NiCE (NASDAQ:NICE) reported first-quarter results on Wednesday that exceeded Wall Street expectations, but shares dropped more than 9% in premarket trading after the company issued softer-than-expected revenue guidance for the second quarter.
The cloud software provider posted adjusted earnings per share of $2.64, beating analyst estimates of $2.52 by $0.12.
Revenue rose 9.8% year over year to $768.6 million, also ahead of consensus forecasts of $760.94 million.
Second-quarter revenue guidance disappoints investors
NiCE forecast second-quarter revenue in a range of $761 million to $771 million.
The midpoint of $766 million came in below analyst expectations of $777.4 million, creating a shortfall of roughly $11.4 million versus consensus estimates.
The weaker guidance overshadowed otherwise solid quarterly performance and pressured the stock following the earnings release.
Cloud and AI businesses continue to expand
Cloud revenue increased 14.6% year over year during the first quarter to $603.4 million.
The company also reported that AI annual recurring revenue surged 66% from the prior year, reflecting continued demand for its AI-focused customer experience platform.
Company boosts full-year EPS outlook
NiCE repurchased approximately $253 million worth of shares during the quarter.
The company also raised its full-year 2026 adjusted earnings-per-share guidance to a range of $10.98 to $11.18.
The updated forecast came in slightly above analyst consensus estimates of $10.95 per share.
Meanwhile, full-year revenue guidance was maintained between $3.17 billion and $3.19 billion, broadly in line with Wall Street expectations of $3.18 billion.
“We delivered a solid start to 2026, reflecting disciplined execution and strong momentum across our AI-native CX platform,” said Scott Russell, chief executive officer of the company.
“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.”
Company updates cloud growth expectations
For the second quarter, NiCE expects adjusted earnings per share between $2.60 and $2.70, compared with analyst expectations of $2.63.
The company also updated its full-year cloud revenue growth forecast, now expecting annual growth between 13% and 15%.