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美國
證券交易委員會
華盛頓特區20549
形式 20-F
根據1934年《證券交易所法》第12(b)或(g)條的登記聲明
根據1934年《證券交易所法》第13或15(d)條提交的年度報告
日終了的財政年度 十二月31, 2024
根據1934年《證券交易所法》第13或15(d)條提交的過渡報告
殼牌公司根據1934年《證券交易所法》第13或15(d)條報告
委員會檔案編號 0-27466

NICE LTD.
(註冊人章程中規定的確切名稱)
N/A
(註冊人姓名的英文翻譯)
以色列
(公司成立或組織的管轄權)
扎欽街13號, P.O. 690號信箱, 拉阿納納 4310602, 以色列
(主要行政辦公室地址)
諾亞·法卡斯·格魯克
企業法律主管
電話:+972-9-7753777
電郵:noa. nice.com
扎欽街13號, P.O. 690號信箱, 拉阿納納 4310602, 以色列
(Name、電話、電子郵件和/或傳真號碼以及公司聯繫人的地址)
根據該法第12(b)條登記或將登記的證券:
每個班級的標題交易符號
每個交易所的名稱
在哪些上註冊 
美國存托股份,每股代表
普通股1股,面值1股
每股新以色列謝克爾
納斯達克全球精選市場



根據該法第12(g)條登記或將登記的證券:
沒有一
(班級名稱)
根據該法第15(d)條有報告義務的證券:
沒有一
(班級名稱)
註明截至年度報告涵蓋期間結束時發行人每種資本或普通股類別的已發行股份數量: 63,249,843 普通股,每股面值1.00新謝克爾(不包括11,524,984股庫存股)。
如果註冊人是《證券法》第405條所定義的知名經驗豐富的發行人,則通過勾選標記進行驗證。
    不是
如果本報告是年度報告或過渡報告,請勾選標記表明註冊人是否無需根據1934年證券交易法第13或15(d)條提交報告。
是的 不是
通過勾選標記確認註冊人是否(1)在過去12個月內(或在註冊人被要求提交此類報告的較短期限內)提交了1934年證券交易法第13或15(d)條要求提交的所有報告,以及(2)在過去90天內是否已遵守此類提交要求:
    不是
通過勾選標記檢查註冊人是否已在過去12個月內(或在註冊人被要求提交此類文件的較短期限內)以電子方式提交了根據S-T法規第405條(本章第232.405條)要求提交的所有交互數據文件。
    不是
通過勾選標記來確定註冊人是大型加速備案人、加速備案人、非加速備案人還是新興成長型公司。請參閱《交易法》第120亿.2條規則中「大型加速備案人」、「加速備案人」和「新興成長型公司」的定義。
大型加速文件服務器 
加速編報公司
非加速文件管理器
新興成長型公司
如果一家新興成長型公司根據美國公認會計原則編制財務報表,請通過勾選標記表明註冊人是否選擇不利用延長的過渡期來遵守根據《交易法》第13(a)條提供的任何新的或修訂的財務會計準則。
用複選標記表示註冊人是否提交了一份報告,證明其管理層根據《薩班斯-奧克斯利法案》(《美國聯邦法典》第15編,第7262(B)節)第404(B)條對其財務報告的內部控制的有效性進行了評估,該評估是由編制或發佈其審計報告的註冊會計師事務所進行的。
如果證券是根據該法第12(B)條登記的,應用複選標記表示登記人的財務報表是否反映了對以前發佈的財務報表的錯誤更正。

通過勾選標記來驗證這些錯誤更正是否是需要根據§240.10D-1(b)對註冊人的任何高管在相關恢復期內收到的激勵性補償進行恢復分析的重述。

用複選標記表示註冊人在編制本文件所包括的財務報表時使用了哪種會計基礎:
美國公認會計原則
☐和的合作伙伴。國際會計準則理事會發布的國際財務報告準則
☐和的合作伙伴。其他
如果在回答上一問題時勾選了「其他」,請通過勾選標記指明註冊人選擇遵循的財務報表項目:
                            
項目17 項目18
如果這是年度報告,請勾選註冊人是否是空殼公司(定義見《交易法》第120條第2款)。



是的 沒有



目錄
頁面
項目16.[預留]

i


初步說明
這份年度報告包含有關NICE的業務、財務狀況和經營結果的歷史信息和1995年私人證券訴訟改革法所指的前瞻性陳述。「預期」、「相信」、「估計」、「預期」、「打算」、「可能」、「計劃」、「項目」、「應該」、「戰略」、「繼續」、「目標」和「目標」以及類似的表述與NICE或其管理層有關,旨在識別前瞻性陳述。這些陳述反映了NICE目前對未來事件的信念、預期和假設,並受到各種風險和不確定因素的影響。這些前瞻性表述與以下方面有關:經營業績;預期現金流;毛利率;我們爲運營提供資金的資源是否充足;儘管競爭對手採取積極的營銷和定價策略,我們仍能維持平均售價;我們與主要分銷渠道保持和發展盈利關係的能力;我們關鍵分銷渠道的財務實力;以及市場對我們的技術、產品和解決方案的接受度。

關於1995年「私人證券訴訟改革法」中的「安全港」條款,我們正在確定一些重要因素,這些因素單獨或總體上可能導致實際結果和結果與我們所作的任何前瞻性陳述中包含的結果大不相同;任何此類陳述均以下列警告性陳述爲參考。許多因素可能會導致NICE的實際結果、業績或成就與此類前瞻性陳述可能明示或暗示的任何未來結果、業績或成就存在實質性差異,這些因素包括但不限於總體經濟和商業狀況的變化、與現有或新競爭對手的競爭、我們基於雲的軟件即服務業務的成功和增長、我們增長戰略的成功執行、進行額外收購或有效整合收購業務的困難、對第三方雲計算平台提供商、託管設施和服務合作伙伴的依賴、快速變化的技術(包括人工智能)、這些不確定性因素包括:在我們的某些產品和服務中越來越多地實施人工智能和產生式人工智能能力,網絡安全攻擊或其他安全事件,隱私問題和立法,我們招聘和保留合格人員的能力,貨幣匯率和利率的變化,我們全球業務產生的額外稅收負擔的影響,意外事件或地緣政治條件的影響,包括那些可能擾亂我們的業務和全球經濟的意外事件或地緣政治狀況,以及各種其他因素,這些因素在本年度報告中均有提及但沒有提及。這些風險在本年度報告的項目3「關鍵信息--風險因素」下有更全面的描述。如果這些風險或不確定性中的一個或多個成爲現實,或者潛在的假設被證明是不正確的,我們的實際結果可能與本文中描述的預期、相信、估計、預期、打算、計劃或預計的結果大不相同。所有前瞻性陳述僅在本新聞稿發佈之日作出。NICE不打算也不承擔任何義務來更新這些前瞻性陳述。投資者在考慮前瞻性陳述以及是否投資或繼續投資NICE的證券時應牢記這一點。

在本年度報告中,所有提及「NICE」、「我們的」或「公司」均指NICE Ltd.,一家根據以色列國法律組建的公司及其全資子公司。有關我們重要子公司的列表,請參閱本年度報告第4.C項「組織結構」。

在本年度報告中,除非另有說明或除非上下文另有要求,所有提及的「$」或「dollars」均指美元,所有提及的「歐元」均指歐元,所有提及的「GBP」均指英鎊,所有提及的「瑞士法郎」均指瑞士法郎,所有提及的「國家情報局」均指以色列新謝克爾,所有提及的「印度盧比」均指印度盧比,所有提到「PHP」的地方都是菲律賓披索,所有提到「澳元」的地方都是澳元,所有提到「日元」的地方都是日元,所有提到「Singapore」的地方都是新加坡元,所有提到「COP」的地方都是哥倫比亞披索。除非另有說明,NICE的財務報表和有關信息均以美元呈列。
ii


第一部分
項目1. 董事、高級管理人員和顧問的身份.
不適用因
項目2. 報價統計數據和預計時間表.
不適用因
1


項目3. 密鑰信息.
A. [保留]

B.資本化與負債

不適用。

C.提供和使用收益的原因

不適用。

D.危險因素

我們的業務面臨重大風險。您應仔細考慮本年度報告和我們向美國證券交易委員會(「SEC」)提交的其他文件中列出的所有信息,包括我們面臨的以及我們所在行業面臨的以下風險因素。下面描述的風險和不確定性並不是我們面臨的唯一風險。我們目前未預見到或我們目前認爲不構成重大風險的其他事件、情況或因素也可能影響我們的業務、經營業績和財務狀況。我們的業務、財務狀況和運營業績可能會受到任何這些風險的重大不利影響。

與我們的業務、競爭和市場相關的風險

我們運營的市場競爭激烈,我們可能無法成功競爭。
總體而言,我們的產品、解決方案和相關服務(在本年度報告的其他地方也稱爲我們的「產品」)的市場競爭激烈。我們的競爭對手包括許多大型、成熟的軟件開發供應商。我們的一些主要競爭對手或潛在競爭對手可能比我們擁有優勢,包括更多的資源、更廣泛的產品組合、應用程序和服務、更高的品牌知名度、更大的專利和知識產權組合以及更大的客戶群。這些潛在優勢可以使我們的競爭對手更好地適應新的市場趨勢、包括人工智能(「AI」)在內的新興技術或客戶要求,或投入更多資源用於產品和服務的營銷和銷售。
我們市場的現有和新的潛在進入者(包括在我們的特定業務領域或特定行業垂直領域競爭的新技術供應商)的額外競爭可能會導致我們提供的一些產品和服務的廣泛可用性和標準化,這可能會導致我們的產品和服務的商品化並減少對我們的產品和服務的需求。

此外,由於競爭壓力,我們產品的價格可能會在整個市場上下降,包括採用不同的定價方法或不同的定價模型,這可能是必要的,因爲我們的產品和服務的潛在商品化、基於人工智能的解決方案引入新的定價計量單位的潛力。市場中這可能是破壞性的,或者在經濟困難時期。這可能會對我們的毛利潤和經營業績產生負面影響。

在最近年份,鄰近市場的參與者通過內部開發、合作和收購增加了他們在我們市場的存在。基礎設施和/或企業軟件供應商,如作爲大型技術提供商、大語言模型(LLM)提供商、人工智能代理功能提供商、對話式AI供應商、客戶關係管理(CRM)供應商、IT服務管理供應商以及統一通信即服務(UCaaS)供應商、視頻協作提供商、平台即服務(PaaS)供應商和純數字供應商已經進入或可能決定進入我們的市場空間,或構建或收購聯繫中心即服務(CCaaS)解決方案,並通過提供全面的解決方案和/或平台與我們競爭。此外,隨着對生成性人工智能技術的投資和轉向使用的持續增長,我們可能會經歷垂直解決方案的參與者擴大其在數字CX市場的投資組合而帶來的競爭加劇。如果相鄰市場中的大型橫向分析提供商和特定領域的競爭對手進入或增加他們在金融犯罪和合規市場的存在,我們也可能面臨更激烈的競爭。其中一些供應商可能被廣爲人知的品牌所認可,這可以作爲一種當他們進入或增加他們在我們市場空間的存在時,他們將獲得優勢。如果我們不能有效地與這些市場進入者或其他競爭對手競爭,我們可能會失去市場份額,我們的業務、財務狀況或經營業績可能會受到不利影響。

2


鑑於我們市場的激烈競爭,我們產品的成功開發、定位和銷售執行以及維護我們的客戶關係是我們成功競爭和保持增長能力的關鍵因素。因此,我們必須繼續在研發、營銷和銷售活動上投入大量資金,以有效競爭。向客戶和合作夥伴成功營銷我們的產品對於我們保持增長的能力和競爭地位至關重要。我們無法保證我們的產品或現有的合作伙伴關係將使我們能夠成功競爭。
此外,我們的軟件解決方案可能會與 由潛在客戶內部開發的軟件, 以及競爭對手提供的軟件和其他解決方案。我們無法確保市場意識或對我們的新產品、應用程序或服務的需求將像我們預期的那樣迅速增長,或者其他人引入的新產品或技術開發或服務不會對我們產品的需求產生不利影響。
我們的一些解決方案的市場高度分散,包括廣泛的產品產品、功能和功能。通過併購或在該市場的競爭對手之間建立聯盟進行整合,可能會極大地影響我們的競爭地位,特別是如果它們能夠使我們的競爭對手提供有競爭力的全面平台解決方案。
隨着我們擴展到新市場和地區,我們面臨着新的挑戰,包括新的競爭,這些挑戰可能擁有特定的資產、關係、專業知識、技術和/或不同的定價策略,使我們的競爭對手能夠更好地響應市場趨勢或客戶要求,或投入更多的資源來開發、推廣和銷售其產品和服務。

我們無法應對或解決快速技術變革以及在我們運營的市場中頻繁引入新產品、服務和商業模式的結果,可能會對我們的運營業績和競爭地位產生重大不利影響。
我們在多個市場開展業務,每個市場的特點都是快速變化的技術和新產品、服務、商業模式引入和不斷變化的行業標準。我們的市場的特點還在於對最先進的技術和產品的持續需求。現有和潛在競爭對手可能會推出新的和增強的產品和服務,這可能會對我們產品的競爭地位產生不利影響。
我們正在投資基於人工智能的能力,以增強我們的產品。人工智能技術正在迅速發展,可能會帶來多種風險,包括用人工智能開發的工作產品中的事實錯誤或不準確性、與算法或編程偏見相關的道德風險、隱私和安全問題以及與保密和知識產權相關的風險。使用人工智能工具或未能確保負責任地使用人工智能技術可能會導致潛在的財務或聲譽損害。

我們相信,我們能夠預見技術和行業標準的變化,並在我們經營的每個市場及時成功地開發和推出新的、增強的和差異化的產品和服務,這是我們發展業務的關鍵因素。因此,我們預計將繼續在研發方面投入大量資金,特別是在我們所有業務領域不斷需要的新軟件應用程序方面,以及在人工智能和生產性人工智能倡議方面的投資。這種投資是否會帶來成功應對我們所在市場變化的產品和服務並不確定。如果我們沒有預料到技術或行業實踐的變化,或未能及時滿足市場需求,或無法開發有需求的新產品和服務,或者客戶採用新技術的速度比我們預期的慢,或者我們的競爭對手比我們更快和/或更成功地推出融入人工智能的新產品和增強型產品,我們提供的產品的競爭地位可能會受到不利影響,我們可能會失去市場份額,我們的經營業績可能會受到重大不利影響。

此外,我們的一些產品必須隨時與客戶的記錄系統集成 a數據源、面向消費者的前臺應用程序和後臺業務運營系統。對這些第三方系統的任何更改都可能要求迫使我們重新設計我們的產品,或導致無法訪問我們的產品所需的數據,而解決這些變化所需的任何此類重新設計或其他調整可能無法及時或獲得市場接受。

我們無法確保我們產品的市場或需求能夠持續或與技術變革的步伐一樣快速增長,無法確保我們能夠成功開發、採用和實施新技術、產品和應用,包括與包含人工智能的產品相關的新技術、產品和應用程序,這些新產品和應用程序將
3


實現市場接受度,在技術和價格方面具有競爭力,並響應客戶需求,或者其他人引入的新產品、服務或技術開發(包括基於人工智能的技術)不會使我們的產品和服務過時或需要調整我們的產品和服務和/或業務模式,以解決相關市場此類技術發展的影響。

市場對基於人工智能的產品和服務的接受度可能會加速我們運營的市場中某些人工智能相關趨勢。如果大規模採用此類趨勢,可能會減少對某些解決方案的需求,例如業務模式所基於的解決方案(除其他外),例如減少人類代理數量。如果我們無法成功解決此類人工智能相關趨勢對我們市場的影響,包括通過引入新的商業模式、產品和產品,那麼我們產品產生的收入可能會受到不利影響。如果發生上述任何情況,我們的業務、財務狀況和經營業績可能會受到重大不利影響。

我們可能無法維持和進一步擴大基於雲的SaaS業務的增長和/或盈利能力。
我們的基於雲的軟件即服務(「SaaS」,也稱爲「雲」)業務在客戶參與以及金融犯罪與合規市場中都取得了顯着增長,因此我們現在更依賴於我們業務這一領域的成功。如果我們無法有效競爭、產生可觀的收入或維持雲業務的盈利能力,或者如果我們無法成功執行雲戰略或預測客戶的需求,包括大企業採用雲解決方案以及基於人工智能的雲產品的速度,我們的收入可能會下降,我們的聲譽可能會受到不利影響。

我們的雲產品通常由客戶以訂閱的方式購買,包括包含消費的產品-基於定價。我們計劃繼續推廣雲產品的消費和利用定價模型,因此預計我們的收入將越來越依賴於我們解決方案的消費和利用。我們未能確保我們的解決方案的訂閱續訂,或者我們的解決方案的訂閱數量或數量或消費和利用率的減少,可能會對我們的收入、盈利能力和運營結果產生不利影響。

我們依賴第三方提供的雲計算平台,包括戰略合作伙伴提供的PaSaaS,例如 亞馬遜和微軟。 這些雲計算平台可能無法繼續提供有競爭力的特徵和功能,或者可能無法以商業上合理的條款提供。We可能會受到某些基礎設施服務定價的影響,例如Paas和網絡連接領域,這反過來又可能會影響我們向客戶提供的費率。

此外,我們的一些客戶可能不接受使用此類服務或特定平台。無法使用任何這些硬件、軟件或雲計算平台可能會對我們的業務產生重大不利影響,增加我們的費用,並導致我們延遲提供服務,直到我們開發等效技術,或通過購買或許可獲得等效技術並集成到我們的服務中。此外,如果我們因Paas提供商相關的原因而遭受服務不可用的時期,我們可能有合同義務爲客戶提供未來服務的積分,在某些情況下還需要退款,或承擔處罰責任。任何此類延長的服務中斷都可能損害我們的聲譽、收入和運營結果。

我們的一些產品和解決方案利用基於人工智能或生成人工智能的雲服務,由於市場對基於人工智能的產品需求不斷增長,這些服務可能會變得難以訪問或以商業上合理的條款獲取。我們無法獲得人工智能處理所需的容量可能會限制我們提供和擴大基於人工智能的產品增長的能力。這種限制還可能導致我們雲盈利能力的惡化.
隨着我們雲業務的發展,我們將繼續依賴與此類供應商的現有和新戰略關係。我們無法建立和促進這些關係可能會對我們雲業務的發展以及我們的增長、聲譽和運營結果產生不利影響。
此外,由於前期技術成本較低、實施更容易,雲計算可能會使新競爭對手更容易進入我們的市場,並使現有市場參與者能夠更大規模地與我們競爭。這種加劇的競爭可能會加大我們降低定價的壓力,這可能會對我們的收入、盈利能力和運營業績產生負面影響。
隨着持續轉向基於雲的產品,我們可能無法彌補本地業務的損失。
4


我們和競爭對手提供的SaaS交付模式的日益流行可能會對我們的本地軟件產品和相關服務的定價和總體需求產生不利影響,這可能會減少我們的收入和盈利能力。隨着持續轉向基於雲的產品,我們無法保證雲業務產生的收入能夠彌補我們內部企業軟件業務的業務損失。
我們可能無法成功執行我們的增長戰略。
我們的戰略是繼續投資、增強和保護我們的業務和運營,並通過有機和收購發展我們的業務。對新市場、產品、解決方案和技術、研發、基礎設施和系統、地域擴張以及額外合格和經驗豐富的人員的投資對於實現我們的增長戰略至關重要。我們收入的增長取決於所有這些因素的成功,包括我們維持和增長客戶群以及現有和新客戶收入的能力、發展戰略合作伙伴關係、將我們的產品引入新的全球市場、通過大量投資研究和開發來加強和改進我們的產品以及成功完善和整合收購的能力。

我們的成功取決於我們有效且高效地執行增長戰略以滿足客戶和市場需求的能力。我們無法保證我們能夠在未來幾年保持增長。如果我們無法成功執行增長戰略並妥善管理我們的投資和支出,我們的運營業績可能會受到重大不利影響。
客戶轉向語音渠道以外的通信渠道可能會對我們語音解決方案的成功產生重大不利影響。

我們的語音解決方案目前產生了很大一部分收入,近年來也產生了很大一部分收入,在未來幾年,我們將繼續依賴我們語音解決方案的銷售和相關的經常性收入,如訂閱和維護服務。企業客戶從語音通信轉向與企業的其他通信方式(如自助服務、電子郵件、消息應用程序、社交媒體和聊天)的趨勢可能會導致對我們的語音平台和應用程序的需求減少。我們不能保證客戶會將我們的解決方案用於我們產品組合中提供的其他或替代通信渠道,也不能保證我們的數字和客戶自動化解決方案的增長將彌補對我們語音解決方案的需求可能下降的影響。因此,語音解決方案市場的大幅下滑可能會對我們的語音解決方案產生的收入產生重大不利影響,這可能會對我們的業務、財務狀況或運營結果產生重大不利影響。

由於與收購和投資相關的風險,我們的業務可能會受到重大不利影響。特別是,我們可能無法成功進行額外收購或有效整合此類收購。
作爲我們增長戰略的一部分,我們在過去幾年中進行了多項收購(有關最近某些收購的描述,請參閱本年度報告中第5項「運營和財務回顧與前景-最近收購」),並預計未來將繼續完成收購和投資。 隨着我們繼續評估戰略機遇,無法保證我們能夠成功完成額外收購。E即使我們成功進行額外收購,將收購的業務整合到我們的運營中或投資新技術也可能會:(1)導致不可預見的運營困難和巨額支出;和(2)吸收管理層的大量關注,這些關注原本可以用於我們業務的持續發展,這兩者都可能導致關鍵客戶或人員的損失,並使我們面臨意外責任。
收購中常見的其他風險包括收購對我們財務和戰略地位的影響、無法成功整合或商業化收購的技術並及時實現預期協同效應或規模經濟以及收購資產的潛在損失。此外,我們可能無法保留key員工可能是運營我們收購的業務所必需的,但我們可能無法及時吸引新的熟練員工 以及管理層來取代它們。
近年來,我們的幾家競爭對手也完成了對我們市場或補充市場中公司的收購。因此,一旦以可接受的條款或根本確定,我們可能更難確定合適的收購或投資目標,或者完成收購或投資。如果我們無法執行我們的
5


收購戰略,我們可能無法實現我們的增長戰略,可能會失去市場份額,或者可能會失去我們在一個或多個市場中的領導地位。
我們經常與其他公司競爭收購公司,這種競爭可能會導致合適收購候選人的可用性減少或價格上漲。出於其他商業或經濟原因,我們也可能無法完成我們認爲對實施我們的戰略至關重要的收購或投資。此外,我們可能無法在我們尋求完成收購或投資的國家獲得必要的監管批准,包括競爭主管部門和外國投資主管部門的批准。出於這些和其他原因,即使我們宣佈了預期的收購,我們最終也可能無法完成收購。此外,即使我們進行了完美的收購,我們也可能會以不太優惠的條件進行收購和/或可能受到此類當局和機構施加的某些條件或承諾的約束,這可能會影響收購後的整合或對我們的業務產生不利影響。
我們可能需要大量融資來完成收購或投資,無論是通過銀行貸款、籌集債務還是其他方式。我們無法保證我們可以使用此類融資選擇或以我們認爲合理的條款提供此類融資選擇。此外,如果我們完成一項或多項重大收購,其中對價全部或部分由我們的普通股或代表我們普通股的美國存托股份(「ADS」)組成,則我們的股東可能會立即或其他稀釋他們在我們的權益或每股收益,或者如果我們發行可交換或可轉換債務爲重大收購融資,未來可能會遭受稀釋。

未來的收購或投資還可能要求我們承擔或有負債、與無形資產相關的攤銷費用和善意損失,其中任何一項都可能對我們的經營業績和財務狀況產生重大不利影響。
如果我們無法發展或維持與現有和新分銷商和戰略合作伙伴的關係,我們的業務和財務業績可能會受到重大不利影響。
我們市場戰略的一個重要要素涉及開發間接銷售、實施和支持渠道,其中包括我們的全球合作伙伴、分銷商、經銷商和其他戰略合作伙伴網絡。我們與許多分銷商、經銷商和經銷商簽訂了協議,在我們運營的業務線和地區營銷和銷售我們的產品。如果我們與分銷渠道合作伙伴或其他戰略合作伙伴的協議被終止,如果我們與分銷渠道合作伙伴或其他戰略合作伙伴的關係惡化,或者如果該合作伙伴的財務狀況減弱,我們的財務業績可能會受到重大不利影響。
此外,我們依靠全球渠道合作伙伴遵守適用的監管要求,例如反腐敗和反賄賂法律法規。儘管我們與此類合作伙伴達成了合同安排,要求他們遵守適用法律,但我們無法保證我們的合作伙伴不會違反適用法律或我們旨在確保遵守適用法律的政策和程序。如果他們未能這樣做,這可能會使我們面臨刑事或民事執法行動,並可能對我們的業務、經營業績和財務狀況產生重大不利影響。
我們增長戰略的執行還取決於我們建立新聯盟並與某些市場參與者(包括技術提供商)建立戰略合作伙伴關係的能力。此外,隨着我們市場機會的變化以及我們在某些市場和地區的業務發展和擴張,我們對特定分銷渠道和戰略合作伙伴的依賴可能會增加,或者我們可能需要創建新的戰略合作伙伴關係和聯盟來滿足不斷變化的市場需求。我們可能無法成功維護、創建或擴大這些渠道和合作夥伴關係,這可能會對我們的業務發展、增長、毛利率和運營業績產生負面影響。
我們還可能會對某些戰略合作伙伴產生依賴,如果我們必須在市場上尋找替代方案,我們的發展努力和業務可能會受到負面影響。此外,這些合作伙伴和聯盟通常不是排他性的,我們的合作伙伴也可能提供我們競爭對手的產品和服務,或者可能與我們直接競爭。如果我們不能成功地以有利的條件建立和維持戰略合作伙伴關係,我們可能會失去銷售機會、客戶和市場份額,這可能會對我們的業務和運營業績產生重大不利影響。
6



與我們的產品和運營相關的風險
我們的一些增強型服務依賴於租賃的網絡連接線路,這些服務的重大中斷或變化可能會對我們的業務產生不利影響。
我們的一部分雲產品通過我們擁有的專用設備網絡提供給客戶,該網絡通過基於互聯網協議的租賃網絡連接線路連接,容量爲我們專用。我們還通過這個專用網絡提供部分語音長途服務。
我們從第三方供應商處租用網絡連接線路和共用設施的空間來存放我們的設備。這些同地辦公設施代表了我們專用網絡的主幹。如果任何這些供應商無法或不願向我們提供,或者如果我們願意,擴大其當前水平的服務,我們向客戶提供的服務可能會受到不利影響。我們可能無法以合理或可比的價格或及時從其他提供商獲得替代服務。我們通過專用網絡提供的服務造成的任何中斷都可能會導致客戶不滿並對我們的運營產生不利影響。此外,如果我們無法轉嫁此類定價上漲,我們依賴的專用網絡的任何供應商的定價上漲都可能會對我們的運營業績產生不利影響。
我們依靠多個互聯網服務提供商爲我們的客戶及其客戶提供與我們雲聯絡中心軟件的連接。這些服務提供商未能提供可靠的服務可能會導致我們失去客戶,並使我們面臨信用或損害賠償的索賠。
我們依賴互聯網服務提供商通過其電信網絡提供不間斷且無錯誤的服務。我們對這些第三方提供商幾乎沒有控制,這增加了我們對他們提供的服務產生的問題的脆弱性,包括與一般互聯網訪問相關的故障。當問題發生時,可能很難確定問題的根源,並且無法保證我們擁有的多個冗餘和備份能夠防止此類問題的發生。服務中斷或中斷,即使不是由我們的產品或服務造成的,也可能會損害我們的聲譽或導致市場對我們產品的接受度下降,任何必要的補救行動都可能迫使我們承擔巨額成本和費用,例如向受影響的客戶支付積分、罰款或損害賠償。
我們依賴第三方網絡服務提供商發起和終止公共交換電話網絡呼叫,這些網絡的重大故障可能會損害我們的運營。
對於我們在統一通信市場的業務,我們利用第三方網絡服務提供商的基礎設施爲客戶提供電話號碼、公共交換電話網絡呼叫終止和發起服務以及本地號碼可移植性,而不是部署我們自己的網絡。如果任何這些網絡服務提供商停止運營或以其他方式終止我們依賴的服務,則延遲將我們的技術切換到另一家網絡服務提供商(如果有的話)可能會對我們的業務、財務狀況或經營結果產生不利影響。
我們依賴第三方提供的軟件、組件和技術基礎設施。如果我們失去了使用該軟件或基礎設施的權利,我們將不得不花費額外的資本來重新設計現有軟件,以遵守新的第三方提供商或開發新軟件。
我們集成和使用各種第三方軟件產品,如LLMS或其他基於人工智能的產品,作爲我們產品和解決方案的組件或集成,以增強其功能。LLMS和其他基礎設施組件需要大量計算資源,這些資源可能是有限的,或者在我們可以接受的條件下不可用。此外,我們依賴第三方的技術基礎設施,例如雲服務和雲提供商,我們通過這些基礎設施交付我們的產品,在某些情況下,包括通過單一雲提供商進行部署。如果這些軟件產品或技術基礎設施的功能版本不再向我們提供或不再以商業合理的條款向我們提供,我們的業務可能會中斷。如果其中任何第三方供應商在實施其服務時出現任何故障、服務中斷或中斷、與實施安全系統、安全措施或授權和訪問控制機制相關的中斷、或因與其他第三方共享此類供應商的資源而導致的其他中斷,或無法及時或以滿足我們需求的方式滿足我們的要求,或者我們與任何此類供應商的關係終止,我們可能會在我們的業務中遭遇中斷,直到獲得替代供應來源。供應商向我們提供組件、技術基礎設施或服務的能力的任何中斷或任何其他中斷都可能導致我們的服務和交付中斷
7


解決方案、產品交付延遲或無法交付,這可能會對我們的業務、財務狀況和運營結果產生重大不利影響。

此外,我們的一些第三方供應商使用專有技術和軟件代碼,在更換供應商的情況下,可能需要對我們的產品進行重大重新設計。如果我們失去了使用這種第三方軟件或技術基礎設施的權利,我們將被要求花費額外的資本來重新設計我們的軟件以與替代第三方軟件或技術基礎設施一起運行,自己開發替代方案,或者尋找此類軟件或基礎設施的新供應商。不能保證我們將以合理的商業條款獲得替代來源,或將滿足我們的要求。這可能導致我們無法交付,或被迫限制我們當前或未來的產品和解決方案中可用的功能,我們的產品和解決方案的商業發佈可能會推遲。此外,如果我們無法轉嫁此類價格上漲,任何第三方供應商的漲價都可能對我們的運營結果產生不利影響。
我們的某些產品和服務中越來越多地實施人工智能和生成人工智能功能可能會影響對我們產品的需求,並可能造成潛在的法律或聲譽損害。
與人工智能技術使用相關的技術進步速度將需要大量資源來實施人工智能驅動的解決方案並評估和解決與此類開發技術相關的風險。此外,與人工智能相關的法律和監管環境正在迅速發展,其中包括新法規以及與知識產權、隱私、消費者保護和就業相關法規的發展。這些法律和法規可能要求我們應對這些變化,並可能影響我們解決方案的運營,並可能增加合規成本或增加不合規風險。任何這些風險都可能使我們面臨責任索賠或聲譽損害。 有關監管環境相關風險的更多信息,請參閱風險因素,”法律和監管環境的變化可能會對我們的業務、運營業績和財務狀況產生重大不利影響".
此外,我們的競爭對手在產品中實施人工智能功能方面可能會更成功,這可能會對我們產品的需求產生負面影響。
隨着我們在產品和服務以及員工中擴大人工智能和生成人工智能功能的使用,包括在與我們業務相關的某些任務中使用人工智能技術,以及隨着市場對人工智能技術的接受度和使用繼續快速發展,我們面臨着與使用人工智能模型和人工智能技術相關的額外挑戰和各種法律和商業風險。這些風險包括運營風險、隱私和網絡安全相關風險以及與知識產權相關的風險等。這些風險還可能影響對我們產品和運營結果的需求,並且我們可能面臨潛在的法律索賠,這可能導致責任和聲譽損害。 請參閱本年度報告第3項「關鍵信息-風險因素」中討論的其他風險因素,以了解與我們增加使用人工智能和生成人工智能相關的這些風險和其他風險的更多信息。
此外,人工智能技術在我們運營的領域和市場中的市場接受度和使用的增加可能會影響此類市場的現有業務趨勢和競爭,因此,對我們某些產品和服務的需求可能會減少。
有關與使用人工智能模型和人工智能技術相關的各種法律和商業風險相關的風險的更多信息,請參閱風險因素,”我們的產品或服務中未發現的錯誤或故障可能會影響對我們產品和服務的需求,並且我們可能面臨直接損害我們財務業績的潛在產品責任索賠".

我們的產品或服務中未發現的錯誤或故障可能會影響對我們產品和服務的需求,並且我們可能面臨直接影響我們財務業績的潛在產品責任索賠。
我們的產品和服務可能包括未檢測到的錯誤、不準確、缺陷、故障、錯誤或其他弱點,可能導致我們的客戶服務中斷或意外停機、數據丟失、產品退貨、市場對我們的產品和服務的接受度喪失或延遲、競爭地位喪失或客戶或其他人的索賠。

此外,在我們的產品和服務中越來越多地實施人工智能和生成人工智能功能會帶來潛在的道德問題、不準確的內容或結果、無意的偏見、隱私和網絡安全相關挑戰、潛在侵犯第三方知識產權以及維護我們知識產權的潛在困難。
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當使用人工智能工具協助此類產品和服務的開發時,產權。實現任何這些或其他人工智能相關風險都可能導致潛在的法律或聲譽損害。

此外,我們的客戶可能會錯誤地實施或濫用我們的產品或服務,這可能會導致客戶不滿並損害我們的聲譽和品牌。糾正和修復此類錯誤、不準確、故障、誤導性內容或錯誤,或投資緩解活動以解決因使用人工智能而產生的風險,例如與隱私、網絡安全或知識產權相關的風險,可能會帶來巨額成本,並可能導致我們的產品和服務中斷、延遲或停止。

當我們的客戶在其業務的重要方面使用我們的產品時,任何錯誤、缺陷、服務中斷或其他性能問題都可能嚴重損害我們客戶的業務,並最終損害我們的聲譽。因此,客戶可以選擇不續訂我們的服務或推遲或扣留向我們付款。我們還可能會失去未來的銷售額,或者客戶可能會對我們提出保修或其他責任索賠,這可能會損害我們的業務並對我們的業績產生不利影響。特別是,我們的一些客戶(包括金融機構)可能會因我們的解決方案無法履行其功能而遭受重大損害。任何此類事件的發生都可能導致我們無法吸引或留住客戶,並對我們的收入、財務狀況和運營業績產生不利影響。

我們無法保證我們的質量保證計劃或其他程序能夠有效檢測、預防或解決我們產品和解決方案中的錯誤、不準確、故障或其他人工智能相關風險,或者我們能夠消除或成功限制我們對解決方案中任何故障或不準確的責任,包括負責任地使用包含人工智能功能的產品和服務。我們承保的任何產品責任保險可能不足以彌補任何此類產品責任索賠造成的損失。成功對我們提出一項或多項大型產品責任索賠可能會對我們的運營業績和財務狀況產生重大不利影響。

我們向客戶提供某些服務水平承諾,如果在特定時期內未達到規定的服務水平,這可能會導致我們爲未來的服務提供積分,並且可能會對我們的收入產生不利影響。
我們的雲服務客戶協議提供了服務級別承諾。如果我們無法滿足規定的服務水平承諾或長期無法使用我們的服務,包括與PaSaaS提供商或其他第三方相關的原因,我們可能有合同義務爲這些客戶提供未來服務的積分,在某些情況下退款,或承擔處罰責任。如果我們的計劃外停機時間超過了我們與客戶協議中允許的停機時間,我們的收入可能會受到不利影響。任何此類延長的服務中斷都可能損害我們的聲譽、收入和運營結果。

設計或實施我們新的RP系統的挑戰可能會對我們的業務和運營產生負面影響。

2025年第一季度,我們開始使用新的企業資源規劃系統(「ERP」)的核心財務部分。企業資源規劃系統的實施是一個複雜和耗時的項目,需要對業務和財務流程進行改造,以獲得企業資源規劃系統的好處。雖然新的企業資源規劃系統旨在保持準確的財務記錄,改進業務功能,並向我們的管理層及時提供有關業務運營的信息,但我們不能確保新的企業資源規劃系統的過渡和實施將一帆風順,因爲任何此類轉換都涉及轉換到新系統所固有的風險,包括信息丟失和可能擾亂正常運營。此外,如果我們沒有按計劃有效地實施企業資源規劃系統,或者企業資源規劃系統沒有按預期運行,我們對財務報告的內部控制的有效性可能會受到不利影響,或者我們對這些控制進行充分評估的能力可能會被延誤。任何後續階段的範圍和時間線仍有待確定。


與信息和產品安全以及知識產權相關的風險
如果我們或第三方提供商(例如託管設施、雲計算平台、服務合作伙伴或其他技術基礎設施提供商)的安全和網絡安全措施受到損害,並且未經授權訪問客戶的數據、我們的數據或我們的IT系統,我們的聲譽可能會受到損害,並且我們可能會承擔重大的法律和財務風險和責任。
我們的產品和服務涉及存儲和傳輸 客戶及其最終用戶的專有和其他敏感或機密信息,包括財務信息和其他個人可識別信息。此外,我們的一些客戶使用我們的產品和服務來編制和分析高度敏感或機密的內容
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信息,我們可能會遇到或存儲此類信息或數據,包括當我們爲客戶執行服務或維護功能時。信息可能會因安全事件而暴露或泄露,我們無法保證我們採取的或第三方提供商使用的安全措施足以防止安全事件的發生。安全事件可能會使我們面臨丟失或未經授權使用我們或我們客戶的信息、調查和執法行動、訴訟和可能的責任的風險。此外,我們可能有合同和其他法律義務通知客戶或其他相關方安全事件。

我們經常受到黑客的調查,並且不時 會發生安全事件。此類安全事件可能是由於計算機黑客的欺詐、員工錯誤、瀆職、故意不當行爲、未經授權訪問或使用我們的系統、產品和服務、我們的客戶數據或我們的數據(包括我們的知識產權和其他機密業務信息)而導致的,以獲取經濟利益或出於其他目的。此外,我們實施的內部安全政策和程序在保護客戶機密信息方面未能有效,或者我們的任何員工不當處理客戶或客戶最終用戶的敏感信息的看法或事實可能會對我們的業務產生負面影響。

Cyber security attacks are becoming increasingly sophisticated, including by way of frequent changes in the techniques used to obtain unauthorized access, and, in many cases, may not be identified until after a security incident occurs. If we fail to recognize and deal with such security attacks and threats, or if we fail to update our systems, products and services and prevent such threatened attacks in real time to protect our customers’ or other parties’ sensitive information, whether retained in our systems or by our customers using our products and services, our business and reputation will be harmed. The costs of recognizing and addressing security attacks and threats and updating our systems, products and services, may be significant.

Our offerings, including our cloud services, may be vulnerable to cyber-attacks, even if they do not contain defects. Such vulnerability may further increase as a result of the use of products and services incorporating AI capabilities. If there is a successful cyber-attack on one of our products or services, even absent a defect or error, it may also result in concerns regarding the integrity of our offerings generally, which could cause adverse publicity and impair their market acceptance and could have a material adverse effect on our results or financial condition.

Third parties regularly attempt to attack our security measures or inappropriately take advantage of our solutions, including our cloud services, through computer viruses, electronic break-ins and other disruptions. Such attempts may also include fraudulently inducing employees or customers into disclosing sensitive information such as usernames, passwords or other information to gain access to our customers’ data, our data or our systems. Furthermore, our customers may authorize third-party technology providers to access their customer data, and some of our customers may not have adequate security measures in place to protect their data that is stored on our services. Because we do not control our customers or third-party technology providers, or the processing of such data by third-party technology providers, we cannot ensure the integrity or security of such transmissions or processing. Malicious third parties may also conduct attacks designed to temporarily deny customers access to our services. Any security incident could result in a loss of confidence in the security of our services, damage our reputation, negatively impact our future sales, disrupt our business and lead to legal liability.

We could be subject to risks of losses resulting from cyber security attacks that might be beyond the limits, or outside the scope of coverage of the insurance policies maintained by us, which may limit or prevent indemnification available to us under our insurance policies. This potential insufficiency of insurance coverage could result in an adverse effect on our business, financial position, profit, and cash flows.
Interruptions or delays in our services through security incidents, failures, or disruptions could impede on our ability to deliver services, harm our reputation and our relationships with customers and partners, adversely affect our results of operation and subject us to liability.

Significant interruptions or delays to our services, whether as a result of error or security incidents, and whether accidental or willful, could harm our reputation and our relationships with customers and partners, subject us to liability, and adversely affect our business and results of operations. In the event of damage or interruption, our insurance policies may not adequately compensate us for any losses that we may incur.

We currently serve our customers using third-party data center hosting facilities and cloud computing platform providers. While we have security measures in place that are aligned with applicable industry standards, they may be breached due to third-party action, including intentional misconduct by computer hackers, employee error, malfeasance or otherwise, and result in someone obtaining unauthorized access to our or our third-party vendors’ systems and infrastructure. Moreover, such facilities and platforms may be vulnerable to interruptions resulting from power or network connectivity issues, criminal
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acts and other misconduct. Occurrence of such damage or interruptions could result in disruptions in our services. Despite precautions such vendors are required to take, the occurrence of such damage or interruption or other unanticipated problems at these facilities, could result in lengthy interruptions in our services, subject us to liability and require the issuance of credits or payment of penalties pursuant to our customer agreements, and/or cause customers to terminate their subscriptions and adversely affect our attrition rates and our ability to attract new customers, all of which would reduce our revenues. Also, we may not be entitled to indemnification or to recoup any such loss or damage from such service providers, which may result in us bearing the burden of any such liability or losses.

In addition, we are also dependent on our computer databases, billing systems and accounting computer programs, network and computer hardware that houses these systems to effectively operate our business and market our services. Our customers may become dissatisfied by any failures of such systems that interrupt our ability to deliver our services. Therefore, significant disruption or failure in the operation of these systems could adversely affect our business and results of operations.

Furthermore, we provide some of our services through computer hardware that we own and that is currently located in third-party web hosting co-location facilities and data centers maintained and operated in various locations globally. Our hosting providers do not guarantee that our customers’ access to our solutions will be uninterrupted, error-free or secure. Our operations depend on our providers’ ability to protect their and our systems in their facilities against such damage or interruption. Our back-up computer hardware and systems may not have sufficient capacity to recover all data and services in the event of an outage occurring simultaneously at all facilities. In the event that our hosting arrangements are terminated, or there is a lapse of service or accidental or willful damage to such facilities, we could experience lengthy interruptions in our service as well as delays and/or additional expense in arranging new facilities and services. Any or all of these events could cause interruptions in our services.

We may face risks relating to inadequate intellectual property protection and liability resulting from infringement by our products or solutions of third-party proprietary rights.
Our success is dependent, to a significant extent, upon our proprietary technology. We currently hold 575 U.S. patents and 35 patents issued in additional countries covering substantially the same technology as the U.S. patents. We have 230 patent applications pending in the United States and other countries. We rely on a combination of patent, trade secret, copyright and trademark law, together with non-disclosure and non-competition agreements, as well as third-party licenses to establish and protect the technology used in our offerings. However, we cannot assure that such measures will be adequate to protect our proprietary technology, that competitors will not develop products with features based upon, or otherwise similar to our products, that intellectual property ownership and third-party licenses, including with respect to copyrights to the AI output, will be available to us or that we will prevail in any proceeding instituted by us in order to enjoin competitors from selling similar products. In most of the areas in which we operate, third parties also have patents which could be found applicable to our technology and products. Such third parties may include competitors, as well as large companies, which heavily invest in their patent portfolios, regardless of their actual field of business. We cannot assure that one or more third parties will not make a claim related to infringement of intellectual property rights or that we will be successful in defending such claim.
We generally distribute our software products and services under license terms that restrict the use of our products and services by terms and conditions prohibiting unauthorized reproduction or transfer of the software products or proprietary technology or data. However, effective copyrights and other intellectual property rights protection may be inadequate or unavailable to us in every country in which our software products are available, and the laws of some foreign countries may not be as protective of intellectual property rights as those in the United States. Consequently, we may be unable to prevent our proprietary technology from being exploited abroad, which could affect our ability to expand to international markets or require costly efforts to protect our technology. Policing the unauthorized use of our products, trademarks and other proprietary rights is expensive, difficult and, in some cases, impossible. Litigation may be necessary in the future to enforce or defend our intellectual property rights, to protect our trade secrets or to determine the validity and scope of the proprietary rights of others. Such litigation could result in substantial costs and diversion of management resources, either of which could harm our business. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating our intellectual property.
In addition, we may face uncertainty regarding the assertion of our ownership rights in inventions created with the assistance of AI, which would otherwise be patentable or copyrightable if not created using AI and we cannot anticipate how applicable intellectual property laws will evolve in respect thereof and the effect this may have on the protection of our intellectual property rights.
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From time to time third parties allege or claim patent infringements. In defending ourselves against any such claims or actions we may be subject to substantial costs and diversion of management resources.
In addition, to the extent we are not successful in defending such claims, we may be subject to injunctions with respect to the use or sale of certain of our products or to liabilities for damages and may be required to obtain licenses which may not be available on reasonable terms. Any of these may have a material adverse impact on our business or financial condition.
We face risks relating to our use of certain “open source” software tools.
Certain of our software products contain open source code and we may use more open source code in the future. In addition, certain third-party software that we embed in our products contains open source code. Open source code is code that is covered by a license agreement that permits the user to liberally use, copy, modify and distribute the software without cost, provided that users and modifiers abide by certain licensing requirements. The original developers of the open source code provide no warranties on such code.
As a result of our use of open source software, we could be subject to suits by parties claiming ownership of what we believe to be open source code and we may incur expenses in defending claims that we did not abide by the open source code license. In addition, third-party licensors do not provide intellectual property protection with respect to the open source components of their products, and therefore we may not be indemnified by such third-party licensors in the event that we or our customers are held liable in respect of the open source software contained in such third-party software. If we are not successful in defending against any such claims that may arise, we may be subject to injunctions and/or monetary damages or be required to remove the open source code from our products. Such events could disrupt our operations and the sales of our offerings, which would negatively impact our revenues and cash flow.
Moreover, under certain conditions, the use of open source code to create derivative code may obligate us to make the resulting derivative code available to others at no cost. The circumstances under which our use of open source code would compel us to offer derivative code at no cost are subject to varying interpretations. If we are required to publicly disclose the source code for such derivative products or to license our derivative products that use an open source license, our previously proprietary software products may be available to others without charge. If this happens, our customers and our competitors may have access to our products without cost to them, which could harm our business.
We monitor our use of such open source code to avoid subjecting our products to conditions we do not intend, however there is no assurance that the use of such open source code may not ultimately subject some of our products to unintended conditions and that we may not be required to take remedial action that may divert resources away from our development efforts.
Risks Relating to Regulatory Environment
Privacy and data protection concerns, legislation and other regulations may limit the use and adoption of our offerings, adversely affect our business, increase compliance costs and expose us to increased liability.
Governments and other international organizations in various jurisdictions around the world (such as the legislative and regulatory institutions of the European Union) have enacted and are continuing to adopt new laws, regulations and guidelines addressing data privacy and protection, including the processing of personal information, cyber security, breach notification, risk management and reporting, as well as requirements related to security risk management and digital operational resilience. These laws, regulations and guidelines may be inconsistent across jurisdictions and are subject to evolving and differing (sometimes conflicting) interpretations. In some cases, different sets of data privacy laws and regulations, such as the European Union’s General Data Protection Regulation (“GDPR”), local laws and regulations including certain U.S. state laws on privacy and data protection, such as the California Consumer Privacy Act (“CCPA”), as amended by the California Privacy Rights Act ("CPRA"), as well as the Israeli Privacy Law and the regulations promulgated thereunder (the “Israeli Privacy Law”), also govern the processing of personal information. Additionally, new state privacy laws in the U.S. may also apply. These and other regulatory requirements may slow the pace at which we close sales or procurement transactions and in some cases may restrict our ability to store, transfer and process data or impact our ability to offer some of our solutions and services for use in relation to data subjects that reside in certain locations or our customers’ ability to deploy our solutions globally. Compliance with these regulatory requirements may be onerous, time consuming and expensive, especially where these requirements are inconsistent from jurisdiction to jurisdiction or where the jurisdictional reach of certain requirements is not clearly defined or seeks to reach across national borders.
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Should we, or any party on our behalf, fail to comply with privacy or cyber security legislation or other required or agreed security measures, we may incur substantive civil liability to government agencies, customers, shareholders and individuals who may have been impacted. As privacy and cyber security legislation is increasing globally, and more government agencies are granted with authority to fine organizations for non-compliance with applicable laws and regulations, and require companies to take certain steps to remediate such non-compliance, we may find ourselves forced to pay damages penalties, fines, remediation costs, reimbursement of customer costs and other significant expenses due to our (or our subcontractors' or vendors’) non-compliance with data privacy or cyber security laws and regulations. Moreover, even the perception that the privacy of personal information that we process or control is not adequately protected or does not meet regulatory requirements could damage our reputation, inhibit sales of our products or services and could limit adoption of our offerings.

In addition to legal and regulatory requirements, we are contractually obligated to certain customers, and may in the future be expected by prospective customers, to meet certain information security certifications or customer unique requirements, including requirements related to system resilience and performance such as the Digital Operational Resilience Act in the EU or network and information systems requirements, such as the Network and Information Security Directive 2 or other standards established by third parties, such as the ISO 27001:2022 on information security management certification. If we are unable to obtain or maintain these certifications or meet these standards or requirements, it could harm our business and subject us to liability.

Industry-specific regulation and other requirements and standards are evolving and unfavorable industry-specific laws, regulations, interpretive positions or standards could harm our business.
Our customers and potential customers conduct business in a variety of industries, including financial, insurance, telecommunications and healthcare services. We also serve customers in the public safety and other government entities. In certain industries in which we operate, there may be regulations or guidelines for use of SaaS, hosting and cloud-based services that mandate specific controls or require enterprises to obtain certain approvals prior to outsourcing certain functions. Regulators in certain industries have adopted and may in the future adopt regulations or interpretive positions regarding the use of cloud computing and other outsourced services. These regulations, such as regulations with respect to digital operational resilience, data sovereignty or residency requirements, may apply to various entities and providers to which we deliver our offerings. The costs of compliance with, and other burdens imposed by, industry-specific laws, regulations and interpretive positions may limit our customers’ use and adoption of our services and reduce overall demand for our services. Compliance with these regulations may also require us to devote greater resources to support certain customers, which may increase costs and lengthen sales cycles. For example, some financial services regulators have imposed guidelines for use of cloud computing services that mandate specific controls or require financial services enterprises to obtain regulatory approval prior to outsourcing certain functions. Other examples may include sector-specific customers’ requirements, such as making available sovereign cloud platform. If we are unable to adjust our products and solutions to facilitate compliance with these guidelines or controls, or if our customers are unable to obtain regulatory approval to use our services where required, our business may be harmed. If in the future we are unable to achieve or maintain industry specific certifications or other requirements or standards relevant to our customers, it may harm our business and adversely affect our results.

Our revenues would be adversely affected if we fail to adapt our offerings to changes in rules and regulations applicable to the business of certain customers, such as rules and regulations regarding securities trading, broker sales compliance and anti-money laundering, which could have an impact on their need for our products and services.
In addition, due to a variety of regulations that apply to certain of our customers, we may be limited in our ability to transfer or outsource business to certain jurisdictions and may be limited in our ability to undertake development activity in certain jurisdictions, which may impede on our efficiency and adversely affect our business results of operations.

Changes in the legal and regulatory environment could materially and adversely affect our business, results of operations and financial condition.
Our business, results of operations and financial condition could be materially and adversely affected if laws, regulations or standards relating to our business, products and services, our operation or our employees (including labor laws and regulations) are changed or new ones are implemented. Such implemented laws and regulations include requirements in the United States, the EU, U.K. and other territories in relation to data privacy and protection, AI, cyber security, consumer protection, anti-bribery and anti-corruption, foreign investment, import and export, sanctions, labor, tax, environmental and social issues. For information on the market risks relating to data privacy and protection and cyber security, please see Item 3, “Risks Relating to Regulatory Environment" in this annual report.
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Certain states and countries have already taken steps towards, proposed, or implemented, laws and regulations relating to AI, including the EU AI Act. We expect that the legal and regulatory environment relating to AI will continue to develop and may also include regulatory developments in intellectual property, privacy, consumer protection, employment, and other laws regarding the use of AI. As the regulatory landscape continues to evolve, our investment in products and services incorporating AI and our procurement of AI-based tools for the internal operations of our business may result in enhanced governmental or regulatory scrutiny. Compliance with the regulatory requirements, as well as with related requirements by our customers, may be onerous, time consuming and expensive and may require adjustments in our products and services or in the implementation of AI technologies as well as in the operations of our business in the various territories in which we operate, and may increase the risk of non-compliance.

We cannot assure that we will be successful in our efforts to address new or changed requirements and standards, including with respect to laws and regulations relating to AI or privacy, that such changes will not negatively affect the demand for our products and services, or that our competitors will not be more successful or prepared than us. Any failure to comply with such requirements may result in reputation or financial harm and may affect our business, financial condition or results of operations.
Alternatively, any substantial changes resulting in a reduction in the implementation or elimination of rules and regulations that apply to a certain sector of our business, such as deregulation in the area of compliance or other regulatory trends that may reduce demand by governmental customers, could result in a decrease in demand for certain of our products, which could materially and adversely affect our business and results of operations.
Risks Relating to Our Financial Condition
Our quarterly results may be volatile at times, which could cause us to miss our forecasts.
We generally provide forecasts as to expected future revenues and profitability in the coming fiscal quarters and fiscal year. Our revenue and operating results can vary and have varied in the past, sometimes substantially, from one quarter to another. These forecasts are based on management estimation and expectations, our then-existing pipeline and backlog, and an analysis of assumptions and assessments that may not materialize or end up being inaccurate. We may not meet our expectations or those of industry analysts in a particular future quarter. Our quarterly operating results may be subject to significant fluctuations due to the following factors: the timing and size of customer orders, delays in issuance or shifting of customer orders (as often happens when customers postpone their buying decisions to the end of the budgetary year), large customer losses or reduction in usage, variations in distribution channels, mix of products and services, delays in deployment of our offerings due to internal or external capacity constraints with deployment partners or customers, new product introductions and competitive pressures.

Our cloud offering is generally purchased by customers on a subscription basis and revenues from these offerings are generally recognized ratably over the term of the subscriptions. In cases where our cloud offering is purchased on a usage-based model, there may be seasonality in the usage of our offering, including macroeconomic factors that may impact customer usage of our solutions, which would impact our ability to predict and forecast revenues and result in fluctuations in our quarterly results. Therefore, any fluctuations in our cloud business could adversely affect our results of operations and our ability to forecast our quarterly results.

Our revenue and operating profit growth depends on the continued growth of demand for our products and services, and our business is affected by general economic, business, and geopolitical conditions worldwide, including inflation and rising interest rates. A softening of demand, whether caused by changes in customer preferences or a weakening of the U.S. or global economies, or by increasing shift to consumption-based pricing models, which may increase our exposure to macro-economic factors, may result in decreased revenue or growth.
In addition, we derive a substantial portion of our sales through indirect channels, making it more difficult for us to predict revenues because we depend partially on estimates of future sales provided by third parties. Changes in our arrangements with our network of channel partners or in the products they offer, such as the introduction of new support programs for our customers, which combines support from our channel partners with back-end support from us, could affect the timing and volume of orders. Furthermore, our expense levels are based, in part, on our expectations as to future revenues. If our revenue levels are below expectations, our operating results could be adversely affected.
Fluctuations in our results of operations may result from, among other things, our ability to retain and increase sales to existing customers, attract new customers and satisfy our customers’ requirements, the timing and success of new product
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and solution introductions and enhancements or product initiation by our competitors, the purchasing and budgeting cycles of our customers and general economic, industry and market conditions.

While seasonality and other factors mentioned above are common in the software and technology industry, this pattern should not be considered a reliable indicator of our future revenue or financial performance. Many other factors, including general economic conditions, may also have an impact on our business and financial results.

In addition, changes in non-core business factors including taxes and foreign exchange rates may also cause variation in quarterly results.

We face foreign exchange currency risks.
Exchange rate fluctuations affect our operations. We experience risks from fluctuations in the value of the NIS, EUR, GBP, INR, PHP and other currencies compared to the U.S. dollar, the functional currency in our financial statements. A significant portion of the expenses associated with our Israeli ,Indian and Philippines operations, including personnel and facilities related expenses, are incurred in NIS, INR and PHP, respectively, whereas most of our business and revenues are generated in dollars, and to a certain extent, in GBP, EUR and other currencies. If the value of the dollar decreases against these foreign currencies, our earnings may be negatively affected. As a result, we may experience an increase in the costs of our operations, as expressed in dollars, which could adversely affect our earnings. In addition, certain balance sheet items are denominated in currencies other than U.S. dollar. Fluctuations in the value of the U.S. dollar exchange rate compared to these currencies, can result in unfavorable balance sheet revaluation at the reporting period.

We monitor foreign currency exposure and may use various instruments to preserve the value of sales transactions, expenses and commitments, however this cannot ensure our full protection against risks of currency fluctuations that could affect our financial results. As part of our efforts to mitigate these risks, we use foreign currency hedging mechanisms, which may be ineffective in protecting us against adverse currency fluctuations and can also limit opportunities to profit from exchange rate fluctuations that would otherwise be favorable. For information on the market risks relating to foreign exchange, please see Item 11, “Quantitative and Qualitative Disclosures about Market Risk” in this annual report.
We currently benefit from local government programs as well as international programs and local tax benefits that may be discontinued or reduced, or may result in liabilities if underlying conditions are not met.
We derive and expect to continue to derive benefits from various programs, including Israeli tax benefits relating to our "Special Preferred Technology Enterprise" and “Preferred Technology Enterprise” programs, and certain other grants and tax benefits, including grants from the Israel Innovation Authority (formerly known as the Office of the Chief Scientist of the Ministry of Economy) of the State of Israel (the “IIA”), for research and development.
To be eligible for tax benefits as a Special Preferred Technology Enterprise as of 2024 and Preferred Technology Enterprise, we must continue to meet certain conditions. While we believe that we have met and continue to meet the conditions that entitled us to previously obtained Israeli tax benefits, there can be no assurance that we will in the future or that the Israeli Tax Authorities will agree.
To be eligible for IIA-related grants and benefits, we must continue to meet certain conditions, including conducting the research, development, manufacturing of products developed with such IIA grants in Israel, and providing the IIA with an undertaking that the know-how to be funded, and any derivatives thereof, is wholly-owned by us, upon its creation. In addition, we are prohibited from transferring to third parties the know-how developed with these grants without the prior approval of a governmental committee and, possibly, paying a fee. See Item 4, “Information on the Company—Research and Development” in this annual report, for additional information about IIA programs.
If the local and international grants, programs and benefits available to us or the laws, rules and regulations under which they were granted are eliminated or their scope is further reduced, or if we fail to meet the conditions of existing grants, programs or benefits and are required to refund grants or tax benefits already received (together with interest and certain inflation adjustments) or fail to meet the criteria for future Israeli Special Preferred Technology Enterprise and Preferred Technology Enterprises, our business, financial condition and results of operations could be adversely affected.
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Additional tax liabilities resulting from our global operations could materially adversely affect our results of operations and financial condition.
As a global corporation, we are subject to income, non-income and transactional tax regimes in the United States, Israel, India and various other jurisdictions, which are unsettled and may be subject to significant change. Our effective tax rate could be materially affected by changes in tax rulings, tax laws, regulations, administrative practices, principles, applicability of special tax regimes, or changes in interpretations of existing tax laws, including changes to the global tax framework, in the jurisdictions in which we do business. Such changes could come about as a result of economic, political, and other conditions. Additionally, our effective tax rate could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuations of our deferred tax assets and liabilities, tax implications of acquisitions, expansion into new territories, intercompany transactions, changes in foreign currency exchange rates, changes in our stock price and uncertain tax positions. Although we believe that our provision for income taxes and our tax estimates are reasonable, tax authorities may disagree with certain positions we have taken. From time to time, we are subject to income and other tax audits in various jurisdictions, the timing of which is unpredictable. We are currently appealing certain tax decrees. See Note 13 to the Financial Statements for additional information. We regularly assess the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of our tax accruals. While we believe we comply with applicable tax laws and have adequate balance sheet reserves related to tax positions, there can be no assurance that a governing tax authority will not have a different interpretation of the law and assess us with additional taxes, which we may dispute and litigate. If we are assessed additional taxes exceeding our tax accruals or if additional taxes are imposed on us, such additional taxes could have a material adverse effect on our results of operations and financial condition.

The Organization for Economic Co-operation and Development, an international association of 38 countries including the United States, has proposed changes to numerous long-standing tax principles, namely, its Pillar Two framework, which imposes a global minimum corporate tax rate of 15%. In December 2022, the EU member states adopted a directive that complements the Pillar Two framework. Certain countries in which we operate have enacted legislation to adopt the Pillar Two framework (e.g., United Kingdom), and several other countries are also considering changes to their tax laws to implement this framework. The first component of the Pillar Two framework was effective for us in calendar year 2024 but was immaterial and a second component expected to be effective in fiscal year 2025. When and how this framework is adopted or enacted by the various countries in which we do business could increase tax complexity and uncertainty and may adversely affect our provision for income taxes in the United States and other non-U.S. jurisdictions.

Further, there are proposals to introduce further amendments to the U.S. federal tax regime, applicable to corporations. As of the date of filing, it remains unclear what legislation, if any, would be enacted. If the proposed legislation is enacted, it could create the potential for added volatility in our provision for income taxes and might have an adverse impact on our future income tax provision and tax rate.

We might recognize a loss with respect to our financial investments.
We invest most of our cash through a variety of financial investments. If the obligor of any of our financial investments defaults or undergoes reorganization in bankruptcy, we may lose a portion of such investment and our assets and income may decrease. In addition, a downturn in the credit markets or the downgrading of the credit rating of our investments could result in a reduction in the market value of our holdings and reduce the liquidity of our investments, which could require us to recognize a loss at the time of credit impairment and would adversely affect our assets and income.
If we fail to maintain effective internal controls over financial reporting and operations, it could have a material adverse effect on our business, operating results, and the price of our ordinary shares and ADSs.
Effective internal controls are necessary for us to provide reliable financial reports and prepare consolidated financial statements for external reporting purposes in accordance with U.S. GAAP and U.S. securities laws, as well as to effectively prevent material fraud. Because of inherent limitations, even effective internal control over financial reporting may not prevent or detect every misstatement. In addition, if we fail to maintain the adequacy of our internal controls, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting and operations. Furthermore, as we grow our business or acquire businesses, our internal controls may become more complex and we may require significantly more resources to ensure they remain effective. In addition, we may identify material weaknesses or significant deficiencies in our internal control over financial reporting. Failure to maintain effective internal control over financial reporting and operations could result in investigation or sanctions by regulatory authorities and could have a material adverse effect on our business and operating results, investor confidence in our reported financial information, and the market price of our ordinary shares and ADSs.
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Current and future accounting pronouncements and other financial reporting standards and principles might have a significant impact on our financial position and negatively impact our financial results.
We prepare our consolidated financial statements in accordance with U.S. GAAP. These principles are subject to interpretation by the SEC and various bodies formed to interpret and create appropriate accounting principles. A change in these principles can have a significant effect on our reported results and may even retroactively affect previously reported transactions. Additionally, the adoption of new or revised accounting principles may require that we make significant changes to our systems, processes and controls. Changes resulting from these new standards may result in materially different financial results and may require that we change how we process, analyze and report financial information and that we change financial reporting controls.
We regularly monitor our compliance with applicable financial reporting standards and review new pronouncements and drafts thereof that are relevant to us. As a result of new standards, changes to existing standards and changes in their interpretation, we might be required to change our accounting policies.
This could lead to risks associated with our ability to react in a timely manner to new accounting pronouncements and financial reporting standards and unpredictable changes in interpretation of standards. Any one or more of these events could have an adverse effect on our business, financial position, and profit.
Risks Relating to our Securities
The market price of each of our ADSs, ordinary shares and the 2020 Notes is volatile and may decline.
Numerous factors, some of which are beyond our control, may cause the market price of our ADSs, ordinary shares and the 2020 Notes to fluctuate significantly. These factors include, among other things:
Quarterly variations in our operating results;
Changes in expectations as to our future financial performance, including financial estimates by securities;
Perceptions of our company held by analysts and investors;
Additions or departures of key personnel;
Announcements related to dividends and share repurchase plans;
Development of or disputes concerning our intellectual property rights;
Announcements of technological innovations;
Material orders of our products or services by customers and business partners;
New products and services by us or our competitors;
Acquisitions or investments by us or by our competitors and partners;
Security breaches or other incidents impacting our customers’ or their end users’ data and security breaches of companies that provide solutions or services similar to ours;

The exchangeability of the 2020 Notes for ADSs;
Hedging or arbitrage trading activity involving ADSs by holders of the 2020 Notes;
Currency exchange rate fluctuations;
Earnings releases by us, our partners or our competitors;
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General financial, economic and market conditions;
Political changes, unrest in regions (including the ongoing war in Israel), natural catastrophes;
Market conditions in the industry and the general state of the securities markets, with particular emphasis on the technology and Israeli sectors of the securities markets; and
General stock market volatility.
Our ADSs and ordinary shares are traded on different markets and this may result in price variations.
Our ADSs have been listed on The NASDAQ Stock Market since 1996 and our ordinary shares have been traded on the Tel Aviv Stock Exchange, or the “TASE,” since 1991. Trading in our securities on these markets takes place in different currencies (our ADSs are traded in U.S. dollars and our ordinary shares are traded in New Israeli Shekels), and at different times (resulting from different time zones, different trading days and different public holidays in the United States and Israel). As a result, the trading prices of our securities on these two markets may differ due to these factors. In addition, any decrease in the price of our securities on one of these markets could cause a decrease in the trading price of our securities on the other market.
Substantial future sales or the perception of sales of our ADSs or ordinary shares, or the exchange, or conversion of a substantial amount of 2020 Notes, or perception thereof, could cause the price of our ADSs or ordinary shares to decline.
Sales of substantial amounts of our ADSs or ordinary shares in the public market, or the perception that these sales could occur, could adversely affect the price of our ADSs and ordinary shares and could impair our ability to raise capital through the sale of additional shares. Such sales may also make it more difficult for us to sell equity or equity-related securities in the future at a time and at a desirable price.
Additionally, the issuance of ADSs upon future exchanges or conversions of the 2020 Notes for ADSs, or the perception that these exchanges or conversions may occur, could dilute shareholders and reduce the market price of the ordinary shares or ADSs. This could also impair NICE’s abilities to raise additional capital through the sale of its securities.
It may be difficult to enforce a U.S. judgment against us and our officers and directors in Israel or the United States, or to serve process on our officers and directors.
Service of process upon us, our Israeli subsidiaries, directors and officers, and Israeli advisors, if any, named in this annual report, may be difficult to obtain within the United States. Additionally, it may be difficult to enforce civil liabilities under U.S. federal securities law in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on a violation of U.S. securities laws because Israel is not the most appropriate forum to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel addressing these matters.
Provisions of Israeli law may delay, prevent or otherwise impede a merger with, or an acquisition of, our company, which could prevent a change of control, even when the terms of such a transaction are favorable to us and our shareholders.
Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, establishes a high ownership threshold to squeeze out minority shareholders in a full tender offer, requires special approvals for transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to these types of transactions.
Furthermore, Israeli tax considerations may make potential transactions unappealing to us or to our shareholders whose country of residence does not have a tax treaty with Israel exempting such shareholders from Israeli tax. These and other similar provisions could delay, prevent or impede an acquisition of us or our merger with another company, even if such an acquisition or merger would be beneficial to us or to our shareholders.
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See Item 10, “Additional Information—Mergers and Acquisitions” in this annual report, for additional discussion regarding anti-takeover effects of Israeli law.
General Risk Factors
Conditions and changes in the local and global economic environments may adversely affect demand for our products and services, our business and financial results.

Adverse economic conditions in markets or regions in which we operate can harm our business. Demand for our products and services, and our results of operations can be affected by adverse changes in local and global economic conditions, slowdowns, inflation, recessions, trade wars or unpredictable changes in tax and tariffs regimes, and economic instability. To the extent that our business suffers as a result of such unfavorable economic and market conditions, our operating results may be materially adversely affected.

In particular, during times of economic slowdowns, enterprises may reduce spending in connection with their contact centers, financial institutions may reduce spending in relation to trading floors, compliance and operational risk management. Generally, our customers may prioritize other expenditures over our solutions, including a possible slowdown resulting from a shift or reduction in expenditures driven by AI and Generative AI solutions' effect on the markets in which we operate. If any of the above occurs, and our customers or partners do not adopt our solutions or significantly reduce their spending, our business, results of operations, and financial condition could be materially adversely affected.

In addition, our operations may be subject to the effects of the rising rate of inflation. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.
Some of our customers or partners may suffer from liquidity concerns and possibly commence insolvency or other reorganization procedures or go out of business due to disruption to the global economy or other business and market conditions, which may result in delay or failure to make payments to us and may adversely impact our business and results of operations.

Disruption to the global economy could also result in a number of follow-on effects in addition to a slow-down in our business and increased costs, including a possible (i) negative impact on our liquidity, financial condition and share price, which may impact our ability to raise capital in the market, obtain financing and secure other sources of funding in the future on terms favorable to us, and (ii) decrease in the value of our assets that are deemed to be other than temporary, which may result in impairment losses.

We face risks relating to our global operations.
We sell our offerings throughout the world and intend to continue to increase our penetration of international markets. Our operations and results of operations could be adversely affected by a variety of global factors affecting international transactions, including:
governmental controls and regulations, including import or export license requirements, trade protection measures, sanctions, telecommunication authorization and licenses and changes in tariffs;
compliance with applicable international and local laws, regulations and practices, including those related to trade compliance, anticorruption, data privacy and protection, tax, labor, employee benefits, customs, currency restrictions and other requirements;
fluctuations in currency exchange rates;
longer payment cycles in certain countries in our geographic areas of operations;
potential adverse tax consequences, variations in effective income tax rates and tax policies among countries where we conduct business, including the complexities of foreign value added tax systems;
geopolitical risks, including those arising from political instability or tensions, armed conflicts, terrorism and security concerns, disruption and tensions resulting from restrictions related to the conflict between Russia
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and Ukraine, the war in Israel and related conflicts in the Middle East, their intensity, duration and effect on demand for our products and services are difficult to predict;
reduced or limited protection for intellectual property rights in some countries; and
general difficulties in managing our global operations.

Changes in the political or economic environments, credit rating and the availability and cost of capital in the countries in which we operate, especially in Israel and the U.S., including the impact of such changes on foreign currency rates and interest rates, could have a material adverse effect on our financial condition, results of operations and cash flow.

As a result of our global presence, especially in emerging markets, we face increasing challenges that could adversely impact our results of operations, reputation and business.
In light of our global presence, especially in emerging markets such as those in Asia, Eastern Europe and Latin America, we face a number of challenges in certain jurisdictions that provide reduced legal protection, including poor protection of intellectual property, inadequate protection against crime (including bribery, corruption and fraud) and breaches of local laws or regulations, unstable governments and economies, governmental actions that may inhibit the flow of goods and currency, challenges relating to competition from companies that already have a local presence in such markets and difficulties in recruiting sufficient personnel with appropriate skills and experience.
Local business practices in jurisdictions in which we operate, and particularly in emerging markets, may be inconsistent with international regulatory requirements, such as anti-corruption and anti-bribery laws and regulations (including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act) to which we are subject. We cannot guarantee that our policies and procedures will be effective in ensuring compliance with these laws or that none of our employees, contractors, partners and agents, as well as those companies to which we outsource certain of our business operations, will not violate applicable law or our policies and procedures designed to ensure compliance with applicable law. Any such violation could have an adverse effect on our business and reputation and may expose us to criminal or civil enforcement actions, including penalties and fines.
Furthermore, the increased presence of our global operations in emerging markets, including outsourcing of certain operations to service providers in such markets (such as India and the Philippines), could impact the control over our operations, as well as create dependency on such external service providers. This method of operation may impact our business and adversely affect our results of operation.
Our business, facilities or operations could be adversely affected by events outside of our control, such as natural disasters or health epidemics.
Natural disasters or other unexpected events that adversely affect the business climate in any of our markets could have a material adverse effect on our business, financial condition and results of operations. Our business operations may be subject to a disruption or failure of our systems or operations because of a natural disaster, such as a major earthquake, weather event, fire, power shortages, telecommunications failures, pandemics and epidemics, such as COVID-19, cyberattack, terrorist attack or other catastrophic event or event beyond our control, which could cause delays in completing sales, providing services, or performing other critical functions. There is no assurance that our disaster recovery and business continuity plans will be effective in addressing any such event. Such events could make it difficult or impossible for us to manage our operations and deliver our products and services to our customers.

The occurrence of such events may adversely affect our operations, financial condition, and results of operations. The extent to which such events impact our business going forward will depend on factors such as the duration and scope of such events; governmental, business, and individuals' actions in response to such events; and the impact on economic activity, including the possibility of recession or financial market instability.

We depend on our ability to recruit and retain qualified personnel.

In order to compete, we must recruit and retain highly qualified personnel across our business, including executives and other key employees. Hiring and retaining highly qualified personnel, executives and key employees is critical to our business. Competition for highly qualified and experienced executives in our industry is intense. There is no guarantee that key
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management members will not leave the Company, or if they do, that we will be able to identify and hire qualified replacements, or that the transition of new personnel will not cause disruption in our business.

In addition, due to our growth, or as a result of regular recruitment, we are required to regularly hire and integrate new employees. Recruiting and retaining qualified engineers and computer programmers to perform research and development and to commercialize our offerings, as well as qualified personnel to market and sell the offerings, are critical to our success.
There is competition to recruit and retain highly skilled employees in the technology industry due to market conditions and the continued workforce trend that values multiple company experiences over long tenures. As a result, we may be required to offer exclusive compensation packages in order to retain and recruit certain skilled employees and key employees with particular expertise.

In certain locations in which we have development centers, including low-cost countries such as India, the rate of attrition is typically higher than other locations and could have a negative impact on our ability to retain our employees in such centers, timely develop our products and solutions, and/or service our customers.
Any inability to attract and retain highly qualified employees may have an adverse effect on our ability to develop new products, solutions and enhancements for our offerings and to successfully market such offerings, all of which would likely have a material adverse effect on our results of operations and financial position. Our success also depends, to a significant extent, upon the continued service of key management, sales, marketing and development employees and executives, the loss of any of whom could materially adversely affect our business, financial condition and results of operations.
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Item 4.    Information on the Company.
Item 4.A    History and Development of the Company.
NICE was founded on September 28, 1986, as Neptune Intelligent Computer Engineering Ltd., with the vision to digitize unstructured data previously captured using analog means. On October 14, 1991, the Company was renamed NICE-Systems Ltd., expanding its mission to the Customer Service market, becoming a leading global provider of Workforce Optimization software applications, as well as adding solutions for the Public Safety and Justice sector. With the increased quantity of available data and the growing need to generate meaningful business insight, NICE launched Interaction Analytics solutions - allowing organizations to quickly understand and operationalize their interaction data. In 2007, NICE acquired Actimize, a leader in Financial Crime and Compliance analytics solutions, aimed to help prevent market abuse, financial fraud and money laundering, transforming the company into an enterprise software analytics leader. Since 2014, NICE has emerged as a leader in cloud, analytics, digital and AI through innovations and strategic acquisitions. In 2016, NICE acquired inContact, a leading provider of cloud contact center software and agent optimization tools, enabling the industry’s first fully integrated and complete cloud contact center solution platform. Subsequently, NICE became an industry leader, helping organizations innovate with AI-powered cloud platforms, designed to unify all data and capabilities for ultimate business results. Since 2019, as consumer expectations are shifting to digital CX, NICE vastly extended the reach of its offering with a series of organic innovations as well as acquisitions of leading Digital & AI Customer Experience solutions, expanding its business reach beyond the contact center, providing organizations with AI-powered digital and automated self-service solutions to address customers’ evolving needs.

On June 6, 2016, the Company was renamed NICE Ltd., which is its legal and commercial name. Today, NICE is an enterprise software leader in cloud, analytics, digital and AI in both the Customer Engagement and Financial Crime and Compliance markets. We possess the complete set of must-have AI assets necessary to lead our markets: large collection of unique historical and current data, most relevant knowledge elements, robust automation applications and unmatched domain expertise. Our solutions help organizations of all sizes create extraordinary and trusted customer experiences, prevent financial crime, and improve criminal justice evidence management.

In May 2024 the Company announced that Barak Eilam informed the Board of Directors of his intention to step down after more than 10 years of tenure as the Chief Executive Officer of NICE and a career of approximately 25 years with the Company. In August, 2024, the Board of Directors approved the appointment and compensation of Scott Russell as the Company’s new Chief Executive Officer, effective January 1, 2025, to succeed Barak Eilam.

NICE is a company limited by shares organized under the laws of the State of Israel. Our Israeli offices are located at 13 Zarchin Street, P.O. Box 690, Ra’anana 4310602, Israel (Tel. +972-9-775-3151). Our subsidiary, NICE Systems, Inc. has been appointed as our Agent for Service in the United States, and is located at 221 River Street, Hoboken, New Jersey 07030.
The Securities and Exchange Commission ("SEC") maintains an Internet site that contains reports, proxy and information statements, and other information that is filed electronically with the SEC at http://www.sec.gov. Our website address is at https://www.nice.com/company/investors/. Information contained, or that can be accessed through, our website does not constitute a part of this annual report and is not incorporated by reference herein, and we have included our website address in this annual report solely for informational purposes.
Principal Capital Expenditures
In the last three fiscal years, our principal capital expenditures were the acquisition of other businesses and repurchases of our American Depositary Receipts (“ADR”). For information regarding our acquisitions and ADR share repurchases, please see Item 5, “Operating and Financial Review and Prospects – Recent Acquisitions,” and “Operating and Financial Review and Prospects – Liquidity and Capital Resources,” in this annual report. For additional information regarding our ADR share repurchases, please also see Item 16E, “Purchases of Equity Securities by the Issuer and Affiliated Purchasers,” in this annual report.
Item 4.B    Business Overview
Breakdown of Revenues

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For a breakdown of total revenues by business model (cloud, products and services) and by geographic markets for each of the last three years, please see Item 5, “Operating and Financial Review and Prospects – Results of Operations,” in this annual report.

About NICE
NICE is a global enterprise software leader, providing AI-powered cloud platforms that serve two main markets: Customer Engagement and Financial Crime and Compliance. Our core mission is to automate customer service by seamlessly orchestrating workflows, AI and human agents, and enterprise knowledge on CXone Mpower— a leading advanced and comprehensive AI platform. We protect financial services organizations with embedded AI to help prevent money laundering and fraud, as well as ensure financial markets compliance in real-time.
Our strategy is based on serving rapidly expanding, specialized markets that require feature-rich solutions, with robust, comprehensive cloud platforms that are spearheaded by AI as an overarching catalyst, propelling our unique AI-driven vectors of growth: using AI differentiation to expand our cloud win rates, positioning AI as the bedrock for driving rapid expansion into digital, utilizing AI to fuel massive platform-adoption and leveraging AI as a lucrative source for new domain-specific use-cases.

In the Customer Engagement market, our CXone Mpower platform enables organizations to automate service at scale, augment their workforce with AI-powered solutions, and unify enterprise knowledge, data and AI models to drive faster resolutions and superior customer experiences. Purpose-built AI ensures every interaction and workflow is intelligently orchestrated across all customer touchpoints, seamlessly blending autonomous Agentic AI and human assisted interactions to deliver best-in-class service that is proactive, knowledge-based, resolution-oriented and efficient. Our Public Safety and Justice business is included in our Customer Engagement segment. In this business, we are transforming the criminal justice system by using AI to uncover the truth in digital evidence, facilitating swift justice. Our AI-powered workflows help relieve police, prosecutors, public defenders, courts and correctional institutions from the tedious task of managing digital evidence.

In the Financial Crime and Compliance market, we protect financial services organizations, with embedded-AI solutions that identify risks and help prevent money laundering and fraud, as well as help ensure financial markets compliance in real-time. With our holistic, data and entity-centric approach, we leverage machine learning, NLP (natural language processing), Generative AI and Agentic AI that automate routine tasks, collaborate with analysts and adapt in real time to proactively keep ahead of emerging threats.

NICE is at the forefront of several industry technological disruptions that have greatly accelerated in the last several years: AI-driven automation is transforming customer service; domain-specific AI is enhancing decision-making and workforce performance; and cloud scalability is enabling enterprises to modernize operations at an unprecedented pace. As organizations seek to optimize both efficiency and customer experience. NICE’s AI-powered platforms unify data, workflows, and automation to drive enterprise-wide transformation. Built on deep domain expertise, our solutions empower customer service, financial crime prevention, and criminal justice organizations to lead with intelligence, efficiency, and confidence.

We rely on multiple key assets to drive our growth:
Our AI leadership with purpose-built AI models that power automation, optimization, and user experience transformation.
Our domain-specific Agentic AI that manages complex tasks, makes decisions and takes action, driving AI-powered automation at scale and precision, with and without human intervention.
Our comprehensive cloud platforms that are scalable, secure, and built for enterprise-wide adoption.
Our AI-powered copiloting employee augmentation capabilities, built for specific roles and around domain-specific functionality to increase efficiencies, maintain compliance and improve resolution.
AI-powered orchestration tools that allow organizations to design, build and operate end-to-end workflows.
Our extensive self-service automation solutions that use the power of AI to deliver human-like interactions at scale.
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Our extensive portfolio of applications addresses organizational needs across all our areas of domain expertise.
Our broad array of proprietary technologies and algorithms in the domains of Generative AI, LLMs, automation, analytics, machine learning, speech-to-text, natural language processing, personality-based routing and others.
Our native AI models which are based on years of industry-specific data and domain expertise, consistently using machine learning for generating actionable insights.
Our access to vast amounts of CX data, derived from billions of domain-specific interactions of all types, enriching our applications and enabling us to build hundreds of CX purpose-built AI models.

Our advanced data security and compliance capabilities that deliver trusted enterprise software across all our markets, including FedRAMP authorization to the relevant business lines, with 30 authorized applications, native PCI, supported by the advanced SOC in the industry.
Our flexible delivery model that allows our customers to benefit from a wide range of both cloud and on-premises solutions.
Our solutions' market coverage of all segments, from small and mid-sized businesses to large scale Fortune 100 enterprises.
The mission critical nature of our solutions to the operations of our customers and our cloud platforms that are essential for enabling a scalable and sustainable work-from-anywhere environment.
Our market leadership, which makes us a well-recognized brand and creates top-of-mind awareness for our solutions in our areas of operation.
Our large and broad partner ecosystem with strategic alliances and integrations that extend market reach and solution capabilities.
Our loyal customer base of more than 25,000 organizations in over 150 countries, across many industries, including 85 of the Fortune 100 companies.
Our strong cash position that allows us to invest in innovative solutions and product development and fuels strategic acquisitions.

Our ability to quickly drive mainstream adoption for innovative solutions and new technologies and trends, which we introduce to the market through our direct sales force and distribution network.
Our skilled employees and domain expertise in our core markets allow us to bring our customers the right solutions to address key business challenges and build strong customer partnerships.
Our customer support and operations, which enable our customers to quickly enjoy the benefits of our solutions, with multiple deployment models in the cloud or on-premises throughout the world and support for full value realization and customer success.
Our outcome-oriented white-glove services that enable our customers to achieve greater efficiency, higher revenue, and lower operating costs with our solutions.
Industry and Technology Trends
Following are the key cross-industry trends that we have identified as driving demand for our solutions where we leverage our key assets and domain expertise to deliver maximum value:

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AI is evolving from task-based assistance to full-scale automation. Organizations have moved beyond using AI for incremental improvements and are now looking for solutions that enable end-to-end automation across customer service and operational workflows. Instead of simply augmenting human performance, there is a growing need for AI Agents capable of taking over complex decision-making, managing entire workflows, and resolving issues autonomously. AI platforms are aspiring to enable enterprises to scale automation across every touchpoint, unlocking significant efficiency gains, cost savings, and transformative business impact.

Cloud platforms are advancing into AI-first platforms. Organizations are moving away from traditional cloud platforms and point solutions in favor of unified AI-powered platforms that seamlessly integrate data, knowledge, and AI models. These AI-first platforms enable enterprises to centralize intelligence, orchestrate workflows, and scale automation across every business function. As AI adoption matures, cloud platforms must evolve from simple hosting environments into intelligent, autonomous infrastructures that drive business outcomes in real-time.

AI copilots are redefining the modern workforce. AI-powered assistants are no longer just productivity tools—they are transforming the way employees work. AI copilots provide real-time guidance, automate repetitive tasks, and deliver contextual insights, allowing employees to focus on high-value, strategic work. Organizations that effectively integrate AI copilots into their workflows will see increased efficiency, improved decision-making, and enhanced employee engagement, setting a new standard for AI-augmented performance.

Software is becoming more conversational and intuitive. The rise of LLMs and Generative AI is transforming traditional user interfaces into dynamic, natural-language-driven experiences. Instead of rigid menus, forms, and workflows, users are interacting with AI-powered systems that understand intent, anticipate needs, and provide contextual assistance in real-time. This shift is making software more accessible, reducing training time, and increasing productivity as AI Agents replace static interfaces with fluid, human-like interactions across applications.
AI trust and explainability are critical for enterprise adoption. As AI takes on greater responsibility in customer service and financial decision-making, trust, security, and explainability (the ability to understand the rationale behind AI's decisions) are becoming top priorities. Enterprises must ensure AI models are transparent, bias-free, and compliant with evolving regulations. Organizations are investing in responsible AI frameworks that provide human oversight, real-time auditing, and governance mechanisms to maintain confidence in AI-driven decisions while meeting stringent regulatory requirements.
Following is a list of customer engagement trends and market dynamics driving the demand for our solutions, where we leverage our key assets and expertise to deliver  maximum value:
AI-driven automation is now a competitive necessity. Organizations can no longer rely solely on human-driven customer service. AI-powered automation is reducing costs, accelerating resolutions, and improving service consistency. Organizations are deploying AI agents and Agentic AI to handle routine interactions, streamline workflows, and free human agents for more complex tasks. Enterprises that fail to embrace AI automation risk falling behind competitors who are delivering faster, smarter, and more cost-efficient service experiences.

Domain-specific AI is essential for accurate automation. Enterprises are moving beyond generic AI models, demanding purpose-built AI trained on industry-specific data to deliver precise, reliable automation in customer service. AI that understands intent, context and preferences enables higher-resolution automation while reducing errors and agent escalations. Businesses are turning to AI platforms that combine predictive, generative, and real-time AI models to drive intelligent automation at scale.

Specialized AI Copilots are redefining workforce augmentation. Customer service teams are leveraging role-specific, proactive AI Copilots that enhance decision-making, automate tasks, and guide agents in real-time. Unlike generic AI assistants, intelligent, domain-trained Copilots help employees resolve issues faster, improve accuracy, and adapt to complex interactions effortlessly. Organizations are rapidly adopting AI-driven augmentation to increase efficiency, reduce training time, and enhance both agent and customer satisfaction.

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Proactive customer service is replacing reactive support. AI is shifting customer service from a reactive model to a proactive one, where issues are predicted and resolved before they escalate. AI-powered workflows analyze real-time customer interactions to anticipate problems and trigger automated resolutions. Enterprises are adopting proactive service strategies that improve customer satisfaction, lower costs, and enhance brand loyalty, marking a paradigm shift from issue resolution to workflow orchestration.

Digital-first engagement is overtaking in-person experiences. The shift from brick-and-mortar to digital-first customer interactions continues to accelerate, with customers expecting seamless, AI-enhanced service across web, mobile, and messaging channels. Organizations are investing in AI-powered digital engagement strategies that provide instant, personalized, and proactive customer service. Enterprises that fail to optimize digital interactions risk losing customers to brands delivering faster, smarter, and more connected experiences.

Knowledge management is the foundation of AI-powered customer service. As AI takes on a larger role in customer interactions, organizations need a unified, intelligent knowledge strategy to ensure AI delivers accurate and trusted responses. AI-powered knowledge management organizes, retrieves, and refines enterprise information, fueling automation and improving agent effectiveness. Organizations are moving beyond static knowledge bases to dynamic, AI-driven knowledge ecosystems that provide context-aware, real-time insights across every customer touchpoint.

Open, flexible AI platforms maximize AI’s intelligence and impact. AI becomes more effective when it has access to broader, high-quality data, enabling smarter decision-making, deeper insights, and more precise automation. At the same time, AI’s ability to drive business outcomes grows exponentially when seamlessly connected to third-party applications and workflows across the enterprise. Organizations are prioritizing extensible AI platforms that integrate across their ecosystem, ensuring greater agility, faster automation, and maximum AI-driven ROI.

Reducing labor costs remains a top priority in CX. Enterprises continue to seek AI-driven automation to offset rising labor costs while maintaining high-quality customer service. AI-powered workflows, intelligent routing, Agentic AI and digital self-service are enabling businesses to handle more interactions with fewer human agents, reducing operational expenses without sacrificing service quality. Organizations that optimize labor efficiency through automation are gaining a competitive edge by lowering costs, improving scalability, and reallocating human resources to higher-value tasks.

Customer satisfaction is now a strategic competitive advantage. In a market where products and pricing are easily replicated, CX is the key differentiator driving loyalty and revenue growth. Organizations are investing in AI-powered personalization, proactive service, and frictionless digital experiences to elevate satisfaction and retention. Businesses that prioritize AI-driven CX improvements not only reduce churn but also turn superior service into a long-term competitive moat that strengthens brand loyalty and business outcomes.

Growing volume of digital evidence, contained in multiple disjointed systems, labor intensive processes and staffing challenges are all impacting the ability of government agencies to deliver on the promise of timely justice. Government agencies of all types - from police and first responders to prosecutors, defense attorneys and courts - are looking to digital transformation as a way to overcome the challenges of digital evidence silos and disjointed work processes. Through digital transformation, stakeholders can work smarter and more efficiently within their own agency and effectively share digital evidence throughout the criminal justice system.

When Emergency Communications becoming more complex, and staff turnover at an all-time high, digital transformation is becoming critical. Emergency communications managers spend much of their time handling manual, time-consuming tasks related to daily operations, quality assurance, reporting, training, development, hiring, staff supervision and fulfilling emergency incident evidence reproduction requests. Training new staff to handle the wide range of emergency calls is a significant cost burden. Digitally transforming and automating quality assurance, incident reconstruction and performance metrics tracking frees up managers to spend more time engaging with and coaching staff. This helps improve and retain
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employees, resulting in more effective emergency incident handling, higher staff retention, and lower turnover-related costs.

Financial Crime and Compliance trends that are driving demand for our solutions:
Growing demand for embedded AI across all fraud, financial crime and risk management controls. Financial services organizations are transforming to ensure secure, safer and more unhindered customer access to accounts across all channels and transactions. At the forefront of these initiatives is the need to leverage purpose-built advanced AI to ensure regulatory compliance and provide exceptional customer experiences while stopping financial fraud and preventing the laundering of illicit funds.

Generative AI and LLMs are being sought out to streamline and further automate financial crime investigation processes and tasks where it may not be necessary to have as much human involvement. This frees investigators from low value, high volume manual tasks so that they may better focus on more important and strategic work. This leads to better resource utilization, increased accuracy and productivity, and improved return on investment.
Preventing financial crime and ensuring stringent compliance with evolving regulatory environments. Regulatory scrutiny of financial institutions continues to apply pressure on organizations to adopt more advanced regulatory compliance and risk management technology. Furthermore, regulators have been expanding their focus from the largest financial institutions to a broader market, including smaller banks and alternative financial service providers, and are creating increased demand for risk and compliance related solutions.
An unpredictable threat landscape environment. The growing number of data breaches and cyber security incidents put increasing amounts of personally identifiable information and sensitive data at risk of exposure. This information can be used to open accounts that can be used for laundering money, terrorist financing, account fraud, market manipulation, social engineering, and more. In addition, the surge in consumer scams that lead to account takeover and authorized fraud threaten an organization’s reputation and their customer satisfaction, as well as create large financial exposures due to both losses as well as fines. In addition, the large volumes of data, related to both internal and external threats, place an enormous operational burden on organizations. Financial institutions are seeking advanced AI solutions to help address these threats and ultimately protect their firm and their customers.

An increasing need to control cost of compliance. The regulatory pressures and increasing threat landscape have driven an increase in the number of risk and compliance personnel, which in turn has dramatically increased the cost of compliance and financial crime programs. Organizations are turning to technology to allow them to help control these costs without compromising their compliance adherence while continuing to lower their risk exposure.

Financial institutions seek a single AI platform that aggregates and analyzes financial crime-related risk in one place. The ever-expanding risk landscape and sophistication of financial criminals, as well as the need to keep costs in check, creates a growing need for a single view of multiple fraud and compliance risk signals throughout a financial services organization. A single platform allows financial services organizations to analyze data, act on it and present it in one dashboard to both operations and executives.

Financial institutions are adopting cloud platforms for financial crime and compliance solutions. Top tier financial institutions have been slow to adopt cloud delivery driven by the sensitive nature of their data, but are now realizing the value of the cloud, and are increasingly choosing to deploy solutions on their own private cloud or on public cloud infrastructure.
AI and Machine learning is being adopted in the fight against financial crime. Traditional methods of financial crime detection, such as rule-based systems, are limited in their ability to adapt and detect new types of financial crime or changes in criminal behavior and patterns. AI and Machine learning algorithms can be trained on historical data and continue to improve their performance as they encounter new behaviors. This enables them to detect patterns and anomalies indicative of financial crime.
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Financial institutions are being disrupted by digital players providing improved experiences and more personalized products and services. Banking services and many other financial service organizations continue to be challenged by neo-banks, fintech companies and other digital players. To improve customer experiences, and compete against these digital players, financial institutions continue to invest heavily in digital capabilities and modern technologies. Consumers have increased expectations for faster and frictionless processes. In terms of risk, digital banking moves the consumer away from the branch creating new risks around identity verification, customer due diligence and general monitoring of consumer financial behavior. The expectations for fast response times drive financial institutions to re-design their anti-fraud and compliance processes to be able to respond in real-time, which in turn requires broader adoption of AI across the customer lifecycle.
Strategy
Our long-term strategy is to further broaden our industry leadership in both the Customer Engagement and Financial Crime and Compliance market segments using NICE’s unique domain-specific AI capabilities and our foundational platforms, applications and data assets.

We continue to lead the industry in both our business segments where the total addressable market is fast-growing due to the opportunities driven by the evolution of AI. NICE is uniquely positioned for ongoing success to enable faster, safer, more personalized and cost efficient interactions occurring in real-time. Our offerings manifest unmatched favorable attributes: they provide constant problem solving that typically transcends economic fluctuations; they address complex challenges that require feature-rich solutions, preventing commoditization and giving rise to high barriers of entry that keep potential competitors at bay; they create an abundance of opportunities fueled by the distinctive lag of technology adoption; and they operate in markets burdened by soaring labor-driven costs, often exceeding 90% of total expenditures, ripe for the massive shift of spend from labor to automation.

NICE is well-positioned across all markets, given our unique set of assets: we are categorically being recognized as one of the top leaders by every market research firm that evaluates the markets we operate in; We offer complete, robust and market-leading platforms; we deliver a wide-ranging portfolio; we own the most critical data elements that form the foundation for AI; and we have an established wide-reaching global ecosystem. On top of it all, we are a highly profitable company, with a strong balance sheet, acting as a springboard for our organic and inorganic growth. For additional information, please see Note 16 of the Financial Statements in this annual report.

In the Customer Engagement business, we intend to further expand our leadership through strategic AI-powered product launches fueled by organic developments and acquisitions. In 2024 we announced the expansion of CXone into CXone Mpower, the AI platform for automating customer service, enabling enterprises to design, build and operate automation for workflows, agents and knowledge at scale and precision. Furthermore, we intend to continue to evolve as a global leader in all major markets and segments for managing customer service – hold and expand the largest market share for CCaaS and WEM solutions; be the most adopted self-service AI provider in the CX market, providing purpose-built AI for CX solutions; become the leading provider of AI copilot capabilities for augmenting CX employees at all levels, offer the most extensive customer-experience marketplace platform and data; and continue to expand into international markets in both the high-end and the mid to low end of the markets we serve. In Public Safety and Justice, we intend to cement and increase our leadership in the digital transformation of the US Justice System, becoming the de facto platform for workflow management across the Criminal Justice system. We will do so by leveraging our Evidencentral platform for handling massive amount of digital evidence and cases with streamlined workflows; using AI to further uncover insights and automate Justice processes; and delivering effective justice from the overwhelming amounts of evidence for every stakeholder in the Criminal Justice eco-system.

In our Financial Crime and Compliance business, we intend to expand to be the largest and leading cloud platform provider of financial crime and compliance solutions in all segments and across all major markets – further embedding AI across our portfolio while leveraging the X-Sight platform to cloudify the high end of the market; enhancing Xceed to be the cloud platform of choice in the mid-market; leveraging our unparalleled collective intelligence to provide a more holistic view of digital identity risk; and better monetizing data, based on advanced AI capabilities.


Leading our markets with domain-specific AI solutions
We intend to continue augmenting our AI leadership across all our markets, as AI establishes itself an overarching catalyst, propelling NICE’s five vectors of AI growth strategy:

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AI fuels our cloud win rate - We are witnessing an enterprise cloud inflection point, where the lion’s share of large-scale cloud transitions is about to take place. AI is enhancing our differentiation, substantially expanding our cloud win rates and displacements.

AI is the bedrock of rapid expansion into digital - NICE's digital solutions encompass the range of digital interactions. AI is a strong contributing factor for migration from legacy digital vendors to NICE, contributing to the growth in volume of digital engagements managed by our platforms.

AI fusion powers our platform adoption – Enterprises are pivoting from multiple point solutions to building and simplifying their tech stack by standardizing on a single platform. This trend is now gaining a significant boost because it is the only viable way to implement AI that works and requires well designed AI-embedded platforms that were built with specific domains and use-cases in mind.

AI automation extends our position beyond the contact center – Enterprises are looking to harness CX specific AI capabilities to replace current customer service manual processes that traverse the traditional contact center, often touching additional organizational functions such as back-office operations, marketing, sales and other internal and customer-facing functions.
AI as endless source for lucrative new use-cases – Organizations are coming to a clear realization that generic Generative AI and LLM solutions are not providing the expected results. NICE’s specialized AI, with its thousands of constantly evolving and expanding models, based on billions of interactions, is fast becoming a truly viable option for addressing the complex use-cases of our markets.


Empowering organizations to lead by adapting to change
We intend to continue leading the market by leveraging several major industry trends and evolving our offering to meet our customers’ current and future needs while focusing on key strategic pillars:

Cloud Foundation – we provide cloud-native open platforms for our Customer Engagement and Financial Crime and Compliance offerings. This allows our customers to facilitate adoption of cloud infrastructure to accelerate innovation and reduce integration, implementation and operational efforts while reducing cost.

Complete Platform Suite – across all markets, we provide one of the industry’s most comprehensive set of integrated, scalable, world class applications. Our ability to provide our customers with a full range of capabilities, for organizations of various sizes that can provide for their various needs using a single vendor unified suite, gives us a strong market differentiation in today’s drive for simplicity, cost savings and elimination of legacy solution silos.

Digital Engagement - we enable organizations to deliver experiences in every possible digital way, keeping them engaged and informed, leveraging smart self-service, AI and knowledge across the full customer journey, as well as providing secure digital banking, and helping public safety organizations shift to digital interaction and digital evidence environments.

AI – we accelerate business transformation with purpose-built AI-embedded natively across our platforms, making our applications and business processes smarter. Our domain expertise, proprietary data, advanced technology, and pre-built AI models create leading solutions for all our market segments.

Large Language Models, Generative AI and Agentic AI– we leverage LLMs Generative AI and Agentic AI to help consumers and employees access knowledge and interact with each other effortlessly and safely, while improving employee productivity and customer experience. In addition, we leverage these technologies and AI Agents to effectively automate tasks at scale, and augment employees to effortlessly complete workflows.

Data - recognizing the power of data, we consider data as a key component and a strategic asset across our portfolio and leverage it as a basis for our purpose-built AI solutions. We manage our customer data with security and compliance measures while leveraging it to equip our customers with a data-driven approach to manage their business, reduce cost, improve performance and identify customer insights.

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Strengthening our market leadership
Our brand, global reach, robust financial resources, extensive domain expertise and ability to deliver a wide array of solutions for large, as well as small and mid-sized organizations, will further anchor our market-leading position.
We plan to continue to develop our open cloud platforms and advanced purpose-built AI capabilities for the Customer Engagement and Financial Crime and Compliance markets to enable unified integrated solutions that offer fast innovation and quick time to value. These platforms allow us to deepen our direct relationships with our customers, nurture our partner ecosystem and create new growth opportunities. Our domain-specific, purpose-built AI serves as a strong differentiator and catalyst for cloud migration and our platform adoption.

In our Customer Engagement business, we intend to continue being a leader in the CCaaS market and expand our leadership into Customer Service Automation with CXone Mpower, a comprehensive AI platform, enabling enterprises to design, build and operate customer service automation by seamlessly orchestrating workflows, agents and knowledge as part of a single, unified and scalable platform. CXone Mpower automates workflows, breaking silos between customer-facing and internal service teams, leverages shared insights between human and AI agents to boost performance and centralizes data and knowledge under one platform, delivering the right insight at the right moment to enhance resolution. With its unique AI domain-expertise, CXone Mpower enables rapid innovation, agility and scalability, and continue to extend our offering around the goal of providing high-quality, proactive, personalized automated end-to-end experiences for consumers, organizations and service agents. With CXone Mpower, organizations can provide the right attended or AI enabled service, based on their profile, preferences and needs. This includes a broad suite of digital, analytics and purpose-built AI-powered integrated applications, used for understanding consumers, employees and business needs and preferences, and leveraging that information to create orchestrated journeys that cover every interaction and workflow from the front and back office. We intend to continue enhancing AI capabilities to deliver purpose-built copiloting, self-service and management capabilities. Alongside our existing offering, we plan to lead in new product categories, as we introduce novel solutions and enter additional market segments.
We will continue to extend our leading market position for AI-powered cloud solutions, operating self-optimizing workflows powered by AI memory, building AI agents quickly based on historical interaction data and designing automation with all the relevant data, knowledge and AI models in one place, building protection for data and brands with robust access control guardrails, catering to organizations of all sizes and replacing legacy on-premises infrastructure players. We will also continue to enable our customers to easily extend our solutions by using CXone Mpower’s open framework of hubs, simplifying integrations with quick, intuitive connections that eliminate silos and streamline management, as well as through innovative third-party applications via our DEVone dedicated partner ecosystem that our customers can self-select through our platform’s CXexchange application marketplace.

Our Evidencentral cloud digital evidence management platform enables public safety, law enforcement and criminal justice agencies to transform to unified digital evidence workflows by managing incident response, investigation and prosecution digitally and embedding analytics and AI throughout the entire criminal justice process. Agencies can leverage data to the fullest and work together collaboratively to enhance public safety and deliver faster, fairer justice processes.
In our Financial Crime and Compliance business, we will continue to expand our offerings across market segments by providing new and enhanced solutions that protect financial services organizations and their customers earlier in the customer lifecycle and by further embedding AI across our portfolio of solutions. With our X-Sight cloud platform, we provide open, scalable and flexible solutions to orchestrate and automate risk mitigation workflows and processes, across a broad set of financial crime and compliance coverage to the top tier of the market. Continued innovations on X-Sight will further cement our leading market position. With our Xceed platform, we provide packaged anti-money laundering (AML) and fraud coverage solutions to the mid-market, enabling smaller organizations to realize greater protection with quick time to value. In the Financial Crime and Compliance business, our solutions are embedded with AI, machine learning, automation, natural language processing, LLMs, and other advanced technologies. This allows financial services organizations to merge innovative and patented technologies to effortlessly connect data and apply AI to turn raw data into financial crime intelligence that fuels analytic precision to detect and prevent financial crimes. These offerings enable us to add value to our existing customers, as well as expand our reach and open up new opportunities, considerably increasing our total addressable market.

Helping our on-premises customers and new customers migrate to the cloud

Our leading cloud platforms and domain expertise, along with our flexible migration models, enable our customers to adopt cloud solutions and migrate to the cloud at the pace that matches their needs and preferences.

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To support all our customers and the different pace of their cloud migrations, we intend to continue offering our solutions in a variety of delivery models, which enable us to be flexible in effectively addressing our customers’ needs.

We are the trusted advisor for our on-premises customers as we support their migration from legacy infrastructure to the cloud. We provide deep cloud expertise and migration tools to simplify configuration, reporting and data collection from legacy systems. Further, we offer holistic transformation consulting services, provided exclusively by our skilled employees, delivering a smooth transition for our customers.

Continuing to cross-sell and upsell our full solutions portfolio to our existing customer base

One of our main assets is our growing customer base. We believe there are many opportunities to expand, up-sell and cross-sell within our existing cloud customer base. This includes increasing our customers’ exposure to the full breadth of our portfolio. We continue to provide our customers with new benefits by expanding the offering they already use, and adding new products and solutions.

Helping our customers adopt and use our solutions

We help our customers get the most out of their installed solutions. We do this by offering comprehensive onboarding programs, consulting services, and white-glove account management. This increases the value for our customer while at the same time drives additional billing, stickiness, and customer satisfaction.

Continuing organic innovation and development, while also pursuing acquisitions
We intend to continue investing in innovation across our portfolio and platforms and augment our organic growth with additional acquisitions that will broaden our product and technology portfolio, expand our presence in selected verticals, adjacent markets and geographic areas, broaden our customer base, and increase our distribution channels.

Maximizing the synergies across our businesses
At NICE, we value and promote a synergetic approach to our platforms and solutions (e.g., sharing information, knowhow, and design practices in transitioning to native cloud platforms across Customer Engagement and Financial Crime and Compliance). We will continue leveraging our solutions' common cloud architectures as well as methodologies of capturing and analyzing massive amounts of structured and unstructured data, providing real-time insight and driving process automation. Maximizing these synergies and cooperation between our business areas is a key pillar of our corporate strategy.

We have several joint offerings across our business segments and combined go-to-market efforts. We will continue leveraging our extensive complementary domain expertise, technological know-how, capabilities and development, in order to grow our business through additional cross-sell and up-sell opportunities.
Increasing our footprint in select geographical regions
As part of our growth strategy, we are expanding our business in select regions globally, where we can further grow and establish our presence in less penetrated, growing markets. We are doing this by leveraging our go-to-market teams and a growing partner ecosystem, in both the Customer Engagement business as well as the Financial Crime and Compliance business. We continue to expand our international partner network.
Expanding our global partnerships
As part of our growth strategy, we are investing in expanding relationships with global go to market partners including strategic partners, resellers, and global system integrators that we believe can accelerate our growth while ensuring the success of our customers. In addition, as part of our open platforms, we are enabling the success of our technology partners who complement our product offerings to bring unique value to our customers.

Customer Engagement Business Strategy
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Our strategy is to continue serving as a leader in the Customer Engagement market and expand our reach beyond the boundaries of the contact center by fundamentally reinventing the way consumers interact with organizations. We are driving a new customer experience standard by providing AI-powered end-to-end automation of customer service, intelligently and proactively interacting with customers, enabling resolution through purpose-built AI and data-driven self-service and providing agents with knowledge and tools to successfully resolve any need in real-time. We intend to achieve this by:
Infusing AI, analytics and automation into every element of our Customer Engagement offerings to enable predictive and proactive service, workforce augmentation and automation. We leverage insights from an extensive number of interactions, with hundreds of purpose-built CX AI models to create frictionless customer experiences that are smarter and faster.

Enabling our customers to deploy domain-specific AI-driven agents that provide self-service and assisted service capabilities, to improve customer experience as well as reduce the cost to service consumers.

Augmenting agents with unique unified and native capabilities including digital collaboration, agent assistants, AI-powered copiloting capabilities and real-time guidance, to assist agents using conversational context and knowledge-based information.

Empowering our customers to anticipate business demands with smarter, AI-based forecasting and scheduling tools, and providing their workforce with AI- enhanced training and analytics tools to help them gain the accountability, transparency and flexibility they need around their performance, as part of our holistic WEM suite that enhances both agent engagement and customer experiences.

Offering CXone Mpower, a global leading unified AI platform for automating customer service, combining journey orchestration for voice and digital channels, with advanced digital capabilities, self-service, domain-specific AI purpose-built for CX use-cases, knowledge management, agent assist tools, customer journey analytics, leading Workforce Engagement Management and automation solutions.

Expanding our capabilities to provide holistic digital and self-service experiences throughout the entire customer journey, through self-service and engagement with human or AI agents, enabling customer service organizations to provide a end-to-end service experience across all touchpoints.

Leading cloud transformation across the entire Customer Engagement portfolio for all market segments and regions to enable rapid innovation, enhance flexibility and agility, and lower operational costs.

Offering our customers the ability to extend our solutions by using CXone Mpower’s open framework of hubs, simplifying integrations with quick, intuitive connections that eliminate silos and streamline management, as well as through innovative third-party applications provided by our DEVone dedicated partner ecosystem, selected from our platform’s CXexchange marketplace.

Increasing our presence across all verticals, regions and market segments with CXone Mpower, AI innovation and enhanced data to help organizations adapt to today’s complex consumer expectations as well as the constantly changing CX environment.

Leveraging our large customer base in all verticals and regions to generate incremental revenue growth through up-selling and cross-selling our Customer Engagement portfolio.

Extending our public safety offering to the Public Safety Answering Points (PSAP) to support next generation digital emergency communication, ensuring compliance, improving performance and enabling enhanced digital evidence collection and investigation.

Offering one of the industry’s most unified cloud-based Digital Evidence Management and Investigation platform, Evidencentral, that integrates and consolidates all forms of evidence information - data and media from police records, citizen videos and photos, and dispatch management systems.

Financial Crime and Compliance Business Strategy
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We plan to continue extending our market leading position and our addressable market, while further supporting the move to the cloud by financial institutions. We also plan to leverage our capabilities to facilitate both better financial crime protection and to help our customers realize cost reductions. We intend to achieve this by focusing on:

Enhancing our platform of integrated Financial Crime and Compliance solutions that help financial services organizations identify risks faster and earlier throughout all phases of the customer lifecycle.

Expanding our market reach within the mid-tier banks and financial institutions with our Xceed native cloud and AI platform, which provides AML and Fraud solutions in a packaged SaaS offering to smaller organizations, enabling them to benefit from the capabilities previously only afforded to large organizations.

Expanding X-Sight, our AI cloud platform and solutions for the top tiers of the market to further strengthen and grow our market leadership position. X-Sight combines data and analytics agility and provides us the ability to cross-sell solutions. Our cloud platform leverages data, AI, machine learning, advanced automation, and other technologies to help customers reduce the cost of operations, while increasing their adherence to compliance and preventing financial crime.

Expanding X-Sight AI, machine-learning data-driven, analytics-managed service or self-development environment to help further optimize analytic models and develop new analytics by leveraging insights across our broad customer base and our market-wide and domain expertise in fraud prevention and anti-money laundering.

Empowering our customers to increase their operations teams’ productivity by providing more purpose-built Generative AI offerings within X-Sight and Xceed to enable faster and more accurate investigations.

Offering X-Sight DataIQ, our orchestration and aggregation engine that effortlessly connects to multiple premium and public data sources, turning raw data into data intelligence to fight financial crimes.

Expanding the X-Sight Marketplace, an ecosystem of innovative third-party partners where our customers can select complementary offerings to extend our platforms and products.

Offering our solutions to verticals outside of the traditional financial services, such as technology, gaming, energy, insurance, industry regulators, government agencies, fintech and alternative payments providers.

Further expanding our footprint across international geographies and segments while continuing to cross-sell and up-sell into our existing customer base around the world.

Expanding our sales channels with world-class systems integrators, consultancies, core banking providers, and other regional reseller firms to identify additional significant opportunities.

I.Offering Overview - Customer Engagement
Enterprises face increasing pressure to deliver superior customer experiences while reducing operational costs. CX leaders struggle with fragmented technology, rising labor expenses, and inconsistent service quality across channels. The growing demand for AI-driven automation and intelligent workflows is reshaping how organizations operate customer service at scale.

CXone Mpower is a comprehensive AI platform, enabling enterprises to design, build and operate customer service automation by seamlessly orchestrating workflows, agents and knowledge as part of a single, unified and scalable platform, helping businesses reduce costs, improve efficiency, and deliver consistent, high-quality service experiences.

Demand for AI-powered solutions continues to accelerate as organizations prioritize cost efficiency, digital-first customer engagement, and proactive service strategies. With purpose-built AI models, proactive automation, and scalable orchestration, CXone Mpower enables enterprises to meet these challenges while future-proofing operations for the AI era of customer experience.


Our Platform and Solutions’ Core Capabilities:

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AI Cloud Platform - CXone Mpower is an AI-first platform designed to automate, optimize, and enhance customer service at scale. AI-powered automation understands intent, analyzes sentiment, and drives intelligent workflows to improve efficiency and resolution accuracy. Predictive, generative, and real-time AI models continuously learn and adapt, ensuring smarter decision-making and optimal customer interactions. The platform integrates enterprise knowledge, data, and AI models to deliver precise, context-aware responses. AI enhances every layer of customer engagement, powering automation across workflows, interactions, and workforce augmentation to drive cost efficiency and service excellence.

Interaction Orchestration - CXone Mpower ensures seamless customer experiences by orchestrating interactions across 30+ supported channels, including voice, digital, and self-service. AI-driven routing matches customers to the best available resource in real time, considering skills, sentiment, and past interactions. CXone Mpower dynamically orchestrates interactions between human and AI agents based on customer intent and desired outcomes, optimizing business results. End-to-end service workflows connect front-office, mid-office, and back-office teams, ensuring smooth handoff and full-resolution automation. Proactive engagement capabilities anticipate customer needs and trigger automated outreach, resolving issues before they escalate.

Workforce Augmentation - CXone Mpower enhances workforce performance with AI-powered solutions that optimize scheduling, training, performance, and real-time decision-making. AI-driven workforce management ensures the right agents are available at the right time, balancing efficiency with service quality. AI copilots provide real-time assistance, automating repetitive tasks, surfacing relevant insights, and guiding agents through complex interactions. Advanced performance analytics continuously monitor quality, compliance, and customer sentiment, delivering actionable insights that help organizations refine agent skills and improve service outcomes.


Customer Service Automation - CXone Mpower automates customer service end-to-end, resolving interactions from intent to fulfillment without human intervention. AI-powered workflows execute entire service processes, ensuring faster, more accurate resolutions. With AI-powered experience memory, CXone Mpower retains customer history and context, enabling intelligent, personalized automation. Generative AI and domain-specific models create dynamic, context-aware responses that continuously evolve, improving service accuracy and efficiency. Automation extends across front-office, mid-office, and back-office processes, ensuring organizations scale AI-driven service efficiently. AI continuously analyzes interaction data and optimizes automation strategies, reducing costs and enhancing customer experience.


    NICE Evidencentral - Our Digital Evidence Management and Investigation Platform for the criminal justice system, transforms how digital evidence and data are managed. Criminal Justice agencies spend precious time managing digital evidence and data- collecting, storing, copying, analyzing, sharing and even physically transporting it. Evidencentral helps overcome these obstacles by breaking down data silos, applying analytics and workflow automation to processes, and by connecting public safety and criminal justice agencies together, so justice can flow smoothly, from incident to court. Evidencentral help agencies get control of digital evidence and data, so they can get emergency response right, be a greater force for good, ensure safer communities, and provide timelier justice for victims.

II.Offering Overview - Financial Crime and Compliance
Enabling trusted financial transactions is critical in the digital banking era and is increasingly challenging for financial services organizations. With criminals, organized crime rings, and armies of cyber bots leveraging AI to attack digital payments and banking channels while also scamming individuals and corporations, preventing fraud without customer friction and detecting and predicting money laundering is more complex than ever. In addition, adhering to capital markets compliance regulations by surveilling trades across all asset classes and communications across all mediums for market manipulation has also become more complex.
These demands, the evolving regulatory landscape and market dynamics coupled with consumers’ desire for frictionless digital transactions require organizations to transform and modernize their financial crime programs.
NICE Actimize provides a market-leading purpose-built cloud platforms embedded with AI capabilities for real-time and cross-channel fraud prevention, know-your-customer, anti-money laundering and capital markets compliance. We enable financial institutions to effectively adapt to changing threats, provide excellent customer experiences and grow their business, all while protecting their organization, safeguarding their customers, and ensuring the integrity of the financial services industry.

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Our Platforms’ and Solutions’ Core Capabilities
Our AI cloud platform for the high-end of the market, X-Sight, is an open and flexible AI-cloud platform for Financial Crime and Compliance, enabling top-tier financial services organizations to leverage market-leading solutions and services that meet their sophisticated and unique needs with security, scalability and speed. X-Sight is powered by embedded AI including Machine Learning, Agentic AI, Generative AI and other AI technologies which provide global clients with immediate value and access to new innovations. Our analytics are trained on industry-wide data and include the richest set of analytic models and features. The platform also includes many self-service capabilities providing the largest global financial institutions the flexibility to configure their controls and financial crime programs to meet their unique needs.

Our AI cloud platform for the mid-market, Xceed, brings together powerful AI, data intelligence, machine learning, and insights for comprehensive AML and fraud prevention for small and mid-sized organizations. The solutions on Xceed provide the protection that larger organizations receive but are packaged and connect directly with core banking providers for smaller organizations to realize immediate value.

Our X-Sight and Xceed AI offerings apply advanced AI techniques fueled by insights we receive in working collaboratively with our large world-class client base to provide rich intelligence to optimize machine learning prevention and detection analytics in our portfolio of solutions as well use Generative AI and automation to cut down analysts' time when investigating financial crimes. This allows us to provide leading solutions to our customers, addressing numerous business use cases across risk domains and coverage areas. All Financial Crime and Compliance solutions are infused with Always on AI, our multi-layered approach that injects AI, machine learning, automation, natural language processing, and other advanced technologies throughout the financial crime and compliance value chain. This provides financial services organizations with innovative and patented technologies which fuel automation and analytic precision to detect and prevent financial crimes in real-time and provides secure and frictionless customer experiences.

Our cloud platforms provide financial services organizations with the agility required to quickly adapt to changing regulatory and threat landscapes. With machine learning, predictive analytics, and embedded AI, organizations are able to proactively prevent crime faster, leading to higher customer satisfaction, lower losses, and reduced risk of regulatory enforcement action or reputational damage. Our platforms and solutions enable organizations to have a more comprehensive understanding of their customers’ activities and risk, as well as the organization’s risk exposure.

Our data intelligence solutions enable organizations to turn raw data into comprehensive actionable intelligence to prevent and detect financial crimes and enable better and faster decisions. With effortless access to data, our curated risk signals, and our X-Sight Marketplace ecosystem of complementary partner offerings, our solutions deliver comprehensive real-time intelligence to fuel analytics and enrich investigations.

Our AI and Analytics innovative technologies, our deep domain expertise, and the insights we receive by working collaboratively and collectively with our large world-class client base provide rich intelligence to our solutions. This allows us to provide market leading solutions to our customers, addressing numerous business use-cases across risk domains and coverage areas. All Financial Crime and Compliance solutions are embedded with AI, including machine learning, Agentic AI and Generative AI, and other advanced technologies throughout the financial crime and compliance value chain. This provides financial services organizations with innovative and patented technologies which fuel automation and analytic precision to detect and prevent financial crimes in real-time and provides secure and frictionless customer experiences.

Our vast coverage of solutions enables organizations to detect market manipulations and prevent money laundering and fraud while helping them adhere to compliance regulations. With broad coverage for compliance around regulations and financial crime risks including account takeover, social engineering scams and many other financial crimes, the solutions include hundreds of out-of-the-box engineered models for current risk topologies across global regulatory regimes as well as emerging risk types including cryptocurrencies and cannabis-related risks to name a couple. Organizations gain holistic coverage to reduce risk, mitigate losses and protect their organizations and customers.

Our intelligent investigations solutions serve hundreds of thousands of analysts and investigators across the globe enabling them to make better, faster decisions. The rich and robust, purpose-built solutions include out-of-the-box workflows and audits for the regulated industries. Our Agentic AI capabilities understand financial institutions’ policy and procedures guidelines, recognize the context of an investigation and have the agency to determine what
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data sources and risk signals to leverage for accurate and fast decisioning. The solutions track all activity providing transparency for internal and regulatory audits.

Our Self-Service solutions provide organizations with customization and self-development capabilities powered by APIs and intuitive tools.

Strategic Alliances
We sell our Customer Engagement and Financial Crime and Compliance platforms and solutions worldwide, primarily directly to customers and indirectly through selected partners to better serve our global customers. We partner with companies in a variety of sales channels, including service providers, system integrators, consulting firms, distributors, value-added resellers and complimentary technology vendors. These partners form a vital network for selling and supporting our solutions and platforms. We have established a cross-organization business partner program to support our ever-growing eco-system, providing a full range of tools and benefits to help promote the NICE offerings and drive mutual revenue growth and success.

Our strategic technology partnerships ensure full integration with the NICE offerings, delivering value added capabilities that enable them to provide our customers with an improved set of solutions and services.

Our DEVone program, comprising more than 200 partners, allows third-party software providers that bring complementary capabilities, to integrate with our CXone Mpower platform and extend its functionality. DEVone partner offerings are listed in our CXexchange Marketplace. Our Actimize X-Sight Marketplace hosts market leading vendors in the AML and Fraud domains that complement the Financial Crime and Compliance solution suite.

Our Evidencentral Marketplace hosts an expanding ecosystem of technology vendors that integrate with our Evidencentral platform to extend its functionality and make it simpler and faster for Emergency Communications, Law Enforcement and Criminal Justice agencies to bring a high volume of multimedia evidence together, accelerate case building, unearth hidden evidence and address evidence disclosure challenges.

Professional Service and Support
The NICE Professional Services and Support organization enables our customers to derive sustainable business value from our solutions. In addition to our internal Services organization, we also utilize third party certified implementation partners to extend our capacity for deployment of our offerings.

The Professional Service and Support offerings include a variety of services - both standalone and bundled with our products. We address all stages of the technology lifecycle, including defining requirements, planning, design, implementation, customization, optimization, proactive maintenance and ongoing support.

Enabling Value
Solution Delivery optimizes solution delivery to our customers and enables them to achieve their specific business and organizational goals, on time and on budget. NICE solutions are delivered by certified project managers, technical experts, and application specialists. We follow a proven methodology that includes business discovery to map solutions to business processes.
Value Realization Services (VRS) ensure quick, deep and sustained adoption of the NICE solutions. These services enable our customers to leverage the features and functionalities of our solutions to drive immediate and long-term results, aligned to their specific business case, accelerating their return on investment. The services are specifically designed to address the top short and long-term business concerns we heard through working with hundreds of customers across the globe. VRS teams work with customers during all phases of solution implementation – before, during and after go-live. We begin working with customer teams as soon as the project is kicked off, when the solution goes live, and for months after the solution is implemented. Our experience has shown that our customers benefit greatly from access to NICE VRS resources once they begin using the solution. This post-implementation engagement allows us to build skill and ownership within customer teams, embed changes within the customer organization and determine return on investment from the solution.

Managed Services empowers organizations to meet short term objectives, such as reducing handle time or improving sales rates, along with achieving long term goals such as customer retention. Our team of experienced practitioners
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work with customers, guiding the process of collecting interactions, prioritizing subjects to study, conducting analysis and most importantly, developing plans that put the results of the analysis into action.
Customer Education Services provide users with the necessary knowledge and skills to operate NICE solutions and to leverage their capabilities to meet customer needs. These services are offered both before and after the deployment of NICE solutions.
Sustaining Value
Customer Success means working hand-in-hand with our customers to identify areas where they can maximize business value and minimize complications, ensuring continued delivery of business benefits.
Cloud Operations ensure that solutions deployed on the NICE cloud run optimally and allow more simplified software upgrades, maximizing availability, performance and quality, while ensuring the security of customer information. This is delivered by using sophisticated proprietary utilities and automations that operate in a proactive manner, providing the means to avoid impacting customer and business operations. This includes: Cloud Architecture teams that design cloud service delivery and operation architectures; Cloud Security teams that help ensure that we set and meet the required Security certifications; Cloud Infrastructure teams that manage both virtual and physical infrastructure requirements; Cloud DevOps teams that implement the utilities and automations while working with our product development teams to optimize our solutions for the cloud environment; and the 7X24 Cloud Application Support teams that monitor and manage the solutions for our customers, ensuring world class up-time, performance, scalability and security. The NICE Cloud utilizes multiple underlying technologies to give our customers many paths to the cloud – these include Physical Data Centers and Public Cloud providers such as AWS and Azure. NICE maintains multiple Cloud Certifications including SOC 2 Type II – Applications; HITRUST; ISO:27001 and PCI DSS.

Customer Support and Maintenance responds to customer requests for support on a 24/7 basis, using advanced tools and methodologies. NICE offers flexible service level agreements to meet our customers’ needs. Our solutions are generally sold with a warranty for repairs of software defects or malfunctions. Software maintenance includes an enhancement program with (in the majority of cases) an ongoing delivery of “like-for-like” upgrade releases, service packs and hot fixes. NICE also offers a Technical Account Management service or TAM. The TAM is a designated manager responsible for escalation management and overall customer care services.
Proactive Maintenance addresses issues before they can significantly impact our customers’ businesses. These offerings include:
Advanced Services – Technical experts perform system-level audits to ensure ongoing compliance with operational specifications as well as specific product customizations tailored to the requirements of the customer.
Application Performance Services – A 24/7 function that proactively monitors NICE-hosted and customer-premises environments with triage, resolution and escalation of system alarms.
Managed Technical Services (Technical and Operation) – NICE offers a suite of managed technical and operation services that enable the customer to fully outsource all necessary responsibilities and functions required in order to manage the NICE solutions. This service includes dedicated onsite and remote support engineers, system management, system operation, updates and upgrades.
Information Security - we have established information security management policies and procedures to protect the confidentiality, integrity, and availability of our data while providing value to the way we conduct our business. We have security measures, internal policies, and procedures in place to protect our customers’ information and ensure that proper measures are taken in connection with our customers’ and their end users’ information. Additionally, we ensure that information security controls are designed and implemented throughout our products and services development lifecycle. Our information security management policies and procedures comply with industry accepted standards, such as ISO 27001. For additional information on information security, please see Item 16K, “Cybersecurity“ in this annual report.

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Manufacturing and Source of Supplies
Many of our solutions are software-based and are deployed by open cloud platform and standard commercial servers. The cloud platform services are provided to us by one or more third-party provider. For information on the risks relating to our engagements with cloud providers, please see Item 3, “Risks Relating to Our Offerings and Operations" and "Risks Relating to Information and Product Security and Intellectual Property" in this annual report.

In addition, there is a small portion of our products that have certain hardware elements that are based primarily on standard commercial off-the-shelf components and utilize proprietary in-house developed circuit cards and algorithms, digital processing techniques and software. These products are IT-grade compatible.
We manufacture those products that contain hardware elements through subcontractors. Our manufacturers provide turnkey manufacturing solutions including order receipt, purchasing, manufacturing, testing, configuration, inventory management and delivery to customers for all of our product lines. NICE exercises various control mechanisms and supervision over the entire production process. In addition, the manufacturer of a significant portion of such products, is obligated to ensure the readiness of a back-up site in the event that the main production site is unable to operate as required. We believe these outsourcing agreements provide us with a number of cost advantages.
Some of the components we use have a single approved manufacturer while others have two or more alternatives for supply. In addition, we maintain an inventory for some of the components and subassemblies in order to limit the potential for interruption. We also maintain relationships directly with some of the more significant manufacturers of our components, and we believe that we can obtain alternative sources of supply in the event that the suppliers are unable to meet our requirements in a timely manner.
We have qualified for and received the ISO-9001:2015 quality management, as well as the ISO 27001:2022 information security management, ISO 27701:2019 privacy management and ISO 14001:2015 environmental management certifications.
Research and Development
We believe that the development of new products and solutions and the enhancement of existing products and solutions are essential to our future success. Therefore, we intend to continue to devote substantial resources to research and new product and service development, and to continuously improve our systems and design processes in order to reduce the cost of our products and services. We conduct our research and development activities primarily in Israel, India and the U.S. Our research and development efforts have been financed through our internal funds and through some programs sponsored through the government of Israel.

We participate in programs funded by the IIA to develop generic technology relevant to the development of our products. Such programs are approved pursuant to the Law for the Encouragement of Research, Development and Technological Innovation in Industry 5744-1984 (the “Research and Development Law”), and the regulations promulgated thereunder. We were eligible to receive grants constituting between 30% and 55% of certain research and development expenses relating to these programs. Some of these programs were approved as programs for companies with large research and development activities and some of these programs are in the form of membership in certain Magnet consortiums. Accordingly, the grants under these programs are not required to be repaid by way of royalties. However, the restrictions of the Research and Development Law described below apply to these programs.
The Research and Development Law generally requires that the product incorporating know-how developed under an IIA-funded program be manufactured in Israel. However, upon the approval of the IIA (or notification in the event set forth below, as the case may be), some of the manufacturing volume may be performed outside of Israel, provided that the grant recipient pays royalties at an increased rate, which may be substantial, and the aggregate repayment amount is increased). Following notification to the IIA (and provided the IIA did not object), up to 10% of the grant recipient’s approved Israeli manufacturing volume, measured on an aggregate basis, may be transferred out of Israel, subject to payment of the increased royalties referenced above.
The Research and Development Law also provides that know-how (or rights thereto) developed under an approved research and development program may not be transferred or pledged to third parties without the approval of the IIA. Such approval is not required for the sale or export of any products resulting from such research or development. The IIA, under
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special circumstances, may approve the transfer of IIA-funded know-how outside Israel, including, in the event of a sale of the know-how, provided that the grant recipient pays to the IIA a portion of the sale price, which portion will not exceed six times the amount of the grants received plus interest (or three times the amount of the grant received plus interest, in the event that the recipient of the know-how has committed to retain the R&D activities of the grant recipient in Israel after the transfer).
Intellectual Property
We currently rely on a combination of trade secret, patent, copyright and trademark law, together with non-disclosure and non-compete agreements, to establish and/or protect the technology used in our systems.
We currently hold 575 U.S. patents and 35 patents issued in additional countries covering substantially the same technology as the U.S. patents. We have 230 patent applications pending in the United States and other countries. We believe that the improvement of existing products and the development of new products are important in establishing and maintaining a competitive advantage. We believe that the value of our products is dependent, among other things, upon our proprietary software and hardware continuing to be “trade secrets” or subject to copyright or patent protection. We generally enter into non-disclosure and non-compete agreements with our employees, subcontractors and business counterparties. However, there can be no assurance that such measures will protect our technology, or that others will not develop a similar technology or use such technology in products competitive with those offered by us. In most of the areas in which we operate, third parties also have patents which could be found applicable to our technology and products. Such third parties may include competitors, as well as large companies, which invest significant amounts in their patent portfolios, regardless of their actual field of business. Although we believe that our products do not infringe upon the proprietary rights of third parties, there can be no assurance that one or more third parties will not make a claim alleging that our products infringe upon their proprietary rights, nor that we will be successful in defending such claim.
In addition, to the extent we are not successful in defending such claims, we may be subject to injunctions with respect to the use or sale of certain of our products or to liabilities for damages and may be required to obtain royalty bearing licenses which may not be available on reasonable terms.
We own the following trademarks and/or registered trademarks in different countries: Actimize, Actimize logo, NICE Adaptive WFO, NICE WFM, NICE Voice of the Customer, NICE Work Force Management, NICE Incentive Compensation, NICE Real Time Solutions, NICE Trading Recording, NICE Uptivity, NICE Air, NICE Communication Surveillance, Customer Engagement Analytics, Decisive Moment, Fizzback, IEX, inContact, inContact Logo, NICE inContact, Last Message Replay, NICE, NICE Analyzer, NICE Engage, NICE Engage Platform, NICE Interaction Management, NICE Sentinel, NICE Inform, NICE Inform Lite, NICE Performance Compliance, NICE Inform Media Player, NICE Inform Verify, NICE Logo, NICE Incentive Compensation Management, NICE Real Time Solutions, NICE Trading Recording, NICE Proactive Compliance, NICE Security Recording, NICE, Nexidia, Nexidia ((!)) Logo, Nexidia Search Grid, Neural Phonetic Speech Analytics, Own the Decisive Moment, Scenario Replay, inContact Cloud Center Solutions, Supervisor on-the-go, VAAS, Voice as a Service, Personal Connection, InTouch, Echo, inCloud, CXone, CXone Logo, NICE inContact CXone, NICE Performance Management, inContact Automatic Contact Distributor, inContact Personal Connection, inContact Interactive Voice Response, inContact Work Force Management, Mattersight, Mattersight Logo, Net Promoter, Satmetrix, NPX, NPS, Fraudmap, Guardian Analytics, Evidence Lake, Alacra, Free your business, Resolve, Brand Embassy, ContactEngine, ContactEngine Logo, GoMoxie, FluenCX, Truth Depends on it, MindTouch, NICE ElevateAI, ElevateAI, NICE Smile design logo, StatsViewer, ScheudleViewer, VoApps, Directdrop voicemail and Directdrop voicemail logo, BusinessPhone, BusinessPhone Logo, LiveVox, LiveVox Logo, Human Call Initiator, HCI and HTI.

Seasonality
In previous years the majority of our business operated under an on-premises enterprise software model, which was characterized, in part, by uneven business cycles throughout the year, with a significant portion of customer orders received in the fourth quarter of each calendar year. This was due primarily to year-end capital purchases by customers and holiday season spending. In recent years, our business has been shifting more and more to the cloud, which is characterized by more evenly distributed business, which balances the impact of being heavily weighted towards the fourth quarter. While the seasonality associated with our cloud business is less impactful, we continue to have a second half fiscal year which typically results in higher usage of our solutions stemming primarily from the retail, health care and insurance verticals. While seasonal factors such as these are common in the software and technology industry, this pattern should not be considered a reliable indicator of our future revenue or financial performance. Many other factors, including general economic conditions,
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also have an impact on our business and financial results. See “Risk Factors” under Item 3, “Key Information” of this annual report for a more detailed discussion of factors which may affect our business and financial results.

Regulation

Data Privacy, Cyber-Related Security and AI
Certain data privacy and cyber-related security laws and regulations apply to us or to our customers and end-users in countries in which we operate and our customers and their end-users are located, including the United States, Israel, the E.U and the U.K., mostly in relation to our SaaS, hosting and cloud offering, as well as other outsourced services. These laws and regulations also include industry specific regulations that may apply to certain of our customers or end-users, such as regulations with respect to the digital operational resilience as well as requirements related to security risk management. In addition, as the regulatory landscape continues to evolve, new laws, rules and regulations governing the use of AI technologies may also apply. For example, the EU AI Act has come into effect during 2024. With heightened privacy, cyber security and AI concerns and regulations, we are aligning our governance and compliance of certain offerings or services to facilitate our customers and end-users' compliance. In addition, our failure to comply with the applicable legislation, procedures and security measures may result in significant financial penalties. For more information on data privacy, cyber security and AI related concerns and legislation, including the GDPR and regulations governing AI, see also Item 3, "Key Information - Risk Factors" in this annual report.
We or our customers are also subject to domestic data privacy laws, such as the Israeli Privacy Law, the CCPA, CPRA and the United Kingdom Data Protection Act 2018. We are evaluating the business impact of compliance with the constantly changing data privacy laws and regulations, which may include domestic laws, regulations and guidelines that may come into effect in additional regions as well, and apply to our operations, products and services.

As part of our effort to comply with such regulations and mitigate any future risks related to data privacy and cyber-security, we have adopted certain internal policies and procedures related to privacy, information security and incident response, as well as Business Continuity Plans, Risk Assessment Procedures and Vendor Management Policies. These internal policies and procedures are intended to address our business and operational practices as well as our customers' information security concerns, and to avoid or mitigate the risks associated with our information assets and those of our customers. In addition, we received the ISO 27001:2022 information security management certification, ISO 27701:2019 privacy management and SOC2 Type II, PCI DSS, Hitrust and FedRamp certifications were provided to the relevant business lines (as required). Furthermore, we continually evaluate our policies and procedures in light of the evolving regulations related to data privacy, cyber-security and AI and to our customers' needs.

Trade Compliance
As a company with global operations, we may be subject to laws as well as international treaties and conventions controlling imports, exports, re-export and transfer of goods, services and technology. These include import and customs laws, export controls, trade embargoes and economic sanctions, restrictions on sales to parties that are listed on (or are owned or controlled by one or more parties listed on) denied party watch lists and anti-boycott measures.

We are subject to applicable export control regulations in countries from which we export goods and services, including the United States, Israel, European Union and the United Kingdom. Such regulations may apply with respect to product components that are developed or manufactured in, or shipped from, the United States, Israel, European Union and the United Kingdom, or with respect to certain content contained in our products. There are restrictions that apply to software products that contain encryption functionality. In the event that our products and services are subject to such controls and restrictions, we may be required to obtain an export license or authorization and comply with other applicable requirements pursuant to such regulations or may be restricted from exporting certain products and services to certain countries or to sanctioned parties.

European Environmental Regulations
Our European activities require us to comply with the Directive 2011/65/EU of the European Parliament and of the Council on the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment and the Commission Delegated Directive (EU) 2015/863 (together “RoHS”). RoHS provides, among other things, that producers of electrical and electronic equipment may not place new equipment containing certain materials, in amounts exceeding certain maximum concentration values, on the market in the EU. We are also required to comply with Regulation (EC) 1907/2006 of the European Parliament and of the Council Registration, Evaluation, Authorisation and Restriction of Chemicals
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(“REACH”, SVHC-205), which requires producers to manage the risks from chemicals used in their products and to provide safety information on the substances found in their products.

Our products meet the requirements of the RoHS and REACH directives, and we are making every effort in order to maintain compliance, without adversely affecting the quality and functionalities of our products. If we fail to maintain compliance, including by reason of failure of our suppliers to comply, we may be restricted from conducting certain business in the EU, which could adversely affect our results of operations.
Our European activities also require us to comply with Directive 2012/19/EU of the European Parliament on Waste Electrical and Electronic Equipment (“WEEE”). The WEEE directive covers the labeling, recovery and recycling of IT/Telecommunications equipment, electrical and electronic tools, monitoring and control instruments and other types of equipment, devices and items, and we have set up the operational and financial infrastructure required for collection and recycling of WEEE, as stipulated in the WEEE directive, including product labeling, registration and the joining of compliance schemes. We are taking and will continue to take all requisite steps to ensure compliance with this directive. If we fail to maintain compliance, we may be restricted from conducting certain business in the EU, which could adversely affect our results of operations.
Similar regulations have been, or are being, formulated in other parts of the world. We may be required to comply with other similar programs that are enacted outside Europe in the future.
Environmental, Social and Governance (ESG) Report
NICE is guided by a deep commitment to social contribution, environmental sustainability and corporate citizenship that is ingrained in our core values. For further information on our ESG strategy and performance, you may access our full ESG Report, which is located on our Corporate Responsibility webpage at https://www.nice.com/company/corporate-responsibility. The contents of our ESG Report and related supplemental information (including information on our website) are not incorporated by reference into this annual report or in any other report or document we file with the SEC.

Competition
We believe that our solutions have several competitive advantages (as set forth above in “Our Solutions” section in this Item 4, “Information on the Company – Business Overview”) in their scale, performance and accuracy, comprehensiveness and broad functionality.
We are leaders in the Customer Engagement space. In the CCaaS market, which is a part of the broader Contact Center Infrastructure market that is still mainly held by traditional on-premises players, we compete against Amazon Connect, Avaya, Cisco, Five9, Genesys, and TalkDesk, as well as other niche vendors. We also compete against certain UCaaS and collaboration software vendors such as 8x8, Vonage and Zoom, which offer basic CCaaS capabilities, and certain digital engagement vendors such as LivePerson, which offer digital engagement and self-service capabilities for contact centers.
In the WEM market we compete against players such as Alvaria, Calabrio, Genesys and Verint. In addition, we are seeing some CRM companies, such as Salesforce and Zendesk, that provide a subset functionality of our broader offerings.
In the emergency communications market, we compete against traditional recording vendors like Eventide, Equature and Exacom. In the Law Enforcement and Justice space, we compete against evidence content generation providers like Axon and Genetec who are looking to expand into broader digital evidence management.

We are leaders in the Financial Crime and Compliance space. We compete against niche vendors that provide one subset of functionality to protect against a specific risk and against vendors that provide a more comprehensive offering. In the Anti-Fraud market, we compete against vendors such as SAS, FICO and Feedzai. In the Anti-Money Laundering market we compete against vendors such as SAS, Oracle and Quantexa. In the Financial Markets Compliance market, we compete against vendors such as SMARTS (NASDAQ), Oracle and SAS. In the Mid-market segment, we compete mainly against Verafin.

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Item 4.C     Organizational Structure
The following is a list of our significant subsidiaries and other subsidiaries, including the country of incorporation or residence. Each of our subsidiaries listed below is wholly owned by us.
Name of SubsidiaryCountry of Incorporation or Residence
NICE Systems Australia PTY Ltd.Australia
NICE Systems Technologies Brasil LTDABrazil
NICE Systems Canada Ltd.Canada
NICE Interactive Solutions India Private Ltd.India
Actimize Ltd.Israel
NICE Japan Ltd.Japan
NICE Technologies Mexico S.R.L.Mexico
NICE Netherlands B.V.Netherlands
NICE Systems (Singapore) Pte. Ltd.Singapore
NICE Technologies Sole Proprietorship LLCUnited Arab Emirates
Actimize UK LimitedUnited Kingdom
NICE Systems Technologies UK LimitedUnited Kingdom
NICE Systems UK Ltd.United Kingdom
Actimize Inc.United States
inContact Inc.United States
NICE Systems Inc.United States
NICE Systems Technologies Inc.United States
LiveVox Inc.

United States
Item 4.D    Property, Plants and Equipment    

We have leased offices and facilities in several countries, which include the following headquarter offices:
Our Israeli headquarters in Ra'anana occupies approximately 165,000 square feet.
Our North American headquarters in Hoboken, New Jersey, occupies approximately 60,000 square feet;
Our EMEA headquarters in London, occupies approximately 10,000 square feet; and
Our APAC headquarters in Singapore occupies approximately 5,600 square feet.
Additional leased facilities consist of the following:
Americas facilities located in Atlanta, Georgia and Salt Lake City, Utah.
APAC facilities include offices space located in Pune and Manila.
We believe that our existing facilities are adequate to meet our current needs and substantially adequate to meet our foreseeable future needs.
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Item 4A.    Unresolved Staff Comments.
None.
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Item 5.    Operating and Financial Review and Prospects.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes and other financial information included elsewhere in this annual report. This discussion contains certain forward-looking statements that involve risks, uncertainties and assumptions. As a result of many factors, including those set forth under Item 3, “Key Information - Risk Factors” and elsewhere in this annual report, our actual results may differ materially from those anticipated in these forward-looking statements. For more information about forward-looking statements, see the “Preliminary Note” that immediately follows the Table of Contents of this annual report.
Overview
NICE is a global enterprise software leader, providing AI-powered cloud platforms that serve two main markets: Customer Engagement and Financial Crime and Compliance. Our core mission is to automate customer service by seamlessly orchestrating workflows, AI and human agents, and enterprise knowledge on CXone Mpower - a leading advanced and comprehensive AI platform. We protect financial services organizations with embedded AI to help prevent money laundering and fraud, as well as ensure financial markets compliance in real-time.
Our strategy is based on serving rapidly expanding, specialized markets that require feature-rich solutions, with robust, comprehensive cloud platforms that are spearheaded by AI as an overarching catalyst, propelling our unique AI-driven vectors of growth: using AI differentiation to expand our cloud win rates, positioning AI as the bedrock for driving rapid expansion into digital, utilizing AI to fuel massive platform-adoption and leveraging AI as a lucrative source for new domain-specific use-cases.
In the Customer Engagement market, our CXone Mpower platform enables organizations to automate service at scale, augment their workforce with AI-powered solutions, and unify enterprise knowledge, data and AI models to drive faster resolutions and superior customer experiences. Purpose-built AI ensures every interaction and workflow is intelligently orchestrated across all customer touchpoints, seamlessly blending autonomous Agentic AI and human assisted interactions to deliver best-in-class service that is proactive, knowledge-based, resolution-oriented and efficient. Our Public Safety and Justice business is included in our Customer Engagement segment. In this business, we are transforming the criminal justice system by using AI to uncover the truth in digital evidence, facilitating swift justice. Our AI-powered workflows help relieve police, prosecutors, public defenders, courts and correctional institutions from the tedious task of managing digital evidence.

In the Financial Crime and Compliance market, we protect financial services organizations, with embedded-AI solutions that identify risks and help prevent money laundering and fraud, as well as help ensure financial markets compliance in real-time. With our holistic, data and entity-centric approach, we leverage machine learning, NLP (natural language processing), Generative AI and Agentic AI that automate routine tasks, collaborate with analysts and adapt in real time to proactively keep ahead of emerging threats.

NICE is at the forefront of several industry technological disruptions that have greatly accelerated in the last several years: AI-driven automation is transforming customer service; domain-specific AI is enhancing decision-making and workforce performance; and cloud scalability is enabling enterprises to modernize operations at an unprecedented pace. As organizations seek to optimize both efficiency and customer experience. NICE’s AI-powered platforms unify data, workflows, and automation to drive enterprise-wide transformation. Built on deep domain expertise, our solutions empower customer service, financial crime prevention, and criminal justice organizations to lead with intelligence, efficiency, and confidence.

We rely on multiple key assets to drive our growth:
Our AI leadership with purpose-built AI models that power automation, optimization, and user experience transformation.
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Our domain-specific Agentic AI that manages complex tasks, makes decisions and takes action, driving AI-powered automation at scale and precision, with and without human intervention.
Our comprehensive cloud platforms that are scalable, secure, and built for enterprise-wide adoption.
Our AI-powered copiloting employee augmentation capabilities, built for specific roles and around domain-specific functionality to increase efficiencies, maintain compliance and improve resolution.

AI-powered orchestration tools that allow organizations to design, build and operate end-to-end workflows.
Our extensive self-service automation solutions that use the power of AI to deliver human-like interactions at scale.
Our extensive portfolio of applications addresses organizational needs across all our areas of domain expertise.
Our broad array of proprietary technologies and algorithms in the domains of Generative AI, LLMs, automation, analytics, machine learning, speech-to-text, natural language processing, personality-based routing and others.
Our native AI models which are based on years of industry-specific data and domain expertise, consistently using machine learning for generating actionable insights.
Our access to vast amounts of CX data, derived from billions of domain-specific interactions of all types, enriching our applications and enabling us to build hundreds of CX purpose-built AI models.
Our advanced data security and compliance capabilities that deliver trusted enterprise software across all our markets, including FedRAMP authorization to the relevant business lines, with 30 authorized applications, native PCI, supported by advanced SOC.
Our flexible delivery model that allows our customers to benefit from a wide range of both cloud and on-premises solutions.
Our solutions' market coverage of all segments, from small and mid-sized businesses to large scale Fortune 100 enterprises.

The mission critical nature of our solutions to the operations of our customers and our cloud platforms that are essential for enabling a scalable and sustainable work-from-anywhere environment.
Our market leadership, which makes us a well-recognized brand and creates top-of-mind awareness for our solutions in our areas of operation..
Our large and broad partner ecosystem with strategic alliances and integrations that extend market reach and solution capabilities.
Our loyal customer base of more than 25,000 organizations in over 150 countries, across many industries, including 85 of the Fortune 100 companies.
Our strong cash position that allows us to invest in innovative solutions and product development and fuels strategic acquisitions.
Our ability to quickly drive mainstream adoption for innovative solutions and new technologies and trends, which we introduce to the market through our direct sales force and distribution network.
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Our skilled employees and domain expertise in our core markets allow us to bring our customers the right solutions to address key business challenges and build strong customer partnerships.
Our customer support and operations, which enable our customers to quickly enjoy the benefits of our solutions, with multiple deployment models in the cloud or on-premises throughout the world and support for full value realization and customer success.
Our outcome-oriented white-glove services that enable our customers to achieve greater efficiency, higher revenue, and lower operating costs with our solutions.
Recent Acquisitions
From time to time we complete acquisitions and investments. Some of them are not considered material to our business and operations. During 2024, we completed two acquisitions for total consideration of approximately $68.9 million. During 2023, we completed an acquisition for total consideration of approximately $446.9 million. For additional information see Note 1b to our Consolidated Financial Statements included elsewhere in this annual report.

The acquisitions were accounted for by the acquisition method of accounting, and, accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values. The results of operations related to each acquisition are included in our consolidated statements of income from the date of acquisition.

Critical Accounting Estimates
We prepare our consolidated financial statements in accordance with U.S. GAAP.

Certain accounting policies require that we apply significant judgment in determining the appropriate assumptions for calculating financial estimates. By their nature, these judgments will be subject to an inherent degree of uncertainty. Our judgments are based upon our management’s historical experience, terms of existing contracts, observance of trends in the industry, information provided by our customers and information available from other outside sources, as appropriate.

We believe that the accounting policies and estimates discussed below are critical to our financial results and to the understanding of our past and future performance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to be critical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time we were making our estimate and (2) changes in the estimate could have a material impact on our financial condition or results of operations.

Revenue Recognition. We generate revenues from sales of cloud, service and software products, which include software license, SaaS, network connectivity, hosting, support and maintenance, implementation, configuration, project management, consulting and training. We sell our cloud, products and services directly through our sales-force and indirectly through a global network of distributors, system integrators and strategic partners, all of whom are considered end-users.

We recognize revenues in accordance with ASC No. 606, “Revenue from Contracts with Customers” (“ASC 606”). Under this standard, we recognize revenues when a customer obtains control of promised goods or services in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. To determine revenue recognition for contracts that are within the scope of this standard, we perform the following five steps:

1) Identify the contract(s) with a customer

A contract with a customer exists when (i) there is an enforceable contract with the customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services; (ii) the contract has commercial substance; and (iii) we determine that collection of substantially all consideration for goods or services that are transferred is likely based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer's historical payment experience.
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2) Identify the performance obligations of the contract

We enter into contracts that may include multiple performance obligations. We account for individual products and services separately if they are distinct – i.e., if a product or service is separately identifiable from other items in the contract and if a customer can benefit from it on its own or with other resources that are readily available to the customer.

3) Determine the transaction price

The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the customer. For certain contracts, the Company's contracts include usage based fees that constitute variable consideration and are included in the transaction price.

The Company receives payments from customers based upon billing cycles and contract terms which may vary by contract type. Invoice payment terms are usually 30 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we generally do not include a significant financing component in our contracts since our sale prices are not subject to billing terms and the purpose of our contracts is not to receive financing from, or provide financing to, customers. In addition, we elect to apply the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component if we expect, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

Revenue is measured based on the consideration specified in a contract with a customer, excluding taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that we collect from a customer. We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations.

4) Allocate the transaction price to the performance obligations of the contract

We allocate the transaction price to each performance obligation identified based on its relative standalone selling price (“SSP”) out of the total consideration of the contract.

We use judgment in determining the SSP. If the SSP is not observable through standalone transactions, we estimate the SSP by taking into account available information such as geographic or regional specific factors, internal costs, profit objectives, and internally approved pricing guidelines related to the performance obligations.

We typically establish SSP range for our products and services, which is reassessed on a periodic basis or when facts and circumstances change. SSP for products and services can evolve over time due to changes in NICE pricing practices that are influenced by intense competition, changes in demand for products and services, and economic factors, among others.

For products for which the SSP cannot be determined based on observable prices given that the same products are sold for a broad range of amounts (i.e., the selling price is highly variable), the SSP included in a contract with multiple performance obligations is determined by applying a residual approach whereby all other performance obligations within a contract are first allocated a portion of the transaction price based upon their respective SSPs, with any residual amount of transaction price allocated to these product revenues.

Some of the Company's contracts include variable fees that are based on actual usage. For these contracts the Company generally allocates the variable fees using the variable consideration allocation exception.

5) Recognize revenue when (or as) the entity satisfies a performance obligation

We derive our cloud revenues from subscription services, which are comprised of subscription fees from granting customers access to our cloud platforms, network connectivity and/or services fees for deployment of certain cloud platforms.

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Revenue from subscription services is recognized when control is transferred to the customer, occurring either evenly over the contract period or based on actual usage. Revenue from network connectivity is based on customer call usage and is recognized in the period the call is initiated. Services fees for deployment, which are considered as material rights, are initially deferred and recognized over the average customer life.

Revenue from software license, support and maintenance services are recognized at the time the related performance obligation is satisfied by transferring the promised product or service to the customer. Software license revenues are recognized at the point in time when the software license is delivered, and the customer obtains control of the asset. Support and maintenance service revenues are recognized when control is transferred to the costumer, occurring evenly over the maintenance contract term, as the services have a consistent continuous pattern of transfer to a customer.

professional services revenues, except fees for deployment of certain cloud platforms, are recognized as services are performed.

Impairment of Long-Lived Assets. Our long-lived assets include goodwill, property and equipment and identifiable other intangible assets that are subject to amortization.
Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. Under ASC 350, "Intangible - Goodwill and Other" ("ASC 350"), goodwill is not amortized, but rather is subject to an annual impairment test. If we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then we prepare a quantitative analysis to determine whether the carrying value of reporting unit exceeds its estimated fair value. If the carrying value of a reporting unit exceeds its estimated fair value, we recognize an impairment of goodwill for the amount of this excess.
During the fourth quarter of each of the fiscal years ended December 31, 2024, 2023 and 2022, we performed a qualitative assessment for our reporting units and concluded that the qualitative assessment did not result in a more likely than not indication of impairment, and therefore no further impairment testing was required. Accordingly, no impairment charge was recognized during any of such fiscal years.
Income Taxes. To prepare our consolidated financial statements, we estimate our income taxes in each of the jurisdictions in which we operate, and in certain of these jurisdictions, our income taxes are calculated based on our assumptions as to our entitlement to various benefits under the applicable tax laws in the jurisdiction. The entitlement to such benefits depends upon our compliance with the terms and conditions set out in these laws.
We account for income taxes in accordance with ASC 740, “Income Taxes.” This topic prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We provide a valuation allowance, if necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. Deferred tax assets and deferred tax liabilities are presented under long-term assets and long-term liabilities, respectively.
We implement a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% (cumulative basis) likely to be realized upon ultimate settlement.

Business Combination. We apply the provisions of ASC 805, “Business Combination,” and we allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets.
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Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from customer relationships, acquired technology and acquired trademarks from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.
Contingent consideration incurred in a business combination is included as part of the acquisition price and recorded at fair value as of the acquisition date. The fair value of the contingent consideration is re-measured at each reporting period, with any adjustments in fair value recognized in earnings under general and administrative expenses.


Stock-based Compensation. We account for stock-based compensation in accordance with ASC 718, “Compensation - Stock Compensation” (“ASC 718”), which requires the measurement and recognition of stock base compensation expense based on estimated fair values for all share-based payment awards made to employees and directors. ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. We elect to account for forfeitures as they occur.
We recognize compensation expenses for the value of our awards, which have graded vesting, based on the accelerated attribution method over the requisite service period of each of the awards.
We estimate the fair value of stock options granted using the Black-Scholes-Merton option-pricing model, which requires a number of assumptions: the expected volatility is based upon actual historical stock price movements; the expected term of options granted is based upon historical experience and represents the period of time that options granted are expected to be outstanding; the risk-free interest rate is based on the yield from U.S. Federal Reserve zero-coupon bonds with an equivalent term; and the expected dividend rate (an annualized dividend yield) is based on the per share dividend declared by our Board of Directors.
We measure the fair value of restricted stock based on the market value of the underlying shares at the date of grant.
Marketable Securities. We account for investments in debt securities in accordance with ASC 320, “Investments - Debt Securities” and ASC No. 326, “Financial Instruments - Credit Losses”. Management determines the appropriate classification of our investments in debt securities at the time of purchase and re-evaluates such determinations at each balance sheet date.
Marketable securities classified as “available-for-sale” (“AFS”) are carried at fair value. Unrealized gains and losses are reported in a separate component of shareholders’ equity in accumulated other comprehensive income, net of taxes. Gains and losses are recognized when realized, on a specific identification basis, in our consolidated statements of income.

For each reporting period, we evaluate whether declines in fair value below the amortized cost are due to expected credit losses, as well as our ability and intent to hold the investment until a forecasted recovery occurs, in accordance with ASC 326. Allowance for credit losses on AFS debt securities are recognized as a charge in financial expenses (income) and other, net, on the consolidated statements of income, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss). As of December 31, 2024, no credit losses have been recorded.

We classified all our securities with maturities beyond 12 months as current assets under the caption short term investments on the consolidated balance sheet. These securities are available to support current operations and we may sell these debt securities prior to their stated maturities.
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Exchangeable Senior Notes. We apply ASC 470, "Debt" and ASC 815 "Derivatives and Hedging" to our senior notes and to all features related to the senior notes. When features meet the definition of a derivative, are not clearly and closely related to the characteristics of the debt host, and do not qualify for any exceptions within ASC 815, they are required to be accounted for separately from the debt instrument and recorded as derivative instrument liabilities. The fair value assigned to the embedded derivative instruments is marked to market in each reporting period. The proceeds allocated to the debt host are then accounted for using the effective interest method.

Starting January 1, 2022, we adopted ASU 2020-06, which simplifies the guidance on the issuer’s accounting for convertible debt instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature, Following the adoption of ASU 2020-06, we do not separately present in equity an embedded conversion feature in such debt. Instead, we account for a convertible debt instrument solely as debt unless the debt contains embedded derivatives required to be bifurcated or the debt is issued at a substantial premium.




In December 2021, we made an irrevocable election to settle the principal amount of the 2020 Notes (as defined in Item 10, "Additional Information - Material Contracts - Notes and Indenture") in cash. Accordingly, upon conversion, the principal amount shall be paid in cash. Any amount in excess of the principal amount may be paid, or delivered, as the case may be, in cash, shares of common stock or a combination of cash and shares of the Company stock, at the Company's discretion. Prior to this irrevocable election, upon conversion, we, could have elected to deliver to holders cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock to settle the principal amount.




Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topics 740): Improvements to Income Tax Disclosures", which expands the disclosure requirements for income taxes, primarily related to the rate reconciliation and income taxes paid. This guidance is effective for the fiscal years beginning after December 15, 2024. Early adoption is permitted. The adoption of ASU 2023-09 is not expected to have a significant impact our consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses, which requires disaggregated disclosure in the notes to the financial statements, of prescribed categories of expenses within relevant income statement captions. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the effect of adopting the ASU on our disclosures.







                                    
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Results of Operations
The following table sets forth our selected consolidated statements of income for the years ended December 31, 2024 and 2023, expressed as a percentage of total revenues (totals may not add up due to rounding).
20242023
Revenue:
Cloud72.5 %66.5 %
Services21.8 %27.0 %
Product5.7 %6.5 %
100.0 %100.0 %
Cost of revenue:
Cloud25.6 %23.3 %
Services6.7 %7.9 %
Product0.9 %1.1 %
33.2 %32.3 %
Gross profit66.8 %67.7 %
Operating expenses:
Research and development, net13.2 %13.6 %
Selling and marketing23.5 %25.2 %
General and administrative10.1 %10.6 %
Total operating expenses46.8 %49.4 %
Operating income20.0 %18.3 %
Financial income and other, net
2.2 %0.9 %
Income before taxes22.2 %19.2 %
Taxes on income5.9 %5.0 %
Net income16.3 %14.2 %
Comparison of Years Ended December 31, 2024 and 2023
For a comparison of our results for the years ended 2023 and 2022, please refer to Item 5 in our annual report on Form 20-F for the year ended 2023, filed with the SEC on March 27, 2024.
Our revenues increased by approximately 
Years Ended December 31,Percentage
(In millions)Change
202420232023-2024
Cloud revenue$1,984.2 $1,581.8 25.4 %
Service revenue596.0 641.4 (7.1)%
Product revenue155.1 154.3 0.5 %
Total revenue$2,735.3 $2,377.5 15.0 %

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Our revenues increased by approximately $357.8 million, or 15%, from $2,377.5 million in the year ended December 31, 2023 to $2,735.3 million in the year ended December 31, 2024. The increase consisted of a $307.7 million increase in Customer Engagement revenue and $50.1 million increase in Financial Crime and Compliance revenue.
The revenue growth of our Customer Engagement business segment in 2024 is primarily attributed to the continued increase in demand for our cloud platform CXone Mpower from new customers and ongoing expansion within our installed customer base, driven by further penetration into both large enterprises and the mid-market.

The revenue increase in our Financial Crime and Compliance business segment in 2024 is primarily attributed to an increase in cloud revenue due to increased adoption of our cloud platforms X-Sight and Xceed, as well as an increase in revenues from our premise-based business.

Our cloud revenue in 2024 increased by 25.4%, or $402.4 million, to $1,984.2 million compared to $1,581.8 million in 2023, mainly due to an increase in the Customer Engagement segment from growing demand for our CXone Mpower cloud platform, including ongoing penetration in the mid-market with further adoption at the high end of the market and increasing international cloud adoption, resulting from both new customers and expansion from existing customers. In addition, the increase in overall cloud revenue is partially attributed to the growing adoption of our cloud solutions in the Financial Crime and Compliance segment. Revenue derived from our cloud platforms accounted for 72.5% of our total revenue in 2024, as part of our strategy of increasing cloud revenue as a percentage of our total revenue.

Our service revenue in 2024 decreased by 7.1%, or $45.4 million, to $596.0 million compared to $641.4 million in 2023, mainly due to a decrease in maintenance revenue, as a growing number of our existing on-premises customers transitioned to our cloud-based solutions.

Our product revenue in 2024 increased by 0.5%, or $0.8 million, to $155.1 million compared to $154.3 million in 2023, as demand increased for on-premises products in 2024 compared to 2023, in the Financial Crime and Compliance business segment.

Revenue by Region
Years Ended December 31,Percentage
(In millions)Change
202420232023-2024
United States, Canada and Central and South America (“Americas”)$2,321.5 $1,986.6 16.9 %
Europe, the Middle East and Africa (“EMEA”)278.1 248.0 12.1 %
Asia-Pacific (“APAC”)135.7 142.9 (5.0)%
Total revenues$2,735.3 $2,377.5 15.0 %

Revenue in Americas increased in 2024 by 16.9%, or $334.9 million, to $2,321.5 million compared to $1,986.6 million in 2023, mainly due to an increase in cloud revenue for our cloud platforms, primarily from CXone Mpower.

Revenue in EMEA increased in 2024 by 12.1%, or $30.1 million, to $278.1 million compared to $248.0 million in 2023, primarily attributed to the increase in cloud revenue for our cloud platforms in both of our business segments..

Revenue in APAC decreased in 2024 by 5.0%, or $7.2 million, to $135.7 million compared to $142.9 million in 2023. The decrease in revenue in 2024 is primarily attributed to the decrease in service and product revenue in Customer Engagement and in the Financial Crime and Compliance segments. The decrease was partially offset by an increase in cloud revenue from CXone Mpower and the Customer Engagement segments.
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Cost of Revenue
Years Ended December 31,Percentage
(In millions)Change
202420232023-2024
Cost of cloud revenue$699.7 $553.7 26.4 %
Cost of service revenue184.4 188.9 (2.4)%
Cost of product revenue25.4 25.6 (0.8)%
Total cost of revenue$909.5 $768.2 18.4 %
Our cost of cloud revenue in 2024 increased by $146.0 million, or 26.4% compared to 2023, and remained stable as a percentage of cloud revenue. The increase in the cost of cloud revenue is primarily due to an increase in our public cloud costs associated with an increase in our cloud sales.

Our cost of service revenue in 2024 decreased by $4.5 million, or 2.4%, compared to 2023 and slightly increased as a percentage of service revenue compared to 2023.
Our cost of product revenue in 2024 decreased by $0.2 million, or 0.8%, compared to 2023 and decreased as a percentage of product revenue compared to 2023, mainly due to decreased scale in our product business in 2024.

Gross Profit
Years Ended December 31,Percentage
(In millions)Change
202420232023-2024
Gross profit on cloud revenue$1,284.4 $1,028.2 24.9 %
as a percentage of cloud revenue64.7 %65.0 %
Gross profit on service revenue411.6 452.5 (9.0)%
as a percentage of service revenue69.1 %70.5 %
Gross profit on product revenue129.7 128.6 0.9 %
as a percentage of product revenue83.6 %83.3 %
Total gross profit$1,825.7 $1,609.3 13.4 %
as a percentage of total revenue66.7 %67.7 %

Our cloud gross profit was $1,284.4 in 2024 compared to $1,028.2 in 2023, representing an increase of $256.2 million, or 24.9%. Our cloud gross profit as a percentage of cloud revenue decreased to 64.7% in 2024 compared to 65.0% in 2023. The increase in cloud gross profit is mainly attributed to an increase in our cloud business.The decrease in the cloud margin is mainly attributed to additional costs to scale our cloud business as we continue to invest in our international expansion.

Our services gross profit was $411.6 in 2024 compared to $452.5 in 2023, representing a decrease of $40.9 million, or 9.0%, which is mainly attributed to a decrease in maintenance and professional services revenue, as a growing number of our existing on-premises customers migrate to our cloud-based solutions. As a percentage of service revenue, our services gross profit was 69.1% in 2024 compared to 70.5% in 2023.

Our product gross profit was $129.7 in 2024 compared to $128.6 in 2023, representing an increase of $1.1 million, or 0.9%, which is attributed to an increase from the Financial Crime and Compliance segment . Our product gross margin increased to 83.6% in 2024 compared to 83.3% in 2023.
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Operating Expenses
Years Ended December 31,Percentage
(In millions)Change
202420232023-2024
Research and development, net$360.6 $322.7 11.7 %
Selling and marketing642.3 599.1 7.2 %
General and administrative276.9 252.3 9.8 %
Total operating expenses$1,279.7 $1,174.1 9.0 %
Research and Development, Net. Net research and development expenses increased by $37.9 million to $360.6 million in 2024 compared to $322.7 million in 2023, and represented 13.2% and 13.6% of revenues in 2024 and 2023, respectively. The increase in research and development expenses is attributed mainly to an increase in headcount to further drive innovation in our AI-based solutions and expand our cloud platforms and capabilities.

Selling and Marketing Expenses. Selling and marketing expenses increased by $43.1 million to $642.3 million in 2024 compared to $599.1 million in 2023, which represented 23.5% and 25.2% of total revenues in 2024 and 2023, respectively. The increase in selling and marketing expenses is attributed primarily to an increase in headcount, stock-based compensation costs and intangible assets amortization.

General and Administrative Expenses. General and administrative expenses in 2024 were $276.9 million compared to $252.3 million in 2023, which represented 10.1% of total revenues in 2024, as compared to 10.6% of total revenues in 2023. The increase in general and administrative expenses is attributed primarily to an increase in salaries and related costs and reduced gains arising from remeasurement of contingent consideration liability.

Financial Expenses and Other, net
Years Ended December 31,Percentage
(In millions)Change
202420232023-2024
Financial income and other, net
58.9 22.5 161.8 %

Financial Expense income and Other, net. Financial income and other, net, increased by $36.4 million to income of $58.9 million in 2024 compared to $22.5 million in 2023. The increase in financial income and other, net is attributable primarily to an increase in interest income earned from our cash and investment portfolio and higher amortization premiums on investment bonds.

Taxes on Income. Total tax expenses were $162.2 million in 2024 and $119.4 million in 2023. Our effective tax rate was 26.8% in 2024 and 26.1% in 2023. The increase in 2024 of $42.8 million in tax expenses is mainly due to our increased profitability.
The majority of our income in Israel continues to benefit from reduced tax rates, pursuant to our Special Preferred Technological Enterprise and Preferred Technology Enterprise programs, as discussed in Note 13 of our Consolidated Financial Statements included elsewhere in this annual report under the caption “Taxes on Income”.

Net Income. Net income increased by $104.3 million to $442.6 million in 2024 compared to $338.3 million in 2023. The increase in 2024 resulted primarily from an increase in our revenue, gross profit, operating income and financial income, partially offset by higher cost of revenue and operating expenses.
Liquidity and Capital Resources
To date, we have financed our operations, acquisitions and the repurchase of our equity, primarily through cash generated from our operating activities as well as through debt financing in the form of Exchangeable Notes.
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As of December 31, 2024, we had $1,621.7 million of cash equivalents and in short-term investments, which included $481.7 million in cash and cash equivalents, and $1,140.0 million in short-term investments. We believe our existing cash and cash equivalents will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months.
We plan to continue to finance our operations in the future primarily through sales of our solutions, most notably our cloud platforms. Our future capital requirements will depend on many factors, including our growth rate, continuing market acceptance of our solutions, client retention, our ability to gain new clients, the timing and extent of spending to support research and development efforts, the expansion of sales and marketing activities and personnel, the introduction of new and enhanced offerings, and the impact of changes to the global economy, among other factors. We may also acquire or invest in complementary businesses, technologies and intellectual property rights, which may increase our use of cash and future capital requirements, both to pay acquisition costs and to support our combined operations.
We continually evaluate our capital needs and may decide to raise additional capital to fund the growth of our business and future acquisitions and investments, through public or private equity offerings or through additional debt financing. Access to additional capital may not be available or on favorable terms.
Cash Flows
Generally, we invest our excess cash in highly liquid investment grade securities. As of December 31, 2024, we had $1,621.7 million of cash and cash equivalents and short-term investments, as compared to $1,407.8 million at December 31, 2023.
Cash provided by operating activities was $832.6 million and $561.4 million in 2024 and 2023, respectively. Net cash from operations in 2024 consisted primarily of net income of $442.6 million, adjusted for non-cash activities such as depreciation and amortization of $205.0 million, stock-based compensation of $182.1 million, an increase in deferred taxes of $40.3 million as well as working capital changes derived from an increase in trade payables of $44.0 million, an increase in accrued expenses and other liabilities of $42.0 million and a decrease in prepaid expenses and other current assets of $25.0 million, partially offset by an increase in trade receivables of $61.0 million. Net cash from operations in 2023 consisted primarily of net income of $338.3 million, adjusted for non-cash activities such as depreciation and amortization of $167.4 million, stock-based compensation of $176.7 million, an increase in deferred taxes of $66.6 million as well as working capital changes derived from a decrease in deferred revenues of $45.9 million, a decrease in accrued expenses and other liabilities of $55.7 million, partially offset by an increase in trade receivables of $34.3 million.
Net cash used in investing activities was $397.4 million and $293.6 million in 2024 and 2023, respectively. In 2024, net cash used in investing activities consisted primarily of net investments in marketable securities and short-term bank deposits of $232.8 million, payment for acquisitions in the aggregate amount of $64.8 million, purchase of property and equipment of $35.0 million and capitalization of internal use software costs of $64.8 million. In 2023, net cash used in investing activities consisted primarily of payment for an acquisition in the amount of $415.2 million, purchase of property and equipment of $29.2 million and capitalization of internal use software costs of $55.0 million, partially offset by net proceeds from investment in marketable securities and short-term bank deposits of $205.8 million.
Net cash used in financing activities was $456.6 million and $290.3 million in 2024 and 2023, respectively.
In 2024, net cash used in financing activities was attributed primarily to repurchase of our ordinary shares of $369.2 million and repayment of long-term debt in the amount of $192.1 million. In 2023, net cash used in financing activities was attributed primarily to repurchase of our ordinary shares of $288.4 million and repayment of long-term debt in the amount of $2.6 million, which were partially offset by proceeds from the issuance of shares upon the exercise of options of $2.6 million.

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Contractual and Other Obligations
Set forth below are our material contractual obligations and other commercial commitments as of December 31, 2024 (in thousands).
Payments Due by Period
Contractual ObligationsTotalLess than 1 year1- 3 years3-5 yearsMore than 5 years
Debt Obligations, including estimated interest *$460,000 $460,000 
Operating Leases130,03516,52332,24126,94954,322
Unconditional Purchase Obligations$458,239 $155,580 $223,083 $79,576 $— 
Severance Pay**$20,291 
Total Contractual Cash Obligations$1,068,565 $632,103 $255,324 $106,525 $54,322 
Uncertain Income Tax Positions ***$92,851 
*    Debt obligations include senior exchangeable notes. The principal balances of the exchangeable senior notes are reflected in the payment periods in the table above based on their respective contractual maturities assuming no conversion. See Note 15 to our consolidated financial statements included elsewhere in this annual report for further details.
**    Severance pay relates to accrued obligations to employees as required under applicable labor laws. These obligations are payable only upon termination, retirement or death of the respective employees.
***    Uncertain income tax positions under ASC 740 are due upon settlement and we are unable to reasonably estimate the ultimate amount or timing of settlement. See Note 13(i) of our consolidated financial statements included elsewhere in this annual report for further information regarding our liability under ASC 740.
Amount of Commitment Expiration Per Period
Other Commercial CommitmentsTotal Amounts CommittedLess than 1 year1- 3 years3- 5 yearsMore than 5 years
Guarantees*$2,324 $84 $2,240 
* Primarily in connection with office lease agreements.

Research and Development and Intellectual Property
For information on our research and development policies and intellectual property, please see “Research and Development” and “Intellectual Property” under Item 4, “Information on the Company” in this annual report.
Trend Information
For additional information on trends in our industry, please see Item 4, “Information on the Company—Business Overview—Industry and Technology Trends” in this annual report.
For additional information on trends, uncertainties, demands, commitments or events that may have a material effect on revenue, please see Item 3, “Key Information—Risk Factors” in this annual report.
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Item 6.    Directors, Senior Management and Employees.

Item 6A.    Directors and Senior Management.
The following tables set forth, as of March 16, 2025, the name, age and position of each of our directors and executive officers and, in regard to our directors, any of the committees of our board of directors on which they serve and whether any such director is an outside director:
Members of the Board of Directors
NameAgePositionAudit Committee MemberCompensation Committee MemberInternal Audit Committee MemberMergers and Acquisitions Committee MemberNominations Committee MemberOutside Director*
David Kostman60Chairman of the Board of DirectorsXX
Rimon Ben-Shaoul80DirectorXX
Dan Falk80DirectorXXXXXX
Yocheved Dvir72DirectorXXXX
Yehoshua Ehrlich75DirectorXX
Leo Apotheker71DirectorXX
Joe Cowan76DirectorXX
Zehava Simon66DirectorXXXX
*See Item 6C., “Directors, Senior Management and Employees—Board Practices— Outside Directors.”
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Members of Management

Name
AgePosition
Scott Russell
51Chief Executive Officer
Beth Gaspich59Chief Financial Officer
Barry Cooper54
President, CX
Craig Costigan64Chief Executive Officer, NICE Actimize
Dan Belanger
60President, CE Americas
Darren Rushworth57President, CE International
Awan Roy54Vice President, Head of NICE India
Shiri Neder49Executive Vice President, Human Resources
Gil Vassoly51Vice President, Corporate Finance


David Kostman has served as one of our directors since 2001 (with the exception of the period between June 2007 and July 2008), and as our Chairman of the Board since February 2013. Mr. Kostman is currently CEO and board member of publicly traded Outbrain, Inc. and serves on the board of directors of publicly traded Unity Inc. and privately held Tivit S.A. Mr. Kostman is also a former board member of publicly traded Retalix Ltd. (acquired by NCR). From 2006 until 2008, Mr. Kostman was a Managing Director in the investment banking division of Lehman Brothers, heading the Global Internet Group. From April 2003 until July 2006, Mr. Kostman was Chief Operating Officer and then Chief Executive Officer of Delta Galil USA, a subsidiary of publicly traded Delta Galil Industries Ltd. From 2000 until 2002, Mr. Kostman was President of the International Division and Chief Operating Officer of publicly traded VerticalNet Inc. Prior to that Mr. Kostman worked in the investment banking divisions of Lehman Brothers from 1994 to 2000, focusing on the technology and Internet sectors, and NM Rothschild & Sons from 1992 to 1993, focusing on mergers and acquisitions and privatizations. Mr. Kostman holds a Bachelor’s degree in Law from Tel Aviv University and a Master’s degree in Business Administration from INSEAD.

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Rimon Ben-Shaoul has served as one of our directors since September 2001. Between 2001 and 2005, Mr. Ben-Shaoul has served as Co-Chairman, President, and Chief Executive Officer of Koonras Technologies Ltd., a technology investment company controlled by LEADER Ltd., an Israeli holding company. Since 2002 Mr. Ben-Shaoul serves as Chairman of Grand AutoMotive LLP, a private company. Mr. Ben-Shaoul also served as a director of MIND C.T.I. Ltd., BVR Systems Ltd. and several private companies. In addition, he served as the President and Chief Executive Officer of Polar Communications Ltd., which manages media and communications investments. Mr. Ben-Shaoul also served as the Chairman of T.A.T Technologies Ltd., a public company listed on NASDAQ and TASE. Between 1997 and 2001, Mr. Ben-Shaoul was the President and Chief Executive Officer of Clal Industries and Investments Ltd., one of the largest holding companies in Israel with substantial holdings in the high-tech industry. During that time, Mr. Ben-Shaoul also served as Chairman of the Board of Directors of Clal Electronics Industries Ltd., Scitex Corporation Ltd., and various other companies within the Clal Group. Mr. Ben-Shaoul also served as a director of ECI Telecom Ltd., Fundtech Ltd., Creo Products, Inc. and Nova Measuring Instruments Ltd. From 1985 to 1997, Mr. Ben-Shaoul was President and Chief Executive Officer of Clal Insurance Company Ltd. and a director of the company and its various subsidiaries. Mr. Ben-Shaoul holds a Bachelor’s degree in Economics and Statistics and a Master’s degree in Business Administration, both from Tel-Aviv University.
Dan Falk has served as one of our outside directors since 2001. Mr. Falk is currently a board member and the Chair of the audit committee of each of Innoviz Technologies Ltd. and Evogene Ltd. Mr. Falk also served on the board of directors of each of Attunity Ltd. and Orbotech Ltd. and until recently also served on the board of directors of Ormat Technologies Inc. From 1999 to 2000, Mr. Falk was President and Chief Operating Officer of Sapiens International Corporation N.V. From 1985 to 1999, Mr. Falk served in various positions in Orbotech Ltd., the last of which was Chief Financial Officer and Executive Vice President. From 1973 to 1985, he served in several executive positions in the Israel Discount Bank. Mr. Falk holds a Bachelor’s degree in Economics and Political Science and a Master’s degree in Business Administration, both from the Hebrew University of Jerusalem.

Yocheved Dvir has served as one of our outside directors since January 2008. Since 2000, Ms. Dvir has served as a strategic advisor in business development affairs to multiple companies and initiatives. Ms. Dvir also serves on the board of directors of Harel Insurance. She previously served on the board of directors of Menorah Insurance Company, Xenia Venture Capital, Endey Med, Alrov Real Estate, Visa Cal, Trendline Business Information & Communications Ltd., Israel Corporation Ltd., ECI Telecom Ltd., Strauss Industries Ltd., Phoenix Holding and Phoenix Insurance Co. Between 1990 and 2000, Ms. Dvir served as a Senior Vice President of the Migdal Group. Ms. Dvir joined the Migdal Group in 1981 and, until late 2000, held a number of senior financial and managerial positions, including Head of the Group’s Economics Department (1986-1988), Head of the Group’s Corporate Office from 1989 to 1992, Head of the Group’s General Insurance Division and Corporate Office from 1993 to 1997, Group CFO from 1997 to 1999, and Head of the Group’s Strategic Development Division and Marketing Array and Risk Manager in 2000. Ms. Dvir holds a Bachelor’s degree in Economics and Statistics from the University of Haifa and completed studies towards a second degree in Statistics from the Hebrew University of Jerusalem.
Yehoshua (Shuki) Ehrlich has served as one of our directors since September 2012. Mr. Ehrlich is an active social investor, serving as Chairman of “Committed to Give”, a group formed by Israeli social investors for promoting philanthropy in Israel and several other social organizations. Mr. Ehrlich also serves as a board member of the American Joint Distribution Committee and a board member of AfterDox, an angels’ investment group. Between the years 2000 and 2010, Mr. Ehrlich served as Managing Director at Giza Venture Capital, where he focused on the communications, enterprise software and information technology sectors. Additionally, Mr. Ehrlich had a fifteen-year career with Amdocs, a public software company specializing in billing, CRM, order management systems for telecommunications and Internet service providers. In his last role at Amdocs, Mr. Ehrlich served as Senior Vice President of Business Development. Mr. Ehrlich holds a Bachelor of Science in Mathematics and Computer Science from Tel Aviv University.
Leo Apotheker has served as one of our directors since August 2013. Mr. Apotheker is currently chairman of the board of privately held Syncron AB, Harvest, Eudonet and MercuryGate, and a member of the board of Schneider SE, a public company traded on the Euronext Exchange. Mr. Apotheker was the Co-Chief Executive Officer of Burgundy Technology Acquisition Corp until recently and the Managing Partner and co-founder of Efficiency Capital SAS, a growth capital advisory firm from 2012-2014. From 2010 to 2011, Mr. Apotheker served as Chief Executive Officer of Hewlett Packard. From 2008 to 2010, he served as Chief Executive Officer of SAP AG. Mr. Apotheker also previously served as the chairman of the board of Unit4, a leading Dutch software company and a member of the board of Taulia Inc. Mr. Apotheker holds a Bachelor’s degree in Economics and International Relations from the Hebrew University of Jerusalem.

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Joe Cowan has served as one of our directors since August 2013. Mr. Cowan is currently a director of Auburn University Foundation, StartProto and MachineMetrics, private entities. Until recently, Mr. Cowan served as a director of Drishti Technologies Inc, ChannelAdvisor Inc and SAI Global. From 2013 until 2017, Mr. Cowan was the CEO and director of Epicor. During 2013, Mr. Cowan also served as President of DataDirect Networks, Inc. He also served as a director of DataDirect Networks, Inc. between 2011 and 2013. From 2010 until 2013, Mr. Cowan served as the Chief Executive Officer and President of Online Resources Corp. During 2009, he served as an Operating Executive and Consultant at Vector Capital. From 2007 to 2009, Mr. Cowan served as the Chief Executive Officer of Interwoven Inc. From 2004 to 2006, Mr. Cowan served as the President and Chief Executive Officer of Manugistics Inc. and Manugistics Group Inc. Prior to that, Mr. Cowan served in various senior executive positions, including as the Chief Operating Officer of Baan Co. NV and Avantis GOB NV. Mr. Cowan has also served on the board of directors of Blackboard Inc., as well as several private companies. Mr. Cowan holds an M.S. degree in Electrical Engineering from Arizona State University and holds a B.S. degree in Electrical Engineering from Auburn University.

Zehava Simon has served as one of our outside directors since July 2015. Ms. Simon served as a Vice President of BMC Software Inc. from 2000 until 2013, most recently as Vice President of Corporate Development. From 2002 to 2011, Ms. Simon also served as Vice President and General Manager of BMC Software in Israel. Prior to that, Ms. Simon held various positions at Intel Israel, which she joined in 1982, including acting as leader of Finance and Operations and Business Development for Intel in Israel. Ms. Simon is currently a board member of Audiocodes Ltd. and Nova Measurements, both public companies traded on NASDAQ and TASE. Ms. Simon is a former member of the board of directors of Insightec Ltd., M-Systems Ltd. (acquired by SanDisk Corp.), Tower Semiconductor Ltd. and Amiad Water Systems, a public company traded on the London Stock Exchange. Ms. Simon holds a B.A. in Social Sciences from the Hebrew University, Jerusalem, a law degree (LL.B.) from the Interdisciplinary Center in Herzliya and an M.A. in Business and Management from Boston University.
Scott Russell has served as our Chief Executive Officer since January 1, 2025. Prior to joining NICE, for the last 14 years, Mr. Russell was at SAP, most recently as a member of the Executive Board of the Company and Global Chief Revenue Officer. During this period, Mr. Russell also served as Chairman of SAP North America and Chairman of Taulia, an SAP acquired business. Prior to that, he served as President Asia Pacific Japan. In addition, Mr. Russell previously served on the Board of Directors of Qualtrics. Mr. Russell holds a Bachelor of Computer and Information Science from the Federation University Australia and a post graduate degree in business from Deakin University at Geelong Campus, Australia.
Beth Gaspich has served as our Chief Financial Officer since October 2016. Ms. Gaspich joined NICE as CFO of the Financial Crime and Compliance division NICE Actimize in September 2011, where she was responsible for finance, legal and business operations. Prior to joining NICE, she was Chief Financial Officer for Archive Systems, Inc., a privately held document management software provider. She also served as Vice President of Finance at RiskMetrics Group, Inc., a cloud-based risk management software company. Ms. Gaspich was one of the founding members of RiskMetrics Group and assisted in taking the company through a successful public offering on the NYSE in January 2008. Prior to that, Ms. Gaspich held several other senior positions throughout her career at large global financial institutions, including JP Morgan and Price Waterhouse. Ms. Gaspich holds a B.A. in Accounting from the University of Missouri.
Barry Cooper has been with NICE since March 2011 and serves as our President, CX since October 2022. Previously he served as our President, WCX - Workforce Engagement & Customer Experience from January 2019, and from May 2016 until December 2018, he served as Chief Operating Officer (COO). Prior to serving as COO, Mr. Cooper served as Vice President, Business Operations for NICE APAC from March 2011 until June 2013, and as of July 2013 and until assuming the role of COO, he served as Executive Vice President, Professional Services and Cloud. Prior to joining NICE, Mr. Cooper was a Management Consultant at Accenture; the Head of Customer Service, IT and Billing at Time Telekom, Malaysia; and Vice President of Professional Services, APAC for CSG Systems, later Comverse. Mr. Cooper holds a First Class Bachelor of Computer Science and Mathematics with Honors from Salford University in the United Kingdom.
Craig Costigan has served as NICE Actimize CEO since November 2018. From 2016 to 2018, he served as President of Capital Markets & Credit at Fidelity National Information Services Inc. (FIS), where he managed a team of approximately 4,000 staff worldwide, overseeing risk, compliance, credit, security finance, securities processing and market data solutions and services for over 2,000 banks, broker dealers, investment firms, hedge funds, insurance companies and clients in the financial market. Prior to that, Mr. Costigan served as President of the Risk, Compliance and Global Securities Business at SunGard. Mr. Costigan holds a BS in Economics from Northeastern University.
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Dan Belanger has served as our President, NICE Americas since July 1, 2024. Prior to his current position, Mr. Belanger served as Sales Director and General Manager for Telecom, Media & Entertainment, Sports and Games industry accounts at Amazon Web Services (AWS) for North America (Amazon Global Sales). Prior to joining AWS in 2020, Mr. Belanger served as Senior Vice President and Managing Director for Hewlett Packard Enterprise, North America leading sales, pre-sales engineering, services, operations and field channel teams. Mr. Belanger graduated Cum Laude from Assumption College, Worcester Massachusetts.
Darren Rushworth has been with NICE since 2017 and serves as our President, CE International since April 2022. Previously he served as President of NICE APAC. Mr. Rushworth’s career spans over 30 years in the IT industry of which the past 21 years have been in the Asia Pacific Region. Prior to joining NICE, Mr. Rushworth held the role of Managing Director of Singapore for SAP Asia Pacific and he also led SAP’s Philippine and Emerging Market operations. Prior to that, Mr. Rushworth held multiple leadership roles at Oracle including VP Applications Sales APAC, VP Channels and VP Oracle Direct APAC.
Awan Roy has served as our Vice President, Head of NICE India GTC since March 2021. From 2007 to 2020 Mr. Roy served as Sr Director, R&D and India Site Head at Varian Medical Systems where he established the India center, growing it into a global Center of Excellence for Infrastructure and Informatics software. Prior to that, Mr. Roy served as Sr Manager at Siemens Healthineers where he led the development of several medical software products and platforms. Mr. Roy holds a Bachelor's degree in Computer Science from the University of Delhi and a Masters' degree in Computer Science from Devi Ahilya Vishwavidyalaya.
Shiri Neder has served as our Executive Vice President, Human Resource since February 2018. Prior to joining NICE, Ms. Neder was the Corporate Vice President, Head of Human Resources at Nova Measuring Instruments. Prior to that, Ms. Neder worked at Amdocs as Vice President, Human Resources for the Product and Delivery organizations and served as head of Amdocs’ Talent Development organization. In addition, Ms. Neder has held positions at Microsoft where she established the Human Resources function for the Telecom division as well as served as Regional Senior Human Resources Manager for the EMEA region. Ms. Neder holds a B.A. in Social Science and an M.A. in Law from Bar Ilan University.
Gil Vassoly has served as our Vice President, Corporate Finance since August 2022. Between 2019 and August 2022, Mr. Vassoly served as Vice President Finance and Operations for KLA Ltd., where he led the Electronics, Packaging and Components Finance Organization and the Orbotech integration, and in early 2019 he served as Chief Financial Officer for StoreONE. Prior to that, between 2015 and 2019, Mr. Vassoly served as Executive Vice President, Chief Operating Officer and Chief Financial Officer for Gibbs International Inc., where he led the finance and operations activity. In addition, Mr. Vassoly held positions at The Gores Group and PwC in Israel, as an Audit Manager. Mr. Vassoly is a Certified Public Accountant (CPA) and holds a BA in Accounting from the College of Management.
We are not party to, and are not aware of, any arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any director or executive officer was selected as a director or member of senior management, as the case may be. In addition, there are no family relationships between any of the directors or executive officers named above.

Item 6B.    Compensation.
(a) Aggregate Executive Compensation
The aggregate compensation paid to our directors and executive officers as a group of 19 person for 2024 (including compensation accrued for such year) consisted of approximately $11.1 million in salary, fees, bonus, commissions and directors’ fees and approximately $1.4 million in amounts set aside or accrued to provide pension, garden leave, severance, retirement or similar benefits or expenses, but excluding amounts expended for business travel, relocation, professional and business association dues and expenses reimbursed to our directors and executive officers.

Our compensation policy for our executive management team, as approved by our shareholders, following the recommendation of our compensation committee and approval by our Board of Directors (as amended, the “Compensation Policy”), is required to be reviewed and approved by our compensation committee, Board of Directors and shareholders once every three years, in line with requirement of the Israeli Companies Law, 5759-1999 (the "Israeli Companies Law"). Any bonus payment made under the Compensation Policy is approved by the Board of Directors in accordance with the Israeli Companies Law.
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We have a performance-based bonus plan for our executive management team. The plan is based on our overall performance, the particular unit performance and individual performance. The measurements can change from year to year, based on a combination of financial parameters, including revenues, booking and operating income as well as other non-financial parameters, such as customer satisfaction and others. The plan is reviewed and approved by our compensation committee and Board of Directors annually, as is any bonus payment under the plan.

During 2024, our officers and directors received, in the aggregate, (i) options to purchase 92,301 ordinary shares, which include 65,566 options with an exercise price equal to the par value of the ordinary shares (the “par value options”), and (ii) 178,622 restricted share units, under our equity-based compensation plans. The options (other than the par value options) have a weighted average price of $168.46 and all options will expire six years after the date of grant. The restricted shares units are granted at par value of the ordinary shares.
Pursuant to the requirements of the Israeli Companies Law, remuneration of our directors requires shareholder approval. Compensation and reimbursement for outside directors (as described below) is statutorily determined pursuant to the Israeli Companies Law. Effective as of July 1, 2015, our shareholders approved the payment to each of our non-executive directors, including outside directors, of an annual fee of $40,000 and a meeting attendance fee of $1,500 for each Board meeting attended (whether in person or through media), and $1,000 for each Board committee meeting attended (whether in person or through media) (in each case paid in U.S. dollars or in NIS based on the exchange rate on July 1, 2015), subject to additional value added tax, as applicable. Furthermore, effective as of 2015, each non-executive director is entitled to an annual equity-based award, as previously approved by our shareholders and pursuant to the terms of the Compensation Policy.

In addition, our shareholders approved a special annual cash fee for the Chairman of the Board in the amount of NIS 450,000 (equivalent to approximately $123,000). The special annual fee is subject to adjustment for changes in the Israeli consumer price index after September 2012. At the Company’s 2024 annual general meeting, following the recommendation of our compensation committee and approval by our Board of Directors, our shareholders approved updates to our Compensation Policy, as further discussed below in Item 10, “Additional Information. – Approval of Office Holder Compensation” in this annual report.
(b) Individual Compensation of Covered Executives
The following describes the compensation of our five most highly compensated executive officers in 2024, based on the total of salary costs, bonus cost and equity costs for equity granted and expensed by the Company in 2024 (“Covered Executives”).
The compensation specified below is broken down into the following components (all amounts specified below are in terms of cost to the Company, as recorded in our financial statements, and U.S. dollar amounts indicated for Salary, Bonus Costs and Equity Costs are in thousands of dollars):

(1)Salary Costs. Salary Costs include gross salary, benefits and perquisites, including those mandated by applicable law which may include, to the extent applicable to each Covered Executive, payments, contributions and/or allocations for pension, garden leave, severance, vacation, travel and accommodation, car or car allowance, medical insurances and risk insurances (e.g., life, disability, accidents), phone, convalescence pay, relocation, payments for social security, and other benefits consistent with the Company’s guidelines.
(2)Bonus Costs. Bonus Costs represent bonuses granted to the Covered Executive with respect to the year ended December 31, 2024, paid in accordance with the Company’s performance-based bonus plan or as detailed below.
(3)Equity Costs. Represents the expense recorded in our financial statements for the year ended December 31, 2024, with respect to equity granted in 2024 and in previous years (if applicable). For assumptions and key variables used in the calculation of such amounts, see Note 14b of our audited consolidated financial statements.
i.Barak Eilam – Former CEO. Salary Costs - $2,268; Bonus Costs - $1,564; Equity Costs - $9,085 expense recorded in 2024 for equity granted in 2024; and $10,653 expense recorded in 2024 for equity granted in previous years. The amounts indicated also include bonus and salary expenses
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accrued in 2024, that are attributable to or payable in 2025 in connection with Mr. Eilam's transition.

ii.Beth Gaspich – CFO. Salary Costs - $560; Bonus Costs - $501; Equity Costs - $2,828 expense recorded in 2024 for equity granted in 2024 and $2,381 expense recorded in 2024 for equity granted in previous years.

iii.Craig Costigan – CEO, NICE Actimize. Salary Costs - $542; Bonus Costs - $600; Equity Costs - $2,351 expense recorded in 2024 for equity granted in 2024 and $2,323 expense recorded in 2024 for equity granted in previous years.
iv.Darren Rushworth– President, CE International. Salary Costs - $921; Bonus Costs $568; Equity Costs - $1,914 expense recorded in 2024 for equity granted in 2024 and $2,522 expense recorded in 2024 for equity granted in previous years.
v.Barry Cooper – President, CX. Salary Costs - $570; Bonus Costs - $532; Equity Costs - $2,015 expense recorded in 2024 for equity granted in 2024 and $5,471 expense recorded in 2024 for equity granted in previous years.

Item 6C.    Board Practices
Corporate Governance Practices
We are incorporated in Israel and therefore are subject to various corporate governance practices under the Israeli Companies Law, relating to such matters as outside directors, the internal audit committee, the internal auditor and approvals of interested party transactions. These matters are in addition to the ongoing listing conditions of the NASDAQ and other relevant provisions of U.S. securities laws. Under applicable NASDAQ rules, a foreign private issuer may generally follow its home country rules of corporate governance in lieu of comparable NASDAQ requirements, except for certain matters such as composition and responsibilities of the audit committee and the independence of its members. For further information, see Item 16G, “Corporate Governance” of this annual report.
General Board Practices
Our articles of association provide that the number of directors serving on the Board shall be not less than three but shall not exceed thirteen. Our directors, other than outside directors, are elected at the annual shareholders meeting to serve until the next annual meeting or until their earlier resignation, death, bankruptcy, incapacity or removal by an extraordinary resolution of the general shareholders meeting. Directors may be re-elected at each annual shareholders’ meeting. The Board may appoint additional directors (whether to fill a vacancy or create new directorships) to serve until the next annual shareholders meeting, provided, however, that the Board shall have no obligation to fill any vacancy unless the number of directors is less than three.
The Board may, subject to the provisions of the Israeli Companies Law, appoint a committee of the Board and delegate to such committee all or any of the powers of the Board, as it deems appropriate. Notwithstanding the foregoing and subject to the provisions of the Israeli Companies law, the Board may, at any time, amend, restate or cancel the delegation of any of its powers to any of its committees. The Board has appointed an internal audit committee under the Israeli Companies Law that has three members, an audit committee that has five members, a compensation committee that has five members, a nominations committee that has two members and a mergers and acquisitions committee that has six members. In addition, from time to time the Board may appoint an ad hoc committee for certain purposes, such as the review, negotiation and recommendation of approval of M&A transactions. We do not have, nor do our subsidiaries have, any service contracts granting to the directors any benefits upon termination of their service as Board members.
Outside Directors
Except as discussed below, under the Israeli Companies Law companies incorporated under the laws of Israel whose shares have been offered to the public in or outside of Israel are required to appoint at least two “outside” directors. Pursuant to regulations under the Israeli Companies Law that took effect in April 2016, a NASDAQ-listed company that does not have
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a controlling shareholder is entitled to opt out of the provisions of the Israeli Companies Law requiring at least two outside directors and certain related requirements, so long as the company complies with the SEC regulations and NASDAQ listing rules regarding independent directors and the composition of the audit and compensation committees. In December 2016, our shareholders approved amendments to our articles of association, pursuant to which our Board of Directors may elect to opt out of such requirements for appointment of outside directors (together the “2016 Relief Amendments”). At this time, our Board of Directors has not made an election to opt out of such requirements.
Outside directors are required to possess professional qualifications as set out in regulations promulgated under the Israeli Companies Law. The Israeli Companies Law provides that a person may not be appointed as an outside director if (i) such person or person’s relative or affiliate has, at the date of appointment, or had at any time during the two years preceding such date, any affiliation with the company, a controlling shareholder thereof or their respective affiliates; or (ii) in a company that does not have a 25% shareholder, such person has an affiliation with any person who, at the time of appointment, is the chairman, the chief executive officer, the chief financial officer or a 5% shareholder of the company. In general, the term “affiliation” includes: an employment relationship; a business or professional relationship maintained on a regular basis; control; and service as an office holder.
No person may serve as an outside director if the person’s position or other activities create or may create a conflict of interest with the person’s responsibilities as an outside director or may otherwise interfere with the person’s ability to serve as an outside director. Until the lapse of two years from termination of office, a company or its controlling shareholder may not give any direct or indirect benefit to the former outside director.
Outside directors are to be elected by a majority vote at a shareholders’ meeting, provided that either:
the majority of shares voted at the meeting shall include at least a majority of the shares of non-controlling shareholders and shares of shareholders who do not have a personal interest (as such term is defined by the Israeli Companies Law) in the approval of such item, present at the meeting and voting on the matter (without taking into account the votes of the abstaining shareholders); or
the total number of shares of non-controlling shareholders voted against the election of the outside directors does not exceed two percent of the aggregate voting rights in the company.
The initial term of an outside director is three years and may be extended for up to two additional three-year terms. Thereafter, he or she may be reelected by our shareholders for additional periods of up to three years each only if the internal audit committee and the Board of Directors confirm that, in light of the outside director’s expertise and special contribution to the work of the Board of Directors and its committees, the reelection for such additional period is beneficial to the company. Reelection of an outside director may be effected through one of the following mechanisms: (1) the Board of Directors proposed the reelection of the nominee and the election was approved by the shareholders in the same manner required to appoint outside directors for their initial term; or (2) one or more shareholders holding one percent or more of a company’s voting rights or the outside director proposed the reelection of the nominee, and the reelection is approved by a majority of the votes cast by the shareholders of the company, excluding the votes of controlling shareholders and those who have a personal interest in the matter as a result of their relations with the controlling shareholders, provided that the aggregate votes cast in favor of the reelection by such non-excluded shareholders constitute more than two percent of the voting rights in the company. An outside director may be removed only in a general meeting, by the same percentage of shareholders as is required for electing an outside director, or by a court, and in both cases only if the outside director ceases to meet the statutory qualifications for appointment or if he or she has violated the duty of loyalty to us. Unless we actually adopt the applicable relief provided under the 2016 Relief Amendments, each committee of the Company’s Board of Directors which is empowered to exercise any of the Board’s powers is required to include at least one outside director, provided that each of the internal audit committee and compensation committee must include all of the outside directors. At this time, our Board of Directors has not made an election to opt out of such requirements.
An outside director is entitled to compensation as provided in regulations adopted under the Israeli Companies Law and is otherwise prohibited from receiving any other compensation, directly or indirectly, from the company. In accordance with such regulations, our shareholders approved that our outside directors are to receive compensation equal to that paid to the other members of the Board of Directors. For further information, please see Item 6, “Directors, Senior Management and Employees—Compensation” in this annual report.
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Financial and Accounting Expertise
Pursuant to the Israeli Companies Law, our Board of Directors has determined that at least one member of our Board of Directors must be an “accounting and financial expert.” The Israeli Companies Law requires that all outside directors must be “professionally qualified.” Under applicable NASDAQ rules, each member of our audit committee must be financially literate and at least one of the members must have experience or background that results in such member’s financial sophistication. Our Board of Directors has determined that each of Dan Falk and Yocheved Dvir is an “accounting and financial expert” for purposes of the Israeli Companies Law and is financially sophisticated for purposes of applicable NASDAQ rules. See also Item 16A, “Audit Committee Financial Expert” in this annual report.
Independent Directors
Under the rules of the NASDAQ, a majority of our directors are required to be “independent” as defined in applicable NASDAQ rules. All of our directors satisfy the respective independence requirements of NASDAQ.
In addition, our Articles of Association provide that, if we do not have a shareholder that holds 25% or more of our issued and outstanding share capital, a majority of the directors must be “independent” as defined in the Israeli Companies Law and the regulations promulgated thereunder. If we have a shareholder that holds 25% or more of our issued and outstanding share capital, then at least one third of the directors must be “independent.” All of our directors satisfy the respective independence requirements of the Israeli Companies Law. The qualifications for independent directors under the Israeli Companies Law are similar to those for outside directors, as described above under “Outside Directors”, including the nine-year term limit and the ability to extend such term beyond nine years upon the approval of our internal audit committee and Board of Directors.
Internal Audit Committee
The Israeli Companies Law requires public companies to appoint an internal audit committee. The role of the internal audit committee under the Israeli Companies Law is to examine flaws in the management of the company’s business in consultation with the internal auditors and the independent accountants, and to propose remedial measures to the Board. The internal audit committee also reviews interested party transactions for approval as required by law, including approval of the remuneration of a director in any capacity, which also requires Board, compensation committee and shareholder approval. The internal audit committee also assesses our internal audit system and the performance of our internal auditor and oversees the implementation and enforcement of our compliance program. Under the Israeli Companies Law, an internal audit committee must consist of at least three directors, including all of the outside directors. The members of the internal audit committee must satisfy certain independence standards under the Israeli Companies Law, and the chairman of the internal audit committee must be an outside director. The following may not serve as members of the internal audit committee: the chairman of the Board of Directors, any director employed by the company or by its controlling shareholder or by an entity controlled by the controlling shareholder, a director who regularly provides services to the company or to its controlling shareholder, any director who derives most of its income from the controlling shareholder and a controlling shareholder or any relative of a controlling shareholder. Pursuant to the 2016 Relief Amendments, the Company may elect to opt out of the composition and attendance rules set with respect to the internal audit committee under the Israeli Companies Law, so long as the Company complies with the SEC regulations and NASDAQ listing rules regarding the composition and attendance rules in that respect. At this time, our Board of Directors has not made an election to opt out of such requirements.
All of the current members of our internal audit committee (presently comprised of Yocheved Dvir (Chair), Dan Falk and Zehava Simon) meet these qualifications.
Internal Auditor
Under the Israeli Companies Law, the Board of Directors must appoint an internal auditor, proposed by the internal audit committee. The role of the internal auditor is to examine, among other matters, whether the company’s activities comply with the law and orderly business procedures. Under the Israeli Companies Law, the internal auditor may be an employee of the company but may not be an interested party or office holder, or a relative of any interested party or office holder and may not be a member of the company’s independent accounting firm or its representative. We have appointed an internal auditor in accordance with the requirements of the Israeli Companies Law.
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Audit Committee
The NASDAQ rules require that the audit committee of a listed company be composed of at least three directors, each of whom is (i) independent; (ii) does not receive any compensation (except for board fees) from the company; (iii) is not an affiliated person of the company or any subsidiary; and (iv) has not participated in the preparation of the company’s (or a current subsidiary’s) financial statements during the past three years. All of the current members of our audit committee (presently comprised of Zehava Simon (Chair), Rimon Ben-Shaoul, Dan Falk, Yocheved Dvir and Joe Cowan) meet the NASDAQ standards described above.
Our audit committee has adopted a charter specifying the committee’s purpose and outlining its duties and responsibilities which include, among other things, (i) appointing, retaining and compensating the company’s independent auditor, subject to Board of Directors and shareholder approval, (ii) pre-approving all services of the independent auditor, (iii) reviewing the annual audited financial statements and quarterly financial statements and the content of our earnings press releases, and (iv) overseeing our accounting and financial reporting processes and the audits of our financial statements. Our audit committee is also authorized to act as our “qualified legal compliance committee.” As such, our audit committee will be responsible for investigating reports made by attorneys appearing and practicing before the SEC in representing us, of perceived material violations of U.S. federal or state securities laws, breaches of fiduciary duty or similar material violations of U.S. law by us or any of our agents.
We believe we currently meet the applicable NASDAQ requirements with respect to our Audit Committee and we intend to continue to take all actions as may be necessary for us to maintain our compliance with applicable NASDAQ requirements with respect to our Audit Committee.
Compensation Committee
As required by NASDAQ rules, our compensation committee approves the compensation of our executive officers. The compensation committee is also authorized to approve the grant of stock options and other securities to eligible grantees under our benefit plans pursuant to guidelines adopted by our Board of Directors. However, grants of stock options and other securities to our executive officers also require approval of our Board of Directors. Under the Israeli Companies Law, the Board of Directors of a public company must establish a compensation committee. Pursuant to the 2016 Relief Amendments, the Company may elect to opt out of the relevant composition and attendance rules set under the Israeli Companies Law, and to comply with the SEC regulations and NASDAQ listing rules that apply to the composition and attendance rules of a compensation committee. At this time, our Board of Directors has not made an election to opt out of such requirements and we have continued to comply with the Israeli Companies Law with respect to the composition and attendance rules of a compensation committee, as our compensation committee consists of at least three directors who satisfy the independence qualifications detailed above in “Internal Audit Committee”, and the chairman of the compensation committee is an outside director.
Under the Israeli Companies Law, the role of the compensation committee is to recommend to the Board of Directors, for ultimate shareholder approval by a special majority, a policy governing the compensation of office holders based on specified criteria, to review modifications to the Compensation Policy from time to time, to review its implementation and to approve the actual compensation terms of office holders prior to the approval thereof by the Board of Directors.
Pursuant to the NASDAQ rules, our compensation committee is required to consist of at least two members, with all members of the compensation committee required to be independent, unless we elect to take advantage of the exemption provided to foreign private issuers to comply with home country practice instead of the listing rules of exchanges such as NASDAQ. At this time, our Board of Directors has not made an election to opt out of such requirements. The determination of whether a director is independent takes into account all factors relevant to whether a director has a relationship with the Company which would be material to such director’s ability to be independent from management in connection with carrying out the duties of a compensation committee member. Factors required for consideration in making this determination specifically include (i) the source of compensation of such director (including any consulting, advisory or other compensatory fee paid to such director) and (ii) whether such director is affiliated with the Company or one of its affiliates or subsidiaries. Pursuant to the NASDAQ rules, we are also required to have a compensation committee charter, which, among other things, must set forth the scope of the compensation committee’s responsibilities and how they will be carried out, as well as grant the compensation committee the power to retain compensation advisers following consideration of certain factors that may be indicative of a conflict of interest by the compensation adviser in rendering compensation advice.
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Our Board of Directors adopted a compensation committee charter that includes the requirements of the NASDAQ rules. However, the charter provides that if there is any conflict between the responsibilities and requirements set forth therein and either the Israeli Companies Law or the Compensation Policy, the latter will govern. For information regarding the Compensation Policy, see Item 10, “Additional Information – Memorandum and Articles of Association – Approval of Office Holder Compensation” in this annual report.
We do not believe that there are any existing conflicts between the compensation committee charter and either of the Israeli Companies Law or the Compensation Policy. However, if any such conflict should develop such that we are no longer in compliance with the requirements of the NASDAQ rules, we intend to utilize the foreign private issuer exemption described above with respect to such requirement, and in accordance with the NASDAQ rules we will disclose the practice that we follow in lieu of the applicable NASDAQ requirement in our future annual reports.
All of the current members of the compensation committee (presently comprised of Dan Falk (Chairman), Yocheved Dvir, Leo Apotheker, Zehava Simon and Yehoshua Ehrlich) satisfy the respective independence requirements of both the NASDAQ rules and the Israeli Companies Law.
Nominations Committee
As required by NASDAQ rules, our nominations committee recommends candidates for election to our Board of Directors pursuant to a written charter. Both of the current members of this committee (David Kostman and Dan Falk) are independent directors.
Mergers and Acquisitions Committee
Our Board of Directors has delegated powers with respect to the review and recommendation of mergers and acquisitions and related investments and transactions, which are then subject to approval by the Board of Directors. The committee also has limited authority to approve mergers and acquisitions for consideration up to a certain amount. All of the current members of this committee (presently comprised of David Kostman (Chairman), Dan Falk, Rimon Ben Shaoul, Yehoshua Ehrlich, Leo Apotheker and Joe Cowan) are independent directors.
Item 6D.    Employees.
As of December 31, 2024, we had 8,726 employees worldwide, which represented an increase of approximately 4.1% from December 31, 2023, resulting from both organic and non-organic growth.

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The following table sets forth the number of our full-time employees at the end of each of the last three fiscal years as well as the main category of activity and geographic location of such employees:
At December 31,
Category of Activity202420232022
Customer Support*2,9943,0122,794
Sales and Marketing1,8081,7461,678
Research and Development3,0702,7802,643
General and Administrative854846811
Total8,7268,3847,926
Geographic Location
Americas3,7233,6743,439
EMEA1,5461,5261,509
APAC3,4573,1842,978
Total8,7268,3847,926

*    Including the number of employees designated under “Operations” in our previous annual reports.
We also utilize temporary employees in various activities. On average, we employed 51 temporary employees and obtained services from 1,851 consultants (not included in the numbers set forth above) during 2024.
Our future success will depend in part upon our ability to attract and retain highly skilled and qualified personnel. Although competition for such personnel is generally intense, we believe that adequate personnel resources are currently available to meet our requirements.
We are not a party to any collective bargaining agreement with our employees or with any labor organization in substantially all jurisdictions where we operate. However, we are subject to certain labor related statutes and certain provisions of collective bargaining agreements between the Histadrut (General Federation of Labor in Israel) and the Coordinating Bureau of Economic Organizations (including the Industrialists’ Association of Israel) that apply to our Israeli employees by order of the Israeli Ministry of Labor and Welfare. These statutes and provisions principally deal with the length of the work day and the work week, minimum wages, insurance coverage of work-related accidents, determination of severance pay and the provisions of other employment matters. Israeli law generally requires the payment of severance pay by employers upon certain circumstances, including, an employee’s death, retirement or termination of employment by the employer without due cause. We currently fund our ongoing severance payment obligations in Israel by making monthly payments to approved severance funds or insurance policies. For more information please see Note 2p of our consolidated financial statements. In addition, according to the National Insurance Law, Israeli employers and employees are required to pay predetermined sums to the National Insurance Institute, an organization similar to the U.S. Social Security Administration. These contributions entitle the employees to benefits in periods of unemployment, work injury, maternity leave, disability, reserve military service and bankruptcy or winding-up of the employer and also include payments for national health insurance. The payments to the National Insurance Institute varies between 7.05%-19.6% of an employee’s salary (up to a certain cap as determined from time to time by the law), of which the employee contributes approximately 3.5%-12.0% and the employer contributes approximately 3.55%-7.6%.

In addition, we pay severance benefits to our employees located elsewhere in accordance with local laws and practices of the countries in which they are employed, including our U.S. based employees pursuant to the U.S. Federal Department labor legislation and requirements and local state regulations.
Employment Agreements
We have employment agreements with our officers. Pursuant to these employment agreements, each party may terminate the employment without cause by giving a 30, 60 or 90 day prior written notice (six to twelve months in case of
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certain senior officers). In addition, we may terminate such agreement for cause with no prior notice subject to applicable laws in the applicable jurisdictions. The agreements generally include non-competition and non-disclosure provisions, although the enforceability of non-competition provisions in employment agreements may be limited under applicable law.
Item 6E.    Share Ownership.
As of March 16, 2025, our directors and executive officers then-serving beneficially owned an aggregate of 312,674 ordinary shares, including options and restricted share units to purchase ordinary shares that were vested on such date or that are scheduled to vest within 60 days thereafter, or approximately 0.5% of our outstanding ordinary shares. The options and restricted share units have an average exercise price of $119.88 per share and the options will expire between 2025 and 2031. No individual director or executive officer beneficially owns 1% or more of our outstanding ordinary shares.
The following is a description of each of our equity plans under which awards were outstanding as of March 16, 2025.
2016 Share Incentive Plan
In February 2016 the Company adopted the 2016 Share Incentive Plan (the “2016 Plan”). The Company adopted the 2016 Plan to provide incentives to employees, directors, consultants and/or contractors by rewarding performance and encouraging behavior that will improve the Company’s profitability.
Under the 2016 Plan, the Company’s employees, directors, consultants and/or contractors may be granted any equity-related award, including: any type of an option to acquire the Company ordinary shares; share appreciation right; share and/or restricted share award (“RSA”); restricted stock unit (“RSU”) and/or other share unit; and/or other share-based award and/or other right or benefit under the 2016 Plan, including any such equity-related award that is a performance-based award (each an “Award”).
Generally, under the terms of the 2016 Plan, unless determined otherwise by the administrator of the 2016 Plan, 25% of an Award granted becomes exercisable on the first anniversary of the date of grant and 6.25% becomes exercisable once every quarter during the subsequent three years. Specifically with respect to RSUs and options granted with an exercise price equal to the nominal value of an ordinary share (“par value options”), unless determined otherwise by the Board of Directors, 25% of the RSUs and the par value options granted become vested on each of the four consecutive annual anniversaries following the date of grant. Certain executive officers are entitled to acceleration of vesting of Awards in the event of a change of control, subject to certain conditions. Different terms related to vesting of Awards may apply with respect to Awards granted in relation to equity grants assumed pursuant to acquisition transactions. Awards with a vesting period expire six years after the date of grant. The maximum number of shares that may be subject to Awards granted under the 2016 Plan is calculated each calendar year as 3% of the Company’s issued and outstanding share capital as of December 31 of the preceding calendar year. Such amount is reset for each calendar year. Awards are non-transferable except by will or the laws of descent and distribution.
Options granted under the 2016 Plan are granted at an exercise price equal to the average of the closing prices of one ADR as quoted on the NASDAQ market during the 30 consecutive calendar days preceding the date of grant, unless determined otherwise by the administrator of the 2016 Plan (including par value options in some cases).
The Company’s Board of Directors also adopted an addendum to the 2016 Plan for Awards granted to residents of Israel (the “Addendum”) and resolved to elect the “Capital Gains Route” (as defined in Section 102(b)(2)) of the Israeli Income Tax Ordinance-5721-1961 (“Tax Ordinance”) for the grant of Awards to Israeli grantees. There is also a U.S. addendum under the 2016 Plan that applies to non-qualified stock options for purposes of U.S. tax laws.
The 2016 Plan is generally administered by our Board of Directors and compensation committee, which determine the grantees under the 2016 Plan and the number of Awards to be granted. As of March 16, 2025, options and restricted share units to purchase 3,066,451 ordinary shares were outstanding under the 2016 Plan at a weighted average exercise price of $10.26.
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Guardian Analytics, Inc. 2006 Stock Plan
In 2006, Guardian Analytics, Inc. (“Guardian Analytics”) adopted the Guardian Analytics, Inc. 2006 Stock Plan (the “Guardian Plan”), to attract and retain Guardian Analytics' employees and consultants (which includes its directors and advisors), and to align the interests of such recipients with the interests of Guardian Analytics’ shareholders.
Pursuant to the terms of the Guardian Analytics' acquisition agreement, we assumed and converted Guardian Analytics' stock options originally granted under the Guardian Plan into stock options of NICE.
As of March 16, 2025, assumed Guardian Analytics' stock options to purchase 2,729 shares of NICE were outstanding under the Guardian Plan, at a weighted average exercise price of $31.71. We have registered, through the filing of a registration statement on Form S-8 with the SEC under the Securities Act, 5,823 ordinary shares for issuance under the Guardian Plan.
Nexidia Inc. 2005 Stock Incentive Plan
In 2005, Nexidia adopted the Nexidia Inc. 2005 Stock Incentive Plan (the “Nexidia Plan”), to attract and retain Nexidia’s employees, directors, consultants and advisors and to align the interests of such recipients with the interests of Nexidia’s shareholders.
Pursuant to the terms of the Nexidia acquisition agreement, we assumed and converted Nexidia’s stock options and restricted stock units originally granted under the Nexidia Plan into stock options and restricted stock units of NICE, respectively.
As of March 16, 2025, assumed Nexidia options to purchase 152 shares of NICE were outstanding under the Nexidia Plan, at a weighted average exercise price of $6.72. We have registered, through the filing of a registration statement on Form S-8 with the SEC under the Securities Act, 173,860 ordinary shares for issuance under the Nexidia Plan.
Item 6F.     Disclosure of a registrant’s action to recover erroneously awarded compensation.
Not applicable.


Item 7.    Major Shareholders and Related Party Transactions
Major Shareholders
As of March 16, 2025, we are not aware of any beneficial owner holding 5% or more of our outstanding ordinary shares.
On November 7, 2024, Capital Research Global Investors filed Schedule 13G with the SEC reporting that they are no longer a beneficial owner of 5% or more of our outstanding ordinary shares.
As of March 16, 2025, we had 40 registered ADS holders of record in the United States, with our ADS holders holding in total approximately 76% of our outstanding ordinary shares, as reported by JPMorgan Chase Bank, N.A., the depositary for our ADSs.
To our knowledge, we are not directly or indirectly owned or controlled by another corporation or by any foreign government and there are no arrangements that might result in a change in control of our company.
Related Party Transactions
Other than transactions related to compensation of our executive officers and directors as described under “Item 6. Directors, Senior Management and Employees”, since January 1, 2024, we have not entered into any related party transactions.


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Item 8.    Financial Information.
A. Consolidated Statements and Other Financial Information
See Item 18, “Financial Statements” in this annual report.
Legal Proceedings
From time to time, we or our subsidiaries may be involved in legal proceedings and/or litigation arising in the ordinary course of our business. While the outcome of these matters cannot be predicted with certainty, we do not believe they, individually or in the aggregate, will have a material effect on our business, consolidated financial position, results of operations, or cash flows.
Dividends
We do not have any plans at this time to make any future dividend payments. Payment of future dividends, if any, will be at the discretion of our Board of Directors and will depend on various factors, such as our statutory profits, financial condition, operating results and current and anticipated cash needs. In the event cash dividends are declared by us, we may decide to pay such dividends in Israeli currency. Under current Israeli regulations, any cash dividend in Israeli currency paid in respect of ordinary shares purchased by non-residents of Israel with non-Israeli currency may be freely repatriated in such non-Israeli currency, at the rate of exchange prevailing at the time of conversion. For more information regarding the taxation implications of the dividend plan, see Item 10, "Additional Information - Taxation” of this annual report.
B. Significant Changes
There are no significant changes that occurred since December 31, 2024, except as otherwise disclosed in this annual report and in the annual consolidated financial statements included in this annual report.

Item 9.    The Offer and Listing.
Trading in the ADSs
Our ADSs have been quoted on the NASDAQ Stock Market under the symbol “NICEV” from our initial public offering in January 1996 until April 7, 1999, and thereafter under the symbol “NICE.” Prior to that time, there was no public market for our ordinary shares in the United States. Each ADS represents one ordinary share.
JPMorgan Chase Bank, N.A. is the depositary for our ADSs. Its address is 4 New York Plaza, Floor 12, New York, New York 10004.
Trading in the Ordinary Shares
Our ordinary shares have been listed on the Tel-Aviv Stock Exchange, or TASE, since 1991 under the symbol “NICE.TA.” Our ordinary shares are not listed on any other stock exchange and have not been publicly traded outside Israel (other than through ADSs, as noted above).
Item 10.    Additional Information.
Memorandum and Articles of Association
Organization and Register
We are a company limited by shares organized in the State of Israel under the Israeli Companies Law. We are registered with the Registrar of Companies of the State of Israel and have the company number 52-0036872.
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Objectives and Purposes
Our objectives and purposes include a wide variety of business purposes, including all kinds of research, development, distribution, service and maintenance of products in all fields of technology and engineering and to engage in any other kind of business or commercial activity. Our objectives and purposes are set forth in detail in Section 2 of our memorandum of association.
Directors
Our articles of association provide that the number of directors serving on the Board shall be not less than three but shall not exceed thirteen. As discussed above in Item 6, “Directors, Senior Management and Employees – Board Practices – Outside Directors,” in December 2016, our shareholders approved amendments to our articles of association, pursuant to which our Board of Directors may elect to opt out of such requirements and we would not be required to have outside directors serve on our Board of Directors. At this time, our Board of Directors has not made an election to opt out of such requirements. Our directors, other than outside directors, are elected at the annual shareholders meeting to serve until the next annual meeting or until their earlier death, resignation, bankruptcy, incapacity or removal by resolution of the general shareholders meeting. Directors may be re-elected at each annual shareholders’ meeting. The Board may appoint additional directors (whether to fill a vacancy or create new directorship) to serve until the next annual shareholders meeting, provided, however, that the Board shall have no obligation to fill any vacancy unless the number of directors is less than three. Our officers serve at the discretion of the Board.
The Board of Directors may meet and adjourn its meetings according to the Company’s needs but must meet at least once every three months. A meeting of the Board may be called at the request of any two directors. The quorum required for a meeting of the Board consists of a majority of directors who are lawfully entitled to participate in the meeting and vote thereon. The adoption of a resolution by the Board requires approval by a simple majority of the directors present at a meeting in which such resolution is proposed. In lieu of a Board meeting, a resolution may be adopted if all of the directors lawfully entitled to vote thereon consent not to convene a meeting.
Subject to the Israeli Companies law, the Board may appoint a committee of the Board and delegate to such committee all or any of the powers of the Board, as it deems appropriate. Under the Israeli Companies Law, the Board of Directors must appoint an internal audit committee comprised of at least three directors. The function of the internal audit committee is to review irregularities in the management of the Company’s business and recommend remedial measures. The committee is also required, under the Israeli Companies Law, to approve certain related party transactions and to assess our internal audit system and the performance of our internal auditor. Notwithstanding the foregoing, the Board may, at any time, amend, restate or cancel the delegation of any of its powers to any of its committees. The Board has appointed an internal audit committee which has three members, an audit committee which has five members, a compensation committee which has five members, a nominations committee which has two members and a mergers and acquisitions committee which has six members. For more information on the Company’s committees, please see Item 6C., “Directors, Senior Management and Employees—Board Practices” in this annual report.
Fiduciary Duties of Officers
The Israeli Companies Law codifies the fiduciary duties that “office holders,” including directors and executive officers, owe to a company. An office holder’s fiduciary duties consist of a duty of care and a duty of loyalty. The duty of loyalty includes avoiding any conflict of interest between the office holder’s position in the company and his personal affairs, avoiding any competition with the company, avoiding exploiting any business opportunity of the company in order to receive personal advantage for himself or others, and revealing to the company any information or documents relating to the company’s affairs which the office holder has received due to his position as an office holder.
Approval of Certain Transactions
The Israeli Companies Law requires that an office holder of a company promptly disclose any personal interest that he or she may have and all related material information known to him or her, in connection with any existing or proposed transaction by the company. In addition, if the transaction is an extraordinary transaction as defined under Israeli law, the office holder must also disclose any personal interest held by the office holder’s spouse, siblings, parents, grandparents, descendants, spouse’s descendants and the spouses of any of the foregoing. In addition, the office holder must also disclose any interest held by any corporation in which the office holder is a 5% or greater shareholder, director or general manager or
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in which he or she has the right to appoint at least one director or the general manager. An extraordinary transaction is defined as a transaction not in the ordinary course of business, not on market terms, or that is likely to have a material impact on the company’s profitability, assets or liabilities.
In the case of a transaction which is not an extraordinary transaction, after the office holder complies with the above disclosure requirement, only Board approval is required unless the articles of association of the company provide otherwise. The transaction must not be adverse to the company’s interest. Furthermore, if the transaction is an extraordinary transaction, then, in addition to any approval stipulated by the articles of association, it also must be approved by the company’s internal audit committee and then by the Board of Directors, and, under certain circumstances, by a meeting of the shareholders of the company. An office holder who has a personal interest in a transaction that is considered at a meeting of the Board of Directors or the internal audit committee generally may not be present at the deliberations or vote on this matter, unless the chairman of the Board or chairman of the internal audit committee, as the case may be, determined that the presence of such person is necessary to present the transaction to the meeting. If a majority of the directors have a personal interest in an extraordinary transaction with the company, shareholder approval of the transaction is required.
It is the responsibility of the audit committee to determine whether or not a transaction should be deemed an extraordinary transaction. In addition, the audit committee must also establish (i) procedures for the consideration of any transaction with a controlling shareholder, even if it is not extraordinary, such as a competitive process with third parties or negotiation by independent directors, and (ii) approval requirements for controlling shareholder transactions that are not negligible. 
The Israeli Companies Law applies the same disclosure requirements to a controlling shareholder of a public company, which includes a shareholder that holds 25% or more of the voting rights if no other shareholder owns more than 50% of the voting rights in the company. Extraordinary transactions with a controlling shareholder or in which a controlling shareholder has a personal interest, and the terms of management fees of a controlling shareholder or compensation of a controlling shareholder who is an office holder, require the approval of the audit committee, the Board of Directors and the shareholders of the company by simple majority; provided that either such majority vote must include at least a simple majority of the shareholders who have no personal interest in the transaction and are present at the meeting (without taking into account the votes of the abstaining shareholders), or that the total shareholdings of those who have no personal interest in the transaction who vote against the transaction represent no more than two percent of the voting rights in the company. Any such extraordinary transaction whose term is longer than three years requires further shareholder approval every three years, unless (with respect to transactions not involving management fees or employment terms) the internal audit committee approves that a longer term is reasonable under the circumstances.
In addition, under the Israeli Companies Law, a private placement of securities requires approval by the Board of Directors and the shareholders of the company if it will cause a person to become a controlling shareholder or if:
the securities issued amount to 20% or more of the company’s outstanding voting rights before the issuance;
some or all of the consideration is other than cash or listed securities or the transaction is not on market terms; and
the transaction will increase the relative holdings of a shareholder that holds 5% or more of the company’s outstanding share capital or voting rights or that will cause any person to become, as a result of the issuance, a holder of more than 5% of the company’s outstanding share capital or voting rights.
According to the Company’s articles of association, certain resolutions, such as resolutions regarding mergers and windings up, require approval of the holders of 75% of the shares represented at the meeting and voting thereon.
Approval of Office Holder Compensation
Under the Israeli Companies Law, we are required to adopt a compensation policy, recommended by the compensation committee, and approved by the Board of Directors and the shareholders, in that order, at least once every three years. The shareholder approval requires a majority of the votes cast by shareholders, excluding any controlling shareholder and those who have a personal interest in the matter (similar to the threshold described above). Our current Compensation Policy was approved by our shareholders at our 2023 annual general meeting. At our 2024 annual general meeting, our
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shareholders approved updates to our current Compensation Policy with respect to Executive Equity Award Caps and Performance Mix. In general, all office holders’ terms of compensation – including fixed remuneration, bonuses, equity compensation, retirement or termination payments, indemnification, liability insurance and the grant of an exemption from liability - must comply with the Company’s Compensation Policy. Although NASDAQ rules generally require shareholder approval when an equity-based compensation plan is established or materially amended, as a foreign company we follow the aforementioned requirements of the Israeli Companies Law.
In addition, the compensation terms of directors, the chief executive officer, and any employee or service provider who is considered a controlling shareholder generally must be approved separately by the compensation committee, the Board of Directors and the shareholders of the company, in that order. The shareholder approval of the compensation of the chief executive officer requires a majority of the votes cast by shareholders, excluding any controlling shareholder and those who have a personal interest in the matter.

Notwithstanding the foregoing, in certain limited circumstances, a company’s compensation committee and board of directors are permitted to approve the compensation policy or the compensation terms of the chief executive officer, without shareholders' approval.
The compensation terms of other officers require the approval of the compensation committee and the Board of Directors. An amendment of existing compensation terms of an office holder who is not a director, if the compensation committee determines that the amendment is not material, requires the approval of the compensation committee only. Pursuant to regulations promulgated under the Israeli Companies Law, an amendment of the existing compensation terms of office holders who are subordinate to the chief executive officer, if the amendment is not material and the changes are in line with the existing Compensation Policy, requires only the chief executive officer’s approval. Under our Compensation Policy, our Chief Executive Officer is authorized to approve non-material changes to the compensation terms of office holders subordinated to him, without seeking the approval of the compensation committee.
The Compensation Policy sets forth the guidelines for the compensation of our office holders. It is tailored to ensure a compensation which balances performance targets and time horizons through rewarding business results and long-term performance. The Compensation Policy requires that compensation of our office holders include a mix of fixed amounts (such as annual based salaries), variable performance-based components (such as performance-based cash incentive compensation), and long term incentive components (such as long-term equity-based compensation, including performance- based equity). Pursuant to the Compensation Policy, performance-based compensation granted may be based on our overall performance, the particular unit performance, individual performance and the results of the customer satisfaction survey conducted annually. Our Compensation Policy includes applicable clawback provisions and references the Company's compensation recovery policy adopted pursuant to the recent NASDAQ listing rules in response to Exchange Act Rule 10D-1.

Duties of Shareholders
Under the Israeli Companies Law, a shareholder has a duty to act in good faith towards the company and other shareholders and to refrain from abusing his or her power in the company including, among other things, voting in a general meeting of shareholders on the following matters:
any amendment to the articles of association;
an increase of the company’s authorized share capital;
a merger; or
approval of interested party transactions which require shareholder approval.
In addition, any controlling shareholder, any shareholder who knows that it possesses power to determine the outcome of a shareholder vote and any shareholder who, pursuant to the provisions of a company’s articles of association, has the power to appoint or prevent the appointment of an office holder in the company, is under a duty to act with fairness towards the company. The Israeli Companies Law does not describe the substance of this duty but provides that a breach of his duty is tantamount to a breach of fiduciary duty of an officer of the company.
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Exemption, Insurance and Indemnification of Directors and Officers
Exemption of Office Holders
Under the Israeli Companies Law, an Israeli company may not exempt an office holder from liability for breach of his duty of loyalty but may exempt in advance an office holder from liability to the company, in whole or in part, for a breach of his duty of care (except in connection with distributions), provided the articles of association of the company allow it to do so. Our articles of association do not allow us to do so.
Office Holder Insurance
Our articles of association provide that, subject to the provisions of the Israeli Companies Law, including the receipt of all approvals as required therein or under any applicable law, we may enter into an agreement to insure an office holder for any responsibility or liability that may be imposed on such office holder in connection with an act performed by such office holder in such office holder’s capacity as an office holder of us with respect to each of the following:
a violation of his duty of care to us or to another person;
a breach of his duty of loyalty to us, provided that the office holder acted in good faith and had reasonable grounds to assume that his act would not prejudice our interests;
a financial obligation imposed upon him for the benefit of another person;
a payment which the office holder is obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Israeli Securities Law, 5728-1968, as amended (the “Securities Law”) and Litigation Expenses (as defined below) that the office holder incurred in connection with a proceeding under Chapters H’3, H’4 or I’1 of the Securities Law; and
any other event, occurrence or circumstance in respect of which we may lawfully insure an office holder.
Indemnification of Office Holders
Our articles of association provide that, subject to the provisions of the Israeli Companies Law, including the receipt of all approvals as required therein or under any applicable law we may indemnify an office holder with respect to any liability or expense for which indemnification may be provided under the Israeli Companies Law, including the following liabilities and expenses, provided that such liabilities or expenses were imposed upon or incurred by such office holder in such office holder’s capacity as an office holder of us:
a monetary liability imposed on or incurred by an office holder pursuant to a judgment in favor of another person, including a judgment imposed on such office holder in a settlement or in an arbitration decision that was approved by a court of law;
reasonable Litigation Expenses, expended by the office holder as a result of an investigation or proceeding instituted against him by a competent authority, provided that such investigation or proceeding concluded without the filing of an indictment against him and either (A) concluded without the imposition of any financial liability in lieu of criminal proceedings or (B) concluded with the imposition of a financial liability in lieu of criminal proceedings but relates to a criminal offense that does not require proof of criminal intent (mens rea) or in connection with a financial sanction;
“conclusion of a proceeding without filing an indictment” in a matter in which a criminal investigation has been instigated and “financial liability in lieu of a criminal proceeding,” have the meaning ascribed to them under the Israeli Companies Law. The term “Litigation Expenses” shall include, without limitation, attorneys’ fees and all other costs, expenses and obligations paid or incurred by an office holder in connection with investigating, defending, being a witness or participating in (including on appeal), or preparing to defend, be a witness or participate in any claim or proceeding relating to any matter for which indemnification may be provided;
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reasonable Litigation Expenses, which the office holder incurred or with which the office holder was charged by a court of law, in a proceeding brought against the office holder, by the Company, on its behalf or by another person, or in a criminal prosecution in which the office holder was acquitted, or in a criminal prosecution in which the office holder was convicted of an offense that does not require proof of criminal intent (mens rea);
a payment which the office holder is obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Securities Law, and Litigation Expenses that the office holder incurred in connection with a proceeding under Chapters H’3, H’4 or I’1 of the Securities Law; and
any other event, occurrence or circumstance in respect of which we may lawfully indemnify an office holder.
The foregoing indemnification may be procured by us (a) retroactively and (b) as a commitment in advance to indemnify an office holder, provided that, in respect of the first bullet above, such commitment shall be limited to (A) such events that in the opinion of the Board of Directors are foreseeable in light of our actual operations at the time the undertaking to indemnify is provided, and (B) to the amounts or criterion that the Board of Directors deems reasonable under the circumstances; and further provided that such events and amounts or criterion are set forth in the undertaking to indemnify, and which shall in no event exceed, in the aggregate, the greater of: (i) 25% of our shareholder’s equity at the time of the indemnification or (ii) 25% of our shareholder’s equity at the end of fiscal year of 2010.
We have undertaken to indemnify our directors and officers pursuant to applicable law and we have obtained directors' and officers' liability insurance for the benefit of our directors and officers.
Limitations on Exemption, Insurance and Indemnification
The Israeli Companies Law provides that a company may not exempt or indemnify an office holder, or enter into an insurance contract, which would provide coverage for any monetary liability incurred as a result of any of the following:
a breach by the office holder of his duty of loyalty unless, with respect to insurance coverage or indemnification, the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;
a breach by the office holder of his duty of care if the breach was done intentionally or recklessly (other than if solely done in negligence);
any act or omission done with the intent to derive an illegal personal benefit; or
a fine, civil fine or ransom levied on an office holder, or a financial sanction imposed upon an office holder under Israeli Law.
Required Approvals
In addition, under the Israeli Companies Law, any exemption of, indemnification of, or procurement of insurance coverage for, our office holders must be approved by our Audit Committee and our Board of Directors and, if the beneficiary is the chief executive officer or a director, by our shareholders. We have obtained such approvals for the procurement of liability insurance covering our officers and directors and for the grant of indemnification letters to our officers and directors.
Rights of Ordinary Shares
Our ordinary shares confer upon our shareholders the right to receive notices of, and to attend, shareholder meetings, the right to one vote per ordinary share at all shareholders’ meetings for all purposes, and to share equally, on a per share basis, in such dividends as may be declared by our Board of Directors; and upon liquidation or dissolution, the right to participate in the distribution of any surplus assets of the Company legally available for distribution to shareholders after payment of all debts and other liabilities of the Company. All ordinary shares rank pari passu in all respects with each other. Our Board of Directors may, from time to time, make such calls as it may think fit upon a shareholder in respect of any sum
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unpaid in respect of shares held by such shareholder which is not payable at a fixed time, and each shareholder shall pay the amount of every call so made upon him (and of each installment thereof if the same is payable in installments).
Meetings of Shareholders
An annual general meeting of our shareholders shall be held once in every calendar year at such time and at such place either within or without the State of Israel as may be determined by our Board of Directors.
Our Board of Directors may, whenever it thinks fit, convene a special general meeting at such time and place, within or without the State of Israel, as may be determined by the Board of Directors. Special general meetings may also be convened upon shareholder request in accordance with the Israeli Companies Law and our articles of association.
The quorum required for a meeting of shareholders consists of at least two shareholders present in person or by proxy who hold or represent between them at least 25% of the outstanding voting shares, unless otherwise required by applicable rules. Although NASDAQ generally requires a quorum of 33-1/3%, subject to an exemption under the NASDAQ rules we follow the generally accepted business practice for companies in Israel, which have a quorum requirement of 25%. A meeting adjourned for lack of a quorum generally is adjourned to the same day in the following week at the same time and place or any time and place as the chairman may designate with the consent of a majority of the voting power represented at the meeting and voting on the matter adjourned. At such reconvened meeting, the required quorum consists of any two members present in person or by proxy.
Mergers and Acquisitions
A merger of the Company shall require the approval of the holders of 75% of the voting power represented at the annual or special general meeting in person or by proxy or by written ballot, as shall be permitted, and voting thereon in accordance with the provisions of the Israeli Companies Law. Upon the request of a creditor of either party of the proposed merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that as a result of the merger, the surviving company will be unable to satisfy the obligations of any of the parties to the merger. In addition, a merger may not be completed unless at least (i) 50 days have passed from the time that the requisite proposal for the merger has been filed by each party with the Israeli Registrar of Companies and (ii) 30 days have passed since the merger was approved by the shareholders of each party.
The Israeli Companies Law also provides that an acquisition of shares of a public company must be made by means of a tender offer if, as a result of the acquisition, the purchaser would become a 25% or greater shareholder of the company and there is no existing 25% or greater shareholder in the company. An acquisition of shares of a public company must be made by means of a tender offer if, as a result of the acquisition, the purchaser would hold more than 45% of the company and there is no existing shareholder of more than 45% in the company. These requirements do not apply if the acquisition (i) occurs in the context of a private placement by the company that received shareholder approval for the purpose of reaching such threshold, (ii) was from a 25% shareholder of the company and resulted in the acquirer becoming a 25% shareholder of the company or (iii) was from a greater than 45% shareholder of the company and resulted in the acquirer becoming a greater than 45% shareholder of the company. The tender offer must be extended to all shareholders, but the offeror is not required to purchase more than 5% of the company’s outstanding shares, regardless of how many shares are tendered by shareholders. The tender offer may be consummated only if (i) at least 5% of the company’s outstanding shares will be acquired by the offeror and (ii) the number of shares tendered in the offer exceeds the number of shares whose holders objected to the offer.
If as a result of an acquisition of shares the acquirer will hold more than 90% of a company’s outstanding shares, the acquisition must be made by means of a tender offer for all of the outstanding shares. If as a result of a full tender offer the acquirer would own more than 95% of the outstanding shares, then all the shares that the acquirer offered to purchase will be transferred to it. The law provides for appraisal rights if any shareholder files a request in court within six months following the consummation of a full tender offer, but the acquirer is entitled to stipulate that tendering shareholders forfeit their appraisal rights. If as a result of a full tender offer the acquirer would own 95% or less of the outstanding shares, then the acquirer may not acquire shares that will cause his shareholding to exceed 90% of the outstanding shares.
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Material Contracts
Notes and Indenture
2017 Notes and Indenture

On January 18, 2017, NICE Systems Inc., a wholly owned subsidiary of the Company ("NICE Systems"), issued $287.5 million aggregate principal amount of the 1.25% exchangeable senior notes due 2024 (the "2017 Notes"). The 2017 Notes were the general unsecured obligations of NICE Systems, guaranteed by us. The sale of the Notes generated net proceeds of approximately $260.1 million. The 2017 Notes were issued pursuant to an indenture (the “2017 Indenture”) among us, NICE Systems and the Trustee.

On December 31, 2021, the Company entered into the First Supplemental Indenture. In accordance with the First Supplemental Indenture, the Company settled certain exchangeable notes by way of a Cash Settlement (as defined in the 2017 Indenture).

The 2017 Notes fully matured on January 15, 2024 and were settled in cash in the amount of $87.4 million.

2020 Notes and Indenture

On August 27, 2020, we issued $400 million aggregate principal amount of 0% exchangeable senior notes due 2025 (the “2020 Notes” and together with the 2017 Notes, the “Notes”) and on September 4, 2020, we issued an additional $60 million of the 2020 Notes pursuant to the exercise of the initial purchasers’ option. The 2020 Notes are general unsecured obligations of the Company. The sale of the 2020 Notes generated net proceeds of approximately $451 million. The 2020 Notes were issued pursuant to an indenture (the “2020 Indenture” and collectively with the 2017 Indenture, the "Indentures") between us and U. S. Bank National Association, as trustee (the “Trustee”).

The 2020 Notes do not bear regular interest, and the principal amount of the 2020 Notes does not accrete. The 2020 Notes will mature on September 15, 2025, unless earlier prepaid, redeemed or converted, and are not redeemable at our option prior to September 21, 2023, except in the event of certain tax law changes. We may redeem for cash all or any portion of the 2020 Notes, at our option, on or after September 21, 2023 if the last reported sale price of the ADSs has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption. In the case of any redemption, the redemption price will be equal to 100% of the principal amount of the 2020 Notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date. A holder may convert its 2020 Notes at its option at any time prior to the close of business on the business day immediately preceding June 15, 2025 in the event certain conditions are met during set periods. On or after June 15, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert its 2020 Notes at any time.

Upon conversion, we, at our election, can pay or deliver (i) cash, (ii) ADSs or (iii) a combination thereof. The conversion rate will initially be 3.3424 ADSs per $1,000 principal amount of 2020 Notes (equivalent to an initial conversion price of approximately $299.19 per ADS). The conversion rate will be subject to adjustment in some events. In addition, following certain corporate events that occur prior to the maturity date or our delivery of a notice of redemption, the Company will under certain circumstances, increase the conversion rate for a holder who elects to convert its 2020 Notes in connection with such a corporate event or to convert its 2020 Notes called for redemption in connection with such notice of redemption, as the case may be.

If we undergo a fundamental change, holders of the 2020 Notes will have the right to require us to repurchase all or a portion of their 2020 Notes upon the occurrence of a fundamental change (as defined in the 2020 Indenture) at a cash repurchase price equal to 100% of the principal amount of the 2020 Notes to be repurchased, plus any accrued and unpaid interest, if any, to, but excluding the fundamental change repurchase date.

The Indentures contain customary events of default, including a default in the payment of principal or interest when due, default in compliance with the covenants set forth therein, and certain events of bankruptcy, insolvency or reorganization.

On December 31, 2021, the Company irrevocably elected that all conversions occurring on or after December 31, 2021 will be settled pursuant to Combination Settlement (as defined in the 2020 Indenture) with a Specified Dollar Amount
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(as defined in the 2020 Indenture) no less than $1,000 per $1,000 principal amount of 2020 Notes. Generally, under this settlement method, the conversion value corresponding to the principal amount will be converted in cash, and the conversion value over the principal amount will be settled, at the Company’s election, in cash or shares or a combination thereof.

Exchange Controls
Holders of ADSs are able to convert dividends and liquidation distributions into freely repatriable non-Israeli currencies at the rate of exchange prevailing at the time of repatriation, pursuant to regulations issued under the Currency Control Law, 5738–1978, provided that Israeli income tax has been withheld by us with respect to amounts that are being repatriated to the extent applicable or an exemption has been obtained.
Our ADSs may be freely held and traded pursuant to the General Permit and the Currency Control Law. The ownership or voting of ADSs by non-residents of Israel are not restricted in any way by our memorandum of association or articles of association or by the laws of the State of Israel, except subjects of a country deemed an “enemy country” under Israeli legislation or persons or individuals on weapon of mass destruction or terror sanctions lists.
Taxation
The following is a discussion of Israeli and United States tax consequences material to our shareholders. The discussion is not intended, and should not be construed, as legal or professional tax advice and does not exhaust all possible tax considerations.
Holders of our ADSs should consult their own tax advisors as to the United States, Israeli or other tax consequences of the purchase, ownership and disposition of our ADSs, including, in particular, the effect of any foreign, state or local taxes.
Israeli Tax Considerations
The following is a summary of both the general corporate tax laws applicable to companies in Israel, with special reference to their effect on us, and a discussion of the material tax consequences to holders of our ordinary shares or ADSs related to our domicile in Israel. This summary does not discuss all the aspects of Israeli tax law that may be relevant to a particular holder in light of his or her personal circumstances or to some types of holders subject to special treatment under Israeli law. To the extent that the discussion is based on new tax legislation which has not been subject to judicial or administrative interpretation, we cannot assure that the views expressed in the discussion will be accepted by the appropriate tax authorities or the courts. The discussion is not intended, and should not be construed, as a legal or professional tax advice and is not exhaustive of all possible tax considerations.

General Corporate Taxation in Israel
Generally, Israeli companies are subject to corporate tax on taxable income, including capital gains, at the rate of 23% for 2023 and 2024. However, the effective tax rate payable by a company that is eligible for tax benefits under the Israeli Law for the Encouragement of Capital Investments-1959 (the "Investments Law"), and in particular the 6% tax rate in 2024 and 12% rate in 2023 under the Special Preferred Technology Enterprise and Preferred Technology Enterprise regime (as discussed below), may be considerably less.
Foreign Exchange Regulations
We are permitted to measure our Israeli taxable income in U.S. dollars pursuant to regulations published by the Israeli Minister of Finance, which provide the conditions for doing so. We believe that we meet, and will continue to meet, the necessary conditions and as such, we measure our results for tax purposes based on the U.S. dollar/NIS exchange rate on December 31 of the relevant tax year.
Tax Benefits under the Israeli Law for the Encouragement of Capital Investments, 1959, as amended.
Pursuant to the Investments Law and its various amendments, our Company and its Israeli subsidiary have been granted “Approved Enterprise” status, allowing us to benefit from significant tax benefits through our “Approved, Privileged, Preferred Enterprise and Special Preferred Enterprises” programs up to 2016 tax year, and from "Preferred Technological Enterprise" and "Special Preferred Enterprises" programs from 2017 onwards. Continued eligibility for these benefits requires compliance with specific conditions; non-compliance may result in revocation of benefits and interest and inflation
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adjustments. As of December 31, 2024, we believe that we compliance with all the conditions required by the Investments Law.

Amendments enacted in December 2016, effective January 1, 2017, introduced the “Nexus Principles” based on OECD guidelines as part of the Base Erosion and Profit Shifting (BEPS) project, which govern the tax regime applicable to both the Company and its Israeli subsidiary from the 2017 tax year.

Benefits under the “Preferred Technology Enterprise” and Special Preferred Enterprises regimes include:
A reduced corporate tax rate of 12% (or 7.5% in Development Area A) on qualifying income from eligible intellectual property (“Preferred Technology Income”), subject to conditions, including a minimal amount or ratio of annual R&D expenditures and R&D employees, and having at least 25% of annual income derived from export. Special Preferred Technological Enterprises are subject to 6% on such income.;
A 12% capital gains tax rate on the sale of preferred intangible assets to foreign affiliated enterprise, provided that the asset was initially purchased from a foreign resident at an amount of NIS 200 million or more. Special Preferred Technological Enterprises are subject to 6% on such income; and
A 20% withholding tax rate for dividends paid from Preferred Technology Income (with an exemption from such withholding tax applying to dividends paid to an Israeli company). Such rate may be reduced to 4% on dividends paid to a foreign resident company, subject to valid certificate from the Israel Tax Authority.
These rates may be further reduced by applicable double tax treaties, subject to the receipt in advance of a valid certificate from the Israel Tax Authority.

The effective tax rate applying to our Special Preferred Technological Enterprises and Preferred Technology Enterprise is calculated based on the Nexus Principles, considering eligible and ineligible R&D expenses incurred by us, as prescribed in the Regulations.
Income from sources other than the Special Preferred Technological Enterprises and Preferred Technology Income are taxable at regular corporate tax rates of 23% for 2023 and 2024.

Full details regarding our Preferred, Preferred Technology Enterprises and Special Preferred Technological Enterprises may be found in Note 13(a)(1) of our consolidated financial statements.
Tax Benefits and Grants for Research and Development
Israeli tax law allows, under specified conditions, a tax deduction for expenditures, including capital expenditures, for the year in which they are incurred. These expenses must relate to scientific research and development projects and must be approved by the relevant Israeli government ministry, determined by the field of research, and the research and development must be conducted for the promotion of the company and carried out by or on behalf of the company seeking such deduction. However, the amount of such deductible expenses is reduced by the sum of any funds received through government grants for the financing of such scientific research and development projects. No deduction is allowed if it is related to an expense invested in an asset depreciable under the general depreciation rules of the Tax Ordinance. Expenditures not so approved, but otherwise qualifying for deduction, are deductible over a three‑year period.
Tax Benefits under the Law for the Encouragement of Industry (Taxes), 1969
Under the Law for the Encouragement of Industry (Taxes), 1969 (the “Industry Encouragement Law”), Industrial Companies (as defined below) are entitled to the following tax benefits, among others:
deductions over an eight-year period for purchases of know-how and patents;
deductions over a three-year period of expenses involved with the issuance and listing of shares on a stock market; and
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the right to elect, under specified conditions, to file a consolidated tax return with other related Israeli Industrial Companies.
Eligibility for benefits under the Industry Encouragement Law does not require prior approval from any governmental authority. Under the Industry Encouragement Law, an “Industrial Company” is defined as an Israeli resident for tax purposes deriving at least 90% of its income (other than income from certain government loans), in any tax year, from an “Industrial Enterprise” located in Israel and owned by such company.
An “Industrial Enterprise” is defined as an enterprise whose major activity in a given tax year is industrial production activity. We believe that we currently qualify as an Industrial Company under the Industry Encouragement Law. No assurance can be given that we will continue to qualify as an Industrial Company or that the benefits described above will be available in the future.
Taxation of Holders of Ordinary Shares
The following discussion refers to the tax consequences to holders of our ordinary shares. However, the same tax treatment would apply to holders of our ADSs.
Capital Gains Tax on Sales of Our Ordinary Shares
Israeli law generally imposes a capital gains tax on the sale of any capital assets by residents of Israel, as defined for Israeli tax purposes, and on the sale of assets located in Israel, including shares in Israeli companies, by both residents and non-residents of Israel, unless a specific exemption is available or unless a tax treaty between Israel and the shareholder’s country of residence provides otherwise. The Tax Ordinance distinguishes between real gain and inflationary surplus. The inflationary surplus is a portion of the total capital gain equivalent to the increase of the relevant asset’s purchase price attributable to an increase in the Israeli consumer price index, or, under certain circumstances, a foreign currency exchange rate, between the date of purchase and the date of sale. The real gain is the excess of the total capital gain over the inflationary surplus.
Taxation of Israeli Residents
Israeli individuals are generally subject to a tax rate of 25% on capital gains derived from the sale of shares, whether listed on a stock market or not unless such shareholder claims a deduction for financing expenses in connection with such shares, in which case the gain is generally taxed at a rate of 30%. In addition, if such shareholder is considered a “significant shareholder” at any time during the 12-month period preceding such sale (i.e., such shareholder holds directly or indirectly, including jointly with others, at least 10% of any means of control in the company), the tax rate will be 30%. “Means of control” generally include the right to vote, receive profits, nominate a director or an executive officer, receive assets upon liquidation, or direct someone who holds any of such rights on how to exercise these rights, regardless of the source of such right. Individual holders dealing in securities in Israel for whom the income from the sale of securities is considered “business income” as defined in Section 2(1) of the Tax Ordinance are subject to tax at the marginal tax rates applicable to business income (up to 47% in 2025). Individuals who are subject to tax in Israel are also subject to an additional income surtax (as described below). For this purpose, taxable income will include taxable capital gains from the sale of our shares and taxable income from dividend distributions. Certain Israeli institutions that are exempt from tax under Section 9(2) or Section 129C(a)(1) of the Tax Ordinance (such as exempt trust funds and pension funds) may be exempt from capital gains tax on the sale of the shares.
Israeli companies are subject to the corporate tax rate on capital gains derived from the sale of listed shares.
Different tax rates may apply to dealers in securities and shareholders who acquired their shares prior to an initial public offering.
Taxation of Non-Israeli Residents
Non-Israeli residents, both individuals and corporations, are generally exempt from Israeli capital gains tax on gains from the sale of shares publicly traded on the TASE, provided such gains do not arise from a permanent establishment in Israel. They are also exempt from capital gains tax on shares of Israeli companies traded on recognized foreign markets, as long as the shares were not acquired before the issuer’s initial public offering and the gains do not arise from a permanent establishment. This exemption does not apply if Israeli residents hold over 25% of the non-Israeli corporation or are entitled to 25% or more of its revenues or profits.

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U.S. resident shareholders are exempt from Israeli capital gains tax for sale, exchange or disposition of our ordinary shares under the U.S.-Israel Tax Treaty unless they hold 10% or more of our voting power in the preceding 12 months, the gains are from real estate or a permanent establishment in Israel, or the individual was present in Israel for 183 days or more in the relevant year. In such cases, the sale, exchange or disposition would be subject to Israeli tax, however the gain would be treated as foreign source income for U.S. tax credit purposes.


潛在對以色列稅款負有責任的股東可能會面臨源頭預扣稅,並且必須證明其免稅地位。在涉及出售以色列居民公司所有股份的交易中,以色列稅務局可能會要求非以色列股東簽署聲明或獲得特定豁免。


上一年最後六個月或本年度前六個月的銷售必須在1月31日和7月31日之前提交納稅申報表。如果所有應繳稅款均在源頭預扣,則如果收入並非來自以色列的業務,納稅人在以色列沒有其他應稅收入,並且沒有義務繳納附加稅,則無需申報。資本收益還必須在年度所得稅申報表上報告。

對我們普通股支付的股息徵稅
以色列居民徵稅
以色列居民個人從我們普通股收到的股息,除紅股(股票股息)或股票股息外,一般都要繳納以色列所得稅。大股東在分派前12個月內的適用稅率爲25%或30%。個人也可能被要求支付股息附加稅。來自普通收入的利潤的股息,如果股票在被提名公司登記,則需繳納25%的預扣稅。來自經批准和享有特權的企業的股息按15%的稅率徵稅,而來自我們的優先企業和優先技術企業的股息按20%的稅率徵稅。如果股息的接受者是一家以色列居民公司,則這種股息收入免稅,只要股息來自以色列境內應計的收入,並從另一家應繳納以色列公司稅的公司獲得。某些免稅的以色列機構,如免稅信託基金和退休基金(根據《稅務條例》第9(2)條或第129C(A)(1)條)也可免徵股息稅。我們不能保證我們將指定正在分配的利潤的方式,以減少股東的納稅義務。

向以色列居民公司分配股息通常不繳納預扣稅。
非以色列居民徵稅
非以色列居民,無論是個人還是公司,通常都要對我們普通股支付的股息繳納以色列所得稅,並在源頭處預扣稅,除非條約另有規定。

在美國統治下-以色列條約規定,我們支付的股息的最高預扣稅爲25%。12.5%的稅率適用於向擁有以色列公司至少10%投票權的美國公司支付的股息,一般而言,在股息支付日期之前的納稅年度部分和整個上一納稅年度。12.5%的稅率僅適用於定期收入的股息,而不適用於批准、授權、優先企業或優先技術企業收入的股息,並且如果公司總收入的25%以上來自某些類型的被動收入,則不適用。如果符合條件,這些企業的股息需繳納15%的預扣稅。

美國居民通常在以色列從源頭扣除預扣稅,並可以根據美國稅務法規、規則和法規中包含的詳細規則申請美國聯邦所得稅抵免。如果股息來自根據投資法納稅的收入和其他收入來源混合收入來源的收入的組合,則將適用混合預扣稅率。我們不能保證我們會指定分配利潤來減少股東的納稅義務。

具有來自以色列的股息收入(已預扣稅)的非居民個人或公司,如果收入並非來自在以色列開展的業務,他們在以色列沒有其他應稅收入,並且他們無需繳納所得附加稅,則一般無需在以色列提交納稅申報表。

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附加稅

根據適用的稅收條約,在以色列納稅的個人在2025 - 2027年每年還需繳納3%的附加稅,稅率爲2025 - 2027年每年超過721,560新謝克爾。此外,個人在納稅年度從「資本來源」(就此而言,指的是任何收入來源)獲得的應稅收入超過該金額的,將在超過起徵點時繳納2%的額外稅。

美國聯邦所得稅的考慮因素
以下是適用於出於稅務目的持有美國存託憑證作爲資本資產的美國持有人(定義如下)的重大美國聯邦所得稅後果的摘要。本摘要基於經修訂的1986年《美國國稅法》(「該法典」)、現行最終、臨時和擬議法規、司法裁決和國稅局(「IRS」)和美國國稅局發佈的立場。以色列所得稅條約於本年度報告之日生效,所有這些條約均可隨時變更(包括解釋變更),可能具有追溯力,其方式可能對美國持有人產生不利影響。
本摘要不涉及所有可能涉及的美國聯邦所得稅事宜涉及特定潛在持有人或可能與ADS投資相關的所有稅務考慮,包括美國聯邦遺產、贈送或替代最低稅務後果,或任何州、地方或非美國稅務後果,收購、所有權和處置ADS.
本摘要不涉及適用於ADS持有人的稅務考慮因素,該持有人可能遵守特殊稅務規則,包括但不限於以下規定:
證券、貨幣或名義本金合同的交易商或交易員;
金融機構、銀行和金融服務實體;;
保險公司;
房地產投資信託;
遵守《稅法》第451(B)條規定的特別稅務會計規則的人員;
投資者須繳納替代最低稅;
免稅組織;
受監管的投資公司;
通過投票實際或建設性地擁有我們10%或更多股份和/或其他股權的投資者 或值;
將持有ADS作爲對沖或轉換交易的一部分,或作爲合成證券或其他用於美國聯邦所得稅目的的綜合交易的交叉頭寸或一部分的頭寸的投資者;
就美國聯邦所得稅而言,被視爲合夥企業或其他轉嫁實體的投資者,以及通過合夥企業或其他轉嫁實體持有ADS的個人;
功能貨幣不是美元的投資者;以及
外籍人士或前美國長期居民。
建議您就ADS投資的外國和美國聯邦、州和地方以及其他稅務後果諮詢您自己的稅務顧問。
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就本摘要而言,「美國持有人」是指ADS的受益所有者,就美國聯邦所得稅而言:
美國公民或居民的個人;
在美國或其任何政治行政區的法律中或根據其法律創建或組織的公司(或就美國聯邦所得稅目的應作爲公司徵稅的其他實體);
收入無論來源如何均須繳納美國聯邦所得稅的遺產;或
如果是信託:
(a)信託已有效選擇就美國聯邦所得稅目的被視爲美國人;或
(b)(i)美國境內的法院能夠對信託的管理實施主要監督;和(ii)一名或多名美國人有權控制信託的所有實質性決定
如果就美國聯邦所得稅目的被歸類爲合夥企業的實體持有ADS,則其合夥企業的美國聯邦所得稅待遇通常取決於合夥企業的地位和合夥企業的活動。出於美國聯邦所得稅目的被歸類爲合夥企業的實體以及通過此類實體持有ADS的個人應諮詢自己的稅務顧問。
一般來說,如果您持有美國存託憑證,則就美國聯邦所得稅而言,您將被視爲這些存託憑證所代表的標的股份的持有人。因此,如果您將ADS兌換爲這些ADS所代表的標的股份,則不會確認任何收益或損失。
美國持有人應根據其特定情況就收購、擁有和處置美國存託憑證對他們造成的美國聯邦所得稅後果諮詢自己的稅務顧問。
美國對美國存託憑證徵稅
分佈
根據下文「被動型外國投資公司」項下的討論,美國存託憑證的美國持有者收到的任何分派,包括以色列扣繳的稅款(參見「以色列稅務考慮」),都將作爲股息徵稅,以美國聯邦稅收原則規定的我們當前和累積的收益和利潤爲限。超過收益和利潤的分配將減少美國持有者在美國存託憑證中調整後的稅基,並可能作爲資本利得徵稅。我們不根據美國聯邦稅收原則對我們的收入和利潤進行計算。如果我們不向美國持有者報告超過收益和利潤的分配部分,它通常將作爲股息徵稅。即使根據上述規則,這種分配將被視爲資本的免稅返還或資本利得。除守則第245和245A條所規定的外,身爲公司的美國持股人將沒有資格獲得任何股息扣除。
根據該準則,非公司美國股東收到的某些股息可能是「合格股息收入」,按較低的20%的資本利得稅徵稅。這項降低的稅率只適用於並非「被動外國投資公司」的「合資格外國公司」的股息,並且只適用於合格的美國持有人(即非公司持有人)在最短期限內持有的股票(通常是從除息日前60天開始的121天期間內的61天)。我們應該被視爲合格的外國公司,因爲(I)我們有資格享受以色列和美國之間的全面稅收條約的好處,其中包括信息交換計劃;以及(Ii)美國存託憑證很容易在美國成熟的證券市場上交易。此外,根據我們目前的業務計劃,我們預計不會被歸類爲「被動型外國投資公司」(參見下面的「被動型外國投資公司」)。因此,我們向持有最短持有期股票的美國個人股東支付的股息應符合降低所得稅稅率的條件。除了上面討論的股息所得稅外,某些非公司美國持有者還將繳納3.8%的股息聯邦醫療保險稅,如下文「非勞動所得的聯邦醫療保險稅」所述。

Distributions in currency other than U.S. dollars (a “foreign currency”) will be included in gross income of a U.S. holder based on the U.S. dollar value at the exchange rate on the date of receipt. If converted to U.S. dollars on that date, no
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foreign currency gain or loss is recognized. If not converted, the U.S. holder will have a basis in the foreign currency equal to its U.S. dollar value on the receipt date, with any subsequent gain or loss treated as ordinary income or loss.

Generally, dividends received by a U.S. holder with respect to ADSs will be treated as foreign source income for calculating the foreign tax credit limitation. Subject to certain conditions and limitations, any Israeli taxes withheld on dividends at the rate provided by the U.S.-Israel tax treaty may be deducted from taxable income or credited against a U.S. holder’s federal income tax liability. The limitation on foreign taxes eligible for the U.S. foreign tax credit is calculated separately with respect to various categories of income, including “passive” income and “general” income. . The rules relating to foreign tax credits and the timing thereof are complex. U.S. holders should consult their own tax advisors regarding the availability of a foreign tax credit under their particular situation.
Sale or Other Disposition of ADSs
If a U.S. holder sells or disposes of ADSs, gain or loss will be recognized for U.S. federal income tax purposes as the difference between the amount realized and the holder’s adjusted tax basis in the ADSs. Subject to the discussion below under the heading “Passive Foreign Investment Companies,” generally, this gain or loss will be a capital in nature, and if the ADSs were held for more than one year, it will be classified as long-term capital gain or loss. Long-term capital gains for individual U.S. holders are generally subject to a lower deferral income tax rate (currently up to 20%) than ordinary income. Additionally, certain non-corporate U.S. holders may be subject to a 3.8% Medicare tax on net gains as discussed below under “Medicare Tax on Unearned Income”.

If a U.S. holder receives foreign currency upon a sale or exchange of ADSs, gain or loss, if any, recognized on the subsequent sale, conversion or disposition of such foreign currency will be ordinary income or loss, and will generally be income or loss from sources within the United States for foreign tax credit limitation purposes. However, if such foreign currency is converted into U.S. dollars on the date received by the U.S. holder, the U.S. holder generally should not be required to recognize any gain or loss on such conversion.

U.S. holders using an Israeli stockbroker or intermediary may be subject to Israeli withholding tax on capital gains unless they obtain an exemption from the Israeli Tax Authorities or claim any allowable refunds or reductions. U.S. holders are advised that any Israeli tax paid under circumstances in which an exemption from (or a refund of or a reduction in) such tax was available will not give rise to a deduction or credit for foreign taxes paid for U.S. federal income tax purposes. If applicable, U.S. holders are advised to consult their Israeli stockbroker or intermediary regarding the procedures for obtaining an exemption or reduction.

Medicare Tax on Unearned Income
Certain U.S. holders that are individuals, estates or trusts are required to pay an additional 3.8% tax on all or a portion of their “net investment income,” which includes dividends and net gains from the sale or other dispositions of ADSs (other than ADSs held in a trade or business).
Passive Foreign Investment Companies
For U.S. federal income tax purposes, we will be considered a passive foreign investment company (“PFIC”) for any taxable year in which either (i) 75% or more of our gross income is "passive income", as defined in the relevant provisions of the Code; or (ii) on average, at least 50% of our assets (generally determined on a quarterly basis) produce or are held for the production of passive income. For this purpose, passive income includes dividend, interest, royalty, rent, and annuity income and the excess of gains over losses from the disposition of assets which produce passive income. If we were determined to be a PFIC for U.S. federal income tax purposes, highly complex rules would apply to U.S. holders owning ADSs.
Based on our estimated gross income, the average value of our gross assets and the nature of our business, we do not believe that we will be classified as a PFIC in the current taxable year. Our status in any taxable year will depend on our assets and activities in each year and because this is a factual determination made annually at the end of each taxable year, there can be no assurance that we will not be considered a PFIC for any future taxable year. If we were treated as a PFIC in any year during which a U.S. holder owns ADSs, such U.S. holder may be subject to materially adverse tax consequences, including additional U.S. federal income tax liability and tax filing obligations. Given our current business plans, however, we do not expect that we will be classified as a PFIC in future years.
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You are urged to consult your own tax advisor regarding the possibility of us being classified as a PFIC and the potential tax consequences arising from the ownership and disposition (directly or indirectly) of an interest in a PFIC.
Tax Cuts and Jobs Act (the "U.S. Tax Reform" or "TCJA")

As a global corporation, we are subject to income, non-income and transactional tax regimes in the United States and various other jurisdictions, which may change significantly. On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the "TCJA"), a comprehensive tax law that included several key tax changes to business taxation, including and amendment to Section 174 of the Code. Effective for taxable years beginning after December 31, 2021, this amendment requires research and development expenses to be capitalized and amortized over five or fifteen years, whereas previously, these expenses could be fully expensed when incurred.

The final impact of the TCJA may vary due to, among other things, possible changes in the interpretations, assumptions made by us as a result of additional information, or additional guidance or finalization of law and regulations that will be issued by the U.S. Department of Treasury, the IRS or other standard-setting bodies, and which may impact our future financial statements, and will be accounted for when such guidance is issued.

Backup Withholding and Information Reporting
Payments of dividends with respect to ADSs and the proceeds from the sale, retirement, or other disposition of ADSs made by a U.S. paying agent or other U.S. intermediary will be reported to the IRS and to the U.S. holder as may be required under applicable U.S. Treasury regulations. We, or an agent, a broker, or any paying agent, as the case may be, may be required to withhold tax (backup withholding), currently at the rate of 24%, if a non-corporate U.S. holder that is not otherwise exempt fails to provide an accurate taxpayer identification number and comply with other IRS requirements concerning information reporting. Certain U.S. holders (including, among others, corporations and tax-exempt organizations) are not subject to backup withholding. Any amount of backup withholding withheld may be used as a credit against your U.S. federal income tax liability provided that the required information is timely furnished to the IRS. U.S. holders should consult their tax advisors as to their qualification for exemption from backup withholding and the procedure for obtaining an exemption.

Foreign Asset Reporting
Certain U.S. holders who are specified individuals or specified domestic entities are required to report information relating to an interest in our ADSs on IRS Form 8938 (Statement of Specified Foreign Financial Assets), subject to certain exceptions (including an exception for shares held in accounts maintained by financial institutions). U.S. holders are encouraged to consult their tax advisors regarding their information reporting obligations, if any, with respect to their ownership and disposition of our ADSs.
Documents on Display
We are subject to certain of the information reporting requirements of the Securities and Exchange Act of 1934, as amended. As a foreign private issuer, we are exempt from the rules and regulations under the Securities Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Securities Exchange Act, with respect to their purchase and sale of our shares. In addition, we are not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Securities Exchange Act. NASDAQ rules generally require that companies send an annual report to shareholders prior to the annual general meeting, however we rely upon an exception under the NASDAQ rules and follow the generally accepted business practice for companies in Israel. Specifically, we file annual reports on Form 20-F, which contain financial statements audited by an independent accounting firm, electronically with the SEC and post a copy on our website. We also furnish to the SEC quarterly reports on Form 6-K containing unaudited financial information after the end of each of the first three quarters.
The SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC, and our SEC reports can be viewed or downloaded there. The
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address of this web site is http://www.sec.gov. In addition, information that we furnish or file with the SEC, including annual reports on Form 20-F, reports on Form 6-K, proxy and information statements and any amendments to, or exhibits included in, those reports are available to be viewed or download, free of charge, on our website at http://www.nice.com/company/investors as soon as reasonably practicable after such materials are filed or furnished with the SEC. Information contained, or that can be accessed through, our website does not constitute a part of this annual report and is not incorporated by reference herein, and we have included our website address in this annual report solely for informational purposes.
Item 11.    Quantitative and Qualitative Disclosures About Market Risk.
General
Market risks relating to our operations result primarily from weak economic conditions in the markets in which we sell our products and changes in interest and exchange rates. To manage the volatility related to the latter exposure, we may enter into various derivative transactions. Our objective is to reduce, where it is deemed appropriate to do so, fluctuations in earnings and cash flows associated with changes in currency exchange rates. It is our policy and practice to use derivative financial instruments only to manage such exposures. We do not use financial instruments for trading purposes and we are not a party to any leveraged derivative.
Foreign Currency Exchange Risk
We conduct our business primarily in U.S. dollars but also in the currencies of Israel, the U.K., the E.U., India and Philippines, as well as other currencies. Thus, we are exposed to foreign exchange fluctuations, primarily in NIS, GBP, EUR, INR and PHP. We monitor foreign currency exposure and from time to time we may use various instruments to preserve the value of sale transactions and commitments, however, this cannot assure us protection against risks of currency fluctuations. For more information regarding foreign currency related risks, please refer to Item 3, “Key Information—General Risks Relating to Our Business” of this annual report. We use currency forward contracts and option contracts in order to protect against the increase in value of forecasted non-dollar currency cash flows and to hedge future anticipated payments.
As of December 31, 2024, we had outstanding currency forward contracts to hedge payroll, facilities expenses and lease obligations, denominated in NIS, INR, PHP and ,COP in the total amount of approximately $211.13 million. The fair value adjustment of those contracts was approximately $1.94 million. These transactions were for a period of up to one year.
The following table details the balance sheet exposure (i.e., the difference between assets and liabilities) in our main foreign currencies, as of December 31, 2024, against the relevant functional currency.
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Functional currencies
(In U.S. dollars in millions)
USDGBPCADMXNAUDSGD
Foreign currencies
USD$— $30 $28 $$(1)$
GBP$22 $— $— $— $(1)$— 
EUR$26 $18 $— $— $— $— 
CAD$28 $$— $— $— $— 
AUD$$(1)$— $— $— $— 
MXN$$— $— $— $— $— 
CHF$— $— $— $— $— $— 
JPY$(6)$— $— $— $— $— 
INR$(4)$— $— $— $— $— 
SGD$(6)$— $— $— $— $— 
HKD$(9)$— $— $— $— $— 
NIS$(10)$— $— $— $— $— 
PHP$(28)$— 
BRL$
Other currencies$(1)$— $— $— $— $— 

The table below presents the fair value of firmly committed transactions for lease obligations denominated in currencies other than the U.S. dollar, which is our reporting currency:
(In U.S. dollars in millions)
New Israeli ShekelOther currencies *Total
Less than 1 year$(4)$(3)$(7)
1-3 years$(8)$(7)$(15)
3-5 years$(7)$(4)$(11)
Over 5 years$(10)$(3)$(13)
Total$(29)$(17)$(46)
*    Other currencies include the following currencies: AUD, EUR, GBP, INR, JPY, PHP, COP and SGD.
Interest Rate Risk
We are subject to interest rate risk on our investments and on our borrowings.
On August 24, 2020, we issued $460 million aggregate principal amount of 0% exchangeable senior notes due 2025.

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截至2024年12月31日,我們的未償債務、相應的利率、貨幣和還款時間表以美元等值(以百萬計)列出於下表中。
貨幣利率20252026年及以後
(In數百萬)
固定費率:
USD$460.0 — %$460.0 $— 
共計:$460.0 $460.0 $— 
債務發行成本,扣除攤銷(1.2)
共計:$458.8 
由於利率波動,我們的投資面臨市場風險,這可能會影響我們的利息收入和有價證券投資組合的公平市場價值。
我們的短期投資組合包括投資級企業債券、美國政府機構和美國國債。截至2024年12月31日, 66.2我們的投資組合中%是此類證券,其餘是美元存款。
我們投資於美國銀行、歐洲銀行、以色列銀行和貨幣市場基金的美元存款。截至2024年12月31日,33.8%如果我們的投資組合是這樣的存款。由於這些投資的期限較短,因此利息收入對利率變化很敏感。
截至2024年12月31日,證券投資組合的加權平均期限爲1.88年。根據標準普爾評級,我們的有價證券投資組合中的證券通常被評爲A+或根據穆迪評級爲A1。佔有價證券組合3.2%的證券被評爲AAA級;佔有價證券組合17.36%的證券被評爲AA級;佔有價證券組合75%的證券被評爲A級;佔有價證券投資組合3.96%的證券被評爲BBB+證券,佔0.5%有價證券投資組合的有價證券被評級爲BBB,佔有價證券投資組合0.5%的證券在2023年被降級後被評級爲BBB。
下表列出了受利率變化風險影響的有價證券的公允價值,按到期日分開(以美元爲單位,以百萬計):
攤銷成本估計公平值
長達1年1-3年4-7年總計長達1年1-3年4-7年總計
公司債券140.6522.3159.2822.1140.0521.5156.8818.3
美國國債63.829.192.963.829.192.9
美國政府機構3.05.18.13.05.18.1
總計207.4556.5159.2923.1206.8555.7156.8919.3
本年度報告第3項「關鍵信息-風險因素」中描述了可能影響實際結果和結果的其他風險和不確定性。
項目12. 股票證券以外的證券的描述.
美國存托股票和收據
下文概述了NICE、摩根大通銀行、N.A.之間經修訂的存款協議項下有關費用和其他付款的某些條款。作爲託管人(「託管人」),以及所有者和
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隨時持有據此發行的ADR(「存款協議」)。存款協議中包含的持有人權利摘要和附加條款已作爲本年度報告附件2.4提交。這些摘要並不完整,並且完整地受到存款協議的限制,該協議的形式已作爲F-6表格註冊聲明的附件99(a)歸檔(註冊號333-203623)於2015年4月24日向SEC提交,經存款協議第1號修正案修訂,其表格已作爲2020年4月29日向SEC提交的F-6表格生效後修正案第1號附件99(a)(2)提交。
保管人的押記
存託機構可以向每個已發行ADS的人收取費用,包括但不限於針對股票存款的發行、有關股票分配、權利和其他分配的發行、根據我們宣佈的股票股息或股票拆分的發行或根據合併、證券交換或影響ADS或已存證券的任何其他交易或事件的發行,對於每個爲了提取已存證券而交出ADS或其ADS因任何其他原因被取消或減少的人,發行、交付、減少、取消或交出每份ADS的費用爲0.05美元(視情況而定)。存管人可以出售(通過公開或私下出售)在存管之前就股份分配、權利或其他分配收到的足夠的證券和財產以支付該費用。
ADR持有人、存入或撤回股份的任何一方、交出ADS的任何一方或發行ADSs的任何一方(包括但不限於根據我們或股票交易所宣佈的股票股息或股票拆分的發行)應產生以下額外費用,以適用者爲準:
a fee of $1.50 per ADR for transfers of certificated or direct registration ADRs;
a fee of up to $0.05 per ADS for any cash distribution made pursuant to the Deposit Agreement;
a fee of up to $0.05 per ADS per calendar year (or portion thereof) for services performed by the Depositary in administering the ADRs (which fee may be charged on a periodic basis during each calendar year and shall be assessed against holders of ADRs as of the record date or record dates set by the Depositary during each calendar year and shall be payable in the manner described in the next succeeding provision);
a fee for the reimbursement of such fees, charges and expenses as are incurred by the Depositary or any of its agents (including, without limitation, the custodian and expenses incurred on behalf of holders in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in connection with the servicing of the shares or other deposited securities, the sale of securities (including, without limitation, deposited securities), the delivery of deposited securities or otherwise in connection with the Depositary’s or its custodian’s compliance with applicable law, rule or regulation (which fees and charges shall be assessed on a proportionate basis against holders as of the record date or dates set by the Depositary and shall be payable at the sole discretion of the Depositary by billing such holders or by deducting such charge from one or more cash dividends or other cash distributions);
stock transfer or other taxes and other governmental charges;
cable, telex and facsimile transmission and delivery charges incurred at the request of an ADR holder in connection with the deposit or delivery of shares;
transfer or registration fees for the registration of transfer of deposited securities on any applicable register in connection with the deposit or withdrawal of deposited securities;
in connection with the conversion of foreign currency into U.S. dollars, the fees, charges and expenses of the Depositary (which are paid out of such foreign currency); and
fees of any division, branch or affiliate of the Depositary utilized by the Depositary to direct, manage or execute any public or private sale of securities under the deposit agreement.
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The Depositary may generally refuse to provide services until it is reimbursed applicable amounts, including stock transfer or other taxes and other governmental charges, and is paid its fees for applicable services.
The fees and charges an ADR holder may be required to pay may vary over time and may be changed by us and by the Depositary. Our ADR holders will receive prior notice of the increase in any such fees and charges.
We will pay all other charges and expenses of the Depositary and any agent of the Depositary (except the custodian) pursuant to agreements from time to time between us and the Depositary. The charges described above may be amended from time to time by agreement between us and the Depositary.
Fees paid by the Depositary
Our Depositary has agreed to reimburse us for certain expenses we incur that are related to establishment and maintenance of the ADR program upon such terms and conditions as we and the Depositary may agree from time to time. The Depositary may make available to us a set amount or a portion of the Depositary fees charged in respect of the ADR program or otherwise upon such terms and conditions as we and the Depositary may agree from time to time.
In respect of 2024, we received a payment in the amount of approximately $1 million from the Depositary as reimbursement for expenses we incurred in 2024 in relation to the maintenance and administration of the ADR program. 
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PART II
Item 13.    Defaults, Dividend Arrearages and Delinquencies.
None.
Item 14.    Material Modifications to the Rights of Security Holders and Use of Proceeds.
None.
Item 15.    Controls and Procedures.
Disclosure Controls and Procedures
An evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of NICE’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) concluded that NICE’s disclosure controls and procedures were effective as of such date.
Management’s Annual Report on Internal Control over Financial Reporting
我們的管理層負責對我們的財務報告建立和維護充分的內部控制,該術語的定義見《證券交易法》第15 d-15(f)條。我們對財務報告系統的內部控制旨在爲財務報告的可靠性以及根據公認會計原則爲外部目的編制財務報表提供合理保證。
由於其固有的侷限性,對財務報告的內部控制可能無法防止或發現錯誤陳述,即使確定有效,也只能爲財務報表提供合理保證。此外,對未來時期有效性的任何評估的預測都可能面臨這樣的風險:控制可能因條件變化而變得不充分,或者對政策或程序的遵守程度可能惡化。
截至2024年12月31日,我們的管理層評估了財務報告內部控制的有效性。我們的管理層的評估基於特雷德韋委員會(COSO)贊助組織委員會發布的內部控制綜合框架(2013)中制定的標準。根據這一評估,我們的管理層得出結論,截至2024年12月31日,我們對財務報告的內部控制有效。
獨立註冊會計師事務所的認證報告
我們的獨立註冊會計師事務所Kost,Forer,Gabbay & Kasierer是安永全球的成員,獨立評估了我們對財務報告內部控制的有效性,併發布了一份證明報告,該報告包含在本年度報告F-4頁的第18項下。

財務報告內部控制的變化
本年度報告涵蓋期間,我們對財務報告的內部控制不發生對或合理可能對我們對財務報告的內部控制產生重大影響的變化。
項目16 A. 審計委員會財務專家.
我們的董事會已確定Dan Falk和Yocheved Dvir均符合S-K法規第407條中定義的審計委員會財務專家的定義,並且根據適用法規具有獨立性。
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項目160亿。 《道德守則》.
我們已採用道德和商業行爲準則(「道德準則」),適用於我們的首席執行官和財務官員,也適用於我們的所有員工。如果我們對道德準則做出任何實質性修改或向我們的首席執行官、首席財務官或公司控制人授予本準則條款的任何豁免,我們將在我們的網站或我們的年度報告中披露此類修改或豁免的性質20-F表格。
《道德準則》總結了我們反賄賂和反腐敗政策的原則。我們對賄賂和腐敗採取零容忍態度,並致力於遵守與打擊賄賂和腐敗相關的適用法律法規。

道德準則以及我們單獨的反賄賂和腐敗政策均可在我們的網站上獲取:www.nice.com。可應要求免費提供書面副本。
項目16 C. 首席會計師費用和服務.
支付給獨立核數師的費用
安永全球成員Kost、Forer、Gabbay & Kasierer以及安永全球其他成員在過去兩個財年每年收取或預計收取的專業服務費用如下:
提供服務2024年費用2023年費用
審計(1)$1,144 $1,150 
審計相關(2)$369 $95 
稅收(3)$468 $438 
所有其他費用$ $ 
總計$1,981 $1,683 
(1)審計費用是指本表所示各年份的審計服務,包括與2023年和2024年年度審計相關的費用(包括根據《薩班斯-奧克斯利法案》第404條在每年進行的審計)、有關我們在表格6-K上提交的季度財務業績的某些程序,有關財務會計和各種會計問題以及當地法定審計執行的諮詢。
(2)審計相關費用涉及傳統上由獨立核數師執行的保證和相關服務,其中包括與其他法定或監管備案(主要是與併購相關的)相關的盡職調查和審計服務。
(3)稅費是指我們的核數師提供的專業服務,包括稅務合規、實際或預期交易的稅務建議、與轉讓定價相關的稅務諮詢。
政策和程序
我們的審計委員會已經通過了一項政策和程序,用於預先批准我們的外部核數師Kost,Forer,Gabbay&Kasierer提供的審計和非審計服務,Kost,Forer,Gabbay&Kasierer是安永全球的成員。該政策旨在確保此類服務不會損害我們核數師的獨立性,對於我們核數師可能執行的各種審計和非審計服務,需要每年事先獲得審計委員會的批准。如果由我們的核數師提供的一種服務沒有獲得這種一般的預先批准,它將需要我們的審計委員會的具體預先批准。任何超過預先批准的成本水平或預算金額的擬議服務也將需要我們的審計委員會的具體預先批准。該政策禁止保留獨立核數師以履行2002年薩班斯-奧克斯利法案第201節或美國證券交易委員會規則中定義的被禁止的非審計職能,並考慮擬議的服務是否與公共核數師的獨立性相兼容。
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項目16 D. 審計委員會上市準則的豁免.
不適用。
項目16 E. 發行人和關聯買家購買股票證券.
2024年,我們回購了普通股,如下表所述。
期間(a)購買的股票總數(b)每股平均支付價格(c)作爲公開宣佈的計劃或計劃的一部分購買的股票總數(d)根據計劃或計劃可能購買的股票的最大數量(或大致美元價值)
(In美元,股份金額除外)
1月1日至1月31日515 200 258,002,366 
2月1日至2月28日55,139 223.79 55,139 245,662,866 
3月1日至3月31日115,458 251.80 115,458 216,590,123 
4月1日至4月30日— — — 216,590,123 
5月1日至5月31日44,250 193.93 44,250 208,008,817 
6月1日至6月30日822,968 167.09 822,968 70,501,148 
7月1日至7月31日169.54 70,500,470 
8月1日至8月31日120,000 178.93 120,000 49,028,302 
9月1日至9月30日392,004 165.72 392,004 483,953,368 
10月1日至10月31日— — — 483,953,368 
11月1日至11月30日249,255 174.90 249,255 440,357,698 
12月1日至12月31日281,042 183.46 281,042 388,797,265 
總計2,080,635 177.44 2,080,120 3,131,945,914 
2022年11月9日,我們的董事會批准了一項計劃,回購我們高達25000美元的已發行和已發行普通股和美國存託憑證(萬)。公司在2023年底前全面執行了25000美元的萬股票回購計劃。2023年11月15日,我們的董事會批准了一項額外的計劃,回購我們在2022年董事會批准的回購計劃完成後開始的高達30000美元的已發行和已發行普通股和美國存託憑證(萬)。2024年6月7日,我們的董事會批准加快30000美元的萬股票回購計劃。當天,我們的董事會還批准了一項額外的計劃,回購我們高達50000美元的已發行和已發行普通股和美國存託憑證(萬)。公司在2024年底前全面執行了30000美元的萬股票回購計劃。根據適用的證券法律和法規,可不時在公開市場或私下協商的交易中進行回購。回購交易的時間和金額將由管理層決定,並可能取決於各種因素,包括市場狀況、替代投資機會和其他考慮因素。

這些計劃並不要求我們購買任何特定金額的普通股和美國存託憑證,並且每個計劃都可以隨時修改或終止,而無需事先通知。
項目16 F. 更改註冊人的認證會計師.
沒有。
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項目16 G。 公司治理.
我們遵循以色列公司法,其相關條款已在本年度報告中概述,而不是遵守納斯達克有關:(i)股東會議法定人數的要求(見本年度報告第10項「補充信息-公司大綱和章程-股東會議」);(ii)股東批准根據股權補償計劃發行證券(見第10項,「附加信息-公司備忘錄和章程-某些交易的批准」和「公職人員補償的批准」在本年度報告中);及(iii)向股東發送年度報告(見本年度報告中第10項「附加信息-展示的文件」)。
項目16 H. 礦山安全揭秘.
不適用因
項目16 I. 有關阻止檢查的外國司法管轄區的披露.
不適用因

Item. 16 J。 內幕交易政策
我們的董事會已經 通過 內幕交易政策(「內幕交易政策」),規範董事、高級管理人員和員工購買、出售和其他處置我們證券的行爲,其合理設計旨在促進遵守適用的內幕交易法律、規則和法規以及適用的上市標準。內幕交易政策副本作爲本年度報告附件11.1存檔。
Item. 1.6万。 網絡安全
網絡安全是我們風險管理實踐的組成部分。 我們建立並維護了網絡安全風險計劃,該計劃旨在評估、識別和管理網絡安全威脅的重大風險。我們的計劃包括相關的信息安全政策和程序,以保護我們的系統、產品和服務中包含的信息的機密性、完整性和可用性,並評估、識別、管理和解決網絡安全風險。我們的內部網絡安全政策和程序納入了行業最佳實踐,並每年在網絡安全風險計劃審查中進行評估。這些政策和程序包括信息安全政策、事件響應程序、風險評估程序和供應商管理政策。
我們已經驗證了我們的信息安全管理政策和程序,並獲得了符合ISO 27001:2022信息安全管理標準和ISO 27701:2019隱私管理標準的認證以及其他認證,例如FedRAMP、SOC 2 Type II應用程序、PCDSS和HITRUST特定業務線。

我們利用多位第三方專家來支持我們的計劃,爲我們提供最佳實踐建議,並協助我們評估和增強我們的網絡安全實踐。這些專家包括威脅監控服務提供商、網絡軟件和託管服務提供商、滲透測試公司、法醫調查人員、網絡安全顧問和專門從事網絡領域的法律顧問。

我們定期在內部和通過第三方參與進行網絡安全風險評估和審計。 這些流程包括定期掃描我們的信息系統是否存在漏洞,包括進行滲透測試,並且我們維護工具來檢測可能影響我們的系統、產品和服務的異常或未經授權的活動。我們還保留一家信譽良好的第三方公司的服務來進行威脅監控和檢測。

我們要求員工、承包商、合作伙伴和供應商了解他們的網絡安全責任。我們所有員工都會進行年度網絡安全培訓和其他持續的網絡安全意識練習。

我們維護第三方風險管理流程,以識別、評估和減輕與我們的第三方服務提供商相關的風險。 作爲此流程的一部分,我們承擔與信息安全相關的合同義務,並要求我們的第三方合作伙伴保持足夠的安全措施和控制以確保我們數據的安全。
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我們的事件響應政策爲網絡安全事件的處理和報告提供了指導方針。如果發生潛在的網絡安全事件,我們的安全運營中心(SOC)會進行初步評估,並根據事件的嚴重程度向公司信息安全副總裁提供有關該事件的報告。然後,公司信息安全副總裁根據事件的性質和/或嚴重性與其他內部和外部各方進行諮詢,包括我們的網絡事件響應團隊(CIRT)成員和我們的總法律顧問。根據評估的事件潛在重大程度,我們可能會通知我們的首席財務官、首席執行官、董事會內部審計委員會主席和我們的董事會主席。我們的事件響應政策涵蓋的其他指導方針包括事件識別、遏制、根除、恢復和經驗教訓活動的步驟。

我們的網絡安全風險計劃由 企業信息安全副總裁 他向我們的首席財務官彙報。 我們的企業信息安全副總裁擁有評估和管理網絡安全計劃和風險的豐富經驗,並且擁有廣泛的網絡安全知識。 企業網絡安全團隊的成員負責實施和維護公司的網絡安全計劃和實踐。我們公司內的其他網絡安全團隊和專業人士有責任在其業務範圍內實施和維護網絡安全流程。此類團隊和個人與我們的企業網絡安全團隊協調,並在我們的企業信息安全副總裁的指導下工作。企業網絡安全團隊與SOC團隊密切合作,SOC團隊是監控和響應安全事件的中心中心,並接受過支持我們處理事件相關事務的管理的培訓。

我們的管理層致力於維護強有力的網絡安全計劃,其中包括提供維持該計劃所需的資源,包括人員、工具、流程、程序和教育。 我們的高級管理層定期評估和審查網絡安全風險和控制措施,包括作爲提交給董事會內部審計委員會的內部審計的一部分。 作爲其一般監督職能的一部分,我們的董事會對網絡安全風險管理進行最終監督。 我們的董事會接收並審查與網絡安全威脅和趨勢以及我們的網絡安全計劃相關的更新、報告和演示。

截至本年度報告提交之日,網絡安全威脅(包括之前任何網絡安全事件造成的)並未對我們的業務戰略、運營業績或財務狀況產生重大影響。 如果未來發生重大網絡安全事件,可能會對我們的業務或財務狀況產生不利影響。 有關網絡安全相關市場風險的信息,請參閱本年度報告第3項「與信息和產品安全以及知識產權相關的風險」。
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第三部分
項目17. 財務報表.
不適用因
項目18. 財務報表.
參見第F-1頁第三頁今年的F-57隨附其年度報告。

項目19. 展品.
展品編號描述
2.1股票格式(作爲NICE有限公司第1號修正案的附件4.1提交給NICE有限公司‘S於1995年12月29日向美國證券交易委員會提交的F-1表格登記聲明(註冊號333-99640),並通過引用併入本文)。
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101
以下財務信息來自NICE有限公司S截至2024年12月31日的年度報告20-F表格,格式爲內聯XBRL:(I)截至2024年12月31日和2023年12月31日的綜合資產負債表;(Ii)截至2024年、2024年、2023年和2022年12月31日的綜合收益表;(Iii)截至2024年12月31日、2023年和2022年12月31日的股東權益和全面收益表;(Iv)截至2024年12月31日、2023年和2022年12月31日的綜合現金流量表;以及(V)綜合財務報表附註。
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NICE Ltd.及其子公司
合併財務報表
截至2024年12月31日
以美元
索引
頁面
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科斯特·福爾加貝和卡西雷爾
Menachem Begin Road 144號,A棟,
以色列特拉維夫6492102
電話:+972-3-6232525
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獨立註冊會計師事務所報告

致本公司股東及董事會

NICE有限公司

對財務報表的幾點看法

我們審計了NICE Ltd.及其子公司隨附的合併資產負債表(「公司」)截至2024年12月31日和2023年12月31日,截至2024年12月31日止三年各年的相關合並利潤表、綜合收益表、股東權益變動表和現金流量表,以及相關附註(統稱爲「合併財務報表」)。我們認爲,合併財務報表在所有重大方面公平地反映了公司2024年12月31日和2023年12月31日的財務狀況,以及截至2024年12月31日期間三年中每年的經營結果和現金流量,符合美國公認會計原則。

我們還根據上市公司會計監督委員會的標準進行了審計(美國)(PCAOB),截至2024年12月31日公司對財務報告的內部控制,基於特雷德韋委員會贊助組織委員會發布的內部控制綜合框架中制定的標準(2013年框架)和我們日期爲2025年3月19日的報告對此表達了無保留的意見。

意見基礎

這些財務報表是公司管理層的責任。我們的責任是根據我們的審計對公司的財務報表發表意見。我們是一家在PCAOB註冊的公共會計師事務所,根據美國聯邦證券法以及美國證券交易委員會和PCAOB的適用規則和法規,我們必須對公司保持獨立性。

我們根據PCAOb的標準進行審計。這些標準要求我們計劃和執行審計,以合理保證財務報表是否不存在由於錯誤或欺詐而造成的重大錯誤陳述。我們的審計包括執行程序以評估財務報表重大錯誤陳述的風險(無論是由於錯誤還是欺詐),以及執行應對這些風險的程序。此類程序包括在測試的基礎上審查有關財務報表中金額和披露的證據。我們的審計還包括評估管理層使用的會計原則和做出的重大估計,以及評估財務報表的整體列報方式。我們相信我們的審計爲我們的意見提供了合理的基礎。












F-2

eyimage.jpg
科斯特·福爾加貝和卡西雷爾
Menachem Begin Road 144號,A棟,
以色列特拉維夫6492102
電話:+972-3-6232525
傳真:+972-3-5622555
ey.com


關鍵審計事項

以下傳達的關鍵審計事項是對財務報表的本期審計產生的事項,該事項已傳達或要求傳達給審計委員會,並且:(1)與對財務報表重要的賬目或披露有關;(2)涉及我們特別具有挑戰性、主觀或複雜的判斷。關鍵審計事項的溝通不會以任何方式改變我們對整體合併財務報表的意見,並且我們不會通過以下溝通關鍵審計事項來就關鍵審計事項或與其相關的賬目或披露提供單獨的意見。

收入確認
有關事項的描述
如綜合財務報表附註2所述,本公司的收入主要來自授權其軟件產品和服務,包括基於雲的服務。該公司與客戶簽訂的合同通常包括轉讓多種產品和服務的承諾,如果這些產品和服務是不同的履約義務,則單獨入賬。在此類合同中,交易價格隨後在相對獨立的銷售價格基礎上分配給不同的履約義務,並在轉讓不同的履約義務的控制權時確認收入。基於雲的服務的收入是隨着時間的推移而確認的,軟件許可證的收入通常是在某個時間點確認的。

對具有多個履約義務的合同進行會計處理需要公司作出重大判斷,其中包括:(A)確定和確定產品和服務是否被視爲不同的履約義務,應根據相關協議的條款和條件單獨覈算;(B)確定沒有單獨銷售的每個不同履約義務的獨立銷售價格。對於沒有單獨銷售的產品,通常無法獲得直接可見的數據,這要求公司根據以下因素對相關履約義務的獨立銷售價格做出重大假設:(A)地理或地區特定因素和內部批准的定價指導方針;(C)每個不同履約義務的控制權轉移模式(即確認收入的時間)。對於根據使用情況確認的基於雲的收入,收入的處理和確認是高度自動化的,涉及捕獲大量數據併爲其定價。

鑑於這些因素,在評估管理層在確定這些客戶合同的收入確認方面的判斷時,相關的審計工作是廣泛的,需要高度的核數師判斷。

F-3

eyimage.jpg
科斯特·福爾加貝和卡西雷爾
Menachem Begin Road 144號,A棟,
以色列特拉維夫6492102
電話:+972-3-6232525
傳真:+972-3-5622555
ey.com

我們是如何在審計中解決這個問題的
我們取得了了解,評估了設計,並測試了公司流程和控制的運營有效性,以確定和確定不同的履約義務、每項履約義務的相對獨立售價,以及收入確認時間的確定。

我們還聘請了具有專業技能和知識的IT專業人員協助測試公司收入流程的某些內部控制,包括通過公司的IT系統捕獲相關使用交易信息的控制。

除其他事項外,我們的審計程序包括評估管理層用於估計非單獨銷售的產品和服務的獨立銷售價格的方法和合理性。

對於合同樣本,我們:(1)獲得並閱讀合同來源文件,包括主協議和協議中的其他文件;(2)測試管理層對重要條款完整性的識別,包括確定和確定不同的履約義務;(3)測試管理層對收入的計算和收入確認的相關時間;(4)在樣本基礎上,我們測試使用情況,並相應地觀察到相關IT系統中捕獲了使用屬性,如持續時間和服務類型。




.





/s/ KOST Forer Gabbay&KASIERER
安永全球會員
我們自1995年以來一直擔任公司的核數師。
特拉維夫,以色列
2025年3月19日















F-4

eyimage.jpg
科斯特·福爾加貝和卡西雷爾
Menachem Begin Road 144號,A棟,
以色列特拉維夫6492102
電話:+972-3-6232525
傳真:+972-3-5622555
ey.com



獨立註冊會計師事務所報告

致NICE Ltd的股東和董事會。

關於財務報告內部控制的看法

我們根據特雷德韋委員會贊助組織委員會發布的內部控制綜合框架(2013年框架)(COSO標準)中制定的標準,對NICE Ltd.及其子公司截至2024年12月31日的財務報告內部控制進行了審計。我們認爲,截至2024年12月31日,NICE Ltd.及其子公司(公司)根據COSO標準,在所有重大方面對財務報告保持了有效的內部控制。

我們還根據上市公司會計監督委員會的標準進行了審計(美國)(PCAOB)、公司截至2024年和2023年12月31日的合併資產負債表、截至2024年12月31日止三年各年的相關合並利潤表、綜合收益表、股東權益變動表和現金流量表,且相關注釋和我們日期爲2025年3月19日的報告對此表達了無保留的意見。

意見基礎

公司管理層負責維持對財務報告的有效內部控制,並負責對財務報告內部控制的有效性進行評估,該評估包含在隨附的管理層關於財務報告內部控制的報告中。我們的責任是根據我們的審計對公司財務報告的內部控制發表意見。我們是一家在PCAOB註冊的公共會計師事務所,根據美國聯邦證券法以及美國證券交易委員會和PCAOB的適用規則和法規,我們必須對公司保持獨立性。

我們按照PCAOb的標準進行審計。這些標準要求我們計劃和執行審計,以合理保證是否在所有重大方面維持了對財務報告的有效內部控制。

我們的審計包括了解財務報告內部控制,評估存在重大缺陷的風險,根據評估的風險測試和評估內部控制的設計和運營有效性,以及執行我們認爲必要的其他程序。我們相信我們的審計爲我們的意見提供了合理的基礎。










F-5

eyimage.jpg
科斯特·福爾加貝和卡西雷爾
Menachem Begin Road 144號,A棟,
以色列特拉維夫6492102
電話:+972-3-6232525
傳真:+972-3-5622555
ey.com



財務報告內部控制的定義和侷限性

公司對財務報告的內部控制是一個程序,旨在根據公認的會計原則,爲財務報告的可靠性和爲外部目的編制財務報表提供合理保證。公司對財務報告的內部控制包括下列政策和程序:(1)關於保存合理詳細、準確和公平地反映公司資產的交易和處置的記錄;(2)提供合理的保證,即交易被記錄爲必要的,以便按照公認的會計原則編制財務報表,公司的收入和支出僅根據公司管理層和董事的授權進行;(三)提供合理保證,防止或及時發現可能對財務報表產生重大影響的未經授權收購、使用或處置公司資產。

由於其固有的侷限性,財務報告的內部控制可能無法防止或發現錯誤陳述。此外,對未來時期有效性的任何評估的預測都可能面臨這樣的風險:控制可能因條件變化而變得不充分,或者對政策或程序的遵守程度可能會惡化。











/s/ KOST FORER GABBAY & KasIEER
安永全球會員
特拉維夫,以色列
2025年3月19日
F-6

NICE Ltd.及其子公司
合併資產負債表
以千爲單位的美元(不包括每股和每股數據)
十二月三十一日,
20242023
資產
流動資產:
現金及現金等價物$481,712 $511,795 
短期投資
1,139,996 896,044 
貿易應收賬款(扣除信用損失撥備美元13,182及$16,712 分別於2024年和2023年12月31日)
643,985 585,154 
債務對沖期權 121,922 
預付費用和其他流動資產239,080 197,967 
總計 流動資產
2,504,773 2,312,882 
長期資產:
預付費用和其他長期資產212,512 219,332 
財產和設備,淨值185,292 174,414 
遞延稅項資產219,232 178,971 
經營租賃使用權資產93,083 104,565 
其他無形資產,淨值231,346 305,501 
商譽1,849,668 1,821,969 
總計 長期資產
2,791,133 2,804,752 
總計 資產
$5,295,906 $5,117,634 

附註是綜合財務報表的組成部分。








F-7

NICE Ltd.及其子公司
合併資產負債表
以千爲單位的美元(不包括每股和每股數據)
十二月三十一日,
20242023
負債及股東權益
當前負債:
貿易應付款項$110,603 $66,036 
遞延收入和客戶預付款299,367 302,649 
經營租賃負債的當前到期日12,554 13,747 
債務
458,791 209,229 
應計費用和其他負債593,109 528,660 
總計 流動負債
1,474,424 1,120,321 
長期負債:
遞延收入和客戶預付款66,289 52,458 
應計遣散費20,291 17,078 
遞延稅項負債1,965 8,596 
債務 457,081 
經營租約92,258 102,909 
其他長期負債37,516 4,691 
總計 長期負債
218,319 642,813 
承付款和或有負債
股東股票:
股本-
國家情報局普通股 1 面值:
授權: 125,000,000 2024年和2023年12月31日的股票;已發行: 74,774,827 2024年和2023年12月31日的股票;已發行: 63,249,84362,870,669 分別於2024年和2023年12月31日的股票
18,961 18,961 
額外實收資本2,278,672 2,123,487 
按成本計算的國庫券- 11,524,98411,904,158 分別於2024年和2023年12月31日的普通股
(1,339,218)(1,005,104)
累計其他綜合損失(71,070)(59,110)
留存收益2,702,397 2,262,898 
歸屬於NICE Ltd.的總計股東3,589,742 3,341,132 
非控股權益13,421 13,368 
總計 股東權益
3,603,163 3,354,500 
總計 負債及股東權益
$5,295,906 $5,117,634 
附註是綜合財務報表的組成部分。
F-8

NICE Ltd.及其子公司
綜合收益表
以千爲單位的美元(不包括每股和每股數據)
截至十二月三十一日止的年度:
202420232022
收入:
$1,984,160 $1,581,825 $1,295,323 
服務
596,031 641,387 650,116 
產品155,081 154,296 235,855 
總計收入
2,735,272 2,377,508 2,181,294 
收入成本:
699,713 553,654 472,805 
服務
184,410 188,890 183,938 
產品25,401 25,629 26,945 
總計 收入成本
909,524 768,173 683,688 
毛利
1,825,748 1,609,335 1,497,606 
運營費用:
研發,淨
360,607 322,708 306,073 
銷售及市場推廣642,251 599,114 609,833 
一般及行政276,936 252,286 246,527 
總計 業務費用
1,279,794 1,174,108 1,162,433 
營業收入
545,954 435,227 335,173 
財務收入和其他,淨
58,872 22,473 10,159 
所得稅稅前收入
604,826 457,700 345,332 
對所得162,238 119,399 79,387 
淨收入442,588338,301265,945
基本每股收益
$6.97 $5.32 $4.17 
稀釋後每股收益
$6.76 $5.11 $4.00 
計算中使用的加權平均股數(單位:千):
基本每股收益
63,48363,59063,790
稀釋後每股收益
65,50666,26566,465
附註是綜合財務報表的組成部分。
F-9

NICE Ltd.及其子公司
綜合全面收益表
以千爲單位的美元

止年度
十二月三十一日,
202420232022
淨收入
$442,588 $338,301 $265,945 
外幣兌換調整變化
(13,355)13,810 (27,582)
可供出售投資:
未實現淨收益(損失)變化919 18,029 (33,319)
減-已實現並計入淨利潤的淨收益(損失)的重新分類調整
(423)12,271 419 
淨變化(扣除$(342), $(4,130)和$4,483)
496 30,300 (32,900)
現金流對沖:
未實現損失變化
(3,621)(5,300)(18,223)
減-已實現並計入淨利潤的淨收益的重新分類調整
4,520 13,335 7,189 
淨變化(扣除美元的稅收影響10, $(1,096)和$1,505)
899 8,035 (11,034)
其他全面收益(虧損)合計
(11,960)52,145 (71,516)
全面收益
$430,628 $390,446 $194,429 

附註是綜合財務報表的組成部分。
F-10

NICE Ltd.及其子公司
股東權益變動報表
以千爲單位的美元





分享
資本
額外
實收
資本
庫存股份累計其他綜合損失留存收益非控制性權益總計
股東
股權
截至2024年1月1日餘額$18,961 $2,123,487 $(1,005,104)$(59,110)$2,262,898 $13,368 $3,354,500 
股票補償— 187,101 — — — — 187,101 
股份基礎下發行庫存股d薪酬計劃(945,979 普通股)和行使認購權(1,513,183 普通股)
— (31,916)34,979 — — — 3,063 
購買國庫券— — (369,093)— — — (369,093)
其他全面收益— — — (11,960)— — (11,960)
支付給非控股權益的股息— — — — — (3,036)(3,036)
歸屬於尼斯股東的淨利潤— — — — 439,499 — 439,499 
歸屬於非控股權益的淨利潤— — — — — 3,089 3,089 
截至2024年12月31日餘額$18,961 $2,278,672 $(1,339,218)$(71,070)$2,702,397 $13,421 $3,603,163 

附註是綜合財務報表的組成部分。












F-11

NICE Ltd.及其子公司
股東權益變動報表
以千爲單位的美元



分享
資本
額外
實收
資本
庫存股份累計其他綜合損失留存收益非控制性權益總計
股東
股權
截至2023年1月1日餘額$18,961 $1,951,035 $(743,054)$(111,255)$1,926,398 $13,338 $3,055,423 
股票補償— 183,302 — — — — 183,302 
股份薪酬計劃下發行庫存股(733,472 普通股)
— (23,923)26,496 — — — 2,573 
購買國庫券— — (288,546)— — — (288,546)
其他全面收益— — — 52,145 — — 52,145 
爲收購承擔的股權獎勵— 13,073 — — — — 13,073 
支付給非控股權益的股息— — — — — (1,771)(1,771)
歸屬於NICE股東的淨利潤— — — 336,500 — 336,500 
歸屬於非控股權益的淨利潤
— — — — — 1,801 1,801 
截至2023年12月31日餘額$18,961 $2,123,487 $(1,005,104)$(59,110)$2,262,898 $13,368 $3,354,500 

附註是綜合財務報表的組成部分。






F-12

NICE Ltd.及其子公司
股東權益變動報表
以千爲單位的美元



分享
資本
額外
實收
資本
庫存股份累計其他綜合損失留存收益非控制性權益總計
股東
股權
截至2022年1月1日餘額$18,961 $1,817,710 $(625,810)$(39,739)$1,653,963 $12,874 $2,837,959 
採用亞利桑那州立大學2020-06(注2k)(28,816)7,331 (21,485)
股票補償— 188,888 — — — — 188,888 
股份薪酬計劃下發行庫存股(840,766 普通股)
— (26,747)27,700 — — — 953 
購買國庫券— — (144,944)— — — (144,944)
其他全面收益— — — (71,516)— — (71,516)
支付給非控股權益的股息— — — — — (376)(376)
歸屬於NICE股東的淨利潤— — — — 265,104 — 265,104 
歸屬於非控股權益的淨利潤— — — — — 840 840 
截至2022年12月31日餘額$18,961 $1,951,035 $(743,054)$(111,255)$1,926,398 $13,338 $3,055,423 

隨附附註是合併財務報表的組成部分





F-13

NICE Ltd.及其子公司
綜合現金流量表
以千爲單位的美元

止年度
十二月三十一日,
202420232022
經營活動產生的現金流量:
淨收入$442,588 $338,301 $265,945 
將淨利潤與經營活動提供的淨現金進行調節所需的調整:
折舊及攤銷205,020 167,360 176,546 
股份酬金182,067 176,658 182,704 
應計遣散費,淨額3,050 789 1,171 
有價證券溢價、折扣和應計利息攤銷(9,861)2,480 8,322 
遞延稅金,淨額(40,261)(66,620)(52,618)
經營資產和負債變化:
應收貿易賬款淨額(61,025)(34,292)(129,712)
預付費用和其他流動資產25,040 73,052 (31,673)
貿易應付款項43,965 3,426 19,923 
應計費用和其他流動負債41,952 (55,703)33,684 
經營租賃使用權資產12,951 12,518 20,393 
遞延收入3,049 (45,947)6,417 
有價證券已實現虧損,淨 12,271 
經營租賃負債(13,291)(11,100)(26,191)
長期債務貼現攤銷1,834 4,615 4,582 
債務枯竭損失 53 1,206 
或有對價公允價值變化(3,054)(18,258) 
其他(1,383)1,827 (984)
經營活動提供的淨現金832,641 561,430 479,715 
投資活動產生的現金流量:
添置物業及設備(34,962)(29,205)(31,893)
購買投資(938,154)(230,263)(396,297)
投資收益705,332 436,044 355,560 
業務收購付款,扣除收購現金(64,816)(415,185)(29,724)
內部使用軟件成本資本化(64,805)(54,974)(49,997)
投資活動所用現金淨額(397,405)(293,583)(152,351)
The accompanying notes are an integral part of the consolidated financial statements.
F-14

NICE LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

Year ended
December 31,
202420232022
Cash flows from financing activities:
Proceeds from issuance of shares upon exercise of options3,063 2,570 953 
Purchase of treasury shares(369,196)(288,443)(144,944)
Dividends paid to non-controlling interest (3,036)(1,771)(376)
Repayment of debt(192,108)(2,628)(20,132)
Proceeds from settlement of debt hedge option104,673   
Net cash used in financing activities(456,604)(290,272)(164,499)
Effect of exchange rate changes on cash(6,914)2,643 (8,425)
Net change in cash, cash equivalents and restricted cash(28,282)(19,782)154,440 
Cash, cash equivalents and restricted cash at the beginning of the year513,314 533,096 378,656 
Cash, cash equivalents and restricted cash at the end of the year$485,032 $513,314 $533,096 
Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheet:
Cash and cash equivalents$481,712 $511,795 $529,596 
Restricted cash included in other current assets3,320 1,519 3,500 
Total cash, cash equivalents and restricted cash shown in the statement of cash flows$485,032 $513,314 $533,096 
Supplemental disclosure of cash flows activities:
Cash paid during the year for:
Income taxes$120,343 $210,445 $123,586 
Interest236 1,221 2,974 
Non-cash activities:
Change in fair value of contingent consideration(3,054)(18,258) 
Increase in accrued expenses and other liabilities with respect to purchase of treasury shares 103  

The accompanying notes are an integral part of the consolidated financial statements.
F-15

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)

NOTE 1:-    GENERAL
a.General:
NICE Ltd. (together with its subsidiaries, “NICE”, or the “Company”) is a global enterprise software leader, providing AI-powered cloud platforms that serve two main markets: Customer Engagement and Financial Crime and Compliance. The Company's core mission is to automate customer service by seamlessly orchestrating workflows, AI and human agents, and enterprise knowledge on CXone Mpower—a leading advanced and comprehensive AI platform. The Company protect financial services organizations with embedded AI to help prevent money laundering and fraud, as well as ensure financial markets compliance in real-time.

The Company's strategy is based on serving rapidly expanding, specialized markets that require feature-rich solutions, with robust, comprehensive cloud platforms that are spearheaded by AI as an overarching catalyst, propelling the Company's unique AI-driven vectors of growth: using AI differentiation to expand the Company's cloud win rates, positioning AI as the bedrock for driving rapid expansion into digital, utilizing AI to fuel massive platform-adoption and leveraging AI as a lucrative source for new domain-specific use-cases.
In the Customer Engagement market, the Company's CXone Mpower platform enables organizations to automate service at scale, augment their workforce with AI-powered solutions, and unify enterprise knowledge, data and AI models to drive faster resolutions and superior customer experiences. Purpose-built AI ensures every interaction and workflow is intelligently orchestrated across all customer touchpoints, seamlessly blending autonomous Agentic AI and human assisted interactions to deliver best-in-class service that is proactive, knowledge-based, resolution-oriented and efficient. The Company's Public Safety and Justice business is included in the Company's Customer Engagement segment. In this business, the Company is transforming the criminal justice system by using AI to uncover the truth in digital evidence, facilitating swift justice. The Company's AI-powered workflows help relieve police, prosecutors, public defenders, courts and correctional institutions from the tedious task of managing digital evidence.

In the Financial Crime and Compliance market, the Company protect financial services organizations, with embedded-AI solutions that identify risks and help prevent money laundering and fraud, as well as help ensure financial markets compliance in real-time. With the Company's holistic, data and entity-centric approach, the Company leverage machine learning, NLP (natural language processing), Generative AI and Agentic AI that automate routine tasks, collaborate with analysts and adapt in real time to proactively keep ahead of emerging threats.

The Company is at the forefront of several industry technological disruptions that have greatly accelerated in the last several years: AI-driven automation is transforming customer service; domain-specific AI is enhancing decision-making and workforce performance; and cloud scalability is enabling enterprises to modernize operations at an unprecedented pace. As organizations seek to optimize both efficiency and customer experience. The Company's AI-powered platforms unify data, workflows, and automation to drive enterprise-wide transformation. Built on deep domain expertise, the Company's solutions empower customer service, financial crime prevention, and criminal justice organizations to lead with intelligence, efficiency, and confidence.

b.Acquisitions:
1.Acquisitions in 2024:
During 2024, the Company completed the acquisition of two companies, which were accounted for as business combinations for a total consideration of $68,910. The financial results of those acquired companies are included in the Company’s consolidated financial statements from their respective acquisition dates. The results from these acquisitions individually and in the aggregate, were not material to the Company’s consolidated financial statements. The Company preliminarily recorded $41,802 of
F-16

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 1:- GENERAL (Cont.)
identifiable intangible assets based on their estimated fair values, and $27,091 of residual goodwill, from these acquisitions.

2.Acquisitions in 2023:
a.In December 2023, the Company completed an acquisition of LiveVox Inc. (“LiveVox”), a leading AI-driven proactive outreach provider. The Company acquired LiveVox for a total consideration of $424,117.
Upon consummation of the acquisition, LiveVox became a wholly-owned subsidiary of the Company. The acquisition was accounted for as a business combination. This method requires, among other things, that assets acquired, and liabilities assumed in the business combination be recognized at their fair values as of the acquisition date.

The following table presents details of the identified intangible assets acquired as of the date of the acquisition:


Fair ValueEstimated useful life (in years)
Net tangible assets and liabilities assumed$63,575 
Trademarks
4,930 5
Technology137,462 5
Customer relationships
31,957 5
Goodwill
186,193 
Total
$424,117 


Goodwill generated from this business combination is primarily attributable to synergies between the Company's and LiveVox's respective products and services. The goodwill is not deductible for income tax purposes.

Pro forma results of operations related to this acquisition have not been prepared because they are not material to the Company's consolidated financial statements.

The preliminary fair value of assets acquired, and liabilities assumed from the acquisition, completed during 2023, were based upon preliminary calculations and valuations, and the estimates and assumptions for this acquisition are subject to change as the Company obtains additional information during the respective measurement periods (up to one year from the respective acquisition dates). These estimates were finalized during 2024 as part of the measurement period. During 2024, the Company recorded measurement period adjustments to the preliminary allocation of the purchase price to the fair value of the assets acquired and liabilities assumed. See also Note 8 regarding changes made during 2024.

During 2023, the Company acquired certain additional companies, which were accounted for as business combinations for a total consideration of $22,815. The financial results of those acquired companies are included in the Company’s consolidated financial statements from their respective acquisition dates. The results from these acquisitions individually and in aggregate, were not material to the Company’s consolidated financial statements. The Company preliminarily recorded $13,247 of
F-17

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)

NOTE 1:- GENERAL (Cont.)
identifiable intangible assets based on their estimated fair values, and $10,682 of residual goodwill, from these acquisitions.

The estimated fair value of assets acquired and liabilities assumed from acquisitions completed during 2023 were based upon preliminary calculations and valuations. These estimates were finalized during 2024 as part of the measurement period. No adjustments were made during 2024.

3.Acquisitions in 2022:
In November 2022, the Company completed an acquisition for a total consideration of $50,381 as follows: $30,000 cash consideration and a milestone-based contingent payment in a total sum of up to $24,000 payable in March 2026. The contingent consideration was measured at fair value at the closing date and recorded as a liability on the balance sheet in the amount of $20,381.
Upon consummation of the acquisition, the acquired company became a wholly-owned subsidiary of the Company. The acquisition was accounted for as a business combination. As of the acquisition date the Company preliminarily recorded core technology, customer relationships, trademark and goodwill in amounts of $12,470; $9,058; $459 and $28,039, respectively. The estimated useful life of the core technology, customer relationships, and trademark is four years, four years and three years, respectively.
Goodwill generated from this business combination was attributed to synergies between the Company's and acquired company respective products and services. The goodwill is not deductible for income tax purposes.
The results of the acquired company's operations have been included in the consolidated financial statements since November 2022. Pro forma results of operations related to this acquisition have not been prepared because they are not material to the Company's consolidated financial statements.

The estimated fair value of assets acquired and liabilities assumed from the acquisition completed during 2022 was based upon preliminary calculations and valuations. These estimates were finalized during 2023 as part of the measurement period. The transaction price included liability classified contingent consideration that was remeasured through earnings and the resulting change in fair value for the twelve months ended December 31, 2023 was non-cash income of $18,258 included under general and administrative operating expenses in the consolidated statements of income. This was primarily driven by lower expected performance measurements of the acquired entity as determined in the purchase agreement.

The fair value of the contingent consideration arrangement was determined using a probability-based scenario analysis approach. The resulting probability-weighted contingent consideration amounts were discounted based on the Company's estimated cost of debt.
As of December 31, 2024, the contingent consideration conditions are not expected to be satisfied and as such, the fair value of the liability was updated as immaterial and is not included in the consolidated balance sheet. For the year ended December 31, 2024, the Company recorded a gain of $3,054 related to the remeasurement of this contingent consideration liability, which is included in general and administrative expenses in the consolidated statements of income.
4.Acquisitions related costs:
During 2024, 2023 and 2022, acquisition related costs amounted to $3,167, $13,987 and $48, respectively, and were included in general and administrative expenses.

F-18

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2:-    SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements were prepared in accordance with United States Generally Accepted Accounting Principles ("U.S. GAAP").
a.Use of estimates:
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
b.Financial statements in United States dollars:
The currency of the primary economic environment in which the operations of NICE Ltd. and certain subsidiaries are conducted is the U.S. dollar ("dollar"); thus, the dollar is the functional currency of NICE Ltd. and certain subsidiaries.
NICE Ltd. and certain subsidiaries' transactions and balances denominated in dollars are presented at their original amounts. Non-dollar transactions and balances have been remeasured to dollars in accordance with ASC 830, “Foreign Currency Matters”. All transaction gains and losses from remeasurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statements of income as financial income or expenses, as appropriate.
For those subsidiaries whose functional currency has been determined to be a non-dollar currency, assets and liabilities are translated at year-end exchange rates and statement of income items are translated at average exchange rates prevailing during the year. Such translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in shareholders' equity.
c.Principles of consolidation:
The consolidated financial statements incorporate the financial statements of the Company and all of its subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation.
d.Cash equivalents:
Cash equivalents are short-term unrestricted highly liquid investments that are readily convertible into cash, with original maturities of three months or less at acquisition.
e.Marketable securities:
The Company accounts for investments in debt securities in accordance with ASC 320, "Investments - Debt Securities" and ASC No. 326, "Financial Instruments - Credit Losses". Management determines the appropriate classification of its investments in debt securities at the time of purchase and re-evaluates such determinations at each balance sheet date.
Marketable securities classified as "available-for-sale" ("AFS") are carried at fair value. Unrealized gains and losses are reported in a separate component of shareholders' equity in accumulated other comprehensive income, net of taxes. Gains and losses are recognized when realized, on a specific identification basis, in the Company's consolidated statements of income.
F-19

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
For each reporting period, the Company evaluates whether declines in fair value below the amortized cost are due to expected credit losses, as well as the Company's ability and intention to hold the investment until a forecasted recovery occurs, in accordance with ASC 326. Allowance for credit losses on AFS debt securities are recognized as a charge in financial expenses (income) and other, net, on the consolidated statements of income, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss). As of December 31, 2024 and 2023, no allowance for credit losses have been recorded.
The Company classifies all securities with maturities beyond 12 months as current assets under the caption short term investments on the consolidated balance sheet. These securities are available to support current operations and the company may sell these debt securities prior to their stated maturities.

f.Property and equipment, net:
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, at the following annual periods ranges:
Years
Computers and peripheral equipment
3 - 5
Internal use software
3
Office furniture and equipment
4 - 14
Leasehold improvementsOver the lease term or the estimated useful life of the improvements, whichever is shorter
g.Internal use software costs:
The Company capitalizes development costs incurred during the application development stage that are related to internal use technology that supports its cloud services. Under ASC 350-40, internal-use software is included in property and equipment, net in the consolidated balance sheets. Capitalization of such costs begins when the preliminary project stage is complete and ceases at the point in which the project is substantially complete and is ready for its intended purpose. Costs incurred in the process of software production are charged to expenses as incurred.
h.Other intangible assets, net:
Other intangible assets are amortized over their estimated useful lives using the straight-line method, at the following annual periods ranges:
 Years
Core technology
38
Customer relationships
19
Trademarks
112
Customer backlog
3
i.Impairment of long-lived assets:
The Company's long-lived assets and identifiable intangibles that are subject to amortization are reviewed for impairment in accordance with ASC 360, "Property, Plant, and Equipment" whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment indicators include any significant changes in the manner of the Company's use of the assets and significant negative industry or economic trends.
F-20

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Upon determination that the carrying value of a long-lived asset may not be recoverable based upon a comparison of aggregate undiscounted projected future cash flows to the carrying amount of the asset, an impairment charge is recorded for the excess of the carrying amount over fair value. In 2024, 2023 and 2022, no impairment charges were recognized.
j.Goodwill:
Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. Under ASC 350, "Intangible - Goodwill and Other" ("ASC 350"), goodwill is not amortized, but rather is subject to an annual impairment test. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company prepares a quantitative analysis to determine whether the carrying value of reporting unit exceeds its estimated fair value. If the carrying value of a reporting unit exceeds its estimated fair value, the Company recognizes an impairment of goodwill for the amount of this excess.
For each of the three years in the periods ended December 31, 2024, 2023 and 2022, no impairment was identified.
k.Exchangeable senior notes:
The Company applies ASC 470, "Debt" and ASC 815 "Derivatives and Hedging" to its senior notes and to all features related to the senior notes. When features meet the definition of a derivative, are not clearly and closely related to the characteristics of the debt host, and do not qualify for any scope exceptions within ASC 815, they are required to be accounted for separately from the debt instrument and recorded as derivative instrument liabilities. The fair value assigned to the embedded derivative instruments is marked to market in each reporting period. The proceeds allocated to the debt host are then accounted for using the effective interest method.

Starting January 1, 2022, the Company adopted ASU 2020-06, which simplifies the guidance on the issuer’s accounting for convertible debt instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature, Following the adoption of ASU 2020-06, we do not separately present in equity an embedded conversion feature in such debt. Instead, the Company account for a convertible debt instrument solely as debt unless the debt contains embedded derivatives required to be bifurcated or the debt is issued at a substantial premium.

Additionally, in December 2021, the Company made an irrevocable election to settle the principal amount of the 2020 Notes only in cash. Accordingly, upon conversion, the Company will pay the principal amount in cash and will pay, or deliver, as the case may be, any amount in excess of the principal amount in cash, shares of common stock or a combination of cash and shares of the Company stock, at the Company's election. Prior to this election, upon conversion, the Company, could have elected to deliver to holders cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock for the principal amount.


l.Revenue recognition:
The Company generates revenues from sales of cloud, services, and software products, which include software license, SaaS, network connectivity, hosting, support and maintenance, implementation, configuration, project management, consulting and training. The Company sells its cloud, products and services directly through its sales-force and indirectly through a global network of distributors, system integrators and strategic partners.
The Company recognizes revenues in accordance with ASC No. 606, "Revenue from Contracts with Customers" ("ASC 606"). Under the standard, the Company recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration that the Company expects
F-21

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
to receive in exchange for those goods or services. To determine revenue recognition for contracts that are within the scope of the standard, the Company performs the following five steps:
1)Identify the contract(s) with a customer
A contract with a customer exists when (i) there is an enforceable contract with the customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services; (ii) the contract has commercial substance; and (iii) the Company determines that collection of substantially all consideration for goods or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer's ability and intent to pay, which is based on a variety of factors, including the customer's historical payment experience.
2)Identify the performance obligations of the contract
The Company enters into contracts that can include multiple performance obligations. The Company accounts for individual products and services separately if they are distinct – i.e., if a product or service is separately identifiable from other promises in the contract and if a customer can benefit from it on its own or with other resources that are readily available to the customer.

3)Determine the transaction price
The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods or services to the customer. For certain contracts, the Company's contracts include usage based fees that constitute variable consideration and are included in the transaction price.
The Company receives payments from customers based upon billing cycles and contract terms which may vary by contract type. Invoice payment terms are usually 30 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company determines its contracts generally to not include a significant financing component since the Company's selling prices are not subjected to billing terms nor is its purpose to receive financing from its customers or to provide customers with financing. In addition, the Company elect to apply the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the Company will transfer a promised good or service to a customer and when the customer will pay for that good or service will be one year or less.
Revenue is measured based on the consideration specified in a contract with a customer, excluding taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer.
4)Allocate the transaction price to the performance obligations in the contract
The Company allocates the transaction price to each performance obligation identified based on its relative standalone selling price ("SSP") out of the total consideration of the contract.
The Company uses judgment in determining the SSP. If the SSP is not observable through standalone transactions, the Company estimates the SSP taking into account available information such as geographic or regional specific factors, internal costs, profit objectives, and internally approved pricing guidelines related to the performance obligations.
The Company typically establishes a SSP range for its products and services, which is reassessed on a periodic basis or when facts and circumstances change. SSP for products and services can evolve over
F-22

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
time due to changes in the Company's pricing practices that are influenced by intense competition, changes in demand for products and services, and economic factors, among others.
For a product where the SSP cannot be determined based on observable prices, given the same products are sold for a broad range of amounts (that is, the selling price is highly variable), the Company applies the residual approach whereby all other performance obligations within a contract are first allocated a portion of the transaction price based upon their respective SSPs, with any residual amount of transaction price allocated to these product revenues.
Some of the Company's contracts include variable fees that are based on actual usage. For these contracts the Company generally allocates the variable fees using the variable consideration allocation exception.
5)Recognize revenue when (or as) the entity satisfies a performance obligation
The Company derives its cloud revenues from subscription services, which are comprised of subscription fees from granting customers access to the Company’s cloud platforms, network connectivity and services fees for deployment of certain cloud platforms.
Revenue from subscription services is recognized when control is transferred to the customer, occurring either evenly over the contract period or based on actual usage. Revenue from network connectivity is based on customer call usage and is recognized in the period the call is initiated. Services fees for deployment, which are considered as material rights, are initially deferred and recognized the over average customer life.
Revenue from software licenses, support and maintenance services are recognized at the time the related performance obligation is satisfied by transferring the promised product or service to the customer. Software license revenues are recognized at the point in time when the software license is delivered and the customer obtains control of the asset. Support and maintenance service revenues are recognized when control is transferred to the customer occurring evenly over the maintenance contract term, as the services have a consistent continuous pattern of transfer to a customer.
professional services revenues, except fees for deployment of certain cloud platforms, are recognized as services are performed.
Deferred revenues, which represent a contract liability, represent unrecognized fees collected mostly for maintenance, cloud and professional services. Deferred revenues are recognized as (or when) the Company performs under the contract. The amount of revenues recognized in the period that was included in the opening deferred revenues balance was approximately $280,365 for the year ended December 31, 2024.
As of December 31, 2024, the aggregate amount of the total transaction price allocated in contracts with original duration greater than one year of the remaining performance obligations was approximately $3,072,784. For performance obligations which are recognized over time, based on usage, the Company elected to disclose only the contractual minimum attributed to these performance obligations, as part of the remaining performance obligation disclosure.
As of December 31, 2024, the Company expects to recognize the majority of the revenue of remaining performance obligations over the next 24 months. Such remaining performance obligations represent unsatisfied or partially unsatisfied performance obligations pursuant to ASC 606. The Company has elected the optional exemption, which allows for the exclusion of the amounts for remaining performance obligations that are part of contracts with an original expected duration of one year or less.
F-23

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
m.Costs to Obtain Contracts:
The Company capitalizes certain sales commission as costs of obtaining a contract when they are incremental and if they are expected to be recovered. The Company applies judgment in estimating the amortization period by taking into consideration customer contract terms, history of renewals, expected length of customer relationship, as well as the useful life of the underlying technology and products. Amortization of sales commission expenses are amortized over the expected period of benefits and included in Selling and Marketing expenses in the accompanying consolidated statements of income. For costs that the Company would have capitalized and amortized over one year or less, the Company has elected to apply the practical expedient and expense these contract costs as incurred. Costs to obtain contracts amortization expense for the years 2024, 2023 and 2022 were $142,802, $142,699 and $135,437, respectively.

n.Research and development costs:
Research and development costs (net of grants and capitalized expenses) incurred in the process of software production are charged to expenses as incurred.
o.Income taxes:
To prepare the consolidated financial statements, the Company estimates its income taxes in each of the jurisdictions in which it operates, and in certain of these jurisdictions, it is calculated based on the Company's assumptions as to its entitlement to various benefits under the applicable tax laws in the jurisdiction. The entitlement to such benefits depends upon the Company's compliance with the terms and conditions set out in these laws.
The Company accounts for income taxes in accordance with ASC 740, "Income Taxes". ASC 740 prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. Deferred tax assets and deferred tax liabilities are presented under long-term assets and long-term liabilities, respectively.
The Company implements a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% (cumulative basis) likely to be realized upon ultimate settlement.
p.Non-royalty grants:
Non-royalty bearing grants from the Government of Israel for funding research and development projects are recognized at the time the Company is entitled to such grants on the basis of the related costs incurred and recorded as a deduction from research and development expenses.
q.Concentrations of credit risk:
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, trade receivables, marketable securities and foreign currency derivative contracts.
The Company's cash and cash equivalents are invested in deposits and money market funds, mainly in dollars with major international banks. Deposits in the U.S. may be in excess of insured limits and are not
F-24

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
insured in other jurisdictions. Generally, these deposits may be redeemed upon demand and therefore bear minimal risk.
The Company's trade receivables are derived from sales to customers generated from a multitude of markets in countries around the world with the largest proportion denominated in the US dollar. The Company performs ongoing credit evaluations of its customers and insures some of its receivables with a credit insurance company. The Company performs ongoing credit evaluations of its customers for the purpose of determining the appropriate allowance for credit losses.

The Company's marketable securities include investment in corporate debentures, U.S. Treasuries and U.S. government agencies. The Company's investment policy limits the amount that the Company may invest in any one type of investment per minimum credit rating or specific issuer, thereby reducing credit risk concentrations.
The Company enter into foreign currency forward and option contracts intended to protect cash flows resulting from payroll and facilities related expenses against the volatility in value of forecasted non-dollar currency. The derivative instruments hedge a portion of the Company's non-dollar currency exposure. See Note 10 for additional information.
r.Severance pay:
The Israeli Severance Pay Law-1963 (the "Severance Pay Law") generally requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain circumstances. The Company makes ongoing deposits into Israeli employees' pension plans to fund their severance liabilities. According to Section 14 of the Severance Pay Law, the Company deposits for employees employed by the Company since May 1, 2009 are made in lieu of the Company's severance liability, therefore no obligation is provided for in the financial statements. Severance Pay liabilities for employees employed by the Company prior to May 1, 2009, as well as employees with special contractual arrangements, are provided for in the financial statements based upon the latest monthly salary multiplied by the number of years of employment.
Severance pay expenses for 2024, 2023 and 2022 amounted to $12,002, $10,917 and $8,328, respectively.
The Company also has other liabilities for severance pay in other jurisdictions.
The Company has multiple 401(k) defined contribution plans covering certain employees in the U.S. All eligible employees may elect to contribute a portion of their eligible compensation, generally not greater than an annual contribution of $23.0 in 2024, $22.5 in 2023 and $20.5 in 2022 (for certain employees over 50 years of age the maximum annual contribution was $30.5 in 2024, $30 in 2023 and $27 in 2022) of their total annual compensation to the plan through salary deferrals, subject to IRS limits. The Company, at its discretion, matches 50% of employee contributions to the plan up to a limit of 6-8% of their eligible compensation. In the years 2024, 2023 and 2022, the Company recorded an expense for all matching contributions in the amount of $10,430; $11,599 and $9,887, respectively.
s.Leases
Under Topic 842, the Company determines if an arrangement is a lease at inception. ROU assets and lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments. The ROU asset is recorded net of any lease incentives received. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company's lease
F-25

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
agreements may contain variable costs such as common area maintenance, insurance, real estate taxes or other costs. Variable lease costs are expensed as incurred on the consolidated statements of income.
The Company elected to combine its lease and non-lease components for car leases and to not recognize a lease liability and a right-of-use ("ROU") asset on the balance sheet for leases with a term of twelve months or less. The Company recognizes the associated lease payments in the consolidated statements of income on a straight-line basis over the lease term.

t.Basic and diluted net earnings per share:
Basic net earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year. Diluted net earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year plus dilutive potential equivalent ordinary shares considered outstanding during the year, in accordance with ASC 260, "Earnings per Share".
As further described in Note 15, the Company entered into an exchangeable note hedge transaction and warrants transaction in 2017. While the exchangeable note hedge transaction was anti-dilutive and as such was not included in the computation of diluted earnings per share, the warrants transaction had a dilutive effect, and as such, was included in the computation of the diluted earnings per share. The number of shares related to the warrants transaction was 3,457,475. During 2024 the warrants were exercised into 1,513,183 ordinary shares using the net share settlement method.
On December 31, 2021, the Company entered into the First Supplemental Indenture according to which the Company irrevocably elected cash settlement for the principal and any premium due upon conversion to apply to all conversions of the 2017 Notes issued under the 2017 Notes with an Exchange Date (as defined in the 2017 Indenture) that occurs on or after December 31, 2021. As a result, the 2017 Notes did not have a dilutive effect for the years ended December 31, 2024, 2023 and 2022.

On December 31, 2021, the Company irrevocably elected to settle the principal of the exchangeable senior notes issued in 2020 in cash. As a result, the Company uses the if converted method for calculating any potential dilutive effect on diluted net income per share, if applicable. The conversion premium will have a dilutive impact on diluted net income per share only when the average market price of an ordinary share for a given period exceeds the conversion price of $299.19 per share. As a result, 1,537,504 shares underlying the conversion option of the exchangeable senior notes issued in 2020 are not considered in the calculation of diluted net income per share in either 2022, 2023 or 2024, as the effect would be anti-dilutive.

The weighted average number of shares related to outstanding anti-dilutive options excluded from the calculations of diluted net earnings per share was 8,089, 4,096 and 18,161 for the years 2024, 2023 and 2022, respectively.
u.Accounting for stock-based compensation:
The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation - Stock Compensation" ("ASC 718"), which requires the measurement and recognition of stock base compensation expenses based on estimated fair values for all share-based payment awards made to employees and directors. ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The Company elect to account for forfeitures as they occur.

The Company recognizes compensation expenses for the value of its awards, which have graded vesting, based on the accelerated attribution method over the requisite service period of each of the awards.
The Company estimates the fair value of stock options granted using the Black-Scholes-Merton option-pricing model, which requires a number of assumptions: the expected volatility is based upon actual historical stock price movements; the expected term of options granted is based upon historical experience
F-26

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
and represents the period of time that options granted are expected to be outstanding; the risk-free interest rate is based on the yield from U.S. Federal Reserve zero-coupon bonds with an equivalent term; and the expected dividend rate (an annualized dividend yield) is based on the per share dividend declared by the Company's Board of Directors.
The Company measures the fair value of restricted stock based on the market value of the underlying shares at the date of grant.
v.Fair value of financial instruments:
The Company applies ASC 820, "Fair Value Measurements and Disclosures" ("ASC 820") for valuing financial instruments. Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. The Company measures its investments in money market funds classified as cash equivalents, marketable securities, foreign currency derivative contracts, exchangeable notes hedge and its contingent consideration arrangement at fair value.
In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
The hierarchy is broken down into three levels based on the inputs as follows:
Level 1 - Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.
Level 2 - Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including, for example, the type of investment, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the investments are categorized as Level 3.
The Company's marketable securities, exchangeable senior notes and foreign currency derivative contracts are classified within Level 2 (see Notes 3, 10 and 15).

The fair value of the contingent consideration arrangement was classified within Level 3 and was determined using a probability-based scenario analysis approach. The resulting probability-weighted contingent consideration amounts were discounted based on the Company's estimated cost of debt.
The carrying amounts of cash and cash equivalents, short-term bank deposits, trade receivables and trade payables approximate their fair value due to the immediate or short-term maturities of these financial instruments.
F-27

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
w.Legal contingencies:
The Company is currently involved in various claims and legal proceedings arising in the ordinary course of business. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss.

x.Advertising expenses:
Advertising expenses are charged to expense as incurred. Advertising expenses for the years 2024, 2023 and 2022 were $58,118, $50,740 and $43,981, respectively.
y.Treasury shares:
The Company repurchases its ordinary shares from time to time on the open market or in other transactions and holds such shares as treasury shares. The Company accounts for the cost to repurchase treasury shares as a reduction of shareholders' equity. The Company reissues treasury shares under the stock purchase plan, upon exercise of options and upon vesting of restricted stock units ("RSU"). Re-issuance of treasury shares is accounted for in accordance with ASC 505-30 in which gains are credited to additional paid-in capital and losses are charged to additional paid-in capital to the extent that previous net gains are included therein and otherwise to retained earnings.
z.Business combination:
The Company applies the provisions of ASC 805, "Business Combination", and allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets.
Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from customer relationships, acquired technology and acquired trademarks from a market participant perspective, useful lives and discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.
Contingent consideration incurred in a business combination is included as part of the acquisition price and recorded at fair value as of the acquisition date. The fair value of the contingent consideration is re-measured at each reporting period, with any adjustments in fair value recognized in earnings under general and administrative expenses.
aa.Non-controlling interests:
The consolidated financial statements include the Company's accounts and the accounts of the Company's wholly- and majority-owned subsidiaries. Non-controlling interest positions of the Company's consolidated entities are reported as a separate component of consolidated equity from the equity attributable to the Company’s shareholders.
In case of an increase in ownership of a subsidiary, the carrying amount of the non-controlling interest is adjusted to reflect the controlling interest’s increased ownership interest in the subsidiary’s net assets. Any difference between the consideration paid by the Company to a non-controlling interest holder (or contributed by the Company to the net assets of the subsidiary) and the adjustment to the carrying amount of
F-28

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
the non-controlling interest in the subsidiary is recognized directly in equity and attributable to the controlling interest. In 2021, the Company acquired an additional 20% in the 2020 Subsidiary (the "2020 Subsidiary") for a total consideration of approximately $14,000. See Note 19 for additional information.
ab.Comprehensive income:
The Company accounts for comprehensive income in accordance with ASC 220, "Comprehensive Income". Comprehensive income generally represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to, shareholders. Other comprehensive income for the Company relates to gains and losses on hedging derivative instruments, unrealized gains and losses on available for sale marketable securities and changes in foreign currency translation adjustments.
The following tables show the components of accumulated other comprehensive income, net of taxes, as of December 31, 2024, 2023 and 2022:
Year ended December 31, 2024
Unrealized gains (losses) on marketable securitiesUnrealized gains (losses) on cash flow hedgesForeign currency translation adjustmentTotal
Beginning balance$(4,086)$933 $(55,957)$(59,110)
Other comprehensive income (loss) before reclassifications
919 (3,621)(13,355)(16,057)
Amounts reclassified from accumulated other comprehensive income (loss)
(423)4,520  4,097 
Net current-period other comprehensive income (loss)
496 899 (13,355)(11,960)
Ending balance$(3,590)$1,832 $(69,312)$(71,070)

Year ended December 31, 2023
Unrealized gains (losses) on marketable securitiesUnrealized gains (losses) on cash flow hedgesForeign currency translation adjustmentTotal
Beginning balance
$(34,386)$(7,102)$(69,767)$(111,255)
Other comprehensive income (loss) before reclassifications
18,029 (5,300)13,810 26,539 
Amounts reclassified from accumulated other comprehensive income
12,271 13,335  25,606 
Net current-period other comprehensive income30,300 8,035 13,810 52,145 
Ending balance
$(4,086)$933 $(55,957)$(59,110)
F-29

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Year ended December 31, 2022
Unrealized gains (losses) on marketable securitiesUnrealized gains (losses) on cash flow hedgesForeign currency translation adjustmentTotal
Beginning balance$(1,486)$3,932 $(42,185)$(39,739)
Other comprehensive loss before reclassifications
(33,319)(18,223)(27,582)(79,124)
Amounts reclassified from accumulated other comprehensive income
419 7,189  7,608 
Net current-period other comprehensive loss
(32,900)(11,034)(27,582)(71,516)
Ending balance$(34,386)$(7,102)$(69,767)$(111,255)

ac.Recently adopted accounting Pronouncements:
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This standard updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance on an interim and annual basis. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 during the year ended December 31, 2024, on a retrospective basis which resulted in updated segment disclosures. See Note 16 for further details.

ad.Recently issued accounting Pronouncements, not yet adopted:

In December 2023, the FASB issued ASU 2023-09 "Income Taxes (Topics 740): Improvements to Income Tax Disclosures", which expands the disclosure requirements for income taxes, primarily related to the rate reconciliation and income taxes paid. This guidance is effective for the fiscal years beginning after December 15, 2024. Early adoption is permitted. The adoption of ASU 2023-09 is not expected to have a significant impact on the Company’s consolidated financial statements.    
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses, which requires disaggregated disclosure in the notes to the financial statements, of prescribed categories of expenses within relevant income statement captions. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effect of adopting the ASU on its disclosures.
NOTE 3:-    SHORT-TERM INVESTMENTS
Short-term investments include marketable securities in the amount of $919,316 and $873,976 as of December 31, 2024 and 2023, respectively and short-term bank deposits in the amounts of $220,680 and $22,068 as of December 31, 2024 and 2023, respectively.

The following table summarizes amortized costs, gross unrealized gains and losses and estimated fair values of available-for-sale marketable securities as of December 31, 2024 and 2023:
F-30

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
    


Amortized costGross unrealized gainsGross unrealized lossesEstimated fair value (Level 2 within the fair value hierarchy)
December 31,December 31,December 31,December 31,
20242023202420232024202320242023
Corporate debentures$822,156 $835,856 $779 $1,299 $(4,552)$(16,582)$818,383 $820,573 
U.S. Treasuries92,902 51,207 50 93 (51)(741)92,900 50,559 
U.S. Government Agencies8,060 2,841 4 3 (32) 8,033 2,844 
$923,118 $889,904 $833 $1,395 $(4,635)$(17,323)$919,316 $873,976 
The scheduled maturities of available-for-sale marketable securities as of December 31, 2024 are as follows:
Amortized
cost
Estimated
fair value
Due within one year$207,335 $206,850 
Due after one year through five years715,783 712,466 
$923,118 $919,316 
Investments with continuous unrealized losses for less than 12 months and 12 months or greater and their related fair values as of December 31, 2024 and 2023 are as indicated in the following tables:


December 31, 2024
Investments with continuous unrealized losses for less than 12 monthsInvestments with continuous unrealized losses for 12 months or greaterTotal Investments with continuous unrealized losses
Fair
value
Unrealized lossesFair
value
Unrealized lossesFair
value
Unrealized losses
Corporate debentures$370,114 $(3,123)$167,185 $(1,429)$537,299 $(4,552)
U.S. Treasuries$5,949 $(22)$10,068 $(29)$16,017 $(51)
U.S. Government Agencies$5,075 $(32)$ $ $5,075 $(32)
$381,138 $(3,177)$177,253 $(1,458)$558,391 $(4,635)
F-31

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
    


December 31, 2023
Investments with continuous unrealized losses for less than 12 monthsInvestments with continuous unrealized losses for 12 months or greaterTotal Investments with continuous unrealized losses
Fair
value
Unrealized lossesFair
value
Unrealized lossesFair
value
Unrealized losses
Corporate debentures$103,904 $(993)$541,497 $(15,589)$645,401 $(16,582)
U.S. Treasuries12,369 (127)29,249 (614)41,618 (741)
$116,273 $(1,120)$570,746 $(16,203)$687,019 $(17,323)


NOTE 4:-    PREPAID EXPENSES AND OTHER CURRENT ASSETS

December 31,
20242023
Government authorities$111,580 $90,455 
Interest receivable4,206 1,124 
Prepaid expenses105,910 90,017 
Other17,384 16,371 
$239,080 $197,967 

NOTE 5:-    PREPAID EXPENSES AND OTHER LONG-TERM ASSETS
December 31,
20242023
Deferred commission costs$118,531 $129,687 
Severance pay fund11,972 11,808 
Prepaid expenses78,751 74,421 
Other3,258 3,416 
$212,512 $219,332 

F-32

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 6:-    PROPERTY AND EQUIPMENT, NET
December 31,
20242023
Cost:
Computers and peripheral equipment
$67,260 $249,677 
Internal use software
301,632 309,383 
Office furniture and equipment
3,663 3,148 
Leasehold improvements
28,616 41,897 
401,171 604,105 
Accumulated depreciation:
Computers and peripheral equipment
19,017 204,631 
Internal use software
175,660 194,262 
Office furniture and equipment
758 78 
Leasehold improvements
20,444 30,720 
215,879 429,691 
Depreciated cost
$185,292 $174,414 

Depreciation expense totaled $89,151, $74,907 and $71,460 for the years ended December 31, 2024, 2023 and 2022, respectively.
The Company recorded a reduction of $325,346 and $34,692 to the cost and accumulated depreciation of fully depreciated equipment, internal use software and leasehold improvements no longer in use for the years ended December 31, 2024 and 2023, respectively.


F-33

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 7:-    OTHER INTANGIBLE ASSETS, NET
a.Finite-lived other intangible assets:
December 31,
20242023
Original amounts:
Core technology$843,415 $821,835 
Customer relationships and backlog
351,185 334,881 
Trademarks50,780 50,072 
1,245,380 1,206,788 
Accumulated amortization:
Core technology672,849 581,930 
Customer relationships and backlog
296,864 281,032 
Trademarks44,321 38,325 
1,014,034 901,287 
Other intangible assets, net$231,346 $305,501 

b.Amortization expense amounted to $115,869, $92,445 and $105,086 for the years ended December 31, 2024, 2023 and 2022, respectively.
c.Estimated intangible asset amortization expense:

For the year ended December 31,
2025$77,261 
202668,164 
202746,377 
202837,971 
20291,573 
Thereafter 
$231,346 

F-34

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 8:-    GOODWILL
Following the Company's acquisitions in 2024 and 2023, as described in Note 1b, the changes in the carrying amount of goodwill allocated to reportable segments for the years ended December 31, 2024 and 2023 are as follows:
Year ended December 31, 2024
Customer Engagement
Financial Crime and ComplianceTotal
As of January 1, 2024$1,471,606 $350,363 $1,821,969 
Acquisitions (*)
30,833  30,833 
Functional currency translation adjustments(2,829)(305)(3,134)
As of December 31, 2024$1,499,610 $350,058 $1,849,668 
(*)Including adjustment of $3,743 resulting from the finalization of purchase price allocations with respect to 2023.
Year ended December 31, 2023
Customer Engagement
Financial Crime and ComplianceTotal
As of January 1, 2023$1,269,610 $347,508 $1,617,118 
Acquisitions
194,990 1,885 196,875 
Functional currency translation adjustments7,006 970 7,976 
As of December 31, 2023$1,471,606 $350,363 $1,821,969 

NOTE 9:-    ACCRUED EXPENSES AND OTHER LIABILITIES
December 31,
20242023
Payroll and related expenses$196,940 $200,820 
Accrued expenses157,857 162,953 
Government authorities235,469 162,306 
Other2,843 2,581 
$593,109 $528,660 

NOTE 10:-    DERIVATIVE INSTRUMENTS
The Company's risk management strategy includes the use of derivative financial instruments to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates.
F-35

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 10:- DERIVATIVE INSTRUMENTS (Cont.)
ASC 815, "Derivatives and Hedging" ("ASC 815"), requires the Company to recognize all of its derivative instruments as either assets or liabilities on the balance sheet at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, an entity must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation.
Gains and losses on derivatives instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that are attributable to a particular risk), are recorded in accumulated other comprehensive income (loss) and reclassified into the statement of income in the same accounting period in which the designated forecasted transaction or hedged item affects earnings.
The Company entered into option and forward contracts to hedge a portion of anticipated New Israeli Shekel ("NIS"), Indian Rupee ("INR"), Philippine peso ("PHP") and Colombian Peso ("COP") payroll and benefit payments. These derivative instruments are designated as cash flow hedges, as defined by ASC 815 and accordingly are measured at fair value. These transactions are effective and, as a result, gain or loss on the derivative instruments are reported as a component of accumulated other comprehensive income (loss) and reclassified as payroll expenses, facility expenses or finance expenses, respectively, at the time that the hedged income/expense is recorded.
Notional amountFair value
(Level 2 within the fair value hierarchy)
December 31,December 31,
2024202320242023
Forward contracts
expenses NIS122,401 107,940 4,047 253 
expenses INR68,504 62,023 (1,329)147 
expenses PHP12,697 11,577 (341)302 
expenses COP
7,526  (428) 
$211,128 $181,540 $1,949 $702 

The Company currently hedges its exposure to the variability in future cash flows, generally for a maximum period of one year. As of December 31, 2024, the Company expects to reclassify all of its unrealized gains and losses from accumulated other comprehensive income to earnings during the next twelve months.
F-36

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 10:- DERIVATIVE INSTRUMENTS (Cont.)
The fair value of the Company's outstanding derivative instruments at December 31, 2024 and 2023 is summarized below:
Fair value of derivative instruments
December 31,
Balance sheet line item20242023
Derivative assets:
Foreign exchange forward contractsPrepaid expenses and other current assets$4,047 $702 
Derivative liabilities:
Foreign exchange forward contractsAccrued expenses and other liabilities$(2,098)$ 
The effect of derivative instruments in cash flow hedging relationship on income and other comprehensive income for the years ended December 31, 2024, 2023 and 2022 is summarized below:
Amount of gain (loss) recognized in
other comprehensive income
on derivative, net of tax (effective portion)
Year Ended December 31,
202420232022
Derivatives in foreign exchange cash flow hedging relationships:
Forward contracts$(3,621)$(5,300)$(18,223)
$(3,621)$(5,300)$(18,223)
Derivatives in foreign exchange cash flow hedging relationships for the years ended December 31, 2024, 2023 and 2022 is summarized below:
Amount of gain (loss) reclassified from other comprehensive income
into income (expenses),
net of tax (effective portion)
Year Ended December 31,
Statements of income line item
202420232022
Forward contracts to hedge payroll and facility expensesCost of revenues, operating expenses and financial expenses4,520 13,335 7,189 
$4,520 $13,335 $7,189 

F-37

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)

NOTE 11:-    LEASES
The Company has entered into various non-cancelable operating lease agreements for certain office spaces and motor vehicles. The leases have original lease periods expiring between 2025 and 2037. The Company does not assume renewals in its determination of the lease term unless the renewals are considered as reasonably assured.
The operating lease cost for the year ended December 31, 2024 was $22,664.    
Supplemental cash flow information related to leases was as follows:    
Year ended December 31, 2024
Cash payments related to operating lease
$17,970 
New right-of-use assets obtained in exchange for operating lease obligations5,418 
Maturities of lease liabilities were as follows:
Operating Leases
2025$16,523 
202616,687 
202715,554 
202814,127 
202912,822 
Thereafter54,322 
Total lease payments130,035
Less imputed interest(25,223)
Total$104,812 
Supplemental balance sheet information related to leases was as follows:
Year ended December 31, 2024
Current maturities of operating leases12,554 
Long-term operating leases92,258 
Total operating lease liabilities$104,812 
Weighted-average remaining operating lease term9.15
Weighted-average discount rate of operating leases5.17 %

F-38

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 12:-    COMMITMENTS AND CONTINGENT LIABILITIES
a.Commitments:
The Company is also obligated under certain agreements with its suppliers to purchase licenses and hosting services. These non-cancelable obligations as of December 31, 2024 are $458,239.
b.Legal proceedings:
From time to time the Company or its subsidiaries may be involved in legal proceedings and/or litigation arising in the ordinary course of business. While the outcome of these matters cannot be predicted with certainty, the Company does not believe it will have a material effect on its consolidated financial position, results of operations, or cash flows.
c.Bank Guarantees:
The Company obtained bank guarantees as of December 31, 2024 of $2,324, primarily in connection with office lease agreements.

NOTE 13:-    TAXES ON INCOME
a.Israeli taxation:
1.Corporate tax:
Commencing 2012, NICE Ltd. and its Israeli subsidiary elected the Preferred Enterprise regime to apply under the Law for the Encouragement of Capital Investments (the "Investment Law"). The election is irrevocable.
In December 2016, the Israeli Knesset passed a number of changes to the Investments Law regimes. These changes came into law in May 2017, effective beginning January 1, 2017, upon the passing into law of Regulations promulgated by the Finance Ministry to implement the "Nexus Principles" based on OECD guidelines published as part of the Base Erosion and Profit Shifting (BEPS) project. Such Regulations provide rules for implementation of the Special Preferred Technology Enterprise tax regime.
The Company believes it qualifies as a Special Preferred Technology Enterprise and accordingly is eligible for a tax rate of 6% on its Special qualifying Preferred Technology income, as defined in such regulations, beginning from tax year 2017 and onwards. The Company expects that it will continue to qualify as a Special Preferred Technology Enterprise in subsequent tax years.
Income not eligible for Preferred Enterprise or Preferred Technology Enterprise or Special Preferred Technology Enterprise benefits is taxed at the regular corporate tax rate, which was 23% in 2024, 2023 and 2022".
2.Foreign Exchange Regulations:
Under the Foreign Exchange Regulations, NICE Ltd. and its Israeli subsidiary calculate their tax liability in U.S. Dollars according to certain orders. The tax liability, as calculated in U.S. Dollars, is translated into NIS according to the exchange rate as of December 31st of each year.
F-39

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 13:- TAXES ON INCOME (Cont.)
3.Tax benefits under the Israeli Law for the Encouragement of Industry (Taxation), 1969:
NICE Ltd. and its Israeli subsidiary believe they each currently qualify as an "Industrial Company" as defined by the Investment Law and, as such, are entitled to certain tax benefits including deduction of public offering expenses in three equal annual installments and amortization of cost of purchased know-how and patents for tax purposes over eight years.
b.Income taxes on non-Israeli subsidiaries:
Non-Israeli subsidiaries are taxed according to the tax laws in their respective country of residence. The Company's consolidated tax rate depends on the geographical mix of where its profits are earned. In 2024, the Company's U.S. subsidiaries are subject to combined federal and state income taxes of approximately 25.7% and its subsidiaries in the U.K. and India are subject to corporation tax at a rate of approximately 25% and 34.9%, respectively. Neither Israeli income taxes, foreign withholding taxes nor deferred income taxes were provided in relation to undistributed earnings of the Company's foreign subsidiaries. This is because the Company has the intent and ability to reinvest these earnings indefinitely in the foreign subsidiaries and therefore those earnings are continually redeployed in those jurisdictions. As of December 31, 2024, the amount of undistributed earnings of non-Israeli subsidiaries, which is considered indefinitely reinvested, was $1,925 with a corresponding unrecognized deferred tax liability of $252. If these earnings were distributed to Israel in the form of dividends or otherwise, the Company would be subject to additional Israeli income taxes, subject to an adjustment for foreign tax credits, and foreign withholding taxes.

c.Net operating loss carryforward:
As of December 31, 2024, the Company and certain of its subsidiaries had tax loss carry-forwards totaling in aggregate approximately $153,170, which can be carried forward and offset against taxable income. Approximately $80,300 of these carry-forward tax losses have no expiration date, with the balance expiring between the years 2025 and 2041.
Utilization of U.S. net operating losses may be subject to substantial annual limitation due to the "change in ownership" provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization.

d.Deferred tax assets and liabilities:
Deferred taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts recorded for tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows :
F-40

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 13:- TAXES ON INCOME (Cont.)
    
December 31,
20242023
Deferred tax assets:
Net operating losses carryforward and tax credits$50,090 $96,079 
Intra-entity transfer of certain intangible assets (*)9,256 14,563 
Operating leases liabilities 21,124 18,820 
Share based payments39,784 37,110 
Research and development costs154,024 112,311 
Reserves, allowances and other51,788 55,124 
Deferred tax assets before valuation allowance326,066 334,007 
Valuation allowance(11,401)(19,818)
Deferred tax assets314,665 314,189 
Deferred tax liabilities:
Acquired intangibles(1,638)(75,396)
Operating lease right-of-use assets(17,381)(15,813)
Internal use software and other fixed assets(45,070)(18,650)
Prepaid compensation expenses(28,160)(33,936)
Other(5,149)(19)
Deferred tax liabilities(97,398)(143,814)
Deferred tax assets, net$217,267 $170,375 

(*) During the years ended December 31, 2024 and 2023, the Company completed intra-entity transfers of certain intangible assets to a different tax jurisdiction. As a result of the transfers, the Company utilized net operating losses carried forward, incurred a tax expense on capital gain.

December 31,
20242023
Deferred tax assets$219,232 $178,971 
Deferred tax liabilities(1,965)(8,596)
Deferred tax assets, net$217,267 $170,375 
The Company has provided valuation allowances in respect of certain deferred tax assets resulting from tax loss carry forwards and other reserves and allowances due to uncertainty concerning their realization.
F-41

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 13:- TAXES ON INCOME (Cont.)
e.A reconciliation of the Company's effective tax rate to the statutory tax rate in Israel is as follows:
Year Ended December 31,
202420232022
Income before taxes on income, as reported in the consolidated statements of income$604,826$457,700$345,332
Statutory tax rate in Israel23.0 %23.0 %23.0 %
Preferred Enterprise / Preferred Technology Enterprise benefits/Special Preferred Technology Enterprise (*)
(13.3)%(6.8)%(3.3)%
Changes in valuation allowance(1.4)%1.6 %0.5 %
Earnings taxed under foreign law6.7 %(0.9)%0.7 %
Tax settlements and prior years adjustments
11.9 %4.4 %0.4 %
Other(0.1)%4.7 %1.7 %
Effective tax rate26.8 %26.1 %23.0 %
(*) The effect of the benefit resulting from the "Preferred Enterprise/Preferred Technology Enterprise benefits/Special Preferred Technology Enterprise (for 2024)" status on net earnings per ordinary share is as follows:
Year Ended December 31,
202420232022
Basic$1.27 $0.49 $0.18 
Diluted$1.23 $0.47 $0.19 
f.Income before taxes on income is comprised as follows:
Year Ended December 31,
202420232022
Domestic$178,691 $195,203 $102,500 
Foreign426,135 262,497 242,832 
$604,826 $457,700 $345,332 

F-42

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 13:- TAXES ON INCOME (Cont.)
g.Taxes on income (tax benefit) are comprised as follows:
Year Ended December 31,
202420232022
  Current
$202,178 $182,789 $132,129 
 Deferred
(39,940)(63,390)(52,742)
162,238 119,399 79,387 
Domestic58,711 51,334 28,853 
Foreign103,527 68,065 50,534 
$162,238 $119,399 $79,387 
Of which:
Year Ended December 31,
202420232022
Domestic taxes:
Current$44,659 $50,414 $29,576 
Deferred14,052 920 (723)
58,711 51,334 28,853 
Foreign taxes:
Current157,519 132,375 102,553 
Deferred(53,992)(64,310)(52,019)
103,527 68,065 50,534 
Taxes on income$162,238 $119,399 $79,387 


F-43

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 13:- TAXES ON INCOME (Cont.)
h.Uncertain tax positions:
A reconciliation of the beginning and ending balances of the total amounts of uncertain tax position is as follows:

December 31,
2024
2023
Uncertain tax positions, beginning of year$90,124 $80,005 
Increases (decrease) in tax positions for prior years
(4,345)1,262 
Increases in tax positions for current year9,743 11,712 
Expiry of the statute of limitations(2,671)(2,855)
Uncertain tax positions, end of year$92,851 $90,124 
    
The Company accrued $62,487 and $38,347 due to interest and penalties related to uncertain tax positions as of December 31, 2024 and 2023, respectively.

NICE Ltd. and its foreign affiliates in Hungary and in the United Kingdom (“Foreign Affiliates”) are undergoing routine Israeli income tax audits for the tax years 2011 through 2021. On December 30, 2020, February 28, 2022 and on February 20, 2023 NICE Ltd. received a final assessments by way of Tax Decrees (“Tax Decrees”) from the Israel Tax Authority (“ITA”) with respect to its fiscal years 2014 through 2016 for an aggregate amount of tax of approximately NIS 166,369 (equivalent to approximately $45,618). On March 22, 2023, August 20, 2023, and on December 7, 2023 NICE Ltd.’s Foreign Affiliates received Tax Decrees from the ITA with respect to its fiscal years 2011 through 2015, for an aggregate amount of tax of approximately NIS 537,562 (equivalent to approximately $119,979). On December 28, 2022, NICE Ltd. received an assessment from the ITA with respect to its fiscal years 2017 (“Assessment”), for an aggregate amount of tax of approximately NIS 56,971 (equivalent to approximately $15,621) On December 6, 2023, NICE Ltd. received an assessment from the ITA with respect to its fiscal years 2018 through 2021, for an aggregate amount of tax of approximately NIS 50,834 (equivalent to approximately $13,938). Nice Ltd. and its affiliates have filed number of appeals and objections in relation to the different assessments and decrees mentioned above with the district court of Tel Aviv. In addition, the ITA, NICE Ltd and NICE Ltd.’s Foreign Affiliates are in discussions in an effort to resolve these matters in a mutually agreeable manner. We believe our recorded unrecognized tax benefits are sufficient to cover the resolution of the ITA’s Tax Decrees and the Assessments.
As of December 31, 2024, U.S. federal income tax returns filed by the Company's U.S. subsidiaries for the tax years prior to 2021 are no longer subject to general audit. To the extent the Company or its subsidiaries generated net operating losses or tax credits in closed tax years, future use of the net operating loss or tax credit carry forward balance would be subject to examination within the relevant statute of limitations for the year in which it was utilized. The Company and its subsidiaries are still subject to other income tax audits for the tax years of 2012 through 2023.
F-44

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 14:-    SHAREHOLDERS' EQUITY
a.The ordinary shares, par value NIS 1.0 per share, of the Company are traded on the Tel-Aviv Stock Exchange and its American Depositary Shares ("ADSs"), each representing one fully paid ordinary share, are traded on The NASDAQ Stock Market.
b.Share option plan:
2016 Share Incentive Plan
In February 2016 the Company adopted the 2016 Share Incentive Plan (the "2016 Plan" ). The Company adopted the 2016 Plan to provide incentives to employees, directors, consultants and/or contractors by rewarding performance and encouraging behavior that will improve the Company’s profitability.
Under the 2016 Plan, the Company's employees, directors, consultants and/or contractors may be granted any equity-related award, including: any type of an option to acquire the Company's ordinary shares; share appreciation right; share and/or restricted share award ("RSA"); restricted stock unit ("RSU") and/or other share unit; and/or other share-based award and/or other right or benefit under the 2016 Plan, including any such equity-related award that is a performance-based award (each an "Award").
Generally, under the terms of the 2016 Plan, unless determined otherwise by the administrator of the 2016 Plan, 25% of an Award granted becomes exercisable on the first anniversary of the date of grant and 6.25% becomes exercisable once every quarter during the subsequent three years. Specifically with respect to RSUs and options granted with an exercise price equal to the nominal value of an ordinary share ("par value options"), unless determined otherwise by the Board of Directors, 25% of the RSUs and the par value options granted become vested on each of the four consecutive annual anniversaries following the date of grant. Certain executive officers are entitled to acceleration of vesting of Awards in the event of a change of control, subject to certain conditions.
Awards with a vesting period expire six years after the date of grant. Pursuant to a resolution of the Company's Board of Directors dated February 4, 2014, options that are performance-based and that were granted during calendar year 2014 and thereafter shall expire seven years following the date of grant. The maximum number of shares that may be subject to Awards granted under each of the Plans is calculated each calendar year as 3% of the Company’s issued and outstanding share capital as of December 31 of the preceding calendar year (pursuant to an amendment of the 2016 Plan approved by the Board of Directors on October 2, 2019). Such amount is reset for each calendar year. Awards are non-transferable except by will or the laws of descent and distribution.
Options granted under the 2016 Plan are granted at an exercise price equal to the average of the closing prices of one ADR as quoted on the NASDAQ market during the 30 consecutive calendar days preceding the date of grant, unless determined otherwise by the administrator of the 2016 Plan (including par value options).
The Company’s Board of Directors also adopted an addendum to the 2016 Plan for Awards granted to residents of Israel (the "Addendum") and resolved to elect the "Capital Gains Route" (as defined in Section 102(b)(2)) of the Israeli Income Tax Ordinance-5721-1961 ("Tax Ordinance") for the grant of Awards to Israeli grantees. There is also a U.S. addendum under the 2016 Plan that applies to non-qualified stock options for purposes of U.S. tax laws.
During 2024, the Company granted 1,176,229 options and restricted share units under the 2016 Plan (which constituted 1.86% of the Company issued and outstanding share capital as of December 31, 2024).
F-45

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 14:- SHAREHOLDERS' EQUITY (Cont.)
Pursuant to the terms of certain acquisitions, the Company assumed or replaced unvested options, RSAs and RSUs and converted them or replaced them with the Company's options, RSAs and RSUs, as applicable, based on an agreed exchange ratio. Each assumed or replaced option, RSA and RSU is subject to the same terms and conditions, including vesting, exercisability and expiration, as originally applied to any such option, RSA and RSU immediately prior to the acquisition.
The fair value of the Company's stock options granted to employees and directors for the years ended December 31, 2024, 2023 and 2022 was estimated using the following assumptions:
202420232022
Expected volatility
33.33%-36.70%
33.35%-35.67%
29.45%-34.11%
Risk free interest rate
3.49%-4.57%
3.60%-4.68%
1.78%-4.15%
Expected dividend   
Expected term (in years)
2.5 - 3.5
3.53.5
A summary of the Company's stock options activity and related information for the year ended December 31, 2024, is as follows:
Number of optionsWeighted-average exercise priceWeighted- average remaining contractual term
(in years)
Aggregate intrinsic
value
Outstanding at January 1, 20241,253,794 24.08 4.25221,610
Granted340,451 13.48
Exercised(272,978)10.55
Cancelled(953)23.05
Forfeited(72,155)0.29
Outstanding at December 31, 20241,248,159 25.53 4.08184,832 
Exercisable at December 31, 2024491,206 57.58 2.7459,781 
The weighted-average grant-date fair value of options granted during the years 2024, 2023 and 2022 was $169.94, $171.43 and $198.41, respectively.
The total intrinsic value of options exercised, and restricted shares vested during the years 2024, 2023 and 2022 was $191,389, $138,202 and $178,693, respectively.                        
F-46

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 14:- SHAREHOLDERS' EQUITY (Cont.)
The options outstanding under the Company's stock option plans as of December 31, 2024, have been separated into ranges of exercise price as follows:
Ranges of
exercise price
Options outstanding as of December 31, 2024Weighted
average
remaining
contractual
term
Weighted
Average
Exercise
Price
Options Exercisable as of December 31, 2024Weighted
average
exercise
price of
options
exercisable
(Years)$$
$
0.00 - 0.32
1,083,2954.260.28346,3950.29
$
6.72
1520.786.721526.72
$
20.44 - 24.99
1,9282.9221.371,92821.37
$
40.63 - 54.51
1,1163.7851.791,11651.79
$
151.63 - 197.42
86,2353.05171.0166,182171.78
$
206.52 - 232.2
75,4332.72221.5575,433221.55
1,248,159 4.0825.53 491,206 57.58 
A summary of the Company's RSU and the Company's RSA activities and related information for the year ended December 31, 2024, is as follows:
Number of RSU and
RSA (*)
Outstanding at January 1, 20241,703,149 
Granted835,778 
Vested(673,001)
Forfeited(78,104)
Outstanding at December 31, 20241,787,822 
(*) NIS 1.0 par value, which represents approximately $0.27.
The weighted-average grant-date fair value of restricted shares granted during the year 2024 was $185.83.
As of December 31, 2024, the total compensation cost related to non-vested awards not yet recognized was approximately $241,817, which is expected to be recognized over a period of up to four years.

F-47

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 14:- SHAREHOLDERS' EQUITY (Cont.)
The total equity-based compensation expense related to all of the Company's equity-based awards recognized for the years ended December 31, 2024, 2023 and 2022 was comprised as follows:
Year ended
December 31,
202420232022
Cost of revenues$17,418 $18,904 $18,535 
Research and development, net33,526 38,047 39,747 
Selling and marketing57,230 48,022 57,114 
General and administrative78,927 78,329 73,492 
Total stock-based compensation expenses$187,101 $183,302 $188,888 
c.Treasury shares:
On February 12, 2020, the Company's Board of Directors authorized a program to repurchase up to $200,000 of the Company issued and outstanding ordinary shares and ADRs, which commenced following completion of the repurchase program that was authorized by the Company's Board of Directors in 2017. On November 9, 2022, the Company's Board of Directors authorized an additional program to repurchase up to $250,000 of the Company issued and outstanding ordinary shares and ADRs, which commenced following completion of the program that was authorized in 2020. On November 15, 2023, the Company's Board of Directors authorized an additional program to repurchase up to $300,000 of the Company issued and outstanding ordinary shares and ADRs, which commenced following completion of the repurchase program that was authorized by the Company's Board of Directors in 2022. On June 7, 2024 the Company's Board of Directors authorized the acceleration of the $300,000 share repurchase plan. On that day, the Company's Board also authorized an additional program to repurchase up to $500,000 of the Company issued and outstanding ordinary shares and ADRs. The Company fully executed the $300,000 share repurchase program by December 31, 2024.
Repurchases may be made from time to time in the open market or in privately negotiated transactions in accordance with applicable securities laws and regulations. The timing and amount of the repurchase transactions will be determined by management and may depend on a variety of factors including market conditions, alternative investment opportunities and other considerations.
These programs do not obligate us to acquire any particular amount of ordinary shares and ADRs and each program may be modified or discontinued at any time without prior notice.

NOTE 15:-    DEBT
Exchangeable Senior Notes and Hedging Transactions
2017 Notes
In January 2017, the Company issued $287,500 aggregate principal amount of 2017 Notes due 2024.
In the event that the last reported sale price of the company’s ADS for at least 20 trading days (whether consecutive or not) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the exchange price ("Share Price
F-48

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 15:- DEBT (Cont.)
Condition") or in the event of the satisfaction of certain other conditions, during set periods, as defined in the indenture governing the Notes, the holders of the exchangeable senior notes will have the option to exchange the Notes for (at the Company's election) (i) cash, (ii) ADSs or (iii) a combination thereof.
As of December 31, 2023, the Share Price Condition for the 2017 Notes was triggered and, accordingly, the net carrying amount of these 2017 Notes was presented in current liabilities.
The Company may provide additional ADSs upon conversion if there is a "Make-Whole Fundamental Change" in the Company as defined in the indenture governing the 2017 Notes. The 2017 Notes are not redeemable by the Company prior to the maturity date apart from certain cases as set forth in the indenture governing the notes.
On December 31, 2021, the Company entered into the First Supplemental Indenture. In accordance with the First Supplemental Indenture, the Company irrevocably elected cash settlement for the principal and any premium due upon conversion (as defined in the 2017 Indenture) to apply to all conversions of 2017 Notes with an Exchange Date (as defined in the 2017 Indenture) that occurs on or after December 31, 2021.
As a result of the requirement to deliver cash to settle the principal and any premium due upon conversion, on December 31, 2021, the Company reclassified from equity to liability the conversion option (a derivative) fair value of $292,940. The conversion option will be no longer eligible for ASC 815 scope exception. Therefore, a derivative accounting for the conversion option was required.
Debt issuance costs of $5,791 attributable to the 2017 Notes are amortized as interest expense over the contractual term of the notes using the effective interest rate.
Interest is payable on the debentures semi-annually at the cash coupon rate, however, the remaining debt discount is being amortized as additional non-cash interest expense using an effective annual interest rate equal to the Company's estimated nonconvertible debt borrowing rate at the time of issuance.
The Company received notices for conversion of $2,626 and $87,427 of principal amount of the 2017 Notes in 2023 and 2024, respectively, for which $2,628 and $87,435 were settled in 2023 and 2024, respectively. The Company paid the note holders the conversion value of the notes in cash. The cash conversion premium payment upon conversion of the 2017 Notes was offset by cash under the convertible bond hedge transaction (a derivative) entered into in connection with the offering of the 2017 Notes. As a result of the conversions, the Company recorded in 2023 $53 loss on extinguishment of debt.

In January 2024, the Company settled the entire 2017 Notes in cash, reflecting both the principal amount in the sum of $87,435 and the conversion option in the sum of $104,673. As such, the Company settled the associated debt hedge asset in the total amount of $104,673, using the resulting proceeds to repay the outstanding debt.

2020 Notes
In August 2020, the Company issued $460,000 aggregate principal amount of exchangeable senior notes (the "2020 Notes" and together with the 2017 Notes, the "Notes") due 2025.
In the event that the Share Price Condition is satisfied or in the event of the satisfaction of certain other conditions, during set periods, set forth in the indenture governing the 2020 Notes, the holders of the exchangeable senior notes will have the option to exchange the Notes for (at the Company's election) (i) cash, (ii) ADSs or (iii) a combination thereof.
F-49

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 15:- DEBT (Cont.)
On December 31, 2021, the Company irrevocably elected that all conversions occurring on or after December 31, 2021, will be settled pursuant to a Combination Settlement (as defined in the 2020 Indenture) with a Specified Dollar Amount (as defined in the 2020 Indenture) no less than $1,000 per $1,000 principal amount of 2020 Notes. Generally, under this settlement method, the conversion value corresponding to the principal amount will be converted in cash, and the conversion value over the principal amount will be settled, at the Company’s election, in cash or shares or a combination thereof.
The 2020 Notes are redeemable by the Company on or after September 21, 2023 upon the fulfillment of the Share Price Condition for cash in relation to the principal amount, and the conversion value over the principal amount will be settled, at the Company's election, in (i) cash, (ii) ADSs or (iii) a combination thereof, apart from certain cases as set forth in the indenture governing the Notes.
The 2020 Notes do not bear interest, however, the remaining debt discount is being amortized as additional non-cash interest expense using an effective annual interest rate.
Debt issuance costs of $8,574 attributable to the 2020 Notes are amortized as interest expense over the contractual term of the 2020 Notes using the effective interest rate.
The Company may provide additional ADSs upon conversion if there is a "Make-Whole Fundamental Change" in the Company as defined in the indenture governing the 2020 Notes.
The following table summarizes some key facts and terms regarding the outstanding Notes as of December 31, 2024:
Due 2025
Issuance dateAugust 27, 2020
Maturity dateSeptember 15, 2025
Effective conversion dateJune 15, 2025
Principal amount$460,000
Cash coupon rate (per annum)%
Conversion rate effective (per $1000 principal amount)3.34
Effective conversion price (per ADS)$299.19
The carrying values of the liability of the Notes are reflected in the Company's accompanying consolidated balance sheets as follows:
F-50

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 15:- DEBT (Cont.)
2020 Notes2017 Notes
December 31,December 31,
2024202320242023
Principal$460,000 $460,000 $ $87,432 
Conversion option (Level 2) $121,922 
Less:
Debt issuance costs, net of amortization(1,209)(2,919) (14)
Unamortized discount   (111)
Net liability carrying amount$458,791 $457,081 $ $209,229 
As of December 31, 2024, the estimated fair value of 2020 Notes which the Company has classified as Level 2 financial instruments is $442,157 ($437,368 as of December 31, 2023).
The estimated fair value was determined based on the quoted bid price of the exchangeable senior notes in an over-the-counter market on the last trading day of the reporting period.
Interest expense related to the Notes is reflected on the accompanying consolidated statements of income as follows:
2020 Notes2017 Notes
Year Ended December 31,Year Ended December 31,
202420232022202420232022
Amortization of debt issuance costs$1,710 $1,699 $1,693 $14 $316 $303 
Non-cash amortization of debt discount   110 2,600 2,587 
Interest expense   46 1,101 1,127 
Loss in respect of convertible loan extinguishment    53 1,206 
Total interest expense recognized$1,710 $1,699 $1,693 $170 $4,070 $5,223 
Effective interest rate0.37 %0.37 %0.37 %4.65 %4.65 %4.65 %
Exchangeable notes hedge transactions
In connection with the pricing of the 2017 Notes, the Company has entered into privately negotiated exchangeable note hedge transactions with some of the initial purchasers and/or their respective affiliates (the "Option Counterparties").
Subject to customary anti-dilution adjustments substantially similar to those applicable to the 2017 Notes, the exchangeable note hedge transactions cover the number of ADSs will initially underline the 2017 Notes.
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NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 15:- DEBT (Cont.)
The note hedge transactions are expected generally to reduce cash payments the Company is required to make in excess of the principal amount, in each case, upon any exchange of the 2017 Notes.
A portion of the call-options can be settled upon a surrender of the same amounts of Notes by a holder. As stated above, the Company irrevocably elected cash settlement to apply to all conversions of 2017 Notes with an Exchange Date (as defined in the 2017 Indenture) that occurs on or after December 31, 2021.
Conversion notices received on and after December 31, 2021 relating to the 2017 Notes will be fully settled in cash, and amounts paid in excess of the principal amount will be offset by an equal receipt of cash under the convertible bond hedge.
As a result of the irrevocable cash election, on December 31, 2021, the Company reclassified from equity to derivative asset the remaining bond hedge fair value of $292,940 (Level 2).
Concurrently with the Company's entry into the exchangeable note hedge transactions, the Company has entered into warrant transactions with the Option Counterparties relating to the same number of ADSs (3,457,475), with a strike price of $101.82 per ADS, subject to customary anti‑dilution adjustments. The warrants were classified to equity in accordance with U.S. GAAP
During 2024, the warrants were exercised into 1,513,183 ordinary shares.

NOTE 16:-    REPORTABLE SEGMENTS AND GEOGRAPHICAL INFORMATION
a.Reportable segments:
ASC 280, "Segment Reporting"' establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company reports its financial results for our two reportable segments: Customer Engagement and Financial Crime and Compliance.

The Customer Engagement segment includes CXone Mpower platform that empowers organizations to automate service at scale, augment the workforce with AI-powered solutions, and unify enterprise knowledge, data and AI models to drive faster resolutions and superior customer experiences.
The Financial Crime and Compliance Segment includes embedded-AI solutions that identify risks and help prevent money laundering and fraud, as well as help ensure financial markets compliance in real-time.

The Company's chief executive officer is its chief operating decision maker (CODM), who allocates resources to and assesses the performance of each operating segment using information about the operating segment's revenue and operating income.

In the 2024 annual reporting, the Company adopted ASU 2023-07 retrospectively.

The following table sets forth segment information of revenue, expenses, and operating income:


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NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 16:- REPORTABLE SEGMENTS AND GEOGRAPHICAL INFORMATION (Cont.)
Year ended December 31, 2024
Customer Engagement
Financial Crime and ComplianceNot
allocated
Total
Revenues$2,281,781 $453,491 $ 2,735,272 
Cost of Cloud (1)
620,919 74,125 
Cost of Services (1)
124,250 58,127 
Cost of Product (1)
17,926 3,124 
Other segment items (1,2)
944,352 159,819 
Operating income$574,334 $158,296 $(186,676)$545,954 
Financial income and other, net
58,872 
Income before taxes on income
$604,826 
(1) Includes depreciation and amortization expense. Depreciation and amortization expense totaled $174,659 and $20,985 in respect of the Customer Engagement and Financial Crime and Compliance segments, respectively.
(2) Other segment items represent mainly cost of wages, maintenance expense, professional services expense, marketing expense, depreciation and amortization expense, and other expenses.
Year ended December 31, 2023
Customer Engagement
Financial Crime and ComplianceNot
allocated
Total
Revenues$1,974,090 $403,418 $ $2,377,508 
Cost of Cloud (1)
496,516 58,618 
Cost of Services (1)
132,069 56,190 
Cost of Product (1)
17,804 3,259 
Other segment items (1,2)
870,908 156,328 
Operating income$456,793 $129,023 $(150,589)$435,227 
Financial income and other, net
22,473 
Income before taxes on income
$457,700 
F-53

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 16:- REPORTABLE SEGMENTS AND GEOGRAPHICAL INFORMATION (Cont.)
(1) Includes depreciation and amortization expense. Depreciation and amortization expense totaled $143,585 and $15,757 in respect of the Customer Engagement and Financial Crime and Compliance segments, respectively.
(2) Other segment items represent mainly cost of wages, maintenance expense, professional services expense, marketing expense, depreciation and amortization expense, and other expenses.
Year ended December 31, 2022
Customer Engagement
Financial Crime and Compliance
Not
allocated
Total
Revenues$1,768,804 $412,490 $ $2,181,294 
Cost of Cloud (1)
427,664 44,636 
Cost of Services (1)
127,951 54,789 
Cost of Product (1)
18,422 4,410 
Other segment items (1,2)
850,875 149,357 
Operating income$343,892 $159,298 $(168,017)$335,173 
Financial income and other, net
10,159 
Income before taxes on income
$345,332 
(1) Includes depreciation and amortization expense. Depreciation and amortization expense totaled $151,913 and $12,972 in respect of the Customer Engagement and Financial Crime and Compliance segments, respectively.
(2) Other segment items represent mainly cost of wages, maintenance expense, professional services expense, marketing expense, depreciation and amortization expense, and other expenses.

The following table presents property and equipment as of December 31, 2024 and 2023, based on operational segments:                        
December 31,
20242023
Customer Engagement
$147,869 $132,824 
Financial Crime and Compliance35,624 39,943 
Non-allocated1,799 1,647 
185,292 $174,414 


F-54

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 16:- REPORTABLE SEGMENTS AND GEOGRAPHICAL INFORMATION (Cont.)

b.Geographical information:
Total revenues from external customers on the basis of the Company's geographical areas are as follows:
Year Ended December 31,
202420232022
Americas, principally the US$2,321,524 $1,986,634 $1,802,192 
EMEA (*)275,009 244,523 245,198 
Israel3,053 3,508 4,484 
Asia Pacific135,686 142,843 129,420 
$2,735,272 $2,377,508 $2,181,294 
The following presents property and equipment and operating lease right-of-use assets as of December 31, 2024 and 2023, based on geographical areas:
December 31,
20242023
Americas, principally the US$132,115 $128,065 
EMEA (*)12,509 10,145 
Israel118,786 122,940 
Asia Pacific14,965 17,829 
$278,375 $278,979 
(*) Includes Europe, the Middle East (excluding Israel) and Africa.

NOTE 17:-    SELECTED STATEMENTS OF INCOME DATA
a.Research and development, net:
Year Ended December 31,
202420232022
Total costs$432,355 $386,745 $364,654 
Less - grants and participations(1,961)(2,441)(2,414)
Less - capitalization of software development costs(69,787)(61,596)(56,167)
$360,607 $322,708 $306,073 


F-55

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 17:-    SELECTED STATEMENTS OF INCOME DATA (Cont.)

b.Financial expenses and other, net:
Year Ended December 31,
202420232022
Financial income:
Interest and amortization/accretion of premium/discount on marketable securities, net$40,482 $13,813 $13,659 
Interest income
24,501 20,260 4,720 
64,983 34,073 18,379 
Financial expenses:
Interest expense
(46)(1,101)(1,127)
Loss in respect of debt extinguishment (53)(1,206)
Debt issuance costs amortization(1,724)(2,015)(1,996)
Exchangeable senior notes amortization of discount(110)(2,600)(2,587)
Exchange rates differences(466)(3,297)(301)
Other(3,390)(2,412)(2,774)
(5,736)(11,478)(9,991)
Other (expenses) Income, net(375)(122)1,771 
$58,872 $22,473 $10,159 

c.Net earnings per share:
The following table sets forth the computation of basic and diluted net earnings per share:
1.Numerator:
Year Ended December 31,
202420232022
Net income to ordinary shareholders$442,588 $338,301 $265,945 




F-56

NICE LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 17:-    SELECTED STATEMENTS OF INCOME DATA (Cont.)

2.Denominator (in thousands):
Year Ended December 31,
202420232022
Denominator for basic net earnings per share:
Weighted average number of shares (thousand)63,483 63,590 63,790 
Effect of dilutive securities:
Add - employee stock options and RSU1,172 995 894 
Warrants issued in the exchangeable notes transaction851 1,680 1,781 
Denominator for diluted net earnings per share - adjusted weighted average shares (thousand)$65,506 66,265 66,465 

NOTE 18:-    RELATED PARTY BALANCES AND TRANSACTIONS
As of December 31, 2024 and 2023, the 2020 Subsidiary's CEO holds 12.04% of the 2020 Subsidiary, which reflects $5,406 and $5,385 of the non-controlling amount on the balance sheet as of December 31, 2024 and 2023, respectively.

NOTE 19:-    SUBSEQUENT EVENTS
On January 16, 2025, the Company acquired an additional 29.9% in the 2020 Subsidiary for a total consideration of $36,466. Upon consummation of the acquisition, the 2020 Subsidiary became a wholly-owned subsidiary of the Company.


F-57


SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.



NICE LTD.
By:
/s/ Scott Russell
Scott Russell
Chief Executive Officer
Date:  March 19, 2025

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