Nuance posts flat revenues, year over year, in second quarter of fiscal 2016

The voice recognition software giant missed revenue expectations but predicts growth ahead from its IoT offerings.

Nuance released its second quarter earnings for fiscal 2016 on Tuesday after the bell.

The voice recognition software giant posted a GAAP net los of $7 million, or two cents a share, compared with a net loss of $14.1 million, or four cents a share, in the second fiscal quarter of 2015.

Non-GAAP net income came to $115 million, and earnings were 38 cents a share on revenues of $487.4 million. Revenues were effectively flat year-over-year, from $488 million in the second quarter of fiscal 2015. Wall Street analysts were expecting 35 cents a share for Q2 2016 on revenues of $491.1 million.

Revenue growth was weighed down by multiple factors, the company noted. For instance, its Healthcare On Demand revenues were eroded by the growing displacement of transcription by Dragon Medical in conjunction with EMR systems. The company also saw a decline in handset revenues in its mobile business.

Over time, Nuance expects to see some relief from its Internet of Things offerings, CEO Paul Ricci told reporters on Tuesday's earnings call. In the meantime, its mobile segment was aided by net bookings in automotive and mobile operator services.

Growth in Nuance's voice biometrics segment of its enterprise business was very strong -- one of the highest bookings growth rates across all of Nuance's produce lines -- "based on the desire for enhanced security, particularly in certain verticals," Ricci said. Government and financial services are at the top of that list, he added.

For the third quarter of fiscal 2016, Nuance predicts non-GAAP revenues between $483 million and $497 million and earnings per share between 35 cents and 38 cents. That's compared with Wall Street expectations of 36 cents a share on revenues of $496 million.