barak Eilam: Great question. I'm not sure I have the exact mix in the top of my head, but if I look on both Q2 booking and Q1, I would say that it's half half. I would say that most most of our customers going back to the offering of co pilot and autopilot. If you think about co pilot, it's the augmentation of the user. So you can argue that it's mostly internal use right to make the user 10 times better and very effective as an interactive consumer and autopilot is what happens when you take AI, you know, you take the agent out of the equation.

Speaker Change: I may have mentioned at the last earnings call that they actually joined us at our sales kickoff this year.

Barak Eilam: And it is the entity that communicates with with the customer. I would say it's about half half. And most of our customers that adopt co pilot eventually add autopilot because then then gain the gain confidence and some of them actually right out of the gate goes both. Yeah, that's really helpful. Thanks.

Beth Gaspich: Seen in years past generally Q4, typically has a bit more positive seasonality impact in what we would see in that in the third quarter and that's typical where do you typically see the sequential cloud growth is also picking up.

Speaker Change: And then if you could just help US understand are you still targeting 18% organic cloud growth for the year. Thank you.

Speaker Change: Yeah. Thank you for the question Tyler So I'll start off with the latter question first switches is yes. So we still continue to expect to see the 18% growth in the cloud excluding the <unk> revenue contribution from the cloud this year.

Sitikantha Panigrahi: I would say that most of our customers going back to the offering of co pilot and autopilot. If you think about co pilot, it's the augmentation of the user. So you can argue that it's mostly internal use right to make the user 10 times better and very effective as an interactive consumer, and autopilot is what happens when you take AI, you know, you take the agent out of the equation. And it is the entity that communicates with the customer. I would say it's about half half. And most of our customers that adopt co pilot eventually add autopilot because then they gain confidence, and some of them actually right out of the gate go both.

Speaker Change: So really right out of the gate, we had a great process integrating them into the company.

Speaker Change: Towards the end of the year.

Speaker Change: Of course, you know we are operating across multiple verticals, but we do have verticals that tend to bring that seasonality. It includes insurance and health care are retail. So we expect to see that again in the course of this year and I mentioned that the kind of the consistent quarterly distribution is on trend with what we've seen in years past.

Speaker Change: In terms of kind of the sequential change in cloud between quarters.

Speaker Change: Did see some lightness in the second quarter in and I would say it was less attributed to the SMB, where we've seen really stabilization.

Yes.

Speaker Change: Great. Thank you.

Speaker Change: It really is attributed more to what we're seeing with wins in the large enterprise.

Speaker Change: Thank you. Our next question comes from the line of Tyler Radke with Citi. Please proceed with your question.

Speaker Change: We've talked about the significant number of large deals that we continue to sign in an investor day actually share that more than half of our cloud revenue is now coming from.

Tyler Radke: Yeah. Thank you for taking the question and congrats on the C O higher.

Sitikantha Panigrahi: Yeah, that's really helpful. Thanks.

Speaker Change: It sounded like it was a really strong quarter from an enterprise bookings perspective.

Beth Gaspich: And then maybe just a question on margin. So it looks like you're bringing up your cash flow expectations from the analyst, which is great to see. Maybe just wanted to understand kind of how you're thinking about the balance of bringing up margins when, you know, you're investing for this gen AI opportunity and maybe alongside that as gen AI starts to become a bigger piece of the business. And maybe more directly monetizable, you know, how should we be thinking about the potential drag on gross margins? Thanks. Yeah, thanks. It's an excellent question. I'll take the AI piece first, which is to say that over the last several years we've really pivoted our business and, in particular, our development teams to be focused on AI solutions, and you can see that success playing out in the selling that we're doing to our customers.

Beth Gaspich: And then maybe just a question on margin. So it looks like you're bringing up your cash flow expectations from the analyst, which is which is great to see. Maybe just wanted to understand kind of how you're thinking about the balance of bringing up margins when, you know, you're investing for this gen AI opportunity and maybe alongside that as gen AI starts to become a bigger piece of the business. And maybe more directly monetizable, you know, how should we be thinking about the potential drag on gross margins?

Speaker Change: <unk> that have <unk> of $1 million or more and likewise, that's what we're seeing from the new logos and new bookings generally that we're signing this year as well. So as a result of that there is more of an elongated ramp into the revenue. These organizations tend to be multiyear.

Tyler Radke: But I was wondering if you could talk about the non enterprise side of the business. It did look like the sequential cloud growth was some of the smallest you you've seen just in terms of a dollar or percentage basis for the second quarter. In a few years was S. M B, a greater headwind than you thought.

Speaker Change: National highly complex. So we know that they generally are buying portfolio deals for us that means they are buying three or more solutions off the platform. So it takes some time for the delivery to ramp to the full recurring revenue base that will have so we saw that play out a little bit in Q2.

Speaker Change: And maybe offsetting some of that enterprise strength.

Speaker Change: And then if you could just help US understand are you still targeting 18% organic cloud growth for the year. Thank you.

Beth Gaspich: Thanks. Yeah, thanks. It's an excellent question. I'll take the AI piece first, which is to say that over the last several years we've really pivoted our business and in particular our development teams to be focused on AI solutions and you can see that to success playing out in the selling that we're doing to our customers. So we've already made significant investments. We'll continue to do so in terms of where we prioritize our internal focus and how we spend in the company and in terms of how that will play out in the margins.

Speaker Change: Yeah. Thank you for the question Tyler So I'll start off with the latter question first switches is yes. So you know we still continue to expect to see the 18% growth in the cloud excluding the Lightbox revenue contribution from the cloud this year.

Speaker Change: They are performing as we expected and we're quite pleased with how things are going. We continue to see an increasing pipeline building of cross-selling and upselling opportunities that are happening. And we are seeing already that we are cross-selling into each other's customer base, which was part of the underlying strategy. So very much aligned and expected with what we had really targeted as part of the strategy of the acquisition.

Speaker Change: And of course, we're keeping that in consideration as we look at the full year as well.

Speaker Change: That being said I think again, we feel confident based on all of the indications of the strength of our business to deliver on the 18% that we've previously.

Beth Gaspich: So we've already made significant investments. We'll continue to do so in terms of where we prioritize our internal focus and how we spend in the company, and in terms of how that will play out in the margins. I think, first of all, you're seeing that a little bit from the cloud growth margin. It's been a bit on the flatish side, and while we're highly confident you'll see that continue to accelerate over the medium term. I think in the near term, we've made a lot of investments in terms of the cloud margin. A lot of that is focused on some of the growth.

Speaker Change: Great.

Speaker Change: In terms of kind of the sequential change in cloud between quarters, and we did see some some lightness in the second quarter in and I would say it was less are attributed to the S. M B, where we've seen really stabilization and it really is attributed more to what we're seeing with wins in the large enterprise.

Speaker Change: And then maybe just as I look to the guidance, it implies an acceleration as the year progresses.

Speaker Change: Given our guidance for on the cloud.

Maybe just to add one more single, India. Some beats lessor for the immediate revenue this quarter, but more so about the potential down the road.

Speaker Change: I know the comp's got a little bit easier, but I think just based on what we're seeing, maybe in other areas of software and some of your competitors, it'd be great if you could help us understand where you're getting comfort around a back-hack acceleration and how confident are you?

Beth Gaspich: I think first of all, you're seeing that a little bit from the cloud growth margin. It's been a bit on the flatish side and while we're highly confident you'll see that continue to accelerate over the medium term. I think in the near term, we've made a lot of investments in terms of the cloud margin. A lot of that is focused on some of the growth. As you know, factors that I talked about earlier as well.

Speaker Change: We announced about.

Speaker Change: I know there's still a lot of year left to go, but perhaps do we think about the back-hack acceleration?

Speaker Change: And a half ago.

Speaker Change: And you know we've talked about a significant number of large deals that we continue to sign and at Investor day actually share that more than half of our cloud revenue is now coming from you know organizations that have a R. R of 1 million or more and likewise, that's what we're seeing from the.

Speaker Change: One six the $5 <unk>, which is very disruptive.

Speaker Change: Fully functional literally reach offering a new class fully integrated two six.

Speaker Change: Yeah.

Speaker Change: Thank you for the question.

Speaker Change: We see that will disrupting this market and more and more deals in the SMB, we're winning with this offering.

Beth Gaspich: As you know, factors that I talked about earlier as well. So growth and sovereign cloud is we're building out and penetrating more internationally as an example. That all being said, when you put it together, I mean we have great operating leverage in our business, and you can see that play out consistently quarter after quarter. We're very proud of the fact that if you put this up to some of the nearest competitors across all our financial metrics, our cloud growth, our growth margins, our operating margins, our cash flow generations. We're leaps and bounds ahead of the other players in the market, and it's just an area that we continue to focus on.

Speaker Change: I mean, we're looking on the second half.

Speaker Change: The new logos and new bookings generally that we're signing this year as well so as a result of that there is more of a long dated ramp into the revenue. These organizations tend to be multinational highly complex. So we know that are they generally are buying portfolio deals for us that means there.

Speaker Change: And I think as we look at the quarterly distribution of our revenue and how we will see further execution from that standpoint throughout the year, it looks quite consistent with what we've seen in past years.

Beth Gaspich: So growth and sovereign cloud is we're building out and penetrating more internationally as an example. That all being said when you put it together, I mean we have great operating leverage in our business and you can see that play out consistently quarter after quarter. We're very proud of the fact that if you put this up to some of the nearest competitors across all our financial metrics, our cloud growth, our growth margins, our operating margins, our cash flow generations.

Speaker Change: It's still early days, but from the many many deals you already won and the tightening to see there is great potential there.

Beth: Great. Thank you for all that color and maybe a follow up for you Beth just as you think about the timing and the ramp of those large enterprise deals that you referenced.

Speaker Change: Buying three or more solutions off the platform. So it takes some time for the delivery to ramp to the full recurring revenue base that will have so we saw that play out a little bit in in Q2.

Speaker Change: How far away are we from cloud revenue growth Reaccelerate I think you would have to see growth step up to hit 18% for the full year. So is that is that going to be more of a Q4 event just help us understand kind of the timing of.

Beth Gaspich: We're leaps and bounds ahead of the other players in the market and it's just an area that we continue to focus on. I think you see that playing out in the cash flows. And if you look at the operating expenses as well, I think we show a very healthy, pretty consistent overall investment that we're making in those areas around R&D and while at the same time continuing to add and grow our sales organization.

Speaker Change: And of course, we're keeping that in consideration as we look at the full year as well that being said I think again, we feel confident based on all of the the indications of the strength of our business to deliver on the 18% that leave our previously.

Beth Gaspich: I think you see that playing out in the cash flows. And if you look at the operating expenses as well, I think we show a very healthy, pretty consistent overall investment that we're making in those areas around R&D and, while at the same time, continuing to add and grow our sales organization. So again, it really comes down to I think a very laser-focused approach that we have here in the company in terms of prioritization of spend, while in parallel really looking to that operation or operational leverage to continue to expand profitability.

Speaker Change: The large enterprise ramps in terms of re accelerating but the total cloud growth.

Speaker Change: Yeah sure.

Speaker Change: Alex kind of alluded to I think the distribution of our revenue looks very similar to what we have seen in years past and that does mean that we'll see the greatest kind of sequential input expected in the fourth quarter that is coming from the other seasonality. So we'll see it again picking up in the back half generally but more so than in the fourth quarter, which is generally <unk>.

Speaker Change: Given our guidance for on the cloud.

Speaker Change: And then maybe just to add one little single, India. Some beach lessor for the immediate revenue this quarter.

Beth Gaspich: So again, it really comes down to I think a very laser focused approach that we have here in the company in terms of prioritization of spend while in parallel really looking to that operation or operational leverage to continue to expand profitability. Wonderful, thank you. Thank you.

Speaker Change: So about the potential down the road.

Speaker Change: We announced about a quarter and a half ago. The one CX. The five dollar in the U S, which is very disruptive.

Speaker Change: Trend with with what we've seen experienced in years past as well.

Speaker Change: Thank you.

Speaker Change: Fully functional.

Speaker Change: Literally reach offering a new class a fully integrated two six in.

Beth Gaspich: Wonderful, thank you. Thank you.

Speaker Change: Thank you. Our next question comes from the line of James Fish with Piper Sandler. Please proceed with your question.

Speaker Change: We see the tool disrupting this market.

Daniel Wang: Our next question comes from the line of Daniel Wang with Mizuhau Securities. Please proceed with your question.

Sitikantha Panigrahi: Our next question comes from the line of Daniel Wang with Mizuhau Securities. Please proceed with your question.

James Fish: Hey, guys actually on a turnover.

Speaker Change: More and more deals in the SMB, we're winning.

James Fish: <unk> side of the business every three years, we see a cyclical uplift it was kind of a stronger part of the quarter really why wouldnt this quarter be kind of the start of a trend of the cyclical uplift given what happens if I look back three years ago and if so how should we expect a balance between.

Speaker Change: So it's still early days, but from the many many deals you already won and the tightening to see if there is great potential there.

Sitikantha Panigrahi: Hi, this is Citi Panigray. Thanks for taking my question. It's really impressive to see the bookings string in this macro environment. So the question I have, and Barak, you mentioned about AI is one of the factors driving this cloud migration. So the question is, are customers looking at your AI solution that's better than others that's driving this CX platform adoption or they're looking at first CX platform and then AI is an add on it this morning. And also in the same context, are you seeing the cloud migration, you know, trend differently between SMB and an outrageous?

Sitikantha Panigrahi: Hi, this is Citi Panigray. Thanks for taking my question. It's really impressive to see the bookings string in this macro environment. So the question I have and Barak, you mentioned about AI is one of the factor driving this cloud migration. So the question is, are customer looking at your AI solution that's better than others that's driving this CX platform adoption or they're looking at first CX platform and then AI is an add on it this morning.

Barak Eilam: Hi, this is Citi Panigray. Thanks for taking my question. It's really impressive to see the bookings string in this macro environment. So the question I have and Barak, you mentioned about AI is one of the factor driving this cloud migration. So the question is, are customer looking at your AI solution that's better than others that's driving this CX platform adoption or they're looking at first CX platform and then AI is an add on it this morning. And also in the same context, are you seeing the cloud migration, you know, trend differently between SMB and an outrageous?

Speaker Change: Great. Thank you for all that color and maybe a follow up for you Beth just as you think about the timing and the ramp of those large enterprise deals that you you referenced how.

Speaker Change: And in terms of the confidence, it comes from a combination of course first from the area that Brock highlighted just a few minutes ago, which is we had record bookings, of course, of CX-1 during Q2. So that was quite exciting and combined with that.

Speaker Change: I think just the general backlog we've seen, the stabilization generally in our customer base and healthy metrics across the board gives us the confidence that we're continuing to be excited about the continued execution of our business.

James Fish: The perpetual product adoption versus term adoption versus the migration to the cloud.

Speaker Change: How far away are we from cloud revenue growth Reaccelerate and I think you would have to see growth step up to hit 18% for the full year. So does that is that going to be more of a Q4 event just help us understand kind of the timing of.

Speaker Change: Great.

Speaker Change: Tyler's point cloud revenue in aggregate came a little bit weaker than we were all expecting in terms of net new and so we're just wondering if youre seeing a little bit more of a.

Speaker Change: In Baroque and Scott, if you're listening, I'd like to congratulate you both in Baroque and Graff on navigating the transition in Scott report to working with you when you're officially on board.

Sitikantha Panigrahi: And also in the same context, are you seeing the cloud migration, you know, trend differently between SMB and an outrageous? Yes, so for the first question is obviously the combination of the two and the two are very tied together. We have superiority. We believe both in the best platform, the most comprehensive and complete in our industry, and it's a true natively built platform in the cloud with all the different solution, workflow, touch points and of course the data repository that we have.

Speaker Change: The large enterprise ramps in terms of re accelerating but the total cloud growth.

Speaker Change: In product adoption on the FCC side as opposed to that migration to the cloud.

Speaker Change: Yeah sure.

Speaker Change: Well thanks for the thanks for the question.

Speaker Change: You alluded to I think the the distribution of our revenue that looks very similar to what we have seen in years past and that does mean that we'll see you know the greatest kind of sequential our input expected in the fourth quarter that it's coming from the other seasonality. So we'll see it again picking up in the back half generally but more so in the fourth quarter, which is generally on trend.

Speaker Change: You'll likely see observation that historically this business has some element of seasonality or cyclical element to Eaton, obviously somewhat aligned with.

Barak Eilam: Yes, so for the first question, it is obviously the combination of the two, and the two are very tied together. We have superiority. We believe both in the best platform, the most comprehensive and complete in our industry, and it's a true natively built platform in the cloud with all the different solution, workflow, touch points, and of course the data repository that we have. And this is an environment; this is, if you'd like, the right place where I can actually flourish. Without the right platform, it just doesn't work. So I think that after two years or even a half of very a lot of enterprises testing and understanding what they I can do, there is a much more mature understanding of enterprises generally that it doesn't, you know, just just to take a point solution of AI, one to the job, and you actually need to for a specific function adopt a platform for that show domain and leverage it in order to do AI.

Speaker Change: Just take care everybody.

Barak Eilam: Yes, so for the first question is obviously the combination of the two and the two are very tied together. We have superiority. We believe both in the best platform, the most comprehensive and complete in our industry, and it's a true natively built platform in the cloud with all the different solution, workflow, touch points and of course the data repository that we have. And this is an environment, this is if you'd like the right place where I can actually flourish without the right platform, I just doesn't work.

Speaker Change: Thank you.

Speaker Change: Appreciate that someone.

Speaker Change: Upcoming regulations and things like that having said that it's going through a very interesting transformation is solid one.

With with what we've seen and experienced in years past as well.

Speaker Change: Shifting.

Speaker Change: Thank you.

Speaker Change: To the cloud and the team is doing it in a phenomenal.

Speaker Change: Yeah.

Speaker Change: Thank you. Our next question comes from the line of James Fish with Piper Sandler. Please proceed with your question.

Speaker Change: Great way.

Speaker Change: Thank you.

Sitikantha Panigrahi: And this is an environment, this is if you'd like the right place where I can actually flourish without the right platform, I just doesn't work. So I think that after two years or even a half of very a lot of enterprises testing and understanding what they I can do, there is a much more mature understanding of enterprises generally that it doesn't, you know, just just to take a point solution of AI, one to the job, and you actually need to for a specific function adopt a platform for that show domain and leverage it in order to do AI.

Vince: Vince mentioned that in one of the reason why we see some fluctuation in product revenues is predominantly coming from from that business. So we'll continue to see some of those fluctuation on the product revenues, but by and large.

Hey, guys I actually wanted to turnover to the FCC side of the business. You know every three years, we see a cyclical uplift it was kind of a stronger part of the quarter really why wouldnt this quarter be kind of the start of a trend that the cyclical uplift given what happens if I look back three years ago.

Speaker Change: Our next question comes from the line of Mehta Marshall with Morgan Stanley.

Sitikantha Panigrahi: So it's the combination of the two, both because they choose of both because of the AI solutions we have as well as because of the platform. And I'm so in the second question was any trans, between SMB, does that enterprise? And in terms of cloud migration? Not a trend, but obviously, you know, cloud is the cloud penetration is is a it's still it, I would say relatively early stages in the large enterprises and it's more events in the SMB. So there is still you know room to grow in the SMB and it's not it's not saturated yet, but the biggest opportunity, obviously, is at the end of time.

Barak Eilam: So I think that after two years or even a half of very a lot of enterprises testing and understanding what they I can do, there is a much more mature understanding of enterprises generally that it doesn't, you know, just just to take a point solution of AI, one to the job, and you actually need to for a specific function adopt a platform for that show domain and leverage it in order to do AI. So it's the combination of the two, both because they choose of both because of the AI solutions we have as well as because of the platform.

Speaker Change: We think that if you look on the next few years it will be a great contributor to our cloud revenue, but it's a process we're managing.

Speaker Change: And one of the important thing about this business.

Speaker Change: And if so how should we expect a balance between for that perpetual product adoption versus term adoption versus the migration to the cloud.

Speaker Change: The loyalty and the stickiness of customers over Bill. This is the area of the business with customers do with Russell.

Speaker Change: Decades, two decades, so that's what we really like about this business and obviously its profitability.

Speaker Change: Tyler's point cloud revenue on an aggregate came a little bit weaker than we were all expecting in terms of net new and so we're just wondering if youre seeing a little bit more of a.

Barak Eilam: So it's the combination of the two, both because they choose of both because of the AI solutions we have as well as because of the platform. And I'm so in the second question was any trans, between SMB, does that enterprise? And in terms of cloud migration? Not a trend, but obviously, you know, cloud is the cloud penetration is is a it's still it, I would say relatively early stages in the large enterprises and it's more events in the SMB. So there is still, you know, room to grow in the SMB, and it's not saturated yet, but the biggest opportunity, obviously, is at the end of time.

Speaker Change: Please thanks.

Speaker Change: Got it and just as a follow up barak on the customer engagement side.

Speaker Change: In product adoption on the FCC side as opposed to that migration to the cloud.

What are you hearing or seeing from customers with the desire to migrate within within the base or even net new customers given.

Speaker Change: Brock, you guys have always been very good about kind of starting with a core win and then kind of expanding customers over time through various parts of the platform.

Barak Eilam: And I'm so in the second question was any trans, between SMB, does that enterprise? And in terms of cloud migration? Not a trend, but obviously, you know, cloud is the cloud penetration is is a it's still it, I would say relatively early stages in the large enterprises and it's more events in the SMB. So there is still you know room to grow in the SMB and it's not it's not saturated yet, but the biggest opportunity, obviously, is at the end of time.

Speaker Change: Well thanks for the thanks for the question.

Speaker Change: Do you like to fill them with ovation that historically this business has had some element of seasonality or cyclical element to eats and obviously somewhat aligned with the upcoming.

Barak: Conversations around return on investments.

Speaker Change: Just wanted to get a sense of are you seeing kind of bigger deals up front, smaller deals up front, has any of the motion of selling kind of additional parts of the portfolio or the timelines of that changed.

In this space can be a year or more are you seeing any sort of pause just as customers kind of holds.

Speaker Change: And then just maybe as a second question, I know as far just kind of talked about it in the second half, but just for Beth, any change, and seasonality of the customer.

Speaker Change: The budget, a little bit tighter or are you starting to see those migrations to grab really pick up.

Speaker Change: Upcoming good relations and things like that having said that it's going through a very interesting transformation a solid one <unk>.

We're now at an inflection point.

Speaker Change: Shifting to.

Speaker Change: To the cloud and the team is doing it in a phenomenal and great weight am best mentioned that in one of the reason why we see some fluctuation in product revenues is predominantly coming from from that business. So we'll continue to see some of those fluctuation on the product revenues, but by and large we think that it should.

Speaker Change: Thanks.

I don't see customer.

Speaker Change: Beta Ingalls questioning whether they need to move to the cloud that's not that.

Speaker Change: That's no longer happening that belongs to several years ago to date, it's all about yes, they want to move to the cloud.

Beth Gaspich: Great and quick follow-up a bit great job on cash flow. Is there anything like, you know, one-time thing driving Q2, or is that the trend we should expect going forward? So in overall, I think you can expect it continued very healthy year in cash flow, and I updated on the call that we now are expecting more than 700 million to be generated in free cash flow this year, which is up. And it's going to amount even from just a few months ago. So you will see that our business from a cash flow generation is not equally distributed.

Speaker Change: So I'll take the first question then Beth will take the second one.

Beth Gaspich: Great and quick follow up a bit great job on cash flow. Is there anything like, you know, one time thing driving Q2 or is that the trend we should expect going forward? So in overall, I think you can expect it continued very healthy year in cash flow and I updated on the call that we now are expecting more than 700 million to be generated in free cash flow this year, which is up.

Speaker Change: You go to the larger enterprises that shift is not a one day thing.

Speaker Change: So the answer is yes, we are seeing bigger deals as I mentioned in my open remarks.

Speaker Change: On the next few years it will be a great contributor to our cloud live in the new but it's a process. We're managing and you know one of the important thing about this business the loyalty and the stickiness of customers over Bill. This is the area of the business from customers do with Barstool.

Speaker Change: It takes time.

Speaker Change: Pretty complicated.

Speaker Change: Need to select a vendor partner that they can actually manage this transformation.

Speaker Change: Eventually CX is a highly complicated environment a lot of integration a lot of our legacy processes and when you go to the large enterprises when we lend them, we like very much to lend them because as Beth mentioned before when those enterprises sign up with us they stay for many many years, sometimes decades index.

Speaker Change: A decade or two decades, so that's what we really like about this business and all of his speech possibility.

Beth Gaspich: And it's going to amount even from just a few months ago. So you will see that our business from a cash flow generation is is not equally distributed. You know, we still have some remnants of our maintenance customers and our on premise space term based customers that still pay annually in advance. So you still typically see that that's coming in kind of the first half and particularly usually Q1. So you won't see the same level of, you know, quarterly distribution that you would you see on on the PNL, but again, continued very healthy and, you know, really strong performance flow before you're expected with that 700 million, which is is nearly, you know, close to 50% year over your increase. Thank you.

Catharine Trebnick: Thank you.

Barak Eilam: Got it and just as a follow up barak on the customer engagement side.

Beth Gaspich: You know, we still have some remnants of our maintenance customers and our on premise space term-based customers that still pay annually in advance. So you still typically see that that's coming in kind of the first half, and particularly usually Q1. So you won't see the same level of, you know, quarterly distribution that you would see on the PNL, but again, continued very healthy and, you know, really strong performance flow before you're expected with that 700 million, which is nearly, you know, close to 50% year over your increase.

Speaker Change: <unk> been with us.

Speaker Change: The ramp takes time takes time not on us, but most like most in most cases takes time on the enterprise side, but when it happens.

Speaker Change: What are you hearing or seeing from customers with the desire to migrate within the within the base or even net new customers given conversations.

Speaker Change: <unk> for the for the loan growth So we don't see.

Speaker Change: Delaying desire to move to the cloud a small delay on how fast they can start the project and ramp up the deployment and the second reason why there is a desire to do that they understand the need to move to the cloud in order to really benefit.

Speaker Change: Conversations around return on investments.

Speaker Change: In this space can be you know a year or more are you seeing any sort of pause just as customers kind of holds.

Speaker Change: Their budgets, a little bit tighter or are you starting to see those migrate.

Speaker Change: All from AI.

Migrations to grab really pick up and we're now at an inflection point.

Speaker Change: And as they choose their AI to the right platform and will be chose the right platform. They want to have the right cloud providers. So it's all.

Speaker Change: I don't see customer debating or questioning whether they need to move to the cloud that's not that's a that's no longer happening one belongs to several years ago. Today. It's it's all about yes, they want to move to the cloud and you go to the larger enterprises that shift is another one.

Speaker Change: Tie together and I think that's our goal.

Beth Gaspich: Thank you.

Arjun Bhatia: Our next question comes from the line of our June Bhatia with William Blair. Please proceed with your question. Perfect. Thank you. We're up for you. I think I heard 100% plus bookings growth in Autopilot and Co-Pilot, which is obviously very strong. Can you talk a little bit about where you're seeing the early adoption or their specific verticals that are leading the way and then. I think that mentioned there's more upsell and cross sell. So we love to hear what the adoption of co pilot on a pilot looks like between existing customers and new deals. as well.

Arjun Bhatia: Our next question comes from the line of our June Bhatia with William Blair. Please proceed with your question. Perfect. Thank you. We're up for you. I think I heard 100% plus bookings growth in autopilot and co pilot, which is obviously very strong. Can you talk a little bit about where you're seeing the early adoption or their specific verticals that are leading the way and then. I think that mentioned there's more upsell and cross sell. So we love to hear what the adoption of co pilot on a pilot looks like between existing customers and new deals, as well.

Catharine Trebnick: Our next question comes from the line of our June Bhatia with William Blair. Please proceed with your question. Perfect. Thank you. We're up for you. I think I heard 100% plus bookings growth in autopilot and co pilot, which is obviously very strong. Can you talk a little bit about where you're seeing the early adoption or their specific verticals that are leading the way and then. I think that mentioned there's more upsell and cross sell.

Speaker Change: <unk> green rates and.

Speaker Change: And market share expansion speaks to that.

Speaker Change: We are winning.

Thank you. Our next question comes from the line of Tim Horan with Oppenheimer and company. Please proceed with your question.

Speaker Change: They are seeing it it takes time, it's pretty complicated they need to select a vendor partner that they can actually manage this transformation.

Speaker Change: Win rate is increasing.

Speaker Change: Thanks, guys can you give us maybe a little bit more color on how the bookings look this quarter, maybe versus last year or 10% above 20%.

Speaker Change: <unk> six is a highly complicated environment a lot of integration a lot of our legacy processes and when you go to the large enterprises when we lend them, we like very much to lend them because that's the best mentioned before Windows enterprises sign up with us they stay for many many years, sometimes decades index.

Speaker Change: And same thing for implementations.

Catharine Trebnick: So we love to hear what the adoption of co pilot on a pilot looks like between existing customers and new deals, as well. So, started the second part. I think it's about half half between existing customers and new customers. A lot of our new deals are coming with AI, different parts of the AI. I've mentioned before, co-pilot is the big thing where customers are usually starting with because they feel a bit more confident to put the AI next to their employees and see it working before they actually put it in the hands of their consumers.

Speaker Change: It is taking like 10, 20% longer to implement these large contracts or any any type of color there.

Speaker Change: And then lastly, and then I had a follow up thanks.

Barak Eilam: So, started the second part. I think it's about half-half between existing customers and new customers. A lot of our new deals are coming with AI, different parts of the AI. I've mentioned before, co-pilot is the big thing where customers are usually starting with because they feel a bit more confident to put the AI next to their employees and see it working before they actually put it in the hands of their consumers. But very fast after that, they move into taking very specific tasks and automate them with the AI hands using the auto pilot. The wind rates seem to be strong and improving.

Barak Eilam: So, started the second part. I think it's about half half between existing customers and new customers. A lot of our new deals are coming with AI, different parts of the AI. I've mentioned before, co-pilot is the big thing where customers are usually starting with because they feel a bit more confident to put the AI next to their employees and see it working before they actually put it in the hands of their consumers. But very fast after that, they move into taking very specific tasks and automate them with the AI hands using the auto pilot. The wind rates seem to be strong and improving.

Speaker Change: So I'll start with these two for first of all as we've mentioned Q2 bookings were extremely strong and specifically six one booking loads.

Speaker Change: <unk> been with us.

Speaker Change: The ramp takes time takes time not on us, but most like most in most cases it takes time on the enterprise side, but when it happens.

Speaker Change: Happens for the for the long run so we don't see a.

Speaker Change: All time high compared to every quarter that we've seen before and in a significant way I can also share with you now.

Speaker Change: Delaying desire to move to the cloud it's more of a delay on how fast they can start the project and ramp up the deployment and the second reason why there was a desire to do that they understand the need to move to the cloud in order to really demonstrate.

Catharine Trebnick: But very fast after that, they move into taking very specific tasks and automate them with the AI hands using the auto pilot. The wind rates seem to be strong and improving. What are you seeing in the competitive landscape? Where are others falling short? We had Microsoft amounts in offering in the space. I'm curious if that's coming up at all with customers or something. They're considering at this point or if it's really tough right now.

Speaker Change: It was not just a one off phenomenon as well.

We stand here at the middle of Q3.

Speaker Change: And although Q2 was so strong given the booking for the first six months six weeks Im sorry.

Speaker Change: For me I and if they choose.

Speaker Change: To the right platform and will be chose the right platform. They want to have the lifestyle and provide those so it's all.

Speaker Change: All of the first months and a half of Q3 are also very strong across the board and also for six long slow. That's that's what we see right now in the booking them those bookings eventually will convert into revenues.

Speaker Change: Tie together and I think that's all in.

Christine Green: Christine Green rates.

Speaker Change: And market share expansion all speaks to that.

Speaker Change: Later, we feel most likely next year.

Speaker Change: With respect to the conversion from bookings to revenue as we've mentioned before sometime it takes longer as we win those very large deals.

Speaker Change: Thank you. Our next question comes from the line of Tim Horan with Oppenheimer and company. Please proceed with your question.

Barak Eilam: What are you seeing in the competitive landscape? Where are others falling short? We had Microsoft amounts in offering in the space. I'm curious if that's coming up at all with customers or something. They're considering at this point, or if it's really tough right now. So generally, in the competitive, the real competitive landscape, we feel that we're winning more. I think from what we see from other competitors versus our performance, it seems that we are taking market share. We also see it in the field in the different deals. I think that the main reason for that is our long-term investment in doing the right things in terms of the architecture and the solution.

Barak Eilam: What are you seeing in the competitive landscape? Where are others falling short? We had Microsoft amounts in offering in the space. I'm curious if that's coming up at all with customers or something. They're considering at this point or if it's really tough right now. So generally in the competitive, the real competitive landscape, we feel that we're winning more. I think from what we see from other competitors versus our performance, it seems that we are taking market share.

Speaker Change: They will guarantee our revenue for the long run, but the ramp takes a bit longer than winning.

Tim Horan: Thanks, guys can you give us maybe a little bit more color on how the bookings look this quarter, maybe versus last year or are we you know, 10% above 20% above and sending for implementation. So you know Kenny is taking like 10, 20% longer to implement these large contracts or you know any any type of color there.

Speaker Change: Smaller similar but the beauty is as we said the opportunity for cross sell and larger customer also tend to be much more sticky.

Speaker Change: Due to the notion of integration.

Catharine Trebnick: So generally in the competitive, the real competitive landscape, we feel that we're winning more. I think from what we see from other competitors versus our performance, it seems that we are taking market share. We also see it in the field in the different deals. I think that the main reason for that is our long-term investment in doing the right things in terms of the architecture and the solution. As we go to those larger enterprises, I think the competition just doesn't have what it takes in terms of both scalability as well as richness and the overall offering that they have in their platform.

Speaker Change: And how embedded the platform is with larger customers.

Tim Horan: And then lastly, well and then I have a follow up thanks.

Speaker Change: We believe we're taking market from the competition. You see it in our growth. We are growing much faster than the competition.

Speaker Change: So I'll start with these two for first of all as we've mentioned Q2 bookings were extremely strong and specifically six one booking.

Speaker Change: Thanks, maybe just on AI can you talk about how rapidly the products improving how much innovation youre seeing and whats changing in the payback period for the customers.

Speaker Change: And on a much larger scale.

Barak Eilam: We also see it in the field in the different deals. I think that the main reason for that is our long-term investment in doing the right things in terms of the architecture and the solution. As we go to those larger enterprises, I think the competition just doesn't have what it takes in terms of both scalability as well as richness and the overall offering that they have in their platform. With respect to Microsoft, I know it does a lot of headlines.

Speaker Change: You know, our all time high compared to every quarter that we've seen before and in a significant way I can also share with you.

Speaker Change: Any kind of.

Speaker Change: Productivity improvements at the customer's experience of quality improvements would be great.

Barak Eilam: As we go to those larger enterprises, I think the competition just doesn't have what it takes in terms of both scalability as well as richness and the overall offering that they have in their platform. With respect to Microsoft, I know it does a lot of headlines. I must say we see zero activity in the field. We had Microsoft; we don't see their go-to-market effective. It does not have the domain expertise to speak about CX. A great example is they have a CRM offering, Dynamics, with barely 5% or less than that market share. So if they were not successful with Dynamics, I'm not sure that they can be successful with what we do, which is way more complicated, that requires way more domain expertise.

Speaker Change: So it.

Speaker Change: Yeah. Thanks, Thanks for that I will say and are being have been in the <unk>.

It was not just a one off phenomena.

Speaker Change: We stand here at the middle of Q3.

Speaker Change: Tech sector for 25 years or more and I've seen the past technological waves all the way from proprietary <unk> software Internet mobile.

And although Q2 was so strong even the booking for the first six months six weeks I'm, sorry, Oh, there first month and a half of Q C are also very strong across the board and also for six long. So that's that's what we see right now in the bookings and those bookings eventually will convert into revenues.

Catharine Trebnick: With respect to Microsoft, I know it does a lot of headlines. I must say we see zero activity in the field. We had Microsoft, we don't see their go-to market effective. It does not have the domain expertise to speak about CX. A great example is they have a CRM offering, Dynamics, with barely 5% or less than that market share. So if they were not successful with Dynamics, I'm not sure that they can be successful with what we do, which is way more complicated, that requires way more domain expertise.

Barak Eilam: I must say we see zero activity in the field. We had Microsoft, we don't see their go-to market effective. It does not have the domain expertise to speak about CX. A great example is they have a CRM offering, Dynamics, with barely 5% or less than that market share. So if they were not successful with Dynamics, I'm not sure that they can be successful with what we do, which is way more complicated, that requires way more domain expertise.

Speaker Change: Cloud et cetera, and I havent experienced in my career.

Technology adult shift from ideation to production and adoption so fast as AI.

Speaker Change: Either later this year most likely next year.

Speaker Change: This is the cycle is so fast.

Speaker Change: With respect to the conversion from bookings to revenue as we've mentioned before sometime it takes longer with windows very large deals are they will guarantee our revenue for the long run, but the ramp takes a bit longer than women.

Speaker Change: And I will separate between two things that I see right now the <unk>. The early days of AI I spoke about a year ago, we've seen a very specific use cases.

Arjun Bhatia: Thank you. Very helpful.

Arjun Bhatia: Thank you. Very helpful. Thank you and congrats. Thank you.

Speaker Change: Converting from ideation to adoption extremely fast I'll give you. One example, we launched if im not mistaken. It was October of last year Auto summary, auto summary done by AI.

Catharine Trebnick: Thank you and congrats. Thank you.

Catharine Trebnick: Thank you. Very helpful. Thank you and congrats. Thank you. Our next question comes from the line of Catherine Trebnik with Rosenblatt Security. Please proceed with your question. Yeah, thank you for taking my question, nice quarter. I have a question on the macro. You reaffirmed your revenue guide for the year, but could you piece in or give more details? Are you seeing any of the deals like they're more complicated because people are looking at AI and trying to understand where they're not pasting the AI?

Speaker Change: Smaller some of them, but the beauty is as we said the opportunity for cross sell and larger customer also tend to be much more sticky.

Catharine Trebnick: Our next question comes from the line of Catherine Trebnik with Rosenblatt Security. Please proceed with your question. Yeah, thank you for taking my question. Nice quarter. I have a question on the macro. You reaffirmed your revenue guide for the year, but could you piece in or give more details? Are you seeing any of the deals like they're more complicated because people are looking at AI and trying to understand where they're not pasting the AI? And then, is there any impact from more eyeballs looking at these deals? So are you seeing any, you know, things that make you want to be a little bit more pragmatic in your guide?

Catherine Trebnick: Our next question comes from the line of Catherine Trebnik with Rosenblatt Security.

Due to the notion of integration.

Barak Eilam: Please proceed with your question. Yeah, thank you for taking my question, nice quarter. I have a question on the macro. You reaffirmed your revenue guide for the year, but could you piece in or give more details? Are you seeing any of the deals like they're more complicated because people are looking at AI and trying to understand where they're not pasting the AI? And then is there any impact from more eyeballs looking at these deals? So are you seeing any, you know, things that make you want to be a little bit more pragmatic in your guide?

Speaker Change: Specialized in CX.

Speaker Change: And how embedded the platform is with larger customers.

Speaker Change: It was launched in October of last year today, we have more than.

Speaker Change: And it's a combination of more deals that we are winning, but also as you hint at the fact that we have such a wide portfolio and customer either adopt the wider portfolio in day one or actually expand down the road.

Catharine Trebnick: And then is there any impact from more eyeballs looking at these deals? So are you seeing any, you know, things that make you want to be a little bit more pragmatic in your guide? Thank you. You know, I don't see it's changing the macro to what we've seen, let's see here we go. I think that the adoption of tech by enterprises is still an necessity for them to want the business. And of course, all our businesses were mission critical and the drivers behind our business are not really changing whether the macro is doing better or worse completely unrelated.

Speaker Change: Thanks, maybe just on the AI can you talk about how rapidly the pots, improving how much innovation, you're seeing and what's changing in the payback period for the customers.

Speaker Change: 80 customers and growing.

Speaker Change: And AI plays a significant role in this strategy.

Speaker Change: That have adopted either purchased or have adopted the summary is we see the immediate volume. So this is a very specific use case, great use case are great. Our immediate alloy in that but what I see right now, which I believe will be the trend moving forward is a broader adoption of product called functionally I further purposes.

Speaker Change: Any kind of points.

Speaker Change: Productivity improvements at the customer's experience of quality improvements would be great.

Speaker Change: Yeah. Thanks, Thanks for that I was saying I was being I've been in the.

Tech sector for 25 years or more.

Speaker Change: Customer service this comes out of the.

Barak Eilam: Thank you. You know, I don't see it's changing the macro to what we've seen. Let's see, here we go. I think that the adoption of tech by enterprises is still a necessity for them to want the business. And of course, all our businesses were mission critical, and the drivers behind our business are not really changing whether the macro is doing better or worse, completely unrelated. And I don't think it's related. They directly to the macro when you sell to large enterprises in what we do. Those are lengthy processes, but when they enterprise adopt us, whether they adopt us in they want to do or to be the standouts throughout the entire enterprise or just part of it, that's a lengthy lengthy process to begin with regardless of the macro.

Speaker Change: And I've seen the past technological waves old away from proprietary hardware and software Internet mobile.

Barak Eilam: Thank you. You know, I don't see it's changing the macro to what we've seen, let's see here we go. I think that the adoption of tech by enterprises is still an necessity for them to want the business. And of course, all our businesses were mission critical and the drivers behind our business are not really changing whether the macro is doing better or worse completely unrelated. And I don't think it related. They directly to the macro when you sell to large enterprises in what we do, those are lengthy processes, but when they enterprise adopt us, whether they adopt us in they want to to do or to be the standouts throughout the entire enterprise or just part of it, that's a lengthy lengthy process to begin with regardless of the macro.

Speaker Change: Early trials of customers trying to just take generic gen AI and disappointment with that.

Speaker Change: We see that we are winning those cloud transformation, not just because customers want to move to the cloud or not just because the desire to integrate digital into that, but AI now plays a very significant part in our win rate and are taking the market share from the competition and best will have the second question.

Speaker Change: Cloud et cetera, and I havent experienced in my career any technology adult a shift from ideation to production and adoption so fast.

And then of course, they come to us to understand all the value the relevant proprietary data the integration to workflow the ability to walk scale and functionally I was deep domain expertise and over there are the.

Speaker Change: Yeah, thank you, Barack.

Speaker Change: This is the cycle is so fast and I will separate between two things that they see them right now.

Speaker Change: Speed of innovation and how much we are investing by the way is just staggering.

Speaker Change: On the seasonality front, what we expected to be quite similar to what we've seen in years past, generally Q4 typically has a bit more positive seasonality impact on what we would see in the third quarter.

Catharine Trebnick: And I don't think it related. They directly to the macro when you sell to large enterprises in what we do, those are lengthy processes, but when they enterprise adopt us, whether they adopt us in they want to to do or to be the standouts throughout the entire enterprise or just part of it, that's a lengthy lengthy process to begin with regardless of the macro. So, you know, we'll always, you know, if you think about our guidance in the past, we are not that type of company that come with very low guide and then that is completely ridiculous and then we beat it and we said that we beat it.

Speaker Change: And that's typical where you typically see the sequential cloud growth is also picking up towards the end of the year.

Speaker Change: First the early days of Fiat.

Speaker Change: Thank you.

Speaker Change: A year ago, we've seen a very specific use cases are converting from ideation to adoption extremely fast I'll give you. One example, we launched if I'm not mistaken. It was October of last year Auto summary, and auto summary, Danbury I specialize in.

Speaker Change: Thank you. Our next question comes from the line of Patrick Wall Ravens with citizens JMP. Please proceed with your question.

Speaker Change: Oh, great. Thank you and.

Speaker Change: And we congratulate you on the results this quarter, So Barack Scott It seems like an amazing hire.

Speaker Change: Could you walk us through.

Barak Eilam: So, you know, we'll always, you know, if you think about our guidance in the past, we are not that type of company that come with very low guide and then that is completely ridiculous, and then we beat it and we said that we beat it. We know what we're seeing at the beginning of the year are very responsible for our guidance. And, and then we come and execute according to that. Thank you. Appreciate it. Thank you.

Barak Eilam: So, you know, we'll always, you know, if you think about our guidance in the past, we are not that type of company that come with very low guide and then that is completely ridiculous and then we beat it and we said that we beat it. We know what we're seeing at the beginning of the year are very responsible for our guidance. And, and then we come and execute according to that.

Speaker Change: The X.

Speaker Change: It was launched in October of last year today, we have more than a.

Speaker Change: How the search process unfolded and then what is what what is it exactly about Scott that made him rise to the top.

Speaker Change: 80 customers and growing.

Speaker Change: That have adopted either purchased or the Doctor. The summary is we see the immediate volume so this.

Speaker Change: For you the board and the search committee.

Speaker Change: Okay.

Speaker Change: Of course, you know, we are operating across multiple verticals, but we do have verticals that tend to bring that seasonality.

Catherine Trebnick: Thank you. Appreciate it.

Catharine Trebnick: We know what we're seeing at the beginning of the year are very responsible for our guidance. And, and then we come and execute according to that. Thank you. Appreciate it. Thank you. Ladies and gentlemen, that concludes our question and answer session.

Speaker Change: Sure happy to do that so.

Speaker Change: This is a very specific use case, great use case.

As soon as I announced my desire to.

Speaker Change: Great all right immediate though I am that but what I see right now, which I believe will be the trend moving forward is a broader adoption of what I call functionally I saw the purpose of customer service. This comes out of the early trials of customers trying to just take generic.

Speaker Change: It includes insurance and health care, retail.

Barak Eilam: Thank you.

Speaker Change: <unk> stepped down.

Speaker Change: In mid May the board immediately hired an executive.

Speaker Change: Searches for them a very good one expensive Stuart and immediately started the search they have defined whether it'd be critical criteria for the next leader of nice and they've done a really a gimmick.

Marty Cohen: Ladies and gentlemen, that concludes our question-and-answer session.

Speaker Change: So we expect here to see that again in the course of this year.

Barak Eilam: Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Alam for any final comments. Thank you all for joining us and have a great day.

Operator: I'll turn the floor back to Mr. Alam for any final comments. Thank you all for joining us, and have a great day. Thank you.

Speaker Change: And I mentioned that the kind of the consistent quarterly distribution is on trend with what we've seen in years past.

Operator: Thank you.

Barak Eilam: I'll turn the floor back to Mr. Alam for any final comments. Thank you all for joining us and have a great day. Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change: Great, thank you.

Speaker Change: Thank you.

Jenny: Jenny I and disappointment with that and.

Speaker Change: Our next question comes from the line of Tyler Radke with city.

Operator: This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change #100: Please proceed with your question.

Operator: This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change: Sensitive in a very thorough search.

Jenny: And then of course, they come to us to understand all the value the relevant proprietary data integration to workflow the ability to walk scale and functionally I was deep domain expertise and over there are the speed of innovation and how much we are investing by the way is just staggering.

Tyler Radke: Yeah, thank you for taking the question and congrats on the CEO higher.

Speaker Change: <unk> viewing and looking for multiple candidate.

Tyler Radke: It sounded like it was a really strong quarter from an enterprise bookings perspective, but I was wondering if you could talk about the non enterprise side of the business.

Speaker Change #102: It did look like the sequential cloud growth was some of the smallest you've seen just in terms of a dollar percentage basis for the second quarter in a few years was SMB, a greater headwind than you thought and maybe offsetting some of that enterprise strength.

Speaker Change: And Scott definitely came up on top with his vast experience in enterprise software.

Speaker Change: Coming from a company that operates at scale is nice would like to scale further and can ensure that we'll scale further.

Speaker Change: Thank you.

Speaker Change: He has global experience he's based in new Jersey, but in his past career.

Speaker Change: Thank you. Our next question comes from the line of Patrick Wall Ravens with citizens JMP. Please proceed with your question.

Speaker Change: As you've seen in different markets.

Speaker Change: And the fact that he also.

Speaker Change: Oh, great. Thank you and.

Speaker Change: Spearheaded.

Speaker Change: Gratulate you on the results this quarter. So Barack Scott seems like an amazing higher could you walk us through how the search.

Speaker Change: Formation of the company to the cloud all of those losses personality of the council of state.

Speaker Change: Process unfolded and then you know what what what is it exactly about Scott that made him rise to the top.

Speaker Change: We're part of the decision criteria for the board of directors and eventually.

Speaker Change: We have decided to go with Scott and we're very happy to.

Speaker Change: For you the board and the search committee.

Speaker Change: To give you and the world will come into a nice starting generally first.

Speaker Change: Yeah.

Speaker Change: Sure happy to do that so you know as soon as I announced my desire to stepped down.

Speaker Change: As you list out and take over the World for me.

Beth: Yes, congratulations and if I could ask a follow up Beth you mentioned that APAC was was down.

Speaker Change: In mid May the board immediately hired an executive.

Speaker Change: God I see is Australia.

Speaker Change: Searches for them a very good one Spencer Stuart and immediately started the search they have defined whether it'd be a critical criteria for the next leader of Oh, nice and they've done a really.

What's going on in APAC or is it something that he can help with.

Speaker Change: So APAC had from a bookings perspective, probably the best quarter ever in terms of bookings.

Speaker Change: Extensive and a very thorough search.

Speaker Change: Had this as I mentioned $100 million TCE deal that were originated out of our APAC region. So very strong quarter performance with respect to what you see in the revenue, it's really an apples to oranges comparison.

Speaker Change: Interviewing and looking for multiple candidate.

Skol: And skol differently came up on top we sees a vast experience in enterprise software.

Skol: Coming from a company that operates at scale is nice who'd like to scale further and can ensure that we'll scale further he's.

Speaker Change: The cloud growth in APAC is continuing to pick up it's in the double digits and it looks very nice and the comparison to the prior year was that they had some large premise based deals last year, where they took the revenue immediately enter their revenue stream. So you know really across both our business segments and all our regions.

Skol: He has global experience he's based in new Jersey, but in his past career have I seen in different markets.

Skol: And the fact that he also spearheaded.

Speaker Change: We're moving more and more towards higher recurring revenue more linearity of course, you will see some continued variability in FCC and some of the regions as they make that transition as they still are early days in terms of penetration to the cloud, but good things happening so a little bit masked by the apples to orange.

Speaker Change #101: Formation of the company to the cloud all of those losses personality the council of state.

Speaker Change #101: We're part of the decision to retire from the board of directors and eventually.

Speaker Change #102: They have decided to go with schools and we're very happy.

Speaker Change #102: To give you an award will come into a nice stopping generally first.

Speaker Change: As a comparison and an APAC, but really a strong quarter there under the covers.

Speaker Change #103: As you list out there and take over the World for me.

Beth Gaspich: Yeah, Congratulations and if I could ask a follow up Beth you mentioned that APAC was was down.

Speaker Change: Thank you.

Avery Galleria: Thank you. Our next question comes from the line every seat Galleria with RBC capital markets. Please proceed with your question.

Beth Gaspich: Scott I see as Australian what what's going on in APAC or is it something that he can help with.

So APAC had from a bookings perspective, probably they are the best quarter ever in terms of bookings are you know we had this as I mentioned, you know $100 million T. C V. L. A that were originated out of our APAC region. So very strong quarter performed.

Speaker Change: Wonderful. Thanks, so much for taking my questions, maybe I want to start diving, a little bit deeper onto the AI front. When we think about your customers who are live and using especially degenerative AI. Today can you maybe talk about how much of that is internal which would include use cases like <unk>.

Speaker Change #104: With respect to what you see in the revenue, it's really an apples to oranges comparison are the cloud growth in APAC is continuing to pick up it's in the double digits and it looks very nice and the comparison to the prior ear was that they had some large premise based deals last year, where they took the revenue.

Speaker Change: Call logging and summarization versus anything external or actually customer facing and then I have a follow up.

Speaker Change: Yes, great question I'm not sure I have the exact.

Speaker Change: Mixed in top of my head, but if I look on.

Speaker Change #100: Both Q2 booking in Q1, I would say that it's half half I would say that most most of our customers going back to the offering of copilot on autopilot. If you think about core biologics the augmentation of the users. So you can argue that this multiple internal use right to make the user 10 times better than.

Lee answer their revenue stream. So you know really across both our business segments and all our regions, we're moving more and more towards higher recurring revenue more linearity of course, you will see some continued variability in F. C C and some of the regions as they make that transition as they still are early days.

Speaker Change #100: Very effective with an interactive consumer an autopilot is what happens when you take a are you when you take the agents out of the equation and it is the entity that communicates with the with the customer I would say, it's about half half and most of our customers that adopt copilot eventually and auto.

Speaker Change #104: As in terms of penetration to the cloud, but are good things happening so a little bit masked by the apples to oranges comparison, and a N APAC, but really a strong quarter there under the covers.

Thank you.

Speaker Change #104: Okay.

Speaker Change #104: Thank you. Our next question comes from the line every seat Jeff Loria with RBC capital markets. Please proceed with your question.

Speaker Change #100: <unk> gained again confident in some of them.

Speaker Change #100: Actually.

Speaker Change #100: Right out of the gate go both.

Oh wonderful. Thanks, so much for taking my questions, maybe I want to start diving, a little bit deeper onto the AI front. When we think about your customers who are live and using especially degenerative AI. Today can you maybe talk about how much of that is internal which would include our use cases like <unk>.

Speaker Change #100: Got it that's really helpful. Thanks.

Speaker Change #101: And then maybe just a question on margin so it looks like Youre, bringing up your your cash flow expectations from the analyst day, which is which is great to see moving just wanted to understand kind of how youre thinking about the balance of bringing up margins when you're investing for this journey, our opportunity and maybe alongside that as Jenny I started.

Speaker Change #105: Call logging in and summarization versus anything external or actually customer facing and then I have a follow up.

Speaker Change #102: To become a bigger piece of the business and maybe more directly monetize a ball how should we be thinking about the potential drag on gross margins. Thanks.

Speaker Change #106: Yeah, Great question I'm not sure I have the exact a mixed in top of my head, but if I look on.

Speaker Change #107: Both Q2 booking in Q1, I would say that it's half half.

Speaker Change #103: Yeah. Thanks, It's an excellent question I'll take the AI piece first which is to say that you know over the last several years, we've really pivoted our business and in particular, our development teams to be focused on AI solutions and you can see that to success playing out in the selling that we're doing to our customers. So.

Speaker Change #107: Most most of our customers going back to the offering of copilot on autopilot. If you think about the profile of the augmentation of.

Speaker Change #107: New users. So you can argue that this multiple internal use right to make the user 10 times better and very effective as an interactive consumer an autopilot is what happens when you take a are you you you know when you take the agents out of the equation and it is the entity that communicates with the with the customer I would say that is.

Speaker Change #103: We've already made significant investments will continue to do so in terms of where we prioritize our internal focus and in how we spend in the company and in terms of how that will play out and the margins I think first of all youre seeing that a little bit from the cloud gross margin.

Speaker Change #108: About half half and most of our customers that adopt copilots eventually edge autopilot, because then in game they gain confidence and some of them.

Speaker Change #103: A bit on the flattish side and you know.

Speaker Change #104: While we are highly confident youll see that continue to accelerate over the medium term I think in the near term you know we've made a lot of investments.

Speaker Change #108: Actually in right out of the gates go both.

Speaker Change #109: Got it that's really helpful. Thanks.

In terms of the cloud margin a lot of that is focused on some of the growth.

Speaker Change #110: And then maybe just a question on margin so it looks like Youre, bringing up your your cash flow expectations from the analyst day, which is which is great to see maybe just wanted to understand kind of how youre thinking about the balance of bringing up margins. When you know you're investing for this journey I opportunity and maybe alongside that.

Speaker Change #104: The factors that I talked about earlier as well so.

Speaker Change #105: Growth in sovereign cloud as we're building out in penetrating more internationally as an example that all being said when you put it together I mean, we have great operating leverage in our business and you can see that play out consistently quarter after quarter.

Speaker Change #110: Jenny I starts to become a bigger piece of the business and maybe more directly monetize a ball how should we be thinking about the potential drag on gross margins. Thanks.

Speaker Change #106: We're very proud of the fact that if you put this up to you know some of the nearest competitors across all our financial metrics, our cloud growth our our gross margins our operating margins, our cash flow generations, where leaps and bounds ahead of the other players in the market and it's just an area that we continue to focus on I think you will.

Speaker Change #111: Yeah. Thanks, It's an excellent question I'll take the AI piece first which is to say that you know over the last several years, we've really pivoted our business and in particular, our development teams to be focused on a isolation and you can see that to success playing out and in the selling that we're doing to our customers.

Speaker Change #106: See that playing out and the cash flows.

Speaker Change #106: And if you look at the other operating expenses as well.

Speaker Change #112: So we've we've already made significant investments will continue to do so in terms of where we prioritize our internal focus and in how we spend in the company and in terms of how that will play out and the margins I think first of all you're you're seeing that a little bit from the cloud gross margin you know it said.

Speaker Change #107: I think we are at we show a very healthy pretty consistent overall investment that we're making in those areas around R&D and while at the same time continuing to add and grow our sales organization. So again it really comes down to I think a very laser focused approach that we have here in the company in terms of prioritization of spam.

Speaker Change #112: Then a bit on the flattish side and you know while we are highly confident you'll see that continue to accelerate over the medium term I think in the near term you know we've made a lot of investments.

And while it in parallel.

Really looking to that operation, our operational leverage to continue to expand profitability.

Speaker Change #108: Wonderful thank you.

Speaker Change #112: In terms of the cloud margin a lot of that is focused on are some of the growth you know factors that I talked about earlier as well so our growth in sovereign cloud as we're building out in penetrating more internationally as an example that all being said when you put it together I mean, we have great operating leverage in our business.

Speaker Change #108: Yeah.

Speaker Change #109: Thank you. Our next question comes from the line of Daniel Wang with Mizuho Securities. Please proceed with your question.

Speaker Change #110: Hi, This is city panic right.

Thanks for taking my question.

Really impressive to see the bookings.

Speaker Change #112: And you can see that play out consistently quarter after quarter and you know we're very proud of the fact that if you put us up to you know some of the nearest competitors across all our financial metrics, our cloud gross hour or our gross margins our operating margins our cash flow generation, that's where leaps and bounds ahead of the other players in them.

Strength in this macro environment so.

Speaker Change #110: Question I have and then Barak you mentioned about AI is one other factor driving this cloud migration. So the question is our customer looking at your AI solution, that's better than others, that's driving this <unk>.

CX platform adoption are theyre looking at first CX platform and then AI is an add on that this morning and also in the same context are you seeing the cloud migration.

Market and you know, it's it's just an area that we continue to focus on I think you see that playing out and in the cash flows and if you look at the AR in other operating expenses as well I think we are at we show a very healthy pretty consistent overall investment that we're making in those areas around R&D and while at the same time.

Barak: In our trend differently between SMB and out of Brexit.

Barak: Yes.

Speaker Change #111: For the first question is it's obviously the combination of the 212 very tied together we have superiority, we believe bolstering the best platform. The most comprehensive and complete in our industry and it is true natively build platform in the cloud with.

Speaker Change #112: I'm continuing to add and grow our sales organization. So again, it's it really comes down to I think a very laser focused approach that we have here in the company in terms of prioritization of spend wallet and in parallel.

Speaker Change #112: Really looking to that operation, our operational leverage to continue to expand profitability.

With all the different solution workflow touch points are and of course, the data repository that we have.

Speaker Change #113: But wonderful thank you.

Speaker Change #113: Yeah.

Speaker Change #111: And this is an environment. This is if you would like the right place really I can actually.

Speaker Change #114: Thank you. Our next question comes from the line of Daniel Wong with Mizuho Securities. Please proceed with your question.

Speaker Change #111: Flores without the right platforming I just doesn't work.

Speaker Change #111: So I think that after two years or even half of very large enterprises.

Daniel Wong: Hi, This is city panic right.

Daniel Wong: Thanks for taking my question.

Speaker Change #111: Testing and understanding what the I can do there is a much more mature understanding of enterprises generally.

Daniel Wong: It's really impressive to see the bookings strength in this macro environment. So the question I have and then Barak you mentioned about AI is one of the factor driving this cloud migration. So the question is our customer looking at your AI solution, that's better than others, that's driving this.

Speaker Change #112: It doesn't just.

Speaker Change #113: Just to take a point solution, let's say I won't do the job when you actually need to for a specific function adopt a platform for industrial domain and leverage it in order to do it. So it's the combination of the two.

Speaker Change #116: CX platform adoption or they're looking at for CX platform and then AI is an add on that this morning and also in the same context are you seeing the cloud migration.

Speaker Change #114: Both because they choose us both because of the AI solutions, we have as well as.

Speaker Change #117: No trend differently between SMB and Oh Brexit.

Speaker Change #114: Because of the platform and I'm sorry, the second question was.

Speaker Change #115: Any trends there.

Speaker Change #115: Between SMB versus enterprise.

Barak Eilam: Yeah. So for the first question is obviously the combination of the two and the two are very tied together we have superiority. We believe Boston are the best platform. The most comprehensive and complete in our industry and it's a it's just true natively built clarksville.

Speaker Change #115: Terms of cloud migration.

Speaker Change #115: And not a trend, but obviously.

Speaker Change #115: Cloud is.

Speaker Change #115: The cloud penetration is is it still I would say relatively early stages in the large enterprises and it's more advanced in the SMB. So there is still room to grow in the SMB and it's not.

In the cloud.

Barak Eilam: With all the different solution workflow touch points are and of course, the data repository that we have.

Speaker Change #115: It is not saturated yet, but the biggest opportunity obviously is at the enterprise.

Speaker Change #118: And this is an environment. This is if you would like the right place really I can actually flourish without the right plus for me I just doesn't work.

Speaker Change #116: Great and quick follow up a bit great job on cash flow.

Speaker Change #119: So I think that after two years or even a hassle sorry, a lot of enterprises.

Speaker Change #116: There anything like.

Speaker Change #116: One time thing driving Q2 or is that the trend we should expect going forward.

Speaker Change #119: Testing and understanding what the I can do there is a much more mature understanding of enterprises generally.

Speaker Change #117: So in overall I think you can expect a continued very healthy a year in cash flow and I update it on the call that we now are expecting more than $700 million to be generated in free cash flow this year, which is up.

Speaker Change #120: That he doesn't are you know just to take a point solution, let's say I want to do the job, but you actually mean to for a specific function adult.

Speaker Change #118: A significant amount even from just a few months ago. So you will see that our business from a cash flow generation is not equally distributed.

Speaker Change #120: And a platform for that show domain and leverage it in order to do it. So it's the combination of the two.

Speaker Change #119: They'll have some remnants of our maintenance customers and our on premise space term based customers that are still pay annually in advance. So you still typically see that thats coming in kind of the first half and particularly usually Q1.

Speaker Change #120: Both because they choose us both because of the AI solutions, we have as well as.

Speaker Change #120: Because of the platform and I'm sorry, the second question was.

Speaker Change #121: Any trends there between SMB versus enterprise.

Speaker Change #122: So cloud migration.

Speaker Change #119: So you won't see the same level of quarterly distribution that you would see on the P&L, but again continued very healthy and.

Speaker Change #122: And not a trend, but obviously.

Speaker Change #122: You know our cloud and the cloud penetration is.

Speaker Change #120: Really strong performance for the full year expected with that $700 million, which is nearly close to 50% year over year increase.

Speaker Change #122: It's still it I would say relatively early stages in the large enterprises and small advance in the a S. M. B. So there is still you know a room to grow in the SMB and smelting.

Speaker Change #120: Thank you.

Speaker Change #120: Thanks.

Speaker Change #120: Thank you.

Speaker Change #122: Not saturated yet, but the biggest opportunity obviously is at the enterprise.

Speaker Change #121: Thank you. Our next question comes from the line of.

Speaker Change #122: Our June <unk> with William Blair. Please proceed with your question.

Speaker Change #123: Oh, great and quick follow up a bit a great job on cash flow.

Speaker Change #123: Perfect. Thank you.

Speaker Change #124: For you I think I heard.

Speaker Change #124: Was there anything like you know what.

Speaker Change #125: 100% plus.

Speaker Change #125: Onetime thing driving Q2 or is that the trend is what we should expect going forward.

Speaker Change #124: Bookings growth in auto pilot and copilot.

Speaker Change #126: Obviously very strong can you talk a little bit about where you're seeing the early adoption or are there specific.

Speaker Change #126: So in an overall I think you can expect a continued very healthy a year in cash flow and and I update it on the call that are we now are expecting a more than 700 million to be generated in free cash flow. This year, which is up a you know.

Speaker Change #126: Verticals.

Speaker Change #126: That are leading the way in Miami.

I think Brad mentioned Theres more upsell and cross sell so would love to hear what.

Speaker Change #126: A significant amount even from just a few months ago. So you will see that our business from a cash flow generation is is not equally distributed you know we still have some remnants of our our maintenance customers and our on premise space term based customers that are still pay annually in advance. So you still typically.

Adoption of co pilot autopilot looks like between existing customers and new deals as well.

Speaker Change #126: So I'll start with the second part I think it's about half half between existing customers.

Customers and.

Speaker Change #126: New customers and a lot of our new deals coming with.

Speaker Change #126: See that that's coming in kind of the first half and particularly usually Q1.

Speaker Change #126: AIA in different parts of the eye that I've mentioned before.

Speaker Change #126: So you won't see the same level of quarterly distribution that you would see on the P&L, but again continued very healthy and are.

Speaker Change #127: Copilots is the big thing where customers are usually starting with because they feel a bit more confident to put AI next to their employees and seats working before they actually put it in the hands of their consumers, but a very fast after that they move into taking very spin.

Really strong performance for the full year expected with that $700 million, which is nearly a you know close to 50% year over year increase.

Speaker Change #127: Thank you congratulations.

Speaker Change #127: Terrific tasks.

Speaker Change #128: Thank you.

Speaker Change #128: And automate them with with the eye, hence using the autopilot.

Thank you. Our next question comes from the line of.

Speaker Change #129: Our June popped yet with William Blair. Please proceed with your question.

Speaker Change #128: Okay and then.

Speaker Change #130: Perfect. Thank you.

Speaker Change #129: The win rates seem to be strong and improving what are you seeing in the competitive landscape, where our others falling short and we had Microsoft announced an offering in the space I'm curious, if that's coming up at all with customers or something.

Speaker Change #130: Barack for you I think I heard.

Speaker Change #131: 100% plus bookings growth in auto pilot and copilot.

Speaker Change #132: Which is obviously very strong can you talk a little bit about where you're seeing the early adoption or are there specific verticals.

Speaker Change #132: That are leading the way and then I think Pat mentioned Theres more upsell and cross sell so would love to hear what.

Speaker Change #129: They're considering.

Speaker Change #129: At this point or if it's too early to call right now.

Speaker Change #133: Adoption of co pilot autopilot looks like between existing customers and new deals as well.

Speaker Change #129: So generally in the competitive the real competitive landscape, we feel that we are winning more.

Speaker Change #129: I think from what we see from other competitors versus our performance. It seems that we are taking market share. We also see it in the field into different deals.

Pat: So I'll start with the second part I think it's about half half between existing customers.

Customers and new.

Speaker Change #135: New customers and a lot of our new deals with both coming with our AI in different parts of the eye as I've mentioned before.

I think that the main reason for that is our long term investments.

Speaker Change #129: In doing the right things in terms of the architecture and the solution as we go to those larger enterprises I've seen the competition just doesn't have.

Speaker Change #135: Co pilots is the big thing where customers are usually starting with them because they feel a bit more confidence with AI next to their employees and seats working before they actually put it in the hands of their consumers, but a very fast after that they move into taking very spin.

Speaker Change #129: What it takes in terms of both scalability as well as the richness and the overall offering.

Speaker Change #130: That they have in their platform with respect to Microsoft I know he's got a lot of headlines I must say, we see deal activity in the field, we had partnerships with Microsoft We don't see the go to market effectively does not have the domain expertise to speak about CX.

Speaker Change #135: Ossific tasks.

Speaker Change #135: And automate them with our with the eye, hence using the the autopilot.

Speaker Change #130: A great example, as you know they have the CRM offering dynamics.

Speaker Change #135: Okay and then.

Speaker Change #135: The win rates are seen.

Speaker Change #130: Barely 5% or less in that market share.

Speaker Change #136: To be strong and improving what are you seeing in the competitive landscape, where our others falling short and we had Microsoft announce an offering in the space I'm curious if that's coming up at all with customer or is there something.

Speaker Change #130: So if they were not successful at dynamics.

Speaker Change #130: Not sure that they can be successful with what we do which is way more complicated.

Speaker Change #131: Requires way more domain expertise.

Speaker Change #131: All right very helpful. Thank you and congrats.

Speaker Change #131: Thank you.

Speaker Change #136: They're considering.

Catharine <unk>: Thank you. Our next question comes from the line of Catharine <unk> with Rosenblatt Securities. Please proceed with your question Yeah. Thank you for taking my question nice quarter.

Speaker Change #137: At this point or if it's too early to call right now.

Speaker Change #138: So generally in the competitive the real competitive landscape, we feel that we are winning more well I think from what we see from other competitors versus our performance. It seems that we are taking market share. We also see it in the field into different deals I think that the main reason for that is all along.

Speaker Change #133: I have a question on the macro you reaffirmed your revenue guide for the year, but could you piece in or give more details are you seen any of the deal cycle.

Speaker Change #133: Good morning, David because people are looking at AI and trying to understand whether or not pace in AI and then is there any impact from more eyeballs looking at these deals. So are you seeing any.

Term investments.

Speaker Change #138: In in doing the right things in terms of the architecture and the solution as we go to those larger enterprises I've seen the competition just doesn't have what it takes in terms of both scalability and as well as richness and the overall offering.

Speaker Change #134: All the things that make you want to be a little bit more pragmatic in your guide. Thank you.

Speaker Change #135: No I don't see a change in the macro to what we've seen let's say a year ago I think that the adoption of <unk> by enterprises as still a necessity for them to run the business.

Speaker Change #139: Did they have in their platform with respect to Microsoft I know he's got a lot of headlines I must say, we see do you want to keep it in the field, we have partnership with Microsoft We don't see their go to market perspective does not have the domain expertise to speak about CX.

Speaker Change #135: Most all of our businesses, we are mission critical and the drivers.

Speaker Change #139: A great example, as you know they have the CRM offering dynamics.

Speaker Change #135: Behind our business are not really changing where the macro is doing better or worse.

Speaker Change #140: We've barely 5% or less than duct marketshare.

Speaker Change #140: So if they were not successful as dynamics I'm not sure that they can be successful with what we do which is way more complicated that's required is way more domain expertise.

Speaker Change #135: Completely related and I don't think it really directly to the macro when you sell to large enterprises.

Speaker Change #135: In what we do those are lengthy processes, but when the enterprise adopters, whether they adopt us and they want to.

Speaker Change #141: Alright very helpful. Thank you and congrats.

Speaker Change #141: Thank you.

Speaker Change #135: To do or to be the standout throughout the entire enterprise will just part of it that's a lengthy lengthy across to begin with regardless of the macro.

Catherine Travnik: Thank you. Our next question comes from the line of Catherine Travnik with Rosenblatt Securities. Please proceed with your question Yeah. Thank you for taking my question nice quarter I have a question on the macro you reaffirmed your revenue guide for the year, but could you piece in or give more details are you seen.

Speaker Change #136: So you know, we'll always if you think about our guidance in the past we are not the type of company that come with very low guide and then that is completely ridiculous and then we beat it and we said that we did we are we know what we are seeing at the beginning of deal a very responsible for our guidance.

Speaker Change #144: Any of the deal cycle like Vermont state. It because people are looking at AI and trying to understand whether or not a pace in the AI and then is there any impact from more eyeballs looking at these deals. So are you seeing any and all the things that make you want to be a little bit more pragmatic in your.

And then we come and execute according to that.

Speaker Change #136: Thank you I appreciate it.

Speaker Change #136: Okay.

Speaker Change #137: Thank you, ladies and gentlemen that concludes our question and answer session I will turn the floor back to Mr. Locke for any final comments.

Got it thank you.

Speaker Change #145: No I don't see a change in the macro to what we've seen let's say a year ago I think that the adoption of <unk> by enterprises as still a necessity for them to run the business.

Speaker Change #138: Thank you all for joining us and have a great day. Thank you.

Speaker Change #139: Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.

Speaker Change #146: Of course, all of our businesses, we are mission critical and the drivers.

Speaker Change #146: Behind our business are not really changing where the macro is doing better.

Speaker Change #146: It was a completely related and I don't think it really directly to the macro when you sell to large enterprises.

Speaker Change #146: In what we do those are lengthy processes, but when their enterprises adopt us whether they adopt us and they wanted to.

Speaker Change #146: To do or to be the standout throughout the entire enterprise will just part of it.

Michael: That's a lengthy lengthy across to begin with Cingal does something Michael. So you know, we'll always you know if you think about our guidance in the past we're not the type of company that come with very low guide and then that is completely ridiculous and then we did it and we say that we did is we are we know what.

Michael: We're staying at the beginning of a very responsible for our guidance.

Michael: And then we come and execute according to that.

Speaker Change #148: Thank you I appreciate it.

Speaker Change #148: Yeah.

Mr. <unk>: Thank you, ladies and gentlemen that concludes our question and answer session I'll turn the floor back to Mr. <unk> for any final comments.

Mr. <unk>: Thank you all for joining us and have a great day. Thank you.

Speaker Change #150: Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.

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