Welcome to NICE Systems Conference Call discussing the First Quarter 2015 Results and thank you all for holding. All participants are at present in a listen only mode. Following the managements formal presentation instructions will be given for the question and answer session. As a reminder this conference is being recorded, May 7, 2015. I would now like to turn this call over to Mr. Marty Cohen, VP, Investor Relations at NICE. Please go ahead.

Thank you, operator. With me on the call today are Barak Eilam, Chief Executive Officer; Sarit Sagiv, Chief Financial Officer and Eran Liron, Executive Vice President, Marketing and Corporate Development. Before we start, I would like to point out that some of the statements made on this call will constitute forward-looking statements. In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, please be advised that the company’s actual results could differ materially from these forward-looking statements. Additional information regarding the factors that could cause actual results or the performance of the company to differ materially is contained in the section entitled Risks Factors in Item 3 of the company’s 2014 Annual Report on Form 20-F as filed with the Securities and Exchange Commission on April 02, 2015. During today’s call, we will present a more detailed discussion of first quarter 2015 results and the company’s guidance for the second quarter and full year 2015. Following our comments, there will be an opportunity for questions. Let me remind you that unless otherwise noted on this call, we will be commenting on our adjusted results of operations which differ in certain respects from Generally Accepted Accounting Principles as reflected mainly in accounting for acquisition-related revenues and expenses, amortization of intangible assets and accounting for stock-based compensation. The difference between the non-GAAP adjusted results and the equivalent GAAP figures are detailed in today’s press release. Before I turn it over to Barak, I would like to remind you that we are hosting our Investor Day on June 1 and June 2 conjunction with our with our annual user conference in San Antonio. There is a special program for analysts and investors. It will include meetings with NICE executives, presentations from customers, products and technology sessions and access to the solutions showcase. If you haven haven't registered and would like to do so, please email us at IR@nice.com. And now I will turn it over to Barak.

Thank you, Marty, and welcome, everyone. I am glad to be on the call with you today. It has now been one year since I first spoke to you after taking on my new role as CEO of NICE. It has been quite a journey and I believe we have made some real good progress during this time. Let me highlight some of our accomplishments during the past year. We have a new management team on board who are executing well. We have a solid strategic and operational plan in place. We have realigned internal processes from R&D to sales which has improved efficiency and productivity. We have put in place a more effective go to market strategy leading to better execution and we have continued to strengthen innovation with new products as well as bringing these products faster to the market. All of this has led to better topline results and much improved profitability. On that note, I am pleased to report another strong quarter. For the first quarter just ended, we reported revenue of $246 million which represented 7.5% growth compared to the first quarter of last year. First-quarter revenue results included a negative impact negative impact of from foreign exchange rates. Revenue growth would have been 10% excluding this impact, exceeding our guidance. While we expect foreign exchange rates to continue to have a negative impact on our revenue going forward, we are not lowering our annual guidance. On the contrary, given the strength of our business, we are reiterating our revenue guidance and increasing EPS guidance for the year. Our earnings per share came in at the high-end of our guidance range at $0.72 per share representing a substantial 26% increase year-over-year. This strong profitability reflects the continued success of our execution to drive growth in…

Thank you, Barak, and good day to everyone. I am excited to be here today on my first earnings call at NICE. I look forward to meeting many of you at upcoming investor events. Now I will provide you with an analysis of our financial results and business performance for the first quarter of 2015 as well as our outlook for the second quarter and full year of 2015. Revenues for the first quarter were $246 million, up 7.5% organically from $229 million in Q1 last year. Excluding the effect of foreign currency exchange rates, organic growth would have been 10% in the first quarter, exceeding our guidance. Customer interactions revenue increased 9% in the quarter to $152 million. Financial crime and compliance revenues were $50 million representing 17% growth over Q1 last year and security revenue reached $44 million in the first quarter of 2015 compared to $47 million last year. Moving to the regional breakdown, the Americas region continued to be strong generating revenues of $164 million and representing 11% growth from Q1 2014. Revenues in EMEA increased 7% from last year to $57 million in Q1. Excluding the negative impact of foreign exchange, EMEA revenue growth would have been 14%. Revenues for Asia-Pacific region were $25 million compared with $27 million in Q1 last year. Looking at revenues by business line, product revenues increased 17% in Q1 and accounted for 37% of total revenue. Maintenance revenues accounted for 40% of total revenues in Q1 and professional services including cloud, accounted for the remaining 23% of total revenues in the quarter. Gross margin in Q1 was 67.9% compared to 65.4% in Q1 last year. The gross margin improvement was the result of the more favorable product mix and the increase of 17% in product revenues. As we previously…

Thank you. [Indiscernible] Our first question comes from the line of Shaul Eyal. Your line is open.

Thank you, operator. Good afternoon, Barak, Marty. Sarit, welcome on board congrats on kicking off the year with a strong set of results. Just a few quick questions on my end. Barak, earlier this morning and I know you indicated it just a minute ago, NICE had several product announcements. On the Employee Engagement Manager, is that product comparable to ClickSoftware by any chance?

Thank you, Shaul, for the kind words and also for the question. Let me explain to you what exactly Employee Engagement Manager doing and this is not exactly what you mentioned ClickSoftware is doing. They are operating or they are actually working in a very different domain of scheduling or actually technician, field service and we are not playing in this domain. Employee Engagement Manager actually takes the existing Workforce Optimization suite that we have specifically around workforce management and scheduling and take something into today's environment of the workforce stepping into a customer service center, we see the millennial generation stepping into the workforce these days, they have very different expectations and habits as I have mentioned starting from ability, agility, the demand for change things very frequently which makes scheduling forecasting a very different task. This is basically allowing us now to go back to our customer base and offering this capability with accelerating upgrades with incremental revenue over here and fitting them into the new employee generation that is stepping into the workforce as I said.

Got it. This is very helpful, thank you for that. Barak, what is the current thinking on cyber security and expanding NICE's reach in that respect?

Yes, as I mentioned before, the place where we see cyber plays for us and we see it plays very nicely is actually more [Indiscernible] but right now we see high demand on the Actimize front. As I said, there is a convergence right now with enterprises into the area of fraud, fraud and cyber starting to converge in terms of the buyer's budget and most importantly, the pain from customers. We are actually leveraging the fact that we already have a product, actually a platform installed in the top financial institutions. We are monitoring today hundreds of millions of user profiles already. Each transaction of them and are now integrating them with information coming from outside of the perimeter of the bank allowing to find or give a solution that actually combine fraud and cyber. And I think the good news for us is the fact that we already have a go-to-market team in place. Our sales team on that front is already talking for the last few years and selling in the last few years to these exact buyers so we don't need to build the new go-to-market team for that but rather leveraging on the existing go-to-market efforts that we have. Lastly I will mention the brand, the brand of NICE Actimize in those financial services is a very strong brand and expanding from fraud to cyber is a very natural move for us.

That makes sense. Just final question for Sarit if I may. This is the second quarter or even the third quarter in a row where product revenue is exceeding guidance very nicely. Should we be thinking over the past two quarters from a mix perspective as being indicative of future quarters? Thank you for that.

You know, the product mix is something that can fluctuate from quarter to quarter so indeed we saw in the last two quarters, Q4 normally very high generally speaking and on the product side as well and we see this also in Q1 but again going forward it can fluctuate from quarter to quarter.

Got it. Thank you. Welcome on board. Good luck. Good work.

Thank you.

Thank you, Shaul.

Next question is from the line of Daniel Ives. Please go ahead.

Thanks, great quarter again. Barak, could you just talk about maybe changes you are seeing from customers or in the field in terms of looking to deploy more analytic software really across the board? You sure are seeing some changes out there. Obviously it is reflected in the numbers. Maybe you could talk about it just from a customer interaction perspective.

Yes, absolutely, Daniel. Thank you for the question. So we continue to see as I mentioned a strong demand for analytics solution. We are also expanding the portfolio on the analytics front for several quarters now but also the demand is growing. And I attribute that to several reasons. First of all, the fact that we are expanding our offering for more than one touch point and the fact today that the consumer or customer service and customer interaction is done across all channels and there is a strong need to connect them and to look at it from the customer eye, this is one of the reasons why analytics play a more significant role. The second thing is the amount of data that we are today managed for our customers. We manage a lot of data, we have a hurdle, we managed together a lot of data for them on the platforms whether it is on the Actimize front, on the security front or on the customer interaction front and customers today understand more and more that after storing this information for so many years, there is an opportunity over here with analytical capabilities to do way more and I think that is something that was in the past seems to be more of a mission impossible becoming much more of a mainstream today. The last reason why I think we see growing demand from customers for analytics solutions is the real time front. The fact that analytics now is being much more operationalized to the users that are using today and for many of our systems, and it has a significant impact on their ongoing operations. In order to do that, you actually need to take an analytical capability that were much more of an off-line in the past to real-time capabilities that we offer today which for us is a great opportunity because it is expanding the addressable market quite significantly from a handful of users or a few dozen of users within an organization to the real estate of thousands and sometimes tens of thousands of users in each enterprise.

Okay, thanks a lot.

Thank you.

Next question from the line of Greg McDowell. Your line is open.

Great. Thank you. Just one quick question. Barak, I was wondering if you could talk a little bit more about the competitive replacements that you mentioned in the prepared remarks? It sounds like the competitive replacements are accelerating and I was hoping you could just talk a little bit about whether you feel like the competition is getting that much weaker or whether your product set and product solutions are just getting that much stronger? Thank you very much.

Greg, thank you for the question. I definitely can - for our sales people that might be listening to the call, I will attribute this achievement to them and kudos to them. But I believe that in parallel to their efforts, a lot of it goes to our portfolio and what we have done in the last few quarters. We have basically as you know, accelerated product releases in the last few quarters but it is not just about expanding or releasing more products, it is about the connection between those products. What we offer today more and more to our customers is a full portfolio, a full suite of products covering a variety of buyers in a variety of areas. So what we see is that in many of those competitive situations, we in many times displace a point solution in one area with a full portfolio and the competition on the other side have a hard time to compete with the full portfolio that we have to offer and it does so for us as quite a competitive edge. The other scenario is we are deployed in one area even in a small footprint and the customer understands after we educate a customer about the potential to take that footprint and make it a full platform for the enterprise and in that effort, we find ourselves through the expansion displacing or replacing sometime one, sometime several competitors all at once.

That’s helpful. Thank you.

Thank you. Next question is from the line of Paul Coster. Your line is open.

Thanks. You have talked of improvements in your operating margins thanks in part to some operating expense containment activity. Can you just talk us through what it is and where we stand in terms of the plan there?

Thank you for the question, Paul. Indeed we see a sequential and year-over-year improvement in the expense management and as a result of that in the operating margin. And it is very much aligned with the plan that we have put about a year ago to improve the operating margin and the profitability of the Company. It has many elements to the plan to name a few of them. So part of it comes as I said from the gross margin we take today projects that are a bit more profitable and we see it in the changes of the product mix. We hope we can continue to do that also in the future. I believe we can. The other element of that goes to a variety of operational aspects that we have done, streamlining a variety of aspects in the Company, creating morning more shared services which are not just impacting positively the cost element but also the fact that it makes it much easier for us to do business in such a streamlined operation. Lastly, I would say it is a lot about discipline that we have, spending the money on the right things, spending the money on the business, not saving of course on product releases. As you see, we are investing allotting innovation and I believe this improvement will continue as we shared with you our plans several quarters ago.

And do you consider it 50% done, 70% done?

We don't share exactly where are we with the plan. I will say that the plan has several dimensions to it. Some of them are more low hanging fruit and I believe those we are much into them. And the other thing that takes a bit longer time because they are a bit more significant in restructuring and other, we will see the impact of those results coming later in the year and also next year.

Okay. Last question, on the fraud management side, I think I heard you talk of creating a hub that I imagine creates some kind of network effect for your customers, is that true? What is the business model associated with it?

Yes, the concept is basically taking the many assets that we already have today and some of them are already deployed with many of our high-end financial institution customers on the financial crime and compliance business. So we already have many fraud components especially the users profile that I have mentioned before that we are managing today and gathering data . We are connected today to dozens and hundreds of sources of information information. We don't leverage on all of them and there is an opportunity for us to do more on that front. And the other, the third aspect connecting into the fraud hub is the other things that are outside of the perimeter of the bank coming from more of a network or information element. And when you combine all of them in the context, we decided to combine them in the context of the fraud aspect. It covers cyber but the business benefit if you would like is on the fraud side because eventually when you are trying to prevent cyber activities, the main business problem you are trying to solve is obviously to stop fraud and this is a direction that we are coming from on the enterprise side of our business

What is the business model associated with this, is it a recurring revenue subscription business?

The business model is very similar to what we have today. There is, we have two flavors of that. One is the perpetual license as we have done many times in the past but we are also doing this business some term license that looks very similar to a subscription business.

Alright. Thanks so much.

Thank you, Paul.

Next question is from the line of Jonathan Ho. Your line is open.

Good morning and congratulations on the strong results. Just wanted to start out with essentially - could you give us the currency impact on the OpEx lines? I know you guys are pretty hedged but just want to understand what that was?

Jonathan, we didn't see a large impact of currency on the bottom line and we are hedging normally for the ILS for the shekel. For most other currencies, we have a natural hedge with the costs against the revenue and we look at the impact of the currencies on the operating margin and there wasn't a large impact there.

Got it, got it. And then just in terms of the management changes that you guys sort of put into place over the course of this year, what has been the most effective set of changes? And do you see sort of further opportunity with these changes? I just want to understand so much of the operating expenses are in restructuring, what you see in terms of the opportunity on the management side?

So if you look on the last year, a bit more than a year since I stepped into my role, we have changed, I have changed give or take half of the management team and the new executives as well as the other executives, what I believe today we have a very strong team, a very seasoned executive that brings to the Company a lot of expertise that we didn't have in the past. In the scale of the business, understanding enterprises, [Indiscernible] in international markets. Also you are seeing a change in the mix of the executive we have in the company. We have much more balance in terms of the geographical location of the executive and much less centralized in Israel. And I believe today we have the right team in place. They are working very well together. Obviously each and every one of those executives driving their own changes in the organization, many of them are already in place and I am sure we will see a continuous improvement thanks to the changes and the spirit they brought to NICE.

Got it. And just one last one on my side. In terms of the analytics, clearly this is a strong growth driver for the business, I'm just trying to understand a little bit better where you think the customer base is in terms of the maturation curve and do think ultimately all of your customers end up using some type of analytics solution?

Yes, it is a very good question. One of our biggest assets in the company, a company that next year is going to celebrate 30 years since its foundation, is the fact that we have a very large customer base And it is not just the customer base, it seems we are working in many of the territories in a direct manner, in direct go-to-market, it is a customer base where we have direct relationship with and there is a constant account management to many of those customers. Second to that or second thing on that is that we are very much at the high-end of the market, if you look on the numbers of Fortune 100 and Fortune 500 customers that we have. Thirdly, as I said for many years, we have been managing a lot of data for those customers and we started our analytics journeys several years back and I think we should be pretty satisfied with the progress, still the opportunity is very significant. Many of our customers - I don't know the exact number from the top of my head - but many of our customers already have some solution or some flavor of analytics added to their platform but the opportunity ahead is very significant because A, it is still a long way to go for them to adapt the full analytics suite. And even if they do so, the pace that we will release new products, new packages in addition allows us to go further and expand on the analytics front.

Great. Thank you.

Next question is from the line of Dan Bergstrom. Your line is open.

Thanks for taking my question. Deferred revenue was strong in the quarter more so from a Q4 to Q1 perspective than historically. What are some of the trends or drivers behind this?

The main growth is attributed to the maintenance contract that is normally - at the beginning of every year, we sign the maintenance for the year to come and the increase in deferred revenue is mainly attributed to that.

Great. Thank you.

Thanks, Dan.

Thank you. Moving on. Our next question is from the line of Tavy Rosner. Your line is open.

Thank you for taking my question. Barak, I have kind of a big picture question. When I take all of the elements you mentioned, the addressable market in analytics, your go-to st0rategy and the fact that you guys posted 10% underlying growth this quarter, when do you think we can go back to seeing double-digit growth on kind of a constant basis?

So as you mentioned, we have a lot of moving parts, many of them are trending in the right direction. And as I showed in the strategy, our plan is to improve on all the indicators and as we have seen in the last few quarters both on the top line and the bottom line, we have a variety of opportunities. Our long-term model is obviously to see a double-digit growth and I think we are doing nice steps in the last few quarters in improving the organic growth and many other parameters in our business to do so so. We don't give a specific date and there are many elements over here but I believe that if we continue this way including releasing innovation, staying ahead of the curve on the product side, this is definitely something we are committed to get to down the road.

That is very helpful. Maybe just a housekeeping question on when I look at the guidance for 2015 EPS, what kind of share count does that imply?

The share count is changing depending on the buyback and the change in the options. I think you can look at the history trend and take an assumption. We finished Q1 with a count of 61 million shares in [Indiscernible].

Great. Thank you, guys.

Thank you.

Thank you. Next question is from the line of Tal Grant.

Congratulations on a strong quarter. Three questions from me please. First of all, I was wondering how much of the growth and products came from sales of the new NICE engage recording platform? And do you consider that as analytics when you talk about analytics growth? Secondly, I noticed services were down a couple of percent year on year which just seems a bit odd because products is up and presumably cloud revenues are up and they are included in services. So are you outsourcing more of that, is that part of the plan to get OpEx down as well? Finally, your trade receivables, your data days were down a lot year on year. They were similar to the Q4 rate. Is that the sort of rate we should expect going forward? Thank you.

Hi, Tal. Thank you for the question. I will take the first two and Sarit will refer to the trade receivables. So the first one on the growth side, so yes, we had a very nice growth on the product side. As we have mentioned, we saw very nice growth on the analytics front and NICE Engage obviously contributed to that as well. We seek good progress on the adoption of NICE Engage. We don’t expose specific numbers for competitive reasons but we are happy with the rogress on that front. To the second question with regards to the slight decline year-over-year on the services front, I don't think we need too much to - we don't see any different trend from the past on the services. It is closing of projects and other things. I don't think much needs to be attributed to that. I believe that the trend moving forward should be somewhat similar to what we have seen in the past. You have mentioned about being more selective, you hinted to being more selective on services. This is definitely something we are doing and we are looking carefully on the type of services we are taking. We have expanded very nicely the ecosystem around us and when applicable and when we see business more on the basic services of our business that we prefer to give to a partner of ours or a system integrator, we do that in the case that we are concerned that it will dilute our margins. So you will refer to the third one.

We had very good collection in Q1 and actually collected some of the big deals that we did recently and you can see this in the reduction in the AR but also you can see very nice operating cash flow of $104 million I mentioned earlier.

Next question, we are moving onto Jeff Kessler. Your line is open.

Thank you and congratulations on the good quarter. One of the things that we are looking at in product that you have been talking about is the change in the mix of product of strength particularly in analytics. And I am wondering as that area becomes stronger, particularly the compliance and fraud area, can you in a sense cross sell that compliance and fraud area with the customer engagement and workforce management area or even into it, not just to the same clients but to actually sell it into the same - into the same setups that you are already selling the workforce management and customer engagement products to as well?

Yes, so thank you for the question, Jeff. It is a very good question and we are doing actually quite a bit of that and promoting it quite a bit. The cross-selling of products and product capabilities between the different markets that we have, I will give you two examples that I didn't mention before but I did talk about in the previous quarter where we see a lot of positive dynamics in that area. One area is taking many of the capabilities we have on the financial crime and compliance, Actimize, and bringing some of those capabilities to our customer interaction business and here we have a very interesting combination taking our case management which is a very strong tool on the financial crime and compliance business and bringing it into service operation and back office operation and gives us a very strong competitive edge. In managing processes, either on the Frontal service, the customer service or on the back - the front and we have today our sales people on the customer interaction business selling the combined portfolio. About a year ago we removed the barriers, the go-to-market barriers and compensation barriers which are very minor but for the service team are very important and we saw a very nice improvement on that last year and I believe we will see more later on this year. So this is on one front. The other direction I will give one more example is actually taking the many capabilities we have today with analytics and voice analytics in the customer service domain and getting it another very important input into our holistic surveillance solution which brings a very strong solution that covers all dimensions of compliance. These are just two I believe very important use cases. Every day we come up with additional cross selling and integrating products from our portfolio. I think this is the benefit of having such a large portfolio. You have enough ingredients to come up with new capabilities coming from the integration of products every time we meet a new business spend from a customer.

While this may not be material to revenue gains at this point, it is a type of thing that obviously you are going to try to generate as a larger percentage of business given that you would love to have customer service reps being able to discern whether or not fraud is going on at the time they are servicing a customer?

Yes, absolutely. We see a potential in that. We actually have traction. We have deals on several fronts. One is the customer service is a channel to fraud, it is not the only channel to fraud but it is a very significant channel to fraud. I mean sometimes the fraud is actually not conducted through this channel but information is being extracted in the conversation with the customer service rep and then being used in our channel. The fact that today we are integrating all of those channels and we have capabilities we talked about in the past like authentication, real-time authentication and voice barometric capabilities, bringing all of those together into the capabilities that we have in fraud is definitely something that we see customers interested in and some of them are adopting as we speak.

Okay. One final question, with the almost exponential increase in the amount of data that your clients are taking back from you and also from the amount of data that you are managing, what is the state of number one, storage? Number two, checking what the health of that storage is for the amount of data that you are now responsible for even though I realize that customers take over most of their data. There is still some responsibility on your part, what are you doing to make sure that the storage is solid at this point and the health of that storage is being monitored all the time?

Jeff, this is actually a perfect question. I agree with you, data is growing exponentially and I don't see it declining or stopping anytime soon. We have responsibility, we are not a storage provider but we are definitely consumer and managing the data within that storage and there are several things that we have been doing throughout the years and also in the last few quarters with respect to that. The first one we have the expertise or the main expertise in managing large amounts of data. We have been doing it for two decades now before the actually the phrase "Big Data" came to the market. So we have the expertise in house. Second, we are using a lot of Big Data technology that today very much adapt to the exponential growth in storage and in data. And thirdly, is the fact that about a year ago a bit more than a year ago we opened a NOC center, a network operating center, giving our customers a service, allowing them basically that we are the one monitoring the health as you said, of our systems including the storage, including the integrity of data. And this is a service we see customers are buying from us more and more and helping us to be further engaged into their business which down the road obviously allows us to have tighter relationships with them and find more and more option [Indiscernible] opportunities.

Thank you very much

Thanks, Jeff.

Thank you. We have no further questions in the queue. I will now hand the call back to Barak for any concluding remarks.