Does the enterprise like Nina? Nuance says yes

Summary:Nina, a Siri-like virtual assistant built for the enterprise, is gaining traction. That and more, from Nuance's latest quarterly earnings report.

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What consumers got in Apple's Siri, the enterprise gets in Nuance Communication's Nina.

But are they welcoming her with open arms?

"A reception well beyond our expectations," the company said, reassuringly, today.

Nuance revealed that, in the first quarter of 2013, it entered into evaluation agreements and began pilot projects with business partners in several industries, from airlines to banks, consulting companies to financial services firms, with a few insurance, Internet, retail and telecom companies in between.

"We also expect increased voice biometrics demand for consumer identification and verification," Nuance says, indicating that Nina will easily play in a world where IT is increasingly consumerized. (Indeed, nothing says consumerization more than a speech-activated virtual assistant.)

The company offered these details in conjunction with its otherwise underwhelming fiscal results for the first quarter of 2013.

Let's dive in, shall we?

Nuance reported non-GAAP earnings of $0.35 per share on revenue of $492.4 million, a 28.9 percent increase over the $382 million it reported during the same quarter a year ago but missing Wall Street's expectations by $0.01 per share.

The company's shares were down more than 12 percent in after-hours trading.

Here's how things look across the company's four verticals:

In healthcare, the company took in non-GAAP revenues of $217.4 million, up 49.6 percent from 1Q12 thanks to large radiology and coding contracts for its eScription and Dragon Medical products.

In the mobile and consumer business, the company took in $131.7 million in revenue, up 21.4 percent from the same period a year ago. Lots of well-known customers here, from Amazon to Apple, Samsung to Sony, with Chinese behemoths Huawei and ZTE in between.

In the enterprise, Nuance took in $83.7 million for the quarter, up 10.4 percent from the same time a year ago thanks to work for Bank of America, Disney, FedEx, ING, Paypal, Royal Bank of Scotland, TD Bank, Telstra and others.

In its document imaging business, Nuance took in $59.6 million, up 13.7 percent from 1Q12 thanks to work for Canon, Deloitte, EMC, First Bank, Gibson Dunn & Crutcher and Husky Oil.

A few other key numbers for 1Q13:

  • Non-GAAP profit was $113 million, just slightly above the $108.5 million it made during the same quarter a year ago.
  • Non-GAAP operating margin was 29.2 percent, down from 32.5 percent in 1Q12;
  • Cash flow from operations was $122.9 million, up 37.3 percent from the same period in 2012;
  • It enters the second quarter $961.1 million in cash and equivalents on hand.

As such, Nuance predicts second quarter non-GAAP earnings of between 36 and 45 cents per share on revenues of between $500 million and $533 million. (Wall Street was looking for earnings of 44 cents a share on revenue of $524.4 million.)

The company says it's looking for growth in the second half of 2013 and into 2014, where it's hoping to see return on lots of ongoing investment.

It's already seeing green shoots in its enterprise business. That group managed 10 percent organic revenue growth and 44 percent segment profit growth over the same quarter in 2012, led by license, professional services and maintenance revenues.

"The emergence of intuitive, voice-driven personal assistants is driving interest and demand for next-generation customer service applications on smart phones and in other settings," the company said. "We launched our Nina solution in August 2012 to serve this market."

It added: "We have built a strong voice biometric pipeline, and now have deployments, pilots and proof of concept programs in place. Under current biometrics deployments, we are managing more than 23 million total voiceprints, and we experienced continued interest and pipeline growth for voice biometrics and data security."

Nuance expects continued growth in enterprise revenues in the latter half of 2013 and into 2014, built upon this growing Nuance OnDemand and Nina-fueled pipeline. Will it be enough to impress investors?

Topics: Enterprise Software, Consumerization, Emerging Tech, Enterprise 2.0, Software

About

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. He is also the former editor of SmartPlanet, ZDNet's sister site about innovation. He writes about business, technology and design now but used to cover finance, fashion and culture. He was an intern at Money, Men's Vogue, Popular Mechanics and the New York Daily Ne... Full Bio

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