Nuance's Fourth-Quarter Exceeds Forecast, but Reports Loss for Full Year
November 25, 2014 – Nuance Communications has reported results for its fourth quarter and fiscal-year 2014. For the full year, revenue was $1,923.5 million, up 3.7 percent from $1,855.3 million in fiscal 2013, but the firm reported a net loss of $150.3 million, or $0.47 per share, compared to a net loss of $115.2 million, or $0.37 per share, for fiscal 2013. Cash flow from operations was $358.1 million, compared to $395.0 million for fiscal 2013.
Nuance ended fiscal 2014 with total deferred revenue of $548.1 million, up 32.2 percent compared to $414.6 million a year ago, and with $588.2 million in cash.
In the fourth quarter of fiscal 2014, Nuance reported revenue of $502.3 million, up 6.4 percent from $472.2 million in fourth-quarter 2013, and a net loss of $1.5 million, or $0.00 per share, compared to a net loss of $32.3 million, or $0.10 per share, for fourth-quarter 2013.
Fourth-Quarter and Full-Year 2014 Highlights
- Bookings – 2014 bookings were $2,441.9 million, up 27.4 percent from $1,916.5 million in 2013. 2014 bookings exceeded Nuance’s updated guidance range of $2.35 billion to $2.40 billion.
- Revenue – Fourth-quarter 2014 non-GAAP (Generally Accepted Accounting Principles) revenue was $520.3 million, up 6.1 percent from $490.4 million a year ago.
- EPS – Fourth-quarter non-GAAP earnings per share (EPS) was $0.33 per diluted share, up from $0.30 per diluted share a year ago.
- Recurring revenue – Recurring revenue increased from 52 percent of total non-GAAP revenue in 2012 to 58 percent in 2013 and to 64 percent in 2014. Perpetual licenses decreased from 38 percent of total non-GAAP revenue in 2012, to 32 percent in 2013, and to 26 percent in 2014.
- Deferred revenue – Nuance ended 2014 with total deferred revenue of $548.1 million, up 32 percent compared to $414.6 million at the end of 2013.
- Operating cash flow – 2014 operating cash flow equaled 99 percent of non-GAAP net income, up from 92 percent in 2013 and ahead of Nuance’s target of 95 percent.
Nuance CFO Tom Beaudoin commented: “We delivered a strong finish to fiscal 2014, with revenue, EPS, and bookings above our guidance ranges. In fiscal 2014, recurring revenues represented 64 percent of total revenue, up six percentage points from last year, as we continue to transition our revenue model toward more stable, predictable, recurring revenue streams. The positive deferred revenue and cash flow characteristics of our recurring revenue streams also continue to benefit the business. Fiscal 2014 bookings and execution in strategic markets position us well for a return to growth in fiscal 2015.”
Highlights from Nuance’s fourth quarter include:
- Imaging – For Nuance’s document-imaging solutions group, fourth-quarter fiscal 2014 non GAAP revenue was $69.5 million, and 2014 non-GAAP revenue was $236.3 million. Key customers in the quarter included ABN Amro, Ashurst, Balabit, Barclays, Brother, Citigroup, CSC, Ernst & Young, Hewlett-Packard, Laing Rourke, Neat, NOV, UPS, and Visma.
- Healthcare – For Nuance’s healthcare-solutions group, fourth-quarter fiscal 2014 non-GAAP revenue was $238.3 million, and 2014 non-GAAP revenue was $942.7 million. Key customers in the quarter included Avera Health, BayCare, Cambridge Trusts, Cleveland Clinic, Froedtert, Group Memorial Health, Inova, Intermountain, Lahey, Providence, Scottsdale Health, and University of Colorado.
- Mobile & Consumer – For Nuance’s mobile- and consumer-solutions group, fourth-quarter fiscal 2014 non-GAAP revenue was $116.9 million, and 2014 non-GAAP revenue was $451.0 million. Key customers and OEM wins in the quarter included Acer, AMD, AT&T, BMW, Bosch, Continental, Daimler, Fiat/Chrysler, Great Wall Motors, Harman Becker, Hisense, Honda, Mahindra, Melco, Motorola, Orange, Panasonic, Parrott, Rogers, Samsung, Scania, Shoretel, TCL, Telefonica, Volvo, and Yanfeng Visteon.
- Enterprise – For Nuance’s enterprise-solutions group, fourth-quarter fiscal 2014 non-GAAP revenue was $95.6 million, and 2014 non-GAAP revenue was $357.1 million. Key customers in the quarter included American Airlines, Australia Department of Human Services, Banco Santander, Bank of America, Barclays, Citigroup, Delta Airlines, Delta Dental, Health Care Service Corporation, Jubilant FoodWorks (Domino’s India), Public Service Enterprise Group, Talk Talk, Telstra, UnitedHealth Group, Wellpoint, and Wells Fargo Bank.