Nuance Q2 buoyed by healthcare segment

Summary:Once again, the voice and language software maker owes much of its revenue to its healthcare segment, and slightly lowered its guidance for the following quarter.

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Nuance released its second quarter earnings report after the bell Thursday.

The voice and language software maker posted a net loss of $39.2 million, or 12 cents per share (statement).

Non-GAAP earnings were 28 cents per share on a revenue of $490.0 million, up slightly from $484.0 million a year ago.

Wall Street was expecting earnings of 23 cents per share on revenue of $484.2 million.

From a segment perspective, Nuance's strongest year-over-year organic revenue performance came from enterprise and healthcare divisions, counterbalanced by underperformance by imaging, and mobile and consumer. For Nuance's healthcare solutions, second quarter fiscal 2014 non-GAAP revenue was $237.0 million. 

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Tom Beaudoin, Nuance CFO, reflected on the quarter in prepared remarks:

We are pleased with our second quarter and first half performance, particularly in our Healthcare and Mobile & Consumer businesses. We exceeded our targets for bookings, revenue and EPS. A growing proportion of our revenue and bookings continues to shift toward recurring revenue models, which reflects in our growing deferred revenue. Balancing more aggressive moves to reduce costs and improve productivity with investments in our key products and markets, we believe we are well-positioned for renewed growth and profitability.

For Q3 14, Nuance expects to continue to see the financial impact from its transition from perpetual license solutions to cloud-based, connected solutions. Taking that into account, Nuance lowered it guidance, expecting Q3 14 non-GAAP revenues of $488 million to $508 million, and Q3 14 GAAP revenues of $477 million to $497 million, with non-GAAP EPS of 24 cents to 29 cents, and GAAP EPS of 18 cents to 13 cents.

For the third quarter outlook, Wall Street was expecting earnings of 30 cents per share on revenue of $527 million.

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Topics: Enterprise Software, Mobility

About

Natalie Gagliordi is a staff writer for CBS Interactive based in Louisville, Kentucky, covering business technology for ZDNet. She previously worked as the editor of Kiosk Marketplace, an online B2B trade publication that focused on interactive self-service technology, while also contributing to additional websites that covered retail tec... Full Bio

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