We're all one quarter older, and Israel's NICE Systems
Revenue rose nearly 30% again this quarter, with 27% growth in the large enterprise interactions business and 39% growth in the much smaller public and security solutions unit. The gross margin improved whether you look at GAAP or non-GAAP figures, and the same is true for the operating margin. At the bottom line, pro forma net income jumped almost 34%, and free cash flow was considerably higher than in the year-ago period.
I've talked enough in the past about the potential business opportunities for NICE in everything from VoIP to air traffic control to department stores. And I've also talked about how the company shares the market with other public companies like Verint
What's interesting now, though, is that the company has more than $400 million (or nearly $19 per share) in cash and investments on the balance sheet, having closed a secondary offering not so long ago. Now, I highly doubt that the company raised the cash just so management could strip down and swim through that pool of cash.
Rather, it seems pretty clear that the company is on the hunt for more acquisitions. And that makes sense -- this company built itself through a series of deals, and some of them, like the one last year with Dictaphone, really made a difference. All the same, I'd expect the deals to be on the smaller side and aimed toward complimentary technologies. Furthermore, given that the video surveillance side of the market seems much more fragmented, that would seem to be where NICE might find the most opportunities.
With the company growing as it is, the shares still look like they might have more room to run. It's still a relatively small company, though, so investors should make sure they can handle the chills, thrills, and spills that go with investing in smaller-cap technology ideas.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).