Welcome to the NICE conference call discussing second quarter 2019 results, and thank you all for holding. All participants are at present in a listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. As a reminder, this conference is being recorded August the eighth, 2019. 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, Beth Gaspich, Chief Financial Officer, and Eran Miron, Executive Vice President, Marketing and Corporate Development. Before we start, I'd 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 performance of the company to differ materially is contained in a section entitled Risk Factors in item three of the company's 2018 annual report on Form 20-F, as filed with the Securities and Exchange Commission on April 5th, 2019.
During today's call, we will present a more detailed discussion of second quarter 2019 results and the company's guidance for the third quarter and full year 2019. 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 differences between the non-GAAP adjusted results and the equivalent GAAP figures are detailed in today's press release. I'll turn the call over to Barak.
Thank you, Marty, and welcome everyone. I'm glad to be on the call with you today. We are pleased to report another strong quarter across the board, including all key financial metrics. Total revenue increased 11% to $381 million, driven by another strong quarter in both product and cloud revenue. Product revenue increased 25% and cloud revenue grew 30% in Q2. The strong top-line results led to a further increase in profitability. Operating income was $101 million, which was an increase of 14% compared to Q2 last year, and operating margin increased 74 basis points to 26.6% compared to the same period last year. These strong operating results led to a 14% increase in earnings per share to $1.25. Our success continues to be driven by an acceleration in cloud, analytics, and AI.
The cloud growth was very strong in both customer engagement and financial crime and compliance, and is being fueled by penetration into all segments of the market, including large enterprises, where we have witnessed robust demand and strong growth. Meanwhile, we are seeing significant expansion of our partnerships around the globe and at the same time, maintaining an acute focus on product innovation. CXone continues to drive the success of our cloud business. CXone is unique in that it is the first and only true native cloud platform that seamlessly incorporates the market-leading omni-channel routing, workforce optimization, and analytics into a single platform. Last quarter, we announced the acquisition of Brand Embassy, which provides a significant expansion to CXone and makes it the most comprehensive platform for digital transformation in customer service. The new offering has already been launched to the market.
We continue to sign many new cloud customers across multiple segments of the market, including some very large enterprises. The deals included an eight-digit ACV deal with a financial services company, which was an end-to-end replacement of several on-premise providers. We also signed multiple CXone seven-digit ACV deals. For example, we closed a deal with a brokerage and investment advisory company, which is a new customer and a competitive replacement. We signed a deal with one of the largest retailers in the world as they continue to expand their relationship with NICE. There was another deal with an energy company, also a new customer and a competitive replacement, as well as an expansion deal with a state government agency where we replaced the incumbent. NICE Actimize drove meaningful cloud growth for financial crime and compliance.
Large deals in the quarter for our essential cloud-based solution included a global digital bank, a Canadian-based credit union, a U.S.-based bank specializing in small business lending, and a leading online brokerage firm. Augmenting the success of our cloud growth is the significant expansion of our ecosystem of partners, which is being fueled by our extensive portfolio of solutions and a large and increasing total addressable market in which we operate. One example is our CXone partner ecosystem through our DEVone and CXexchange programs. We now have 135 partners building on the platform. This extensive network provides our customers with endless solutions options. At the same time, it offers our partners the means to significantly expand their go-to-market and provides us an excellent vehicle for M&A. Similar to our acquisition of Brand Embassy, which was a DEVone partner.
We also have many successful go-to-market partnerships with various UCaaS providers, telcos, and other resellers that allows us to cover this fast-growing market. This network continues to constantly expand, we are now further augmenting our partnership strategy with the recent announcement of a partnership with Atos, a global leader in digital transformation with over 110,000 employees in 73 countries. Atos is making CXone a preferred solution for contact center as a service and bringing CXone to the company's install base of hundreds of thousands of contact center agents across the globe, as well as to new customers. With Atos' largest global presence, we're excited about the potential to bring CXone to new customers around the globe, especially in Europe, where Atos has a very large customer base. This is a great opportunity to execute on our strategy of growing CXone in international markets.
We also recently announced an expanded collaboration with Microsoft. We introduced new integrations for Microsoft Teams, which is further enabling organizations to effortlessly collaborate with the contact center. Similar to the CXone marketplace, we announced the X-Sight Marketplace, the industry's first financial crime management focused marketplace. The X-Sight Marketplace initial solutions category includes ID verification, ultimate beneficial ownership, value-added data and adverse media, watchlist, device identification, and user authentication and fraud. Since the announcement of the new X-Sight Marketplace, less than two months ago, more than 20 solution providers have already signed up, including a specialist in cybersecurity, a provider of unique live streaming technology for biometric onboarding, and a provider known for its AI-powered risk management content solution. Along with partnering, we also continue to accelerate innovation, especially around analytics and AI.
In RPA, where we are seeing strong growth in very fast-growing market, we recently released a new version of RPA. This latest version incorporates deeper AI capabilities for extended automation discovery and real-time monitoring intelligence. In fact, NICE RPA was named the leader in Everest Group's PEAK Matrix for the second consecutive year, scoring high on both vision and capability and market impact. The most recent release of CXone end-to-end artificial intelligence capabilities included our new AI self-service bot option, new AI-infused focusing and scheduling options, and AI-powered interaction analytics. We've also added predictive behavioral routing for CXone. CXone now provides additional depth and breadth of CRM integration for delivering a more personalized customer experience. Another example of innovation includes the introduction of Actimize CDD-X, which modernizes KYC and CDD programs with advanced analytics and the power of AI.
NICE Actimize CDD-X leverages ActimizeWatch to apply machine learning to enhance the accuracy of risk rating using the collective intelligence of previous outcomes. Significant reduction in operational costs are realized for the innovative use of visualization and purpose-built intelligence automation to streamline customer review time by up to 70%. In Q2, we continued to sign several 7-digit deals incorporating cutting-edge analytics, including two largest deals with healthcare companies that included our analytics-powered compliance center solution. These deals, including many others during the quarter, were competitive replacements. We also signed a 7-digit deal with a major card processor for a portfolio of our financial crime and compliance solutions and a 7-digit deal with a major reinsurance and health solutions company for interaction analytics. This company is already a CXone customer, and this deal demonstrates the value of our customer's ability to extend on our platform.
We also signed a 7-digit analytics deal with one of the largest cruise lines in the world. In closing, we have the market-leading technologies driven by ongoing innovation through profoundly market-differentiating cloud platforms with CXone and X-Sight and a robust go-to-market fueled by an enterprise-class direct sales force and strong and expanding partnerships. These assets position us very well to capture the many growth opportunities ahead in an addressable market of $7 billion, growing to over $12 billion over the next few years. I will now turn the call over to Beth, who will review our financial results.
Thank you, Barak, and good day, everyone. I am pleased to provide the analysis of our financial results and business performance for the second quarter of 2019, as well as our outlook for the third quarter and full year 2019. Total revenue for the second quarter increased 11% to $381 million compared to $344 million in the same period of last year. Our total revenue growth was driven by further growth in the cloud, with 30% cloud growth in the second quarter of 2019, as well as an increase of 25% in product revenue. Our high percentage of recurring revenue continued to increase to 72% of total revenue, reflecting our strong cloud momentum. As we highlighted last quarter, our recurring revenue has grown to become a much larger portion of our total revenue.
Therefore, we expect both our revenue and our profitability to be more evenly distributed among the quarters this year. We also witnessed double-digit growth in both of our businesses. Customer Engagement revenues for the second quarter increased 11% to $313 million and represented 82% of our total revenues. Financial Crime and Compliance revenues increased 10% to $68 million and represented 18% of total revenues. Product revenues accounted for 16% of total revenue in the second quarter. Cloud revenues accounted for 38% of total revenue for the second quarter, which represents an increase from 32% in Q2 last year. Services revenue accounted for the remaining 46% of total revenue in the second quarter of 2019. Looking at geographies, Americas reached $307 million in the second quarter, EMEA, $48 million, and APAC, $26 million in the second quarter of 2019. Now to profitability.
Gross profit increased 12% to $271 million in the second quarter. Gross profit margin improved to 70.9% compared to 70.5% last year. The expansion in gross margin is a result of product mix. Cloud gross margin increased to 61.4% from 59.8% in Q1 2019. Operating income increased 14% to $101 million in the second quarter. Operating margin increased significantly to 26.6% compared to 25.8% in the same period of last year. The strong operating income and margin demonstrates the leverage in our model and our commitment to continue to expand profitability over time. Earnings per share for the second quarter increased 14% to $1.25 compared to $1.10 in the second quarter of last year. Total cash and financial investments were $867 million at the end of June 2019, and total debt was $460 million net of issuance cost and the equity component associated with our convertible debt.
I will conclude my remarks with our guidance. For the third quarter of 2019, we expect total revenue to be in a range of $380 million-$390 million. We expect third quarter 2019 fully diluted earnings per share to be in a range of $1.23-$1.33. We are increasing full year 2019 revenue to be in an expected range of $1,563 million-$1,583 million. We are increasing full year 2019 fully diluted earnings per share to be in an expected range of $5.13-$5.33. I will now turn the call over to the operator for questions. Operator?
Thank you. Everyone wishing to ask any questions, it is now star one on your phone. The first question we have from the line of Shaul Eyal from Oppenheimer & Co. Thank you, Shaul, you're live in the call.
Thank you so much. Good afternoon, guys. Congrats on the performance and the outlook. Barak, the number of seven- and eight-digit transaction keeps showing healthy momentum, but it's actually coming also from cloud-related transactions. I think that it would appear that the prior view a couple of years back was that cloud contracts are probably on a smaller scale, but you're actually showing us the opposite, and it's not only on CXone but on X-Sight as well. Help us reconcile this view. Is it rapid cloud adoption? Is it that enterprises are showing increased readiness to adopt such solutions? Is it improved TCO? And I have a follow-up.
Thanks for the question. Indeed, I think that you can see a growing trend in our last few quarters and this quarter is even more so about both the number as well as the magnitude in terms of size of our cloud deals. I spoke about an 8-figure ACV deal and multiple 7-figure ACV deals in the cloud. I think that the reason for that is a few reasons. First of all, the market adoption at the higher end of the market for cloud is growing dramatically, and we believe that we are taking a big share of that. The first one is the adoption. The second thing I would say is a combination of few things.
The fact that we are selling much more portfolio deals, the fact that the NICE's portfolio is very complete with both CXone and X-Sight, it gives us an opportunity to sell much larger deals with much more components. We believe that the market is buying into our vision and strategy, that it makes much more sense to go after the integrated set of solutions that we have given the steps that we've taken as a company. The second thing is the fact that it is a platform, it's much easier to consume it, and people are investing into the platform. As a result of that, we see much larger deals and much stronger long-term and larger commitments from customers.
Third, I think that there is a much more or better realization of customers, and that our solution is true, real native cloud solution versus some of what our competitors came out with a semi-cloud hosted solution and other things that they are defining cloud-like or semi-cloud, both on their financials as well as the market. The market just doesn't buy it. I think that you can see it in the multiple competitive replacement that I've mentioned on the previous remarks.
Understood. I have a follow-up, Barak, and maybe also Ran, Liron would like to comment on it. Yeah, last night, we've all read about the acquisition of ClickSoftware by Salesforce. Most of you know the inside out of ClickSoftware. We know it, its history. We also know the people at Francisco Partners, some of which come with a strong NICE roots. I'm not suggesting ClickSoftware is a competitor to you guys, but it has been playing in some adjacencies on the workforce optimization front. My question is, what do you think happening strategically in this place? Is it that the big CRM guys are beginning to wake up and realize the benefits of workforce optimization, cloud-related capabilities?
Yeah, we saw the news similarly to you. While personally, we know the company ClickSoftware from the past, they are in very remote area to what we're doing. As far as I know from the past, doing much more of a workforce optimization for stream support. Very, I think different than what we are doing. We are not competing and not cooperating with them. I don't think it has a implication on our strategic domain. There is some synergies, I think, between CRM and ClickSoftware. I think they even had partnership in place, so I assume it makes sense for Salesforce. It's hard for me to further relate to that because it is remote to what we're doing as a company.
Thank you very much. Good luck.
Thank you.
Thank you. Your next question is now from John DiFucci from Jefferies. Thank you, John. You're live.
Thank you. I have a question. I think the first one's for Barak and Beth, and then maybe a follow-up for Beth. The product was strong, again, this quarter, and I know Beth, you're just going to say that'll move around a lot from quarter to quarter. I assume that maintenance was also strong again this quarter, and I just want to verify that. If so, I think that implies that pro services was relatively weak in the quarter, at least weaker than what we were looking for. If that's the case, was it simply a difficult comp, which it was, or Barak mentioned, as Shaul said, all those large deals, but also in the press release, you mentioned Atos, and I think you might've said in the prepared remarks.
Should we perhaps expect more of this going forward as you move pro services more to partners, if that's what's happening?
John, I'll take this to begin with. I think I'll highlight a few of the comments that you made. First, starting with the product growth, as you highlighted, I have mentioned on several occasions that we should expect to see variability in the product revenue. Of course, we're very pleased with the revenue growth we've seen in our product revenue in the first half of this year, 25% in the most recent quarter. I think it further evidences really that, as we've said all along, the cloud revenue that we're bringing is really incremental to our business. You will continue to see strong growth quarters, but at the same time, have some variability. As you look on the services for the specific quarter, our maintenance is consistent, and we have a healthy retention of our maintenance business.
If you look specifically on Q2 of last year, you'll see that we actually experienced a 13% growth in the second quarter of 2018, and that was related to our professional services, where we had some specific milestones we were able to recognize during that quarter. It was a difficult in comparison.
Okay. Okay, great. Thank you, Beth. Maybe Barak, should we start to see, you did mention the Atos partnership in the press release. Should we start to see perhaps more of that professional services going to partners?
No, I don't think that will have any meaningful impact on professional services. For us, it's the different partnership we're signing, like the one with Atos, which I believe is a very strategic one for us, first of all, very much of an incremental business. Even with that, they will be required to have our professional services. Already today in our business, there is a lot of partners doing services, so it's not necessarily taking what we are doing as services. I don't see a change to the model as a result of that. The reason why we're signing those partnership is that the market is growing very fast in multiple segments. We would like to be able to extend our go to market. We can do it by ourselves to a certain pace, if you would like.
Definitely, partnership are helping us to have a much better coverage in the market.
Okay, great. If I might, just the question for Beth. The results look really good. It sounds like all the other anecdotal evidence sounds great. One of the line items that I know I'm going to get questions on is cash flow, because that was materially below our estimates, and it was mainly due to underperformance of receivables and prepaid expenses and others. I just want to make sure I understand that. Given how your model works and you bill CXone monthly in arrears, and it sounds like you had a lot of big deals here, and Barak mentioned several of them. Is it fair to assume those deals were back-end loaded as large deals typically are? You got little revenue in the quarter, and it doesn't go to deferred revenue with that business.
You pay commissions upfront, and even if you recognize the commissions over time. That makes sense to me, but if that's wrong, tell me and tell me what else is happening.
Sure. Thanks. You actually highlighted several things which are true. I think if I just break it down, first of all, if you recall, we actually had a record cash flow from operations in the first quarter of $182 million. We decided to take advantage of that strong cash flow, and we entered into several agreements that were prepaid expenses where we can lock in discounts and that will benefit us really going forward into the future. That combines with the comments you made, which is true, that we do have commissions, which, on these deals that Barak referenced, were primarily revenue that you'll see looking forward, and they do come with commissions that sometimes are paid in advance.
Great. Thank you. Nice job.
Thank you. The next one now from Dan Ives, Wedbush Securities. Thank you, Dan. You're live.
Yeah, thanks. My question on the fraud detection, the Actimize piece. Just talk about, are you starting to see deal sizes more transformational or larger, just the regulatory environment starts to change? Is that something where you may be seeing an inflection on that area of the business?
Thanks for the question. We definitely see traction over there. The market continues to be very attractive. With the launch of two things, first of all, X-Sight is growing our addressable market. Through the platform, we manage even with existing customers to extend our footprint and go beyond the traditional fraud solutions that we have. Fraud continues to evolve. That's one element. The second that I've mentioned is the cloud adoption. Similarly to what we have started to see, let's say about three years ago or so, two and a half, three years ago, on the customer engagement side, with a strong demand that started to cloud. We now see it on the Actimize front in our financial crime and compliance business. We were prepared for that.
Hence, you see the NICE growth also on the cloud and data part of the business, which allow us to bring innovation much faster into the market, specifically around fraud, as you have mentioned. The last part is, again, taking the very similar approach, and we're very much, in a positive way, surprised with the traction. We launched the X-Sight Marketplace just two months ago. In the course of just two months, we have an outstanding demand, and we've managed in two months to sign up more than 20 partners. I believe this will continue to grow dramatically, which will allow us to provide much more complete and holistic solutions through our own innovation in the Marketplace around fraud to this growing market with financial services.
Thanks. Great quarter.
Thank you.
Thank you.
Thank you. Your next one is from Rishi Jaluria from D.A. Davidson. Thank you, Rishi.
Guys, this is Hannah on for Rishi. Thank you for taking my questions today. First off, it sounds like you're getting a lot of new customers on the CXone and X-Sight platforms. I was wondering if you could talk about what kind of traction you've seen in terms of converting some of your on-prem customers to the cloud.
Sure. As you've heard from my comments and some of the deals that I've highlighted, many of those customers are new customers. Many of the new customers are competitive replacements. Some are replacing a specific competitor, and in some places, given that we're selling a pretty wide portfolio, our customers are actually replacing several competitors at the same time. That's many of the things that I've highlighted on the call. At the same time, we see an extension and migration to the cloud of our own customers. In some cases, they decide to have some of the solution on-premise and some in the cloud. In other cases, they migrate completely to the cloud. When they do that, we see a significant increase of the annual revenue from such a customer.
I think that you can see it from our results this quarter and last quarter as well, that while the cloud is growing, product is also moving very nicely in the right direction.
Great. That's really helpful. Second, I was interested to see you guys were recently ranked fourth in terms of RPA revenue by Gartner. I was wondering if you could talk about if you're seeing any changes on the competitive front there.
Thank you. I think I've mentioned in my remarks, we see this market as a very interesting market. A lot of activity in this market. It's a highly segmented market with a dozen, if not more than that, of players, and we're very happy to be rated among the few leaders in this market. We believe that we have a very robust technology that allows us to serve not just the classic unattended RPA of the market, but much more so and much more strategic and interesting, the unattended part of the market, the attended and semi part of the market, which is, we believe, where the future of this market is heading. Indeed, we see multiple opportunities when you come with our attended robotics automation. Win rate is going significantly up. I think this market, while it is a very interesting market, it's still in its infancy.
There is a tremendous opportunity for us in this market.
Great. Thank you.
Okay, thank you. Your next question now from Paul Coster, JPMorgan. Thank you, Paul.
Yeah, thank you. Thanks for taking my question. Barak, a couple of sort of strategic questions. One is, if you look at the geographic mix for a company that's been around a long time, it really does feel very heavily skewed towards the Americas. I'm just wondering, why is that, and what do you think, do you feel like there is more growth accessible to you in EMEA and APAC, and will you start ramping up the organization to go after those regions? Any comments on that geographic mix would be helpful. Thanks.
Sure. As you can see from our financials, that didn't change dramatically. We are very U.S.-centric in a good way. We're a strong believer that in our market, the U.S. market represents great opportunity, both historically and also into the future. Yes, the international market provide a tremendous opportunity as well, and indeed, we have started to invest more in very specific areas of international markets. The announcement of the Atos relationship, by the way, is part of that strategy. Atos, while they operate globally, their biggest presence and where they have the majority of their customer base and their go-to-market efforts and the different assets that they have are in Europe. That's just one example.
I believe that you'll see in the near future, more and more of the announcements and activities that we are doing internationally, which will eventually, we believe, will allow us to further fuel our growth in international markets.
Got it. Makes sense. The other question is that I think historically, the firm has really sort of appealed to line-of-business buyers. It seems to me, though, that you're assembling a lot of component technologies, Robotic Process Automation, analytics, and so on, that might start to appeal more broadly in the enterprise IT context. I guess the question is, are you seeing any change in the sort of mix, the demographics of your buyers? Are you starting to appeal to enterprise IT directly?
Yeah. First of all, we operate in different solutions, but in a very well-defined and large markets. We have a variety of buyers to our solutions. I think you characterize it correctly. Our buyers are historically are more on the operational side. As we evolved throughout the years with much more analytics, AI, and a much broader platform, which is becoming more strategic, we find ourselves more often than not, selling to first, broader than just those buyers, both our most strategic IT and strategic business, but also going much more up the chain. It's becoming now almost a daily habit or weekly habit of our sales team, of myself, our senior leadership, to have casual conversations and business conversations with C-level executives among the largest Fortune 500 company out there.
I think that the evolution of the company, and especially the thing that we've done, including a lot of analytics and AI into our platform and our superiority of our cloud solution, I think position us well to sell much higher in those large enterprises.
All right. Thank you.
Okay. Thank you.
Thank you.
Your next question, thank you, Sanjit Singh from Morgan Stanley. Thank you, Sanjit.
Thank you, and thank you for taking the question. Barak, I wanted to revisit some of the themes around Analyst Day, and particularly the five-year targets around cloud. When I look at the great progress this year, you're at 38% of revenue from cloud, when the product revenue is also growing really strong. I think that the mix is up about 6 points year-over-year. I just wanted to get a sense. It seems like cloud is progressing a lot faster. Do you think that we're going to cross that 50% threshold earlier than you expected? What do you think that would imply in terms of the overall growth rate of the company? Thank you.
Thanks for the question. Every time we try to give not just the quarterly results or not just the specific guidance for the year when we can, and it's the right thing to do, we also provide some more visionary and more strategic goals. We've done it back in 2014 with the NICE 2020 plan, and then it followed with the NICE to be. Indeed, in the latest Analyst Day, we provided some very, I would say, even specific metrics and KPIs of where we would like to be several years from now. It's been only, I think, a quarter since we announced it, and things are progressing, we believe, quite well. We absolutely would be very happy to cross those KPIs much faster than the horizon or the timeline that we gave. I think it's too early for us to update those numbers.
Rest assured that if we believe that our pace will increase, we will do that similarly, by the way, to what we've done after 2014. I think we've done it in 2016, that we came with NICE 2020, and we update you after a couple of years that we believe that we are getting into those 2020 goals much faster than we thought. We definitely hope so, but I think it's too early to provide such an update.
Understood. Fair enough. Sticking with some of the themes on Analyst Day, I think one of the initiatives that you had is moving down market with WFO, taking WFO and analytics more down market, as well as using X-Sight to extend the reach into other market adjacencies. Can you just give us sort of a progress update on those initiatives as you see it thus far this year? What sort of early signs do you see with respect to both of those initiatives?
Sure. I think that we are very happy with the progress of those two initiatives. I will refer to each one of them a bit separately. The first one is that we have a very strong and very healthy market share in WFO, and it goes to the mid and higher end of the market. Historically, we did not play in the lower end of the market. Since the introduction of CXone, which is actually providing under one platform, a fully integrated omni-channel routing, analytics, and WFO, what we see is a very high attachment rate between those three as we go to this segment of the market. In contact, by the way, historically, we are very strong and still are very strong. That is going very well, and we see that attachment rate increasing quite dramatically compared to the first data we bought in contact.
For the first one, which is, as you said, the down market play for WFO through CXone, is going very well. The second one in X-Sight, I think you heard it from my earlier remarks, the Essentials element, the cloud element of X-Sight. The examples that I have gave of several customers that we've landed this quarter with X-Sight Essentials, just from describing those customers, I didn't give specific names, but as you can see that this is not the classic, very large, high-end global banks, although we have some business with them as well. Actually, through X-Sight and the Essentials, we've managed to go much lower in the markets, by the way, lower, but still pretty sizable financial services.
Great. Thank you, Barak.
Thank you.
Thanks. Thank you. The next one now from Chris Rimer from Barclays. Thank you, Chris.
Hi. Thank you for taking my questions. Could you give some more detail on the partnership with Atos as to what products might be available to them and what kind of customer base you think that will generate?
Sure. The announcement that we have made and what we've signed with Atos is a partnership around the CXone. Atos has a very large customer base. Many of those customers, if not all of them, have customer service and a contact center operation. Today, they have Atos Unified Communication, as well as Atos Legacy Contact Center on-premise solution. Basically, the partnership is to go and offer those customers a migration to the cloud of those contact center and customer service assets into CXone. Atos built that customer base for many years of solid execution, and we're talking about an opportunity of hundreds of thousands of contact center agents. Most importantly, Atos has a very successful go-to-market vehicle for both of their partners as well as, of course, their sales team. Atos is a very large corporation with hundreds and 10,000 employees around the globe.
This is basically going to serve an extension, a very good extension, to our own go-to-market, penetrating markets where we have either light presence or no presence at all.
Understood. Thank you. Beth, just a technical question. Did you give the number of recurring revenues this quarter, the percentage? I might have missed it in your comments.
Sure. Thank you. Yes, we did give the recurring revenue. It's continued to increase, and this year, in the second quarter, it represents 72% of our total revenue.
Okay. Thank you very much.
Thank you.
Thank you. We now have Pat Walravens from JMP Securities. Thank you, Pat.
Yeah. This is Mark for Pat. Thank you so much for taking my question. Regarding competition, I just want to see if you see any changes, especially around Twilio Flex. Thank you.
No, I don't think we can report on any change in the competitive landscape. We believe that in both markets where we operate, these are very healthy markets that are growing very fast. We believe, as you heard on our remarks, that we are taking a good share out of the market with a lot of competitive replacements. I prefer not to refer to any specific competitor. The one that you've mentioned, we don't see any change in the dynamics in the market.
Okay, thank you. Just one last one for me. Just regarding to RPA, so it's a relatively new technology. Just wondering maybe where do you see the technology add most value to customers and maybe the technology doesn't work really well and doesn't live up to the expectation. Anything you can share around there? Thank you.
Sure. Obviously, it's extremely valuable technology in the sense that, enterprises today are looking on every possible opportunity to both streamline the operation as well as reducing the cost. RPA is a classic way, actually the ultimate way, to do that in a very cost-effective way. Basically taking mundane tasks that do not necessarily need to be managed by a human being and take those microprocesses and sometimes macro processes or complete end-to-end processes and automate them in a very fast and rapid way. That's the basic promise of this technology. What the evolution that we see in the market, that it started as a market of what we refer to as unattended RPA, meaning that the robot is operating by itself at the back, taking a process without intervention. That provide a certain list of opportunities in the market.
We believe this is very good, and we play in this segment as well. Where we see this market evolving more and more so into two areas. The first one is what I refer to as attended automation, where you put together the man and the machine or the man and the robot, and they exchange work together. Basically, the person is the one that's outsourcing, if you like, quote-unquote, work to the robot. As you take the best out of those two individuals or two entities, the robot and the machine, these are more complex operations, and you need more complex technology. When it works, and it works, of course, it provides tremendous value, much more than just unattended automation. The second part is that we see, and we add a lot of AI capabilities into RPA.
We have introduced about a year ago, a platform called Automation Finder, which is a fully automated, powered by AI, vehicle that allows to actually find automation opportunity, map them, and deploy them. That's something that we see that we are ahead of the market and others do not have these capabilities. It gets a lot of traction, and it allows us to increase our win rate quite significantly. I'll just mention the last one is the introduction of NEVA, which is a virtual assist entity that allows us to further and more easily integrate RPA technology into the workforce in larger organizations.
Great. Thank you so much.
Thank you.
Okay. Thank you. That concludes the questions at present. I'll just hand back now to Barak. Thank you, Barak.
Thank you all for joining us today, and have a great week. Thank you.
Thank you.
Okay, everyone, thank you. That concludes your conference call for today. You may now disconnect. Thank you for joining, and have a good day.