Nuance Announces Fourth Quarter and Fiscal Year 2015 Results

Expect to continue improvements in financial performance and limproved growth in 2016 and beyond

Nuance Communications, Inc. (NASDAQ: NUAN) today announced financial results for its fiscal 2015 and fourth quarter, ended September 30, 2015.

Fiscal Fourth Quarter Performance

In the fourth quarter of fiscal 2015, Nuance reported GAAP revenue of $504.1 million, up from $502.3 million a year ago. Nuance reported non GAAP revenue of $513.3 million, which includes $9.2 million of revenue lost to accounting treatment in conjunction with acquisitions, compared to $520.3 million in the fourth quarter of fiscal 2014. Fourth quarter 2015 revenue was negatively affected by currency fluctuations as well. If fourth quarter 2014 currency rates were applied to fourth quarter 2015 non-GAAP revenue, Nuance would have achieved approximately 1% organic non-GAAP revenue growth for the quarter. In the fourth quarter of 2015, total recurring revenue was $347.0 million and represented 68% of total non-GAAP revenue, compared to $325.7 million and 63% a year ago. In the fourth quarter of fiscal 2015, Nuance reported net new bookings of $357.4 million, up 8.7% from $328.8 million a year ago. If fourth quarter 2014 currency rates were applied to Nuance’s fourth quarter 2015, net new bookings would have been up 12% from a year ago.

In the fourth quarter of fiscal 2015, Nuance recognized GAAP net loss of $(11.0) million, or $(0.04) per share, compared to GAAP net loss of $(1.5) million, or $(0.00) per share, in the fourth quarter of fiscal 2014. Nuance reported non-GAAP net income of $129.6 million, or $0.41 per diluted share, up from non-GAAP net income of $107.6 million, or $0.33 per diluted share, in the fourth quarter of fiscal 2014. Nuance’s fourth quarter fiscal 2015 non GAAP operating margin was 30.2%, up from 25.9% in the fourth quarter of fiscal 2014. Nuance reported cash flow from operations of $151.6 million in the fourth quarter of fiscal 2015, up 58.0% from $95.9 million in the fourth quarter of fiscal 2014.

“Nuance delivered a strong finish to its fiscal year, reporting revenue, EPS, cash flow from operations, margins and net new bookings that all exceeded our expectations,” said Dan Tempesta, Nuance’s CFO. “We made substantial progress on our company-wide transformation project, and continued to prioritize resources and focus toward our most significant market opportunities. We expect to continue our improvements in financial performance and lead the company to improved growth in 2016 and beyond.”

Fiscal Year 2015 Performance

In fiscal 2015, Nuance reported GAAP revenue of $1,931.1 million, up from $1,923.5 million in fiscal 2014. Nuance reported non-GAAP revenue of $1,979.1 million, which includes $47.9 million of revenue lost to accounting treatment in conjunction with acquisitions. Fiscal 2015 non-GAAP revenue declined slightly from non-GAAP revenue of $1,987.1 million in fiscal 2014. Fiscal 2015 revenue was negatively affected by currency fluctuations. If fiscal 2014 currency rates were applied to Nuance’s fiscal 2015 non-GAAP revenue, Nuance would have achieved approximately 1% organic non-GAAP revenue growth for the year. In fiscal 2015, total recurring revenue was $1,314.7 million and represented 66% of total non-GAAP revenue, compared to $1,263.3 million and 64% in fiscal 2014. In fiscal 2015, Nuance reported net new bookings of $1,450.4 million, up 3.6% from $1,400.6 million in fiscal 2014. If fiscal year 2014 currency rates were applied to Nuance’s fiscal year 2015, net new bookings would have been up 6% from a year ago.

In fiscal 2015, Nuance recognized GAAP net loss of $(115.0) million, or $(0.36) per share, compared to GAAP net loss of $(150.3) million, or $(0.47) per share, in fiscal 2014. In fiscal 2015, Nuance reported non-GAAP net income of $411.6 million, or $1.27 per diluted share, compared to $360.1 million, or $1.12 per diluted share, in fiscal 2014. Nuance’s fiscal 2015 non-GAAP operating margin was 26.2%, compared to 23.7% in fiscal 2014. Nuance reported cash flow from operations of $487.6 million in fiscal 2015, compared to $358.1 million in fiscal 2014. Nuance ended fiscal 2015 with total deferred revenue of $668.2 million, up 21.9% compared to $548.1 million a year ago. Nuance ended fiscal 2015 with $568.8 million in cash, cash equivalents and marketable securities.