Q3 2025 Nice Ltd Earnings Call

In listen only mode.

Following managements formal presentation instructions will be given for the question and answer session.

As a reminder, this conference is being recorded November 13th 2025.

Patrick Walravens: All right. Fantastic. Thank you for that.

Operator: Your next question comes from the line of Elizabeth Porter with Morgan Stanley. Please go ahead.

I would now like to turn this call over to Mr. Ryan Gilligan VP Investor Relations at Nice. Please go ahead.

Elizabeth Porter: Great. Thank you so much for the question. Now that we're a few months out from the renewed and expanded RingCentral partnership, are there any changes that you're seeing in pipeline velocity or average deal size through this channel? Understanding we're probably going to get a little bit more next week, any context for how we should think about this as an incremental driver to fiscal 2026 bookings? Thank you.

Thank you operator, I'm incredibly incredibly excited to join <unk> as the Companys, New Vice President of Investor Relations and I look forward to working closely with all of you in the investment community.

With me on today's call are Scott Russell, Chief Executive Officer, and Best Gaskets, Chief Financial Officer.

Scott Russell: Yeah. It's a great question. First of all, Vlad and I and our teams have been in really tight collaboration with the renewed partnership. We've got an updated go-to-market. We've got the real potential to have an expansion. I'll give you two key levers. One is RingCentral. We're already an existing partner of Cognigy, and a proven, scalable partner of Cognigy. Not only in the combined install base that we have with RingCentral together, but as their go-to-market, as their agentic and conversational AI platform supporting their solutions, it is a great collaboration. We're doubling down on that. Super. Secondly, as you rightly point out, with our renewed partnership commitment, we're able to give confidence to our customers across all segments around combining world-leading UCaaS platform with the best-in-class CCaaS and now agentic AI platform as a unified offering.

Before we start I would like to point out that some of the statements made on this call will constitute forward looking statements and.

In accordance with the Safe Harbor provisions of the private Securities Litigation Reform Act of 1095, please be advised that the companys actual results could differ materially from these forward looking statements.

Additional information regarding the factors that could cause actual results or performance of the company to differ materially is contained in the section entitled risk factors in item three of the company's 2024 annual report on form 20-F as filed with the Securities and Exchange Commission on March 19 2025.

During today's call, we will present, a more detailed discussion of third quarter 2025 results and the company's guidance for full year 2025.

You can find our press release as well as pdfs of our financial results on <unk> Investor Relations website.

Scott Russell: Yes, identified leads, clear go-to-market momentum, and collaboration between our two go-to-market organizations means that we do expect renewed growth, and I know that the RingCentral team feel the same way.

Following our comments there will be an opportunity for questions.

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.

Speaker #1: Following management's formal presentation, instructions will be given for the question-and-answer session. As a reminder, this conference is being recorded on November 13, 2025. I would now like to turn this call over to Mr. Ryan Gilligan, VP. Please go ahead.

Elizabeth Porter: Great. Thank you.

Amortization of acquired intangible assets.

Operator: Your next question comes from the line of Samad Samana with Jefferies. Please go ahead.

Acquisition related expenses.

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

Samad Samana: Hey, good morning. Thanks for taking my questions. Maybe one, just Beth, as a housekeeping question. If I think about the guidance increase for the year, was any of that on the cloud side an organic increase as well, or was it largely due to Cognigy? I have a follow-up.

Speaker #1: Investor Relations at NICE.

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

Speaker #2: Operator, I'm incredibly excited to join NICE as the company's new Vice President of Investor Relations. I look forward to working closely with all of you in the investment community. Thank you.

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

Operator: Yeah. Thank you. We have maintained our expectation of 12% growth in the cloud, excluding Cognigy, for the course of 2025. That is remaining unchanged. The increase that you're seeing in the range in the midpoint up to the 12.5% midpoint is predominantly coming from the inclusion of Cognigy.

Speaker #2: With me on today's call are Scott Russell, Chief Executive Officer, and Beth Gaspich, Chief Financial Officer. Before we start, I would like to point out that some of the statements made on this call will constitute forward-looking statements.

Thank you, Brian and we are thrilled to welcome you on board and have you joined that team good morning, and welcome everyone.

Well, let me start by saying the renewed strategy, we laid out for nice at the beginning of the year is now producing clear tangible results reflected in both financial performance and our growing market position with.

Speaker #2: In accordance with the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995, please be advised that the company's actual results could differ materially from these forward-looking statements.

Samad Samana: Great. Maybe just zooming out from that very specific question, Scott, I don't want to front-run the Capital Markets Day on Monday, where I'm sure you'll dig into this in detail, but as you think about the early days of Cognigy being folded in and what they brought in the NICE team, how are you thinking about the joint go-to-market effort right now? What have the early observations been? Is it better together? Are customers appreciating that better together story, or is it still today CX One and Cognigy maybe going a bit separately, but you'll pull that in over time? Thank you again.

We're seeing great momentum across our entire business setting a solid foundation for sustained growth.

Speaker #2: Additional information regarding the factors that could cause actual results or performance of the company to differ materially is contained in the section entitled Risk Factors in Item 3 of the company's 2024 Annual Report on Form 20F as filed with the Securities and Exchange Commission on March 19, 2025.

We're pleased to report another strong quarter underlined by exceptional cloud and AI bookings stemming from the continued expansion and execution of our strategy our international expansion and our robust go to market performance this quarter reinforced the strength.

Speaker #2: During today's call, we will present a more detailed discussion of third-quarter 2025 results and the company's guidance for full year 2025. You can find our press release, as well as PDFs of our financial results on NICE's Investor Relations website.

<unk> solutions driving real transformation for our customers with exceptional cloud bookings driving our cloud backlog increase of 15% year over year and with our AI capabilities included in every new seven figure <unk> deal.

Scott Russell: Yeah. Yeah. Thanks, Samad. A couple of observations. First of all, I was really pleased. I talked about our cloud backlog growth and the growth of it. NICE Cognigy has already been an injection of positivity to our backlog. It is a standalone business that has a really great pipeline, that has a really great brand, and recognition in the market. It has not been diluted. In fact, it's been enhanced. That's exciting because it means the acknowledgment of the market, that of a leading conversation on AI platform in its own right, competing head-to-head with competitors in that space, they stand really, really strong. We obviously have been really active in making sure that the NICE teams are fully up to speed. It was quite advantageous, actually.

Speaker #2: Following our comments, there will be an opportunity for questions. 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 compensation, amortization of acquired and tangible assets, principles.

In Q3 total revenue was $732 million at the high end of our guidance range with cloud revenue, reaching $563 million up 13% year over year.

Speaker #2: accounting for share-based acquisition-related expenses, amortization of discount on debt, and loss from extinguishment of debt, and the tax effect of the non-GAAP adjustments. The differences between the non-GAAP adjusted results and the equivalent GAAP figures are detailed in today's press release.

Our cloud revenue growth was primarily driven by AI and self service offerings, whose IRR accelerated to 14, 9% driven by sustained organic momentum and the contribution from <unk>, which closed in early September.

This demand for our <unk> offering is reflected in strong bookings for autopilot and co pilot deals more than tripling in Q3.

Speaker #2: The

We also achieved a higher win rates against our key CX competitors underscoring the growing customer appetite of our of our AI powered and domain reach solutions.

Speaker #3: are thrilled to welcome you on board and have everyone. Well, let me start by saying the renewed strategy that we laid out for NICE at the beginning of the year is now producing clear, tangible

Scott Russell: We didn't expect the closing to happen in September, but because it did, we were able to get ahead of the enablement of our go-to-market, the large coverage we have, including our partners. Don't forget, our partners play a huge part of our go-to-market execution. Through September, we really ramped that up, which means we were able to hit the ground running in Q4, and as we lead into 2026, with the NICE team being really equipped about leading those conversations on the AI and the automation play that Cognigy brings. Those two are really good, and the resonance that we're getting from the NICE customer base is also really strong.

Furthermore, it reinforces our conviction that we operate in a vibrant growing markets, where organizations are showing robust demand for accelerating their AI transformation using our offerings.

Speaker #3: growing market position. We're seeing great momentum across our entire As reflected, mainly in

Speaker #3: business, setting a solid foundation growth. We're pleased to for sustained report another strong quarter, underlined by exceptional cloud and AI bookings. Stemming from the continued expansion and execution of our AI-first strategy, our international expansion, and our robust go-to-market performance.

Nice to see not only as a catalyst for our groundbreaking innovation, but more importantly, as a fundamental thoughts for reinventing how business technology and humans interact in each of our markets in.

In the world of customer experience, our leading CX AI platform <unk> one is using purpose built.

Scott Russell: The third part that I guess I want to just reiterate what I replied before to Patrick or Elizabeth when we're just talking about is there is a large—it might have been Saturday, actually—there's a large amount of market, both internationally and in the US, which are evaluating their transformation journey, where they've got an on-prem suite, fragmented solutions, and they're trying to figure out what's my transformation roadmap. What it's meant for us is instead of saying, you've got to do your CCaaS move to the cloud first and then do your AI, they love the optionality. Hey, I might lead with my AI, get some real productivity and automation savings that will drive through. Then the unified platform gives us that potential to have even higher.

Speaker #3: This quarter reinforced the strength of our AI solutions. Driving real transformation for our customers, with exceptional cloud bookings driving a cloud backlog increase of 15% year over year, and with our every new seven-figure CX AI capabilities included in deal.

To reshape customer journeys in exciting new ways.

Our AI powered orchestration allows us to perfectly blamed human and Io agents, creating seamlessness in the end to end experiences that go well beyond the contact center delivering automated workflows that moved from accurately identified customer maintained all the way to organizational fulfillment.

Speaker #3: In Q3, total revenue was $732 million at the high end of our guidance range, with cloud revenue reaching $563 million, up 13% year over year.

And resolution.

We're also seeing increased demand for our leading nice cognizant conversational and a <unk> II solutions.

Speaker #3: Our cloud revenue growth was primarily driven by our AI and self-service offerings, reaching 49%. This growth was fueled by sustained organic ARR momentum and the contribution from NICE Cognigy, which closed in early September.

Available for implementation on any technology environment, allowing companies to design run and optimize II agents quickly and simply with little to no code requirements and with specific CX built functionality and vertical knowhow.

Scott Russell: We've already increased our win rates, but we're looking at even higher win rates as a result of NICE Cognigy. Look, Samad, I guess you're right. We will share more on Monday, but we do expect that the benefits that we had planned for and expected through the acquisition, the early indicators are really positive, and that forms a big part of our growth potential not only in Q4, but 2026 and beyond.

Speaker #3: This demand for our AI offering is reflected in strong bookings for autopilot and tripling in Q3. copilot deals, more than We also achieved a higher win rate against our key CX customer appetite of competitors, underscoring the growing our AI-powered and domain-rich solutions.

There is tremendous added value that we're seeing for the powerful combination of CX, one and nice color and <unk> together.

Our ownership of the point of engagement awards us a distinct understanding of customer intake sentiment preference and context across literally billions of engagements.

Operator: One additional point that I would add to what Scott just said as well is when we think about the cloud backlog, of course, we're excited about the momentum Cognigy is bringing and what that means for us. When we looked at the cloud backlog at the end of the third quarter, it's important to highlight that the growth, excluding Cognigy, also was increasing to 13%. When we look ahead to our expectations stepping into 2026, we see the positive sign there of the ability to inflect and see further growth in the cloud revenue, which is exactly what we'd like to see, and we expect to see going forward.

Speaker #3: Furthermore, it reinforces our conviction that we operate in a vibrant, growing market where organizations are showing robust demand for accelerating their AI transformation using our offerings.

Distinct II ready foundational data then forms the basis for automated creation of smart and <unk> II, turning this data into CX built workflow intelligence.

Speaker #3: We at NICE perceive AI not only as a catalyst for our groundbreaking innovation, but more importantly, as a fundamental force for reinventing how business, technology, and humans interact in each of our markets.

The symbiosis of CX engagement data dynamically informing II agent conversations and actions all happening as a part of a single unified platform is at the core of our differentiation and what sets us apart in our markets.

Speaker #3: In the world of customer experience, our leading CX AI platform, CX One, is using purpose-built AI to reshape customer journeys in exciting new ways.

Scott Russell: Yeah, we got the organic, the inorganic, and then the better together. Really positive effect.

Our innovation roadmap is already well ahead with meaning noise cognate <unk> integration capabilities already completed and many more underway.

Samad Samana: Great, thank you again.

Operator: Your next question comes from the line of Tyler M. Ratke with CITI. Please go ahead.

Speaker #3: Our AI-powered orchestration allows us to perfectly blend human and AI agents, creating seamlessness in the end-to-end experiences that go well beyond the contact center.

Nice cognitive drives further growth of the <unk> platform and CX, one accelerates the noss colony <unk> expansion in our customer base, particularly in the enterprise segment.

Samad Samana: All right. Thank you for taking the question, and good morning. Scott, I think you talked about 15% cloud backlog growth. I know it's not a stat we get every quarter, but certainly 15% is higher than where you're getting or where we're seeing cloud revenue. Could you just talk about is there any Cognigy impact there or anything on duration, or is that a good read for where perhaps cloud revenue growth could go going forward, perhaps into next year?

Combining sophisticated <unk> with engagement base data also enables us to change the paradigm of customer engagement from a reactive to a proactive framework identifying business into initiating maintains that can utilize human or iia agents to reach out to consumers increasing.

Speaker #3: Delivering automated workflows that move from accurately identified customer intent all the way to organizational fulfillment and resolution. We're also seeing increased demand for our leading NICE Cognigy conversational and agentic AI solutions.

Speaker #3: Available for implementation in any technology environment, allowing companies to design, run, and optimize AI agents quickly and simply, with little to no code requirements, and with specific CX-built functionality and vertical know-how.

Sales, reducing effort improving loyalty and trust.

<unk> solutions are resonating with organizations of all sizes and verticals as evidenced by some of our key deals in the quarter.

Operator: Yeah. Tyler, I'll take that question, and it's actually what I was trying to clarify after Scott made his comments and the prior question from Samad. With the cloud backlog that we referenced of the 15% year-over-year growth, we did have inclusion of Cognigy. If you exclude the backlog of Cognigy, we had cloud growth of 13% year-over-year. The 13% year-over-year backlog growth compares to our 12% growth expectation this year. Of course, that builds a lot of confidence for us as we look forward into 2026 in our ability to further accelerate our growth.

In Q3, one of our leading one of the leading global auto manufacturers chose <unk> to transform their customer experiences as part of an eight figure <unk> deal underscoring <unk> continued leadership in the cloud contact center transformation and reinforcing the completeness of our <unk>.

Speaker #3: There's tremendous added value that we're seeing for the powerful combination of CX One, and NICE Cognigy together. Our ownership of the point of engagement awards us a distinct understanding of customer intent, context across literally sentiment preference, and billions of engagements.

By platform.

The decision reflects the growing enterprise shift away from fragmented legacy systems towards a unified cloud and AI platform that enables modernization agility and superior customer engagement.

Speaker #3: This distinct AI-ready foundational data then forms the basis for automated creation of smart agentic AI, turning this data into CX-built workflow intelligence. The symbiosis of CX engagement data dynamically informing AI agent conversations and actions all happening as a part of a single unified platform is at the core of our differentiation and what sets us apart in our markets.

Scott Russell: We can share more details on Monday.

Samad Samana: Yeah. Yeah. Okay. Okay. Good. No duration impact, but 13% is what we should be thinking about. Okay. Perfect. Just on the margin side, I mean, I know there's some moving pieces with the international expansion and bringing on Cognigy, but maybe just help us understand, are there additional sort of investments you're making that should pressure margins on a go-forward basis? Obviously, we can kind of see where margins are with the first full quarter of Cognigy here in Q4, but should we expect kind of additional pressure, additional kind of costs that are going to lead revenue, whether that's international expansion or AI beyond Q4?

And another substantial Q3 deal IATA cruises chose nice cognate <unk> automation initiative, creating accurate dynamic responses to customer requests.

Our integration with their existing environment allowed IRR cruises to capitalize on their existing data and workflows, while modernizing the overall customer engagement experience.

Speaker #3: Our innovation roadmap is already Cognigy integration capabilities already completed, and many well ahead, with many NICE more underway. NICE Cognigy drives further growth of the CX One platform and CX One accelerates the NICE Cognigy expansion in our customer base, particularly in the enterprise segment.

<unk> solutions are also generating strong upsell momentum consumer cellular and existing nice customer added AI agent augmentation using our co pilot solution in a seven digit ICB deal, enabling real time proactive triggering of agent guidance injection of knowledge and.

Speaker #3: Combining sophisticated agentic AI with engagement-based data also enables us to change the paradigm of customer engagement. From a reactive, to a proactive framework, identifying business-initiated intents, that can utilize human or AI agents to reach out to consumers, increasing sales, reducing effort, improving loyalty and trust.

Conversational suggestions and improving the ongoing customer engagement.

Operator: Yeah. It's a great question, Tyler. We'll talk a lot more deeply about this specifically on Monday as well as we start to talk more around what you should expect to see in 2026 and the midterm outlook, '27, '28. In general, I think what you should expect is that this is an area of investment for us. When we think about this area, we've had great success internationally, and often that requires some sovereign cloud infrastructure. You're building that infrastructure, putting it in place internationally ahead of the impact of the positive accretion that you get from natural growth in the cloud. We still haven't seen all of the benefit from the great business we've been signing internationally that will continue to drive leverage in that margin. In the short term, we are going to continue to make those investments.

Q3 also saw continued momentum in our international business as an increasing number of organizations across the growth look to nice for the CX transformation.

Speaker #3: Our CX AI solutions are resonating with organizations of all sizes and verticals, as evidenced by some of our key deals in the quarter. In Q3, one of our leading global auto manufacturers chose CX One to transform their customer experiences, as part of an eight-figure NICE's continued leadership in the cloud contact center transformation, and reinforcing the completeness of our CX AI platform.

DWP UK department of work and pensions extended the CX sovereign cloud initiative with <unk> self service solutions in another seven digit <unk> deal.

Modernizing citizen engagement through automation and digital self service.

They chose nice for our compliance with sovereign class standards urban public sector standards platform scalability, and our ability to execute on their AI and digital transformation roadmap.

Speaker #3: Their decision reflects the growing enterprise shift ACV deal, underscoring away from fragmented legacy systems towards a unified cloud and AI platform that enables modernization, agility, and superior customer engagement.

Our overall strong Q3 performance is further proof that our strategy is hitting the mark and that we're delivering across all our key focus areas.

Operator: We see tremendous opportunities internationally. We've been very successful there. Yes, you should expect that you'll see in the near term a slight pressure that you're seeing during the course of Q4. We'll talk more again about expectations for 2026 and beyond on this coming Monday.

To leading the AI Revolution in all end markets and specifically in CX <unk>, one and <unk> solutions.

Speaker #3: In another substantial Q3 deal, AIda Cruises, chose NICE Cognigy for their FAQ automation initiative, creating accurate, dynamic responses to customer requests. Our integration with their existing environment allowed AIda Cruises to capitalize on their existing data and workflows, while modernizing the overall customer engagement experience.

The emphasis on developing our ecosystem and strategic partnerships to scale, our impact leverage our collaboration with major technology, and GSI partners and with many more to come.

Samad Samana: Okay, see you there. Thank you.

Operator: Thank you. Your next question comes from the line of Jim Fish with Piper Sandler. Please go ahead.

Scott Russell: Hey, guys. Appreciate the color on Cognigy and breaking it out. Beth, 50 basis—I'm sorry, 1.5% impact for Q4 gets you to about $8 million. Some quick math after that would kind of point to a big ramp to get to that $85 million ARR exiting next year, I guess. How do you get there, and how should we think about the impact to expansion rate from here? Just because if you kind of look at that 111 last quarter that you had on cloud net retention rate, now we're talking 109. You have the ability to cross-sell this into the base, but it did imply a fairly decent drop sequentially. Really two questions, and I'll be quiet. It's essentially that. How do you get to that big ramp? Secondly, what's going on with net retention rate, and how can Cognigy kind of fill that hole?

Our international expansion and cloud adoption and acceleration in global markets and of course, maintaining our financial strength with both operational rigor and industry, leading profitability, while thoughtfully deploying capital through acquisitions and share repurchases.

Speaker #3: Our AI solutions are also generating strong cellular and existing NICE upsell momentum. Consumer customers have added AI agent augmentation using our Copilot solution in a seven-digit ACV deal, enabling real-time proactive triggering of agent guidance, injection of knowledge, and conversational suggestions, thereby improving ongoing customer engagement.

This is the perfect opportunity to remind everyone that our capital markets day is coming up in just a few days on Monday, 17th of November in New York City.

The event will feature presentations from our executive management team covering in more detail, our long term strategy and the future of the <unk> market as CX innovation roadmap with NAS cognizant, and our financial overview, including mid term outlook.

Speaker #3: Q3 also saw continued momentum in our international business, as an increasing number of organizations across the globe looked to NICE for their CX transformation.

Speaker #3: DWP, UK's Department of Work and Pensions, extended their CX sovereign cloud initiative with NICE's self-service solutions in another seven-digit ACV deal. Modernizing citizen engagement through automation and digital self-service.

If you have not registered yet and you'd like to attend please contact our investor relations team at IR at <unk> Dot Com, we look forward to seeing you all in person at this event and with that I will now turn the call over to Beth.

Scott Russell: Thanks, guys.

Operator: Yeah. Thank you, Jim. I'll try to break it down. Let's start with the $85 million because it's really important that we clarify that, first of all. The $85 million, we expect as our exit ARR for Cognigy at the end of December 2026, as we exit the year. That means that's the run rate coming out of the year. It does not mean that it represents the revenue contribution we expect from Cognigy during the course of 2026. Of course, the revenue is going to be distributed and ramping up through the course of that year, and that is the exit point. That's the first thing that I would clarify there. I think that as you think about Q4 and what we're predicting for the fourth quarter in particular, first, I would say it's a little bit of early days with this acquisition.

Scott I'm pleased to share another quarter of strong financial execution underscored by robust cloud revenue growth and continued positive momentum from our AI and self service business our acquisition of <unk>. The global leader in AI driven customer service solutions closed in early September earlier then.

Speaker #3: They chose NICE for our compliance with sovereign cloud standards, proven public sector standards, platform digital transformation to execute on their AI and roadmap. Our overall strong Q3 our strategy is hitting the performance is further proof that mark.

Originally anticipated and cognizant performance is included in our third quarter financial results.

Speaker #3: And that we're delivering across all our key focus scalability, and our ability areas. Our commitment to leading the AI revolution in all our markets, and specifically in CX, with CX One, and our NICE Cognigy solutions.

Total revenue of $732 million came in at the high end of our guidance range, increasing 6% year over year for the third quarter.

<unk> revenue increased 13% year over year, contributing $563 million, representing a record 77% of our total revenue.

Speaker #3: The emphasis on developing our ecosystem and strategic partnerships to scale our impact, leverage our collaboration with major technology, and GSI partners, and with many more to come.

Excluding cognizant <unk> cloud revenue increased 12% year over year in line with our expectations, our cloud revenue growth in the third quarter continued to be driven by the strong performance of our CX AI and self service.

Operator: We are factoring that into our expectation in the near term, but we have already seen the positive momentum that's really exciting, even out of the gate from the Cognigy business. We do expect to see that inflection continuing to happen throughout the course of 2026, and I think that's built into everything that I've described.

Speaker #3: Our international expansion and cloud adoption acceleration in global markets, and of course, maintaining our financial strength with both operational rigor and industry-leading profitability, while thoughtfully deploying capital through acquisitions and share repurchases.

Which totaled $268 million in Q3, increasing 49% year over year, and 43% year over year, excluding cognizant.

Speaker #3: This is the perfect opportunity to remind everyone that our capital markets day is coming up in just a few days. On Monday, 17th of November, in New York City.

Scott Russell: Maybe let me just quickly add, Jim. I just want to reiterate our expectation of the exit 2026 ARR at the $85 million. We feel very comfortable that that's on track. The early indicators, as Beth mentioned, are very positive. That's not only on the revenue that you're seeing, and that you mentioned in Q4, but the momentum around backlog, bookings, pipeline, that then generates into revenue, or, more importantly, into ARR by the end of next year.

This key growth driver in our business continues to expand and next generation CX AI now represents 12% of our overall cloud revenue.

Speaker #3: The event will feature presentations from our executive management team, covering in more detail our long-term strategy and the future of the CX market. Our CX innovation roadmap with NICE Cognigy, and our financial overview, including midterm outlook.

Our fast growing CX AI is expected to becoming more meaningful in the coming years, especially with the addition of cognizant, which we expect will further augment our AI and self service growth trajectory.

Speaker #3: like to attend, please contact If you've not registered yet, and you'd our investor relations team at look forward to seeing you all in person at this event, and with that, I will now turn the call over to Beth.

Our cloud and <unk> for the trailing 12 months of Q3 was 109%, reflecting continued strength in customer loyalty and expansion activity as we scale across a larger base.

Speaker #3: IR@nice.com.

Operator: Your next question comes from the line of Arjun Bhatia with William Blair & Company. Please go ahead.

Speaker #2: Thank We another quarter of strong financial execution underscored by robust cloud revenue growth and continued positive momentum from our AI and self-service business. Our acquisition of Cognigy, the global leader in AI-driven customer service solutions, closed in early September.

Our NR as reported on our last 12 months basis and naturally lags current.

Operator: Hi, team. I'm Willow Miller on for Arjun Bhatia. Thanks for taking our question. Can we get an update on LiveVox? Are you seeing stability in the business after seeing some elevated churn earlier this year?

Current trends as demonstrated by our consistent cloud revenue growth year to date, and the strong 15% year over year growth in our cloud backlog as highlighted by Scott, We're seeing positive underlying indicators that are healthy and our conflict upward over the next few quarters.

Operator: Thank you for the question. I think it's, first of all, you'll see that our cloud revenue growth during the quarter achieved exactly as expected. We achieved the 12%. LiveVox is a part of that. Really what it emphasizes is that the core of our cloud business is growing even better than what you see externally. With respect to LiveVox in particular, it has a positive outlook, and it's actually forecasting ongoing growth in cloud revenue. All good and healthy signs that we're seeing in that part of the business.

Speaker #2: Earlier than originally anticipated, and Cognigy's performance is included in our third quarter financial results. Total revenue of $732 million came in at the high end of our guidance range, the third quarter.

Speaker #2: Earlier than originally anticipated, and Cognigy's performance is included in our third quarter financial results. Total revenue of $732 million came in at the high end of our guidance range, increasing 6% year over year for revenue increased 13% year over year contributing $563 million representing a record 77% of our total revenue.

Our on premises business performed in line with expectations as services revenue of $139 million represented 19% of total revenue and product revenue of $30 million represented the remaining 4% of total revenue.

From a geographic breakdown, the Americas region, which represented 84% of revenue in Q3 increased 5% year over year with double digit cloud revenue growth and strong product revenue, which was partially offset by a decrease in services related revenue as our customers continue to migrate their maintenance too.

Speaker #2: Excluding Cognigy, cloud revenue increased 12% year over year, in line with our expectations. Our cloud revenue growth in the third quarter continued to be driven by the strong performance of our CX AI and self-service ARR, which totaled $268 million in Q3, increasing 49% year over year and 43% year over year, excluding Cognigy.

Operator: Great to hear. Thank you.

Operator: Your next question comes from the line of Michael Funk with Bank of America. Please go ahead.

Scott Russell: Good morning. Thank you for the questions. Beth, earlier in the prepared remarks, you mentioned the NRR trend, and I think you commented some expectation or hope of positive inflection in NRR. Can you just talk through the NRR trend intra-quarter? I know your metric is a trailing 12-month. Related, can you talk about your pipeline, the strength of the pipeline, and quality of pipeline, and overall feedback you're hearing from customers about their appetite for spending?

Our cloud.

Our international business demonstrated strong revenue growth in the third quarter as our cloud business continues to drive momentum with our continued success of large enterprise scale wins in the international markets.

Speaker #2: This key growth driver in our business continues to expand, and next-generation CX AI now represents 12% of our overall cloud revenue. Our fast-growing CX AI is expected to become more meaningful in the coming years, especially with the addition of Cognigy, which we expect will further augment our AI and self-service growth trajectory.

Our international revenue contribution increased from last year, and we expect this trend to continue.

Media revenue increased 7% year over year, and APAC revenue increased 19% year over year together, our international revenue increased 11% year over year.

Our international markets represent one of our most compelling growth opportunities. These regions remain relatively underpenetrated in terms of cloud adoption, creating a significant runway for expansion, we're seeing tangible traction with large enterprise wins in both EMEA and APAC now going live and contributing to our <unk>.

Operator: Thank you for the quarter, or I'm sorry, for the comments or the question. For NRR in particular, I did highlight in my comments, and it's important to highlight that NRR is not in quarter specifically. That is looking at the trailing 12 months and, of course, reflects some of the change that we saw in our cloud growth that was happening during 2024. When you look at the current impact in quarter of the NRR, we see exactly what we would expect, which is stabilization that's consistent with the 12% growth that you've seen throughout the course of this year. We talked about the ability to positively see that inflect in a positive manner looking ahead.

Speaker #2: Our cloud NRR for the trailing 12 months of Q3 was 109%, reflecting continued strength in customer loyalty and expansion activity as we scale across a larger base.

Speaker #2: Our NRR is reported and naturally lags current trends. As demonstrated on a last 12-month basis, by our consistent cloud revenue growth year to date and the strong 15% year over year growth in our cloud backlog, as highlighted by Scott, we're seeing positive underlying indicators that our healthy NRR can reflect upward over the next few quarters.

<unk> results.

Our ongoing investments in sovereign cloud infrastructure are proving instrumental in securing these opportunities offering local compliance data residency and trust advantages that customers increasingly prioritize in addition, cognizant cognizant strong presence and brand recognition in EMEA.

Speaker #2: on-premises business performed in line with Our expectations as services revenue of $139 million represented 19% of total revenue, and product revenue of $30 million represented the remaining 4% of total revenue.

With their growing presence in the Americas further enhance our reach in the region, serving as a powerful catalyst for growth and enabling cross selling of our complementary AI and self service solutions.

Operator: We're looking at cloud backlog, but some other trends that we see as well that give that positive confidence in the growth, and great cross-sell and upsell efforts we have with our existing install base.

Turning to our business segments customer engagement revenue, which represented 84% of our total revenue in the quarter with $613 million, increasing 6% year over year, driven by the continued strength of our CX, one AI cloud platform across all geographies, which more than offset the continued trans.

Speaker #2: From a geographic breakdown, the Americas region, which represented 84% of revenue in Q3, increased 5% year over year with double-digit cloud revenue growth and strong product revenue, which was partially offset by a decrease in services-related revenue as our customers continued to migrate their maintenance to our cloud.

Scott Russell: Yeah. Maybe I'll cover the pipeline question. Michael, the pipeline's strong, and you can probably tell the sentiment that I'm sharing. It's based on not only execution of what we see and what we've experienced in Q3 and our execution against the strategy, but it's also based on what we're seeing in the market. I think the first thing that I will say is there are lots of questions about AI in the market, and I understand why that potentially is the case. That is not true for CX. In CX, the proven benefits that you with a world-class AI platform that drives automation, great experiences, reduced cost, increased loyalty, ability to be able to drive upsell, and sales and benefits for your customers, we can prove that with real customer references today.

<unk> from our on premise business.

Speaker #2: Our international business demonstrated strong revenue growth in the third quarter as our cloud business continues to drive momentum with our continued success of large enterprise scale wins in the international markets.

Revenues from financial crime and compliance risks represented 16% of our total revenue in Q3 and totaled $119 million increased 7% year over year. This was due primarily to strong cloud and product revenue growth.

Speaker #2: Our international revenue contribution, increased from last year, and we expect this trend to continue. EMEA revenue increased 7% year over year, and APAC revenue increased 19% year over year.

Moving to profitability. Our total gross margin was 69, 9% compared to 71, 7% last year, reflecting our deliberate investments to scale international operations and to continue to expand our global cloud footprint, where we are already seeing dividends as highlighted in our strong international revenue growth.

Speaker #2: Together, our international revenue increased 11% year over year. Our international markets represent one of our most compelling growth opportunities. These regions remain relatively under-penetrated in terms of cloud adoption, creating a significant runway for expansion.

Scott Russell: The demand of that to be able to improve customer experiences as an AI transformation initiative, it's positive momentum. Whereas in other parts of AI, you can question, you don't question it here. I would also add our growth drivers, and we'll talk more about this on Monday. If you think about the growth drivers that we have, we've clearly got still a significant market on the jump balls of on-prem to cloud. We're improving our win rates. We see increased pipeline. Very good. Our international expansion on the back of the investments. We see a lot more on the international side. We see that in our pipeline.

Our operating income in Q3 increased 5% year over year to $231 million and our operating margin totaled 31, 5%.

Speaker #2: We're seeing tangible traction with large enterprise wins in both EMEA and APAC now going live and contributing to our revenue results. Our ongoing investments in sovereign cloud infrastructure are proving instrumental in securing these opportunities, offering local compliance, data residency, and trust advantages that customers increasingly prioritize.

The impact of cognizant on our profitability was immaterial on our gross margin and operating margin in the third quarter looking forward to the fourth quarter and beyond we expect no significant impact to the gross margin from cognizant. However, we do expect dilution to the operating margin, which we previously communicated and as fact.

Speaker #2: In addition, Cognigy's strong presence and brand recognition in EMEA coupled with their growing presence in the Americas further enhance our reach in the region, serving as a powerful catalyst for growth and enabling cross-selling of our complementary AI and self-service solutions.

Third into our updated guidance that I'll touch on in a moment.

Earnings per share for the third quarter with $3, 18% to 10% increase compared to last year.

Scott Russell: Of course, I'm very optimistic on all the things that I talked before about NICE Cognigy inside of our business, whether it be the net new market where NICE doesn't have a role today, where we're going after that, the install base, where we're going after that, and then an accelerated opportunity on those jump ball scenarios. A lot of that pipeline, we haven't even put into. We're in the early days of bringing that into our business. I guess it's not only on the current pipeline that we see that is strong and the buying sentiment, but the potential that we have now that we've got the complete end-to-end capability. Yeah, it is born from the trends being in our favor, which we were predicting, but it's good to see that it's coming to life.

Our cash flow from operations in Q3 was $191 million up 20% year over year, underscoring strong operational execution and profitability.

Speaker #2: Turning to our business segments, customer engagement revenue, which represented 84% of our total revenue in the quarter, was $613 million increasing 6% year over year, driven by the continued strength of our CX1 AI cloud platform across all geographies, which more than offset the continued transition from our on-prem business.

During the quarter, we deployed significant capital to advance our strategic priorities repurchasing $41 million of shares fully repaying $460 million of outstanding debt and funding the acquisition of cognizant. We ended the quarter debt free with total cash and short term investments of 400.

Speaker #2: Revenues from financial crime and compliance, which represented 16% of our total revenue in Q3, and totaled $119 million increased 7% year over year. This was due primarily to strong cloud and product revenue growth.

Third $56 million, demonstrating both the strength of our balance sheet and our capacity to invest decisively and durable profitable growth and create long term shareholder value.

Scott Russell: All right, Beth. Thank you so much. We look forward to hearing more next week.

In summary, we delivered another quarter of strong execution, driven by sustained cloud growth accelerating AI and self service adoption and disciplined financial management.

Speaker #2: Moving to profitability, our total gross margin was $69.9% compared to $71.7% last year, reflecting our deliberate investments to scale international operations and to continue to expand our global cloud footprint where we are already seeing dividends as highlighted in our strong international revenue growth.

Scott Russell: Thanks, Michael.

Operator: Thank you. Your next question comes from the line of Catharine Trebnick with Rosenblatt Securities. Please go ahead.

Our recent momentum together with cognizant now part of our portfolio and a debt free balance sheet. We are entering the next phase of growth from a position of exceptional financial and operational strength focused on driving innovation scale and long term shareholder value.

Operator: Well, thank you for my question. I have one for Scott. Most of your Cognigy customers are using speech-to-text to LLM and back-to-speech. OpenAI and others have recently released direct real-time voice APIs. Are you seeing competition from these APIs, and why or why not? Thanks. Sorry, that was more technical, but I had to ask.

Speaker #2: Our operating income in Q3 increased 5% year over year, to $231 million, and our operating margin totaled $31.5%. The impact of Cognigy on our profitability was immaterial, on our gross margin, and operating margin in the third quarter.

We're excited to share more financial details at our upcoming capital markets day, including a 2026 and midterm outlook.

Scott Russell: No, no, no. Very happy to answer the question, Catharine. Look, I think we've got to just pause a little bit and look at this market for the reality it is. Anyone can create a bot. Anyone. I can do it myself in 10 minutes. Creating an AI agent, whether it's text-to-speech, speech-to-text, and all the other capabilities, creating an AI agent that delivers superior customer experience, exceptional customer experience, advanced from what a human does today, that takes a whole lot more than creating a bot with some simple capabilities. We actually don't see the LLM providers as competition in this space. In fact, we see them as partners within our ecosystems. Their models are really good, they're general-purpose, they've got an expanded capability. With NICE, and in particular with our Cognigy, we provide the contextual, CX-specific AI built.

Now I'll close with our guidance for total revenue and non-GAAP EPS for the full year 2025.

Speaker #2: Looking forward to the fourth quarter and beyond, we expect no significant impact to the gross margin from Cognigy. However, we do expect dilution to the operating margin which we previously communicated and is factored into our updated guidance that I'll touch on in a moment.

Our updated guidance includes the expected results of cognizant from the date of acquisition through year end.

We are increasing our full year 2025 total revenue guidance, which is now expected to be in the range of $2 billion and $932 million to $2 billion and $946 million, which represents a year over year increase of 7% at the midpoint, we are increasing our expected year.

Speaker #2: Earnings per share for the third quarter were $3.18, a 10% increase compared to last year. Our cash flow from operations in Q3 was $191 million, up 20% year over year.

Speaker #2: Underscoring strong operational execution and profitability, during the quarter, we deployed significant capital to advance our strategic priorities. We repurchased $41 million of shares, fully repaid $460 million of outstanding debt, and funded the acquisition of Cognigy.

Year over year cloud revenue growth to be in the range of 12% to 13% for the full year.

Previously, we shared an expected year over year increase of 50 basis points to our operating margin our expectation for our organic operating margin excluding the impact of cognizant remains unchanged as a result of the acquisition of cognizant, we now expect our operating margin to slot.

Speaker #2: We ended the cash and short-term investments of quarter debt-free with total $456 million demonstrating both the strength of our balance sheet and our capacity to invest decisively in durable, profitable growth and create long-term shareholder value.

Scott Russell: It's built on rich customer interaction data. It's built on the knowledge of what that data is, the sentiments, the context, as well as the intents. That contextual knowledge, together with the guardrails, the regulations, the knowledge, and the standards inside the enterprise, integrating those also with the legacy systems that you need to connect to to make sure that you're delivering according to the standards that an enterprise needs. No simple bot does that. You need a complete platform. I guess we see the goodness of the demand, because what happens is a customer often says, Oh, I'll try to build it myself on this, on whether it be OpenAI or Anthropic or other platforms. Fantastic.

Contract.

Previously, we shared an expected year over year growth in non-GAAP earnings per share of 12% at the midpoint, our expectations for our organic non-GAAP earnings per share excluding the impact of cognizant remained unchanged as a result of the acquisition of cognizant. We now expect the full year 2020.

Speaker #2: In summary, we delivered another quarter of strong execution driven by sustained cloud growth, accelerating AI and self-service adoption, and disciplined financial management. Our recent momentum, together with Cognigy now part of our portfolio and a debt-free balance sheet, positions us to enter the next phase of growth from a position of exceptional financial and operational strength focused on driving innovation, scale, and long-term shareholder value.

Five non-GAAP fully diluted earnings per share to be in a range of $12 and 18 to.

<unk> to $12 32, which represents an increase of 10% at the midpoint I will now turn the call over to the operator for questions operator.

At this time, if you would like to ask a question Press Star then the number one on your telephone keypad to withdraw your question simply press Star one again.

Speaker #2: We're excited to share more financial details at our upcoming capital markets day including a 2026 and midterm outlook. Now, I'll close with our guidance for total revenue and non-GAAP EPS for the full year 2025.

Scott Russell: As soon as they see the reality of you need much more richness to be able to deliver a great consumer experience with that AI agent, it quickly comes straight to us, and we're able to leverage that. We leverage the large language models. They're super, they're really important, but also the complementary of what we bring with the contextual intelligence means that it actually drives demand for us in a really positive way. I love the question because we get it a lot, but it immediately then translates to validation of why the domain-specific capabilities that we have are really critical when you're delivering to your consumers. No one is going to introduce inferior customer experience to their customers. No one.

We kindly ask that you limit your questions to one and one follow up for today's call. We will pause for just a moment to compile the Q&A roster.

Speaker #2: Our updated guidance includes the expected results of Cognigy from the date of acquisition through year-end. We are in increasing our full year 2025 total revenue guidance, which is now expected to be in the range of $2 billion and $932 million to $2 billion and $946 million, which represents a year-over-year increase of 7% at the midpoint.

Your first question comes from the line of city kind of Groggy with Mizuho. Please go ahead.

Great.

Thank you I just wanted to ask about <unk> you closed in September.

So what's your expectation of Q4 revenue contribution from cognizant and specifically, how you're planning to position cognizant in terms of go to market.

Speaker #2: We are increasing our expected year-over-year cloud revenue growth to be in the range of $12 to $13% for the full year. Previously, we shared an expected year-over-year increase of 50 basis points to our operating margin.

Any changes to the partnership they have with it.

Are there sika vendors.

Yeah. Thank you city for the question so I'll start off with the financial aspect of the question.

Operator: Thank you very much.

Operator: Your next question comes from the line of Tavi Rosner with Barclays. Please go ahead.

Speaker #2: Our expectation for our organic operating margin excluding the impact of Cognigy remains unchanged. As a result of the acquisition of Cognigy, we now expect our operating margin to slightly contract.

First we are very pleased that we were able to close the acquisition of <unk> earlier than originally anticipated and we originally anticipated a Q4 close and we're very excited that we received the regulatory approvals earlier than originally anticipated what it means for our revenue contribution is that.

Patrick Walravens: Hi. Thank you. Good afternoon. Most of my questions have been asked, I just wanted to touch on ActiMICE for a second. What's the competitive dynamics? It does feel like more players are trying to disrupt the market. Do you feel anything on your end?

Speaker #2: Previously, we shared an expected year-over-year growth in non-GAAP earnings per share of 12% at the midpoint. Our expectations for our organic non-GAAP earnings per share excluding the impact of Cognigy remain unchanged.

In the third quarter. It contributed roughly about 50 basis points to our cloud revenue growth from the inclusion of Cognex <unk> and what we've anticipated and Thats included in our updated guidance for the full year is that it should include an increase about 150 basis point impact.

Scott Russell: Look, I guess I'll say a couple of things. Obviously, we've put a lot of emphasis around the CX business, and it's obviously an exciting inflection point in the CX market with the AI potential, momentum, everything that we've talked about. We're clearly proactively positioning our leadership in that and winning, which is why we've emphasized that so heavily. We have got a really strong business in ActiMICE. It's the market leader. There continues to be high demand. The regulatory environment around the standards and the expectations around compliance and avoiding financial crime and compliance continues to be a really important aspect for financial institutions. That business is in a really positive place. It's got a lot of cloud potential and momentum still to come.

Speaker #2: As a result of the acquisition of Cognigy, we now expect the full year 2025 non-GAAP fully diluted earnings per share to be in a range of $12.18 to $12.32, which represents an increase of 10% at the midpoint.

An increase to our cloud revenue growth during the fourth quarter. So those are the assumptions we've made on the financial inclusion and as a result of the cognizant acquisition and on the go to market side on the go to market.

Speaker #2: I will now turn the call over to the operator for questions. Operator. At this time, if you would like to ask a question, press star, then the number one on your telephone keypad.

It is really clear that <unk> is a world class leading conversation on the <unk> platform and they are actively and we will expand and grow going after all.

Speaker #2: To withdraw your question, simply press star one again. We kindly ask that you limit your questions to one and one follow-up for today's call.

Of the <unk> market, whether with a nice is the underlying.

Speaker #2: We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Sati, Panagrahi with Mizuho, please go ahead.

<unk> platform or not but more importantly, going after that market because we know.

Scott Russell: The thing I love about the ActiMICE business, candidly, it is the retention rates and the GR. We don't lose a customer because once it's implemented, it just provides an ongoing value and model that resonates to the largest financial institutions on the planet. That industry definitely benefits from continued focus on compliance and financial crime, and that is a driver for us. Yeah, we're positive about the outlook of that business.

Those companies who are running on other platforms don't have an integrated solution. They need an AI platform and the <unk> solution is ready made and we will go after that market. So we're excited about the potential that brings.

Speaker #3: Great. Thank you. I just wanted to ask about Cognigy. You closed in September, so what's your expectation of Q4 revenue contribution from Cognigy? Specifically, how are you planning to position Cognigy in terms of go-to-market, and are there any changes to the partnership they have with other CCaaS vendors?

And you can be assured that.

The Coke energy team are very excited to have the power of <unk> behind them as we go pursue them.

And Scott just a quick follow up to that.

Keep hearing from a lot of customers, who are not yet in cloud or seek us they use cognitive for AI do you see this is an opportunity for you to even accelerate our reach out to those customer and move them to cloud Israel.

Speaker #4: Yeah. Thank you, Sati, for the question. So I'll start off with the financial aspect of the question. First, we're very pleased that we were able to close the acquisition of Cognigy earlier than originally anticipated.

Patrick Walravens: Great. Thank you. Looking forward to meeting you guys on Monday.

Scott Russell: Thanks, David.

Operator: That concludes our question and answer session. I will now turn the call back over to Scott Russell for closing remarks.

Yeah for sure I mean, if you think about it we have three growth vectors for cognizant business that we're really excited about first a customer that is in the cloud that have already done the <unk> migration, but theyre looking to do their IR transformation cognate <unk> as the market leader they are fantastic at being able to provide that autumn.

Speaker #4: We originally anticipated a Q4 close, and we were very excited that we received the regulatory approvals earlier than originally anticipated. What it means for our revenue contribution is that in the third quarter, it contributed roughly about 50 basis points to our cloud revenue growth from the inclusion of Cognigy.

Elizabeth Porter: Thank you. First of all, I appreciate the time for everyone today. As you can clearly see, we're excited. We're excited about our ability to be able to execute on the strategy that we laid out, the renewed strategy that I've talked about many times on these calls, and seeing the results. Frankly, the expectations is Q3 is a part of a proof point of a long journey in front of us to really lead and win in this market and be excited about it. We're also excited to be with you next Monday to join us. I think it's really important that you can understand and see really the NICE Cognigy platform, how it then benefits with the CXone platform, and how bringing the two together, the one plus one equals way more than two. It's five. It's ten, and the potential that brings.

Nation that that customer service experience and so secondly is the <unk> install base and the tremendous opportunity in the enterprise customer base, we have bringing <unk> into that installed base and then third to your point.

Speaker #4: And what we've anticipated, and that's included in our updated guidance for the full year, is that it should include an increase about 150 basis points impact and increase to our cloud revenue growth during the fourth quarter.

We are the only company that has the combined world, leading IR platform and the world's leading <unk> platform that we combined together and if they want to start with their on premise that I want to start with II transformation I lead the way with Nostology, if they want to do their cloud migration on CX, one they stopped it but either way we can give them.

Speaker #4: So those are the assumptions we've made on the financial inclusion and as a result of the Cognigy

Speaker #4: acquisition. And on the go-to-market side, thanks,

Speaker #5: Beth. On the go-to-market, it is really clear that Cognigy is a world-class leading conversation on agentic AI platform. And they are actively, and we will expand and grow going after all of the CX market, whether NICE is the underlying CCAS platform or not, but more importantly, going after that market because we know those companies who are running on other platforms don't have an integrated solution.

<unk> journey on a unified platform. So it does give us real optionality for our customers in terms of their transformation journey from their own frame.

Elizabeth Porter: Also from Beth and I, the updated strategy, the midterm outlook, and how that plays out. I appreciate the time and look forward to seeing you all on Monday.

And that's obviously very exciting.

Great I look forward to hearing more on Monday.

Look forward to it.

Speaker #5: They need an AI platform, and the Cognigy solution is ready-made and will go after that market. So we're excited about the potential that brings and you can be assured that the Cognigy team are very excited to have the power of NICE behind them as we go pursue

Your next question comes from the line of Patrick <unk> Robbins with citizens. Please go ahead.

Operator: Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.

Oh, great and congratulations you guys on all the momentum in the business, it's great to see.

Scott with cognizant as you're as you're.

Speaker #5: that. And Scott, just a quick

Getting deeper into all of these sales cycles can I ask if youre seeing Sierra and I break it I am sure Youre getting this question a lot, but they did.

Speaker #3: follow-up to that. We keep hearing from a lot of customers who are not yet in cloud or CCAS, they use Cognigy for AI. Do you see this is an opportunity now for you to even accelerate or reach out to those well?

For anyone who doesn't know they just raised $350 million in September at a $10 billion valuation so it'd be great to hear your thoughts in terms of what the competition looks like.

Yes, great question.

Speaker #6: Yeah, for sure. I mean, if

Speaker #6: you think about it, we customers and move them to cloud as have three growth vectors for our Cognigy business that we're really excited about.

So let me let me first the growth and the expansion of <unk> II in the CX market is clearly evident and we've been talking about this for a period of time, but when the introduction of new players. It's a validation of the attractiveness of the growth potential that this market brings.

Speaker #6: First, a customer that is in the cloud, that have already done the CCAS migration, but they're looking to do their AI transformation. Cognigy is the market leader.

Speaker #6: They are fantastic. It being able to provide that automation, that customer service experience, and so secondly, is the NICE install base and the tremendous opportunity in the enterprise customer base that we have bringing Cognigy into that install base.

And I guess, you can see a move of acquiring a proven market leader <unk> is a proven market leader in conversational and Egencia IR 30 day, they've proven with some of the world's leading brands and it's in a testament of our leadership and our ability to capitalize on the opportunity and just as a reminder.

Speaker #6: And then third, to your point, is we are the only company that has the combined world-leading AI platform and the world-leading CCAS platform that we combine together.

And why we feel really strongly about our competitive positioning cognizant was specifically targeted because of its enterprise scale.

Speaker #6: And if they want to start with their on-premise, they want to start with AI transformation, they lead the way with NICE Cognigy. If they want to do their cloud migration on CX1, they start there, but either way, we can give them the end-to-end journey on a unified platform.

It is already delivering at the enterprise the top end of what organizations need of scale, it's easy to adopt there's no words like forward deployed engineers by a cognizant team, we don't need services surrounding it's easy to adopt.

Speaker #6: So it does give us real optionality for our customers in terms of their transformation journey from their on-prem. And that's obviously very

And it's proven customer value that we can scale with both <unk> and non <unk> customers. So so yes, we see new entrants in the market. It's a validation of the potential that that market brings but it also gives us renewed confidence about our ability to lead on NII only play.

Speaker #6: exciting. Great.

Speaker #3: I look forward to hearing more on Monday.

Speaker #6: Look forward to

Speaker #6: it.

Speaker #2: Your next question comes from the line

Speaker #2: of Patrick Walravens with Citizens. Please go

Speaker #2: ahead. Oh, great.

Speaker #3: And congratulations, you guys, on all the momentum in the business. It's great to see so, Scott, with Cognigy as your getting deeper into all these sales cycles, can I ask if you're seeing Sierra and I bring it, I'm sure you're getting this question a lot, but for anyone who doesn't know, they just raised $350 million in September to $10 billion valuation.

I see cash and then the combination of the two together and I think we'll be able to share much more details Patrick you know capital markets day on Monday, where we can really showcase that capability.

Alright fantastic. Thank you for that.

Your next question.

Elizabeth quarter with Morgan Stanley. Please go ahead.

Speaker #3: your thoughts in terms of what the So it'd be great to hear competition looks like.

Great. Thank you so much for the question now that we're a few months out from the renewed and expanded ring central partnership are there any changes that youre seeing in pipeline velocity. Our average deal size through this channel and understanding we're probably going to get a little bit more next week, but any context for how we should think about this as an incremental driver.

Speaker #6: Yeah. Yeah, great question. So let me first say the growth and the expansion of AI in the CX market, it's clearly evident. And we've been talking about this for a period of time, but when the introduction of new players it's a validation of the attractiveness of the growth potential that this market brings.

26 booking thank you yes.

Speaker #6: And I guess you can see our move of acquiring a proven market leader. Cognigy is a proven market leader in conversational and agentic AI.

My question, So first of all glad and I and our teams have been really tight collaboration with the renewed partnership.

Got an updated go to market, we've got the real potential to have an expansion I'll give you two key leave US one is.

Speaker #6: They're already there. They're proven, with some of the world's leading brands. It's a testament to our leadership and our ability to capitalize on the opportunity.

<unk> central were already an existing partner of cognition and a proven scalable partner of cognizant. So not only in the combined install base that we have with marine central together, but as they go to market is there a gene teekay <unk> conversational AI platform supporting their solutions <unk> is a great collaboration with doubling.

Speaker #6: And just as a reminder, we feel really strongly about our competitive positioning. Cognigy was specifically targeted because of its enterprise scale. It is already delivering at the enterprise level, meeting the top end of what organizations need in terms of scale.

Speaker #6: It's easy to adopt. There's no words like forward deployed engineers by our Cognigy team. We don't need services surrounding it. It's easy to adopt.

On that Super and then secondly, as you rightly point out with our renewed partnership commitment, we're able to give confidence to our customers out of across all segments around combining world waiting Ucas platform with the best in class <unk> and now with <unk> II platform as a unified offering so yes.

Speaker #6: And it's proven customer value that we can scale with both CX1 and non-CX1 customers. So yes, we see new entrants in the market; it's a validation of the potential that that market brings. But it also gives us renewed confidence about our ability to lead on an AI-only play, a CCAS, and then the combination of the two together. I think we'll be able to share much more details, Patrick, in our Capital Markets Day on Monday, where we can really showcase that capability.

<unk> leads clear go to market momentum and collaboration between our two go to market organizations means that.

We do expect renewed growth and I know that the ring central team feels the same way.

Great. Thank you.

Your next question comes from the line of Smog Samana with Jefferies. Please go ahead.

Speaker #3: All right, fantastic. Thank you for that.

Speaker #2: Your next question comes from the line of Elizabeth Porter with Morgan Stanley. Please go ahead.

Hey, good morning, Thanks for taking my questions. Maybe one just a housekeeping question. If I think about the guidance increase for the year was any of that on the cloud side.

Speaker #7: Great. Thank you so much for the question. Now that we're a few months out from the renewed and expanded RingCentral partnership, are there any changes that you're seeing in pipeline velocity or average deal size through this channel?

Organic increase as well or is it largely due to cognizant and then I have a follow up.

Speaker #7: And understanding we're probably going to get a little bit more next week, but any context for how we should think about this as an incremental driver to fiscal 26 bookings?

Yes. Thank you.

<unk> maintained our expectation of 12% growth in the cloud excluding <unk> four for the course of 2025. So that is remaining unchanged and so the increase that youre seeing in the range and the midpoint up to the 12, 5% midpoint is predominantly coming from the inclusion of <unk>.

Speaker #7: Thank you.

Speaker #6: Yeah, it's a great question. So, first of all, Vlad and I, along with our teams, have been in really tight collaboration with the renewed partnership.

Speaker #6: We've got an updated go-to-market. We've got the real potential to have an expansion. I'll give you two key levers. One is RingCentral, we're already an existing partner of Cognigy and a proven scalable partner of Cognigy.

Great and then maybe just zooming out from.

Are there any specific question, Scott and I don't want to front run the capital markets day on Monday, where I'm sure you'll dig into this in detail, but as you think about the early days of Cognex Youre being folded in and what they brought in a nice team. How are you thinking about the joint go to market effort right now.

Speaker #6: So not only in the combined install base that we have with RingCentral together, but as their go-to-market, as their agentic and conversational AI platform supporting their solutions, it is a great collaboration.

Speaker #6: We're doubling down on that. Super. And then secondly, as you rightly point out, with our renewed partnership commitment, we're able to give confidence to our customers over across all segments around combining world-leading UCAS platform with the best-in-class CCAS and now agentic AI platform as a unified offering.

Early observations been is it better together and our customers depreciating that better together story or is it still today.

The next one and cognate G, maybe going a bit separately being able to pull that in over time. Thank you again, okay. Yeah. Thanks, so much.

So a couple of observations.

Speaker #6: So yes, identified leads, clear go-to-market momentum, and collaboration between our two go-to-market organizations means that we do expect renewed growth. And I know that the RingCentral team feel the same

<unk> first of all I was really pleased.

And I talked about our cloud backlog growth.

And the in the growth of it nice cognate <unk> has already been an injection of positivity to add backlog it's.

Speaker #6: way. Great.

As a stand alone business that has a really great pipeline that has a really great brand and recognition in the market.

Speaker #7: Thank

Speaker #7: you. Your next question comes from the

Speaker #2: line of Samad Sumana with Jefferies. Please go ahead.

It has not been diluted in fact, it's been enhanced.

And that's exciting because it means that the acknowledgment of the market as a leading conversational AI platform in its own right competing head to head with competitors in that space. They stayed really really strong.

Speaker #8: questions. Maybe one just as Hey, good morning. Thanks for taking my a housekeeping question. If I think about the guidance increase for the year, was any of that on the cloud side an organic increase as well, or was it largely due to Cognigy?

We obviously have been really active in and making sure that the nice teams are fully up to speed. So it was it.

Speaker #8: And then I have a follow-up.

Speaker #1: Yeah, thank you. We have maintained our expectation of 12% growth in the cloud, excluding Cognigy, for the course of 2025. So that is remaining unchanged.

It was quite advantageous actually we didn't expect the closing to happen in September but because it need we were able to get ahead, all the enablement of our go to market. The large coverage, we have including our partners.

Speaker #1: And so the increase that you're seeing in the range in the midpoint up to the 12.5% midpoint is predominantly coming from the inclusion of

Forget our partners play a huge part of our <unk>.

Sure.

Speaker #8: Great. And then maybe just zooming

And our go to market execution and such through September, but we really ramped that up which means we were able to hit the ground running in Q4 and as we lead into 2006.

Speaker #8: out from that very Cognigy. specific question, Scott, and I don't want to front-run the capital markets day on Monday where I'm sure you'll dig into this in detail, but as you think about the early days of Cognigy being folded in and what they brought in the NICE team, how are you thinking about the joint go-to-market effort right now?

With the nice team being really equipped about leading those conversations on the AI and the automation played at cognizant brings so those two are really good plan there and the residents that we're getting from the nice customer base is also really strong.

Speaker #8: What have the early observations been? Is it better together? And are customers appreciating that better together story, or is it still today CX1 and Cognigy maybe going a bit separately, but you'll fold that in over time?

But the third part of that I guess I wanted to just reiterate what I replied before Patrick or Elizabeth when we're just talking about is there is a large automotive been Saudi actually theres, a large amount of market both internationally and in the U S, which are evaluating the transformation journey, where they've got in <unk>.

Speaker #8: Thank you again.

Speaker #6: Yeah. Yeah, thanks, Samad. So a couple of observations. First of all, I was really pleased and I talked about our cloud backlog growth and the growth of it.

On Prem suite fragmented solutions and they try to figure out what's my my transformation roadmap.

Speaker #6: NICE Cognigy has already been an injection of positivity to our backlog. It's as a standalone business that has a really great pipeline that has a really great brand and recognition in the market.

What it's meant for US is instead of saying you've got to do you see cash move to the cloud first and then do your AI.

They love the Optionality I might lead with my IR I get some real productivity and automation savings that will drive thru, but then the unified platform gives us that potential to have even higher we've already increased our win rates, but we're looking at even higher win rates as a result of NAS cognition.

Speaker #6: It has not been diluted. In fact, it's been enhanced. So that's exciting because it means that the acknowledgment of the market that of a leading conversation on AI platform in its own right, competing head-to-head with competitors in that space, they stand really, really strong.

Look I.

I guess, it's you are right, we will share more on Monday, but we do expect that the benefits that we had planned for and expected through the acquisition. The early indicators are really positive.

Speaker #6: We obviously have been really active in making sure that the NICE teams are fully up to speed. So it was quite advantageous, actually. We didn't expect the closing to happen in September, but because it did, we were able to get ahead of the enablement of our go-to-market, the large coverage we have, including our partners.

And that forms a big part of our growth potential.

Not only in Q4 to 2026 and beyond and one additional point that I would add to what Scott just said as well is when we think about the cloud backlog of course, we're excited about the momentum cognizant is bringing and what that means for us, but when we looked at the cloud backlog at the end of the third quarter. It's important to highlight that the growth. Excluding <unk> also has.

Speaker #6: Don't forget our partners play a huge part of our go-to-market execution. And so through September, we really ramped that up, which means we're able to hit the ground running in Q4.

Speaker #6: And as we lead into '26, with the NICE team being really equipped about leading those conversations on the AI and the automation play that Cognigy brings.

<unk> to 13%. So when we look ahead to our expectations stepping into 2026, we see the positive sign there of the ability to inflect and see further growth in the cloud revenue, which is exactly what we'd like to see and we expect to see going forward. If we get the organic inorganic and then the debate it together so really positive effect.

Speaker #6: So those two are really good, and the resonance that we're getting from the NICE customer base is also really strong. But the third part that I guess I want to just reiterate what I replied before to Patrick or Elizabeth when we're just talking about is there is a large—I might have been Saturday, actually—there's a large amount of market, both internationally and in the US, which are evaluating their transformation journey, where they've got an on-prem suite, fragmented solutions, and they're trying to figure out what's my transformation roadmap.

Great. Thank you again.

Your next question comes from the line of Tyler <unk> with Citi. Please go ahead.

Alright, Thank you for taking my question and good morning. So.

Scott I think you've talked about 15% cloud backlog growth I know, it's not a stat, we get every quarter, but certainly 15% is higher than where youre getting.

Speaker #6: And what it's meant for us is instead of saying you've got to do your CCAS move to the cloud first, and then do your AI, they love the optionality.

Sure thing.

Cloud revenue so could you just talk about.

Is there any.

<unk> impact there or anything on duration or is that a good read for where perhaps cloud revenue growth could go.

Speaker #6: Hey, I might lead with my AI, get some real productivity and automation savings that will drive through, but then the unified platform gives us that potential to have even higher.

Going forward, perhaps into next year.

Speaker #6: We've already increased our win rates, but we're looking at even higher win rates as a result of NICE Cognigy. So look, Samad, I guess you're right.

So Tyler I'll answer I'll take that question and it's actually what I was trying to clarify and thereafter as Scott made his comments and then prior question from some odd with the cloud backlog that we referenced in the 15% year over year growth. We did have inclusion of cognizant. If you exclude the backlog of cognizant, we had cloud growth at <unk>.

Speaker #6: We will share more on Monday. But we do expect that the benefits that we had planned for and expected through the acquisition, the early indicators are really positive.

Speaker #6: And that forms a big part of our growth potential, not only in Q4, but 2026 and beyond.

13% year over year, so the 13% year over year backlog growth compares to our 12% growth expectation. This year. So of course that built a lot of confidence for us as we look forward into 2026, and our ability to further accelerate our growth, which will share more details on Monday.

Speaker #1: additional point that I would add to what Scott And one just said as well is when we think about the cloud backlog, of course, we're excited about the momentum Cognigy is bringing and what that means for us.

Speaker #1: But what when we looked at the cloud backlog at highlight that the growth excluding the end of the third quarter, it's important to Cognigy also was increasing to 13%.

Yes, yes, okay. Okay.

No no duration impact of 13%.

Speaker #1: So when we look ahead to our expectations stepping into 2026, we see the positive sign there of the ability to inflect and see further growth in the cloud revenue, which is exactly what we'd like to see, and we expect to see going

That is what we should be thinking about okay, perfect and then just on.

On the margin side I mean.

Right.

There are some moving pieces with the international expansion and bring on cognition.

Speaker #1: forward. Yeah, we get the organic, the inorganic,

But maybe just help us understand.

Speaker #6: So really positive and then the better together.

Are there additional sort of investments, you're making that that should pressure margins on a go forward basis, obviously, we can kind of see where mark.

Speaker #8: Great. Thank you again.

Speaker #8: Great. Thank you again.

Speaker #2: Your next question comes from the line of Tyler M. Radtke with CITI. Please go effect.

Speaker #2: ahead. All right.

Margins are with the first full quarter of.

<unk> here in Q4, but should we expect kind of additional pressure additional kind of costs that are going to lead revenue, whether that's international expansion or AI beyond Q4.

Speaker #8: question and good morning. Thank you for taking the So Scott, I think you talked about 15% cloud backlog growth. I know it's not a stat we get every quarter, but certainly 15% is higher than where you're getting or where we're seeing cloud revenue.

Yeah. So it's a great question, Tyler and we'll talk a lot more deeply about this specifically on Monday as well as we start to talk more around what you should expect to see in 2026 and 20. The midterm outlook 27 28, but in general I think what you should expect is that this is an area of invest.

Speaker #8: So could you just talk about is there any Cognigy impact there or anything on duration, or is that a good read for where perhaps cloud revenue growth could go?

Speaker #8: Going forward, perhaps into next

Speaker #8: year?

Speaker #1: Yeah. So Tyler, I'll take that

<unk> for us when we think about this area and we've had great success internationally and often.

Speaker #1: question, and it's actually what I was trying to clarify in the after Scott made his comments and the prior question from Samad. With the cloud backlog that we referenced of the 15% year-over-year growth, we did have inclusion of Cognigy.

That requires some sovereign cloud infrastructure, so youre building that infrastructure, putting it in place internationally are ahead of the.

Speaker #1: If you exclude the backlog of Cognigy, we had cloud growth of 13% year-over-year. So the 13% year-over-year backlog growth compares to our 12% growth expectation this year.

The.

Impact of the positive accretion that you get from natural growth in the cloud. So we still haven't seen all of the benefit from the great business. We have been signing internationally that will continue to drive leverage in that margin, but in the short term we are going to continue to make those investments, we see tremendous opportunities internationally and we've been very.

Speaker #1: So of course, that builds a lot of confidence for us as we look forward into 2026 in our ability to further accelerate our

Speaker #6: We can share more details on

Successful there and so yes, you should expect that Youll see in the near term.

Speaker #6: Monday. growth.

Speaker #8: Yeah. Yeah. Okay. Okay. Good. So no duration impact, but 13% is what we should be thinking about. Okay. Perfect. And then just on the margin side, I mean, I know there's some moving pieces with the international expansion and bringing on Cognigy.

Slight pressure that youre seeing during the course of Q4, and we will talk more again about expectations for 2026 and beyond on this coming Monday.

Okay see you there thank.

Thank you.

Thank you Karen.

Your next question comes from the line of Jim Fish with Piper Sandler. Please go ahead.

Speaker #8: But maybe just help us understand are there additional sort of investments you're making that should pressure margins on a go-forward basis? Obviously, we can kind of see where margins are with the first full quarter.

Hey, guys appreciate the color on cognizant and breaking it out.

50.

I'm, sorry, one 5% impact for Q4, it gets you to about $8 million.

But some quick math after that would kind of point to a big ramp to get to that $85 million exiting next year I guess, how do you get there and how should we think about the impact to your expansion rates from here just because.

Speaker #8: Of Cognigy here in Q4, but should we expect kind of additional pressure, additional kind of costs that are going to lead revenue, whether that's international expansion or AI beyond

Speaker #8: Q4? Yeah.

You kind of look at that 111.

Speaker #1: So it's a great question, Tyler. And we'll talk a lot more deeply about this specifically on Monday as well as we start to talk more around what you should expect to see in 2026 and 20 the midterm outlook, 27, 28.

Last quarter that you had on cloud and that retention rate now were talking 109, you have the ability to cross sell this.

But it does imply a fairly decent dropped sequentially. So really two questions in.

Speaker #1: But in general, I think what you should expect is that this is an area of investment for us. When we think about this area, we've had great success internationally.

Quiet.

It's essentially that how do you get to that big ramp and secondly, whats going on with net retention rate and how can Congress. If you kind of fill that hole. Thanks guys.

Speaker #1: And often, that requires some sovereign cloud infrastructure. So you're building that infrastructure, putting it in place internationally ahead of the impact of the positive accretion that you get from natural growth in the cloud.

Yes. Thank you Jim I'll try to break it down let's start with the $85 million because it's really important that we clarify that first of all the.

The $85 million, we expect as our exit.

Speaker #1: So we still haven't seen all of the benefit from the great business we've been signing internationally that will continue to drive leverage in that margin.

<unk>.

For Cognex <unk> at the end of December 2026, as we exit the year that means that's the run rate coming out of the year. It does not mean that it represents the revenue contribution we expect from <unk> during the course of 2026.

Speaker #1: But in the short term, we are going to continue to make those investments. We see tremendous opportunities internationally. We've been very successful there. And so, yes, you should expect that you'll see in the near term a slight pressure that you're seeing during the course of Q4.

Of course, the revenue is going to be distributed and ramping up through the course of that year and so that is the exit point. So that's the first thing that I would clarify there.

Speaker #1: And we'll talk more again about expectations for 2026 and beyond on this coming

Speaker #1: Monday. Thank

I think that <unk>.

Speaker #8: Okay. See you

As you think about Q4, and what were predicting for the fourth quarter in particular first I would say, it's a little bit of early days with this acquisition.

Speaker #8: there. Thank you.

Speaker #1: you. Your next question

Speaker #2: comes from the line of Jim Fish with Piper Sandler. Please go

Speaker #2: ahead.

Speaker #9: guys. Appreciate the color on Cognigy and breaking it out. Beth, 50 basis I'm sorry, 1.5% impact for Q4 gives you about 8 million. But some quick math after that would kind of point to a big ramp to get to that 85 million ARR exiting next year.

So we are factoring that into our expectation in the near term, but we have already seen the positive momentum that's really excited and even out of the gate from the <unk> business. So we do expect to see that inflection continuing to happen throughout the course of 2026.

And so I think thats built into everything that I've described.

Speaker #9: I guess how do you get there? And how should we think about the impact to expansion rate from here? Just because if you kind of look at that 111 last quarter that you had on cloud net retention rate, now we're talking 109.

Maybe let me just quickly add Jim I, just want to reiterate our expectation of our of the exit 2026.

IRR.

At the $85 million, we feel very comfortable that that's on track. The early indicators as Bert mentioned is very positive.

Speaker #9: You have the ability to cross-sell this. Into the base, but it did imply a fairly decent drop sequentially. So really two questions and I'll be quiet.

That's not only on the revenue that youre seeing.

You mentioned in Q4, but.

Speaker #9: And it's essentially that. How do you get to that big ramp and secondly, what's going on with net retention rate and how can Cognigy kind of fill that hole?

<unk> momentum around backlog bookings pipeline that then generates into revenue or more importantly into IRR by the end of next year.

Speaker #9: Thanks,

Speaker #9: guys. Yeah.

Speaker #1: Thank you, Jim. I'll try to break it down. Let's start with the 85 million because it's really important that we clarify that first of all.

Your next question comes from the line of Arjun Bhatia with William Blair <unk> Company. Please go ahead.

Speaker #1: The 85 million we expect as our exit ARR for Cognigy at the end of December 2026, as we exit the year. That means that's the run rate coming out of the year.

Hi, Tim I'm willing all around for origin bonds. Yeah. Thanks for taking our question can we get an update on my box are you seeing stability in the business after seeing some elevated churn earlier this year.

Thank you for the question I think it's first of all you'll see that our cloud revenue growth during the quarter achieved exactly as expected we achieved a 12%.

Speaker #1: not mean that it represents the revenue contribution we expect from It does Cognigy during the course of 2026. So of course, the revenue is going to be distributed and ramping up through the course of that year.

And of course live auction as a part of that so really what it emphasizes is that the core of our cloud business is growing even better than what you see externally with respect to our lives vocs in particular, it has a positive outlook and its actually forecasting ongoing growth in our cloud revenue. So all good and healthy signs that we're seeing in that part of the business.

Speaker #1: And so that is the exit point. So that's the first thing that I would clarify there. I think that as you think about Q4 and what we're predicting for the fourth quarter in particular, first, I would say it's a little bit of early days with this acquisition.

Speaker #1: So we are factoring that into our expectation in the near term, but we have already seen the positive momentum that's really exciting even out of the do expect to see that inflection continuing gate from the Cognigy business.

Thank you.

Your next question comes from the line of Michael Funk with Bank of America. Please go ahead.

Alright, good morning, and thank you for the questions.

Speaker #1: to happen throughout the course of So we I think that's built into everything that

Beth earlier in the prepared remarks, you mentioned the <unk> trends.

Speaker #1: I've described. Maybe let

You commented some expectation or hope of positive inflection of NR.

Speaker #3: I just want to quickly add, Jim. I want to reiterate our expectation of an exit in 2026, with ARR at $85 million. We feel very comfortable that that's on track.

Can you just talk through the MLR trends intra quarter I know your metric is a trailing 12 month and then.

Speaker #3: The early indicators as Beth mentions is very positive. That's not only on the revenue that you're seeing and that you mentioned in Q4, but the momentum around backlog, bookings, pipeline, that then generates into revenue or more importantly into ARR by the end of next

Related.

Can you talk about your pipeline the strength of our pipeline and quality of pipeline and overall feedback you're hearing from customers about their appetite for spending.

Yeah. Thank you for the quarter I'm, sorry for the comment or the question so far in R. R.

Speaker #3: year. Your next question comes

For <unk> in particular I did highlight in my comments and it's important to highlight that NR is not in quarter specifically.

Speaker #2: from the line of Arjun Bhatia with William Blair and Company. Please go

That is looking at the trailing 12 months that of course reflects some of the change that we saw in our cloud growth that was happening during 2024. When you look at the current impact in quarter of the NR.

Speaker #2: ahead.

Speaker #10: Hi,

Speaker #10: team. I'm Willow Miller on for Arjun Bhatia. Thanks for taking our question. Can we get an update on Livebox? Are you seeing stability in the business after seeing some elevated churn earlier this year?

We see exactly what we would expect which is stabilization that's consistent with the 12% growth that you've seen throughout the course of this year.

Speaker #1: Yeah. Thank you for the question. I think it's first of all, you'll see that our cloud revenue growth during the quarter achieved exactly as expected.

And we talked about the ability to positively see that inflect in a positive manner looking ahead and of course, we're looking at cloud backlog, but some other trends that we see as well that give that positive confidence and the growth in <unk>.

Speaker #1: We achieved the 12%. And of course, Livebox is a part of that. So really, what it emphasizes is that the core of our cloud business is growing even better than what you see externally.

Speaker #1: With respect to Livebox in particular, it has a positive outlook and it's actually forecasting ongoing growth in the cloud revenue. So all good and healthy signs that we're seeing in that part of the

Great Cross sell and up sell efforts, we have with our existing installed base yes.

Yes, maybe I'll cover the pipeline question.

Speaker #1: business. Great to hear.

So Michael.

The pipeline strong.

Speaker #10: Thank you.

And you can probably tell that.

Speaker #2: Your next question comes from the line of Michael Funk with Bank of America. Please go ahead.

The sentiment that I'm sharing it's based on not on the execution of what we see and what we've experienced in Q3.

Speaker #11: questions. Beth, earlier Hi, good morning. And thank you for the in the prepared remarks, you mentioned the NRR trends and I think you commented some expectation or hope of positive inflection in NRR.

Our execution against this strategy, but it's also based on what we're seeing in the market.

I think the first thing that I'll say is there is there is lots of questions about <unk> in the market and I understand why that potentially is the case that is not true CX in CX. The proven benefits that you with a world class II platform that drives automation, great experiences and reduce costs.

Speaker #11: So can you just talk through the NRR trends intra-quarter? Because I know your metric is a trailing 12-month. And then related, can you talk about your pipeline?

Speaker #11: The strength in the pipeline and quality of pipeline and overall feedback you're hearing from customers about their appetite for

Increased loyalty ability to be able to drive up so and sales and benefits to your customers. We can prove that with real customer references today. So the demand of that to be able to improve customer experiences as NII transformation initiative.

Speaker #11: spending. Yeah.

Speaker #1: Thank you for the quarter or I'm sorry, for the comment or the question. So for NRR, for NRR in particular, I did highlight in my comments and it's important to highlight that NRR is not in quarter specifically.

We it's positive.

Positive momentum, whereas in other parts of AI. You can question you don't question. It here, but I would also add.

Speaker #1: That is looking at the trailing 12 months. And of course, reflects some of the change that we saw in our cloud growth that was happening during 2024.

Our growth drivers and we'll talk more about this on Monday, but if you think about the growth drivers that we have we've clearly got still a significant market on the on the jump balls of on Prem to cloud, we're improving our win rates, we see increased pipeline very good our international expansion on the back of the investments we see a lot more on the internet.

Speaker #1: When you look at the current impact in the quarter of the NRR, we see exactly what we would expect, which is stabilization that's consistent with the 12% growth that you've seen throughout the course of this year.

Speaker #1: And we talked about the ability to positively see that inflect in a positive manner looking ahead. Of course, we're looking at cloud backlog, but some other trends that we see as well give that positive confidence in the growth and great cross-sell and upsell efforts we have with our existing install.

National side, we see that in our pipeline and of course.

I'm very optimistic on all the things that I talked before about nice cognate <unk> inside of that business, whether it be the net new market. We're not doesn't have a role today, where we're going after that the install base will be going after that and then an accelerated opportunity of Don those jump balls scenarios a lot of that.

Speaker #1: Yeah, maybe I'll cover the...

Speaker #3: pipeline question. So Michael, the pipeline's strong. And you can probably tell that the sentiment that I'm sharing, it's based on not only execution of what we see and what we've experienced in Q3, and our execution against the strategy but it's also based on what we're seeing in the market.

Pipeline, we haven't even put into we were the early days of bringing that into our business. So I guess, it's not only on the current pipeline that we see to be strong and the buying sentiment, but the potential that we have now that we've got the complete into wind capability. So yes.

Speaker #3: I think the first thing that I will say is there is lots of questions about AI in the market. And I understand why that potentially is the case.

It is born from the trains being in our favor, which we were predicting but it's good to see that it is coming to life.

Speaker #3: That is not true for CX. In CX, the proven benefits that you gain with a world-class AI platform that drives automation, great experiences, reduced costs, increased loyalty, the ability to drive upsells and sales, and benefits for your customers—we can prove that with real customer references today.

Scott. Thank you so much we look forward to hearing more next week.

Thanks, Michael.

Your next question comes from the line of Catharine <unk> with Rosenblatt Securities. Please go ahead.

Well. Thank you for my question I have one for Scott most of your cognizant customers are using speech detects the L. L M and back to speech open.

Speaker #3: So the demand of that to be able to improve customer experiences as an AI transformation initiative in the it's positive momentum. Whereas in other parts of AI, you can question, you don't question it here.

Open AI and others have recently released direct real time voice API and are you seeing competition from these API and why or why not sorry that was more technical but I have no no no.

Speaker #3: But I would also add our growth drivers, and we'll talk more about this on Monday, but if you think about the growth drivers that we have, we've clearly got still a significant market on the jump balls of on-prem to cloud.

Very happy to answer the question Catherine.

I think we're going to just pulls a little bit.

And look at this market for the reality of these.

Speaker #3: We're improving our win rates. We see increased pipeline very good. Our international expansion on the back of the investments. We see a lot more on the international side.

Anyone can create a bulk.

Anyone I can do it myself in 10 minutes.

But creating NII agent, whether it's teach takes the <unk> and all the other capabilities, creating an AI agent that delivers superior.

Speaker #3: We see that in our pipeline. And of course, I'm very optimistic on all the things that I talked before about nice Cognigy inside of our business, whether it be the net new market where nice doesn't have a role today, where we're going after that, the install base, where we're going after that, and then an accelerated opportunity of on those jump ball scenarios.

Customer experience exceptional customer experience advanced from what a human does today that takes a whole lot more than creating a bulk bought with some simple capabilities and so we actually don't see the low end providers.

Competition in this space in fact, we see them as partners within our ecosystem. The models are really good the general purpose. They have got an expanded capability.

Speaker #3: A lot of that pipeline, we haven't even put into we're in the early days of bringing that into our business. So I guess it's not only on the current pipeline that we see that is strong and the buying sentiment, but the potential that we have now that we've got the complete end-to-end capability.

With nice and in particular with that cognizant, we provide the contextual.

CX specific II built but it's built on rich customer interaction data. It's built on the knowledge of what that data is the sentiments the context as well as the <unk> and that contextual knowledge together with the guard rails together with the regulations together with the knowledge and the state is inside the enterprise.

Speaker #3: So yeah, it is born from the trends being in our favor, which we were predicting, but it's good to see that it's coming to life.

Speaker #11: Got it, Bev. Thank you so much. We look forward to hearing more next week.

Speaker #3: Thanks, Michael. Thank

Speaker #2: Your next question comes from the line you. of Catherine Tribnick with Rosenblatt Securities. Please go

Integrating those also with the legacy systems that you need to connect to to make sure that youre delivering according to the standards that an enterprise needs.

Speaker #2: ahead. Oh, thank you

Speaker #10: for taking my question. I have one for Scott. Most of your Cognigy customers are using speech-to-text to LLM and back to speech. OpenAI and others have recently released direct real-time voice APIs, and are you seeing competition from these APIs and why or why not?

No simple does that you need a complete platform.

So I guess, we see the goodness of the demand because what happens is is that customer often says I'll build myself on this.

Speaker #10: Thanks. Sorry, that was more technical, but I had to ask.

Yeah.

On whether it be open AI arent anthropic or other platforms are fantastic, but as soon as they see the reality of you need much more richness to be able to deliver a great consumer experience with that AI agent. It quickly come straight to us and we're able to leverage that so we liberate lodge language models the super they are really important but.

Speaker #3: No, no, no. Very happy to answer the question, Catherine. Look, I think we've got to just pause a little bit and look at this market for the reality it is.

Speaker #3: Anyone can create a bot. Anyone. I can do it myself in 10 minutes. But creating an AI agent whether it's text-to-speech, speech-to-text, and all the other capabilities, but creating an AI agent that delivers superior customer experience, exceptional customer experience, advanced from what a human does today, that takes a whole lot more than creating a bot with some simple capabilities.

Also the complementary of what we bring with the contextual intelligence means that it actually drives demand for us in a really positive why so I love. The question because we get it a lot but it immediately they trained lights to validation of why the domain specific capabilities that we have a really critical when you're in delivering to your consumers.

Because no one is going to introduce inferior customer experience to the customers no one.

Speaker #3: And so we actually don't see the LLM providers as competition in this space. In fact, we see them as partners within our ecosystems. Their models are really good.

Thank you very much.

Yes.

Speaker #3: The general purpose, they've got an expanded capability, but with nice and in particular with our Cognigy, we provide the contextual CX-specific AI build, but it's built on rich customer interaction data.

Your next question comes from the line of Tabi Rosner with Barclays. Please go ahead.

Hi, Thank you. Good afternoon. Most of my questions have been asked just wanted to touch on the <unk> for a second.

What's the competitive dynamics. It does feel like more players are trying to disrupt the market is there do you feel anything on your end.

Speaker #3: It's built on the knowledge of what that data is, the sentiments, the context, as well as the intents and that contextual knowledge together with the guardrails, together with the regulations, together with the knowledge and the standards inside the enterprise integrating those also with the legacy systems that you need to connect to to make sure that you're delivering according to the standards that an enterprise needs.

Yeah.

I guess I'll say a couple of things obviously, we've put a lot of emphasis are around the <unk> business and it's obviously an exciting inflection point in the <unk> market with DIY potential momentum everything that we've talked about and when we clearly proactively positioning our leadership in that and winning which is why we've we've emphasized that so heavily but we are going to.

Speaker #3: No simple bot does that. You need a complete platform. And so I guess we see the goodness of the demand because what happens is a customer often says, "Oh, I'll try to build it myself on this on whether it be OpenAI or an Anthropic or other platforms." Fantastic.

Really strong business in <unk>. It is it's the market leader.

It continues to be high demand the regulatory environment around the standards and the expectations around compliance and.

Avoiding financial crime and compliance continues to be a really important.

Speaker #3: But as soon as they see the reality of you need much more richness to be able to deliver a great consumer experience with that AI agent, it quickly comes straight to us.

Aspects of financial institutions.

That business is.

Xena really positive place, it's got a lot of cloud potential amendment and still to come.

Speaker #3: And we're able to leverage that. So we leverage the large language models. They're super. They're really important. But also, the complementary of what we bring with the contextual intelligence means that it actually drives demand for us in a really positive way.

The thing I love about the <unk> business candidly it is the retention rates in the in the Gi.

We don't lose the customer because once it's implemented it just provides an ongoing value and model that that resonates to the largest financial institutions on the planet. So.

Speaker #3: So I love the question because we get it a lot, but it immediately then translates to validation of why the domain-specific capabilities that we have are really critical when you're delivering to your consumers. Because no one is going to introduce inferior customer experience to their customers.

Industry differently benefits from.

From <unk>.

Continued focus on compliance and financial crime and that is a driver for us.

Speaker #3: No one.

And we're positive about the outlook of that business.

Speaker #1: Thank you very much.

Great. Thank you looking forward to me that you guys on Monday.

Speaker #2: Your next question comes from the line of Tavi Rosner with Barclays. Please go

Thanks, Joe.

Speaker #2: ahead. Hi.

Yes.

That concludes our question and answer session I will now turn the call back over to Scott Russell for closing remarks.

Speaker #4: Thank you. Good afternoon. Most of my questions have been asked. I just wanted to touch on the Actimize for a second. What's the competitive dynamics?

Thank you.

So first of all I appreciate the time for everyone. Today as you can clearly see we are excited.

Speaker #4: It does feel like more players are trying to disrupt the market. Is there anything you feel on your end?

We're excited about.

Speaker #3: Look, so I guess I'll say a couple of things. Obviously, we've put a lot of emphasis around the CX business, and it's obviously an exciting inflection point in the CX market with the AI potential, momentum, everything that we've talked about.

Our ability to be able to execute on the strategy that we laid out the renewable strategy that I've talked about many times on these calls.

And and seeing the results.

Speaker #3: And we're clearly proactively positioning our leadership in that and winning, which is why we've emphasized that so heavily. But we have got a really strong business in Actimize.

And frankly the expectations. These Q3s is a part of a proof point of our long journey in front of us to really lead and win in this market and be excited about it. We're also excited to be with you next Monday to join US I think it's really important that you can understand and see really nice talking to you.

Speaker #3: It is the market leader that continues to be in high demand. The regulatory environment around the standards and the expectations around compliance, as well as avoiding financial crime, continue to be really important aspects for financial institutions.

Platform within benefits with the <unk> platform and how bringing the two together the one plus one equals y.

<unk> more than two it's five its team and the potential that brings but also from the F&I.

Speaker #3: So that business is in a really positive place it's got a lot of cloud potential and momentum still to come, but the thing I love about the Actimize business candidly, it is the retention rates and the we don't lose a customer because once it's implemented, it just provides an ongoing value and model that resonates to the largest financial institutions on the planet.

<unk> strategy the midterm outlook.

And then how that plays out so I appreciate the time and look forward to seeing you all on Monday.

Ladies and gentlemen, this concludes today's call. Thank you all for joining you may now disconnect.

Speaker #3: So from continued focus on compliance and financial crime and that is a driver for us. And yeah, we're positive about the outlook of that business.

Speaker #4: You. Looking forward to meeting you guys on Monday.

Speaker #3: Thanks, Bev.

Speaker #2: That concludes our question-and-answer session. I will now turn the call back over to Scott Russell for closing

Speaker #2: remarks. Thank

Speaker #3: you. Look, so first of all, I appreciate the time for everyone today. As you can clearly see, we're excited. We're excited about our ability to be able to execute on the strategy that we laid out, the renewed strategy that I've talked about on many times on these calls.

Speaker #3: And seeing the results and frankly, the expectations is Q3 is a part of a proof point of a long journey in front of us to really lead and win in this market and be excited about it.

Speaker #3: We're also excited to be with you next Monday to join us. I think it's really important that you can understand and see really the nice Cognigy platform, how it then benefits with the CX1 platform and how bringing the two together, the one plus one equals way more than two.

Speaker #3: It's five, it's 10, and the potential that brings, but also from Beth and I, the updated strategy, the midterm outlook and how that plays out.

Speaker #3: So, I appreciate the time and look forward to seeing you all on.

Speaker #3: Monday. Ladies and gentlemen, this