1986 - Founding Vision NiCE was founded on September 28, 1986 as Neptune Intelligent Computer Engineering Ltd., with a mission to digitize unstructured data previously captured through analog means, laying the foundation for data and analytics innovation. 1991 - Expansion into Customer Service On October 14, 1991, the Company was renamed NICE-Systems Ltd. and shifted its focus to the Customer Service market, becoming a global leader in Workforce Optimization software for contact centers and adding solutions for Public Safety and Justice sectors. 2000s - Analytics and Compliance Growth As interaction data grew, NiCE launched Interaction Analytics to help organizations mine insights from customer interactions. In 2007, it acquired Actimize, a leader in financial crime and compliance analytics, transforming the company into a broader enterprise analytics provider. 2014–2016 - Cloud & AI Emergence From 2014 onward, NiCE expanded into cloud, digital and analytics, through innovations and acquisitions. A key milestone was the 2016 acquisition of inContact, enabling NiCE to offer one of the industry’s first fully integrated cloud, data-driven contact center platforms. 2019+ - Digital CX & AI Self-Service As customer expectations shifted toward digital CX, NiCE broadened its portfolio with AI-powered digital and automated self-service solutions, extending its reach beyond traditional contact centers into comprehensive customer experience automation. 2025 - Strategic AI Expansion with Cognigy In 2025, NiCE accelerated its AI strategy by acquiring Cognigy, a global leader in conversational and Agentic AI for customer experience, enabling organizations to implement AI agents that reason, adapt, and decide in real-time, powered by custom data models that enable continuous testing, optimization, and learning. This acquisition strategically combines Cognigy’s advanced conversational and Agentic AI capabilities with NiCE’s CXone platform to accelerate AI adoption across front- and back-office customer interactions. Today, NiCE is a global leader in AI, cloud, analytics, digital experience, and automated solutions across Customer Engagement and Financial Crime & Compliance markets, leveraging extensive data assets, automation capabilities, and domain expertise to help organizations deliver trusted customer experiences and improve business results. We possess the complete set of must-have AI assets necessary to lead our markets: one of the world’s leading CCaaS platforms, combined with one of the world's leading conversational and Agentic AI platforms, a large collection of unique historical and current data, most relevant knowledge elements, robust automation applications, and deep domain expertise. Our solutions help organizations of all sizes create extraordinary and trusted customer experiences, prevent financial crime, and improve criminal justice evidence management. NiCE is a company limited by shares organized under the laws of the State of Israel. Our Israeli offices are located at 13 Zarchin Street, P.O. Box 690, Ra’anana 4310602, Israel (Tel. +972-9-775-3151). Our subsidiary, NICE Systems, Inc. has been appointed as our Agent for Service in the United States, and is located at 221 River Street, Hoboken, New Jersey 07030. The Securities and Exchange Commission ("SEC") maintains an Internet site that contains reports, proxy and information statements, and other information that is filed electronically with the SEC at http://www.sec.gov. Our website address is at https://www.nice.com/company/investors/. Information contained, or that can be accessed through, our website does not constitute a part of this annual report and is not incorporated by reference herein, and we have included our website address in this annual report solely for informational purposes. 25 Principal Capital Expenditures In the last three fiscal years, our principal uses of capital were the acquisition of other businesses and repurchases of our American Depositary Receipts (“ADR”). For information regarding our acquisitions and ADR share repurchases, please see Item 5, “Operating and Financial Review and Prospects – Recent Acquisitions,” and “Operating and Financial Review and Prospects – Liquidity and Capital Resources,” in this annual report. For additional information regarding our ADR share repurchases, please also see Item 16E, “Purchases of Equity Securities by the Issuer and Affiliated Purchasers,” in this annual report. Item 4.B Business Overview Breakdown of Revenues For a breakdown of total revenues by business model (cloud, products and services) and by geographic markets for each of the last three years, please see Item 5, “Operating and Financial Review and Prospects – Results of Operations,” in this annual report. About NiCE NiCE is a global enterprise software leader, delivering mission-critical AI-powered cloud platforms that serve two main markets: Customer Engagement and Financial Crime and Compliance. Our platforms are designed to automate complex, high-volume, and highly regulated workflows where reliability, security, and measurable outcomes are essential. In Customer Engagement, our CXone platform enables enterprises to automate customer service by orchestrating workflows, AI, and human agents, and enterprise knowledge within a single, unified AI platform. In Financial Crime and Compliance, we provide embedded AI solutions that help financial institutions prevent money laundering and fraud, and ensure real-time regulatory compliance across financial markets. Our strategy is based on serving specialized and rapidly expanding markets that demand feature-rich solutions delivered through secure, enterprise-grade cloud platforms. AI is foundational to this strategy, driving differentiation, accelerating cloud adoption, and enabling customers to automate increasingly complex workflows at scale. We leverage our proprietary AI models and unique customer engagement data to increase competitive win rates in cloud migrations, expand adoption across digital and automated channels, and introduce new domain-specific use cases that deepen customer relationships and increase long-term platform value. In the Customer Engagement market, our CXone AI platform enables organizations to automate service at scale, augment their workforce with AI-powered solutions, and unify enterprise knowledge, data and AI models to drive faster resolutions and superior customer experiences. Purpose-built AI ensures every interaction and workflow is intelligently orchestrated across all customer touchpoints, seamlessly blending autonomous Agentic AI and human assisted interactions to deliver best-in-class service that is proactive, knowledge-based, resolution-oriented, and efficient. Our Public Safety and Justice business is included in our Customer Engagement segment. In this business, we are transforming the criminal justice system by using AI to uncover the truth in digital evidence, facilitating swift justice. Our AI-powered workflows help relieve police, prosecutors, public defenders, courts and correctional institutions from the tedious task of managing digital evidence. In the Financial Crime and Compliance market, we protect financial services organizations, with embedded-AI solutions that identify risks to help prevent money laundering and fraud in real-time, as well as help ensure financial markets compliance. With our holistic, data and entity-centric approach, we leverage machine learning, predictive analytics, behavioral analytics, network analytics, NLP (natural language processing), generative AI and Agentic AI to detect suspicious activity and automate routine tasks, collaborate with analysts and adapt in real time to proactively keep ahead of emerging threats. NiCE is at the forefront of several industry technological disruptions that have greatly accelerated in the last several years: AI-driven automation and Agentic AI solutions are transforming customer service, as organizations seek to optimize both efficiency and customer experience; domain-specific AI is enhancing decision-making and workforce performance; and cloud scalability is enabling enterprises to modernize operations at an unprecedented pace. NiCE’s AI-powered platforms unify data, workflows, AI agents and automation to drive enterprise-wide transformation. Built on deep domain expertise, our 26 solutions empower customer service, financial crime prevention, and criminal justice organizations to lead with intelligence, efficiency, and confidence. We rely on multiple key assets and core strengths to drive our growth: •Our AI leadership with purpose-built AI models that power automation, optimization, and user experience transformation. •Our domain-specific Agentic AI that is designed to manage complex tasks, make decisions and take action, with and without human intervention. •Our comprehensive cloud platforms that are scalable, secure, and built for enterprise-wide adoption. •Our AI-powered copiloting employee augmentation capabilities, built for specific roles and around domain-specific functionality to increase efficiencies, maintain compliance and improve resolution. •AI-powered orchestration tools that are designed to allow organizations to design, build and operate end-to-end workflows. •Our extensive self-service automation solutions that are built to use the power of AI to deliver human-like interactions at scale. •Our extensive portfolio of applications addresses organizational needs across all our areas of domain expertise. •Our broad array of proprietary technologies and algorithms in the domains of generative AI, LLMs, automation, analytics, machine learning, speech-to-text, natural language processing, personality-based routing and others. •Our native AI models which are based on years of industry-specific data and domain expertise, consistently using machine learning for generating actionable insights. •Our access to vast amounts of CX data, derived from billions of domain-specific interactions of all types, enriching our applications and enabling us to build hundreds of CX purpose-built AI models. •Our advanced data security and compliance capabilities that deliver trusted enterprise software across all our markets, including FedRAMP authorization to the relevant business lines, with more than 30 authorized applications, native PCI, supported by one of the most advanced Security Operation Centers (SOCs) in the industry. •Our flexible delivery model that allows our customers to benefit from a wide range of both cloud and on-premises solutions. •Our solutions' market coverage of all segments, from small and mid-sized businesses to large scale Fortune 100 enterprises. •The mission critical nature of our solutions to the operations of our customers and our cloud platforms that are essential for enabling a scalable and sustainable work-from-anywhere environment. •Our market leadership, which makes us a well-recognized brand and creates top-of-mind awareness for our solutions in our areas of operation. •Our large and broad partner ecosystem with strategic alliances and integrations that extend market reach and solution capabilities. •Our loyal customer base of more than 25,000 organizations in over 150 countries, across many industries, including 85 of the Fortune 100 companies. 27 •Our strong cash position that allows us to invest in innovative solutions and product development and fuels strategic acquisitions. •Our ability to quickly drive mainstream adoption for innovative solutions and new technologies and trends, which we introduce to the market through our direct sales force and distribution network. •Our skilled employees and domain expertise in our core markets allow us to bring our customers the right solutions to address key business challenges and build strong customer partnerships. •Our customer support and operations, which enable our customers to quickly enjoy the benefits of our solutions, with multiple deployment models in the cloud or on-premises throughout the world and support for full value realization and customer success. •Our outcome-oriented white-glove services that enable our customers to achieve greater efficiency, higher revenue, and lower operating costs with our solutions. Industry and Technology Trends Following are the key cross-industry trends that we have identified as driving demand for our solutions where we leverage our key assets and domain expertise to deliver maximum value: •AI is evolving from task-based assistance to full-scale automation. Enterprises are increasingly deploying AI beyond task-level support to end-to-end automation of complex workflows. This includes the use of AI agents capable of autonomously or collaboratively managing decisions, interactions, and processes, enabling organizations to improve efficiency, consistency, and operational scalability across customer-facing and internal functions. •AI adoption is increasingly driving platform expansion and demand for advanced automation capabilities. Enterprises are expanding the use of AI across operational and customer engagement workflows, leading to increased demand for AI-powered automation, Agentic capabilities, and orchestration of people, AI agents, systems, and processes. This trend is contributing to increased platform adoption and expansion opportunities within existing customer environments. •Cloud platforms are advancing into AI-first platforms. Organizations are consolidating fragmented systems into unified platforms that integrate data, knowledge, workflows, and AI models. These platforms are designed not only to host applications, but to orchestrate intelligence across the enterprise, enabling real-time decision-making and automation while reducing architectural complexity and vendor sprawl. •The continued migration from on-premises infrastructure to cloud-based customer engagement platforms remains a significant driver of industry demand. Many enterprises remain in early stages of cloud transformation, creating sustained opportunities for cloud platform adoption, recurring revenue expansion, and long-term customer relationships. •AI copilots are reshaping the modern workforce. AI-powered copilots are increasingly embedded into daily workflows to provide real-time guidance, automate repetitive activities, and surface contextual insights. When integrated with domain-specific workflows, these capabilities improve decision quality, increase efficiency, and enable employees to focus on higher-value work while operating within governed and compliant environments. •Software is becoming more conversational and adaptive. Advances in large and small language models and generative AI are transforming user interaction models from static interfaces to natural-language-driven experiences. Conversational systems that understand intent and context are reducing training requirements, improving usability, and enabling more efficient interaction across complex enterprise applications. •AI Personal Assistants are becoming the new consumer entry point. AI‑powered personal assistants are rapidly becoming the primary interface through which consumers manage daily tasks, information, and transactions. As these assistants evolve into autonomous agents capable of handling service, commerce, and decision support, they are emerging as the new digital front doorstep for brands. 28 •Transition from data warehouses to AI‑ready data platforms. The industry is evolving from siloed data warehouses to consolidated data platforms that provide the unified data foundation required to power enterprise AI. •AI trust and explainability are critical for enterprise adoption. As AI assumes greater responsibility in customer engagement and regulated decision-making, enterprises are prioritizing security, transparency, and governance. This includes requirements for explainability, human oversight, auditability, and compliance with evolving regulatory standards, making responsible AI frameworks a critical component of enterprise-scale deployment. Following is a list of customer engagement trends and market dynamics driving the demand for our solutions, where we leverage our key assets and expertise to deliver  maximum value: •AI-driven automation has become foundational to modern customer service. Enterprises are increasingly deploying AI to automate routine interactions and workflows, improve consistency, and manage service at scale. AI agents and Agentic capabilities are being used alongside human agents to increase efficiency and enable organizations to handle growing interaction volumes without proportional increases in cost. •Demand is shifting toward domain-specific AI. Organizations are prioritizing AI solutions trained on industry-specific data that understand intent, context, and operational nuance. Purpose-built AI improves automation accuracy, reduces error rates and escalations, and enables more reliable outcomes in complex customer service environments. •AI copilots are transforming customer service workforce productivity. Role-specific AI copilots are being embedded into customer service workflows to provide real-time guidance, automate repetitive tasks, and support decision-making. When aligned to domain workflows, these capabilities improve agent effectiveness, reduce training requirements, and support consistent service delivery. •Customer service is becoming increasingly proactive. Enterprises are applying AI to anticipate issues, trigger automated actions, and coordinate resolution across teams and systems. This shift supports improved customer outcomes, greater operational efficiency, and more predictable service performance. •Digital-first engagement continues to accelerate. The shift from brick-and-mortar to digital-first customer interactions continues to accelerate, with customers expecting seamless, AI-enhanced service across web, mobile, and messaging channels. Organizations are investing in AI-powered digital engagement strategies that provide instant, personalized, and proactive customer service. Enterprises that fail to optimize digital interactions risk losing customers to brands delivering faster, smarter, and more connected experiences. •Knowledge management is the foundation of AI-powered customer service. As AI plays a larger role in customer interactions, enterprises require unified and governed knowledge foundations to ensure accuracy, consistency, and trust. AI-driven knowledge management supports both automated and human-assisted service by delivering context-aware information in real time. •Enterprises favor open, extensible AI platforms. AI becomes more effective when it has access to broader, high-quality data, enabling smarter decision-making, deeper insights, and more precise automation. At the same time, AI’s ability to drive business outcomes grows exponentially when seamlessly connected to third-party applications and workflows across the enterprise. Organizations are prioritizing extensible AI platforms that integrate across their ecosystem, ensuring greater agility, faster automation, and maximum AI-driven ROI. •Enterprises are increasingly extending customer engagement automation beyond traditional contact center environments into mid- and back-office operational workflows. This expansion increases demand for workflow orchestration, AI-driven automation, and cross-functional service platforms, expanding the addressable market for customer engagement technologies. •Reducing labor costs remains a top priority in CX. Enterprises continue to seek AI-driven automation to offset rising labor costs while maintaining high-quality customer service. AI-powered workflows, intelligent routing, Agentic AI and digital self-service are enabling businesses to handle more interactions with fewer human agents, reducing operational expenses without sacrificing service quality. Organizations 29 that optimize labor efficiency through automation are gaining a competitive edge by lowering costs, improving scalability, and reallocating human resources to higher-value tasks. •Customer satisfaction is now a strategic competitive advantage. In a market where products and pricing are often easily replicated, CX is the key differentiator driving loyalty and revenue growth. Organizations are investing in AI-powered personalization, proactive service, and frictionless digital experiences to elevate satisfaction and retention. Businesses that prioritize AI-driven CX improvements not only reduce churn but also turn superior service into a long-term competitive moat that strengthens brand loyalty and business outcomes. •Growing volume of digital evidence, contained in multiple disjointed systems, labor intensive processes and staffing challenges are all impacting the ability of government agencies to deliver on the promise of timely justice. Government agencies of all types - from police and first responders to prosecutors, defense attorneys and courts - are looking to digital transformation as a way to overcome the challenges of digital evidence silos and disjointed work processes. Through digital transformation, stakeholders can work smarter and more efficiently within their own agency and effectively share digital evidence throughout the criminal justice system. •With emergency communications becoming more complex, and staff turnover at an all-time high, digital transformation is becoming critical. Emergency communications managers spend much of their time handling manual, time-consuming tasks related to daily operations, quality assurance, reporting, training, development, hiring, staff supervision and fulfilling emergency incident evidence reproduction requests. Training new staff to handle the wide range of emergency calls is a significant cost burden. Digitally transforming and automating quality assurance, incident reconstruction and performance metrics tracking frees up managers to spend more time engaging with and coaching staff. This helps improve and retain employees, resulting in more effective emergency incident handling, higher staff retention, and lower turnover-related costs. Financial Crime and Compliance trends that are driving demand for our solutions: •Growing demand for embedded AI across all fraud, financial crime and risk management controls. Financial services organizations are transforming to ensure secure, safer and more unhindered customer access to accounts across all channels and transactions. At the forefront of these initiatives is the need to leverage purpose-built advanced AI to ensure regulatory compliance and provide exceptional customer experiences while stopping financial fraud and preventing the laundering of illicit funds. •Agentic AI, generative AI and LLMs are being used to streamline and further automate financial crime investigation processes and tasks. This frees investigators from low value, high volume manual tasks so that they may better focus on more important and strategic work and decision making. This leads to better resource utilization, increased accuracy and productivity, and improved return on investment. •Preventing financial crime and ensuring stringent compliance with evolving regulatory environments. Regulatory scrutiny of financial institutions continues to apply pressure on organizations to adopt more advanced regulatory compliance and risk management technology. Regulators have been expanding their focus from the largest financial institutions to a broader market, including smaller banks and alternative financial service providers. Furthermore, the U.S. GENIUS Act, imposes heightened KYC, AML, sanctions, and other regulatory compliance obligations on stablecoin issuers. Together, these shifts are creating increased demand for sophisticated risk and compliance related solutions. •An unpredictable threat landscape environment. The growing number of data breaches and cyber security incidents put increasing amounts of personally identifiable information and sensitive data at risk of exposure. This information can be used to open accounts for laundering money, terrorist financing, financial fraud, market manipulation, social engineering, and more. In addition, the surge in consumer scams that lead to account takeover and authorized fraud threatens an organization’s reputation and customer satisfaction, as well as creates large financial exposures due to both losses and fines. The large volumes of data, related to both internal and external threats, place an enormous operational burden on organizations. Financial institutions are seeking advanced AI solutions to help address these threats and ultimately protect their firm and their customers. •An increasing need to control cost of compliance. The regulatory pressures and increasingly complex threat landscape have driven up the number of risk and compliance personnel, in turn dramatically 30 increasing the cost of compliance and financial crime programs. Organizations are turning to technology, specifically AI, to help control these costs without compromising their compliance adherence while continuing to lower their risk exposure. •Financial institutions seek a single AI platform that aggregates and analyzes financial crime-related risk in one place. The ever-expanding risk landscape and sophistication of financial criminals, as well as the need to keep costs in check, creates a growing need for a single unified view of fraud, AML and compliance risk throughout a financial services organization. Single platforms allow financial services organizations to analyze data, act on it and present it in one dashboard to both operations and executives. •Financial institutions are adopting cloud platforms for financial crime and compliance solutions. Top tier financial institutions have been slow to adopt cloud delivery driven by the sensitive nature of their data, but are now realizing the value and economics of the cloud, and are increasingly choosing to deploy solutions on their own private cloud or on public cloud infrastructure. •AI and Machine learning is being adopted in the fight against financial crime. Traditional methods of financial crime detection, such as rule-based systems, are limited in their ability to adapt and detect new types of financial crime or changes in criminal behavior and patterns. AI and Machine learning algorithms can be trained on historical data and continue to improve their performance as they encounter new behaviors. This enables them to detect patterns and anomalies indicative of financial crime. •Financial institutions are leveraging consortium risk signals to defend against fraud and stop the movement of illicit funds across institutions. The increased usage of real-time payment rails leaves banks with narrow windows to detect and prevent financial crime. Consortium risk signals give financial institutions a broader, cross‑institutional view of emerging fraud patterns, helping identify repeat offenders and coordinated schemes that no single institution could detect alone. By pooling anonymized data, shared insights, and transaction behaviors across multiple banks, consortiums enhance detection accuracy and provide real‑time intelligence that reveals fraud trends spanning several institutions. This collaborative approach strengthens fraud and AML programs, enabling faster, more informed decisions that reduce false positives and prevent losses, all while maintaining strong privacy and governance controls. Strategy Our long-term strategy is to further broaden our industry leadership in both the Customer Engagement and Financial Crime and Compliance market segments using our unique domain-specific AI capabilities and our foundational platforms, applications and data assets. In January 2025, we completed a leadership transition with Scott Russell assuming the role of CEO, bringing deep enterprise software and cloud experience to accelerate our AI‑first platform strategy. We continue to lead the industry in both our business segments where the total addressable market is fast-growing due to the opportunities driven by the evolution of AI. NiCE is uniquely positioned for ongoing success to enable faster, safer, more personalized and cost efficient interactions occurring in real-time. Our offerings manifest unmatched favorable attributes: they provide constant problem solving that typically transcends economic fluctuations; they address complex challenges that require feature-rich solutions, preventing commoditization and giving rise to high barriers of entry that keep potential competitors at bay; they create an abundance of opportunities fueled by the distinctive lag of technology adoption; and they operate in markets burdened by soaring labor-driven costs, often exceeding 90% of total expenditures, ripe for the massive shift of spend from labor to automation. NiCE is well-positioned across all markets, given our unique set of assets: we offer complete, robust and market-leading platforms; we deliver a wide-ranging portfolio; we own the most critical data elements that form the foundation for AI to learn, adapt, and drive superior outcomes; we have an established wide-reaching global ecosystem; and we are categorically recognized as one of the top leaders by every market research firm that evaluates the markets we operate in. On top of it all, we are a highly profitable company, with a strong balance sheet, acting as a foundation for our organic and inorganic growth. For additional information, please see Note 16 of the Financial Statements in this annual report. In the Customer Engagement business, we intend to further expand our leadership through strategic AI-powered product launches fueled by organic developments and selective acquisitions. In September 2025, we acquired Cognigy, a global leader in conversational and Agentic AI. The combination of Cognigy and CXone, our CX AI platform, enables organizations to accelerate AI adoption across front and back-office operations by deploying autonomous AI agents capable of real-time reasoning, adaptation, and decision-making, while leveraging our purpose-built data models to continuously test, 31 optimize, and learn. Furthermore, we intend to continue to evolve as a global leader in all major markets and segments for managing customer service – hold and expand the largest market share for CCaaS and WEM solutions; be the most adopted self-service AI provider in the CX market, providing purpose-built AI for CX solutions; become the leading provider of AI copilot capabilities for augmenting CX employees at all levels, offer the most extensive CX marketplace platform and data; and continue to expand into international markets in both the high-end and the mid to low end of the markets we serve. In Public Safety and Justice, we intend to further increase our leadership in the digital transformation of the US criminal justice system, becoming the de facto platform for workflow management across the Criminal Justice system. We will do so by leveraging our Evidencentral platform for handling massive amount of digital evidence and cases with streamlined workflows; using AI to further uncover insights and automate justice processes; and delivering effective justice from the overwhelming amounts of evidence for every stakeholder in the criminal justice eco-system. In our Financial Crime and Compliance business, we intend to expand to be the largest and leading AI cloud platform provider of fraud, financial crime and compliance solutions in all segments and across all major markets – further embedding AI across our portfolio while leveraging the X-Sight platform to cloudify the high end of the market; enhancing Xceed to be the cloud platform of choice in the mid-market; leveraging our unparalleled collective intelligence to provide a more holistic view of digital identity risk; and better monetizing data, based on advanced AI capabilities. Leading our markets with domain-specific AI solutions We intend to continue strengthening our AI leadership across all our markets, as AI becomes an overarching catalyst for NiCE’s five vectors of growth: •AI fuels our cloud win rate - We are witnessing an enterprise cloud inflection point, where the majority of large-scale cloud transitions is about to take place. AI is enhancing our differentiation, substantially expanding our cloud win rates and displacements. •AI is the bedrock of rapid expansion into digital - NiCE's digital solutions encompass the range of digital interactions. AI is a strong contributing factor for migration from legacy digital vendors to NiCE, contributing to the growth in volume of digital engagements managed by our platforms. •AI fusion powers our platform adoption – Enterprises are pivoting from multiple point solutions to building and simplifying their tech stack by standardizing on a single platform. This trend is now gaining a significant momentum because it is one of the most viable ways to implement AI. •AI automation extends our opportunity beyond the contact center – Enterprises are looking to harness CX specific AI capabilities to replace current manual customer service processes that traverse the traditional contact center, often touching additional organizational functions such as back-office operations, marketing, sales and other internal and customer-facing functions. •AI as an endless source for lucrative new use-cases – Organizations are coming to a clear realization that generic generative AI and LLM solutions are not providing the expected results. NiCE’s specialized AI, with its thousands of constantly evolving and expanding models, based on billions of interactions, is fast becoming a truly viable option for addressing the complex use-cases of our markets. Empowering organizations to lead by adapting to change We intend to continue leading the market by leveraging several major industry trends and evolving our offering to meet our customers’ current and future needs while focusing on key strategic pillars: •Cloud Foundation – we provide cloud-native open platforms for our Customer Engagement and Financial Crime and Compliance offerings. This allows our customers to facilitate adoption of cloud infrastructure to accelerate innovation and reduce integration, implementation, operational efforts and cost. •Complete Platform Suite – across all markets, we provide one of the industry’s most comprehensive set of integrated, scalable, world class applications. Our ability to provide our customers with a full range of capabilities, for organizations of various sizes and different needs using a single vendor unified suite, gives 32 us a strong market differentiation in today’s drive for simplicity, cost savings and elimination of legacy solution silos. •Digital Engagement – we enable organizations to deliver experiences in every possible digital way, keeping their customers engaged and informed, leveraging smart self-service, AI and knowledge across the full customer journey, as well as providing secure digital banking, and helping public safety organizations shift to digital evidence and collaboration environments. •AI – we accelerate business transformation with purpose-built AI-embedded natively across our platforms, making our applications and business processes smarter. Our domain expertise, proprietary data, advanced technology, and purpose-built AI models create leading solutions for all our market segments. •Large Language Models, generative AI and Agentic AI – we leverage LLMs generative AI and Agentic AI to empower autonomous AI agents that reason, plan, and execute workflows, alongside empowering consumers and employees to access knowledge and interact with each other effortlessly and safely, while improving employee productivity and customer experience. In addition, we leverage these technologies to move beyond simple task automation, to full end-to-end workflow execution, empowering employees to effortlessly complete complex processes. •Data – recognizing the power of data, we consider data as a key component and a strategic asset across our portfolio and leverage it as a basis for our purpose-built AI solutions. We manage our customer data with security and compliance measures while leveraging it to equip our customers with a data-driven approach to manage their business, reduce cost, improve performance and identify customer insights. Strengthening our market leadership Our brand, global reach, robust financial resources, extensive domain expertise and ability to deliver a wide array of solutions for large, as well as small and mid-sized organizations, will further anchor our market-leading position. We plan to continue to develop our open cloud platforms and advanced purpose-built AI capabilities for the Customer Engagement and Financial Crime and Compliance markets to enable unified integrated solutions that offer fast innovation and quick time to value. These platforms allow us to deepen our direct relationships with our customers, nurture our partner ecosystem and create new growth opportunities. Our domain-specific, purpose-built AI serves as a strong differentiator and catalyst for cloud migration and our platform adoption. In our Customer Engagement business, we intend to continue being a leader in the CCaaS market and expand our leadership into AI-first customer experience automation with CXone, a comprehensive CX AI platform, enabling enterprises to design, build and operate customer service automation by seamlessly orchestrating workflows, human and AI agents and knowledge as part of a single, unified and scalable platform. CXone automates workflows, breaking silos between customer-facing and internal service teams, leverages shared insights between human and AI agents to boost performance and centralizes data and knowledge under one platform, delivering the right insight at the right moment to enhance resolution. With its unique AI domain-expertise and Agentic capabilities, CXone enables rapid innovation, agility and scalability, and continue to extend our offering around the goal of providing high-quality, proactive, personalized automated end-to-end experiences for consumers, organizations and service agents. With CXone, organizations can provide the right attended or AI enabled service, based on their profile, preferences and needs. This includes a broad suite of digital, analytics and purpose-built AI-powered integrated applications, used for understanding consumers, employees and business needs and preferences, and leveraging that information to create orchestrated journeys that cover every interaction and workflow from the front and back office. We intend to continue enhancing AI capabilities to deliver purpose-built copiloting, self-service and management capabilities. Alongside our existing offering, we plan to lead in new product categories, as we introduce novel solutions and enter additional market segments. We will continue to extend our leading market position for AI-powered cloud solutions, operating self-optimizing workflows powered by AI memory, building AI agents quickly based on historical interaction data and designing automation with all the relevant data, knowledge and AI models in one place, building protection for data and brands with robust access control guardrails, catering to organizations of all sizes and replacing legacy on-premises infrastructure players. We will also continue to enable our customers to easily extend our solutions by using CXone's open framework of hubs, simplifying integrations with quick, intuitive connections that eliminate silos and streamline management, as well as through innovative third-party applications via our DEVone dedicated partner ecosystem that our customers can self-select through our platform’s CXexchange application marketplace. 33 Our Evidencentral cloud digital evidence management platform enables public safety, law enforcement and criminal justice agencies to transform to unified digital evidence workflows by managing incident response, investigation and prosecution digitally on a single platform, with analytics and AI throughout the entire process. Agencies can leverage data to the fullest and work together collaboratively to enhance public safety and deliver faster, fairer justice processes. In our Financial Crime and Compliance business, we will continue to expand our offerings across market segments by providing new and enhanced solutions that protect financial services organizations and their customers earlier in the customer lifecycle and by further embedding AI across our portfolio of solutions. With our X-Sight cloud platform, we provide open, scalable and flexible solutions to orchestrate and automate risk mitigation workflows and processes, across a broad set of financial crime and compliance coverage to the top tier of the market. Continued innovations on X-Sight will further cement our leading market position. With our Xceed platform, we provide packaged anti-money laundering (AML) and fraud coverage solutions to the mid-market, enabling smaller organizations to realize greater protection with quick time to value. In the Financial Crime and Compliance business, our solutions are embedded with AI, machine learning, automation, natural language processing, LLMs, and other advanced technologies. This allows financial services organizations to merge innovative and patented technologies to effortlessly connect data and apply AI to turn raw data into financial crime intelligence that fuels analytic precision to detect and prevent financial crimes. These offerings enable us to add value to our existing customers, as well as expand our reach and open up new opportunities, considerably increasing our total addressable market. Helping our on-premises customers and new customers migrate to the cloud Our leading cloud platforms and domain expertise, along with our flexible migration models, enable our customers to adopt cloud solutions and migrate to the cloud at the pace that matches their needs and preferences. To support all our customers and the different pace of their cloud migrations, we intend to continue offering our solutions in a variety of delivery models, which enable us to be flexible in effectively addressing our customers’ needs. We are the trusted advisor for our on-premises customers as we support their migration from legacy infrastructure to the cloud. We provide deep cloud expertise and migration tools to simplify configuration, reporting and data collection from legacy systems. Further, we offer holistic transformation consulting services, provided exclusively by our skilled employees, delivering a smooth transition for our customers. Continuing to cross-sell and upsell our full solutions portfolio to our existing customer base One of our main assets is our growing customer base. We believe there are many opportunities to expand, up-sell and cross-sell within our existing cloud customer base. This includes increasing our customers’ exposure to the full breadth of our portfolio. We continue to provide our customers with new benefits by expanding the offering they already use, and adding new products and solutions. Helping our customers adopt and use our solutions We help our customers get the most out of their installed solutions. We do this by offering comprehensive onboarding programs, consulting services, and white-glove account management. This increases the value for our customer while at the same time drives additional billing, stickiness, and customer satisfaction. Continuing organic innovation and development, while also selectively pursuing acquisitions We intend to continue investing in innovation across our portfolio and platforms and will selectively augment our organic growth with additional disciplined acquisitions that broaden our product and technology portfolio, expand our presence in select verticals, adjacent markets and geographic areas, broaden our customer base, and increase our distribution channels. Maximizing the synergies across our businesses At NiCE, we value and promote a synergetic approach to our platforms and solutions (e.g., sharing information, knowhow, and design practices in transitioning to native cloud platforms across Customer Engagement and Financial Crime and Compliance). We will continue leveraging our solutions' common cloud architectures as well as methodologies of capturing and analyzing massive amounts of structured and unstructured data, providing real-time insight and driving process automation. Maximizing these synergies and cooperation between our business areas is a key pillar of our corporate strategy. 34 We have several joint offerings across our business segments and combined go-to-market efforts. We will continue leveraging our extensive complementary domain expertise, technological know-how, capabilities and development, in order to grow our business through additional cross-sell and up-sell opportunities. Increasing our footprint in select geographical regions As part of our growth strategy, we are expanding our business in select regions globally, where we can further grow and establish our presence in less penetrated, growing markets. We are doing this by leveraging our go-to-market teams and a growing partner ecosystem, in both the Customer Engagement business as well as the Financial Crime and Compliance business. We continue to expand our international partner network. Expanding our global partnerships As part of our growth strategy, we are investing in expanding relationships with global go to market partners including strategic partners, resellers, and global system integrators that we believe can accelerate our growth while ensuring the success of our customers. In addition, as part of our open platforms, we are enabling the success of our technology partners who complement our product offerings to bring unique value to our customers. Customer Engagement Business Strategy Our strategy is to continue our market leadership in the Customer Engagement market and expand our reach beyond the boundaries of the contact center by fundamentally reinventing the way consumers interact with organizations. We are driving a new CX standard by providing AI-powered end-to-end automation of customer service, intelligently and proactively interacting with customers, enabling resolution through purpose-built AI and data-driven self-service and providing agents with knowledge and tools to successfully resolve any need in real-time. We intend to achieve this by: •Infusing AI, analytics and automation into every element of our Customer Engagement offerings to enable predictive and proactive service, workforce augmentation and automation. We leverage insights from an extensive number of interactions, with hundreds of purpose-built CX AI models to create frictionless customer experiences that are smarter and faster. •Enabling our customers to deploy domain-specific AI-driven agents that provide self-service and assisted service capabilities, to improve customer experience as well as reduce the cost to service consumers. •Augmenting agents with unique unified and native capabilities including digital collaboration, agent assistants, AI-powered copiloting capabilities and real-time guidance, to assist agents using conversational context and knowledge-based information. •Empowering our customers to anticipate business demands with smarter, AI-based forecasting and scheduling tools, and providing their workforce with AI- enhanced training and analytics tools to help them gain the accountability, transparency and flexibility they need around their performance, as part of our holistic WEM suite that enhances both agent engagement and customer experiences. •Offering CXone, a unified AI platform for enterprise customer experience operations with advanced conversational and Agentic AI capabilities across voice and digital channels, domain-specific AI purpose-built for CX use-cases, knowledge management, agent assist tools, interaction analytics and leading Workforce Engagement Management and automation solutions. •Expanding our capabilities to provide holistic digital and Agentic AI experiences throughout the entire customer journey, through self-service and engagement with human or AI agents, enabling customer service organizations to provide a end-to-end service experience across all touchpoints. •Leading cloud transformation across the entire Customer Engagement portfolio for all market segments and regions to enable rapid innovation, enhance flexibility and agility, and lower operational costs. 35 •Offering our customers the ability to extend our solutions by using CXone's open framework of hubs, simplifying integrations with quick, intuitive connections that eliminate silos and streamline management, as well as through innovative third-party applications provided by our DEVone dedicated partner ecosystem, selected from our platform’s CXexchange marketplace. •Increasing our presence across all verticals, regions and market segments with CXone, AI innovation and enhanced data to help organizations adapt to today’s complex consumer expectations as well as the constantly changing CX environment. •Leveraging our large customer base in all verticals and regions to generate incremental revenue growth through up-selling and cross-selling our Customer Engagement portfolio. •Bringing AI and automation capabilities to Public Safety Answering Points (PSAPs) to support next generation digital emergency communication, ensuring compliance, and improve staff performance and retention. •Offering one of the industry’s most unified cloud-based Digital Evidence Management platform, Evidencentral, that integrates and consolidates all forms of evidence information - data and media from police records, videos and photos, and dispatch management systems. Financial Crime and Compliance Business Strategy We plan to continue extending our market leading position and our addressable market, while further supporting the move to the cloud by financial institutions. We also plan to leverage our capabilities to facilitate both better financial crime protection and to help our customers realize cost reductions. We intend to achieve this by focusing on: •Enhancing our platform of integrated Financial Crime and Compliance solutions that help financial services organizations identify risks faster and earlier throughout all phases of the customer lifecycle. •Expanding our market reach within mid-tier banks and financial institutions with our Xceed native cloud and AI platform, which provides AML and Fraud solutions in a packaged SaaS offering to smaller organizations, enabling them to benefit from the capabilities previously only afforded to large organizations. •Expanding X-Sight, our AI cloud platform and solutions for the top tiers of the market to further strengthen and grow our market leadership position. X-Sight combines data and analytics agility and provides us the ability to cross-sell solutions. Our cloud platform leverages data, AI, machine learning, advanced automation, and other technologies to help customers reduce the cost of operations, while increasing their adherence to compliance and preventing financial crime. •Expanding X-Sight AI, machine-learning data-driven, analytics-managed service or self-development environment to help further optimize analytic models and develop new analytics by leveraging insights across our broad customer base and our market-wide and domain expertise in fraud prevention and anti-money laundering. •Empowering our customers to increase their operations teams’ productivity by providing more purpose-built generative AI and Agentic AI offerings within X-Sight and Xceed to enable faster and more accurate investigations. •Offering X-Sight DataIQ, our orchestration and aggregation engine that effortlessly connects to multiple premium and public data sources, turning raw data into data intelligence to fight financial crimes. •Expanding the X-Sight Marketplace, an ecosystem of innovative third-party partners where our customers can select complementary offerings to extend our platforms and products. •Offering our solutions to verticals outside of the traditional financial services, such as technology, gaming, energy, insurance, industry regulators, government agencies, fintech and alternative payments providers. 36 •Further expanding our footprint across international geographies and segments while continuing to cross-sell and up-sell into our existing customer base around the world. •Expanding our sales channels with world-class systems integrators, consultancies, core banking providers, and other regional reseller firms to identify additional significant opportunities. I.Offering Overview - Customer Engagement CXone is an enterprise-grade AI platform designed to automate and manage customer engagement at scale. The platform enables organizations to orchestrate customer interactions across channels and systems, deploy Agentic and human-assisted experiences, and augment the workforce with real-time intelligence, all within a unified cloud environment. By consolidating these capabilities, CXone supports efficient service delivery, consistent customer experiences, and disciplined operational execution. CXone enables organizations to apply AI across customer-facing and operational workflows, supporting both automation and human-assisted engagement. Purpose-built conversational and Agentic AI capabilities allow enterprises to deploy autonomous AI agents that operate within governed workflows, adapt in real time, and continuously improve through learning. These capabilities extend across front-office, mid-office, and back-office environments, supporting scalable adoption and long-term operational resilience. Our Platform and Solutions’ Core Capabilities: Agentic Experience Automation - CXone enables Agentic experience automation across customer service, sales, and marketing workflows, and supports end-to-end process automation. Autonomous AI agents execute defined workflows from intent through fulfillment, operating across customer engagement, revenue-generating, and operational processes. These capabilities retain context and govern experience memory to deliver accurate, personalized, and continuously improving interactions. Agentic automation spans front-office engagement and downstream business processes, enabling scalable automation while maintaining control and reliability. AI Platform - CXone is a cloud-native, AI-first platform designed to automate and optimize customer engagement at enterprise scale by integrating enterprise data, knowledge, workflows, and AI models within a unified architecture. The platform applies predictive, generative, and real-time AI to understand intent, analyze sentiment, and execute intelligent workflows, while continuously learning from both human- and AI-driven interactions. By retaining context and outcomes across interactions on a consolidated data and intelligence layer, CXone enables closed-loop learning in which each interaction informs and improves subsequent engagements, supporting sustained performance improvement, operational efficiency, and consistent service delivery over time while maintaining governance, security, and control. Engagement Orchestration - CXone orchestrates customer engagement through a single, AI-powered channel that unifies voice, digital, and self-service interactions. The platform coordinates interactions and workflows across systems and teams using AI-driven routing and decision making informed by intent, context, and business objectives. By operating on a unified engagement layer, CXone enables consistent execution, coordinated resolution, and enterprise-wide visibility across front-, mid-, and back-office processes. Workforce Empowerment - CXone provides workforce capabilities designed to manage and optimize performance across both human and AI agents. The platform supports scheduling, quality management, performance monitoring, and real-time assistance for hybrid workforces operating at scale. AI copilots and analytics deliver contextual guidance and oversight, while performance insights help organizations manage capacity, compliance, and service quality consistently across human- and AI-driven interactions. NiCE Evidencentral - Our Digital Evidence Management and Investigation Platform for the criminal justice system, transforms how digital evidence and data are managed. Criminal Justice agencies spend precious time managing digital evidence and data- collecting, storing, copying, analyzing, sharing and even physically transporting it. Evidencentral helps overcome these obstacles by breaking down data silos, applying analytics and workflow automation to processes, and by connecting public safety and criminal justice agencies together, so justice can flow smoothly, from incident to court. Evidencentral help agencies get control of digital evidence and data, so they can get emergency response right, be a greater force for good, ensure safer communities, and provide timelier justice for victims. 37 II.Offering Overview - Financial Crime and Compliance Enabling trusted financial transactions is critical in the digital banking era and is increasingly challenging for financial services organizations. With criminals, organized crime rings, and armies of cyber bots leveraging AI to attack digital payments and banking channels while also scamming individuals and corporations, preventing fraud without customer friction and detecting and predicting money laundering is more complex than ever. In addition, adhering to capital markets compliance regulations by surveilling trades across all asset classes and communications across all mediums for market manipulation has also become more complex. These demands, the evolving regulatory landscape and market dynamics coupled with consumers’ desire for frictionless digital transactions require organizations to transform and modernize their financial crime programs. NiCE Actimize provides a market-leading purpose-built cloud platforms embedded with AI capabilities for real-time and cross-channel fraud prevention, know-your-customer, anti-money laundering and capital markets compliance. We enable financial institutions to effectively adapt to changing threats, provide excellent customer experiences and grow their business, all while protecting their organization, safeguarding their customers, and ensuring the integrity of the financial services industry. Our Platforms’ and Solutions’ Core Capabilities AI cloud platform for the high-end of the market, X-Sight, is an open and flexible AI-cloud platform for Financial Crime and Compliance, enabling financial services organizations to leverage market-leading solutions and services that meet their sophisticated and unique needs with security, scalability and speed. X-Sight is powered by embedded AI including Machine Learning, Agentic AI, generative AI and other AI Technologies which provide global clients with immediate value and access to new innovations. Our analytics are trained on industry-wide data and include the richest set of analytic models and features. The platform also includes many self-service capabilities providing the largest global financial institutions the flexibility to configure their controls and financial crime programs to meet their unique needs. AI cloud platform for the mid-market, Xceed, brings together powerful AI, data intelligence, machine learning, and insights for comprehensive AML and fraud prevention for small and mid-sized organizations. The solutions on Xceed provide the protection that larger organizations receive but are packaged and connect directly with core banking providers for smaller organizations to realize immediate value. X-Sight and Xceed AI offerings apply advanced AI techniques fueled by insights we receive in working collaboratively with our large world-class client base to provide rich intelligence to optimize machine learning prevention and detection analytics in our portfolio of solutions as well use generative AI, Agentic AI and automation to cut down analysts' time when investigating financial crimes. This allows us to provide leading solutions to our customers, addressing numerous business use cases across risk domains and coverage areas. All Financial Crime and Compliance solutions are infused with Always on AI, our multi-layered approach that injects AI, machine learning, automation, natural language processing, and other advanced technologies throughout the financial crime and compliance value chain. This provides financial services organizations with innovative and patented technologies which fuel automation and analytic precision to detect and prevent financial crimes in real-time and provides secure and frictionless customer experiences. Cloud platforms provide financial services organizations with the agility required to quickly adapt to changing regulatory and threat landscapes. With machine learning, predictive analytics, and embedded AI, organizations are able to proactively prevent crime faster, leading to higher customer satisfaction, lower losses, and reduced risk of regulatory enforcement action or reputational damage. Our platforms and solutions enable organizations to have a more comprehensive understanding of their customers’ activities and risk, as well as the organization’s risk exposure. Data intelligence solutions enable organizations to turn raw data into comprehensive actionable intelligence to prevent and detect financial crimes and enable better and faster decisions. With effortless access to data, our curated risk signals, and our X-Sight Marketplace ecosystem of complementary partner offerings, our solutions deliver comprehensive real-time intelligence to fuel analytics and enrich investigations. AI and Analytics innovative technologies, our deep domain expertise, and the insights we receive by working collaboratively and collectively with our large world-class client base provide rich intelligence to our solutions. This allows us to provide market leading solutions to our customers, addressing numerous business use-cases across risk domains and coverage areas. All Financial Crime and Compliance solutions are embedded with AI, including machine learning, Agentic AI and generative AI, and other advanced technologies throughout the financial crime and compliance value chain. This 38 provides financial services organizations with innovative and patented technologies which fuel automation and analytic precision to detect and prevent financial crimes in real-time and provides secure and frictionless customer experiences. Vast coverage of solutions enables organizations to detect market manipulations and prevent money laundering and fraud while helping them adhere to compliance regulations. With broad coverage for compliance around regulations and financial crime risks including account takeover, social engineering scams and many other financial crimes, the solutions include hundreds of out-of-the-box engineered models for current risk topologies across global regulatory regimes as well as emerging risk types including cryptocurrencies and cannabis-related risks to name a couple. Organizations gain holistic coverage to reduce risk, mitigate losses and protect their organizations and customers. Intelligent investigations solutions serve hundreds of thousands of analysts and investigators across the globe enabling them to make better, faster decisions. The rich and robust, purpose-built solutions include out-of-the-box workflows and audits for the regulated industries. Our Agentic and generative AI capabilities understand financial institutions’ policy and procedures guidelines, recognize the context of an investigation and have the agency to determine what data sources and risk signals to leverage for accurate and fast decisioning. The solutions track all activity providing transparency for internal and regulatory audits. Self-Service solutions provide organizations with customization and self-development capabilities powered by APIs and intuitive tools. Strategic Alliances We sell our Customer Engagement and Financial Crime and Compliance platforms and solutions worldwide, primarily directly to customers and indirectly through selected partners to better serve our global customers. We partner with companies in a variety of sales channels, including service providers, system integrators, consulting firms, distributors, value-added resellers and complimentary technology vendors. These partners form a vital network for selling and supporting our solutions and platforms. We have established a cross-organization business partner program to support our ever-growing eco-system, providing a full range of tools and benefits to help promote the NiCE offerings and drive mutual revenue growth and success. Our strategic technology partnerships ensure full integration with the NiCE offerings, delivering value added capabilities that enable them to provide our customers with an improved set of solutions and services. Our DEVone program, comprising more than 200 partners, allows third-party software providers that bring complementary capabilities, to integrate with our CXone platform and extend its functionality. DEVone partner offerings are listed in our CXexchange Marketplace. Our Actimize X-Sight Marketplace hosts market leading vendors in the AML and Fraud domains that complement the Financial Crime and Compliance solution suite. Our Evidencentral Marketplace hosts an expanding ecosystem of technology vendors that integrate with our Evidencentral platform to extend its functionality and make it simpler and faster for Emergency Communications, Law Enforcement and Criminal Justice agencies to bring a high volume of multimedia evidence together, accelerate case building, unearth hidden evidence and address evidence disclosure challenges. Professional Service and Support The NiCE Professional Services and Support organization enables our customers to derive sustainable business value from our solutions. In addition to our internal Services organization, we also utilize third party certified implementation partners to extend our capacity for deployment of our offerings. The Professional Service and Support offerings include a variety of services - both standalone and bundled with our products. We address all stages of the technology lifecycle, including defining requirements, planning, design, implementation, customization, optimization, proactive maintenance and ongoing support. Enabling Value Solution Delivery optimizes outcomes for our customers, enabling them to achieve their specific business and organizational goals on time and on budget. NiCE solutions are delivered by certified project managers, technical experts, and application specialists. We follow a proven methodology that includes business discovery to map solutions to business processes. 39 Value Realization Services (VRS) ensure quick, deep and sustained adoption of the NiCE solutions. These services enable our customers to leverage the features and functionalities of our solutions to drive immediate and long-term results, aligned to their specific business case, accelerating their return on investment. The services are specifically designed to address the top short and long-term business concerns we heard through working with hundreds of customers across the globe. VRS teams work with customers during all phases of solution implementation – before, during and after go-live. We begin working with customer teams as soon as the project is kicked off, when the solution goes live, and for months after the solution is implemented. Our experience has shown that our customers benefit greatly from access to NiCE VRS resources once they begin using the solution. This post-implementation engagement allows us to build skill and ownership within customer teams, embed changes within the customer organization and determine return on investment from the solution. Managed Services empowers organizations to meet short term objectives, such as reducing handle time or improving sales rates, along with achieving long term goals such as customer retention. Our team of experienced practitioners work with customers, guiding the process of collecting interactions, prioritizing subjects to study, conducting analysis and most importantly, developing plans that put the results of the analysis into action. Customer Education Services provide users with the necessary knowledge and skills to operate NiCE solutions and to leverage their capabilities to meet customer needs. These services are offered both before and after the deployment of NiCE solutions. Sustaining Value Customer Success focuses on close collaboration with our customers to identify areas where they can maximize business value and minimize complications, ensuring continued delivery of business benefits. Cloud Operations ensure that solutions deployed on the NiCE cloud run optimally and allow more simplified software upgrades, maximizing availability, performance and quality, while ensuring the security of customer information. This is delivered by using sophisticated proprietary utilities and automations that operate in a proactive manner, providing the means to avoid impacting customer and business operations. This includes: Cloud Architecture teams that design cloud service delivery and operation architectures; Cloud Security teams that help ensure that we set and meet the required Security certifications; Cloud Infrastructure teams that manage both virtual and physical infrastructure requirements; Cloud DevOps teams that implement the utilities and automations while working with our product development teams to optimize our solutions for the cloud environment; and the 7X24 Cloud Application Support teams that monitor and manage the solutions for our customers, ensuring world class up-time, performance, scalability and security. The NiCE Cloud utilizes multiple underlying technologies to give our customers many paths to the cloud – these include Physical Data Centers and Public Cloud providers such as AWS and Azure. NiCE maintains multiple Cloud Certifications including SOC 2 Type II – Applications; BSI C5, Cyber Essentials, IRAP, HITRUST; ISO:27001 and PCI DSS. Customer Support and Maintenance responds to customer requests for support on a 24/7 basis, using advanced tools and methodologies. NiCE offers flexible service level agreements to meet our customers’ needs. Our solutions are generally sold with a warranty for repairs of software defects or malfunctions. Software maintenance includes an enhancement program with (in the majority of cases) an ongoing delivery of “like-for-like” upgrade releases, service packs and hot fixes. NiCE also offers a Technical Account Management service or TAM. The TAM is a designated manager responsible for escalation management and overall customer care services. Proactive Maintenance addresses issues before they can significantly impact our customers’ businesses. These offerings include: •Advanced Services – Technical experts perform system-level audits to ensure ongoing compliance with operational specifications as well as specific product customizations tailored to the requirements of the customer. •Application Performance Services – A 24/7 function that proactively monitors NiCE-hosted and customer-premises environments with triage, resolution and escalation of system alarms. Managed Technical Services (Technical and Operation) – NiCE offers a suite of managed technical and operation services that enable the customer to fully outsource all necessary responsibilities and functions required in order to 40 manage the NiCE solutions. This service includes dedicated onsite and remote support engineers, system management, system operation, updates and upgrades. Information Security - we have established information security management policies and procedures to protect the confidentiality, integrity, and availability of our IT Systems and data while providing value to the way we conduct our business. We have security measures, internal policies, and procedures in place to protect our customers’ information and ensure that proper measures are taken in connection with our customers’ and their end users’ information. Additionally, our information security controls are designed and implemented throughout our products and services development lifecycle. Our information security management policies and procedures are based on industry standards, such as ISO 27001. For additional information on information security, please see Item 16K, “Cybersecurity“ in this annual report. Manufacturing and Source of Supplies Many of our solutions are software-based and are deployed by open cloud platform and standard commercial servers. The cloud platform services are provided to us by one or more third-party provider. For information on the risks relating to our engagements with cloud providers, please see Item 3, "Key Information - Risk Factors - “Risks Relating to Our Offerings and Operations" and "Key Information - Risk Factors - "Risks Relating to Information and Product Security and Intellectual Property" in this annual report. In addition, there is a small portion of our products that have certain hardware elements that are based primarily on standard commercial off-the-shelf components and utilize proprietary in-house developed circuit cards and algorithms, digital processing techniques and software. These products are IT-grade compatible. We manufacture those products that contain hardware elements through subcontractors. Our manufacturers provide turnkey manufacturing solutions including order receipt, purchasing, manufacturing, testing, configuration, inventory management and delivery to customers for all of our product lines. NiCE exercises various control mechanisms and supervision over the entire production process. In addition, the manufacturer of a significant portion of such products, is obligated to ensure the readiness of a back-up site in the event that the main production site is unable to operate as required. We believe these outsourcing agreements provide us with a number of cost advantages. Some of the components we use have a single approved manufacturer while others have two or more alternatives for supply. In addition, we maintain an inventory for some of the components and subassemblies in order to limit the potential for interruption. We also maintain relationships directly with some of the more significant manufacturers of our components, and we believe that we can obtain alternative sources of supply in the event that the suppliers are unable to meet our requirements in a timely manner. We have qualified for and received the ISO-9001:2015 quality management and ISO 14001:2015 environmental management certifications. Research and Development We believe that the development of new products and solutions and the enhancement of existing products and solutions are essential to our future success. Therefore, we intend to continue to devote substantial resources to research and new product and service development, and to continuously improve our systems and design processes in order to reduce the cost of our products and services. We conduct our research and development activities primarily in Israel, India and the U.S. Our research and development efforts have been financed through our internal funds and through some programs sponsored through the government of Israel. We participate in programs funded by the IIA to develop generic technology relevant to the development of our products. Such programs are approved pursuant to the Law for the Encouragement of Research, Development and Technological Innovation in Industry 5744-1984 (the “Research and Development Law”), and the regulations promulgated thereunder. We were eligible to receive grants constituting between 30% and 55% of certain research and development expenses relating to these programs. Some of these programs were approved as programs for companies with large research and development activities and some of these programs are in the form of membership in certain Magnet consortiums. Accordingly, the grants under these programs are not required to be repaid by way of royalties. However, the restrictions of the Research and Development Law described below apply to these programs. 41 The Research and Development Law generally requires that the product incorporating know-how developed under an IIA-funded program be manufactured in Israel. However, upon the approval of the IIA (or notification in the event set forth below, as the case may be), some of the manufacturing volume may be performed outside of Israel, provided that the grant recipient may be required to pay royalties at an increased rate, which may be substantial, and the aggregate repayment amount may be increased to between 120% and 300% of the grants from IIA depending on the manufacturing volume that is performed outside of Israel). Following notification to the IIA (and provided the IIA did not object), up to 10% of the grant recipient’s approved Israeli manufacturing volume, measured on an aggregate basis, may be transferred out of Israel, subject to payment of the increased royalties referenced above. The Research and Development Law also provides that know-how (or rights thereto) developed under an approved research and development program may not be transferred or pledged to third parties without the approval of the IIA. Such approval is not required for the sale or export of any products resulting from such research or development. The IIA, under special circumstances, may approve the transfer of IIA-funded know-how outside Israel, including, in the event of a sale of the know-how, provided that the grant recipient pays to the IIA a portion of the sale price, which portion will not exceed six times the amount of the grants received plus interest (or three times the amount of the grant received plus interest, in the event that the recipient of the know-how has committed to retain the R&D activities of the grant recipient in Israel after the transfer). Under IIA regulations, grants received before June 30, 2017 bear the annual interest rate that applied at the time of the approval of the applicable IIA file which will apply to all of the funding received under such IIA approval. Grants received from the IIA after June 30, 2017, bear an annual interest rate based on the 12-month Secured Overnight Financing Rate, or SOFR, or at an alternative rate published by the Bank of Israel plus 0.71513%. Grants approved after January 1, 2024, shall bear the higher rate of (i) 12 months SOFR, plus 1%, or (ii) a fixed annual interest rate of 4%. Intellectual Property We currently rely on a combination of trade secret, patent, copyright and trademark law, together with non-disclosure and non-compete agreements, to establish and/or protect the technology used in our systems. We currently hold 598 U.S. patents and 30 patents issued in additional countries covering substantially the same technology as the U.S. patents. We have 228 patent applications pending in the United States and other countries. We believe that the improvement of existing products and the development of new products are important in establishing and maintaining a competitive advantage. We believe that the value of our products is dependent, among other things, upon our proprietary software and hardware continuing to be “trade secrets” or subject to copyright or patent protection. We generally enter into non-disclosure and non-compete agreements with our employees, subcontractors and business counterparties. However, there can be no assurance that such measures will protect our technology, or that others will not develop a similar technology or use such technology in products competitive with those offered by us. In most of the areas in which we operate, third parties also have patents which could be found applicable to our technology and products. Such third parties may include competitors, as well as large companies, which invest significant amounts in their patent portfolios, regardless of their actual field of business. Although we believe that our products do not infringe upon the proprietary rights of third parties, there can be no assurance that one or more third parties will not make a claim alleging that our products infringe upon their proprietary rights, nor that we will be successful in defending such claim. In addition, to the extent we are not successful in defending such claims, we may be subject to injunctions with respect to the use or sale of certain of our products or to liabilities for damages and may be required to obtain royalty bearing licenses which may not be available on reasonable terms. We own the following trademarks and/or registered trademarks in different countries: Actimize, Actimize logo, NiCE Adaptive WFO, NiCE WFM, NiCE Voice of the Customer, NiCE Work Force Management, NiCE Incentive Compensation, NiCE Real Time Solutions, NiCE Trading Recording, NiCE Uptivity, NiCE Air, NiCE Communication Surveillance, Customer Engagement Analytics, Decisive Moment, Fizzback, IEX, inContact, inContact Logo, NiCE inContact, Last Message Replay, NiCE, NiCE Analyzer, NiCE Engage, NiCE Engage Platform, NiCE Interaction Management, NiCE Sentinel, NiCE Inform, NiCE Inform Lite, NiCE Performance Compliance, NiCE Inform Media Player, NiCE Inform Verify, NiCE, NiCE Logo, NiCE, NiCE Logo, NiCE smile Logo, NiCE Incentive Compensation Management, NiCE Real Time Solutions, NiCE Trading Recording, NiCE Proactive Compliance, NiCE Security Recording, NiCE, Nexidia, Nexidia ((!)) Logo, Nexidia Search Grid, Neural Phonetic Speech Analytics, Own the Decisive Moment, Scenario Replay, inContact Cloud Center Solutions, Supervisor on-the-go, VAAS, Voice as a Service, Personal Connection, InTouch, Echo, inCloud, CXone, CXone Logo, NiCE inContact CXone, NiCE Performance Management, inContact Automatic Contact Distributor, inContact Personal Connection, inContact Interactive Voice Response, inContact Work Force Management, Mattersight, Mattersight Logo, Net Promoter, Satmetrix, NPX, NPS, Fraudmap, Guardian Analytics, Evidence 42 Lake, Alacra, Free your business, Resolve, Brand Embassy, ContactEngine, ContactEngine Logo, GoMoxie, FluenCX, Truth Depends on it, MindTouch, NiCE ElevateAI, ElevateAI, NiCE Smile design logo, StatsViewer, ScheudleViewer, VoApps, Directdrop voicemail and Directdrop voicemail logo, BusinessPhone, BusinessPhone Logo, LiveVox, LiveVox Logo, Human Call Initiator, HCI and HTI, Playvox, Clearview-live, Cognigy, NiCE Cognigy Logo, Cognigy.AI, Cognigy.NLU, Cognigy.VG, Cognigy.LA, Nexus Engine, Cognigy Nexus LLM, Cognigy Logo, Cognigy AI Logo, Cognigy VG Logo. Seasonality In previous years the majority of our business operated under an on-premises enterprise software model, which was characterized, in part, by uneven business cycles throughout the year, with a significant portion of customer orders received in the fourth quarter of each calendar year. This was due primarily to year-end capital purchases by customers and holiday season spending. In recent years, our business has been shifting more and more to the cloud, which is characterized by more evenly distributed business, which balances the impact of being heavily weighted towards the fourth quarter. While the seasonality associated with our cloud business is less impactful, we continue to have a second half fiscal year which typically features higher usage of our solutions stemming primarily from the retail, health care and insurance verticals. While seasonal factors such as these are common in the software and technology industry, this pattern should not be considered a reliable indicator of our future revenue or financial performance. Many other factors, including general economic conditions, also have an impact on our business and financial results. See “Risk Factors” under Item 3, “Key Information” of this annual report for a more detailed discussion of factors which may affect our business and financial results. Regulation Data Privacy, Cybersecurity and AI Certain data privacy and cybersecurity related laws and regulations apply to us or to our customers and end-users in countries in which we operate and our customers and their end-users are located, including the United States, Israel, the E.U. and the U.K., mostly in relation to our SaaS, hosting and cloud offering, as well as other outsourced services. These laws and regulations also include industry specific regulations that may apply to certain of our customers or end-users, such as regulations with respect to the digital operational resilience as well as requirements related to security risk management. We or our customers are also subject to domestic data privacy laws, such as the GDPR, Israeli Privacy Law, the CCPA and the United Kingdom Data Protection Act 2018. We are also subject to laws regulating AI Technologies, including in the US and abroad. We continuously evaluate the business impact of compliance with the constantly changing data privacy, cyber security and AI laws and regulations, which may include domestic laws, regulations and guidelines that may come into effect in additional regions as well, and apply to our operations, products and services. With heightened privacy, cybersecurity and AI regulations, we continuously align our governance and compliance of certain products, offerings or services to facilitate our customers' and end-users' compliance. As part of our efforts to comply with such regulations and mitigate any future risks related to data privacy, cybersecurity and the use of AI, we have adopted certain internal policies and procedures related to privacy and data protection, information security and incident response, and the use of AI. These policies include Business Continuity Plans, Risk Assessment Procedures and Vendor Management Policies and guidelines on AI governance and the use of AI Technologies, and are intended to address our business and operational practices as well as our customers' concerns, and to avoid or mitigate the risks associated with our information assets and those of our customers. In addition, we received the ISO 27001:2022 information security management certification, ISO 27701:2019 privacy management and SOC2 Type II, PCI DSS, BSI C5, Cyber Essentials, IRAP, Hitrust and FedRamp certifications for the relevant business lines (as required). Furthermore, we continually evaluate our policies and procedures in light of the evolving regulations related to data privacy, cybersecurity and AI and to our customers' needs. For more information on data privacy, cybersecurity and AI related concerns and legislation, including the GDPR and regulations governing AI, see also Item 3, "Key Information - Risk Factors" in this annual report. Trade Compliance As a company with global operations, we may be subject to laws as well as international treaties and conventions controlling imports, exports, re-export and transfer of goods, services and technology. These include import and customs laws, export controls, trade embargoes and economic sanctions, restrictions on sales to parties that are listed on (or are owned or controlled by one or more parties listed on) denied party watch lists and anti-boycott measures. We are subject to applicable export control regulations in countries from which we export goods and services, including the United States, Israel, the European Union and the United Kingdom. Such regulations may apply with respect to 43 product components that are developed or manufactured in, or shipped from, the United States, Israel, the European Union and the United Kingdom, or with respect to certain content contained in our products. There are restrictions that apply to software products that contain encryption functionality. In the event that our products and services are subject to such controls and restrictions, we may be required to obtain an export license or authorization, which could be time-consuming and may not be granted on a timely basis or at all, and comply with other applicable requirements pursuant to such regulations or may be restricted from exporting certain products and services to certain countries or to sanctioned parties. Export control regulations have expanded over the past several years. The U.S. Department of Commerce, Bureau of Industry and Security (“BIS”), other regulatory authorities in the European Union, or any member state of the European Union and Israel’s Minister of Defense have changed and may again change the export control rules at any time and may impose additional export control restrictions and elevated licensing requirements on our products, which would negatively impact our business, financial condition, results of operations, and prospects. We are also monitoring the recent passage of the Remote Access Security Act in the U.S. House of Representatives, which would provide the Department of Commerce with authority to restrict remote access to export-controlled items, including potentially our products, through the cloud. If the Act were passed by Congress, signed into law, and implemented by the Department of Commerce, it could restrict our ability to enable remote cloud access to certain products, if they are made subject to new remote access restrictions. Applicable economic sanctions laws imposed by the countries in which we do business, including the United States, Israel, the European Union, and the United Kingdom, may restrict our transactions or dealings in or with certain countries or territories, and with certain customers, business partners, and other persons and entities. Due to evolving geopolitical developments, these laws and regulations are complex and may change rapidly. As a result, we may be prohibited from, directly or indirectly (including through a third-party intermediary), procuring goods, services, or technology from, or engaging in transactions with countries, territories, individuals, and entities that are the target of sanctions or required to suspend of terminate such existing engagements. Any violation of applicable export control regulations or economic sanctions laws could result in fines, civil and criminal sanctions against us or our employees, prohibitions on the conduct of our business, and damage to our reputation, which could have an adverse effect on our business, financial condition, and results of operations. Investigations of alleged violations can be expensive and disruptive. In addition, the promulgation of new laws, rules, and regulations could restrict or unfavorably impact our business, which could decrease demand for our services, reduce revenue, increase costs, or subject us to additional liabilities. European Environmental Regulations Our European activities require us to comply with the Directive 2011/65/EU of the European Parliament and of the Council on the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment and the Commission Delegated Directive (EU) 2015/863 (together “RoHS”). RoHS provides, among other things, that producers of electrical and electronic equipment may not place new equipment containing certain materials, in amounts exceeding certain maximum concentration values, on the market in the EU. We are also required to comply with Regulation (EC) 1907/2006 of the European Parliament and of the Council Registration, Evaluation, Authorization and Restriction of Chemicals (“REACH”, SVHC-205), which requires producers to manage the risks from chemicals used in their products and to provide safety information on the substances found in their products. Our products meet the requirements of the RoHS and REACH directives, and we are making every effort in order to maintain compliance, without adversely affecting the quality and functionalities of our products. If we fail to maintain compliance, including by reason of failure of our suppliers to comply, we may be restricted from conducting certain business in the EU, which could adversely affect our results of operations. Our European activities also require us to comply with Directive 2012/19/EU of the European Parliament on Waste Electrical and Electronic Equipment (“WEEE”). The WEEE directive covers the labeling, recovery and recycling of IT/Telecommunications equipment, electrical and electronic tools, monitoring and control instruments and other types of equipment, devices and items, and we have set up the operational and financial infrastructure required for collection and recycling of WEEE, as stipulated in the WEEE directive, including product labeling, registration and the joining of compliance schemes. We are taking and will continue to take all requisite steps to ensure compliance with this directive. If we fail to maintain compliance, we may be restricted from conducting certain business in the EU, which could adversely affect our results of operations. 44 Similar regulations have been, or are being, formulated in other parts of the world. We may be required to comply with other similar programs that are enacted outside Europe in the future. Environmental, Social and Governance (ESG) Report NiCE is guided by a deep commitment to social contribution, environmental sustainability and corporate citizenship that is ingrained in our core values. The Board's Internal Audit and ESG Committee is responsible for oversight of ESG matters. For further information on our ESG strategy and performance, you may access our full ESG Report, which is located on our Corporate Responsibility webpage at https://www.nice.com/company/corporate-responsibility. The contents of our ESG Report and related supplemental information (including information on our website) are not incorporated by reference into this annual report or in any other report or document we file with the SEC. Competition We believe that our solutions have several competitive advantages (as set forth above in “Our Solutions” section in this Item 4, “Information on the Company – Business Overview”) in their scale, performance and accuracy, comprehensiveness and broad functionality. We are leaders in the Customer Engagement space. In the CCaaS market, which is a part of the broader Contact Center Infrastructure market that is still mainly held by traditional on-premises players, we compete against Amazon Connect, Avaya, Cisco, Five9, Genesys, and TalkDesk, as well as other niche vendors. In the Conversational and Agentic AI market, we compete against vendors such as Kore.ai, Sierra.ai, Cresta and Salesforce. In the digital engagement market, we compete against vendors such as LivePerson, which offer digital engagement and self-service capabilities for contact centers. In the WEM market we compete against players such as Alvaria, Calabrio, Genesys and Verint. We also compete against certain UCaaS and collaboration software vendors such as 8x8, Vonage and Zoom, which offer basic CCaaS capabilities. In addition, we are seeing some CRM companies, such as Salesforce and Zendesk, that provide a subset functionality of our broader offerings. We are leaders in the Financial Crime and Compliance space. We compete against niche vendors that provide one subset of functionality to protect against a specific risk and against vendors that provide a more comprehensive offering. In the Anti-Fraud market, we compete against vendors such as SAS, FICO and Feedzai. In the Anti-Money Laundering market we compete against vendors such as SAS, Oracle and Quantexa. In the Financial Markets Compliance market, we compete against vendors such as SMARTS (Nasdaq), Oracle and SAS. In the Mid-market segment, we compete mainly against Verafin. 45 Item 4.C Organizational Structure The following is a list of our significant subsidiaries and other subsidiaries, including the country of incorporation or residence. Each of our subsidiaries listed below is wholly owned by us. Name of Subsidiary Country of Incorporation or Residence NICE Systems Australia PTY Ltd. Australia NICE Systems Technologies Brasil LTDA Brazil NICE Systems Canada Ltd. Canada NICE Interactive Solutions India Private Ltd. India Actimize Ltd. Israel NICE Japan Ltd. Japan NICE Technologies Mexico S.R.L. Mexico NICE Netherlands B.V. Netherlands NICE Systems (Singapore) Pte. Ltd. Singapore NICE Technologies Sole Proprietorship LLC United Arab Emirates Actimize UK Limited United Kingdom NICE Systems Technologies UK Limited United Kingdom NICE Systems UK Ltd. United Kingdom Actimize Inc. United States inContact Inc. United States NICE Systems Inc. United States NICE Systems Technologies Inc. United States LiveVox Inc. United States Cognigy GmbH Germany Item 4.D Property, Plants and Equipment We have leased offices and facilities in several countries, which include the following headquarter offices: •Our Israeli headquarters in Ra'anana occupies approximately 148,000 square feet. •Our North American headquarters in Hoboken, New Jersey, occupies approximately 60,000 square feet; •Our EMEA headquarters in London, occupies approximately 10,000 square feet; and •Our APAC headquarters in Singapore occupies approximately 5,600 square feet. Additional leased facilities consist of the following: •Americas facilities located in Atlanta, Georgia and Salt Lake City, Utah. •APAC facilities include offices space located in Pune and Manila. We believe that our existing facilities are adequate to meet our current needs and substantially adequate to meet our foreseeable future needs. 46