NICE Accelerates AI Cloud Momentum With 13% Revenue Growth and Upgraded Full-Year Guidance
AI Revenue Jumps 49% Year-Over-Year: Integration and Innovation Drive Results
NICE’s third quarter 2025 performance stood out for its sustained cloud growth and an unmistakable surge in AI adoption. Cloud revenue climbed 13% year-over-year to $562.9 million, bolstered by 49% year-over-year growth in AI-related Annual Recurring Revenue (ARR), and 43% excluding the newly acquired Cognigy business. Every new seven-figure customer experience (CX) deal featured NICE’s AI solutions, demonstrating market-wide traction and positioning the company as a leader in next-generation enterprise-grade platforms.
Upgraded 2025 Guidance: Confidence Underpinned by Organic Growth and Cognigy Integration
Building on its third-quarter strength, NICE raised its full-year 2025 non-GAAP total revenue guidance to a range of $2,932 million–$2,946 million, aiming for 7% growth at the midpoint over 2024. Earnings per share guidance was also lifted to a $12.18–$12.32 range, up 10% year-over-year at the midpoint. This outlook factors in ongoing organic expansion and the amplified capabilities from the Cognigy acquisition.
Key Financials Reflect Resilience and Scalability
| Metric | Q3 2025 (GAAP) | Y/Y Change | Q3 2025 (Non-GAAP) | Y/Y Change |
|---|---|---|---|---|
| Total Revenue | $732.0M | +6% | $732.0M | +6% |
| Cloud Revenue | $562.9M | +13% | $562.9M | +13% |
| Operating Income | $160.8M | +14% | $230.9M | +5% |
| Operating Margin | 22.0% | vs 20.5% | 31.5% | vs 32.0% |
| Diluted EPS | $2.29 | +23% | $3.18 | +10% |
| Operating Cash Flow | $190.5M | +20% | — | — |
Strong Balance Sheet and Free Cash Flow Signal Flexibility
NICE exited the quarter with $418.1 million in cash and cash equivalents, total net cash and investments of $455.9 million after fully repaying all outstanding debt, and delivered free cash flow of $163.6 million for the quarter. This strong liquidity profile gives the company substantial firepower for continued innovation, strategic M&A, and shareholder returns.
AI Strategy Delivers on Growth and Margin Expansion
CEO Scott Russell pointed to the success of NICE’s AI-first strategy as a central growth engine. The recent integration of Cognigy strengthens NICE’s unified CXone platform—combining AI, engagement data, and automation—to set a new standard for real-time, intelligent customer engagement. Importantly, the expansion of AI offerings also delivered double-digit EPS growth on both a GAAP and non-GAAP basis.
Margin and Profitability Metrics Remain Healthy
Gross margins were steady, with GAAP gross margin at 66.8% and non-GAAP gross margin at 69.9%. Operating margins showed year-over-year improvement on a GAAP basis and were resilient at industry-leading levels on a non-GAAP basis, underlining operational efficiency despite the ramp in AI investment.
What to Watch: AI-Powered Deals and Execution on Guidance
With the next catalyst being ongoing enterprise AI deal flow and the delivery on newly upgraded full-year guidance, NICE’s ability to maintain momentum in both organic and acquired segments will be in focus for investors. Those tracking sector trends may want to pay particular attention to AI ARR growth and customer adoption patterns as lead indicators.
Key Takeaway
NICE has made a clear case for its position as a leader in cloud-based and AI-powered customer experience solutions. Investors may find the rapid AI adoption, the company’s prudent capital management, and upward-revised guidance to be strong signals of confidence and momentum heading into the year’s close. The continued integration of Cognigy will remain a story to watch for future operational and financial upside.
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