NiCE beats guidance at $791M revenue, cuts 500 jobs as AI reshapes its own R&D
What's the deal? NiCE reported third-quarter revenue of $790.7 million, up 8% year over year and above its guidance, while announcing it will cut about 500 jobs, roughly 5% of its global workforce. The Israeli-founded software giant, which sells customer-service and contact-centre software to about 25,000 clients, says AI is now helping it do more with fewer people.
The numbers: AI annual recurring revenue climbed 46% to $392 million, though that is still just 16% of cloud revenue. Non-GAAP EPS beat guidance, and NiCE raised its full-year earnings outlook.
The catch: Profitability slipped sharply. GAAP operating income fell 25% to $120.6 million, and net income dropped 34% to $95.1 million, as the company shifts resources toward AI products.
The layoffs: The 500 cuts reach beyond slower-growing business lines into research and development, chief executive Scott Russell said, as AI tools boost developer output and management layers are removed. NiCE expects $15 million to $20 million in restructuring charges; its roughly 1,000 Israeli staff are expected to be largely spared.
Why now? The move marks a reversal from July, when Russell told CTech the company had no plans to cut headcount. AI agents from startups like Cognigy, which NiCE bought for about $1 billion, are reshaping a market where clients increasingly delay deals to assess automation first.
The signal: NiCE is both selling AI that replaces call-centre staff and using AI to trim its own developers. Rival Five9 reported 78% AI revenue growth last quarter, underscoring an industry race in which the key question is whether fast AI growth can lift overall growth and margins.
Read more: CTech by Calcalist
Image: NICE building in Ra'anana. Credit: דוד שי, CC BY-SA 4.0, via Wikimedia Commons
