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May 14, 2009

Nuance swings to profit in Q2

Product and licensing revenue fell 8% to $87.02m

By CBR Staff Writer

Speech-recognition software vendor Nuance Communications has reported net income of $7.06m for the second quarter 2009, compared to a loss of $26.8m in the year-ago quarter, on revenue up 13% at $229.14m. The company attributed the results to tighter expense controls and increased services margins.

Operating income was $15.44m compared to operating loss of $13.72m in the same period last year. Diluted EPS was $0.03 compared to diluted net loss per share of $0.13.

The company said product and licensing revenue fell 8% to $87.02m, professional services, subscription, and hosting revenue grew 42% to $103m, and maintenance and support revenue increased 6% to $39.11m.

For the six-month period, the company reported a net loss of $17.48m compared to a loss of $42.21m a year ago, on revenue up 12% at $446m.

Paul Ricci, chairman and chief executive at Nuance, said: Despite the challenging environment for capital and consumer spending, Nuance made significant progress in operating margins and the growth of recurring revenue streams. Strong expense controls, which we expect to continue for the remainder of the fiscal year, enabled us to exceed profit expectations. In healthcare, enterprise, and mobile services markets, we made significant investments. In Q2, we won several long-term contracts that will begin contributing revenue in future quarters.

Looking ahead to the third quarter, the company expects adjusted EPS of between $0.23 and $0.26. For fiscal 2009 it expects adjusted revenue between $1 billion and $1.02 billion and adjusted EPS between $1 and $1.07.

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