Q3 FY2026
Filed Nov 4, 2026NiCE Exceeds Revenue and EPS Guidance Ranges, Reporting 8% Year-Over-Year Revenue Growth in Third Quarter 2026
Revenue and cloud revenue grew, AI ARR increased 46%, and the company raised full-year non-GAAP EPS guidance. However, GAAP and non-GAAP gross margins, operating income, net income and diluted EPS were lower than the corresponding prior-year quarter, while the company announced a workforce reduction of approximately 5%.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 total revenueGAAP | $790.7M | – | 8.0% |
| Q3 2026 total revenuenon-GAAP | $790.7M | – | 8.0% |
| Q3 2026 cloud revenueGAAP | $622.7M | – | 10.6% |
| Q3 2026 gross profitGAAP | $493.2M | – | – |
| Q3 2026 gross marginGAAP | 62.4% | – | – |
| Q3 2026 gross profitnon-GAAP | $526.2M | – | – |
| Q3 2026 gross marginnon-GAAP | 66.5% | – | – |
| Q3 2026 operating expensesGAAP | $372.6M | – | – |
| Q3 2026 operating expensesnon-GAAP | $312.4M | – | – |
| Q3 2026 operating incomeGAAP | $120.6M | – | – |
| Q3 2026 operating marginGAAP | 15.3% | – | – |
| Q3 2026 operating incomenon-GAAP | $213.8M | – | – |
| Q3 2026 operating marginnon-GAAP | 27.0% | – | – |
| Q3 2026 net incomeGAAP | $95.1M | – | – |
| Q3 2026 net income marginGAAP | 12.0% | – | – |
| Q3 2026 net incomenon-GAAP | $168.2M | – | – |
| Q3 2026 net income marginnon-GAAP | 21.3% | – | – |
| Q3 2026 basic earnings per shareGAAP | $1.63 | – | – |
| Q3 2026 diluted earnings per shareGAAP | $1.60 | – | – |
| Q3 2026 diluted earnings per sharenon-GAAP | $2.84 | – | – |
| Q3 2026 non-GAAP EBITDAnon-GAAP | $237.7M | – | – |
| Q3 2026 net cash provided by operating activitiesGAAP | $97.7M | – | – |
| Q3 2026 free cash flow from continuing operationsnon-GAAP | $69.01M | – | – |
| Year to date September 30, 2026 total revenueGAAP | $2.34B | – | – |
| Year to date September 30, 2026 gross profitGAAP | $1.49B | – | – |
| Year to date September 30, 2026 operating incomeGAAP | $351.3M | – | – |
| Year to date September 30, 2026 net incomeGAAP | $225.1M | – | – |
| Year to date September 30, 2026 diluted earnings per shareGAAP | $3.77 | – | – |
| Year to date September 30, 2026 non-GAAP net incomenon-GAAP | $488.7M | – | – |
| Year to date September 30, 2026 non-GAAP diluted earnings per sharenon-GAAP | $8.18 | – | – |
| Year to date September 30, 2026 net cash provided by operating activitiesGAAP | $399.6M | – | – |
| Year to date September 30, 2026 free cash flow from continuing operationsnon-GAAP | $310.9M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| CloudThird-quarter 2026 cloud revenue would have increased 12.2% excluding an atypical $10 million customer credit, of which approximately $9 million was recorded against non-CXone cloud revenue. | $622.7M | – | 10.6% |
| Services | $128.7M | – | – |
| Product | $39.33M | – | – |
Full-year 2026 outlook
- Revenue$3,170 million to $3,190 million
- NoteNon-GAAP fully diluted earnings per share of $11.12 to $11.32
- NoteApproximately 12% year-over-year growth in cloud revenue
- NotePre-tax restructuring charges of approximately $15–20 million, primarily in the fourth quarter of 2026
Capital returns
- In the third quarter of 2026, $72.2 million was used for share repurchases.
- Purchase of treasury shares was $383,395 (U.S. dollars in thousands) year to date September 30, 2026.
What drove it
- AI ARR reached $392 million, increasing 46% year over year.
- AI ARR reached 16% of cloud revenue.
- International revenue increased 33% year over year.
- Third-quarter 2026 total revenue and cloud revenue would have increased 9.4% and 12.2%, respectively, excluding an atypical $10 million customer credit.
- The company is strengthening its partner-led go-to-market and delivery capabilities.
Concerns
- GAAP gross margin was 62.4% compared to 66.8% for the third quarter of 2025.
- Non-GAAP gross margin was 66.5% compared to 69.9% for the third quarter of 2025.
- GAAP operating income was $120.6 million compared to $160.8 million for the third quarter of 2025.
- Non-GAAP operating income was $213.8 million compared to $230.9 million for the third quarter of 2025.
- GAAP diluted earnings per share was $1.60 compared to $2.29 in the third quarter of 2025.
- Non-GAAP diluted earnings per share was $2.84 compared to $3.18 in the third quarter of 2025.
- NiCE expects to reduce its global workforce by approximately 5%.
- NiCE expects to record pre-tax restructuring charges of approximately $15–20 million, primarily in the fourth quarter of 2026.
What to watch
- Execution of the plan to streamline the operating model, reduce management layers and simplify decision-making.
- The expected approximately 5% reduction in global workforce and the timing of pre-tax restructuring charges of approximately $15–20 million.
- Full-year 2026 non-GAAP total revenue guidance of $3,170 million to $3,190 million.
- Full-year 2026 non-GAAP fully diluted earnings per share guidance of $11.12 to $11.32.
- The expectation of approximately 12% year-over-year growth in cloud revenue for full-year 2026.
- AI ARR, which reached $392 million and 16% of cloud revenue.
Balance sheet and cash flow
- As of September 30, 2026, total cash and cash equivalents, and short-term investments were $350.9 million, with no outstanding debt.
- Cash and cash equivalents were $312,307 (U.S. dollars in thousands) as of September 30, 2026, compared to $379,388 (U.S. dollars in thousands) as of December 31, 2025.
- Short-term investments were $38,629 (U.S. dollars in thousands) as of September 30, 2026, compared to $38,010 (U.S. dollars in thousands) as of December 31, 2025.
- Net cash provided by operating activities was $97.7 million in the third quarter of 2026.
- Free cash flow from continuing operations was $69,014 (U.S. dollars in thousands) in the third quarter of 2026.
- Purchase of property and equipment was $7,295 (U.S. dollars in thousands) in the third quarter of 2026.
- Capitalization of internal use software costs was $21,419 (U.S. dollars in thousands) in the third quarter of 2026.
Analysis
NiCE reported Q3 2026 GAAP and non-GAAP revenue of $790.7 million, up 8.0% year over year from $732.0 million. Cloud revenue was $622.7 million and increased 10.6% year over year. The company stated that total revenue and cloud revenue would have increased 9.4% and 12.2%, respectively, excluding an atypical $10 million customer credit, of which approximately $9 million was recorded against non-CXone cloud revenue. International revenue increased 33% year over year, while AI ARR increased 46% year over year to $392 million and reached 16% of cloud revenue.
Profitability declined from the corresponding prior-year quarter. GAAP gross margin was 62.4% versus 66.8%, and non-GAAP gross margin was 66.5% versus 69.9%. GAAP operating income was $120.6 million versus $160.8 million, with operating margin at 15.3% versus 22.0%. Non-GAAP operating income was $213.8 million versus $230.9 million, and non-GAAP operating margin was 27.0% versus 31.5%.
Earnings also declined year over year. GAAP net income was $95.1 million versus $144.9 million, and GAAP diluted EPS was $1.60 versus $2.29. Non-GAAP net income was $168.2 million versus $200.8 million, while non-GAAP diluted EPS was $2.84 versus $3.18. Year-to-date GAAP net income was $225,116 (U.S. dollars in thousands) compared with $461,547 (U.S. dollars in thousands), and year-to-date non-GAAP diluted EPS was $8.18 compared with $9.06.
Cash generation was lower than the corresponding prior-year period. Q3 net cash provided by operating activities was $97.7 million compared with $190,500 (U.S. dollars in thousands), and free cash flow from continuing operations was $69,014 (U.S. dollars in thousands) compared with $163,579 (U.S. dollars in thousands). The company used $72.2 million for third-quarter share repurchases. As of September 30, 2026, total cash and cash equivalents and short-term investments were $350.9 million, with no outstanding debt.
The company reiterated full-year 2026 non-GAAP total revenue guidance of $3,170 million to $3,190 million and raised full-year non-GAAP diluted EPS guidance to $11.12 to $11.32. Guidance includes the expectation of approximately 12% year-over-year cloud revenue growth. NiCE also announced a plan to reduce its global workforce by approximately 5% and expects pre-tax restructuring charges of approximately $15–20 million, primarily in the fourth quarter of 2026. The charges will be excluded from non-GAAP results.
Management, verbatim
In the third quarter, we delivered total revenue and non-GAAP EPS above the high end of our guidance ranges, while continuing to advance our position in the rapidly evolving CX AI market.
Scott Russell, CEO of NiCE
We saw strong performance in several important areas of our business, including international markets, where revenue increased 33% year over year and AI ARR increased 46% to $392 million reaching 16% of cloud revenue.
Scott Russell, CEO of NiCE
Together with the actions we're taking to streamline the business, these advantages give me confidence in our ability to deliver sustainable, long-term value for our shareholders.
Scott Russell, CEO of NiCE
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so comparisons of actual results with prior guidance are unavailable.
- GAAP full-year 2026 revenue and earnings guidance was not provided.
- Full-year 2026 gross margin, operating expenses and tax-rate guidance was not provided.
- Quarter-over-quarter comparisons were not provided for the reported operating metrics.
- A dividend declaration or dividend payment was not reported.
- A reported income-tax rate was not provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.