{"url_path":"/sec/nice/10-k/2026/item-19","section_key":"item-19","section_title":"Item 19 Exhibits.","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-02-26","source_url":"https://www.sec.gov/Archives/edgar/data/1003935/0001003935-26-000010-index.html","accession_number":"0001003935-26-000010","cik":"0001003935","ticker":"NICE","issuer_name":"NICE Ltd.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1003935/0001003935-26-000010-index.html","primary_entity_key":"0001003935","primary_entity_name":"NICE Ltd."},"word_count":20132,"has_tables":true,"body_markdown":"Item 19.    Exhibits.\n\nExhibit No.Description\n\n[1.1](https://www.sec.gov/Archives/edgar/data/1003935/000117891307001172/exhibit_1-1.txt)\n\n[Amended and Restated Memorandum of Association, as approved on December 21, 2006 (English translation) (filed as Exhibit 1.1 to NICE Ltd.’s Annual Report on Form 20-F filed with the SEC on June 13, 2007, and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1003935/000117891307001172/exhibit_1-1.txt)\n\n[1.2](https://www.sec.gov/Archives/edgar/data/1003935/000117891325003011/exhibit_99-1.htm)\n\n[Amended and Restated Articles of Association](https://www.sec.gov/Archives/edgar/data/1003935/000117891325003011/exhibit_99-1.htm)[of NICE Ltd.](https://www.sec.gov/Archives/edgar/data/1003935/000117891325003011/exhibit_99-1.htm)[, as amended](https://www.sec.gov/Archives/edgar/data/1003935/000117891325003011/exhibit_99-1.htm)[through September 30, 2025](https://www.sec.gov/Archives/edgar/data/1003935/000117891325003011/exhibit_99-1.htm)[(](https://www.sec.gov/Archives/edgar/data/1003935/000117891325003011/exhibit_99-1.htm)[previously filed as Exhibit A to Exhibit 99.1 to, and incorporated by reference from, NICE’s Current Report on Form 6-K filed with the Commission on August 21, 2025](https://www.sec.gov/Archives/edgar/data/1003935/000117891325003011/exhibit_99-1.htm)[)](https://www.sec.gov/Archives/edgar/data/1003935/000117891325003011/exhibit_99-1.htm).\n\n2.1Form of Share Certificate (filed as Exhibit 4.1 to Amendment No. 1 to NICE Ltd.’s Registration Statement on Form F-1 (Registration No. 333-99640) filed with the SEC on December 29, 1995, and incorporated herein by reference).\n\n[2.2](https://www.sec.gov/Archives/edgar/data/1003935/000119380515000624/e613599_ex99-a.htm)\n\n[Form of Deposit Agreement including Form of ADR Certificate (filed as Exhibit](https://www.sec.gov/Archives/edgar/data/1003935/000119380515000624/e613599_ex99-a.htm)[99(a)](https://www.sec.gov/Archives/edgar/data/1003935/000119380515000624/e613599_ex99-a.htm)[to NICE Ltd.’s Registration Statement on Form F-6 (Registration No. 333-203623) filed with the SEC on April 24, 2015, and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1003935/000119380515000624/e613599_ex99-a.htm)\n\n[2.3](https://www.sec.gov/Archives/edgar/data/1003935/000119380520000533/e619587_ex99-a2.htm)\n\n[Form of Amendment No. 1 to the Deposit Agreement, including Form ADR Certificate (filed as Exhibit 99(a)(2) to the Post-Effective Amendment No. 1 to the Form F-6 (Registration No. 333-303623) filed with the SEC on April 29, 2020 and incorporated herein by reference.](https://www.sec.gov/Archives/edgar/data/1003935/000119380520000533/e619587_ex99-a2.htm)\n\n[2.4](https://www.sec.gov/Archives/edgar/data/1003935/000100393523000005/exhibit24-2022.htm)\n\n[Description of Securities (filed as Exhibit 2.4 to NICE Ltd.'s Annual Report on Form 20-F filed with the SEC on March 30, 2023, and incorporated herein by reference](https://www.sec.gov/Archives/edgar/data/1003935/000100393523000005/exhibit24-2022.htm)[)](https://www.sec.gov/Archives/edgar/data/1003935/000100393523000005/exhibit24-2022.htm).\n\n[4.](https://www.sec.gov/Archives/edgar/data/1003935/000117891323002186/exhibit_99-1.htm)1\n\n[NICE Ltd.'s Executives & Directors Compensation Policy (filed as Exhibit A in Exhibit 99.1 of NICE's Report on Form 6-K filed with the SEC on June 8, 2023, and incorporated herein by reference)](https://www.sec.gov/Archives/edgar/data/1003935/000117891323002186/exhibit_99-1.htm).\n\n[4.2](https://www.sec.gov/Archives/edgar/data/1003935/000117891324001829/exhibit_99-1.htm)\n\n[Amendment to Executives & Directors Compensation Policy (filed as Annex A in Exhibit 99.1 of NICE's Report on Form 6-K filed with the SEC on May 24, 2024 and incorporated herein by reference)](https://www.sec.gov/Archives/edgar/data/1003935/000117891324001829/exhibit_99-1.htm).\n\n[4.](https://www.sec.gov/Archives/edgar/data/1003935/000117891320002737/exhibit_4-4.htm)3\n\n[Guardian Analytics, Inc. 2006 Stock Plan (filed as Exhibit 4.4 to NICE Ltd.’s Registration Statement on Form S-8 (Registration No. 333-249186), filed with the SEC on October 1, 2020, and incorporated herein by reference)](https://www.sec.gov/Archives/edgar/data/1003935/000117891320002737/exhibit_4-4.htm).\n\n[4.](https://www.sec.gov/Archives/edgar/data/1003935/000100393521000006/a08indentureexecuted.htm)4\n\n[2020 Indenture, dated August 27, 2020 (filed as Exhibit 4.14 to NICE Ltd.'s Annual Report on Form 20-F filed with the SEC on March 23, 2021, and incorporated herein by reference).](https://www.sec.gov/Archives/edgar/data/1003935/000100393521000006/a08indentureexecuted.htm)\n\n[4.](exhibit45.htm)5\n\n[NICE Ltd. 2016 Share Incentive Plan](exhibit45.htm).\n\n[4](https://www.sec.gov/Archives/edgar/data/1003935/000117891325003011/exhibit_99-1.htm)[.](https://www.sec.gov/Archives/edgar/data/1003935/000117891325003011/exhibit_99-1.htm)[6](https://www.sec.gov/Archives/edgar/data/1003935/000117891325003011/exhibit_99-1.htm)\n\n[NICE Ltd. Employee Share Purchase Plan (previously filed as Exhibit B to Exhibit 99.1 to, and incorporated by reference from, NICE’s Current Report on Form 6-K filed with the Commission on August 21, 2025)](https://www.sec.gov/Archives/edgar/data/1003935/000117891325003011/exhibit_99-1.htm).\n\n[4.](exhibit47.htm)[7](exhibit47.htm)[*](exhibit47.htm)\n\n[Credit Agreement, dated as of February 18, 2026, among](exhibit47.htm)[NICE](exhibit47.htm)[Ltd., Nice Systems Inc., the lenders party thereto, and JPMorgan Chase Bank, N.A.](exhibit47.htm)\n\n[8.1](exhibit81-2025.htm)\n\n[List of significant subsidiaries.](exhibit81-2025.htm)\n\n[11.1](exhibit111.htm)\n\n[N](exhibit111.htm)[I](exhibit111.htm)[CE](exhibit111.htm)[Ltd. Policy on Insider Trading](exhibit111.htm)[.](exhibit111.htm)\n\n[12.1](exhibit121-2025.htm)\n\n[Certification by the Chief Executive Officer of NICE Ltd., pursuant to Section 302 of the Sarbanes-Oxley Act 2002.](exhibit121-2025.htm)\n\n107\n\n[12.2](exhibit122-2025.htm)\n\n[Certification by the Chief Financial Officer of NICE Ltd., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](exhibit122-2025.htm)\n\n[13.1](exhibit131-2025.htm)\n\n[Certification by the Chief Executive Officer of NICE Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](exhibit131-2025.htm)\n\n[13.2](exhibit132-2025.htm)\n\n[Certification by the Chief Financial Officer of NICE Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](exhibit132-2025.htm)\n\n[15.1](exhibit151-2025.htm)\n\n[Consent of Kost, Forer, Gabbay & Kasierer, a member of EY Global.](exhibit151-2025.htm)\n\n[97.1](https://www.sec.gov/Archives/edgar/data/1003935/000162828024013301/exhibit971-2023.htm)\n\n[NICE Ltd. Policy for Recovery of Erroneously Awarded Compensation (filed as Exhibit 97.1 to NICE Ltd.'s Annual Report on Form 20-F, filed with the SEC on March 27, 2024, and incorporated here by reference).](https://www.sec.gov/Archives/edgar/data/1003935/000162828024013301/exhibit971-2023.htm)\n\n101\nThe following financial information from NICE Ltd.’s Annual Report on Form 20-F for the year ended December 31, 2025, formatted in Inline XBRL (\"iXBRL\"): (i) Consolidated Balance Sheets at December 31, 2025 and 2024; (ii) Consolidated Statements of Income for the years ended December 31, 2025, 2024 and 2023; (iii) Statements of Changes in Shareholders’ Equity and Comprehensive Income for the years ended December 31, 2025, 2024 and 2023; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023; and (v) Notes to Consolidated Financial Statements.\n\n* Schedules (or similar attachments) to these exhibits have not been filed since they do not contain information material to an investment or voting decision and that information is not otherwise disclosed in these exhibits or the Form 20-F.\n\n108\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nCONSOLIDATED FINANCIAL STATEMENTS\n\nAS OF DECEMBER 31, 2025\n\nIN U.S. DOLLARS\n\nINDEX\n\nPage\n\n[Reports of Independent Registered Public Account](#idf0c740f34fa4d9c924e7b044f1c8aae_121)[ing Fir](#idf0c740f34fa4d9c924e7b044f1c8aae_121)m (PCAOB ID 1281)\nF -\n[2](#idf0c740f34fa4d9c924e7b044f1c8aae_121)\n\n[Consolidated Balance Sheets](#idf0c740f34fa4d9c924e7b044f1c8aae_124)\nF -\n[7](#idf0c740f34fa4d9c924e7b044f1c8aae_124)\n\n[Consolidated Statements of Income](#idf0c740f34fa4d9c924e7b044f1c8aae_127)\nF -\n[9](#idf0c740f34fa4d9c924e7b044f1c8aae_127)\n\n[Consolidated Statements of Comprehensive Income](#idf0c740f34fa4d9c924e7b044f1c8aae_130)\nF -\n[10](#idf0c740f34fa4d9c924e7b044f1c8aae_130)\n\n[Statements of Changes in Shareholders' Equity](#idf0c740f34fa4d9c924e7b044f1c8aae_133)\nF -\n[11](#idf0c740f34fa4d9c924e7b044f1c8aae_133)\n\n[Consolidated Statements of Cash Flows](#idf0c740f34fa4d9c924e7b044f1c8aae_136)\nF -\n[14](#idf0c740f34fa4d9c924e7b044f1c8aae_136)\n\n[Notes to Consolidated Financial Statements](#idf0c740f34fa4d9c924e7b044f1c8aae_139)\nF -\n[16](#idf0c740f34fa4d9c924e7b044f1c8aae_139)\n\nKost Forer Gabbay & Kasierer\n\n144 Menachem Begin Road, Building A,\n\nTel-Aviv 6492102, Israel\nTel: +972-3-6232525\nFax: +972-3-5622555\ney.com\n\nREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\n\nTo the Shareholders and the Board of Directors of\n\nNICE Ltd.\n\nOpinion on the Financial Statements\n\nWe have audited the accompanying consolidated balance sheets of NICE Ltd. and its subsidiaries (the Company) as of December 31, 2025, and 2024, the related consolidated statements of income, comprehensive income, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the \"consolidated financial statements\"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025, and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.\n\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 26, 2026, expressed an unqualified opinion thereon.\n\nBasis for Opinion\n\nThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\nF-2\n\nKost Forer Gabbay & Kasierer\n\n144 Menachem Begin Road, Building A,\n\nTel-Aviv 6492102, Israel\nTel: +972-3-6232525\nFax: +972-3-5622555\ney.com\n\nCritical Audit Matters\n\nThe critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.\n\nRevenue Recognition\n\nDescription of the Matter\n\nAs described in Note 2 to the Consolidated Financial Statements, the Company generates revenues mainly from services, including cloud-based services, and licensing of its software products. The Company enters into contracts with customers that often include promises to transfer multiple products and services, which are accounted for separately if they are distinct performance obligations. In such contracts, the transaction price is then allocated to the distinct performance obligations mainly on a relative standalone selling price basis and revenue is recognized when control of the distinct performance obligation is transferred.\n\nAuditing the Company's recognition of revenue required significant judgment to evaluate (a) the identification and determination of whether products and services are considered distinct performance obligations, (b) management’s determination of stand-alone selling prices, particularly for products and services that are not sold separately and (c) the timing of revenue recognition.\n\nHow We Addressed the Matter in Our Audit\n\nWe obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process to identify performance obligations, the determination of stand-alone selling prices for each distinct performance obligation and the timing of revenue recognition.\n\nOur audit procedures also included, among others, reading the executed contract and purchase order to understand the contract, identifying the performance obligation(s), determining the distinct performance obligations, and evaluating the timing of revenue recognition for a sample of individual sales transactions. We evaluated the accuracy of the Company’s contract summary documentation, specifically related to the identification and determination of distinct performance obligations and the timing of revenue recognition. We also evaluated the reasonableness of management's estimate of stand-alone selling prices for products and services and tested the mathematical accuracy of management's calculations of revenue.\n\nF-3\n\nKost Forer Gabbay & Kasierer\n\n144 Menachem Begin Road, Building A,\n\nTel-Aviv 6492102, Israel\nTel: +972-3-6232525\nFax: +972-3-5622555\ney.com\n\nBusiness Combination\n\nDescription of the Matter\n\nAs described in Note 1 to the consolidated financial statements, during 2025, the Company completed its acquisition of Cognigy GmbH for a total consideration of $887.3 million. The transaction was accounted for as a business combination.\n\nAuditing the Company's accounting for its acquisition of Cognigy GmbH was complex due to the significant estimation uncertainty required by management in determining the fair value of the identified intangible assets, which principally consisted of technology intangible asset in the amount of $390.0 million (hereinafter, “the Intangible Asset\"). The Company used the Multi-period Excess Earning method of the income approach to measure the fair value of this Intangible Asset. The significant assumptions used to estimate the fair value of the Intangible Asset included, among others, discount rate, projected revenue growth rates and cost of goods sold. These significant assumptions are forward-looking and could be affected by future economic and market conditions.\n\nHow We Addressed the Matter in Our Audit\n\nWe obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company's process for accounting of acquisition. This included testing controls over the estimation process supporting the recognition and measurement of the Intangible Asset, including the valuation models and underlying assumptions used to develop such estimates.\n\nTo test the estimated fair value of the Intangible Asset, we performed audit procedures that included, among others, evaluating the methods and significant assumptions used by the Company, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. For example, we compared the revenue growth rates, expected costs and profitability to historical financial information, comparable companies and market and economic trends. We involved our valuation specialists to assist in evaluation of the methodology used by the Company and certain assumptions included in the fair value estimates. Our valuation specialists’ procedures included, among others, developing a range of independent estimates for the discount rates used in the valuation models and comparing those to the discount rates selected by management.\n\n/s/ KOST FORER GABBAY & KASIERER\n\nA Member of Ernst & Young Global\n\nWe have served as the Company's auditor since 1995.\n\nTel-Aviv, Israel\n\nFebruary 26, 2026\n\nF-4\n\nKost Forer Gabbay & Kasierer\n\n144 Menachem Begin Road, Building A,\n\nTel-Aviv 6492102, Israel\nTel: +972-3-6232525\nFax: +972-3-5622555\ney.com\n\nREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\n\nTo the Shareholders and the Board of Directors of NICE Ltd.\n\nOpinion on Internal Control Over Financial Reporting\n\nWe have audited NICE Ltd. and its subsidiaries' internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, NICE Ltd. and its subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.\n\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated February 26, 2026, expressed an unqualified opinion thereon.\n\nBasis for Opinion\n\nThe Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.\n\nOur audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.\n\nF-5\n\nKost Forer Gabbay & Kasierer\n\n144 Menachem Begin Road, Building A,\n\nTel-Aviv 6492102, Israel\nTel: +972-3-6232525\nFax: +972-3-5622555\ney.com\n\nDefinition and Limitations of Internal Control Over Financial Reporting\n\nA company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.\n\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\n/s/ KOST FORER GABBAY & KASIERER\n\nA Member of Ernst & Young Global\n\nTel-Aviv, Israel\n\nFebruary 26, 2026\n\nF-6\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nCONSOLIDATED BALANCE SHEETS\n\nU.S. dollars in thousands (except share and per share data)\n\nDecember 31,\n\n20252024\n\nASSETS\n\nCURRENT ASSETS:\n\nCash and cash equivalents$379,388 $481,712 \n\nShort-term investments\n38,010 1,139,996 \n\nTrade receivables (net of allowance for credit losses of $17,974 and $13,182 at December 31, 2025 and 2024, respectively)\n737,954 643,985 \n\nPrepaid expenses and other current assets223,780 239,080 \n\nTotal current assets\n1,379,132 2,504,773 \n\nLONG-TERM ASSETS:\n\nPrepaid expenses and other long-term assets233,095 212,512 \n\nProperty and equipment, net189,395 185,292 \n\nDeferred tax assets198,213 219,232 \n\nOperating lease right-of-use assets78,064 93,083 \n\nOther intangible assets, net587,599 231,346 \n\nGoodwill2,440,532 1,849,668 \n\nTotal long-term assets\n3,726,898 2,791,133 \n\nTotal assets\n$5,106,030 $5,295,906 \n\nThe accompanying notes are an integral part of the consolidated financial statements.\n\nF-7\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nCONSOLIDATED BALANCE SHEETS\n\nU.S. dollars in thousands (except share and per share data)\n\nDecember 31,\n\n20252024\n\nLIABILITIES AND SHAREHOLDERS' EQUITY\n\nCURRENT LIABILITIES:\n\nTrade payables$100,782 $110,603 \n\nDeferred revenues and advances from customers303,911 299,367 \n\nCurrent maturities of operating leases liabilities13,742 12,554 \n\nDebt\n— 458,791 \n\nAccrued expenses and other liabilities469,192 593,109 \n\nTotal current liabilities\n887,627 1,474,424 \n\nLONG-TERM LIABILITIES:\n\nDeferred revenues and advances from customers61,392 66,289 \n\nAccrued severance pay23,821 20,291 \n\nDeferred tax liabilities109,993 1,965 \n\nOperating leases75,059 92,258 \n\nOther long-term liabilities71,610 37,516 \n\nTotal long-term liabilities\n341,875 218,319 \n\nCOMMITMENTS AND CONTINGENT LIABILITIES\n\nSHAREHOLDERS' EQUITY:\n\nShare capital-\n\nOrdinary shares of NIS 1 par value:\n\nAuthorized: 125,000,000 shares at December 31, 2025 and 2024; Issued: 74,774,827 shares at December 31, 2025 and 2024; Outstanding: 60,427,562 and 63,249,843 shares at December 31, 2025 and 2024, respectively\n18,961 18,961 \n\nAdditional paid-in capital2,381,750 2,278,672 \n\nTreasury shares at cost – 14,347,265 and 11,524,984 Ordinary shares at December 31, 2025 and 2024, respectively\n(1,802,988)(1,339,218)\n\nAccumulated other comprehensive loss(35,693)(71,070)\n\nRetained earnings3,314,498 2,702,397 \n\nTotal attributable to NiCE Ltd.'s shareholders\n3,876,528 3,589,742 \n\nNon-controlling interests— 13,421 \n\nTotal shareholders' equity\n3,876,528 3,603,163 \n\nTotal liabilities and shareholders' equity\n$5,106,030 $5,295,906 \n\nThe accompanying notes are an integral part of the consolidated financial statements.\n\nF-8\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF INCOME\n\nU.S. dollars in thousands (except share and per share data)\n\nYear ended December 31,\n\n202520242023\n\nRevenue:\n\nCloud\n$2,238,421 $1,984,160 $1,581,825 \n\nServices\n559,989 596,031 641,387 \n\nProduct146,989 155,081 154,296 \n\nTotal revenue\n2,945,399 2,735,272 2,377,508 \n\nCost of revenue:\n\nCloud\n770,476 699,713 553,654 \n\nServices\n193,934 184,410 188,890 \n\nProduct24,844 25,401 25,629 \n\nTotal cost of revenue\n989,254 909,524 768,173 \n\nGross profit\n1,956,145 1,825,748 1,609,335 \n\nOperating expenses:\n\nResearch and development, net\n360,450 360,607 322,708 \n\nSelling and marketing661,132 642,251 599,114 \n\nGeneral and administrative288,805 276,936 252,286 \n\nTotal operating expenses\n1,310,387 1,279,794 1,174,108 \n\nOperating income\n645,758 545,954 435,227 \n\nFinancial income and other, net\n58,259 58,872 22,473 \n\nIncome before taxes on income\n704,017 604,826 457,700 \n\nTaxes on income91,916 162,238 119,399 \n\nNet income612,101442,588338,301\n\nBasic earnings per share\n$9.82 $6.97 $5.32 \n\nDiluted earnings per share\n$9.67 $6.76 $5.11 \n\nWeighted average number of shares (in thousands) used in computing:\n\nBasic earnings per share\n62,33363,48363,590\n\nDiluted earnings per share\n63,32365,50666,265\n\nThe accompanying notes are an integral part of the consolidated financial statements.\n\nF-9\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME\n\nU.S. dollars in thousands\n\nYear ended\nDecember 31,\n\n202520242023\n\nNet income\n$612,101 $442,588 $338,301 \n\nChange in foreign currency translation adjustment\n24,903 (13,355)13,810 \n\nAvailable-for-sale investments:\n\nChange in net unrealized gains (losses)(749)919 18,029 \n\nLess - reclassification adjustment for net gains (losses) realized and included in net income\n4,467 (423)12,271 \n\nNet change (net of tax effect of $(214), $(342) and $(4,130) )\n3,718 496 30,300 \n\nCash flow hedges:\n\nChange in unrealized gains (losses)\n16,844 (3,621)(5,300)\n\nLess - reclassification adjustment for net gains (losses) realized and included in net income\n(10,088)4,520 13,335 \n\nNet change (net of tax effect of $(431), $10 and $(1,096))\n6,756 899 8,035 \n\nTotal other comprehensive income (loss)\n35,377 (11,960)52,145 \n\nComprehensive income\n$647,478 $430,628 $390,446 \n\nThe accompanying notes are an integral part of the consolidated financial statements.\n\nF-10\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nSTATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY\n\nU.S. dollars in thousands\n\nShare\ncapitalAdditional\npaid-in\ncapitalTreasury sharesAccumulated other comprehensive lossRetained earningsNon-controlling InterestTotal\nshareholders'\nequity\n\nBalance as of January 1, 2025$18,961 $2,278,672 $(1,339,218)$(71,070)$2,702,397 $13,421 $3,603,163 \n\nStock-based compensation— 150,155 — — — — 150,155 \n\nIssuance of treasury shares under share-based compensation plan (814,556 ordinary shares)\n— (24,032)25,141 — — — 1,109 \n\nTreasury shares purchase— — (488,911)— — — (488,911)\n\nOther comprehensive income— — — 35,377 — — 35,377 \n\nTransactions with non-controlling interests— (23,045)— — — (13,421)(36,466)\n\nNet income attributable to NiCE Shareholders— — — — 612,101 — 612,101 \n\nBalance as of December 31, 2025$18,961 $2,381,750 $(1,802,988)$(35,693)$3,314,498 $— $3,876,528 \n\nThe accompanying notes are an integral part of the consolidated financial statements.\n\nF-11\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nSTATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY\n\nU.S. dollars in thousands\n\nShare\ncapitalAdditional\npaid-in\ncapitalTreasury sharesAccumulated other comprehensive lossRetained earningsNon-controlling InterestTotal\nshareholders'\nequity\n\nBalance as of January 1, 2024$18,961 $2,123,487 $(1,005,104)$(59,110)$2,262,898 $13,368 $3,354,500 \n\nStock-based compensation— 187,101 — — — — 187,101 \n\nIssuance of treasury shares under share-based compensation plan (945,979 ordinary shares) and exercise of warrants (1,513,183 ordinary shares)\n— (31,916)34,979 — — — 3,063 \n\nTreasury shares purchase— — (369,093)— — — (369,093)\n\nOther comprehensive loss\n— — — (11,960)— — (11,960)\n\nDividends Paid to non-controlling interest— — — — — (3,036)(3,036)\n\nNet income attributable to NiCE Shareholders\n— — — — 439,499 — 439,499 \n\nNet income attributable to non-controlling interests\n— — — — — 3,089 3,089 \n\nBalance as of December 31, 2024$18,961 $2,278,672 $(1,339,218)$(71,070)$2,702,397 $13,421 $3,603,163 \n\nThe accompanying notes are an integral part of the consolidated financial statements.\n\nF-12\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nSTATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY\n\nU.S. dollars in thousands\n\nShare\ncapitalAdditional\npaid-in\ncapitalTreasury sharesAccumulated other comprehensive lossRetained earningsNon-controlling InterestTotal\nshareholders'\nequity\n\nBalance as of January 1, 2023$18,961 $1,951,035 $(743,054)$(111,255)$1,926,398 $13,338 $3,055,423 \n\nStock-based compensation— 183,302 — — — — 183,302 \n\nIssuance of treasury shares under share-based compensation plan (733,472 ordinary shares)\n— (23,923)26,496 — — — 2,573 \n\nTreasury shares purchase— — (288,546)— — — (288,546)\n\nOther comprehensive income— — — 52,145 — — 52,145 \n\nEquity awards assumed for acquisitions— 13,073 — — — — 13,073 \n\nDividends Paid to non-controlling interest— — — — — (1,771)(1,771)\n\nNet income attributable to NiCE Shareholders— — — 336,500 — 336,500 \n\nNet income attributable to non-controlling interests— — — — — 1,801 1,801 \n\nBalance as of Balance as of December 31, 2023$18,961 $2,123,487 $(1,005,104)$(59,110)$2,262,898 $13,368 $3,354,500 \n\nThe accompanying notes are an integral part of the consolidated financial statements\n\nF-13\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\nU.S. dollars in thousands\n\nYear ended\nDecember 31,\n\n202520242023\n\nCash flows from operating activities:\n\nNet income$612,101 $442,588 $338,301 \n\nAdjustments required to reconcile net income to net cash provided by operating activities:\n\nDepreciation and amortization199,044 205,020 167,360 \n\nShare-based compensation146,046 182,067 176,658 \n\nAccrued severance pay, net(908)3,050 789 \n\nAmortization of premium, discount and accrued interest on marketable securities1,468 (9,861)2,480 \n\nDeferred taxes, net10,495 (40,261)(66,620)\n\nChanges in operating assets and liabilities:\n\nTrade receivables, net(75,792)(61,025)(34,292)\n\nPrepaid expenses and other current assets40,744 25,040 73,052 \n\nTrade payables(15,124)43,965 3,426 \n\nAccrued expenses and other current liabilities(175,149)41,952 (55,703)\n\nOperating lease right-of-use assets14,361 12,951 12,518 \n\nDeferred revenue(22,833)3,049 (45,947)\n\nRealized (gain) loss on marketable securities, net(4,463)— 12,271 \n\nOperating lease liabilities(16,309)(13,291)(11,100)\n\nAmortization of discount on debt1,210 1,834 4,615 \n\nLoss from extinguishment of debt— — 53 \n\nChange in fair value of contingent consideration— (3,054)(18,258)\n\nOther1,658 (1,383)1,827 \n\nNet cash provided by operating activities716,549 832,641 561,430 \n\nCash flows from investing activities:\n\nPurchase of property and equipment(18,920)(34,962)(29,205)\n\nPurchase of investments(93,272)(938,154)(230,263)\n\nProceeds from sales of marketable investments1,002,100 512,556 68,715 \n\nProceeds from maturities of marketable investments200,972 192,776 367,329 \n\nPayments for business acquisitions, net of cash acquired(856,092)(64,816)(415,185)\n\nCapitalization of internal use software costs(74,828)(64,805)(54,974)\n\nNet cash provided by (used in) investing activities159,960 (397,405)(293,583)\n\nThe accompanying notes are an integral part of the consolidated financial statements.\n\nF-14\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\nU.S. dollars in thousands\n\nYear ended\nDecember 31,\n\n202520242023\n\nCash flows from financing activities:\n\nProceeds from issuance of shares upon exercise of options1,109 3,063 2,570 \n\nPurchase of treasury shares(488,911)(369,196)(288,443)\n\nDividends paid to non-controlling interest — (3,036)(1,771)\n\nPurchase of subsidiaries shares from non-controlling interest(36,466)— — \n\nRepayment of debt(460,000)(192,108)(2,628)\n\nProceeds from settlement of debt hedge option— 104,673 — \n\nNet cash used in financing activities(984,268)(456,604)(290,272)\n\nEffect of exchange rate changes on cash4,734 (6,914)2,643 \n\nNet change in cash, cash equivalents and restricted cash(103,025)(28,282)(19,782)\n\nCash, cash equivalents and restricted cash at the beginning of the year485,032 513,314 533,096 \n\nCash, cash equivalents and restricted cash at the end of the year$382,007 $485,032 $513,314 \n\nReconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheet:\n\nCash and cash equivalents$379,388 $481,712 $511,795 \n\nRestricted cash included in other current assets2,619 3,320 1,519 \n\nTotal cash, cash equivalents and restricted cash shown in the statement of cash flows$382,007 $485,032 $513,314 \n\nSupplemental disclosure of cash flows activities:\n\nCash paid during the year for:\n\nFederal income taxes paid, net in the US$98,662 $53,700 $139,200 \n\nState income taxes paid, net in the US23,999 28,542 32,018 \n\nIncome taxes paid, net in Israel63,733 8,987 1,912 \n\nIncome taxes paid, net in other jurisdictions27,692 18,726 18,891 \n\nInterest224 236 1,221 \n\nNon-cash activities:\n\nChange in fair value of contingent consideration— (3,054)(18,258)\n\nIncrease in accrued expenses and other liabilities with respect to purchase of treasury shares— — 103 \n\nThe accompanying notes are an integral part of the consolidated financial statements.\n\nF-15\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 1:-    GENERAL\n\na.General:\n\nNICE Ltd. (together with its subsidiaries, “NiCE”, or the “Company”) 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. The Company's 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.\n\nThe Company's 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.\n\nIn the Customer Engagement market, the Company's 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. The Company's Public Safety and Justice business is included in the Company's Customer Engagement segment. In this business, the Company is transforming the criminal justice system by using AI to uncover the truth in digital evidence, facilitating swift justice. The Company's AI-powered workflows help relieve police, prosecutors, public defenders, courts and correctional institutions from the tedious task of managing digital evidence.\n\nIn the Financial Crime and Compliance market, the Company 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 the Company's holistic, data and entity-centric approach, the Company 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.\n\nThe Company 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. The Company's AI-powered platforms unify data, workflows AI agents, and automation to drive enterprise-wide transformation. Built on deep domain expertise, the Company's solutions empower customer service, financial crime prevention, and criminal justice organizations to lead with intelligence, efficiency, and confidence.\n\nb.Acquisitions:\n\n1.Acquisitions in 2025:\n\na.On September 8, 2025, the Company completed an acquisition of Cognigy GmbH, (\"Cognigy\"), a global market leader in conversational and agentic AI. The Company acquired Cognigy for a total cash consideration of $887,358. This strategic acquisition unites the Company’s market-leading\n\nF-16\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 1:- GENERAL (Cont.)\n\nCXone platform with Cognigy’s leading conversational and agentic AI capabilities, enabling AI-first customer service delivery, orchestrating AI agents seamlessly across the front and back office in a unified CX AI platform powered by purpose-built CX AI models.\n\nIn connection with the acquisition of Cognigy, the Company agreed to pay up to $50,000 time-bound holdback (\"holdback\") to Cognigy's founders, which is comprised of $25,000 in cash and 159,552 American Depositary Shares (\"ADSs\") of the Company, subject to their continued employment over a two‑year period following the acquisition. Because the holdback is contingent upon future service, it is accounted for as post‑combination compensation.\n\nUpon consummation of the acquisition, Cognigy became a wholly-owned subsidiary of the Company. The acquisition was accounted for as a business combination. This method requires, among other things, that assets acquired, and liabilities assumed in the business combination be recognized at their fair values as of the acquisition date. The Company used the Multi-period Excess Earning method of the income approach to measure the fair value of its Intangible Assets.\n\nThe following table presents details of the identified intangible assets acquired as of the date of the acquisition:\n\nFair ValueEstimated useful life (in years)\n\nNet tangible assets and liabilities assumed$(5,557)\n\nTrademarks\n15,297 7\n\nTechnology390,049 7\n\nCustomer relationships\n51,253 3\n\nGoodwill\n578,775 \n\nDeferred tax(142,459)\n\nTotal887,358 \n\nGoodwill generated from this business combination is attributed to synergies between the Company's and Cognigy's respective products and services. The goodwill is not deductible for income tax purposes.\n\nPro forma results of operations related to this acquisition have not been prepared because they are not material to the Company's consolidated financial statements.\n\nThe preliminary fair value of assets acquired and liabilities assumed from the acquisition, completed during 2025, were based upon preliminary calculations and valuations, and the estimates and assumptions for this acquisition are subject to change as the Company obtains additional information during the respective measurement periods (up to one year from the respective acquisition dates).\n\nb.On January 16, 2025, the Company acquired an additional 29.9% in the 2020 Subsidiary for a total consideration of $36,466. Upon consummation of the acquisition, the 2020 Subsidiary became a wholly-owned subsidiary of the Company.\n\nF-17\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 1:- GENERAL (Cont.)\n\n2.Acquisitions in 2024:\n\nDuring 2024, the Company completed the acquisition of two companies, which were accounted for as business combinations for a total consideration of $68,910. The financial results of those acquired companies are included in the Company’s consolidated financial statements from their respective acquisition dates. The results from these acquisitions individually and in the aggregate, were not material to the Company’s consolidated financial statements. The Company preliminarily recorded $41,802 of identifiable intangible assets based on their estimated fair values, and $27,091 of residual goodwill, from these acquisitions.\n\nThe estimated fair value of assets acquired and liabilities assumed from acquisitions completed during 2024 were based upon preliminary calculations and valuations. These estimates were finalized during 2025 as part of the measurement period. No adjustments were made during 2025.\n\n3.Acquisitions in 2023:\n\na.In December 2023, the Company completed an acquisition of LiveVox Inc. (“LiveVox”), a leading AI-driven proactive outreach provider. The Company acquired LiveVox for a total consideration of $424,117.\n\nUpon consummation of the acquisition, LiveVox became a wholly-owned subsidiary of the Company. The acquisition was accounted for as a business combination. This method requires, among other things, that assets acquired, and liabilities assumed in the business combination be recognized at their fair values as of the acquisition date.\n\nThe following table presents details of the identified intangible assets acquired as of the date of the acquisition:\n\nFair ValueEstimated useful life (in years)\n\nNet tangible assets and liabilities assumed$63,575 \n\nTrademarks\n4,930 5\n\nTechnology137,462 5\n\nCustomer relationships\n31,957 5\n\nGoodwill\n186,193 \n\nTotal\n$424,117 \n\nGoodwill generated from this business combination is primarily attributable to synergies between the Company's and LiveVox's respective products and services. The goodwill is not deductible for income tax purposes.\n\nPro forma results of operations related to this acquisition have not been prepared because they are not material to the Company's consolidated financial statements.\n\nThe preliminary fair value of assets acquired, and liabilities assumed from the acquisition, completed during 2023, were based upon preliminary calculations and valuations, and the estimates and assumptions for this acquisition are subject to change as the Company obtains additional information during the respective measurement periods (up to one year from the respective acquisition dates).\n\nF-18\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 1:- GENERAL (Cont.)\n\nThese estimates were finalized during 2024 as part of the measurement period. During 2024, the Company recorded measurement period adjustments to the preliminary allocation of the purchase price to the fair value of the assets acquired and liabilities assumed. See also Note 8 regarding changes made during 2024.\n\nDuring 2023, the Company acquired certain additional companies, which were accounted for as business combinations for a total consideration of $22,815. The financial results of those acquired companies are included in the Company’s consolidated financial statements from their respective acquisition dates. The results from these acquisitions individually and in aggregate, were not material to the Company’s consolidated financial statements. The Company preliminarily recorded $13,247 of identifiable intangible assets based on their estimated fair values, and $10,682 of residual goodwill, from these acquisitions.\n\nThe estimated fair value of assets acquired and liabilities assumed from acquisitions completed during 2023 were based upon preliminary calculations and valuations. These estimates were finalized during 2024 as part of the measurement period. No adjustments were made during 2024.\n\n4.Acquisitions related costs:\n\nDuring 2025, 2024 and 2023, acquisition related costs amounted to $9,066, $3,167 and $13,987, respectively, and were included in general and administrative expenses.\n\nNOTE 2:-    SIGNIFICANT ACCOUNTING POLICIES\n\nThe consolidated financial statements were prepared in accordance with United States Generally Accepted Accounting Principles (\"U.S. GAAP\").\n\na.Use of estimates:\n\nThe preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.\n\nb.Financial statements in United States dollars:\n\nThe currency of the primary economic environment in which the operations of NiCE and certain subsidiaries are conducted is the U.S. dollar (\"dollar\"); thus, the dollar is the functional currency of NiCE and certain subsidiaries.\n\nNiCE and certain subsidiaries' transactions and balances denominated in dollars are presented at their original amounts. Non-dollar transactions and balances have been remeasured to dollars in accordance with ASC 830, “Foreign Currency Matters”. All transaction gains and losses from remeasurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statements of income as financial income or expenses, as appropriate.\n\nFor those subsidiaries whose functional currency has been determined to be a non-dollar currency, assets and liabilities are translated at year-end exchange rates and statement of income items are translated at average exchange rates prevailing during the year. Such translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in shareholders' equity.\n\nF-19\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)\n\nc.Principles of consolidation:\n\nThe consolidated financial statements incorporate the financial statements of the Company and all of its subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation.\n\nd.Cash equivalents:\n\nCash equivalents are short-term unrestricted highly liquid investments that are readily convertible into cash, with original maturities of three months or less at acquisition.\n\ne.Marketable securities:\n\nThe Company accounts for investments in debt securities in accordance with ASC 320, \"Investments - Debt Securities\" and ASC No. 326, \"Financial Instruments - Credit Losses\". Management determines the appropriate classification of its investments in debt securities at the time of purchase and re-evaluates such determinations at each balance sheet date.\n\nMarketable securities classified as \"available-for-sale\" (\"AFS\") are carried at fair value. Unrealized gains and losses are reported in a separate component of shareholders' equity in accumulated other comprehensive income, net of taxes. Gains and losses are recognized when realized, on a specific identification basis, in the Company's consolidated statements of income.\n\nFor each reporting period, the Company evaluates whether declines in fair value below the amortized cost are due to expected credit losses, as well as the Company's ability and intention to hold the investment until a forecasted recovery occurs, in accordance with ASC 326. Allowance for credit losses on AFS debt securities are recognized as a charge in financial expenses (income) and other, net, on the consolidated statements of income, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss). As of December 31, 2025 and 2024, no allowance for credit losses have been recorded.\n\nThe Company classifies all marketable securities with maturities beyond 12 months as current assets under the caption short term investments on the consolidated balance sheet. These securities are available to support current operations and the company may sell these debt securities prior to their stated maturities.\n\nf.Property and equipment, net:\n\nProperty and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, at the following annual periods ranges:\n\nYears\n\nComputers and peripheral equipment\n3 - 5\n\nInternal use software\n3\n\nOffice furniture and equipment\n4 - 14\n\nLeasehold improvementsOver the lease term or the estimated useful life of the improvements, whichever is shorter\n\ng.Internal use software costs:\n\nThe Company capitalizes development costs incurred during the application development stage that are related to internal use technology that supports its cloud services. Under ASC 350-40, internal-use software is included in property and equipment, net in the consolidated balance sheets. Capitalization of such costs begins when the preliminary project stage is complete and ceases at the point in which the project is\n\nF-20\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)\n\nsubstantially complete and is ready for its intended purpose. Costs incurred in the process of software production are charged to expenses as incurred.\n\nh.Other intangible assets, net:\n\nOther intangible assets are amortized over their estimated useful lives using the straight-line method, at the following annual periods ranges:\n\n Years\n\nCore technology\n3 – 8\n\nCustomer relationships\n1 – 9\n\nTrademarks\n1 – 12\n\nCustomer backlog\n3\n\ni.Impairment of long-lived assets:\n\nThe Company's long-lived assets and identifiable intangibles that are subject to amortization are reviewed for impairment in accordance with ASC 360, \"Property, Plant, and Equipment\" whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment indicators include any significant changes in the manner of the Company's use of the assets and significant negative industry or economic trends.\n\nUpon determination that the carrying value of a long-lived asset may not be recoverable based upon a comparison of aggregate undiscounted projected future cash flows to the carrying amount of the asset, an impairment charge is recorded for the excess of the carrying amount over fair value. In 2025, 2024 and 2023, no impairment charges were recognized.\n\nj.Goodwill:\n\nGoodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. Under ASC 350, \"Intangible - Goodwill and Other\" (\"ASC 350\"), goodwill is not amortized but rather subject to an annual impairment test, which the Company performs as at the fourth quarter of each year, or if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company prepares a quantitative analysis to determine whether the carrying value of reporting unit exceeds its estimated fair value. If the carrying value of a reporting unit exceeds its estimated fair value, the Company recognizes an impairment of goodwill for the amount of this excess.\n\nFor each of the three years in the periods ended December 31, 2025, 2024 and 2023, no impairment was identified.\n\nk.Exchangeable senior notes:\n\nThe Company applies ASC 470, \"Debt\" and ASC 815 \"Derivatives and Hedging\" to its senior notes and to all features related to the senior notes. When features meet the definition of a derivative, are not clearly and closely related to the characteristics of the debt host, and do not qualify for any scope exceptions within ASC 815, they are required to be accounted for separately from the debt instrument and recorded as derivative instrument liabilities. The fair value assigned to the embedded derivative instruments is marked to market in each reporting period. The proceeds allocated to the debt host are then accounted for using the effective interest method.\n\nStarting January 1, 2022, the Company adopted ASU 2020-06, which simplifies the guidance on the issuer’s accounting for convertible debt instruments by removing the separation models for (1) convertible debt with\n\nF-21\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)\n\na cash conversion feature and (2) convertible instruments with a beneficial conversion feature, Following the adoption of ASU 2020-06, the Company does not separately present in equity an embedded conversion feature in such debt. Instead, the Company account for a convertible debt instrument solely as debt unless the debt contains embedded derivatives required to be bifurcated or the debt is issued at a substantial premium.\n\nAdditionally, in December 2021, the Company made an irrevocable election to settle the principal amount of the 2020 Notes only in cash. Accordingly, the Company paid the principal amount in cash and there were no excess payments above the principal amount.\n\nl.Revenue recognition:\n\nThe Company generates revenues from sales of cloud, services, and software products, which include software license, SaaS, network connectivity, hosting, support and maintenance, implementation, configuration, project management, consulting and training, most of which are considered separate performance obligations. The Company sells its cloud, software products and services directly through its sales-force and indirectly through a global network of distributors, system integrators and strategic partners.\n\nThe Company recognizes revenues in accordance with ASC No. 606, \"Revenue from Contracts with Customers\" (\"ASC 606\"). Under the standard, the Company recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services.\n\nTrade Receivables are recorded when the right to consideration becomes unconditional. Trade receivables are recorded net of credit losses allowance for any potential uncollectible amounts. The Company makes estimates of expected credit and collectability trends for the allowance for credit losses based upon its assessment of various factors, including historical collectability experience, the age of the trade receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. The Company writes off receivables when they are deemed uncollectible, having exhausted all collection efforts.\n\nTo determine revenue recognition for contracts that are within the scope of the standard, the Company performs the following five steps:\n\n1)Identify the contract(s) with a customer\n\nA contract with a customer exists when (i) there is an enforceable contract with the customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services; (ii) the contract has commercial substance; and (iii) the Company determines that collection of substantially all consideration for goods or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer's ability and intent to pay, which is based on a variety of factors, including the customer's historical payment experience.\n\n2)Identify the performance obligations of the contract\n\nThe Company enters into contracts that can include multiple performance obligations. The Company accounts for individual products and services separately if they are distinct – i.e., if a product or service is separately identifiable from other promises in the contract and if a customer can benefit from it on its own or with other resources that are readily available to the customer.\n\nF-22\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)\n\n3)Determine the transaction price\n\nThe transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods or services to the customer. For certain contracts, the Company's contracts include usage based fees that constitute variable consideration and are included in the transaction price.\n\nThe Company receives payments from customers based upon billing cycles and contract terms which may vary by contract type. Invoice payment terms are usually 30 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company determines its contracts generally do not include a significant financing component since the Company's selling prices are not subjected to billing terms nor is its purpose to receive financing from its customers or to provide customers with financing. In addition, the Company elect to apply the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the Company will transfer a promised good or service to a customer and when the customer will pay for that good or service will be one year or less.\n\nRevenue is measured based on the consideration specified in a contract with a customer, excluding taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, which are collected by the Company from a customer.\n\n4)Allocate the transaction price to the performance obligations in the contract\n\nThe Company allocates the transaction price to each performance obligation identified based on its relative standalone selling price (\"SSP\") out of the total consideration of the contract.\n\nThe Company uses judgment in determining the SSP. If the SSP is not observable through standalone transactions, the Company estimates the SSP taking into account available information such as geographic or regional specific factors, internal costs, profit objectives, and internally approved pricing guidelines related to the performance obligations.\n\nThe Company typically establishes a SSP range for its products and services, which is reassessed on a periodic basis or when facts and circumstances change. SSP for products and services can evolve over time due to changes in the Company's pricing practices that are influenced by intense competition, changes in demand for products and services, and economic factors, among others.\n\nFor products where the SSP cannot be determined based on observable prices, given the same products are sold for a broad range of amounts (that is, the selling price is highly variable), the Company applies the residual approach whereby all other performance obligations within a contract are first allocated a portion of the transaction price based upon their respective SSPs, with any residual amount of transaction price allocated to these product revenues.\n\nSome of the Company's contracts include variable fees that are based on actual usage. For these contracts, the Company generally allocates the variable fees using the variable consideration allocation exception.\n\n5)Recognize revenue when (or as) the entity satisfies a performance obligation\n\nThe Company derives its cloud revenues from subscription services, which are comprised of subscription fees from granting customers access to the Company’s cloud platforms, network connectivity and services fees for deployment of certain cloud platforms.\n\nRevenue from subscription services is recognized when control is transferred to the customer, occurring either evenly over the contract period as services have a consistent continuous pattern of transfer to the\n\nF-23\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)\n\ncustomer, or based on actual usage. Revenue from network connectivity is based on customer call usage and is recognized in the period the call is initiated. Services fees for deployment, which are considered as material rights, are initially deferred and recognized over the average customer life.\n\nRevenue from software licenses, support and maintenance services are recognized at the time the related performance obligation is satisfied by transferring the promised product or service to the customer. Software license revenues are recognized at the point in time when the software license is delivered and the customer obtains control of the license asset. Support and maintenance service revenues are recognized when control is transferred to the customer occurring evenly over the maintenance contract term, as the services have a consistent continuous pattern of transfer to a customer.\n\nProfessional services revenues are generally recognized over-time as services are performed using an input method based on labor hours, which the Company believes best depicts the transfer of the services to the customer. Subscription professional services are recognized evenly over the subscription term, as the services have a consistent continuous pattern of transfer to the customer.\n\nDeferred revenues, which represent a contract liability, represent unrecognized fees collected mostly for maintenance, cloud and professional services. Deferred revenues are recognized as (or when) the Company performs under the contract. The amount of revenue recognized in the period that was included in the opening deferred revenues balance was approximately $277,197 for the year ended December 31, 2025.\n\nAs of December 31, 2025, the aggregate amount of the total transaction price allocated in contracts with original duration greater than one year of the remaining performance obligations was approximately $3,675,111. For performance obligations which are recognized over time, based on usage, the Company elected to disclose only the contractual minimum attributed to these performance obligations, as part of the remaining performance obligation disclosure.\n\nAs of December 31, 2025, the Company expects to recognize the majority of the revenue of remaining performance obligations over the next 24 months. Such remaining performance obligations represent unsatisfied or partially unsatisfied performance obligations pursuant to ASC 606. The Company has elected the optional exemption, which allows for the exclusion of the amounts for remaining performance obligations that are part of contracts with an original expected duration of one year or less.\n\nm.Costs to Obtain Contracts:\n\nThe Company capitalizes certain sales commission as costs of obtaining a contract when they are incremental and if they are expected to be recovered. The Company applies judgment in estimating the amortization period by taking into consideration customer contract terms, history of renewals, expected length of customer relationship, as well as the useful life of the underlying technology. Amortization of sales commission expenses are amortized over the expected period of benefits and included in Selling and Marketing expenses in the accompanying consolidated statements of income. For costs that the Company would have capitalized and amortized over one year or less, the Company has elected to apply the practical expedient and expense these contract costs as incurred. As of December 31, 2025 and 2024, the amounts of deferred commissions were $127,746 and $118,531, respectively. Costs to obtain contracts amortization expense for 2025, 2024 and 2023 were $147,713, $142,802 and $142,699, respectively.\n\nn.Research and development costs:\n\nResearch and development costs (net of grants and capitalized expenses) incurred in the process of software production are charged to expenses as incurred.\n\nF-24\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)\n\no.Income taxes:\n\nTo prepare the consolidated financial statements, the Company estimates its income taxes in each of the jurisdictions in which it operates, and in certain of these jurisdictions, it is calculated based on the Company's assumptions as to its entitlement to various benefits under the applicable tax laws in the jurisdiction. The entitlement to such benefits depends upon the Company's compliance with the terms and conditions set out in these laws.\n\nThe Company accounts for income taxes in accordance with ASC 740, \"Income Taxes\". ASC 740 prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. Deferred tax assets and deferred tax liabilities are presented under long-term assets and long-term liabilities, respectively.\n\nThe Company implements a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% (cumulative basis) likely to be realized upon ultimate settlement. The Company's policy is to include interest and penalties, if any, related to unrecognized income tax benefits as a component of income tax expense.\n\np.Non-royalty grants:\n\nNon-royalty bearing grants from the Government of Israel for funding research and development projects are recognized at the time the Company is entitled to such grants on the basis of the related costs incurred and recorded as a deduction from research and development expenses.\n\nq.Concentrations of credit risk:\n\nFinancial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, trade receivables, marketable securities and foreign currency derivative contracts.\n\nThe Company's cash and cash equivalents are invested in deposits and money market funds, mainly in dollars with major international banks. Deposits in the U.S. may be in excess of insured limits and are not insured in other jurisdictions. Generally, these deposits may be redeemed upon demand and therefore bear minimal risk.\n\nThe Company's trade receivables are derived from sales to customers generated from a multitude of markets in countries around the world with the largest proportion denominated in the US dollar. The Company performs ongoing credit evaluations of its customers and insures some of its receivables with a credit insurance company. The Company performs ongoing credit evaluations of its customers for the purpose of determining the appropriate allowance for credit losses.\n\nThe Company's marketable securities include investment in corporate debentures, U.S. Treasuries and U.S. government agencies. The Company's investment policy limits the amount that the Company may invest in any one type of investment per minimum credit rating or specific issuer, thereby reducing credit risk concentrations.\n\nThe Company enter into foreign currency forward and option contracts intended to protect cash flows resulting from payroll related expenses against the volatility in value of forecasted non-dollar currency. The\n\nF-25\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)\n\nderivative instruments hedge a portion of the Company's non-dollar currency exposure. See Note 10 for additional information.\n\nr.Severance pay:\n\nThe Israeli Severance Pay Law-1963 (the \"Severance Pay Law\") generally requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain circumstances. The Company makes ongoing deposits into Israeli employees' pension plans to fund their severance liabilities. According to Section 14 of the Severance Pay Law, the Company deposits for employees employed by the Company since May 1, 2009 are made in lieu of the Company's severance liability, therefore no obligation is provided for in the financial statements. Severance Pay liabilities for employees employed by the Company prior to May 1, 2009, as well as employees with special contractual arrangements, are provided for in the financial statements based upon the latest monthly salary multiplied by the number of years of employment.\n\nSeverance pay expenses for 2025, 2024 and 2023 amounted to $11,288, $12,002 and $10,917, respectively.\n\nThe Company also has other liabilities for severance pay in other jurisdictions.\n\nThe Company has multiple 401(k) defined contribution plans covering certain employees in the U.S. All eligible employees may elect to contribute a portion of their eligible compensation, generally not greater than an annual contribution of $23.5 in 2025, $23.0 in 2024 and $22.5 in 2023 (for certain employees over 50 years of age the maximum annual contribution was $30.5 in 2025, $30 in 2024 and $27 in 2023) of their total annual compensation to the plan through salary deferrals, subject to IRS limits. The Company, at its discretion, matches 50% of employee contributions to the plan up to a limit of 6-8% of their eligible compensation. In 2025, 2024 and 2023, the Company recorded an expense for all matching contributions in the amount of $10,912; $10,430 and $11,599, respectively.\n\ns.Leases\n\nUnder Topic 842, the Company determines if an arrangement is a lease at inception. ROU assets and lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments. The ROU asset is recorded net of any lease incentives received. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company's lease agreements may contain variable costs such as common area maintenance, insurance, real estate taxes or other costs. Variable lease costs are expensed as incurred on the consolidated statements of income.\n\nThe Company elected to combine its lease and non-lease components for car leases and to not recognize a lease liability and a right-of-use (\"ROU\") asset on the balance sheet for leases with a term of twelve months or less. The Company recognizes the associated lease payments in the consolidated statements of income on a straight-line basis over the lease term.\n\nt.Basic and diluted net earnings per share:\n\nBasic net earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year. Diluted net earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year plus dilutive potential equivalent ordinary shares considered outstanding during the year, including employee stock options, restricted share units (“RSUs”), performance stock units (“PSUs”) and shares issuable pursuant to the Employee Stock Purchase Plan (“ESPP”), in accordance with ASC 260, \"Earnings per Share\".\n\nF-26\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)\n\nAs further described in Note 15, the Company entered into an exchangeable note hedge transaction and warrants transaction in 2017. While the exchangeable note hedge transaction was anti-dilutive and as such was not included in the computation of diluted earnings per share, the warrants transaction had a dilutive effect, and as such, was included in the computation of the diluted earnings per share. The number of shares related to the warrants transaction was 3,457,475. During 2024 the warrants were exercised into 1,513,183 ordinary shares using the net share settlement method.\n\nOn December 31, 2021, the Company entered into the First Supplemental Indenture according to which the Company irrevocably elected cash settlement for the principal and any premium due upon conversion to apply to all conversions of the 2017 Notes issued under the 2017 Notes with an Exchange Date (as defined in the 2017 Indenture) that occurs on or after December 31, 2021. As a result, the 2017 Notes did not have a dilutive effect for the years ended December 31, 2024 and 2023.\n\nOn December 31, 2021, the Company irrevocably elected to settle the principal of the exchangeable senior notes issued in 2020 in cash. As a result, the Company used the if converted method for calculating any potential dilutive effect on diluted net income per share, if applicable. The conversion premium would have a dilutive impact on diluted net income per share only when the average market price of an ordinary share for a given period exceeded the conversion price of $299.19 per share. As a result, 1,537,504 shares underlying the conversion option of the exchangeable senior notes issued in 2020 were not considered in the calculation of diluted net income per share in either 2023 or 2024, as the effect was anti-dilutive. During 2024, the warrants were exercised (See Note 15 Debt, for further information).\n\nThe weighted average number of shares related to outstanding anti-dilutive options, RSU's and ESPP excluded from the calculations of diluted net earnings per share was 10,263, 8,089 and 4,096 for the years 2025, 2024 and 2023, respectively.\n\nu.Accounting for stock-based compensation:\n\nThe Company has granted restricted share units (“RSUs”) and stock options vesting solely upon continued service, as well as performance-based awards, including performance stock units (“PSUs”), with vesting based on achievement of specified performance targets. In addition, the Company has granted share purchase rights under its Employee Stock Purchase Plan (“ESPP”), which is primarily available to active employees. The Company accounts for stock-based compensation in accordance with ASC 718, \"Compensation - Stock Compensation\" (\"ASC 718\"), which requires the measurement and recognition of stock base compensation expenses based on estimated fair values for all share-based payment awards made to employees and directors. ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The Company elected to account for forfeitures as they occur.\n\nThe Company recognizes compensation expenses for the value of its awards, which have graded vesting, based on the accelerated attribution method over the requisite service period of each of the awards.\n\nThe Company estimates the fair value of stock options and ESPP granted using the Black-Scholes-Merton option-pricing model, which requires a number of assumptions: the expected volatility is based upon actual historical stock price movements; the expected term of options granted is based upon historical experience and represents the period of time that options granted are expected to be outstanding; the risk-free interest rate is based on the yield from U.S. Federal Reserve zero-coupon bonds with an equivalent term; and the expected dividend rate (an annualized dividend yield) is based on the per share dividend declared by the Company's Board of Directors.\n\nThe Company measures the fair value of restricted stock based on the market value of the underlying shares at the date of grant.\n\nF-27\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)\n\nv.Fair value of financial instruments:\n\nThe Company applies ASC 820, \"Fair Value Measurements and Disclosures\" (\"ASC 820\") for valuing financial instruments. Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the \"exit price\") in an orderly transaction between market participants at the measurement date. The Company measures its investments in money market funds classified as cash equivalents, marketable securities, foreign currency derivative contracts at fair value.\n\nIn determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.\n\nThe hierarchy is broken down into three levels based on the inputs as follows:\n\n•Level 1 - Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.\n\n•Level 2 - Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.\n\n•Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.\n\nThe availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including, for example, the type of investment, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the investments are categorized as Level 3.\n\nThe Company's marketable securities and foreign currency derivative contracts are classified within Level 2, as the valuation inputs of the derivative contracts are based on quoted prices and market observable data of similar instruments and as the marketable securities are valued using alternative pricing sources utilizing market observable inputs (see Notes 3 and 10 ).\n\nThe carrying amounts of cash and cash equivalents, short-term bank deposits, trade receivables and trade payables approximate their fair value due to the immediate or short-term maturities of these financial instruments.\n\nw.Legal contingencies:\n\nThe Company is currently involved in various claims and legal proceedings arising in the ordinary course of business. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss.\n\nx.Advertising expenses:\n\nAdvertising expenses are charged to expense as incurred. Advertising expenses for the years 2025, 2024 and 2023 were $47,740, $58,118 and $50,740, respectively.\n\nF-28\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)\n\ny.Treasury shares:\n\nThe Company repurchases its ordinary shares from time to time on the open market or in other transactions and holds such shares as treasury shares. The Company accounts for the cost to repurchase treasury shares as a reduction of shareholders' equity. The Company reissues treasury shares under the stock purchase plan, upon exercise of options, ESPP and upon vesting of restricted stock units (\"RSUs\"). Re-issuance of treasury shares is accounted for in accordance with ASC 505-30 in which gains are credited to additional paid-in capital and losses are charged to additional paid-in capital to the extent that previous net gains are included therein and otherwise to retained earnings.\n\nz.Business combination:\n\nThe Company applies the provisions of ASC 805, \"Business Combination\", and allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets.\n\nSignificant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from customer relationships, acquired technology and acquired trademarks from a market participant perspective, useful lives and discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.\n\nContingent consideration incurred in a business combination is included as part of the acquisition price and recorded at fair value as of the acquisition date. The fair value of the contingent consideration is re-measured at each reporting period, with any adjustments in fair value recognized in earnings under general and administrative expenses.\n\naa.Non-controlling interests:\n\nThe consolidated financial statements include the Company's accounts and the accounts of the Company's wholly- and majority-owned subsidiaries. Non-controlling interest positions of the Company's consolidated entities were reported as a separate component of consolidated equity from the equity attributable to the Company’s shareholders.\n\nIn case of an increase in ownership of a subsidiary, the carrying amount of the non-controlling interest was adjusted to reflect the controlling interest’s increased ownership interest in the subsidiary’s net assets. Any difference between the consideration paid by the Company to a non-controlling interest holder (or contributed by the Company to the net assets of the subsidiary) and the adjustment to the carrying amount of the non-controlling interest in the subsidiary was recognized directly in equity and attributable to the controlling interest.\n\nDuring 2020, the Company acquired 50.1% of the share capital of one of the Company's Subsidiaries (the \"2020 Subsidiary\"). In 2021, the Company acquired an additional 20% in the 2020 Subsidiary for a total consideration of approximately $14,000. On January 16, 2025, the Company acquired an additional 29.9% in the 2020 Subsidiary for a total consideration of $36,466. Upon consummation of the acquisition, the 2020 Subsidiary became a wholly-owned subsidiary of the Company.\n\nF-29\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)\n\nab.Comprehensive income:\n\nThe Company accounts for comprehensive income in accordance with ASC 220, \"Comprehensive Income\". Comprehensive income generally represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to, shareholders. Other comprehensive income for the Company relates to gains and losses on hedging derivative instruments, unrealized gains and losses on available for sale marketable securities and changes in foreign currency translation adjustments.\n\nThe following tables show the components of accumulated other comprehensive income, net of taxes, as of December 31, 2025, 2024 and 2023:\n\nYear ended December 31, 2025\n\nUnrealized gains (losses) on marketable securitiesUnrealized gains (losses) on cash flow hedgesForeign currency translation adjustmentTotal\n\nBeginning balance$(3,590)$1,832 $(69,312)$(71,070)\n\nOther comprehensive income (loss) before reclassifications\n(749)16,844 24,903 40,998 \n\nAmounts reclassified from accumulated other comprehensive income (loss)\n4,467 (10,088)— (5,621)\n\nNet current-period other comprehensive income\n3,718 6,756 24,903 35,377 \n\nEnding balance$128 $8,588 $(44,409)$(35,693)\n\nYear ended December 31, 2024\n\nUnrealized gains (losses) on marketable securitiesUnrealized gains (losses) on cash flow hedgesForeign currency translation adjustmentTotal\n\nBeginning balance\n$(4,086)$933 $(55,957)$(59,110)\n\nOther comprehensive income (loss) before reclassifications\n919 (3,621)(13,355)(16,057)\n\nAmounts reclassified from accumulated other comprehensive income (loss)\n(423)4,520 — 4,097 \n\nNet current-period other comprehensive income (loss)\n496 899 (13,355)(11,960)\n\nEnding balance\n$(3,590)$1,832 $(69,312)$(71,070)\n\nF-30\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)\n\nYear ended December 31, 2023\n\nUnrealized gains (losses) on marketable securitiesUnrealized gains (losses) on cash flow hedgesForeign currency translation adjustmentTotal\n\nBeginning balance$(34,386)$(7,102)$(69,767)$(111,255)\n\nOther comprehensive income (loss) before reclassifications\n18,029 (5,300)13,810 26,539 \n\nAmounts reclassified from accumulated other comprehensive income\n12,271 13,335 — 25,606 \n\nNet current-period other comprehensive income\n30,300 8,035 13,810 52,145 \n\nEnding balance$(4,086)$933 $(55,957)$(59,110)\n\nac.Recently adopted accounting pronouncements:\n\nIn December 2023, the FASB issued ASU 2023-09, \"Income Taxes (Topics 740): Improvements to Income Tax Disclosures\", which expands the disclosure requirements for income taxes, primarily related to the rate reconciliation and income taxes paid. The Company adopted ASU 2023-09 for its annual period beginning January 1, 2025, on a retrospective basis. See Note 13 Income taxes, for further information.\n\nad.Recently issued accounting pronouncements, not yet adopted:\n\nIn November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses, which requires disaggregated disclosure in the notes to the financial statements, of prescribed categories of expenses within relevant income statement captions. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effect of adopting the ASU on its disclosures.\n\nIn July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers. The practical expedient assumes that current conditions as of the balance sheet date do not change for the remaining life of the assets. The guidance is effective for the Company beginning January 1, 2026, with early adoption permitted. The Company is currently evaluating the effect of adopting the ASU on its consolidated financial statements.\n\nIn September 2025, the FASB issued ASU 2025-06, Intangible - Goodwill and Other Internal-Use Software (Subtopic 350-40), Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting guidance for costs to develop software for internal use. It removes the previous development stage model and introduces a more judgment-based approach. The guidance is effective for the Company for the beginning January 1, 2028, with early adoption permitted. The Company is currently evaluating the effect of adopting the ASU on its consolidated financial statements.\n\nIn December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The update provides recognition, measurement, presentation, and disclosure requirements for government grants, including guidance for grants related to an asset and grants related to income. The guidance is effective for the Company beginning January 1, 2029, with early adoption permitted. The Company is currently evaluating the effect of adopting the ASU on its consolidated financial statements.\n\nF-31\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\n    \n\nNOTE 3:-    SHORT-TERM INVESTMENTS\n\nShort-term investments include marketable securities in the amount of $38,010 and $919,316 as of December 31, 2025 and 2024, respectively and short-term bank deposits in the amounts of $0 and $220,680 as of December 31, 2025 and 2024, respectively.\n\nThe following table summarizes amortized costs, gross unrealized gains and losses and estimated fair values of available-for-sale marketable securities as of December 31, 2025 and 2024:\n\nAmortized costGross unrealized gainsGross unrealized lossesEstimated fair value (Level 2 within the fair value hierarchy)\n\nDecember 31,December 31,December 31,December 31,\n\n20252024202520242025202420252024\n\nCorporate debentures$34,906 $822,156 $130 $779 $(1)$(4,552)$35,035 $818,383 \n\nU.S. Treasuries2,975 92,902 — 50 — (51)2,975 92,900 \n\nU.S. Government Agencies— 8,060 — 4 — (32)— 8,033 \n\n$37,881 $923,118 $130 $833 $(1)$(4,635)$38,010 $919,316 \n\nThe scheduled maturities of available-for-sale marketable securities as of December 31, 2025 are as follows:\n\nAmortized\ncostEstimated\nfair value\n\nDue within one year$20,541 $20,572 \n\nDue after one year through five years17,340 17,438 \n\n$37,881 $38,010 \n\nInvestments with continuous unrealized losses for less than 12 months and 12 months or greater and their related fair values as of December 31, 2025 and 2024 are as indicated in the following tables:\n\nDecember 31, 2025\n\nInvestments with continuous unrealized losses for less than 12 monthsInvestments with continuous unrealized losses for 12 months or greaterTotal Investments with continuous unrealized losses\n\nFair\nvalueUnrealized lossesFair\nvalueUnrealized lossesFair\nvalueUnrealized losses\n\nCorporate debentures$— $— $3,021 $(1)$3,021 $(1)\n\n$— $— $3,021 $(1)$3,021 $(1)\n\nF-32\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\n    \n\nDecember 31, 2024\n\nInvestments with continuous unrealized losses for less than 12 monthsInvestments with continuous unrealized losses for 12 months or greaterTotal Investments with continuous unrealized losses\n\nFair\nvalueUnrealized lossesFair\nvalueUnrealized lossesFair\nvalueUnrealized losses\n\nCorporate debentures$370,114 $(3,123)$167,185 $(1,429)$537,299 $(4,552)\n\nU.S. Treasuries5,949 (22)10,068 (29)16,017 (51)\n\nU.S. Government Agencies5,075 (32)— — 5,075 (32)\n\n$381,138 $(3,177)$177,253 $(1,458)$558,391 $(4,635)\n\nNOTE 4:-    PREPAID EXPENSES AND OTHER CURRENT ASSETS\n\nDecember 31,\n\n20252024\n\nGovernment authorities$84,425 $111,580 \n\nInterest receivable10,490 4,206 \n\nPrepaid expenses109,691 105,910 \n\nOther19,174 17,384 \n\n$223,780 $239,080 \n\nNOTE 5:-    PREPAID EXPENSES AND OTHER LONG-TERM ASSETS\n\nDecember 31,\n\n20252024\n\nDeferred commission costs$127,746 $118,531 \n\nSeverance pay fund14,593 11,972 \n\nPrepaid expenses88,314 78,751 \n\nOther2,442 3,258 \n\n$233,095 $212,512 \n\nF-33\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 6:-    PROPERTY AND EQUIPMENT, NET\n\nDecember 31,\n\n20252024\n\nCost:\n\nComputers and peripheral equipment\n$87,334 $67,260 \n\nInternal use software\n380,074 301,632 \n\nOffice furniture and equipment\n3,487 3,663 \n\nLeasehold improvements\n29,336 28,616 \n\n500,231 401,171 \n\nAccumulated depreciation:\n\nComputers and peripheral equipment\n43,038 19,017 \n\nInternal use software\n245,341 175,660 \n\nOffice furniture and equipment\n170 758 \n\nLeasehold improvements\n22,287 20,444 \n\n310,836 215,879 \n\nDepreciated cost\n$189,395 $185,292 \n\nDepreciation expense totaled $98,307, $89,151 and $74,907 for the years ended December 31, 2025, 2024 and 2023, respectively.\n\nThe Company recorded a reduction of $3,781 and $325,346 to the cost and accumulated depreciation of fully depreciated equipment, internal use software and leasehold improvements no longer in use for the years ended December 31, 2025 and 2024, respectively.\n\nNOTE 7:-    OTHER INTANGIBLE ASSETS, NET\n\na.Finite-lived other intangible assets:\n\nDecember 31,\n\n20252024\n\nOriginal amounts:\n\nCore technology$1,238,975 $843,415 \n\nCustomer relationships and backlog\n402,481 351,185 \n\nTrademarks66,076 50,780 \n\n1,707,532 1,245,380 \n\nAccumulated amortization:\n\nCore technology751,003 672,849 \n\nCustomer relationships and backlog\n321,687 296,864 \n\nTrademarks47,243 44,321 \n\n1,119,933 1,014,034 \n\nOther intangible assets, net$587,599 $231,346 \n\nF-34\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nb.Amortization expense amounted to $100,737, $115,869 and $92,445 for the years ended December 31, 2025, 2024 and 2023, respectively.\n\nc.Estimated intangible asset amortization expense:\n\nFor the year ending December 31,\n\n2026$143,341 \n\n2027121,413 \n\n2028107,646 \n\n202959,479 \n\n203057,906 \n\n203157,906 \n\nThereafter39,908 \n\n$587,599 \n\nNOTE 8:-    GOODWILL\n\nFollowing the Company's acquisitions in 2025 and 2024, as described in Note 1b, the changes in the carrying amount of goodwill allocated to reportable segments for the years ended December 31, 2025 and 2024 are as follows:\n\nYear ended December 31, 2025\n\nCustomer Engagement\nFinancial Crime and ComplianceTotal\n\nAs of January 1, 2025$1,499,610 $350,058 $1,849,668 \n\nAcquisitions\n578,775 — 578,775 \n\nFunctional currency translation adjustments10,658 1,431 12,089 \n\nAs of December 31, 2025$2,089,043 $351,489 $2,440,532 \n\nYear ended December 31, 2024\n\nCustomer Engagement\nFinancial Crime and ComplianceTotal\n\nAs of January 1, 2024$1,471,606 $350,363 $1,821,969 \n\nAcquisitions (*)\n30,833 — 30,833 \n\nFunctional currency translation adjustments(2,829)(305)(3,134)\n\nAs of December 31, 2024$1,499,610 $350,058 $1,849,668 \n\n(*) Including adjustment of $3,743 resulting from the finalization of purchase price allocations with respect to 2023.\n\nF-35\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 9:-    ACCRUED EXPENSES AND OTHER LIABILITIES\n\nDecember 31,\n\n20252024\n\nPayroll and related expenses$230,092 $196,940 \n\nAccrued expenses196,162 157,857 \n\nGovernment authorities41,084 235,469 \n\nOther1,854 2,843 \n\n$469,192 $593,109 \n\nNOTE 10:-    DERIVATIVE INSTRUMENTS\n\nThe Company's risk management strategy includes the use of derivative financial instruments to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates.\n\nASC 815, \"Derivatives and Hedging\" (\"ASC 815\"), requires the Company to recognize all of its derivative instruments as either assets or liabilities on the balance sheet at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, an entity must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation.\n\nGains and losses on derivatives instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that are attributable to a particular risk), are recorded in accumulated other comprehensive income (loss) and reclassified into the statement of income in the same accounting period in which the designated forecasted transaction or hedged item affects earnings.\n\nThe Company entered into forward contracts to hedge a portion of anticipated New Israeli Shekel (\"NIS\"), Indian Rupee (\"INR\"), Philippine Peso (\"PHP\") and Colombian Peso (\"COP\") payroll and benefit payments. These derivative instruments are designated as cash flow hedges, as defined by ASC 815 and accordingly are measured at fair value. These transactions are effective and, as a result, gain or loss on the derivative\n\nF-36\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 10:- DERIVATIVE INSTRUMENTS (Cont.)\n\ninstruments are reported as a component of accumulated other comprehensive income (loss) and reclassified as payroll expenses, respectively, at the time that the hedged income/expense is recorded.\n\nNotional amountFair value\n(Level 2 within the fair value hierarchy)\n\nDecember 31,December 31,\n\n2025202420252024\n\nForward contracts\n\nexpenses NIS133,851 122,401 10,153 4,047 \n\nexpenses INR65,174 68,504 (1,138)(1,329)\n\nexpenses PHP12,932 12,697 (215)(341)\n\nexpenses COP\n6,432 7,526 337 (428)\n\n$218,389 $211,128 $9,137 $1,949 \n\nThe Company currently hedges its exposure to the variability in future cash flows, generally for a maximum period of one year. As of December 31, 2025, the Company expects to reclassify all of its unrealized gains and losses from accumulated other comprehensive income to earnings during the next twelve months.\n\nThe fair value of the Company's outstanding derivative instruments at December 31, 2025 and 2024 is summarized below:\n\nFair value of derivative instruments\n\nDecember 31,\n\nBalance sheet line item20252024\n\nDerivative assets:\n\nForeign exchange forward contractsPrepaid expenses and other current assets$10,490 $4,047 \n\nDerivative liabilities:\n\nForeign exchange forward contractsAccrued expenses and other liabilities$(1,353)$(2,098)\n\nThe effect of derivative instruments in cash flow hedging relationship on income and other comprehensive income for the years ended December 31, 2025, 2024 and 2023 is summarized below:\n\nAmount of gain (loss) recognized in\n\nother comprehensive income\n\non derivative, net of tax\n\nYear Ended December 31,\n\n202520242023\n\nDerivatives in foreign exchange cash flow hedging relationships:\n\nForward contracts$16,844 $(3,621)$(5,300)\n\n$16,844 $(3,621)$(5,300)\n\nF-37\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 10:- DERIVATIVE INSTRUMENTS (Cont.)\n\nDerivatives in foreign exchange cash flow hedging relationships for the years ended December 31, 2025, 2024 and 2023 is summarized below:\n\nAmount of gain (loss) reclassified from other comprehensive income into income (expenses),\n\nnet of tax\n\nYear Ended December 31,\n\nStatements of income line item\n202520242023\n\nForward contracts to hedge payroll\n\nCost of revenues, operating expenses\n(10,088)4,520 13,335 \n\n$(10,088)$4,520 $13,335 \n\nF-38\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 11:-    LEASES\n\nThe Company has entered into various non-cancelable operating lease agreements for certain office spaces and motor vehicles. The leases have original lease periods expiring between 2026 and 2037. The Company does not assume renewals in its determination of the lease term unless the renewals are considered as reasonably assured.\n\nThe operating lease cost for the year ended December 31, 2025 was $15,155.    \n\nSupplemental cash flow information related to leases was as follows:    \n\nYear ended December 31, 2025\n\nCash payments related to operating lease\n$16,244 \n\nNew right-of-use assets obtained in exchange for operating lease obligations7,609 \n\nMaturities of lease liabilities were as follows:\n\nOperating Leases\n\n2026$16,329 \n\n202714,174 \n\n202814,656 \n\n202913,670 \n\n203012,432 \n\nThereafter34,143 \n\nTotal lease payments105,404\n\nLess imputed interest(16,603)\n\nTotal$88,801 \n\nSupplemental balance sheet information related to leases was as follows:\n\nYear ended December 31, 2025\n\nCurrent maturities of operating leases13,742 \n\nLong-term operating leases75,059 \n\nTotal operating lease liabilities$88,801 \n\nWeighted-average remaining operating lease term7.61\n\nWeighted-average discount rate of operating leases4.78 %\n\nF-39\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 12:-    COMMITMENTS AND CONTINGENT LIABILITIES\n\na.Commitments:\n\nThe Company is also obligated under certain agreements with its suppliers to purchase licenses and hosting services. These non-cancelable obligations as of December 31, 2025 are $342,548, and are expected to be realized during the years 2026-2030.\n\nb.Legal proceedings:\n\nFrom time to time the Company or its subsidiaries may be involved in legal proceedings and/or litigation arising in the ordinary course of business. While the outcome of these matters cannot be predicted with certainty, the Company does not believe it will have a material effect on its consolidated financial position, results of operations, or cash flows.\n\nc.Bank Guarantees:\n\nThe Company obtained bank guarantees as of December 31, 2025 of $2,595, primarily in connection with office lease agreements.\n\nNOTE 13:-    TAXES ON INCOME\n\na.Israeli taxation:\n\n1.Corporate tax:\n\nCommencing 2012, NiCE and its Israeli subsidiary elected the Preferred Enterprise regime to apply under the Law for the Encouragement of Capital Investments (the \"Investment Law\"). The election is irrevocable.\n\nIn December 2016, the Israeli Knesset passed a number of changes to the Investments Law regimes. These changes came into law in May 2017, effective beginning January 1, 2017, upon the passing into law of Regulations promulgated by the Finance Ministry to implement the \"Nexus Principles\" based on OECD guidelines published as part of the Base Erosion and Profit Shifting (BEPS) project. Such Regulations provide rules for implementation of the Special Preferred Technology Enterprise tax regime.\n\nThe Company believes it qualifies as a Special Preferred Technology Enterprise and accordingly is eligible for a tax rate of 6% on its Special qualifying Preferred Technology income, as defined in such regulations, beginning from tax year 2017 and onwards. The Company expects that it will continue to qualify as a Special Preferred Technology Enterprise in subsequent tax years.\n\nIncome not eligible for Preferred Enterprise or Preferred Technology Enterprise or Special Preferred Technology Enterprise benefits is taxed at the regular corporate tax rate, which was 23% in 2025, 2024 and 2023.\n\n2.Foreign Exchange Regulations:\n\nUnder the Foreign Exchange Regulations, NiCE and its Israeli subsidiary calculate their tax liability in U.S. Dollars according to certain orders. The tax liability, as calculated in U.S. Dollars, is translated into NIS according to the exchange rate as of December 31st of each year.\n\nF-40\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 13:- TAXES ON INCOME (Cont.)\n\n3.Tax benefits under the Israeli Law for the Encouragement of Industry (Taxation), 1969:\n\nNiCE and its Israeli subsidiary believe they each currently qualify as an \"Industrial Company\" as defined by the Investment Law and, as such, are entitled to certain tax benefits including deduction of public offering expenses in three equal annual installments and amortization of cost of purchased know-how and patents for tax purposes over eight years.\n\nb.Income taxes on non-Israeli subsidiaries:\n\nNon-Israeli subsidiaries are taxed according to the tax laws in their respective country of residence. The Company's consolidated tax rate depends on the geographical mix of where its profits are earned. In 2025, the Company's U.S. subsidiaries are subject to combined federal and state income taxes of approximately 25.26% and its subsidiaries in the U.K. and India are subject to corporation tax at a rate of approximately 25.00% and 25.17%, respectively. Neither Israeli income taxes, foreign withholding taxes nor deferred income taxes were provided in relation to undistributed earnings of the Company's foreign subsidiaries. This is because the Company has the intent and ability to reinvest these earnings indefinitely in the foreign subsidiaries and therefore those earnings are continually redeployed in those jurisdictions. As of December 31, 2025, the amount of undistributed earnings of non-Israeli subsidiaries, which is considered indefinitely reinvested, was $1,665 with a corresponding unrecognized deferred tax liability of $230. If these earnings were distributed to Israel in the form of dividends or otherwise, the Company would be subject to additional Israeli income taxes, subject to an adjustment for foreign tax credits, and foreign withholding taxes.\n\nc.Net operating loss carryforward:\n\nAs of December 31, 2025, the Company and certain of its subsidiaries had tax loss carry-forwards totaling in aggregate approximately $237,607, which can be carried forward and offset against taxable income. Approximately $168,852 of these carry-forward tax losses have no expiration date, with the balance expiring between the years 2026 and 2041.\n\nUtilization of U.S. net operating losses may be subject to substantial annual limitation due to the \"change in ownership\" provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization.\n\nd.Deferred tax assets and liabilities:\n\nDeferred taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts recorded for tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows :\n\nF-41\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 13:- TAXES ON INCOME (Cont.)\n\nDecember 31,\n\n20252024\n\nDeferred tax assets:\n\nNet operating losses carryforward and tax credits$67,096 $50,090 \n\nAcquired intangibles (*)13,172 9,256 \n\nOperating leases liabilities 15,985 21,124 \n\nShare based payments 36,462 39,784 \n\nResearch and development costs 135,522 154,024 \n\nReserves, allowances and other 49,816 51,788 \n\nDeferred tax assets before valuation allowance318,053 326,066 \n\nValuation allowance(9,722)(11,401)\n\nDeferred tax assets308,331 314,665 \n\nDeferred tax liabilities:\n\nAcquired intangibles (157,533)(1,638)\n\nOperating lease right-of-use assets (13,536)(17,381)\n\nInternal use software and other fixed assets (18,991)(45,070)\n\nPrepaid compensation expenses (29,367)(28,160)\n\nOther(684)(5,149)\n\nDeferred tax liabilities(220,111)(97,398)\n\nDeferred tax assets, net$88,220 $217,267 \n\n(*) During the years ended December 31, 2025 and 2024, the Company completed intra-entity transfers of certain intangible assets to a different tax jurisdiction. As a result of the transfers, the Company utilized net operating losses carried forward and incurred a tax expense on the resulting capital gains.\n\nDecember 31,\n\n20252024\n\nDeferred tax assets$198,213 $219,232 \n\nDeferred tax liabilities(109,993)(1,965)\n\nDeferred tax assets, net$88,220 $217,267 \n\nThe Company has provided valuation allowances in respect of certain deferred tax assets resulting from tax loss carry forwards and other reserves and allowances due to uncertainty concerning their realization.\n\ne.A reconciliation of the Company's effective tax rate to the statutory tax rate in Israel is as follows:\n\nF-42\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 13:- TAXES ON INCOME (Cont.)\n\nYear Ended December 31,\n\n202520242023\n\nAmount PercentAmount PercentAmount Percent\n\nStatutory tax rate161,931 23 %139,110 23 %105,27123 %\n\nPreferred Tax Benefit Regimes (*)(59,236)(8)%(10,975)(2)%(25,505)(6)%\n\nForeign tax effects\n\nUnited Kingdom\n\nStatutory tax rate difference between United Kingdom and Israel725 — %7,089 1 %— — %\n\nChanges in valuation allowance (1,678)— %(8,417)(1)%7,249 2 %\n\nOther5,842 1 %(4,154)(1)%4,560 1 %\n\nUnited States\n\nStatutory tax rate difference between United State and Israel(5,994)(1)%(6,980)(1)%(4,412)(1)%\n\nState income taxes, Net of Federal Income Tax Effect902 — %35,448 6 %(1,354)— %\n\nShare-based payment awards13,910 2 %10,703 2 %21,090 5 %\n\nCapital Gain on Sales of IP28,938 4 %\n\nForeign-derived intangible income (7,195)(1)%(10,925)(2)%(5,866)(1)%\n\nResearch and Development tax credits(7,035)(1)%(8,974)(1)%(6,797)(1)%\n\nOther (9,712)(1)%(3,777)(1)%(15,121)(3)%\n\nIndia— — %— — %4,075 1 %\n\nOther foreign jurisdictions(1,603)— %(2,673)— %4,266 1 %\n\nNontaxable or Nondeductible Items\n\nShare-based payment awards— — %— — %4,854 1 %\n\nOther Nontaxable or Nondeductible Items(5,640)(1)%(1,396)— %4,525 1 %\n\nChanges in Unrecognized Tax Benefits(17,228)(2)%22,557 4 %26,181 6 %\n\nOther Adjustments(5,012)(1)%5,602 1 %(3,617)(1)%\n\nTotal income tax expenses$91,916 13 %$162,23827 %$119,39926 %\n\n(*) The effect of the benefit resulting from the \"Preferred Enterprise/Preferred Technology Enterprise benefits \" status on net earnings per ordinary share is as follows:\n\nF-43\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 13:- TAXES ON INCOME (Cont.)\n\nYear Ended December 31,\n\n202520242023\n\nBasic$0.32 $1.27 $0.49 \n\nDiluted$0.30 $1.23 $0.47 \n\nf.Income before taxes on income is comprised as follows:\n\nYear Ended December 31,\n\n202520242023\n\nDomestic$363,941 $178,691 $195,203 \n\nForeign340,076 426,135 262,497 \n\n$704,017 $604,826 $457,700 \n\ng.Taxes on income (tax benefit) are comprised as follows:\n\nYear Ended December 31,\n\n202520242023\n\n  Current\n$81,476 $202,178 $182,789 \n\n Deferred\n10,440 (39,940)(63,390)\n\n91,916 162,238 119,399 \n\nDomestic(9,289)58,711 51,334 \n\nForeign101,205 103,527 68,065 \n\n$91,916 $162,238 $119,399 \n\nF-44\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 13:- TAXES ON INCOME (Cont.)\n\nOf which:\n\nYear Ended December 31,\n\n202520242023\n\nDomestic taxes:\n\nCurrent$(6,109)$44,659 $50,414 \n\nDeferred(3,180)14,052 920 \n\n(9,289)58,711 51,334 \n\nForeign taxes:\n\nCurrent87,585 157,519 132,375 \n\nDeferred13,620 (53,992)(64,310)\n\n101,205 103,527 68,065 \n\nTaxes on income$91,916 $162,238 $119,399 \n\nh.Uncertain tax positions:\n\nA reconciliation of the beginning and ending balances of the total amounts of uncertain tax position is as follows:\n\nDecember 31,\n\n20252024\n\nUncertain tax positions, beginning of year$92,851 $90,124 \n\nIncreases (decrease) in tax positions for prior years\n8,147 (4,345)\n\nIncreases in tax positions for current year14,715 9,743 \n\nSettlements(41,652)— \n\nExpiry of the statute of limitations(3,520)(2,671)\n\nUncertain tax positions, end of year$70,541 $92,851 \n\n    \n\nThe Company accrued $16,678 and $62,487 due to interest and penalties related to uncertain tax positions as of December 31, 2025 and 2024, respectively.\n\nNiCE and its foreign affiliates in Hungary and in the United Kingdom (“Foreign Affiliates”) were undergoing routine Israeli income tax audits for the tax years 2011 through 2021. Following discussions\n\nF-45\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 13:- TAXES ON INCOME (Cont.)\n\nwith the Israel Tax Authority (“ITA”), on May 20, 2025, the parties entered into a settlement agreement relating to the tax years 2011-2021, pursuant to which the parties have agreed on an overall settlement for all issues under dispute.The settlement agreement was approved by the Israeli court on May 20, 2025.\n\nIn July 2025, the OBBBA was enacted into law. For fiscal year 2025, the primary impact of the OBBBA to the Company’s tax provision was the accelerated expensing of domestic R&D activities, which decreased the Company’s income eligible for FDII, reduced the Company’s deferred tax assets, and reduced the Company’s current income tax liability. Other OBBBA changes did not have a material impact on the Company’s financial statements.\n\nAs of December 31, 2025, U.S. federal income tax returns filed by the Company's U.S. subsidiaries for the tax years prior to 2021 are no longer subject to general audit. To the extent the Company or its subsidiaries generated net operating losses or tax credits in closed tax years, future use of the net operating loss or tax credit carry forward balance would be subject to examination within the relevant statute of limitations for the year in which it was utilized. The Company and its subsidiaries are still subject to other income tax audits for the tax years of 2019 through 2024.\n\nNOTE 14:-    SHAREHOLDERS' EQUITY\n\na.The ordinary shares, par value NIS 1.0 per share, of the Company are traded on the Tel-Aviv Stock Exchange and its American Depositary Shares (\"ADSs\"), each representing one fully paid ordinary share, are traded on The NASDAQ Stock Market.\n\nb.Share option plan:\n\n2016 Share Incentive Plan\n\nIn February 2016 the Company adopted the 2016 Share Incentive Plan (the \"2016 Plan\") to provide incentives to employees, directors, consultants and/or contractors by rewarding performance.\n\nUnder the 2016 Plan, the Company's employees, directors, consultants and/or contractors may be granted any equity-related award, including: any type of an option to acquire the Company's ordinary shares; share appreciation right; share and/or restricted share award (\"RSA\"); restricted stock unit (\"RSU\") and/or other share unit; and/or other share-based award and/or other right or benefit under the 2016 Plan, including any such equity-related award that is a performance-based award (each an \"Award\").\n\nGenerally, under the terms of the 2016 Plan, unless determined otherwise by the administrator of the 2016 Plan, 25% of an Award granted becomes exercisable on the first anniversary of the date of grant and 6.25% becomes exercisable once every quarter during the subsequent three years. Specifically with respect to RSUs and options granted with an exercise price equal to the nominal value of an ordinary share (\"par value options\"), unless determined otherwise by the Board of Directors, 25% of the RSUs and the par value options granted become vested on each of the four consecutive annual anniversaries following the date of grant. Certain executive officers are entitled to acceleration of vesting of Awards in the event of a change of control, subject to certain conditions.\n\nAwards with a vesting period expire six years after the date of grant. Pursuant to a resolution of the Company's Board of Directors dated February 4, 2014, options that are performance-based and that were granted during calendar year 2014 and thereafter shall expire seven years following the date of grant. The maximum number of shares that may be subject to Awards granted under each of the Plans is calculated each calendar year as 3% of the Company’s issued and outstanding share capital as of December 31 of the preceding calendar year (pursuant to an amendment of the 2016 Plan approved by the Board of Directors on\n\nF-46\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 14:- SHAREHOLDERS' EQUITY (Cont.)\n\nOctober 2, 2019). Such amount is reset for each calendar year. Awards are non-transferable except by will or the laws of descent and distribution.\n\nOptions granted under the 2016 Plan are granted at an exercise price equal to the average of the closing prices of one ADR as quoted on the Nasdaq market during the 30 consecutive calendar days preceding the date of grant, unless determined otherwise by the administrator of the 2016 Plan (including par value options).\n\nThe Company’s Board of Directors also adopted an addendum to the 2016 Plan for Awards granted to residents of Israel (the \"2016 Addendum\") and resolved to elect the \"Capital Gains Route\" (as defined in Section 102(b)(2)) of the Israeli Income Tax Ordinance-5721-1961 (\"Tax Ordinance\") for the grant of Awards to Israeli grantees. There is also a U.S. addendum under the 2016 Plan that applies to non-qualified stock options for purposes of U.S. tax laws.\n\nEmployee Share Purchase Plan\n\nIn August 2025, the Company's Board of Directors approved the NiCE Employee Share Purchase Plan (\"ESPP\" or the \"Plan\"), and on September 30, 2025, the Company's shareholders approved the Plan. The Plan permits eligible employees to purchase shares of the Company’s common stock through payroll deductions with up to 15% of their gross base earnings. The purchase price of the shares is 85% of the lower of the fair market value of the Company’s common stock on the first day of a six month offering period, or the relevant purchase date. In addition, no participant may purchase more than 1,000 shares of common stock in each purchase period.\n\nDuring 2025, the Company granted 894,258 options and restricted share units under the 2016 Plan (which constituted 1.48% of the Company issued and outstanding share capital as of December 31, 2025).\n\nPursuant to the terms of certain acquisitions, the Company assumed or replaced unvested options and RSUs and converted them or replaced them with the Company's options and RSUs, as applicable, based on an agreed exchange ratio. Each assumed or replaced option and RSU is subject to the same terms and conditions, including vesting, exercisability and expiration, as originally applied to any such option and RSU immediately prior to the acquisition.\n\nF-47\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 14:- SHAREHOLDERS' EQUITY (Cont.)\n\nThe fair value of the Company's stock options granted to employees and directors for the years ended December 31, 2025, 2024 and 2023 was estimated using the following assumptions:\n\n202520242023\n\nExpected volatility\n34.85%-42.91%\n\n33.33%-36.70%\n\n33.35%-35.67%\n\nRisk free interest rate\n3.45%-4.32%\n\n3.49%-4.57%\n\n3.60%-4.68%\n\nExpected dividend— — — \n\nExpected term (in years)\n2.5 - 3.5\n\n2.5-3.5\n3.5\n\nThe following table set forth the parameters used in computation of the ESPP for the year ended December 31, 2025:\n\n2025\n\nExpected volatility40.65 %\n\nRisk free interest rate3.77 %\n\nExpected dividend— \n\nExpected term (in years)0.5\n\nA summary of the Company's stock options activity and related information for the year ended December 31, 2025, is as follows:\n\nNumber of options\nWeighted-average exercise\n\nprice ($)\n\nWeighted- average remaining contractual term (Years)\n\nAggregate intrinsic\n\nvalue ($)\n\nOutstanding at January 1, 20251,248,159 25.534.08184,832 \n\nGranted439,722 10.51\n\nExercised(158,693)6.06\n\nCancelled(12,543)199.10\n\nForfeited(81,892)0.27\n\nOutstanding at December 31, 20251,434,753 23.00 3.96142,015 \n\nExercisable at December 31, 2025608,521 48.33 2.5851,459 \n\nThe weighted-average grant-date fair value of options granted during the years 2025, 2024 and 2023 was $141.00, $169.94 and $171.43, respectively.\n\nThe total intrinsic value of options exercised, and restricted shares vested during the years 2025, 2024 and 2023 was $118,347, $191,389 and $138,202, respectively.                        \n\nF-48\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 14:- SHAREHOLDERS' EQUITY (Cont.)\n\nThe options outstanding under the Company's stock option plans as of December 31, 2025, have been separated into ranges of exercise price as follows:\n\nRanges of\nexercise priceOptions outstanding as of December 31, 2025Weighted\naverage\nremaining\ncontractual\nterm (Years)Weighted\nAverage\nExercise\nPrice ($)Options Exercisable as of December 31, 2025Weighted\naverage\nexercise\nprice of\noptions\nexercisable ($)\n\n$\n0.00 - 0.32\n1,257,1064.140.25454,4120.29\n\n$\n20.44 - 54.51\n2,7292.5431.712,72931.71\n\n$\n144.90 - 197.42\n106,5703.36163.8583,032169.22\n\n$\n206.52 - 232.2\n68,3481.72221.5668,348221.56\n\n1,434,753 3.9623.00 608,521 48.33 \n\nA summary of the Company's RSU and the Company's RSA activities and related information for the year ended December 31, 2025, is as follows:\n\nNumber of RSU (*)\n\nWeighted average grant date fair value per share\n\nOutstanding at January 1, 20251,787,822 196.57\n\nGranted454,536 161.09\n\nVested(655,863)208.86\n\nForfeited(246,735)193.88\n\nOutstanding at December 31, 20251,339,760 178.82 \n\n(*) NIS 1.0 par value, which represents approximately $0.30.\n\nThe total fair value of RSUs vested during 2025, 2024 and 2023 was $136,984, $149,531 and $111,795, respectively.\n\nAs of December 31, 2025, the total compensation cost related to non-vested awards not yet recognized was approximately $168,423, which is expected to be recognized over a weighted average period of approximately 1.72 years.\n\nF-49\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 14:- SHAREHOLDERS' EQUITY (Cont.)\n\nThe total equity-based compensation expense related to all of the Company's equity-based awards recognized for the years ended December 31, 2025, 2024 and 2023 was comprised as follows:\n\nYear ended\nDecember 31,\n\n202520242023\n\nCost of revenues$14,161 $17,418 $18,904 \n\nResearch and development, net20,600 33,526 38,047 \n\nSelling and marketing50,729 57,230 48,022 \n\nGeneral and administrative64,665 78,927 78,329 \n\nTotal stock-based compensation expenses$150,155 $187,101 $183,302 \n\nc.Treasury shares:\n\nOn November 9, 2022, the Company's Board of Directors authorized an additional program to repurchase up to $250,000 of the Company issued and outstanding ordinary shares and ADRs, which commenced following completion of the program that was authorized in 2020. On November 15, 2023, the Company's Board of Directors authorized a program to repurchase up to $300,000 of the Company issued and outstanding ordinary shares and ADRs, which commenced following completion of the repurchase program that was authorized by the Company's Board of Directors in 2022. On June 7, 2024, the Company's Board of Directors authorized the acceleration of the $300,000 share repurchase plan. On that day, the Company's Board also authorized an additional program to repurchase up to $500,000 of the Company issued and outstanding ordinary shares and ADRs. The Company fully executed the $300,000 share repurchase program by December 31, 2024. The Company fully executed the $500,000 share repurchase program authorized on June 7, 2024, by December 31, 2025. On May 15, 2025, the Company's Board of Directors authorized an additional $500,000 share repurchase program of the Company issued and outstanding ordinary shares and ADRs.\n\nRepurchases may be made from time to time in the open market or in privately negotiated transactions in accordance with applicable securities laws and regulations. The timing and amount of the repurchase transactions will be determined by management and may depend on a variety of factors including market conditions, alternative investment opportunities and other considerations.\n\nThese programs do not obligate us to acquire any particular amount of ordinary shares and ADRs and each program may be modified or discontinued at any time without prior notice.\n\nF-50\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 15:-    DEBT\n\nExchangeable Senior Notes and Hedging Transactions\n\n2017 Notes\n\nIn January 2017, the Company issued $287,500 aggregate principal amount of 2017 Notes due 2024.\n\nIn the event that the last reported sale price of the company’s ADS for at least 20 trading days (whether consecutive or not) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the exchange price (\"Share Price Condition\") or in the event of the satisfaction of certain other conditions, during set periods, as defined in the indenture governing the Notes, the holders of the exchangeable senior notes had the option to exchange the Notes for (at the Company's election) (i) cash, (ii) ADSs or (iii) a combination thereof.\n\nAs of December 31, 2023, the Share Price Condition for the 2017 Notes was triggered and, accordingly, the net carrying amount of these 2017 Notes was presented in current liabilities.\n\nThe Company had the ability to provide additional ADSs upon conversion if there is a \"Make-Whole Fundamental Change\" in the Company as defined in the indenture governing the 2017 Notes. The 2017 Notes were not redeemable by the Company prior to the maturity date apart from certain cases as set forth in the indenture governing the notes.\n\nOn December 31, 2021, the Company entered into the First Supplemental Indenture. In accordance with the First Supplemental Indenture, the Company irrevocably elected cash settlement for the principal and any premium due upon conversion (as defined in the 2017 Indenture) to apply to all conversions of 2017 Notes with an Exchange Date (as defined in the 2017 Indenture) that occurs on or after December 31, 2021.\n\nAs a result of the requirement to deliver cash to settle the principal and any premium due upon conversion, on December 31, 2021, the Company reclassified from equity to liability the conversion option (a derivative) fair value of $292,940. The conversion option will be no longer eligible for ASC 815 scope exception. Therefore, a derivative accounting for the conversion option was required.\n\nDebt issuance costs of $5,791 attributable to the 2017 Notes were amortized as interest expense over the contractual term of the notes using the effective interest rate.\n\nInterest was payable on the debentures semi-annually at the cash coupon rate, however, the remaining debt discount was amortized as additional non-cash interest expense using an effective annual interest rate equal to the Company's estimated nonconvertible debt borrowing rate at the time of issuance.\n\nThe Company received notice for conversion of $87,427 of principal amount of the 2017 Notes in 2024, for which $87,435 was settled in 2024. The Company paid the note holders the conversion value of the notes in cash. The cash conversion premium payment upon conversion of the 2017 Notes was offset by cash under the convertible bond hedge transaction (a derivative) entered into in connection with the offering of the 2017 Notes.\n\nIn January 2024, the Company settled the entire 2017 Notes in cash, reflecting both the principal amount in the sum of $87,435 and the conversion option in the sum of $104,673. As such, the Company settled the associated debt hedge asset in the total amount of $104,673, using the resulting proceeds to repay the outstanding debt.\n\n2020 Notes\n\nF-51\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 15:- DEBT (Cont.)\n\nIn August 2020, the Company issued $460,000 aggregate principal amount of exchangeable senior notes (the \"2020 Notes\" and together with the 2017 Notes, the \"Notes\") due 2025.\n\nIn the event that the Share Price Condition was satisfied or in the event of the satisfaction of certain other conditions, during set periods, set forth in the indenture governing the 2020 Notes, the holders of the exchangeable senior notes had the option to exchange the Notes for (at the Company's election) (i) cash, (ii) ADSs or (iii) a combination thereof.\n\nOn December 31, 2021, the Company irrevocably elected that all conversions occurring on or after December 31, 2021, will be settled pursuant to a Combination Settlement (as defined in the 2020 Indenture) with a Specified Dollar Amount (as defined in the 2020 Indenture) no less than $1,000 per $1,000 principal amount of 2020 Notes. Generally, under this settlement method, the conversion value corresponding to the principal amount will be converted in cash, and the conversion value over the principal amount will be settled, at the Company’s election, in cash or shares or a combination thereof.\n\nThe 2020 Notes were redeemable by the Company on or after September 21, 2023 upon the fulfillment of the Share Price Condition for cash in relation to the principal amount, and the conversion value over the principal amount could be settled, at the Company's election, in (i) cash, (ii) ADSs or (iii) a combination thereof, apart from certain cases as set forth in the indenture governing the Notes.\n\nThe 2020 Notes did not bear interest, however, the remaining debt discount was being amortized as additional non-cash interest expense using an effective annual interest rate.\n\nDebt issuance costs of $8,574 attributable to the 2020 Notes were amortized as interest expense over the contractual term of the 2020 Notes using the effective interest rate.\n\nThe 2020 Notes fully matured on September 15, 2025 and were settled in cash in the amount of $460,000.\n\nThe carrying values of the liability of the Notes are reflected in the Company's accompanying consolidated balance sheets as follows:\n\n2020 Notes\n\nDecember 31,\n\n20252024\n\nPrincipal$— $460,000 \n\nConversion option (Level 2)\n\nLess:\n\nDebt issuance costs, net of amortization— (1,209)\n\nUnamortized discount— — \n\nNet liability carrying amount$— $458,791 \n\nF-52\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 15:- DEBT (Cont.)\n\nInterest expense related to the Notes is reflected on the accompanying consolidated statements of income as follows:\n\n2020 Notes2017 Notes\n\nYear Ended December 31,Year Ended December 31,\n\n202520242023202520242023\n\nAmortization of debt issuance costs$1,210 $1,710 $1,699 $— $14 $316 \n\nNon-cash amortization of debt discount— — — — 110 2,600 \n\nInterest expense— — — — 46 1,101 \n\nLoss in respect of convertible loan extinguishment— — — — 53 \n\nTotal interest expense recognized$1,210 $1,710 $1,699 $— $170 $4,070 \n\nEffective interest rate0.37 %0.37 %0.37 %— %4.65 %4.65 %\n\nExchangeable notes hedge transactions\n\nIn connection with the pricing of the 2017 Notes, the Company entered into privately negotiated exchangeable note hedge transactions with some of the initial purchasers and/or their respective affiliates (the \"Option Counterparties\").\n\nSubject to customary anti-dilution adjustments substantially similar to those applicable to the 2017 Notes, the exchangeable note hedge transactions covered the number of ADSs that underlined the 2017 Notes.\n\nThe note hedge transactions were generally expected to reduce cash payments the Company was required to make in excess of the principal amount, in each case, upon any exchange of the 2017 Notes.\n\nAs stated above, the Company irrevocably elected cash settlement to apply to all conversions of 2017 Notes with an Exchange Date (as defined in the 2017 Indenture) that occurs on or after December 31, 2021.\n\nConversion notices received on and after December 31, 2021 relating to the 2017 Notes was fully settled in cash, and amounts paid in excess of the principal amount were offset by an equal receipt of cash under the convertible bond hedge.\n\nAs a result of the irrevocable cash election, on December 31, 2021, the Company reclassified from equity to derivative asset the remaining bond hedge fair value of $292,940 (Level 2).\n\nConcurrently with the Company's entry into the exchangeable note hedge transactions, the Company entered into warrant transactions with the Option Counterparties relating to the same number of ADSs (3,457,475), with a strike price of $101.82 per ADS, subject to customary anti‑dilution adjustments. The warrants were classified to equity.\n\nDuring 2024, the warrants were exercised into 1,513,183 ordinary shares.\n\nF-53\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 16:-    REPORTABLE SEGMENTS AND GEOGRAPHICAL INFORMATION\n\na.Reportable segments:\n\nASC 280, \"Segment Reporting\"' establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is\n\navailable that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.\n\nIn November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This standard updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance on an interim and annual basis. The Company adopted ASU 2023-07 during the year ended December 31, 2024, on a retrospective basis.\n\nThe Company reports its financial results for our two reportable segments: Customer Engagement and Financial Crime and Compliance.\n\nThe Customer Engagement segment includes CXone Mpower platform that empowers organizations to automate service at scale, augment the workforce with AI-powered solutions, and unify enterprise knowledge, data and AI models to drive faster resolutions and superior customer experiences.\n\nThe Financial Crime and Compliance Segment includes embedded-AI solutions that identify risks and help prevent money laundering and fraud, as well as help ensure financial markets compliance in real-time.\n\nThe Company's chief executive officer is its chief operating decision maker (CODM), who allocates resources to and assesses the performance of each operating segment using information about the operating segment's revenue and operating income.\n\nThe following table sets forth segment information of revenue, expenses, and operating income:\n\nF-54\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 16:- REPORTABLE SEGMENTS AND GEOGRAPHICAL INFORMATION (Cont.)\n\nYear ended December 31, 2025\n\nCustomer Engagement\nFinancial Crime and ComplianceNot\nallocatedTotal\n\nRevenues$2,459,974 $485,425 $— 2,945,399 \n\nCost of Cloud (1)\n676,020 95,034 \n\nCost of Services (1)\n122,099 72,458 \n\nCost of Product (1)\n16,355 4,385 \n\nOther segment items (1,2)\n980,425 146,701 \n\nOperating income$665,075 $166,847 $(186,164)$645,758 \n\nFinancial income and other, net\n58,259 \n\nIncome before taxes on income\n$704,017 \n\n(1) Includes depreciation and amortization expense. Depreciation and amortization expense totaled $161,050 and $22,400 in respect of the Customer Engagement and Financial Crime and Compliance segments, respectively.\n\n(2) Other segment items represent mainly cost of wages, maintenance expense, professional services expense, marketing expense, depreciation and amortization expense, and other expenses.\n\nYear ended December 31, 2024\n\nCustomer Engagement\nFinancial Crime and ComplianceNot\nallocatedTotal\n\nRevenues$2,281,781 $453,491 $— $2,735,272 \n\nCost of Cloud (1)\n620,919 74,125 \n\nCost of Services (1)\n124,250 58,127 \n\nCost of Product (1)\n17,926 3,124 \n\nOther segment items (1,2)\n944,352 159,819 \n\nOperating income$574,334 $158,296 $(186,676)$545,954 \n\nFinancial income and other, net\n58,872 \n\nIncome before taxes on income\n$604,826 \n\nF-55\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 16:- REPORTABLE SEGMENTS AND GEOGRAPHICAL INFORMATION (Cont.)\n\n(1) Includes depreciation and amortization expense. Depreciation and amortization expense totaled $174,659 and $20,985 in respect of the Customer Engagement and Financial Crime and Compliance segments, respectively.\n\n(2) Other segment items represent mainly cost of wages, maintenance expense, professional services expense, marketing expense, depreciation and amortization expense, and other expenses.\n\nYear ended December 31, 2023\n\nCustomer Engagement\n\nFinancial Crime and Compliance\nNot\nallocatedTotal\n\nRevenues$1,974,090 $403,418 $— $2,377,508 \n\nCost of Cloud (1)\n496,516 58,618 \n\nCost of Services (1)\n132,069 56,190 \n\nCost of Product (1)\n17,804 3,259 \n\nOther segment items (1,2)\n870,908 156,328 \n\nOperating income$456,793 $129,023 $(150,589)$435,227 \n\nFinancial income and other, net\n22,473 \n\nIncome before taxes on income\n$457,700 \n\n(1) Includes depreciation and amortization expense. Depreciation and amortization expense totaled $143,585 and $15,757 in respect of the Customer Engagement and Financial Crime and Compliance segments, respectively.\n\n(2) Other segment items represent mainly cost of wages, maintenance expense, professional services expense, marketing expense, depreciation and amortization expense, and other expenses.\n\nThe following table presents property and equipment as of December 31, 2025 and 2024, based on operational segments:                        \n\nDecember 31,\n\n20252024\n\nCustomer Engagement\n$158,829 $147,869 \n\nFinancial Crime and Compliance28,949 35,624 \n\nNon-allocated1,617 1,799 \n\n189,395 $185,292 \n\nF-56\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 16:- REPORTABLE SEGMENTS AND GEOGRAPHICAL INFORMATION (Cont.)\n\nb.Geographical information:\n\nTotal revenues from external customers on the basis of the Company's geographical areas are as follows:\n\nYear Ended December 31,\n\n202520242023\n\nAmericas, principally the US$2,465,646 $2,321,524 $1,986,634 \n\nEMEA (*)321,609 275,009 244,523 \n\nIsrael3,462 3,053 3,508 \n\nAsia Pacific154,682 135,686 142,843 \n\n$2,945,399 $2,735,272 $2,377,508 \n\nThe following presents property and equipment and operating lease right-of-use assets as of December 31, 2025 and 2024, based on geographical areas:\n\nDecember 31,\n\n20252024\n\nAmericas, principally the US$110,818 $132,115 \n\nEMEA (*)18,065 12,509 \n\nIsrael121,806 118,786 \n\nAsia Pacific16,770 14,965 \n\n$267,459 $278,375 \n\n(*) Includes Europe, the Middle East (excluding Israel) and Africa.\n\nNOTE 17:-    SELECTED STATEMENTS OF INCOME DATA\n\na.Research and development, net:\n\nYear Ended December 31,\n\n202520242023\n\nTotal costs$441,252 $432,355 $386,745 \n\nLess - grants and participations(1,878)(1,961)(2,441)\n\nLess - capitalization of software development costs(78,924)(69,787)(61,596)\n\n$360,450 $360,607 $322,708 \n\nF-57\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 17:-    SELECTED STATEMENTS OF INCOME DATA (Cont.)\n\nb.Financial expenses and other, net:\n\nYear Ended December 31,\n\n202520242023\n\nFinancial income:\n\nInterest and amortization/accretion of premium/discount on marketable securities, net$32,446 $40,482 $13,813 \n\nExchange rates differences7,226 — — \n\nInterest income\n22,025 24,501 20,260 \n\n61,697 64,983 34,073 \n\nFinancial expenses:\n\nInterest expense\n— (46)(1,101)\n\nLoss in respect of debt extinguishment— — (53)\n\nDebt issuance costs amortization(1,210)(1,724)(2,015)\n\nExchangeable senior notes amortization of discount— (110)(2,600)\n\nExchange rates differences— (466)(3,297)\n\nOther(2,657)(3,390)(2,412)\n\n(3,867)(5,736)(11,478)\n\nOther Income (expenses), net\n429 (375)(122)\n\n$58,259 $58,872 $22,473 \n\nc.Net earnings per share:\n\nThe following table sets forth the computation of basic and diluted net earnings per share:\n\n1.Numerator:\n\nYear Ended December 31,\n\n202520242023\n\nNet income to ordinary shareholders$612,101 $442,588 $338,301 \n\nF-58\n\nNICE LTD. AND ITS SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nU.S. dollars in thousands (except share and per share data)\n\nNOTE 17:-    SELECTED STATEMENTS OF INCOME DATA (Cont.)\n\n2.Denominator (in thousands):\n\nYear Ended December 31,\n\n202520242023\n\nDenominator for basic net earnings per share:\n\nWeighted average number of shares (thousand)62,333 63,483 63,590 \n\nEffect of dilutive securities:\n\nAdd - Employee stock options, RSU and ESPP\n990 1,172 995 \n\nWarrants issued in the exchangeable notes transaction— 851 1,680 \n\nDenominator for diluted net earnings per share - adjusted weighted average shares (thousand)63,323 65,506 66,265 \n\nNOTE 18:-    RELATED PARTY BALANCES AND TRANSACTIONS\n\nAs of December 31, 2024, the 2020 Subsidiary's CEO held 12.04% of the 2020 Subsidiary, which reflects $5,406 of the non-controlling amount on the balance sheet as of December 31, 2024.\n\nOn January 16, 2025, the Company acquired an additional 29.9% in the 2020 Subsidiary. Upon consummation of the acquisition, the 2020 Subsidiary became a wholly-owned subsidiary of the Company.\n\nNOTE 19:-    SUBSEQUENT EVENTS\n\nOn February 18, 2026, the Company's Board of Directors approved an additional $600,000 share repurchase program.\n\nOn February 18, 2026, the Company's Board of Directors adopted an extension and amendment to the 2016 Share Incentive Plan.\n\nOn February 20, 2026, the Company and a US subsidiary as a borrower, completed the closing of a secured credit agreement providing for a $300,000 revolving credit facility. The facility requires a parent guarantee from the Company. As of the date these financial statements were issued, no amounts were drawn.\n\nF-59\n\nSIGNATURES\n\nThe registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.\n\nNICE LTD.\n\nBy:\n/s/ Scott Russell\n\nScott Russell\n\nChief Executive Officer\n\nDate:  February 26, 2026\n\n109"}