Shares of NICE Ltd moved higher in premarket activity on Friday, extending gains after the company released financial results that demonstrated accelerating momentum in its artificial intelligence offerings. The customer experience software provider reported substantial growth in both profitability and key subscription metrics for the final quarter of its fiscal year.
Financial Performance and Guidance
For the fourth quarter, NICE recorded a net profit of $150.6 million, representing a significant increase from the $99.5 million reported during the same period last year. This translated to earnings of $2.41 per share on a GAAP basis. On an adjusted basis, which excludes certain non-cash expenses, earnings came in at $3.24 per share.
The company's cloud revenue segment, a critical growth driver, expanded by 14% during the quarter. Looking ahead to the full 2026 fiscal year, management provided revenue guidance in the range of $3.17 billion to $3.19 billion. Adjusted earnings per share are projected to fall between $10.85 and $11.05. Cloud revenue growth is expected to maintain its trajectory, with forecasts calling for an increase of 14.5% to 15%.
AI Metrics and Market Position
A standout element of the report was the performance of NICE's artificial intelligence products. Annual recurring revenue specifically tied to AI subscriptions soared by 66% year-over-year to reach $328 million. The company's cloud backlog, representing contracted revenue not yet recognized, finished the year 25% higher. Chief Executive Officer Scott Russell characterized the period as "a strong fourth quarter" and pointed to "accelerating AI momentum" across the business.
NICE operates in the competitive cloud software market for customer service management and financial crime compliance. Its primary competitors include specialized firms like Five9 and RingCentral, alongside larger technology platforms that are increasingly integrating AI and automation tools into their offerings. The company's results suggest it is successfully differentiating its AI capabilities in a crowded marketplace.
Capital Allocation and Balance Sheet
The board of directors approved a new share repurchase program authorizing up to $600 million in buybacks. This authorization increases the company's total remaining repurchase capacity to approximately $1 billion. However, the program cannot commence until after the release of the audited annual report for the 2025 fiscal year.
NICE concluded the year with a strong financial position, holding $417.4 million in cash and short-term investments while carrying no debt. The company also recently secured a $300 million revolving credit facility that extends through February 2029, providing additional financial flexibility.
Analyst Reaction and Market Context
Following the earnings release, several Wall Street firms adjusted their price targets while maintaining generally positive ratings. RBC Capital Markets reduced its target to $150 from $175 but kept its Outperform recommendation. Similarly, Morgan Stanley trimmed its target to $148 from $160 while sustaining an Overweight rating. These adjustments reflect a broader market reassessment of software valuations rather than company-specific concerns.
The positive premarket movement follows a substantial 13.25% rally in the previous trading session, which closed with shares at $111.55. The company's financial update was formally submitted to the U.S. Securities and Exchange Commission via a Form 6-K filing dated February 19.
Strategic Considerations and Risks
Despite projecting higher revenue for the coming year, NICE anticipates a slight decline in adjusted profitability. This dynamic may increase scrutiny on the company's expense management and operational efficiency. The technology sector faces macroeconomic headwinds that could impact enterprise spending on large software deals. Additionally, competitive pressure in the AI space could lead to pricing challenges as customers evaluate multiple solutions.
The company's ability to maintain its cloud growth targets while navigating these potential obstacles will be closely watched by investors. The significant investment in AI appears to be delivering measurable results in recurring revenue, a key metric for software-as-a-service businesses. The substantial share repurchase authorization signals management's confidence in the company's long-term value proposition and commitment to returning capital to shareholders.