NICE Systems' CEO Discusses Q1 2012 Results - Earnings Call Transcript

NICE-Systems Ltd. (NICE)

Q1 2012 Earnings Call

May 9, 2012 8:30 a.m. ET


Marty Cohen - Vice President, Investor Relations

Zeevi Bregman - President and Chief Executive Officer

Dafna Gruber - Chief Financial Officer

Eran Liron - Corporate Vice President, Business Development


Shaul Eyal - Oppenheimer & Co.

Shyam Patil - Raymond James

Paul Coster - JPMorgan

Daniel Meron - RBC Capital Markets

Michael Kim - Imperial Capital



Welcome to the NICE Systems Conference Call discussing First Quarter 2012 Results and thank you all for holding. All participants are at present in a listen-only mode. Following management’s formal presentation, instructions will be given for the question-and-answer session. As a reminder, this conference is being recorded, May 9, 2012.

I would now like to turn this call over to Mr. Marty Cohen, VP, Investor Relations. Please go ahead.

Marty Cohen

Thank you, operator. With me on the call today are Zeevi Bregman, President and Chief Executive Officer; Dafna Gruber, Chief Financial Officer; and Eran Liron, Executive Vice President, Corporate Development.

Before we start, I’d like to point out that some of the statements made on this call will constitute forward-looking statements in accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Please be advised that the company’s 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 3 of the company’s 2010 Annual Report on Form 20-F, and is filed with the Securities and Exchange Commission on March 29, 2012.

During today’s call, we will present a more detailed discussion of first quarter 2012 results and the company’s guidance for the second quarter and the full year. 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 the Generally Accepted Accounting Principles as reflected mainly in accounting for acquisition-related revenues and expenses, amortization of intangible assets and accounting for stock-based compensation. The difference between the non-GAAP adjusted results and the equivalent GAAP figures are detailed in today’s press release.

With that, I will turn the call over to Zeevi.

Zeevi Bregman

Thank you, Marty, and welcome everyone to our first quarter 2012 earnings call. Earlier today we reported strong results for the first quarter of 2012. We continue to see strong growth in our analytics and advanced applications and we continue to enhance and broaden our product offering including our performance management and Voice of the Customer solution.

We are pleased with our results of all our business lines including our financial crime and compliance business with our outstanding cash flow generation in this quarter. Non-GAAP revenues were $215 million, up 15% compared to the first quarter of 2011. Non-GAAP EPS in Q1 was $0.57 which was an increase of 21% compared to the first quarter of last year. In Q1, our book-to-bill ratio came in below 1. Our pipeline is healthy and includes several large deals that we expect to close later in this year. In addition, our backlog is strong and we expect very strong revenues in the second half of the year and especially in Q4.

In the Americas we continue to see strong customer demand for our solutions and we are particularly pleased to see continued strength in Latin America including increasing demand for advanced application and security solution. In EMEA, buying behaviors remain stable and we continued to see further penetration into new markets, especially in Eastern Europe. We believe that once the economy improves in Europe, it will result in better business for us. In APAC, the business climate is strong with a growing pipeline for analytics based advanced applications.

We hear a lot about big data today, and for many years NICE has been at the forefront of delivering value from the enormous amounts of structured and unstructured information trapped inside organizations. Unlike other vendors, this is not new to us. But what really separates NICE from others in the market is our ability to capture voice, text, email, web, social media, video and billions of financial transactions per day and analyze this enormous amount of structured and unstructured data in real time.

Our solutions provide our customers the ability to analyze each stage of the interaction or event by preparing them for the interactions and events before they occur, shake them as they happen with real time decisioning and guidance capabilities which is referred to as the deciding moment, and then help them improve each future interaction or event from post analysis.

This is game changing for our customer as it can help them more than ever improve operational efficiency and hence the customer experience. Increased customer satisfaction, drive revenues and show compliance and safeguard people and assets.

Last week we held our Annual Global Customer Conference in Nashville, Tennessee. Where we were able to successfully demonstrate our real time capabilities to more than 1500 participants. Over 50 customers presented compelling stories of their innovative implementation of NICE solutions to support their business growth. Keynote speakers from leading financial institutions and telecom companies shared how our analytics solutions help reduce customer complaint trends, achieve multiple improvements in customer satisfaction, get employee engaged and drive performance improvement and cost savings.

The customer feedback we received was very positive about enhancements we are making to our offerings, particularly on the solution enabling our customers to own the decisive moment by making an impact in real time across channels. A large part of our business is regulation and compliance driven. And we continue to benefit from the increasing regulatory environment. A few weeks ago, we announced the opening of a new practice committed to helping our U.S. based customers prepare for the new requirements of the Dodd-Frank Act.

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