Nuance Show Enterprise ‘Overachievement’ in Q2 Update

“…Nuance emphasized that its performance exceeded the expectations of its leadership in terms of margins and earnings per share, and delivered revenues at the high end of its guidance range.”

Nuance Communications has issued its results for the second quarter of 2019, illustrating a stronger than expected performance in certain areas.

Effective October 1st of last year, Nuance adopted the ASC 606 revenue recognition standard, which doesn’t require it to recast older financial reports. But the company has still published its latest results under the old ASC 605 standard, showing a year-over-year drop in revenues of $17.2 million together with a massive jump in GAAP net income, which rose from a loss of $167.1 million in Q2 of 2018 to a profit of $3.1 million in this latest quarter.

Nuance’s ASC 606 GAAP revenues for Q2 of 2019 came in at $409.6 million, while the company reported a GAAP net loss of $20.7 million.

It’s a bit of a muddy picture, but in its commentary on the results, Nuance emphasized that its performance exceeded the expectations of its leadership in terms of margins and earnings per share, and delivered revenues at the high end of its guidance range. “We achieved this favorable outcome due to revenue overachievement in our Enterprise business, disciplined expense management and a better revenue mix in Healthcare,” the voice biometrics and speech interface specialist explained.

In accordance with the strong performance, Nuance’s leadership have decided to raise their full-year operating margin and EPS guidance. They have also narrowed their revenue guidance for the 2019 fiscal year while maintaining the midpoint of $1.868 billion.

The quarterly update comes on the heels of Nuance’s announcement that it had partnered with Banma to bring enhance speech recognition technology to China-made smart cars.

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May 14, 2019 – by Alex Perala