Nuance Q4 solid, outlook for year light

The natural language understanding software maker says its fiscal 2015 will be back-end loaded as it transitions to a cloud model.

Nuance Communications reported a better-than-expected fourth quarter as the company's enterprise and healthcare business fared well, but delivered a first quarter outlook that was light relative to expectations as it transitions to a cloud model.

The company reported a fourth quarter net loss $1.5 million, or break even on a per share basis, on revenue of $502.3 million, up 6.4 percent from a year ago. Non-GAAP earnings in the fourth quarter were 33 cents a share, a nickel ahead of estimates.

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For fiscal 2014, Nuance reported a net loss of $150.3 million, or 47 cents a share, on revenue of $1.92 billion, up 2.7 percent from a year ago. On a non-GAAP basis, Nuance reported fiscal 2014 earnings of $1.12 a share.

In prepared remarks, Nuance said:

Across our business, we continue to focus on the expansion of our core technology portfolio toward natural language understanding and semantic processing, and the advancement of solutions driven by clinical language understanding, cloud-based connected services, highly interactive mobile applications, and deeper integration of virtual assistant capabilities.

In statement, Nuance said that it was set up for a "return to growth" in the fiscal year ahead. The company added that it transitions to a recurring revenue model over licensing.

For the first quarter, Nuance said it sees non-GAAP earnings of 21 cents a share to 23 cents a share on revenue of $480 million to $490 million. Wall Street was expecting earnings of 27 cents a share on revenue of $500 million.

For fiscal 2015, Nuance sees non-GAAP earnings of $1.10 a share to $1.20 a share on revenue of $1.97 billion and $2.03 billion. Nuance noted that it expects revenue and earnings to be loaded to the back half of the year.

By the numbers:

  • Nuance's healthcare unit reported fourth quarter revenue of $235.1 million, up from $220 million a year ago.
  • The enterprise unit reported fourth quarter revenue of $94.4 million, up from $85.5 million a year ago.
  • The mobile and consumer business had fourth quarter revenue of $114.8 million, down from $117.2 million a year ago.
  • And Nuance's imaging business had revenue of $58 million, up from $49.5 million a year ago.
  • Nuance ended the fiscal year with deferred revenue of $548.1 million, up 32 percent from a year ago.
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