HOBOKEN, N.J., May 6, 2026, 15:05 (EDT)
Shares of NICE Ltd. sank 22.9% to $96.35 on Nasdaq Wednesday, after the company issued a weaker-than-expected revenue outlook for the second quarter—overshadowing its first-quarter beat and solid AI sales growth. The stock dipped as low as $95.62 earlier in the session. Seeking Alpha
The drop in shares comes as NICE pitches its AI story to investors, aiming to show that artificial intelligence could unlock another phase of growth, with more companies shifting call centers and service processes onto cloud platforms. Cloud revenue climbed 14.6% for the quarter. AI ARR — that’s recurring revenue from AI-based subscriptions — jumped 66%, and every CXone enterprise deal included it. NiCE
The immediate outlook didn’t offer much for bulls. NICE projected second-quarter revenue between $761 million and $771 million—midpoint growth works out to about 5.5%. That’s short of the $777.38 million Wall Street was targeting, per Seeking Alpha. Seeking Alpha
NICE beat forecasts for the first quarter, delivering adjusted earnings of $2.64 per share on $768.62 million in revenue. Analysts had been looking for $2.52 a share and $760.94 million, according to MarketBeat. MarketBeat
“A solid start to 2026,” is how Chief Executive Scott Russell summed up the quarter. He said integration of Cognigy—the AI automation firm NICE picked up last year—has moved faster than expected. International revenue jumped 30%. Russell added that AI is now pushing NICE’s reach well beyond its traditional contact center business. NiCE
During the earnings call, Mizuho’s Siti Panigrahi questioned why NICE expects second-quarter revenue growth to slow to 5%, down from “9% plus.” CFO Beth Gaspich attributed the slowdown to a handful of major renewals. She said the company made specific commercial moves with these large customers to lock in longer-term AI deals, which led to “phasing effects” around when revenue could be booked. Benzinga
That’s the bet. If those AI initiatives don’t filter through to reported revenue soon, or don’t boost net revenue retention—a metric tracking what existing customers are still spending after any upgrades, downgrades, or churn—the shift might dampen growth even with strong bookings. NICE put its cloud net revenue retention at 107%, though it flagged some short-term pressure as its lineup moves further into AI. Benzinga
Profit performance was uneven. GAAP net income dropped to $46.8 million, down from $129.3 million the previous year. The company spent $253.3 million on share buybacks and closed out March holding $304.1 million in cash, cash equivalents, and short-term investments, with no debt on its books.
Competition’s fierce in the contact-center software space. NICE faces off with Genesys, Five9, and Verint as companies look for tools that handle call routing, agent scheduling, and customer data analysis. According to a 2025 provider report from ISG, NICE, Verint, and Genesys topped the field when it comes to routing, workforce, and analytics. ISG Research
Russell pointed to real-world cases to back up the AI strategy. Openreach, he said, rolled out NICE Cognigy agents across 15 million customer journeys. Over at Lufthansa, the same software processed close to 2 million interactions in just a week of strike turmoil. “Not a pilot,” he emphasized about the Lufthansa use. Benzinga
Management is now considering a portfolio review. Russell told analysts that NICE has teamed up with advisers to look at options for its non-CX businesses—think financial crime, compliance, and public-safety units—but emphasized that nothing’s final yet. Benzinga
NICE stuck to its 2026 revenue target, holding the line at $3.17 billion to $3.19 billion, and bumped up its adjusted EPS outlook to a range of $10.98 to $11.18. Now, the focus shifts: can AI-fueled demand ramp up cloud sales fast enough to balance out pricing changes and legacy losses, especially with investors already rattled by Wednesday’s drop? investing.com
