AI growth can’t offset weak guidance at Nice
Shares fall as investors question sustainability of earnings boost.
After a sharp rally alongside other software stocks last week, Nice reported on Wednesday mixed results for the first quarter of 2026.
The Israeli developer of customer experience and relationship management software posted results that modestly exceeded expectations for the quarter. However, its guidance for the current period came in slightly below analysts’ forecasts, pointing to a slowdown in growth to single digits.
The company’s shares fell around 10% in pre-market trading in New York. The decline appears to reflect investor concern that the company’s improved full-year profit outlook is being driven largely by financial engineering, specifically a substantial share buyback program, rather than underlying growth.
Like many software companies facing negative sentiment amid the rapid rise of artificial intelligence, Nice announced last quarter a $600 million share repurchase plan.
Nice reported first-quarter revenue of $769 million, up 10% year over year and slightly ahead of expectations. Cloud revenue, the company’s core growth engine, rose 14.6% to $603 million, still robust, but showing signs of moderation.
On the bottom line, the company posted earnings of $0.77 per share, significantly below analysts’ estimates.
Guidance for the second quarter was notably cautious. Nice expects revenue of between $761 million and $771 million, implying growth of roughly 5%. Earnings are projected in the range of $2.60 to $2.70 per share, also below market expectations.
The company left its full-year revenue forecast unchanged at $3.17 billion to $3.19 billion, suggesting annual growth of around 8% compared to 2025. At the same time, it raised its full-year earnings outlook to more than $11 per share.
“We delivered a solid start to 2026, reflecting disciplined execution and strong momentum across our AI‑native CX platform,” said Scott Russell, CEO of Nice. “In the first quarter, we exceeded the high end of our guidance on both revenue and non-GAAP EPS, and delivered cloud revenue growth of 14.6% year over year. AI remains a powerful growth driver, with AI ARR increasing 66% year over year and included in 100% of our CXone enterprise deals, highlighting the growing adoption of our AI solutions at scale. International markets were another area of strength, with 30% revenue growth as we continue to expand large enterprise deployments globally.”
