The NICE Actimize Advantage
Explanation
of Non-GAAP
measures
Non-GAAP financial measures are included in this press release. Non-GAAP financial measures consist of GAAP financial
measures adjusted to exclude 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 Company early adopted ASU 2021-08, Business Combinations, effective January 1, 2021. The amendments
in ASU 2021-08 require acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in
a business combination. The Company applied the new guidance retrospectively to all business combinations for which the
acquisition date occurred on or after January 1, 2021, therefore comparative financials were not adjusted. Through December
31, 2020 business combination accounting rules required the recognition of a legal performance obligation related to a revenue
arrangement of an acquired entity as a liability. The amount assigned to such liability was based on its fair value at the date of
acquisition. Comparative financials Non-GAAP adjustment for a revenue arrangement is intended to reflect the full amount of
such revenue. The Company believes that these Non-GAAP financial measures, used in conjunction with the corresponding
GAAP measures, provide investors with useful supplemental information about the financial performance of our business. We
believe Non-GAAP financial measures are useful to investors as a measure of the ongoing performance of our business. Our
management regularly uses our supplemental Non-GAAP financial measures internally to understand, manage and evaluate our
business and to make financial, strategic and operating decisions. These Non-GAAP measures are among the primary factors
management uses in planning for and forecasting future periods. Our Non-GAAP financial measures are not meant to be
considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our
consolidated financial statements prepared in accordance with GAAP. These Non-GAAP financial measures may differ
materially from the Non-GAAP financial measures used by other companies. Reconciliation between results on a GAAP and
Non-GAAP basis is provided in a table immediately following the Consolidated Statements of Income. The Company provides
guidance only on a Non-GAAP basis. A reconciliation of guidance from a GAAP to Non-GAAP basis is not available due to the
unpredictability and uncertainty associated with future events that would be reported in GAAP results and would require
adjustments between GAAP and Non-GAAP financial measures, including the impact of future possible business acquisitions.
Accordingly, a reconciliation of the guidance based on Non-GAAP financial measures to corresponding GAAP financial
measures for future periods is not available without unreasonable effort.
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