Yield

Figures converted from ILS at historical FX rates — see data/company.json.fx_rates. Ratios, margins, and multiples are unitless and unchanged. NICE reports its financial statements in US dollars, so the cash-flow, FCF and balance-sheet figures here are identical to the native version; only the Tel Aviv share price and market value, quoted in shekels there, are shown in dollars.

Yield

On the framework's adjusted-FCF basis — reported free cash flow less stock-based compensation less the five-year average of acquisition spend — NICE yields about 2.9% on FY2025 figures, against the roughly 8–9% bar its net-cash balance sheet selects. Reported FCF yield looks like ~10.3%; the adjustment removes ~740 bps, most of it NICE's persistent acquisition spend. The name also sits below the framework's $10B market-cap floor.

The adjustment, line by line

NICE's structured cash-flow feed did not carry stock-based compensation or acquisition spend, and the deterministic feature file therefore reports adjusted FCF and its yield as not computable (fit_features.adjusted_fcf.latest_adjusted = null; not_computable.adjusted_fcf). The lines below are reconstructed directly from the filed consolidated statements of cash flows in the FY2021, FY2022 and FY2025 20-Fs, which is where these numbers live.

Adjusted FCF = reported FCF − stock-based compensation − trailing five-fiscal-year average of acquisition spend; figures in $M, derived from company filings. The five-year acquisition average needs a full FY2019–FY2025 window, so it is shown only for FY2023 onward. Reported FCF nets capex and capitalized internal-use software. Sources: FY2025 20-F Consolidated Statements of Cash Flows [1]; FY2022 20-F [2]; FY2021 20-F [3].

Two lines do the work. Stock-based compensation runs $146–183M a year — a genuine, recurring cost of paying employees that the cash-flow statement adds back to operating cash flow [4]. Acquisitions are the larger and lumpier item: $856.1M for Cognigy in 2025, $415.2M for LiveVox in 2023, against just $29.7M in 2022 [5]. Averaging five years is what the framework does to keep a single mega-deal from either flattering or wrecking one year's figure — and even smoothed, NICE's M&A habit costs about $302M a year against the FY2021–FY2025 window.

The result: FY2025 reported FCF of $622.8M becomes about $175M adjusted. FY2024 was the strongest recent year at $390.8M adjusted (a low acquisition year, before Cognigy loaded the average); FY2023 was $148.4M (LiveVox in the window). The three-year average of adjusted FCF is about $238M.

The yield, three ways

The denominator is NICE's market value in dollars, to match the dollar cash flow. The NASDAQ ADR closed at $101.34 on 22 July 2026, and with 63.3M shares that is a market value of about $6.4B; the Tel Aviv close of ₪291.8 on 21 July converts to about $6.0B at ₪→$ 0.326, and independent data services placed the market cap near $5.8–5.9B a few days earlier. The yield figures below use $6.0B; the conclusion holds anywhere in the $5.8–6.4B range.

Yields = FCF measure ÷ ~$6.0B market value. Reported FCF $622.8M; less SBC $476.8M; fully adjusted $175.0M; three-year average adjusted $238.1M. FCF components from the FY2025 20-F Cash Flow Statement [6]; market value derived from the NASDAQ ADR price and company.json.fx_rates.

The reported free-cash-flow yield of ~10.3% is the number that looks attractive after a 40% share-price fall. Strip out stock compensation and it is ~7.9%; strip out the averaged acquisition spend as well and the framework yield is ~2.9%. The three-year average adjusted yield is ~3.9%. The gap between the ~10% headline and the ~3% framework figure is the whole point of this tab: reported FCF overstates what NICE returns to owners once the cost of paying staff in stock and of buying growth is charged against it.

The company's own multi-year yield baseline cannot be built from this corpus. The price history available runs only from January 2026, so there is no series of fiscal-year-end prices to compute a five-to-seven-year yield distribution or to test the "stable low yield suddenly jumps" fortress signature (fit_features.yield_baseline is empty and flagged not computable). What can be said is narrower: the reported FCF yield widened as the price fell through 2026, but on the adjusted basis the yield never approached the fortress bar.

Which bar applies — the balance-sheet class

NICE carries no financial debt after 2025. The $460M of 0% exchangeable senior notes issued in 2020 and due 2025 were repaid in full during the year [7] [8]. Against that, year-end cash of $379.4M plus short-term investments of $38.0M give $417.4M of liquidity [9].

Net cash = $417.4M liquidity − $0 debt. EBITDA = FY2025 operating income $645.8M + depreciation & amortization $199.0M = $844.8M. Net debt / EBITDA = −$417.4M ÷ $844.8M = −0.49x. Sources: FY2025 20-F Balance Sheet [10] and Income Statement [11].

Net debt / EBITDA of −0.49x is comfortably net cash, so the balance sheet is a fortress, and the reference line is the ~8–9% bar the framework applies to net-cash names (its anchor is Microsoft, whose ~4% yield stretched toward 9% on an AI scare). NICE's ~2.9% adjusted yield sits roughly 530–610 bps below that 8–9% line. Even the SBC-only-adjusted yield of 7.9% is below it; only the fully unadjusted reported FCF yield of ~10.3% would clear it, and that is not the basis the framework uses. The feature file classes the balance sheet as unknown only because its inputs were missing FY2025 debt and cash; the filed statements resolve it to fortress.

Normalization — not cyclical, but M&A-sensitive

NICE is not a cyclical business, so no mid-cycle margin normalization is warranted: revenue is 76% recurring cloud, has risen every year in the record, and reported FCF margins have held in a 18–27% band [12]. The judgment call here is not the cycle but the acquisition line. If Cognigy is treated as a one-off strategic pivot into agentic AI rather than a run-rate cost, the five-year acquisition average ex-Cognigy falls to about $131M, and FY2025 adjusted FCF rises to about $346M — a ~5.7% yield. That is the most charitable reasonable normalization, and it still sits below the 8–9% fortress bar. The band across treatments is therefore roughly 2.9% (full framework) to 5.7% (ex-Cognigy) to 7.9% (SBC only) — under the bar throughout.

The consensus check

CapIQ consensus (pulled 23 July 2026) does not publish a framework-adjusted FCF number; the closest vendor metric is consensus free cash flow (mean), which is unadjusted — it charges neither SBC nor future M&A. On that reported-FCF proxy, consensus sees free cash flow rising from $589.8M in FY2026 to $829.1M by FY2029.

Consensus free cash flow (mean); reported-basis yield on ~$6.0B market value shown for context. FY2028 and FY2029 rest on 1–2 estimates and are thin. Source: consensus estimates, CapIQ pull 23 July 2026 (data/sp/estimates.json) — no filing page.

On the reported-FCF proxy, consensus forward yields run ~9.8% (FY2026) to ~13.8% (FY2029), which clears the fortress bar. Read at face value that is the "fear, not fundamentals" setup — the sell side already expects double-digit cash yields while the buy side has marked the stock down 40%. But the comparison is not like-for-like: apply the same adjustments used on the trailing figure — subtract ~$146M of SBC and NICE's ~$130–300M of habitual M&A — and consensus adjusted FCF lands around $310–490M, a ~5–8% adjusted yield, i.e. around or just below the fortress line rather than clearly above it. The framework's forward path therefore turns on one concession: NICE would have to substantially slow acquisitions and let the five-year average roll down while consensus FCF growth arrives. For the adjusted yield to reach 8% within three years, reported FCF would need to hit roughly consensus FY2028 levels (~$767M) and annual M&A drop toward zero. Given NICE's demonstrated serial-acquirer behaviour, the probability of the framework-adjusted yield clearing the 8% bar within 1–3 years is low-to-moderate — on the order of 1-in-3 — and it requires the acquisition engine to stop, which nothing in the record suggests it will.

FCF-to-revenue trend

Conversion is stable-to-improving on a reported basis, which does not undercut the business — it is the adjustment, not the operations, that pulls the yield down.

Reported FCF and adjusted FCF each ÷ total revenue. Revenue $2,181M (FY22) → $2,945M (FY25). Derived from company filings; revenue per FY2025 20-F Income Statement [13].

Reported FCF/revenue has climbed from 18.2% in FY2022 to a 21–27% band, with FY2025's 21.1% held back by working-capital timing rather than deterioration. Adjusted FCF/revenue is lower and lumpier (5.9%–14.3%), tracking the acquisition calendar rather than any operating decline. On the framework's falsifier — is FCF/EBITDA sliding where flat was underwritten — the answer is no: the reported conversion is not deteriorating. The pressure on the yield comes from the numerator's adjustments, not from a weakening business.

Where this leaves the yield pillar

NICE's market value of ~$6.0B is below the framework's $10B universe floor, which is a threshold question the Business tab owns; it is noted here because it frames the yield work. On yield itself: the balance sheet is a genuine fortress, which sets an 8–9% bar, and the adjusted free-cash-flow yield of ~2.9% (up to ~5.7% on the most charitable M&A treatment) sits below that bar under every reasonable adjustment. The reported ~10% yield that a screen would show is an SBC-and-M&A artifact. The forward path back over the bar exists on paper through consensus FCF growth, but it depends on NICE halting the acquisitions that define its strategy — a concession the record does not support. The buyback flywheel and share-count trajectory that would compound a high yield are examined in Self-Help; the drawdown and volume capitulation behind the depressed price are in Dislocation.