Welcome to the NiCE conference call discussing fourth quarter 2025 results, and thank you all for holding. As a reminder, this conference is being recorded February 19, 2026. I would now like to turn this call over to Mr. Ryan Gilligan, VP, Investor Relations at NiCE. Please go ahead.

Thank you, operator. With me on today's call are Scott Russell, Chief Executive Officer; and Beth Gaspich, Chief Financial Officer. Before we start, I would like to point out that some of the statements made on this call will constitute forward-looking statements. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, please be advised that the company's actual results could differ materially from these forward-looking statements. Additional information regarding the factors that could cause actual results or performance of the company to differ materially is contained in the section entitled Risk Factors in Item 3 of the company's 2024 annual report on Form 20-F as filed with the Securities and Exchange Commission on March 19, 2025. During today's call, we will present a more detailed discussion of fourth quarter and full year 2025 results and the company's guidance for the first quarter and full year 2026. You can find our press release as well as PDFs of our financial results on NiCE's Investor Relations website. Following our comments, there will be an opportunity for questions. Let me remind you that unless otherwise noted on this call, we will be commenting on our adjusted results of operations, which differ in certain respects from generally accepted accounting principles as reflected mainly in accounting for share-based compensation, amortization of acquired intangible assets, acquisition-related expenses, amortization of discount on debt, and loss from extinguishment of debt and the tax effect of the non-GAAP adjustments. The differences between the non-GAAP adjusted results and the equivalent GAAP figures are detailed in today's press release. The information and some of our comments discussed on this call may contain forward-looking statements that are subject to risks, uncertainties, and assumptions. I will now turn the call over to Scott.

Thank you, Ryan, and good morning, everyone. I am extremely proud of our team's accomplishments in 2025. We met our financial guidance for each quarter and achieved total revenue growth of 8%, cloud revenue growth of 13%, and non-GAAP EPS of $12.30, all at the upper end of our guidance. Since my arrival, we have sharpened our focus on execution and speed. We embraced an AI-first platform-led strategy, emphasizing international expansion and strategic partnerships. Our results for 2025 demonstrate robust execution of that strategy. We expanded our CX AI market leadership, with AI ARR increasing by 66% to $328 million, now representing 13% of our cloud revenue. We achieved record numbers in acquiring new AI clients, with growth of 300% year-over-year, and closed a record number of seven-figure ACV deals for CXone, all inclusive of AI. We enhanced our competitive position through the acquisition of Cognigy, the leader in agentic AI, positioning NiCE as the sole player in the CX market with a fully AI-native CX platform. Our international markets had a breakthrough year in 2025. We secured our largest international deal ever and grew international revenue by 16%, with growth accelerating to 29% in the fourth quarter. Additionally, we expanded our strategic partner ecosystem through deals with various prominent firms, and we expect these partnerships to contribute even more in the coming years. With strong booking momentum and high retention rates exiting Q4, we are set to reaccelerate cloud revenue growth as we enter 2026, which Beth will discuss in more detail soon. None of this would have been achievable without a healthy core CCaaS business. We have the leading platform in a dynamic market. Seats and interactions on CXone grew consistently in 2025, and it's worth noting that only about 40% of contact centers have transitioned to CCaaS, leaving a substantial on-premise to cloud migration opportunity ahead. Our efforts are delivering substantial value to our customers, and this is reflected in our strong CCaaS performance. In Q4, cloud revenue increased by 14% year-over-year, and excluding NiCE Cognigy, it grew by 12%. Q4 was a record-setting quarter for new cloud ACV bookings, pushing cloud backlog growth to 25%, including Cognigy, and 22% without it. Our win rates against key CX competitors are improving as customers increasingly prefer comprehensive end-to-end CX platforms over fragmented point solutions. This is showcased in several significant deals during the quarter, including a large win with a leading North American financial services firm that chose NiCE in a competitive environment to replace a legacy on-prem setup, adopting NiCE's AI-powered CXone platform, including NiCE Cognigy to enhance service automation and reduce low-value interactions while delivering more personalized client experiences. We also secured a seven-figure ACV deal with a leading financial services group in EMEA, which selected NiCE CXone to replace a legacy on-premise ACD and unify multiple platforms into a single AI-ready CX foundation. With a strong core, we're well-positioned to capitalize on the significant CX AI opportunities ahead of us. AI is broadening NiCE's CX market potential beyond the contact center, creating new use cases that are still in the early stages of adoption and driving faster expansion as our customers scale AI throughout their organizations. NiCE Cognigy solidifies this position; it is ranked number one by industry analysts and was recently acknowledged as the only conversational AI platform to receive the customer choice distinction in the latest Gartner Peer Insights Voice of the Customer Report. This customer validation extends to our core platform as well, with CXone now recognized as the only CCaaS platform to receive the customer choice distinction. By merging the market leaders in CCaaS and agentic AI for CX into the only AI-native CX platform that operates seamlessly across voice, digital, and AI at enterprise scale, NiCE is uniquely positioned to take advantage of the substantial CX AI opportunities ahead. Our platform dominates the engagement point and is built on the largest CX data foundation in the industry. With decades of CX experience and a platform that manages 20 billion interactions each year, NiCE comprehends customer experience more than anyone else, and this leadership is reflected in our outcomes. The year 2026 will see NiCE Cognigy acting as a force multiplier. We've recently introduced Cognigy Simulator, an AI performance lab for quicker, scalable, and more reliable AI agent testing. Soon, we'll enhance NiCE Copilot capabilities with Task Assist for agents powered by NiCE Cognigy. By later this year, we will fully integrate NiCE Cognigy into a cohesive native CXone platform, providing a seamless AI-native experience at enterprise scale. As we approach 2026, I am greatly encouraged by the significant pipeline growth within our NiCE installed base, with expectations of further growth as we continue integrating NiCE Cognigy into CXone. While we are incredibly excited about our future seamlessly integrated capabilities, NiCE Cognigy is already gaining substantial momentum. Additionally, we are witnessing strong AI-driven enterprise software demand, with customers prioritizing investments that yield clear ROI and measurable results. In Q4, we achieved seven-digit ACV wins, including a leading North American consumer services company that expanded its relationship with NiCE by incorporating Cognigy for self-service into its existing CXone platform. This expansion will replace a prior AI solution from a CRM provider, providing the compounding benefits of a unified platform with improved orchestration and deeper insights, leading to more seamless experiences across channels. Another significant enterprise victory came from a leading North American energy company, an existing CXone customer that chose to deepen its relationship with NiCE to enhance AI-driven customer engagement. By integrating Cognigy for self-service and Copilot to assist agents in tackling more complex interactions, the customer seeks to improve containment and call handling times while efficiently scaling during high demand periods. Though the market remains in the early phases of AI adoption, it is already supporting our growth. As stated during our Capital Markets Day, we must make strategic, targeted, and timely investments in 2026 to capture this opportunity. Our investments will emphasize innovation, including enhancing the integration of NiCE Cognigy and advancing our agentic AI capabilities, while also broadening our go-to-market and delivery capacities to execute on the significant growth catalysts we foresee in 2026 and beyond. These catalysts encompass promoting AI-first growth across every customer touchpoint, automating end-to-end customer journeys with AI, capitalizing on the CCaaS cloud migration, accelerating our international growth and partner ecosystem, and extending our reach beyond the contact center. Before I pass the call to Beth, I want to highlight two key points. First, 2026 will be centered on speed, and we are moving quickly to seize the opportunities ahead. Secondly, my conviction today is even stronger than when I first joined that AI is a significant tailwind for NiCE. NiCE is fundamentally an AI company. Delivering enterprise CX AI requires comprehensive domain expertise, unified data, orchestration, and governance at scale, and that aligns with our strengths. We have the technology, data, domain expertise, and customer base to succeed, and we will seize this opportunity. Now, I will hand the call over to Beth.

Thank you, Scott. I'm pleased to close out 2025 by sharing our strong fourth quarter and full year results, which reflect continued disciplined execution across our business. Our fourth quarter performance has further strengthened our confidence in the recent financial targets we shared at our Capital Markets Day in November 2025. Later in my remarks, I will share our first quarter and full year guidance for 2026, which reflects the healthy momentum we experienced exiting 2025. 2025 was a transformative year for NiCE with Scott and our NiCErs across the globe laying the groundwork for accelerating top line growth in the years ahead. Before I dive further into the fourth quarter 2025 results, there are several financial accomplishments from last year that I would like to highlight. First, our full year 2025 results were impressive and came in at the high end of our previously communicated guidance ranges. Full year total revenue was $2.945 billion, representing 8% year-over-year growth. Full year cloud revenue grew 13% year-over-year and 12% excluding Cognigy. 2025 reflected consistent execution in our core cloud business with 12% cloud revenue growth delivered each quarter, excluding Cognigy. Operating margin tracked as expected, while free cash flow margin of 21% exceeded our guidance, reflecting disciplined execution while absorbing Cognigy starting in early September. Second, we completed the acquisition of Cognigy, which was financed entirely with cash on hand, supported by our strong balance sheet and robust organic operating cash flow. Third, we fully repaid $460 million of outstanding debt. Our balance sheet is now debt-free, providing us with significant financial flexibility to invest prudently in our business and return capital to shareholders. Fourth, we continue to return significant capital to our shareholders through our share repurchase program, underscoring our confidence in the durability of our cash flow generation and long-term value creation. In 2025, we repurchased $489 million of our shares, representing 32% growth year-over-year and 79% of free cash flow generation, ending the year with approximately 60.4 million shares outstanding. Shifting to fourth quarter financial results. Total revenue was $786 million, representing 9% year-over-year growth. Cloud revenue totaled $608 million, growing 14% year-over-year and represented 77% of total revenue, continuing the steady mix shift toward our cloud-first model. Excluding Cognigy, cloud revenue increased 12% year-over-year. Cloud growth in the quarter was driven primarily by continued momentum in our CX AI offerings with AI ARR of $328 million, up 66% year-over-year as customers increasingly adopt our AI-powered automation across both self-service and human-assisted workflows. Cloud growth also benefited from ongoing CCaaS migrations and a very strong international performance, including a modest incremental contribution for an earlier-than-expected go-live of a large international enterprise deployment originally planned for 2026, as well as a small foreign exchange tailwind of approximately 50 basis points in the quarter. As we've noted previously, while AI is already a meaningful contributor to growth, we remain early in fully monetizing its long-term potential. That context is important as we continue to invest in this opportunity today while building operating leverage over time as our AI revenue compounds. Our cloud net revenue retention for the trailing 12 months was 109%, remaining healthy and stable with the prior quarter, reflecting continued customer retention and expansion activity. Turning to our business segments. Customer Engagement revenue was $658 million in Q4, representing 84% of total revenue and growing 10% year-over-year, driven by double-digit cloud revenue expansion across all geographic regions with strong performance internationally, reflecting increased enterprise adoption of CXone and growing demand for our AI-powered CX solutions. Financial Crime and Compliance revenue totaled $128 million, growing 2% year-over-year and represented 16% of total revenue. Actimize is the clear market leader and is benefiting from the positive momentum we are experiencing in shifting this segment to a higher recurring business with healthy cloud revenue growth. From a geographic perspective, the Americas region represented 82% of total revenue, growing 5% year-over-year, and this performance was supported by double-digit cloud revenue growth in the region alongside the continued evolution of our revenue mix from on-premise related revenue towards cloud-based solutions. EMEA revenue, which represented 13% of total revenue, grew 38% year-over-year or 32% on a constant currency basis, and APAC revenue representing 5% of total revenue grew 11% year-over-year, consistent on a constant currency basis. This strong growth is reflective of continued healthy demand in international markets, one of our key growth drivers. International revenue is now majority cloud, while cloud adoption internationally remains underpenetrated, supporting a significant growth runway in 2026 and beyond. Turning to profitability. Our total gross margin for the fourth quarter was 69.3%, consistent with our expectations. Our gross margin reflects our continued investments in scaling our global cloud infrastructure and supporting increased AI workloads, particularly as usage expands across regions and use cases. Operating income for the quarter was $301 million, resulting in an operating margin of 31%. Earnings per share for the quarter were $3.24, a 7% increase compared to last year. Cash flow from operations in Q4 was $180 million, underscoring the strength of our operating model and our ability to fund growth internally. Free cash flow was $156 million in Q4, and we ended the year with $417 million in cash and short-term investments. Our strong free cash flow and balance sheet are key strategic assets that provide us flexibility to invest in innovation, support strategic initiatives and continue returning capital to shareholders over time. We remain committed to disciplined and thoughtful capital allocation. To further enhance our financial flexibility, yesterday, we entered into a new $300 million revolving credit facility, which provides additional liquidity and optionality while maintaining our strong balance sheet. In addition, we are announcing that our Board has authorized a new $600 million share repurchase program, reinforcing our confidence in the durability of our cash flow generation and our disciplined approach to capital allocation. This brings our total remaining share repurchase authorization to approximately $1 billion. Before closing with guidance, I do want to spend a few minutes on how we are thinking about 2026, specifically around the cadence of investments and how that should translate into margins throughout the year. At our Capital Markets Day, we shared a midterm framework for growth, margins and cash generation. Today, we are confirming that framework with additional clarity on timing and cadence. 2026 will be a year of deliberate targeted investment to support our next phase of growth to capitalize on the immense CX AI opportunity. These investments are focused on three primary areas: cost of goods sold, R&D, and sales and marketing. As we've shared, near-term margin performance expectations reflect intentional investment choices. These investments are designed to optimize our AI market-leading position, drive durable growth, expand our competitive differentiation and position the business for long-term operating leverage. While we plan to increase organic investments during 2026, our margins remain industry-leading, outperforming our market peers even with the addition of the focused spend, and we expect to build on this strength with steady margin expansion in 2027. In tandem with investing for growth acceleration, we are investing in AI internally to enhance productivity and execution across the organization. Within our go-to-market operations, we are applying AI to accelerate customer quoting and surface key signals from customer interactions, enabling faster deal execution, improved forecast accuracy and reduced deal risk. Beyond go-to-market, we're using AI to improve internal operations, including applying AI to HR knowledge and deploying Cognigy within our internal help desk to resolve IT queries more quickly and with a more human-like experience. These are just a few examples where we're already leveraging AI internally to deliver long-term operational efficiencies. In 2026, we expect the pace of incremental margin investment to be highest in the first half of the year as we execute against our growth priorities, including integrating Cognigy and scaling its operations with operating margins improving in the second half. This positions us to exit 2026 near the upper end of our 25% to 26% operating margin range and sets the stage for margin expansion in 2027 and beyond, driven by the benefits of our 2026 investments, including stronger cloud revenue growth, continued scaling of our AI business and the increasingly accretive contribution from Cognigy. Cognigy remains on track to be accretive within 18 months of the acquisition close. Now I'll close with our total revenue and non-GAAP EPS guidance for the full year and first quarter of 2026. Full year 2026 total revenue is expected to be in a range of $3.170 billion to $3.190 billion, which represents an increase of 8% at the midpoint. We expect cloud revenue growth in 2026 to be in the range of 14.5% to 15%, with Cognigy expected to contribute approximately 200 basis points. Turning to financial income, it's important to note that our cash and short-term investment balance was reduced by approximately $1.2 billion in 2025 as we financed the Cognigy acquisition and fully repaid our outstanding debt, which will naturally impact financial income in 2026. We expect our effective tax rate throughout 2026 to be in the range of 20.5% to 21% due to tax law changes in certain jurisdictions that became effective at the start of this year. Full year 2026 fully diluted earnings per share is expected to be in a range of $10.85 to $11.05. For the first quarter of '26, we expect total revenue to be in the range of $755 million to $765 million, representing an 8.5% year-over-year growth at the midpoint. We expect the first quarter 2026 fully diluted earnings per share to be in a range of $2.45 to $2.55. In summary, we exited 2025 from a position of strength, anchored by a stabilized and growing cloud business, a differentiated customer experience platform with embedded agentic AI and a strong balance sheet that supports investment and continued capital returns to our shareholders. Our large and expanding installed base reflected in healthy cloud net revenue retention, continued growth in cloud backlog from both customer expansion and new large enterprise wins, and an increasing number of enterprise go-lives gives us confidence in the durability of our growth as we enter 2026. Our 2026 guidance reflects our excitement about the market opportunity ahead and our confidence in our ability to accelerate top line growth through our market leadership and unmatched assets. Together with Scott, we would like to thank all our dedicated teams across NiCE for their disciplined execution and focus throughout the past year, which drove our strong financial performance. We remain confident in our strategy, our execution and our ability to deliver durable shareholder value over the long term. With that, I'll turn the call back to the operator for questions.

Your first question comes from the line of Rishi Jaluria with RBC.

This is Rishi Jaluria. Nice to see solid execution to close out the year. Maybe two questions, if I may. First, looking at the market, it's pretty clear that the market is scared of AI disrupting and displacing your business. Clearly, that's spread to all of software and is something that we've all been dealing with really in a big way over the past couple of months. You made it clear over the past couple of years and at Analyst Day and now today that you're viewing AI as a real tailwind for NiCE and something that could pick up accelerating momentum in kind of the coming years. Can you maybe help us understand where is the disconnect? Where do you think that the market is wrong? And kind of where is your opportunity to kind of disprove those bear cases and kind of prove yourselves as an AI beneficiary? And then I've got a quick follow-up.

Thank you, Rish. Let me address that. There's clearly a gap between market fears and the reality of our business. First, there's concern about competition from new AI point solutions. However, the CX AI market is growing quickly and can support various approaches. Our business growth is not coming at the cost of those competitors; rather, it's benefiting from it. For example, 13% of our cloud revenue at NiCE comes from AI. We have successfully integrated it into our core platform, providing lasting value to our customers. CX is complex and requires orchestration with unified data governance and deep domain expertise throughout the customer journey. While point solutions and some AI offerings may tackle narrow use cases, they often complicate the overall customer experience. The market needs a unified platform that integrates voice, digital, and AI, which is where our combined offering stands out. Our numbers reflect this; we anticipated our cloud growth in 2026 to be between 13% to 15%, and now we're projecting at the high end of 14.5% to 15%. This growth is driven by customer demand, with a backlog increasing at 25% and a solid pipeline converting to revenue for NiCE, ultimately providing value for our customers. I'm confident that our growth indicators demonstrate the benefits AI brings, and I believe the market will come to recognize NiCE positively.

That's very helpful. I’d like to follow up on that. In the AI-native space, we've seen significant funding for voice AI startups. It seems that the market, particularly the stock market, perceives this as an either/or situation. However, there seem to be opportunities for partnerships and integrations that could enhance customer success. Can you discuss these opportunities? Scott, you mentioned increasing traction in your partner ecosystem, but could you elaborate on the potential for deeper integrations and partnerships with some of these AI natives? This would allow customers to have more options, even if it might seem competitive. Ultimately, they will need the infrastructure and call routing solutions that you offer. Can you help us understand what these ISV or AI partnerships could look like?

Yes, that's a great question. I'll divide my response into two parts. First, we position ourselves as an open platform. We have made a deliberate choice to enable our customers to utilize their own data, which is crucial given the billions of interactions on our platform. This allows us to integrate not only with NiCE CXone but also with an open stack that supports various tools. Our partnerships with Salesforce, AWS, ServiceNow, and others are key to this strategy. In the enterprise sector, we navigate a complex technology landscape, leveraging this to our advantage. Now, focusing on the AI aspect, we often receive inquiries about new frontier models and their potential disruption. In reality, these developments are beneficial for us. These frontier models represent significant advancements in agent capabilities. We collaborate with AI players to incorporate these models into our systems, while also having built a purpose-driven AI around customer engagement data, allowing us to differentiate ourselves through specialization. These models are powerful, but we enhance them by processing billions of interactions, focusing on specific learning loops and optimizations. Our specialization in customer intent resolution, compliance-heavy workflows, and real-time voice orchestration reinforces this. So, instead of replacement, it's about enabling a stronger and more differentiated outcome through our combined offerings. This development opens more opportunities for us to deliver ROI. That's evident in the growth of our backlog and bookings, as our customers continue to choose NiCE, which positively impacts our revenue outlook.

Your next question comes from the line of Samad Samana with Jefferies.

Great to see the solid Q4 results. Maybe first, just one on the guidance. I think we're all happy to see the upward revision to the 2026 cloud revenue growth forecast. I was curious, Beth or Scott, if you guys could break down what led to the upward revision? Is it the core organic cloud revenue? Is it Cognigy doing better than expected? Because if we assume Cognigy is at 200 basis points of revenue growth contribution, that kind of implies an acceleration for the organic business. Just help us unpack that. And then I have one follow-up.

Yes. Thanks for the question, Samad. And I'll take that, and Scott, feel free to chime in here. I think generally, as a starting point, we feel confident that both will contribute to that mix and give us that confidence as we step into 2026. Scott has already highlighted the strength of the backlog. We had a record in terms of new cloud ACV bookings in the fourth quarter that led to that strength of the 25% growth in our cloud backlog looking ahead. So that's a mix of both the strength of that AI force that we see, inclusive of both our own homegrown AI and of course, amplified by the addition of Cognigy. So when we look at both the core, which you've seen was consistent at a 12% growth throughout each and every quarter this year, we feel confident that there is opportunity to accelerate growth both in that core as well as continue to drive that growth through Cognigy, which had a very strong fourth quarter showing as well. So it comes from a combination of both those places.

Great. And then, Scott, a follow-up for you. And I know that this topic came up at the Capital Markets Day as well. I think it's appreciated by investors that the company is putting the foot on the gas with AI being this massive opportunity, right? You guys are literally putting your money where your mouth is. I'm curious maybe as you think about deploying new investments and how that's going inside the organization? And are you starting to see a shift inside of the sales organization, whether it's win rates, whether it's productivity as maybe the accelerated investments drive enthusiasm in the organization as well?

Yes. It's a good question. So first of all, there is a positive energy and momentum that we're seeing in the business. And that's obviously on the back of the bookings and the backlog generated in Q4, the momentum that we've been able to generate, but also the pipeline and what we see. What was interesting is the Cognigy business continues to grow remarkably on a stand-alone basis, just acquisition of new market where NiCE has no footprint at all and our ability to be able to go and compete and win in that new marketplace where they don't have a need for a CCaaS but really want an AI CX platform as a leadership, that's given a real positive energy inside of our sales organization, combined with the obvious opportunity that we see with the existing installed base, the large customer base that we have and our ability to be able to serve that. So I think first on the positive momentum, fantastic. The other point, and Beth touched on this in her opening comments, we're embracing the use of AI inside of our business as much as we expect our customers to. We're living and breathing that reality. So for our sales teams, being able to use it to be able to get better understanding of customer signals, intent, our ability to automate quoting and being able to do fast turnaround for business for our customers when we're competing, these were deployed and we're up and running. So I think our go-to-market is also seeing higher productivity that allows them to get more at bats to be able to get more customers engaged and ultimately improve our win rates. So you need to do both. You need to have a great capability that you take in a market, but you've got to walk the talk, and we're definitely doing that.

Your next question comes from the line of Arjun Bhatia with William Blair & Company.

Scott, maybe one for you to start out with. Obviously, it's good to see the continued traction in your AI and self-service ARR. I imagine the distribution of customers in that group of those that are advanced versus those that are still starting is quite wide. But when you're looking at your more advanced customers, what are you seeing in terms of seat dynamics there? Has that changed at all over the past couple of quarters? Or is this still something that's being contemplated for years or quarters in the future in terms of what they do with their seat counts and agent counts?

Yes, that's a great question. There are a few key points to highlight. Our core CX CCaaS platform remains robust, and we're seeing a positive shift in our outlook for '26 and beyond. I’ll explain this based on my recent discussions with customers, including CEOs and CTOs. They've conveyed that their contact centers are currently facing capacity constraints. They are not overstaffed. Instead, they plan to leverage AI to enhance their agents' capabilities for higher value interactions, proactive outreach, and revenue generation. This approach is not about reducing staff but rather about improving efficiency so that their teams can focus on more valuable tasks. They have indicated no intention to reduce agent numbers in the near to mid-term. That said, as we further develop our platform, we recognize the potential to reduce human capacity as AI technology advances. However, it's important to remember that customer experience is complex and requires accurate data management at scale, proper safeguards, domain knowledge, and ultimately delivering a great experience for consumers. They are not looking for simple solutions that automate while complicating interoperability with their AI agents. We've identified that customers appreciate a unified customer engagement platform, which we refer to as the "front door." Whether it's through voice, digital, or AI, or a combination of these, they need a solution that operates in a scalable and reliable manner. We believe this is a key differentiation for us. Interestingly, the concerns about a decline in seat counts are not supported by the data, as we are growing on multiple fronts and expect to continue this growth.

All right. Perfect. Yes, that's super helpful color. And then Beth, I had one for you. Just in terms of the investments that you're making, I think I fully appreciate, right, it's the right time to sort of lean in given the precipice of the tech change here. But how are you just monitoring that you're making the sort of the right investments and you're allocating capital appropriately? Like what are the ROI signals you're looking for? Or is it just continued sort of revenue reacceleration here?

Yes. Thank you. We're very excited about the opportunity ahead of us, and we absolutely believe this is the appropriate time to lean in. We really have at NiCE a fence investment approach where we are very closely monitoring a very tightly the exact areas that we plan to invest, which we've talked a lot about. It's around the go-to-market. It's bringing in more integration of Cognigy into the platform, agentic capabilities as well as using additional AI technologies internally, accelerating our delivery timeline, all of those areas are very intentional, and we are very much closely monitoring that the dollars are being spent in the right places. In parallel, as a general muscle that we have in NiCE, we are constantly also driving initiatives that drive long-term operating leverage. Scott talked about the use of AI; there are other initiatives as well that we're always putting in place. So we're also monitoring the effectiveness and seeing that we get the ROI from those initiatives and investments through key specific metrics. When you add all of those together, ultimately, the big test is that we see that we are delivering on the growth that we've signed up for on the top line. And so those are a combination of all the things we monitor very, very closely to ensure we're on track and that we're getting the ROI from those investments.

Your next question comes from the line of Tyler Radke with Citi.

This is Kyle for Tyler. It was great to observe the significant increase in international revenue. I'm interested to know how you expect that trend to continue into fiscal year 2026. Also, could you provide any insights on what might be included in the total revenue guidance on a constant currency basis?

Let me discuss our international expansion. First, I want to note that I have taken over a beneficial situation from a significant investment made in our international growth. Our data center footprint, sovereign cloud, and capacity in key markets such as the U.K., Europe, and parts of Asia have set a strong foundation. In 2025, we achieved a real breakthrough, particularly in terms of bookings and backlog. We experienced a notable acceleration in revenue in the fourth quarter, as reflected in our results. Looking ahead to 2026 and beyond, we see further expansion opportunities. To provide some context, the shift to CCaaS in international markets is not as advanced as it is in North America, which presents more chances for us to capture on-prem to cloud migrations by leveraging our investments and momentum. Additionally, these migrations are being done with AI from the start, not in a sequential manner. Our unified platform allows us to integrate Cognigy and our AI capabilities into these deals, providing us with a competitive advantage and enabling faster revenue acceleration as AI adoption timelines shorten, even though CCaaS migration can be a complex, one-time process. Lastly, our investments in the ecosystem are paying off in international markets. Almost all of our go-to-market strategy in these regions involves our partners. Our strategic ecosystem is crucial to our strong international expansion, as we have focused on effective go-to-market strategies with system integrators, resellers, and technology partners. This approach extends our reach beyond the capabilities of NiCE, allowing us to utilize their strength in various international markets. Therefore, we expect to see continued momentum in this area.

And then I would just quickly, Kyle, address on the currency side. I think, first of all, I'll start with the overall outlook for NiCE in totality. It's important to highlight that in total, NiCE is still predominantly concentrated in terms of mix out of the Americas, which is mostly USD denominated. For example, 82% of our revenue in the fourth quarter was coming from the Americas, mostly USD. Any impact that we may see within the international business, which is thriving and growing for us, has been considered and is factored in. We're always looking at the environment generally on a macro for exchange rates and other factors as well that is inclusive in the expectations that we're looking at. Again, you may see that more noticeable as you've seen in the fourth quarter in terms of the impact on the international markets, but not any expectation that is not already baked into our expectation for the full year.

Understood. And then regarding the Better Together story with NiCE and Cognigy, the ability to win more deals as a combined CCaaS and AI domain expert. How did the joint go-to-market motion play out in 4Q? I know it's early, but also how to think about the Cognigy opportunities from current CXone customers versus sales to customers on competitor CCaaS platforms as well?

Let me address that. I was really pleased to see that despite Cognigy joining the NiCE family in September, right at the start of our busiest quarter of the year, there were two remarkable outcomes. First, Cognigy successfully maintained its position as a leading standalone AI platform. Second, I must commend our NiCE go-to-market team for their ability to quickly adapt. In the fourth quarter, we effectively integrated Cognigy into our significant wins, contributing to the strong performance we achieved. Notably, all of our seven-digit deals included AI, with nearly all incorporating Cognigy. The initial collaboration has been very successful. Our current focus is on how to capitalize and expand rapidly in 2026. We are still in the early stages of AI expansion, with new competitors emerging in the AI point solutions space, but we have a differentiated offering. Therefore, we are committed to reinforcing our Better Together strategy with a unified platform, while also competing effectively in the AI-only market where necessary. Our competitive win rates were strong, and I am confident in the quick integration, thanks to Phil Heltewig and the Cognigy team for their seamless transition into the NiCE team.

Your next question comes from the line of Siti Panigrahi with Mizuho.

Great. If I look at your cloud backlog that excluding Cognigy, it's organic cloud backlog, now 22% growth, that is quite a step-up from 13% in Q3. So a few things, like what's the composition like for that step-up? And you guys earlier talked about it takes longer to convert to recognized revenue. So how should we think about the lag from the backlog to cloud revenue growth over the next 2, 3 years? 2-3 quarters?

Yes. Thanks, Siti, for the question. I would start and just say that when you think about the 25% growth we had in the backlog, you highlighted the 22% growth that we had, excluding Cognigy. When you think about how that will play out in the coming years and months, essentially, the substantial majority of that will actually be recognized in the next 24 months. It is not, however, linear. Of course, it is dependent upon various go-lives that happen throughout that period. The expectation, as we continue to shift that from the backlog over into recognized revenue, you should see that gradual expansion playing out in the cloud revenue growth over that period.

Okay. And then on the Cognigy side, Beth, you mentioned before exiting Q4, $85 million in annual recurring revenue. Is that still valid based on your guidance for the year?

It is. We had a very nice performance of Cognigy since the start of the acquisition and the close. So yes, very much on track and looking forward and excited about our ongoing opportunity during the course of '26.

Your next question comes from the line of Jamie Reynolds with Morgan Stanley.

This is Jamie on for Elizabeth. And congrats on the strong quarter. It's just the first question. It'd be great to just unpack a little bit more about how that displacement with the CRM vendor materialized. What capabilities did NiCE bring where that vendor fell short?

I'll address this, Jamie. There are several factors involved. Firstly, the customer we are discussing needed an integrated customer engagement platform. They were not interested in multiple platforms for AI, digital functions, and voice, as this caused friction in their engagement, negatively affecting the customer experience. They sought a seamless orchestration of data, operational flows, and processes from start to finish. This reflects a growing trend where customers prefer a unified approach to their customer engagement platform, serving as the front door to the enterprise, rather than relying on fragmented technologies. This doesn't exclude the necessity of integrating with a CRM as they still require access to sales, commerce, and customer data. When it comes to interactions and understanding customer intent, they desired a straightforward way to manage communication between human agents and AI agents, whether synchronous or asynchronous, inbound or outbound, all within a single system. We recognize the benefits of this integration. Ultimately, they selected this approach because it promises improved ROI and an enhanced customer experience. This is just one example; we have many other customers on a similar path.

Got it. That's helpful. And then just as a quick follow-up, it'd be great to get any color on how the performance among the more seasonal customers kind of trended in the fourth quarter relative to your expectations?

Yes, thanks. When we looked at the seasonality, we had highlighted that we had a strong bar to climb when compared to the fourth quarter of 2024, but we were quite pleased with the seasonality that we experienced in the fourth quarter this year. I did highlight a couple of things in my formal remarks around we had about a 50 basis point tailwind coming into the cloud revenue in the fourth quarter coming from foreign exchange that was included there. We also ended up having a go-live of a very large international deal earlier than anticipated that came into that. So those also kind of triggered some health in the quarter. But generally, we were pleased with the seasonality that we saw, which was healthy for our fourth quarter across our diversified vertical customer base.

Your next question comes from the line of Michael Funk with Bank of America.

So Scott, earlier you mentioned that only 40% of enterprises have transitioned from on-prem to the cloud. I would like to hear more about the pace of that migration, including the comparison between new customers and those migrating internally, as well as the increase in total contract value when customers migrate internally.

Yes. As I mentioned, there's a significant market ahead of us. The international side is particularly strong because it hasn't progressed in migration compared to the Americas. From a geographic standpoint, we see real momentum internationally, and we're benefiting from it. Looking at the market, customers previously had to choose between on-prem, cloud migration, or an AI move, distinguishing their methods. Now we provide them with the option to do both. The results are clear: all our major wins, particularly in CCaaS, are integrating AI. They're utilizing AI to enhance automation, achieve quick returns, and ensure early deployment while still transitioning to CCaaS, leading to early returns on investment. This gives us a competitive edge because we integrate the journey from on-prem to cloud and AI, all together. This represents a significant differentiation compared to a year ago, where we were still able to capitalize on the situation. It's important to note that the migration paths customers choose will continue to be a crucial part of our differentiation. Customers are not willing to endure a long transition for CCaaS migration. We've also concentrated on reducing the time to turn up or achieve value, improving our delivery time frames by 20% during 2025. This was a focus area at the start of last year. The more we demonstrate our ability to execute efficient, time-bound migrations while leveraging AI capability, the more we can accelerate CCaaS transitions as customers consider this technology in their operations.

Maybe one more, if I could, quickly. Financial crime and compliance business, love to hear your thoughts on the operating and strategic benefits of owning that business versus maybe some strategic alternatives?

Yes. It's a fantastic business. What brings me joy is that it continues to be recognized and understood as the market leader. We provide services to the most sophisticated financial institutions with a level of trust that is truly gratifying. When I meet with banking executives and our clients, the first thing they express is their trust in Actimize; they depend on it. They need our assistance to continue combatting financial crime, fraud, and compliance issues. From both a branding and trust perspective, especially within the significant segment of our CX business, this really bolsters our reputation as a company. It’s a great business, performing strongly and very profitably. We are proud to have it as part of the NiCE family.

Your next question comes from the line of Thomas Blakey with Cantor Fitzgerald.

Scott, I'd like to discuss the increased win rates you've mentioned, which are clearly reflected in the growth of our backlog. Could you elaborate on the win rates related to pricing and any strategies you might have concerning Cognigy or other consumption-based AI solutions available in the market?

Yes. I'll try to answer it simply. We're definitely seeing customers being more astute in their expectations of ROI, and that leads to more quantifiable outcomes. Now they're not buying outcome-based pricing, but they're negotiating an understanding of proven ROI that we're able to deliver. One of the advantages we obviously have is that we understand their volumes, their interactions on their existing seats, how efficient their platform is. We use data to inform them about what the automation that AI can do to improve upon that and then how that delivers measurable return, and we put that into our offers. We've seen our pricing continue to be effective in terms of profitable business for NiCE, but also as a differentiator. But we're watching it closely. I think the market in AI will continue to be scrutinized, the promise versus the reality. It's easy to come in with an AI solution and say, we'll build you a bunch of AI agents. If it doesn't deliver the real value, they go to vendors and partners that have proven to deliver that before. We leverage that. There is no doubt that we're using our historical strength and benefits to our advantage. If that means updating our pricing models, we'll do so.

Yes, no, that's helpful. You're definitely balancing that well in terms of the backlog growth. Maybe for Beth, you've broken out in the past the consumption-based AI ARR. I don't know if it's something you'd want to help with here. And just understanding the increase in backlog and the jump in AI ARR in total, I wanted to know if consumption is driving that. When we can kind of expect as folks are finding value here, looking to expand AI in terms of the CX role internally, NRR to start maybe expanding? Is that more of a '26 or an out-year kind of environment when you kind of look at your contracts and backlog wins, that would be helpful?

Yes, sure. I think I would start with where Scott just led to, which is we have a flexible pricing model that allows that fluidity, and we're driving more and more increasingly towards interaction and consumption-based pricing, which is demonstrated in our overall AI ARR growth where we're leaning in more and more towards pricing, which is coming from that increasing and ongoing expansion of interactions that we see. With respect to our backlog, it demonstrates we have even further upside. We look at our backlog; we're including there our minimum contractual commitments. Our pricing model and the way we commercialize with our customers generally is on a subscription basis over a multiyear period. So that's what's reflected in our model. We're still in very early stages of deployment with a lot of those enterprise customers. As we continue to see those interactions increasing, that's further upside we have even beyond what's captured in our backlog.

Your final question comes from the line of Patrick Walravens with Citizens.

Great. Let me extend my congratulations. I was curious if you could provide an update on your two $100 million deals, one in APAC and one in EMEA. Beth, you might have mentioned something about that when discussing something that went live. What is the current status of those two? Additionally, are there any other similar large deals in the pipeline?

I'll address the first part. Both of those internationally driven deals are included in our recognized revenue. They have both gone live, and we are very excited about them as we are delivering to our customers. Additionally, there are more opportunities as those customers are looking to do more with us. We are off to a great start with these relationships, and we expect more developments. They are already live and contributing to our revenue.

Yes. In terms of the outlook, look, I guess you're getting a sense on this call, both with our backlog, but our optimism. There are some big opportunities that are in front of us. It's highly competitive out there, but I think we're proving that we've got a differentiated ability to win those. I look forward to being able to share more significant wins going forward, both internationally, but also in North America.

That concludes our question-and-answer session. I will now turn the call back over to Scott for closing remarks.

Look, I just wanted to, first of all, thank everybody for the engagements, not only today but throughout '25. It was a year of clear transition, but we're really excited about what we delivered, but also about the future in front of us. In particular, I just wanted to thank all the NiCE employees, the NiCErs all around the world, our partners, and our customers that contributed towards this. We've got exciting times ahead. It is an exciting market, but we've got the momentum to be able to seize upon it, which we will do. So I appreciate the time, everyone, today.

Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.