Shares of leading enterprise software provider Nice (NICE -13.61%) had dropped 7% as of 11 a.m. ET on Thursday, according to data provided by S&P Global Market Intelligence. Nice reported second-quarter earnings this morning and saw sales and adjusted earnings per share (EPS) rise 9% and 14%, respectively.
However, management's conservative guidance for just 5% sales growth and 10% EPS growth left the market hoping for more. Despite this initial reaction, there was a lot to like about Nice's quarter if we dig a little deeper into the figures.
Nice grew where it matters: AI
Perhaps the most essential item from the second-quarter report was that its artificial intelligence (AI) and self-service solutions grew sales by 42% -- up from 39% last quarter.
These AI-related sales are crucial to Nice's future because growth in this department will show that the company is an AI innovator and not a disruptee.
Image source: Getty Images.
Leading this AI growth charge was a sixfold increase in bookings for its Copilot solution, which offers real-time support, insights, suggestions, monitoring, and alerts to customer experience (CX) agents and supervisors.
Nice already counts 85 of the Fortune 100 as customers, and it seems that they are quickly adding the company's AI to their CX operations.
With the company recently acquiring conversational and agentic AI leader Cognigy for $955 million, these AI-related sales should remain strong for years to come.
Ultimately, Nice leads the contact-center-as-a-service industry -- both qualitatively (based on leadership rankings from Forrester and Gartner) and in terms of market share.
However, its competition with Amazon Web Services -- which is simultaneously its biggest partner and competitor -- will need to be monitored by investors.
Trading at a mere 12 times free cash flow (even accounting for stock-based compensation), Nice remains a promising opportunity in my eyes.
