NiCE CEO on AI ROI, Automation, and 8% Revenue Growth

**SPEAKER_1** (0:00)
To take a closer look at the numbers, joining us now, Scott Russell, the CEO of Nice. Scott, great to have you on. Let's talk about where you exceeded here. You exceeded your revenue guidance. You delivered 8%.
You're over your growth on the revenue front this quarter. What were the biggest drivers to the upside?

**Scott Russell** (0:17)
It was still a quarter. There was three real drivers that we saw. Number one, the AI growth is real. So our AI backlog grew at 72%.
Our total cloud backlog grew. And what that has been is four quarters of record bookings growth that we've now converted into revenue where customers are getting real value out of their CX platform, changing the way you experience engaging with the brands that you love. The second is we were able to get real momentum through our partner network, our systems integration partners, delivering multiples higher in growth that is allowing us to leverage that ecosystem to be able to fuel more adoption, more deployments and more value for our customers. Last but not least, our financial crime and compliance business had a stellar quarter, particularly with product growth, that allowed us to, as you say, overachieve and be above the high end of our range, and also allowed us to be able to not only be at the high end of range of EPS, but we also lifted our earnings per share on the full year as well.

**SPEAKER_1** (1:18)
And so let's first look at this cloud driven growth. You had another strong quarter here. We've been talking more and more about adoption, enterprise adoption. Are you seeing demand accelerate, or are enterprises just simply becoming more comfortable with this concept of having to invest in an AI powered experience if they want to keep up?

**Scott Russell** (1:39)
Great question. What we're seeing is customers are being more prudent with their decisions on AI. So the pipeline and the growth and the demand continues to increase, but they're no longer spending money on experimentation, pilots, proof of concepts, evaluations.
They're not going to spend tokens, they're not going to spend dollars, that is not going to give real returns to their business. And so what they're now doing is they're saying, I want outcomes. Now in our world, we're able to deliver that at scale. So that's why our bookings growth has been so strong, because we've been in the world of customer experience for a long time, decades, but with the AI capability, we can increase handling time, we can improve containment rates. And what that means for their customers is when you interact with their brands, you get a great experience, you're able to get the resolution of the needs that you have, and you're able to get on with your day having a great interaction, whether that be with a human or AI. So what we're focused on now is realizable outcomes, measurable return on investment, and AI is prime time in our market, whereas 9, 12 months ago, that was still in experimentation phase.

**SPEAKER_1** (2:48)
It's all moved so quickly, Scott, and what's become palatable for these companies is also moving at a rapid pace. They want to see the return on that spend, and you said they're being more deliberate with that spend. So from your customers, where are they seeing the fastest return on these investments today? What areas are they seeing the most improvement in the use of this AI?

**Scott Russell** (3:11)
Yeah, it's really evolved. So what we saw previously was the use of AI agents for simple tasks, authentication of who you are, a voice agent that is able to then verify maybe password resets, verification details, simple knowledge-based inquiries. And then the second we saw was copilot. So helping a human agent who is talking to a consumer and helping them get better answers, more quality answers in a faster timeframe. It's pivoted. Now what companies are looking for is really complex workflows. I'll give you a quick example. Lufthansa, world leading airline brand, they use AI agents with nice technology to be able to do flight rebookings, to be able to do hotel cancellations, credits, refunds and returns all through our native AI platform that allows them to do that without needing the human agent involved. And if you think about scenarios where there's a storm, we're able to proactively help customers already do those rebookings through AI that 12, 18 months ago was only a dream.

**SPEAKER_1** (4:18)
And Scott, as we look at the macro backdrop, I mean, I spend most of the day talking about the macroeconomic backdrop that we're dealing with. Are you seeing any hesitation from customers because of what we have here with the higher rates and it's seeming as if it's going to be higher for longer?