Earnings Review and Free Research Report: Nuance Beat Revenue Forecasts; Met Earnings Expectations

Research Desk Line-up: Intuit Post Earnings Coverage

LONDON, UK / ACCESSWIRE / August 30, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Nuance Communications, Inc. (NASDAQ: NUAN) (“Nuance”), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=NUAN, following the Company’s announcement of its third quarter fiscal 2017 operating results on August 08, 2017. The voice and language technology Company delivered its fourth consecutive quarter of y-o-y improvement in net new bookings, recurring revenue, cash flow from operations, and hosting and cloud revenues. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Get more of our free earnings reports coverage from other constituents of the Application Software industry. Pro-TD has currently selected Intuit Inc. (NASDAQ: INTU) for due-diligence and potential coverage as the Company announced on August 08, 2017, its financial results for Q4 and full year FY17 which ended on July 30. Register for a free membership today, and be among the early birds that get access to our report on Intuit when we publish it.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on NUAN; also brushing on INTU. With the links below you can directly download the report of your stock of interest free of charge at:

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Earnings Reviewed

For the third quarter of the fiscal year 2017, Nuance reported GAAP revenue of $486.2 million compared to $477.9 million in Q3 FY16. The Company’s reported quarter non‑GAAP revenue was $495.6 million, which includes revenue lost to accounting treatment in conjunction with acquisitions, compared to $484.9 million in the year ago corresponding period. The Company’s revenue numbers topped analysts’ expectations of $493 million.

Nuance stated that, had the malware incident not occurred, third-quarter GAAP revenues on a pro forma basis would have been $501.6 million and non-GAAP revenues on a pro forma basis would have been $511.0 million.

In Q3 FY17, Nuance‘s GAAP recurring revenue was $354.5 million compared to $339.7 million in Q3 FY16. The Company’s non-GAAP recurring revenue was $363.2 million versus $345.0 million in the year ago comparable period.

For Q3 FY17, Nuance’s GAAP gross margin was 55.5%, a decrease of 100 basis points on a y-o-y basis. The Company’s non-GAAP gross margin was 61.5%, a decrease of 50 basis points y-o-y. Nuance’s GAAP operating margin was 2.9%, a decrease of 310 basis points on a y-o-y basis. The Company’s reported a quarter non-GAAP operating margin of 27.0%, down compared to 29.2% in the prior year same quarter as a result of the lost revenues from the malware incident.

Nuance reported GAAP net loss of $27.8 million, or $0.10 per share, for Q3 FY17 compared to GAAP net loss of $11.8 million, or $0.04 per share, in Q3 FY16. The Company’s non-GAAP net income was $79.2 million, or $0.27 per diluted share, down from non-GAAP net income of $83.3 million, or $0.30 per diluted share, in the year ago corresponding period. The Company’s earnings met Wall Street’s expectations of $0.27 per share. Nuance estimated that Q3 FY17 GAAP loss per share on a pro forma basis would have been $(0.04) and non-GAAP earnings per share on a pro forma basis would have been $0.30.

Update on Malware Incident

On June 27, 2017, Nuance was a victim of the sophisticated NotPetya malware incident that affected thousands of companies globally. The malware affected certain Nuance systems, including systems used by its healthcare customers, primarily for transcription services, as well as systems used by its Imaging division to receive and process orders. Nuance has made progress in its restoration efforts for customer-facing systems.

Cash Matters

Nuance’s cash flow from operations was $132.0 million in Q3 FY17, up from $125.9 million in Q3 FY16. As of June 30, 2017, the Company’s balance of cash, cash equivalents, and marketable securities was $901.1 million; an increase from $831.2 million at March 31, 2017. This increase was driven by cash flows from operations during the quarter, partially offset by $54 million of cash outflow from investing activities during the quarter.

Nuance ended Q3 FY17 with deferred revenue of $798.7 million, up 9.5% from a year ago. This growth was primarily driven by the Company’s hosting solutions.

Outlook

Nuance revised its full fiscal year 2017 GAAP revenue guidance range to $1.906 billion to $1.936 billion and non-GAAP revenue guidance range to $1.945 billion to $1.975 billion, which represents a reduction of $90 million from the midpoint of its May 2017 guidance range. The Company is targeting a gross margin of approximately 62% and an operating margin in the band of 25% to 26% for FY17. This revised guidance accounts for lower revenues due to the malware incident, along with increased costs for enhanced security measures.

Nuance also revised its EPS guidance to a range of negative $0.64 to $0.55, and non-GAAP range to $0.96 to $1.03.

Stock Performance

At the closing bell, on Tuesday, August 29, 2017, Nuance Communications’ stock was slightly down 0.44%, ending the trading session at $15.67. A total volume of 957.71 thousand shares have exchanged hands. The Company’s stock price advanced 8.67% in the previous twelve months. Moreover, the stock gained 5.17% since the start of the year. The stock currently has a market cap of $4.58 billion.

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