Nuance ends Q4, fiscal year on good enough note fueled by healthcare

Nuance has plenty of revenue growth goals outlined for 2014, but next quarter's outlook already missed targets.
Written by Rachel King, Contributor

Nuance turned its earnings report for the fourth quarter and fiscal year on Monday after the bell.

The voice and language software maker posted a net loss of $32.3 million, or 10 cents per share (statement).

Non-GAAP earnings were 30 cents per share on a revenue of $490.4 million.

Wall Street was looking for earnings of 29 cents per share on a revenue of $489.56 million.

Reflecting the better-than-expected results, Nuance shares ticked up slightly in after hours trading by roughly 1.9 percent.

For the full fiscal 2013, the communications company posted non-GAAP earnings of $1.33 per share on a revenue of roughly $1.96 billion.

While the revenue figure increased by 12.6 percent from fiscal 2012, Nuance acknowledged that it lost $102.4 million due to "accounting treatment in conjunction with acquisitions."

CEO Paul Ricci provided a generic reflection on the quarter in prepared remarks:

We are pleased that we achieved fourth quarter results consistent with our guidance, and executed on our strategy to enter new growth markets, deliver a new generation of solutions and enable attractive, recurring revenue streams.

Revenue results were nine figures minimum in each department. Once again, healthcare proved to be the biggest cash cow with $226.7 million in Q4 and $911.6 million from the entire year.

However, those numbers are down from previous results on both a sequential and an annual basis.

Ricci attributed that downturn to the state of the healthcare industry in general.

The healthcare industry is under significant and mounting pressure to modernize their use of medical information in order to improve the efficiency and efficacy of patient care, all while streamlining operations and reducing costs. Within our healthcare business, we address these needs by providing solutions and services that intelligently capture the patient encounter with the physician, automate the captured clinical documentation and classification of clinical information, and by delivering an end-to-end system that streamlines the process and improves the quality of clinical information. We are leveraging our industry leadership in clinical documentation, medical voice recognition and clinical language understanding (CLU) technologies to expand and accelerate our market opportunity by introducing innovative and intelligent solutions that automate and improve the quality of documentation as well as coding and billing processes for our healthcare customers.

Mobile/consumer, enterprise, and document imaging solutions all trailed, respectively.


For the first quarter, Wall Street is expecting Nuance to return with earnings of 33 cents per share and $494.74 million in revenue.

But Nuance responded with guidance of only $477 million to $487 million in revenue with non-GAAP earnings projected to fall between 18 and 21 cents per share.

For fiscal 2014, Nuance offered a revenue guidance range of $2.03 billion and $2.09 billion with non-GAAP earnings between $1.05 to $1.15 per share.

From a birds-eye perspective, Nuance also revealed some of its own goals for 2014:

  • Continued growth for "core automotive solutions, accompanied by an increase in on-demand bookings for connected cars"
  • More investment in clinical documentation solutions, especially around Dragon Medical and Powerscribe
  • More revenue growth from voicemail-to-text solutions fueled by several unnamed but new contracts
  • Expanding on-demand IVR inbound/outbound, voice biometrics, Nina Mobile and Nina Web solutions for enterprise customers

Screenshot via Nuance Investor Relations

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