Nuance - Nuance Announces Fiscal 2006 Second Quarter Results
Nuance Announces Fiscal 2006 Second Quarter Results
Organic Growth in Enterprise and Embedded Markets Fuels Results
BURLINGTON, Mass.--(BUSINESS WIRE)--May 9, 2006--Nuance Communications, Inc. (Nasdaq: NUAN - News) today announced financial results for the second quarter ended March 31, 2006.
Nuance reported revenues of $71.7 million in the quarter ended March 31, 2006, a 35 percent increase over revenues of $53.1 million in the quarter ended March 31, 2005. On a GAAP basis, Nuance recognized a net loss of $1.4 million, or $(0.01) per share, in the quarter ended March 31, 2006, compared with a net loss of $1.0 million, or $(0.01) per share, in the quarter ended March 31, 2005.
In addition to using GAAP results in evaluating the business, management also believes it is useful to evaluate results using non-GAAP measures. Using a non-GAAP measure, Nuance reported non-GAAP net income of $10.3 million, or $0.06 per diluted share, for the period ending March 31, 2006, compared to non-GAAP income of $3.5 million, or $0.03 per diluted share, in the quarter ended March 31, 2005.
These non-GAAP figures exclude non-cash taxes and interest, amortization of intangible assets, non-cash amortization of stock-based compensation, and acquisition-related transition and integration costs and charges. See "GAAP to non-GAAP Reconciliation" below for further information on the Company's non-GAAP measure.
"Nuance's second quarter performance resulted from solid growth in our network and embedded speech businesses and through sustained progress in streamlining costs," said Paul Ricci, chairman and CEO of Nuance. "The combination of strength in our speech markets with continued progress in cost synergies from the Nuance acquisition allowed us to expand operating margins ahead of our expectations this quarter."
The Company reported particular strength in revenues in the enterprise market, worldwide, where organic growth was 28 percent and overall growth was 67 percent over the same quarter last year. In addition, Nuance reported that embedded revenues were once again at a record level, up more than 45 percent organically from the same quarter last year. Balancing these gains, the Company noted some slowdown in the quarter in the North American dictation market, primarily from effects of the Dictaphone acquisition as prospective customers assessed the effect of the Dictaphone acquisition on the Dragon MT transcription solution, and delays in converting several transactions in the pipeline of the former Nuance business in North America.
Consistent with the Company's strategy and recent trends, highlights from the quarter include:
Enterprise Speech - The Company experienced strong growth for its combination of core technologies, applications and services. Nuance once again achieved record professional services revenues in the quarter, and exited the quarter with an increase in its ratio of services-backlog-to-revenues. The Company benefited from new or expanded agreements with leading businesses and service providers, including Amtrak, Apple, Bank of America, Bell Canada, Nestle, USAA, United and XM Radio.
Directory Assistance and Premium Services - At 3GSM and CTIA, the world's premier wireless events, the Company introduced Nuance Mobile, a comprehensive initiative to deliver powerful new speech-enabled search and communication applications that improve the mobile phone experience for consumers and business professionals. Nuance Mobile includes the provision of technology, services and applications, as well as a partnering program focused on driving innovation in the market. In addition, Nuance secured a strategic design win to provide next-generation directory assistance services for a major carrier in Asia-Pacific and launched new premium services including an SMS-to-voice application at BT with Tom Baker, star of the popular "Dr. Who" series, and a voice portal for the 2006 FIFA World Cup with a large European carrier.
Dictation Solutions - Nuance's Dragon NaturallySpeaking dictation solutions continued to perform well as the Company experienced sustained interest among businesses, healthcare organizations and consumers. In particular, the Company's dictation solutions performed well in Europe where the Company signed several volume license agreements with large hospitals in France and the United Kingdom.
Embedded Speech - Revenues from embedded speech were a record in the quarter, up more than 45 percent year-over-year, driven especially by a strong performance within the automotive market. The Company secured strategic design wins with Bosch, Denso, Ford, Nokia, Philips and Volkswagen. Within the mobile phone market, Nuance introduced next-generation solutions for speech-enabled MP3 phones and Dragon Dictation for SMS and email on mobile phones.
Imaging Solutions - Nuance's imaging solutions grew ten percent over the previous year as the Company signed contracts with leading companies such as Allstate Insurance, FedEx Kinkos, The Hartford Insurance Company and United Technology Group. In particular, the Company's PDF Converter solutions contributed significantly to the year-over-year growth as its corporate channels secured several volume license agreements.
Dictaphone Acquisition - Nuance in the March 2006 quarter announced and subsequently closed the acquisition of Dictaphone Corporation. Dictaphone expands Nuance's product portfolio, market reach and revenue streams within the large and rapidly growing healthcare vertical. With an unrivaled set of solutions aimed at automating the $10 billion manual transcription processing segment within healthcare, Dictaphone has a customer base of over 4,000 hospital and outpatient facilities and approximately 400,000 physicians.
Organic Growth in Enterprise and Embedded Markets Fuels Results
BURLINGTON, Mass.--(BUSINESS WIRE)--May 9, 2006--Nuance Communications, Inc. (Nasdaq: NUAN - News) today announced financial results for the second quarter ended March 31, 2006.
Nuance reported revenues of $71.7 million in the quarter ended March 31, 2006, a 35 percent increase over revenues of $53.1 million in the quarter ended March 31, 2005. On a GAAP basis, Nuance recognized a net loss of $1.4 million, or $(0.01) per share, in the quarter ended March 31, 2006, compared with a net loss of $1.0 million, or $(0.01) per share, in the quarter ended March 31, 2005.
In addition to using GAAP results in evaluating the business, management also believes it is useful to evaluate results using non-GAAP measures. Using a non-GAAP measure, Nuance reported non-GAAP net income of $10.3 million, or $0.06 per diluted share, for the period ending March 31, 2006, compared to non-GAAP income of $3.5 million, or $0.03 per diluted share, in the quarter ended March 31, 2005.
These non-GAAP figures exclude non-cash taxes and interest, amortization of intangible assets, non-cash amortization of stock-based compensation, and acquisition-related transition and integration costs and charges. See "GAAP to non-GAAP Reconciliation" below for further information on the Company's non-GAAP measure.
"Nuance's second quarter performance resulted from solid growth in our network and embedded speech businesses and through sustained progress in streamlining costs," said Paul Ricci, chairman and CEO of Nuance. "The combination of strength in our speech markets with continued progress in cost synergies from the Nuance acquisition allowed us to expand operating margins ahead of our expectations this quarter."
The Company reported particular strength in revenues in the enterprise market, worldwide, where organic growth was 28 percent and overall growth was 67 percent over the same quarter last year. In addition, Nuance reported that embedded revenues were once again at a record level, up more than 45 percent organically from the same quarter last year. Balancing these gains, the Company noted some slowdown in the quarter in the North American dictation market, primarily from effects of the Dictaphone acquisition as prospective customers assessed the effect of the Dictaphone acquisition on the Dragon MT transcription solution, and delays in converting several transactions in the pipeline of the former Nuance business in North America.
Consistent with the Company's strategy and recent trends, highlights from the quarter include:
Enterprise Speech - The Company experienced strong growth for its combination of core technologies, applications and services. Nuance once again achieved record professional services revenues in the quarter, and exited the quarter with an increase in its ratio of services-backlog-to-revenues. The Company benefited from new or expanded agreements with leading businesses and service providers, including Amtrak, Apple, Bank of America, Bell Canada, Nestle, USAA, United and XM Radio.
Directory Assistance and Premium Services - At 3GSM and CTIA, the world's premier wireless events, the Company introduced Nuance Mobile, a comprehensive initiative to deliver powerful new speech-enabled search and communication applications that improve the mobile phone experience for consumers and business professionals. Nuance Mobile includes the provision of technology, services and applications, as well as a partnering program focused on driving innovation in the market. In addition, Nuance secured a strategic design win to provide next-generation directory assistance services for a major carrier in Asia-Pacific and launched new premium services including an SMS-to-voice application at BT with Tom Baker, star of the popular "Dr. Who" series, and a voice portal for the 2006 FIFA World Cup with a large European carrier.
Dictation Solutions - Nuance's Dragon NaturallySpeaking dictation solutions continued to perform well as the Company experienced sustained interest among businesses, healthcare organizations and consumers. In particular, the Company's dictation solutions performed well in Europe where the Company signed several volume license agreements with large hospitals in France and the United Kingdom.
Embedded Speech - Revenues from embedded speech were a record in the quarter, up more than 45 percent year-over-year, driven especially by a strong performance within the automotive market. The Company secured strategic design wins with Bosch, Denso, Ford, Nokia, Philips and Volkswagen. Within the mobile phone market, Nuance introduced next-generation solutions for speech-enabled MP3 phones and Dragon Dictation for SMS and email on mobile phones.
Imaging Solutions - Nuance's imaging solutions grew ten percent over the previous year as the Company signed contracts with leading companies such as Allstate Insurance, FedEx Kinkos, The Hartford Insurance Company and United Technology Group. In particular, the Company's PDF Converter solutions contributed significantly to the year-over-year growth as its corporate channels secured several volume license agreements.
Dictaphone Acquisition - Nuance in the March 2006 quarter announced and subsequently closed the acquisition of Dictaphone Corporation. Dictaphone expands Nuance's product portfolio, market reach and revenue streams within the large and rapidly growing healthcare vertical. With an unrivaled set of solutions aimed at automating the $10 billion manual transcription processing segment within healthcare, Dictaphone has a customer base of over 4,000 hospital and outpatient facilities and approximately 400,000 physicians.
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