Delaware | 001-27038 | 94-3156479 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Emerging growth company | ¨ |
NUANCE COMMUNICATIONS, INC. | ||||||
Date: November 28, 2017 | By: | /s/ Daniel D. Tempesta | ||||
Daniel D. Tempesta Executive Vice President and Chief Financial Officer |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Press release |
© 2017 Nuance Communications, Inc. All rights reserved. |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Press release |
© 2017 Nuance Communications, Inc. All rights reserved. |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Press release |
© 2017 Nuance Communications, Inc. All rights reserved. |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Press release |
© 2017 Nuance Communications, Inc. All rights reserved. |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Press release |
© 2017 Nuance Communications, Inc. All rights reserved. |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Press release |
© 2017 Nuance Communications, Inc. All rights reserved. |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Press release |
© 2017 Nuance Communications, Inc. All rights reserved. |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Press release |
Three months ended September 30, | Twelve months ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenues: | ||||||||||||||||
Professional services and hosting | $ | 213,298 | $ | 245,667 | $ | 976,893 | $ | 955,329 | ||||||||
Product and licensing | 170,153 | 178,540 | 635,391 | 669,227 | ||||||||||||
Maintenance and support | 82,459 | 81,997 | 327,078 | 324,347 | ||||||||||||
Total revenues | 465,910 | 506,204 | 1,939,362 | 1,948,903 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Professional services and hosting | 162,348 | 159,785 | 660,849 | 626,168 | ||||||||||||
Product and licensing | 19,199 | 21,359 | 74,004 | 86,379 | ||||||||||||
Maintenance and support | 13,846 | 13,581 | 54,094 | 54,077 | ||||||||||||
Amortization of intangible assets | 16,366 | 15,799 | 64,853 | 62,876 | ||||||||||||
Total cost of revenues | 211,759 | 210,524 | 853,800 | 829,500 | ||||||||||||
Gross profit | 254,151 | 295,680 | 1,085,562 | 1,119,403 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 66,978 | 65,618 | 266,097 | 271,130 | ||||||||||||
Sales and marketing | 105,929 | 101,427 | 398,130 | 390,866 | ||||||||||||
General and administrative | 43,040 | 41,704 | 166,677 | 168,473 | ||||||||||||
Amortization of intangible assets | 28,964 | 27,792 | 113,895 | 108,021 | ||||||||||||
Acquisition-related costs, net | 5,689 | 8,740 | 27,740 | 17,166 | ||||||||||||
Restructuring and other charges, net | 21,405 | 4,967 | 61,054 | 25,224 | ||||||||||||
Total operating expenses | 272,005 | 250,248 | 1,033,593 | 980,880 | ||||||||||||
(Loss) income from operations | (17,854 | ) | 45,432 | 51,969 | 138,523 | |||||||||||
Other expenses, net | (37,692 | ) | (37,619 | ) | (170,984 | ) | (136,784 | ) | ||||||||
(Loss) income before income taxes | (55,546 | ) | 7,813 | (119,015 | ) | 1,739 | ||||||||||
Provision (benefit) for income taxes | 9,878 | (10,661 | ) | 31,981 | 14,197 | |||||||||||
Net (loss) income | $ | (65,424 | ) | $ | 18,474 | $ | (150,996 | ) | $ | (12,458 | ) | |||||
Net (loss) income per share: | ||||||||||||||||
Basic | $ | (0.23 | ) | $ | 0.07 | $ | (0.52 | ) | $ | (0.04 | ) | |||||
Diluted | $ | (0.23 | ) | $ | 0.06 | $ | (0.52 | ) | $ | (0.04 | ) | |||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 288,718 | 283,139 | 289,348 | 292,129 | ||||||||||||
Diluted | 288,718 | 289,371 | 289,348 | 292,129 |
© 2017 Nuance Communications, Inc. All rights reserved. |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Press release |
September 30, 2017 | September 30, 2016 | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 592,299 | $ | 481,620 | |||||
Marketable securities | 251,981 | 98,840 | |||||||
Accounts receivable, net | 395,392 | 380,004 | |||||||
Prepaid expenses and other current assets | 88,269 | 78,126 | |||||||
Total current assets | 1,327,941 | 1,038,590 | |||||||
Marketable securities | 29,844 | 27,632 | |||||||
Land, building and equipment, net | 176,548 | 185,169 | |||||||
Goodwill | 3,590,608 | 3,508,879 | |||||||
Intangible assets, net | 664,474 | 762,220 | |||||||
Other assets | 142,508 | 138,980 | |||||||
Total assets | $ | 5,931,923 | $ | 5,661,470 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Current portion of long-term debt | $ | 376,121 | $ | — | |||||
Contingent and deferred acquisition payments | 28,860 | 9,468 | |||||||
Accounts payable, accrued expenses and other current liabilities | 340,505 | 332,258 | |||||||
Deferred revenue | 366,042 | 349,173 | |||||||
Total current liabilities | 1,111,528 | 690,899 | |||||||
Long-term debt | 2,241,283 | 2,433,152 | |||||||
Deferred revenue, net of current portion | 423,929 | 386,960 | |||||||
Other liabilities | 223,801 | 219,129 | |||||||
Total liabilities | 4,000,541 | 3,730,140 | |||||||
Stockholders' equity | 1,931,382 | 1,931,330 | |||||||
Total liabilities and stockholders' equity | $ | 5,931,923 | $ | 5,661,470 |
© 2017 Nuance Communications, Inc. All rights reserved. |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Press release |
Three months ended | Twelve months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net (loss) income | $ | (65,424 | ) | $ | 18,474 | $ | (150,996 | ) | $ | (12,458 | ) | |||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 59,458 | 58,381 | 234,413 | 231,474 | ||||||||||||
Stock-based compensation | 32,463 | 40,871 | 154,272 | 163,828 | ||||||||||||
Non-cash interest expense | 16,383 | 13,061 | 59,295 | 47,105 | ||||||||||||
Deferred tax provision | (1,907 | ) | (18,494 | ) | 4,855 | (12,014 | ) | |||||||||
Loss on extinguishment of debt | — | — | 18,565 | 4,851 | ||||||||||||
Fixed asset impairment | — | — | 16,351 | 2,480 | ||||||||||||
Other | 4,144 | (586 | ) | 8,403 | (3,055 | ) | ||||||||||
Changes in operating assets and liabilities, excluding effects of acquisitions: | ||||||||||||||||
Accounts receivable | (34,481 | ) | 2,076 | (6,349 | ) | 25,450 | ||||||||||
Prepaid expenses and other assets | (130 | ) | 2,881 | (14,661 | ) | (9,645 | ) | |||||||||
Accounts payable | (13,416 | ) | 13,165 | (1,207 | ) | 38,206 | ||||||||||
Accrued expenses and other liabilities | 13,080 | 9,276 | 9,040 | 27,826 | ||||||||||||
Deferred revenue | (13,666 | ) | (237 | ) | 46,886 | 61,747 | ||||||||||
Net cash (used in) provided by operating activities | (3,496 | ) | 138,868 | 378,867 | 565,795 | |||||||||||
Cash flows from investing activities: | ||||||||||||||||
Capital expenditures | (27,802 | ) | (13,460 | ) | (61,835 | ) | (54,883 | ) | ||||||||
Payments for business and asset acquisitions, net of cash acquired | (3,549 | ) | (144,569 | ) | (113,769 | ) | (172,763 | ) | ||||||||
Purchases of marketable securities and other investments | (140,408 | ) | (81,389 | ) | (332,470 | ) | (117,640 | ) | ||||||||
Proceeds from sales and maturities of marketable securities and other investments | 67,420 | 16,031 | 173,864 | 82,285 | ||||||||||||
Net cash used in investing activities | (104,339 | ) | (223,387 | ) | (334,210 | ) | (263,001 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Payments of debt | — | — | (634,055 | ) | (511,844 | ) | ||||||||||
Proceeds from issuance of long-term debt, net of issuance costs | (599 | ) | (502 | ) | 837,482 | 959,358 | ||||||||||
Payments for repurchase of common stock | — | — | (99,077 | ) | (699,472 | ) | ||||||||||
Proceeds from issuance of common stock from employee stock plans | 8,701 | 8,389 | 17,383 | 16,850 | ||||||||||||
Cash used to net share settle employee equity awards | (1,576 | ) | (1,589 | ) | (54,099 | ) | (68,636 | ) | ||||||||
Net payments on other long-term liabilities | (159 | ) | (51 | ) | (583 | ) | (1,371 | ) | ||||||||
Net cash provided by (used in) financing activities | 6,367 | 6,247 | 67,051 | (305,115 | ) | |||||||||||
Effects of exchange rate changes on cash and cash equivalents | 173 | 837 | (1,029 | ) | 4,492 | |||||||||||
Net (decrease) increase in cash and cash equivalents | (101,295 | ) | (77,435 | ) | 110,679 | 2,171 | ||||||||||
Cash and cash equivalents at beginning of period | 693,594 | 559,055 | 481,620 | 479,449 | ||||||||||||
Cash and cash equivalents at end of period | $ | 592,299 | $ | 481,620 | $ | 592,299 | $ | 481,620 |
© 2017 Nuance Communications, Inc. All rights reserved. |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Press release |
Three months ended | Twelve months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
GAAP revenues | $ | 465,910 | $ | 506,204 | $ | 1,939,362 | $ | 1,948,903 | ||||||||
Acquisition-related revenue adjustments: professional services and hosting | 2,044 | 2,534 | 10,553 | 10,212 | ||||||||||||
Acquisition-related revenue adjustments: product and licensing | 6,494 | 3,710 | 26,462 | 20,095 | ||||||||||||
Acquisition-related revenue adjustments: maintenance and support | 204 | — | 1,014 | 383 | ||||||||||||
Non-GAAP revenues | $ | 474,652 | $ | 512,448 | $ | 1,977,391 | $ | 1,979,593 | ||||||||
GAAP cost of revenues | $ | 211,759 | $ | 210,524 | $ | 853,800 | $ | 829,500 | ||||||||
Cost of revenues from amortization of intangible assets | (16,366 | ) | (15,799 | ) | (64,853 | ) | (62,876 | ) | ||||||||
Cost of revenues adjustments: professional services and hosting (1,2) | (4,087 | ) | (7,429 | ) | (28,962 | ) | (30,129 | ) | ||||||||
Cost of revenues adjustments: product and licensing (1,2) | (50 | ) | (90 | ) | (348 | ) | (376 | ) | ||||||||
Cost of revenues adjustments: maintenance and support (1) | (650 | ) | (1,064 | ) | (3,767 | ) | (4,138 | ) | ||||||||
Non-GAAP cost of revenues | $ | 190,606 | $ | 186,142 | $ | 755,870 | $ | 731,981 | ||||||||
GAAP gross profit | $ | 254,151 | $ | 295,680 | $ | 1,085,562 | $ | 1,119,403 | ||||||||
Gross profit adjustments | 29,895 | 30,626 | 135,959 | 128,209 | ||||||||||||
Non-GAAP gross profit | $ | 284,046 | $ | 326,306 | $ | 1,221,521 | $ | 1,247,612 | ||||||||
GAAP (loss) income from operations | $ | (17,854 | ) | $ | 45,432 | $ | 51,969 | $ | 138,523 | |||||||
Gross profit adjustments | 29,895 | 30,626 | 135,959 | 128,209 | ||||||||||||
Research and development (1) | 6,564 | 8,615 | 33,061 | 35,671 | ||||||||||||
Sales and marketing (1) | 10,845 | 12,041 | 45,813 | 49,064 | ||||||||||||
General and administrative (1) | 10,269 | 11,633 | 42,321 | 43,525 | ||||||||||||
Acquisition-related costs, net | 5,689 | 8,740 | 27,740 | 17,166 | ||||||||||||
Amortization of intangible assets | 28,964 | 27,792 | 113,895 | 108,021 | ||||||||||||
Restructuring and other charges, net | 21,405 | 4,967 | 61,054 | 25,224 | ||||||||||||
Costs associated with IP collaboration agreements | — | — | — | 4,000 | ||||||||||||
Other | 2,285 | 3,156 | 10,265 | 15,145 | ||||||||||||
Non-GAAP income from operations | $ | 98,062 | $ | 153,002 | $ | 522,077 | $ | 564,548 | ||||||||
GAAP (loss) income before income taxes | $ | (55,546 | ) | $ | 7,813 | $ | (119,015 | ) | $ | 1,739 | ||||||
Gross profit adjustments | 29,895 | 30,626 | 135,959 | 128,209 | ||||||||||||
Research and development (1) | 6,564 | 8,615 | 33,061 | 35,671 | ||||||||||||
Sales and marketing (1) | 10,845 | 12,041 | 45,813 | 49,064 | ||||||||||||
General and administrative (1) | 10,269 | 11,633 | 42,321 | 43,525 | ||||||||||||
Acquisition-related costs, net | 5,689 | 8,740 | 27,740 | 17,166 | ||||||||||||
Amortization of intangible assets | 28,964 | 27,792 | 113,895 | 108,021 | ||||||||||||
Restructuring and other charges, net | 21,405 | 4,967 | 61,054 | 25,224 | ||||||||||||
Non-cash interest expense | 16,383 | 13,061 | 59,295 | 47,105 | ||||||||||||
Costs associated with IP collaboration agreements | — | — | — | 4,000 | ||||||||||||
Loss on extinguishment of debt | — | — | 18,565 | 4,851 | ||||||||||||
Other | 2,285 | 3,156 | 10,265 | 16,119 | ||||||||||||
Non-GAAP income before income taxes | $ | 76,753 | $ | 128,444 | $ | 428,953 | $ | 480,694 | ||||||||
© 2017 Nuance Communications, Inc. All rights reserved. |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Press release |
Three months ended | Twelve months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
GAAP provision (benefit) for income taxes | $ | 9,878 | $ | (10,661 | ) | $ | 31,981 | $ | 14,197 | |||||||
Income tax effect of Non-GAAP adjustments | 44,971 | 38,581 | 184,020 | 158,624 | ||||||||||||
Removal of valuation allowance and other items | (39,058 | ) | 14,018 | (95,515 | ) | (30,517 | ) | |||||||||
Removal of discrete items | 748 | (4,193 | ) | (572 | ) | (4,993 | ) | |||||||||
Non-GAAP provision for income taxes | $ | 16,539 | $ | 37,744 | $ | 119,914 | $ | 137,311 | ||||||||
GAAP net (loss) income | $ | (65,424 | ) | $ | 18,474 | $ | (150,996 | ) | $ | (12,458 | ) | |||||
Acquisition-related adjustment - revenues (2) | 8,742 | 6,244 | 38,029 | 30,690 | ||||||||||||
Acquisition-related adjustment - cost of revenues (2) | — | 1 | — | (925 | ) | |||||||||||
Acquisition-related costs, net | 5,689 | 8,740 | 27,740 | 17,166 | ||||||||||||
Cost of revenue from amortization of intangible assets | 16,366 | 15,799 | 64,853 | 62,876 | ||||||||||||
Amortization of intangible assets | 28,964 | 27,792 | 113,895 | 108,021 | ||||||||||||
Restructuring and other charges, net | 21,405 | 4,967 | 61,054 | 25,224 | ||||||||||||
Stock-based compensation (1) | 32,465 | 40,871 | 154,272 | 163,828 | ||||||||||||
Non-cash interest expense | 16,383 | 13,061 | 59,295 | 47,105 | ||||||||||||
Adjustment to income tax expense | (6,661 | ) | (48,405 | ) | (87,933 | ) | (123,114 | ) | ||||||||
Costs associated with IP collaboration agreements | — | — | — | 4,000 | ||||||||||||
Loss on extinguishment of debt | — | — | 18,565 | 4,851 | ||||||||||||
Other | 2,286 | 3,156 | 10,265 | 16,119 | ||||||||||||
Non-GAAP net income | $ | 60,215 | $ | 90,700 | $ | 309,039 | $ | 343,383 | ||||||||
Non-GAAP diluted net income per share | $ | 0.20 | $ | 0.31 | $ | 1.05 | $ | 1.15 | ||||||||
Diluted weighted average common shares outstanding | 295,004 | 289,371 | 295,129 | 298,292 | ||||||||||||
© 2017 Nuance Communications, Inc. All rights reserved. |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Press release |
Three months ended September 30, | Twelve months ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(1) Stock-based compensation | |||||||||||||||
Cost of professional services and hosting | $ | 4,087 | $ | 7,428 | $ | 28,962 | $ | 31,054 | |||||||
Cost of product and licensing | 50 | 90 | 348 | 376 | |||||||||||
Cost of maintenance and support | 650 | 1,064 | 3,767 | 4,138 | |||||||||||
Research and development | 6,564 | 8,615 | 33,061 | 35,671 | |||||||||||
Sales and marketing | 10,845 | 12,041 | 45,813 | 49,064 | |||||||||||
General and administrative | 10,269 | 11,633 | 42,321 | 43,525 | |||||||||||
Total | $ | 32,465 | $ | 40,871 | $ | 154,272 | $ | 163,828 | |||||||
(2) Acquisition-related revenue and cost of revenue | |||||||||||||||
Revenues | $ | 8,742 | $ | 6,244 | $ | 38,029 | $ | 30,690 | |||||||
Cost of professional services and hosting | — | 1 | — | (925 | ) | ||||||||||
Total | $ | 8,742 | $ | 6,245 | $ | 38,029 | $ | 29,765 | |||||||
© 2017 Nuance Communications, Inc. All rights reserved. |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Press release |
Hosting Revenues | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||||||||
GAAP Revenues | $ | 177.4 | $ | 184.6 | $ | 181.1 | $ | 187.0 | $ | 730.2 | $ | 193.3 | $ | 202.2 | $ | 189.4 | $ | 149.0 | $ | 733.8 | ||||||||||||||||||||
Adjustment | 2.3 | 2.5 | 2.0 | 2.3 | 9.1 | 2.3 | 2.7 | 3.1 | 2.0 | 10.1 | ||||||||||||||||||||||||||||||
Non-GAAP Revenues | $ | 179.7 | $ | 187.1 | $ | 183.2 | $ | 189.3 | $ | 739.2 | $ | 195.6 | $ | 204.8 | $ | 192.5 | $ | 150.9 | $ | 743.9 | ||||||||||||||||||||
Maintenance and Support Revenues | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||||||||
GAAP Revenues | $ | 79.9 | $ | 79.9 | $ | 82.5 | $ | 82.0 | $ | 324.3 | $ | 82.5 | $ | 81.6 | $ | 80.5 | $ | 82.5 | $ | 327.1 | ||||||||||||||||||||
Adjustment | 0.2 | 0.1 | 0.0 | 0.0 | 0.4 | 0.2 | 0.4 | 0.2 | 0.2 | 1.0 | ||||||||||||||||||||||||||||||
Non-GAAP Revenues | $ | 80.2 | $ | 80.0 | $ | 82.5 | $ | 82.0 | $ | 324.7 | $ | 82.7 | $ | 82.0 | $ | 80.7 | $ | 82.7 | $ | 328.1 | ||||||||||||||||||||
Perpetual Product and Licensing Revenues | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||||||||
GAAP Revenues | $ | 115.2 | $ | 88.0 | $ | 80.9 | $ | 99.5 | $ | 383.6 | $ | 78.7 | $ | 76.5 | $ | 73.5 | $ | 77.3 | $ | 306.0 | ||||||||||||||||||||
Adjustment | 2.0 | 2.2 | 1.4 | 1.0 | 6.6 | 0.7 | 0.5 | 0.9 | 0.4 | 2.4 | ||||||||||||||||||||||||||||||
Non-GAAP Revenues | $ | 117.2 | $ | 90.2 | $ | 82.3 | $ | 100.5 | $ | 390.2 | $ | 79.3 | $ | 77.0 | $ | 74.4 | $ | 77.7 | $ | 308.4 | ||||||||||||||||||||
Recurring Product and Licensing Revenues | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||||||||
GAAP Revenues | $ | 63.9 | $ | 70.6 | $ | 72.1 | $ | 79.1 | $ | 285.6 | $ | 73.1 | $ | 82.8 | $ | 80.8 | $ | 92.8 | $ | 329.4 | ||||||||||||||||||||
Adjustment | 4.0 | 3.5 | 3.3 | 2.7 | 13.5 | 5.1 | 7.8 | 5.0 | 6.1 | 24.1 | ||||||||||||||||||||||||||||||
Non-GAAP Revenues | $ | 67.9 | $ | 74.1 | $ | 75.3 | $ | 81.7 | $ | 299.1 | $ | 78.2 | $ | 90.6 | $ | 85.8 | $ | 98.9 | $ | 353.5 | ||||||||||||||||||||
Professional Services Revenues | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||||||||
GAAP Revenues | $ | 49.7 | $ | 55.6 | $ | 61.2 | $ | 58.7 | $ | 225.2 | $ | 60.1 | $ | 56.5 | $ | 62.1 | $ | 64.3 | $ | 243.1 | ||||||||||||||||||||
Adjustment | 0.3 | 0.4 | 0.3 | 0.2 | 1.1 | 0.2 | 0.1 | 0.1 | 0.1 | 0.5 | ||||||||||||||||||||||||||||||
Non-GAAP Revenues | $ | 50.0 | $ | 55.9 | $ | 61.5 | $ | 58.9 | $ | 226.3 | $ | 60.3 | $ | 56.7 | $ | 62.2 | $ | 64.4 | $ | 243.6 | ||||||||||||||||||||
Total Recurring Revenues | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||||||||
GAAP Revenues | $ | 326.1 | $ | 339.6 | $ | 339.7 | $ | 352.1 | $ | 1,357.4 | $ | 353.0 | $ | 370.2 | $ | 354.5 | $ | 328.6 | $ | 1,406.4 | ||||||||||||||||||||
Adjustment | 6.4 | 6.2 | 5.3 | 5.0 | 22.9 | 7.5 | 11.4 | 8.7 | 8.2 | 35.9 | ||||||||||||||||||||||||||||||
Non-GAAP Revenues | $ | 332.5 | $ | 345.8 | $ | 345.0 | $ | 357.1 | $ | 1,380.3 | $ | 360.5 | $ | 381.7 | $ | 363.2 | $ | 336.8 | $ | 1,442.3 |
© 2017 Nuance Communications, Inc. All rights reserved. |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
1 |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
2 |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
3 |
Q4 2017 As reported | Q4 2017 Incident Impact* | FY 2017 As reported | FY 2017 Incident Impact* | |
Net new bookings | $424.4 | 0 | $1,653.6 | $(10.2) |
GAAP revenue | $465.9 | $(53.0) | $1,939.4 | $(68.0) |
GAAP recurring revenue % of revenue | 71.0% | (3.0)% | 73.0% | 0 |
GAAP gross margin | 54.5% | (3.2)% | 56.0% | (1.0)% |
GAAP operating margin | (3.8)% | (10.8)% | 2.7% | (3.5)% |
GAAP EPS | $(0.23) | $(0.19) | $(0.52) | $(0.25) |
Non-GAAP revenue | $474.7 | $(53.0) | $1,977.4 | $(68.0) |
Non-GAAP recurring revenue % of revenue | 71.0% | (3.0)% | 73.0% | (1.0)% |
Non-GAAP gross margin | 59.8% | (3.6)% | 61.8% | (1.0)% |
Non-GAAP operating margin | 20.7% | (7.6)% | 26.4% | (2.3)% |
Non-GAAP EPS | $0.20 | $(0.11) | $1.05 | $(0.13) |
CFFO | $(3.5) | $(120.0) | $378.9 | $(120.0) |
• | We delivered net new bookings in Q4 17 of $424.4 million, down 18% year-over-year, as expected, due to record results in Q4 16. We saw strong growth and record net new bookings in Healthcare, led by growth in clinical documentation improvement solutions. Our Imaging MFP Scan business had a record net new bookings quarter as well. |
• | For fiscal 2017, total net new bookings were $1,653.6 million, up 10% from $1,502.3 million in fiscal 2016, meeting the high end of our guidance range. Growth was led by Dragon Medical cloud, Enterprise offerings, clinical documentation improvement solutions, and automotive. Of note, our Enterprise segment delivered record net new bookings on an annual basis. |
Q1 2016 | Q2 2016 | Q3 2016 | Q4 2016 | FY 2016 | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | FY 2017 | |
Net New Bookings (in millions) | $308.7 | $313.7 | $362.9 | $516.9 | $1,502.3 | $380.3 | $410.4 | $438.5 | $424.4 | $1,653.6 |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
4 |
• | In Q4 17, we achieved GAAP revenue of $465.9 million, down 8% from a year ago. Non-GAAP revenue was $474.7 million, down 7% from a year ago, and down 9% on an organic basis. Our year-over-year decline was due to lower revenues as a result of the malware incident, continued HIM erosion, handset declines, and continued challenges in Imaging. These were offset by strong growth in our Dragon Medical cloud, automotive, and Enterprise offerings. |
• | For fiscal 2017, we reported GAAP revenue of $1,939.4 million, down $9.5 million from $1,948.9 million in fiscal 2016. Non-GAAP revenue was $1,977.4 million, down $2.2 million from $1,979.6 million in fiscal 2016. |
• | Our organic revenue in fiscal 2017 declined 3% from fiscal 2016 due primarily to the malware incident. |
• | In Q4 17, GAAP recurring revenue was $328.6 million, compared to $352.1 million a year ago. Non-GAAP recurring revenue was $336.8 million compared to $357.1 million a year ago. GAAP and non-GAAP recurring revenue increased 100 basis points to 71% in Q4 17 compared to 70% in Q4 16. |
• | GAAP recurring revenue was $1,406.4 million in FY17 compared to $1,357.4 million in FY16. Non-GAAP recurring revenue in FY17 was $1,442.3 million compared to $1,380.3 million in FY16. GAAP and non-GAAP recurring revenue increased to 73% of total revenue in FY17, both up from 70% in FY16. |
Q1 2016 | Q2 2016 | Q3 2016 | Q4 2016 | FY 2016 | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | FY 2017 | |
Hosting | $179.7 | $187.1 | $183.2 | $189.3 | $739.2 | $195.6 | $204.8 | $192.5 | $150.9 | $743.9 |
% of Revenue | 36% | 38% | 38% | 37% | 37% | 39% | 40% | 39% | 32% | 38% |
Maintenance and Support | $80.2 | $80.0 | $82.5 | $82.0 | $324.7 | $82.7 | $82.0 | $80.7 | $82.7 | $328.1 |
% of Revenue | 16% | 16% | 17% | 16% | 16% | 17% | 16% | 16% | 17% | 17% |
Perpetual Product and Licensing | $117.2 | $90.2 | $82.3 | $100.5 | $390.2 | $79.3 | $77.0 | $74.4 | $77.7 | $308.4 |
% of Revenue | 24% | 19% | 17% | 20% | 20% | 16% | 15% | 15% | 16% | 16% |
Recurring Product and Licensing | $67.9 | $74.1 | $75.3 | $81.7 | $299.1 | $78.2 | $90.6 | $85.8 | $98.9 | $353.5 |
% of Revenue | 14% | 15% | 16% | 16% | 15% | 16% | 18% | 17% | 21% | 18% |
Professional Services | $50.0 | $55.9 | $61.5 | $58.9 | $226.3 | $60.3 | $56.7 | $62.2 | $64.4 | $243.6 |
% of Revenue | 10% | 11% | 13% | 11% | 11% | 12% | 11% | 13% | 14% | 12% |
Total revenue | $494.9 | $487.4 | $484.9 | $512.4 | $1,979.6 | $496.0 | $511.1 | $495.6 | $474.7 | $1,977.4 |
Total Recurring Revenue * | $332.5 | $345.8 | $345.0 | $357.1 | $1,380.3 | $360.5 | $381.7 | $363.2 | $336.8 | $1,442.3 |
% of Revenue | 67% | 71% | 71% | 70% | 70% | 73% | 75% | 73% | 71% | 73% |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
5 |
Q1 2016 | Q2 2016 | Q3 2016 | Q4 2016 | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | |
Estimated 3-Year Value of Total On-Demand Contracts (in millions) | $2,245.3 | $2,161.3 | $2,161.1 | $2,430.0 | $2,499.4 | $2,568.3 | $2,359.5 | $2,307.3 |
• | At the end of the quarter, the estimated 3-year value of total on-demand contracts was $2,307.3 million, down from $2,430.0 million a year ago primarily due to the impact of the malware incident as well as erosion on our HIM business offset primarily by growth in our Dragon Medical cloud and automotive connected car businesses. |
• | GAAP gross margin in Q4 17 was 54.5%, a decrease of 390 basis points year-over-year. Q4 17 non-GAAP gross margin was 59.8%, a decrease of 390 basis points year-over-year. The reductions in both GAAP and non-GAAP gross margins were due the impact on revenues attributable to the malware incident without commensurate reductions in relatively fixed cost elements within our cost of revenues. |
• | In fiscal 2017, we reported GAAP gross margin of 56.0% in FY17, a decrease of 140 basis points compared to 57.4% in FY16. Non-GAAP gross margin was 61.8%, which was down 120 basis points compared to FY16 due the malware incident coupled with mix shift away from product and licenses toward professional services and hosting. |
• | Q4 17 GAAP operating expenses were $272.0 million, compared to $250.2 million a year ago. GAAP operating margin was (3.8)%, a decrease of 1,280 basis points year-over-year. Q4 17 non-GAAP operating expenses were $186.0 million, compared to $173.3 million a year ago. Q4 17 non-GAAP operating margin was 20.7%, a decrease of 920 basis points year-over-year primarily as a result of lost revenues from the malware incident. |
• | Total FY17 GAAP operating expenses were $1,033.6 million, an increase of $52.7 million from $980.9 million a year ago. Total non-GAAP operating expenses were $699.4 million, an increase of $16.4 million from $683.1 million a year ago. Our FY17 GAAP operating margin was 2.7%, a decrease of 440 basis points as compared to 7.1% in FY16. Non-GAAP operating margin was 26.4%, a decrease of 210 basis points as compared to 28.5% in FY16, primarily due to the impact on revenues attributable to the malware incident. |
• | GAAP net interest expense was $37.9 million in Q4 17, up $1.5 million year-over-year. Non-GAAP net interest expense was $21.5 million in Q4 17, down $1.8 million year-over-year. The decrease in non-GAAP net interest expense in Q4 17 is primarily a result of capital market activities, including the issuance in December 2016 of $500 million in senior 5.625% notes and the issuance in March 2017 of $350 million in 1.25% convertible notes, offset by the impact of the retirement of $600 million of our high-yield 5.375% bonds in January 2017. |
• | GAAP net interest expense was $150.0 million in FY17, up $21.7 million year over year. Non-GAAP net interest expense was $90.7 million for FY17, up $9.5 million year over year primarily as a result of a full year of interest impact from our $300 million high-yield 6.00% bonds offset by the combination of our newly issued $500 million high-yield 5.625% bond in December 2016 and the retirement of $600 million of our high-yield 5.375% bonds in January 2017. |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
6 |
• | Q4 17 GAAP provision for income taxes was $9.9 million, compared to $(10.7) million a year ago. Q4 17 non-GAAP provision for income taxes was $16.5 million, compared to $37.7 million a year ago. The non-GAAP tax rate was 21.5% in Q4 17, compared to 29.4% a year ago. The decrease in the non-GAAP effective income tax rate on a year-over-year basis was mainly due to the lower level of non-GAAP pre-tax income being generated in the United States. |
• | FY17 GAAP provision for income taxes was $32.0 million, compared to $14.2 million a year ago. FY17 non-GAAP provision for income taxes was $119.9 million, compared to $137.3 million a year ago. The non-GAAP tax rate was 28.0% in FY17, compared to 28.6% a year ago. The decrease in the non-GAAP effective income tax rate on a year-over-year basis was mainly due to the lower level of non-GAAP pre-tax income being generated in the United States. |
• | GAAP EPS in Q4 17 was $(0.23) per share, compared to $0.06 a year ago. In Q4 17, non-GAAP EPS was $0.20, down $0.11 from a year ago primarily as a result of the impact on revenue and operating expenses attributable to the malware incident. |
• | In FY17, we recognized a GAAP net loss of $(151.0) million, or $(0.52) per share, compared to GAAP net loss of $(12.5) million, or $(0.04) per share, in FY16. Non-GAAP net income was $309.0 million, or $1.05 per diluted share compared to $343.4 million, or $1.15 per diluted share, in FY16. |
• | During Q4 17, we did not repurchase any shares of our common stock. As of September 30, 2017, we had approximately $193.4 million remaining under the Board’s repurchase program authorization. |
• | Q4 17 CFFO was $(3.5) million, a decrease of 103% year over year, primarily due to collections shortfalls resulting from incident-related lower revenues and delayed collections, as well as incremental expenses incurred in responding to the incident. CFFO as a percent of non-GAAP net income was (6)% in Q4 17. |
• | We reported full-year CFFO of $378.9 million, down 33.0% compared to $565.8 million in FY16, primarily due to the impact of the malware incident. CFFO as a percent of non-GAAP net income was 123%. |
Q1 2016 | Q2 2016 | Q3 2016 | Q4 2016 | FY 2016 | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | FY 2017 | |
Cash Flow from Operations (in millions) | $141.1 | $159.9 | $125.9 | $138.9 | $565.8 | $124.9 | $125.4 | $132.0 | $(3.5) | $378.9 |
• | As of September 30, 2017, our balance of cash, cash equivalents and marketable securities was $874.1 million. |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
7 |
• | In Q4 17, DSO was 76 days, up nine days compared to a year ago. The increase in DSO was due to higher Q4 Mobile and Enterprise billings, longer collections cycles as we conduct more business in China and emerging markets, and delayed collections and lower revenues in our Healthcare segment primarily due to the malware incident. |
Q1 2016 | Q2 2016 | Q3 2016 | Q4 2016 | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | |
Days Sales Outstanding | 69 | 68 | 68 | 67 | 71 | 69 | 66 | 76 |
• | We ended Q4 17 with deferred revenue of $790.0 million, up 7.3% from a year ago. This growth was primarily driven by our hosting solutions, most notably for automotive connected services. |
Q1 2016 | Q2 2016 | Q3 2016 | Q4 2016 | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | |
Total Deferred Revenue (in millions) | $732.7 | $748.5 | $729.1 | $736.1 | $802.5 | $802.4 | $798.7 | $790.0 |
• | Q4 net new bookings for our Healthcare business achieved a record in the quarter driven by our clinical documentation improvement offerings which achieved a record bookings quarter, and Dragon Medical cloud and diagnostics which had their second best quarters for bookings; |
• | FY17 Dragon Medical revenues grew 19% organically year-over-year fueled by the growth of Dragon Medical cloud as providers desire cloud-based offerings that provide real-time intelligence, reduce physician fatigue, and improve the patient experience; |
• | We saw a continued increase in demand for our clinical documentation improvement solutions as clients, such as Partners Healthcare, Southeast Alabama Medical Center, Rochester Regional Health, and Magnolia Regional Health Center, utilize our Computer Assisted Physician Documentation (CAPD), |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
8 |
• | We delivered a strong Q4 in diagnostics with increased demand for PowerShare Image Sharing and PowerScribe 360 solutions among hospitals for cross-platform solutions, flexibility, and integration with key quality applications. |
Q1 2016 | Q2 2016 | Q3 2016 | Q4 2016 | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | |
Annualized line run-rate in healthcare on-demand business (in billions) | 5.140 | 5.130 | 5.003 | 4.785 | 4.651 | 4.743 | 4.345 | 2.936 |
• | We produced strong results across our omni-channel engagement portfolio, with notable deals at AT&T, Barclays Bank, and Esurance, and solid performance with our channel partners, including Accenture, Avaya, Cisco, DiData, Genesys, KCOM, Presidio, Servion and Telstra; |
• | We secured new competitive wins for our digital engagement solutions including Citizens Bank, Esurance, and organizations across verticals, such as financial services, telecommunications, travel, and government; |
• | We saw improved demand for our Nuance On-Demand voice solutions, securing long-term multi-year renewals and winning new business as a result of investments in omni-channel innovations, voice to digital capabilities, and enhanced resiliency and security to our platforms; |
• | We continued to win independent analyst validation across our omni-channel engagement portfolio: |
◦ | Nina, the virtual assistant for customer engagement, secured the #1 vendor position from both Forrester and Opus Research, outpacing IBM Watson, IPSoft, and others. Additionally, Nuance customer implementations of Nina at FedEx and IP Australia each won the Intelligent Assistant Awards at the Intelligent Assistants Conference in San Francisco; and, |
◦ | Nuance was named the leader in Biometric Authentication in the Voice Biometrics Intelliview Report by Opus Research, naming Nuance as the biometrics solution leader in each category of Contact Center Authentication, Contact Center Fraud Detection, and Mobile Authentication. |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
9 |
• | Our automotive business continued to lead the Mobile segment with strategic wins and launches from Toyota, Volkswagen, Audi, Harman, and Garmin, as automakers continue to integrate our hybrid embedded-connected automotive AI platform, Dragon Drive, as part of their core HMI experience; |
• | We experienced continued demand for our telecommunications and cable service provider offerings in FY17 as we expanded into Latin and Central America, India, Vietnam, and Indonesia. Q4 wins included Vivo, Oi, and Mobifone as our customers leverage Loop, our mobile operator AI-powered monetization platform for subscriber marketing and engagement; and, |
• | We expanded our Dragon TV business, with new wins, culminating in our Dragon TV solution being honored with a Technology & Engineering Emmy® Award in the “Contextual Voice Navigation for Discovering and Interacting with TV Content” category, recognizing its intuitive voice-activated navigation platform that empowers users to seamlessly search and discover content. |
• | We saw growth in net new bookings, year-over-year, with notable wins, such as the renewed strategic alliance with Canon which demonstrates client demand for our capture solutions that help organizations meet workflow need. This agreement, combined with the recent Lexmark and Epson partnerships, expands the market opportunity for Imaging’s entire portfolio; |
• | Key enterprise wins continue to validate our document security and vertical focus highlighted by Norton Healthcare and Pinnacle Health System; |
• | We delivered strong growth for our PDF solutions in FY17, year over year, substantiating the offering as a better PDF solution for business users, and paving the way for Ingram Micro’s Emerging Vendor award; and |
• | We accelerated our product innovations with major releases of eCopy 6.0, Power PDF 2.0, and the new OmniPage Server. |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
10 |
Q1 2016 | Q2 2016 | Q3 2016 | Q4 2016 | FY 2016 | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | FY 2017 | |
Healthcare | $248.1 | $244.4 | $241.0 | $239.8 | $973.3 | $239.2 | $238.5 | $232.6 | $189.0 | $899.3 |
Yr/yr. Organic Growth | 1% | 2% | (5)% | (11)% | (4)% | (6)% | (5)% | (5)% | (22)% | (9)% |
Recurring Revenue % | 76% | 77% | ||||||||
Mobile | $96.4 | $91.8 | $91.8 | $97.2 | $377.3 | $91.8 | $100.2 | $101.5 | $104.5 | $398.0 |
Yr/yr. Organic Growth | (0)% | (16)% | (4)% | (9)% | (8)% | (5)% | 8% | 7% | 6% | 4% |
Recurring Revenue % | 79% | 85% | ||||||||
Enterprise | $88.8 | $94.4 | $95.2 | $109.0 | $387.5 | $112.9 | $119.4 | $112.1 | $117.9 | $462.3 |
Yr/yr. Organic Growth | (2)% | 13% | 10% | 16% | 9% | 15% | 14% | 6% | 4% | 9% |
Recurring Revenue % | 62% | 69% | ||||||||
Imaging | $61.6 | $56.7 | $56.8 | $66.4 | $241.6 | $52.1 | $53.0 | $49.4 | $63.2 | $217.7 |
Yr/yr. Organic Growth | 3% | (5)% | 1% | 7% | 2% | (15)% | (7)% | (13)% | (5)% | (10)% |
Recurring Revenue % | 41% | 43% | ||||||||
Total revenue | $494.9 | $487.4 | $484.9 | $512.4 | $1,979.6 | $496.0 | $511.1 | $495.6 | $474.7 | $1,977.4 |
Yr/yr. Organic Growth | 0% | (1)% | (1)% | (4)% | (1)% | (3)% | 1% | (1)% | (9)% | (3)% |
Yr/yr. Constant Currency Organic Growth | (3)% | 1% | (1)% | (10)% | (3)% | |||||
Recurring Revenue % | 70% | 73% |
Q1 2016 | Q2 2016 | Q3 2016 | Q4 2016 | FY 2016 | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | FY 2017 | |
Healthcare | $81.2 | $78.4 | $78.1 | $75.7 | $313.5 | $78.6 | $83.3 | $70.5 | $29.8 | $262.1 |
Segment Margin % | 33% | 32% | 32% | 32% | 32% | 33% | 35% | 30% | 16% | 29% |
Mobile | $33.8 | $33.4 | $31.0 | $35.2 | $133.4 | $33.5 | $40.4 | $41.4 | $39.5 | $154.9 |
Segment Margin % | 35% | 36% | 34% | 36% | 35% | 36% | 40% | 41% | 38% | 39% |
Enterprise | $26.2 | $34.1 | $31.1 | $38.6 | $130.0 | $32.0 | $41.8 | $34.4 | $33.0 | $141.2 |
Segment Margin % | 30% | 36% | 33% | 35% | 34% | 28% | 35% | 31% | 28% | 31% |
Imaging | $27.0 | $22.2 | $20.6 | $31.0 | $100.8 | $17.6 | $18.5 | $16.9 | $26.5 | $79.5 |
Segment Margin % | 44% | 39% | 36% | 47% | 42% | 34% | 35% | 34% | 42% | 37% |
Total Segment Profit | $168.2 | $168.1 | $160.8 | $180.6 | $677.6 | $161.6 | $184.0 | $163.2 | $128.9 | $637.7 |
Segment Margin % | 34% | 34% | 33% | 35% | 34% | 33% | 36% | 33% | 27% | 32% |
• | In Healthcare, we expect revenue will increase through growth in Dragon Medical cloud, diagnostics, and our CAPD offerings, partially offset by the malware incident impact and continued erosion in our transcription offerings. We expect Dragon Medical to surpass HIM as the largest business line within Healthcare by the end of this fiscal year and will continue to deliver double digit growth. We exited FY17 with our transcription business (HIM) at approximately $300 million for the year, down approximately $100 million year-over-year, due to the malware incident and erosion. As noted last quarter, we expect HIM to continue to decline in FY18 due to the malware incident impact and continued erosion resulting in estimated FY18 annual revenue for this business line of approximately $250 million. Healthcare net new bookings growth in FY18 is expected to come from Dragon Medical cloud and diagnostics. |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
11 |
• | In Enterprise, we expect demand for our AI-powered omni-channel engagement solutions will remain strong and will support continued revenue growth for the segment. Additionally, we expect strong growth in our biometrics, security, and digital messaging solutions, and solid performance in our voice on-premise solutions and services. Our recently introduced omni-channel analytics offering will complement these solutions to help drive Enterprise bookings growth in FY18. |
• | In Mobile, we expect revenue and bookings growth will be led by our automotive business, supported by continued demand for our telecommunications and cable service provider offerings. This will be offset by continued declines in devices revenue. In FY17, the automotive business generated approximately $250 million in annual revenue. In FY18, we expect to continue to see double-digit growth in automotive, while devices revenue is expected to continue to decrease as a result of declining handset business. Mobile operator services are expected to increase in size from FY17 revenue levels driven by continued geographic expansion of this business into Colombia, Chile, Argentina, and new markets in Asia, Middle East, and Africa. |
• | In Imaging, we expect that revenue will be slightly up driven by our MFP offerings as well as our improved sales management and execution dynamics. Imaging bookings growth is expected to be driven by a transformative wave of product innovation as we look to make FY18 our most comprehensive launch year ever with 12 major releases planned which will culminate in a newly combined suite of print and scan offerings. |
• | Increasing investments in our growth businesses, including organizing a separate, reportable segment for our rapidly growing automotive business; |
• | Productivity and cost initiatives that build on prior, successful programs to drive efficiencies across Nuance’s global operations, that will fund the company’s increasing investments in conversational AI and enhanced go-to-market resources for its vertical markets, including automotive, healthcare, telecommunications and financial services; and, |
• | Deliver gradual, year-over-year margin improvements. |
Q1 2018 | Low | High | |
GAAP revenue | $478.0 | $492.0 | |
Non-GAAP revenue | $486.0 | $500.0 | |
GAAP EPS | $(0.17) | $(0.13) | |
Non-GAAP EPS | $0.19 | $0.22 |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
12 |
FY 2018 | Low | High | |
GAAP revenue | $2,012.0 | $2,062.0 | |
Non-GAAP revenue | $2,030.0 | $2,080.0 | |
GAAP EPS | $(0.09) | $0.03 | |
Non-GAAP EPS | $1.06 | $1.15 |
FY 2018 Guidance Other Metrics | Guidance |
Net new bookings growth | 5% to 7% |
Organic non-GAAP revenue growth | 2% to 4% |
Recurring revenue % of revenue | ~73.0% |
Non-GAAP gross margin | ~63.0% |
Non-GAAP operating margin | 26.5% to 27.0% |
Capital expenditures | ~$50m |
Net cash interest and other expense | ~$85m |
CFFO | $430m to $450m |
CFFO as a % of NGNI | 130% to 135% |
Non-GAAP tax rate | 28.0% to 29.0% |
Net cash taxes | $30m to $35m |
Diluted share count | ~301m |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
13 |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
14 |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
15 |
(i) | Transition and integration costs. Transition and integration costs include retention payments, transitional employee costs, earn-out payments treated as compensation expense, as well as the costs of integration-related services, including services provided by third parties. |
(ii) | Professional service fees and expenses. Professional service fees and expenses include financial advisory, legal, accounting and other outside services in connection with acquisition activities, and disputes and regulatory matters related to acquired entities. |
(iii) | Acquisition-related adjustments. Acquisition-related adjustments include items that are required to be marked to fair value each reporting period, such as contingent consideration, and other items related to acquisitions for which the measurement period has ended, such as gains or losses on settlements of pre-acquisition contingencies. |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
16 |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
17 |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
18 |
Three months ended September 30, | Twelve months ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenues: | ||||||||||||||||
Professional services and hosting | $ | 213,298 | $ | 245,667 | $ | 976,893 | $ | 955,329 | ||||||||
Product and licensing | 170,153 | 178,540 | 635,391 | 669,227 | ||||||||||||
Maintenance and support | 82,459 | 81,997 | 327,078 | 324,347 | ||||||||||||
Total revenues | 465,910 | 506,204 | 1,939,362 | 1,948,903 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Professional services and hosting | 162,348 | 159,785 | 660,849 | 626,168 | ||||||||||||
Product and licensing | 19,199 | 21,359 | 74,004 | 86,379 | ||||||||||||
Maintenance and support | 13,846 | 13,581 | 54,094 | 54,077 | ||||||||||||
Amortization of intangible assets | 16,366 | 15,799 | 64,853 | 62,876 | ||||||||||||
Total cost of revenues | 211,759 | 210,524 | 853,800 | 829,500 | ||||||||||||
Gross profit | 254,151 | 295,680 | 1,085,562 | 1,119,403 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 66,978 | 65,618 | 266,097 | 271,130 | ||||||||||||
Sales and marketing | 105,929 | 101,427 | 398,130 | 390,866 | ||||||||||||
General and administrative | 43,040 | 41,704 | 166,677 | 168,473 | ||||||||||||
Amortization of intangible assets | 28,964 | 27,792 | 113,895 | 108,021 | ||||||||||||
Acquisition-related costs, net | 5,689 | 8,740 | 27,740 | 17,166 | ||||||||||||
Restructuring and other charges, net | 21,405 | 4,967 | 61,054 | 25,224 | ||||||||||||
Total operating expenses | 272,005 | 250,248 | 1,033,593 | 980,880 | ||||||||||||
(Loss) income from operations | (17,854 | ) | 45,432 | 51,969 | 138,523 | |||||||||||
Other expenses, net | (37,692 | ) | (37,619 | ) | (170,984 | ) | (136,784 | ) | ||||||||
(Loss) income before income taxes | (55,546 | ) | 7,813 | (119,015 | ) | 1,739 | ||||||||||
Provision (benefit) for income taxes | 9,878 | (10,661 | ) | 31,981 | 14,197 | |||||||||||
Net (loss) income | $ | (65,424 | ) | $ | 18,474 | $ | (150,996 | ) | $ | (12,458 | ) | |||||
Net (loss) income per share: | ||||||||||||||||
Basic | $ | (0.23 | ) | $ | 0.07 | $ | (0.52 | ) | $ | (0.04 | ) | |||||
Diluted | $ | (0.23 | ) | $ | 0.06 | $ | (0.52 | ) | $ | (0.04 | ) | |||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 288,718 | 283,139 | 289,348 | 292,129 | ||||||||||||
Diluted | 288,718 | 289,371 | 289,348 | 292,129 |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
19 |
September 30, 2017 | September 30, 2016 | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 592,299 | $ | 481,620 | |||||
Marketable securities | 251,981 | 98,840 | |||||||
Accounts receivable, net | 395,392 | 380,004 | |||||||
Prepaid expenses and other current assets | 88,269 | 78,126 | |||||||
Total current assets | 1,327,941 | 1,038,590 | |||||||
Marketable securities | 29,844 | 27,632 | |||||||
Land, building and equipment, net | 176,548 | 185,169 | |||||||
Goodwill | 3,590,608 | 3,508,879 | |||||||
Intangible assets, net | 664,474 | 762,220 | |||||||
Other assets | 142,508 | 138,980 | |||||||
Total assets | $ | 5,931,923 | $ | 5,661,470 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Current portion of long-term debt | $ | 376,121 | $ | — | |||||
Contingent and deferred acquisition payments | 28,860 | 9,468 | |||||||
Accounts payable, accrued expenses and other current liabilities | 340,505 | 332,258 | |||||||
Deferred revenue | 366,042 | 349,173 | |||||||
Total current liabilities | 1,111,528 | 690,899 | |||||||
Long-term debt | 2,241,283 | 2,433,152 | |||||||
Deferred revenue, net of current portion | 423,929 | 386,960 | |||||||
Other liabilities | 223,801 | 219,129 | |||||||
Total liabilities | 4,000,541 | 3,730,140 | |||||||
Stockholders' equity | 1,931,382 | 1,931,330 | |||||||
Total liabilities and stockholders' equity | $ | 5,931,923 | $ | 5,661,470 |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
20 |
Three months ended September 30, | Twelve months ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net (loss) income | $ | (65,424 | ) | $ | 18,474 | $ | (150,996 | ) | $ | (12,458 | ) | |||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 59,458 | 58,381 | 234,413 | 231,474 | ||||||||||||
Stock-based compensation | 32,463 | 40,871 | 154,272 | 163,828 | ||||||||||||
Non-cash interest expense | 16,383 | 13,061 | 59,295 | 47,105 | ||||||||||||
Deferred tax provision | (1,907 | ) | (18,494 | ) | 4,855 | (12,014 | ) | |||||||||
Loss on extinguishment of debt | — | — | 18,565 | 4,851 | ||||||||||||
Fixed asset impairment | — | — | 16,351 | 2,480 | ||||||||||||
Other | 4,144 | (586 | ) | 8,403 | (3,055 | ) | ||||||||||
Changes in operating assets and liabilities, excluding effects of acquisitions: | ||||||||||||||||
Accounts receivable | (34,481 | ) | 2,076 | (6,349 | ) | 25,450 | ||||||||||
Prepaid expenses and other assets | (130 | ) | 2,881 | (14,661 | ) | (9,645 | ) | |||||||||
Accounts payable | (13,416 | ) | 13,165 | (1,207 | ) | 38,206 | ||||||||||
Accrued expenses and other liabilities | 13,080 | 9,276 | 9,040 | 27,826 | ||||||||||||
Deferred revenue | (13,666 | ) | (237 | ) | 46,886 | 61,747 | ||||||||||
Net cash (used in) provided by operating activities | (3,496 | ) | 138,868 | 378,867 | 565,795 | |||||||||||
Cash flows from investing activities: | ||||||||||||||||
Capital expenditures | (27,802 | ) | (13,460 | ) | (61,835 | ) | (54,883 | ) | ||||||||
Payments for business and asset acquisitions, net of cash acquired | (3,549 | ) | (144,569 | ) | (113,769 | ) | (172,763 | ) | ||||||||
Purchases of marketable securities and other investments | (140,408 | ) | (81,389 | ) | (332,470 | ) | (117,640 | ) | ||||||||
Proceeds from sales and maturities of marketable securities and other investments | 67,420 | 16,031 | 173,864 | 82,285 | ||||||||||||
Net cash used in investing activities | (104,339 | ) | (223,387 | ) | (334,210 | ) | (263,001 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Payments of debt | — | — | (634,055 | ) | (511,844 | ) | ||||||||||
Proceeds from issuance of long-term debt, net of issuance costs | (599 | ) | (502 | ) | 837,482 | 959,358 | ||||||||||
Payments for repurchase of common stock | — | — | (99,077 | ) | (699,472 | ) | ||||||||||
Proceeds from issuance of common stock from employee stock plans | 8,701 | 8,389 | 17,383 | 16,850 | ||||||||||||
Cash used to net share settle employee equity awards | (1,576 | ) | (1,589 | ) | (54,099 | ) | (68,636 | ) | ||||||||
Net payments on other long-term liabilities | (159 | ) | (51 | ) | (583 | ) | (1,371 | ) | ||||||||
Net cash provided by (used in) financing activities | 6,367 | 6,247 | 67,051 | (305,115 | ) | |||||||||||
Effects of exchange rate changes on cash and cash equivalents | 173 | 837 | (1,029 | ) | 4,492 | |||||||||||
Net (decrease) increase in cash and cash equivalents | (101,295 | ) | (77,435 | ) | 110,679 | 2,171 | ||||||||||
Cash and cash equivalents at beginning of period | 693,594 | 559,055 | 481,620 | 479,449 | ||||||||||||
Cash and cash equivalents at end of period | $ | 592,299 | $ | 481,620 | $ | 592,299 | $ | 481,620 |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
21 |
Three months ended | Twelve months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
GAAP revenues | $ | 465,910 | $ | 506,204 | $ | 1,939,362 | $ | 1,948,903 | ||||||||
Acquisition-related revenue adjustments: professional services and hosting | 2,044 | 2,534 | 10,553 | 10,212 | ||||||||||||
Acquisition-related revenue adjustments: product and licensing | 6,494 | 3,710 | 26,462 | 20,095 | ||||||||||||
Acquisition-related revenue adjustments: maintenance and support | 204 | — | 1,014 | 383 | ||||||||||||
Non-GAAP revenues | $ | 474,652 | $ | 512,448 | $ | 1,977,391 | $ | 1,979,593 | ||||||||
GAAP cost of revenues | $ | 211,759 | $ | 210,524 | $ | 853,800 | $ | 829,500 | ||||||||
Cost of revenues from amortization of intangible assets | (16,366 | ) | (15,799 | ) | (64,853 | ) | (62,876 | ) | ||||||||
Cost of revenues adjustments: professional services and hosting (1,2) | (4,087 | ) | (7,429 | ) | (28,962 | ) | (30,129 | ) | ||||||||
Cost of revenues adjustments: product and licensing (1,2) | (50 | ) | (90 | ) | (348 | ) | (376 | ) | ||||||||
Cost of revenues adjustments: maintenance and support (1) | (650 | ) | (1,064 | ) | (3,767 | ) | (4,138 | ) | ||||||||
Non-GAAP cost of revenues | $ | 190,606 | $ | 186,142 | $ | 755,870 | $ | 731,981 | ||||||||
GAAP gross profit | $ | 254,151 | $ | 295,680 | $ | 1,085,562 | $ | 1,119,403 | ||||||||
Gross profit adjustments | 29,895 | 30,626 | 135,959 | 128,209 | ||||||||||||
Non-GAAP gross profit | $ | 284,046 | $ | 326,306 | $ | 1,221,521 | $ | 1,247,612 | ||||||||
GAAP (loss) income from operations | $ | (17,854 | ) | $ | 45,432 | $ | 51,969 | $ | 138,523 | |||||||
Gross profit adjustments | 29,895 | 30,626 | 135,959 | 128,209 | ||||||||||||
Research and development (1) | 6,564 | 8,615 | 33,061 | 35,671 | ||||||||||||
Sales and marketing (1) | 10,845 | 12,041 | 45,813 | 49,064 | ||||||||||||
General and administrative (1) | 10,269 | 11,633 | 42,321 | 43,525 | ||||||||||||
Acquisition-related costs, net | 5,689 | 8,740 | 27,740 | 17,166 | ||||||||||||
Amortization of intangible assets | 28,964 | 27,792 | 113,895 | 108,021 | ||||||||||||
Restructuring and other charges, net | 21,405 | 4,967 | 61,054 | 25,224 | ||||||||||||
Costs associated with IP collaboration agreements | — | — | — | 4,000 | ||||||||||||
Other | 2,285 | 3,156 | 10,265 | 15,145 | ||||||||||||
Non-GAAP income from operations | $ | 98,062 | $ | 153,002 | $ | 522,077 | $ | 564,548 | ||||||||
GAAP (loss) income before income taxes | $ | (55,546 | ) | $ | 7,813 | $ | (119,015 | ) | $ | 1,739 | ||||||
Gross profit adjustments | 29,895 | 30,626 | 135,959 | 128,209 | ||||||||||||
Research and development (1) | 6,564 | 8,615 | 33,061 | 35,671 | ||||||||||||
Sales and marketing (1) | 10,845 | 12,041 | 45,813 | 49,064 | ||||||||||||
General and administrative (1) | 10,269 | 11,633 | 42,321 | 43,525 | ||||||||||||
Acquisition-related costs, net | 5,689 | 8,740 | 27,740 | 17,166 | ||||||||||||
Amortization of intangible assets | 28,964 | 27,792 | 113,895 | 108,021 | ||||||||||||
Restructuring and other charges, net | 21,405 | 4,967 | 61,054 | 25,224 | ||||||||||||
Non-cash interest expense | 16,383 | 13,061 | 59,295 | 47,105 | ||||||||||||
Costs associated with IP collaboration agreements | — | — | — | 4,000 | ||||||||||||
Loss on extinguishment of debt | — | — | 18,565 | 4,851 | ||||||||||||
Other | 2,285 | 3,156 | 10,265 | 16,119 | ||||||||||||
Non-GAAP income before income taxes | $ | 76,753 | $ | 128,444 | $ | 428,953 | $ | 480,694 | ||||||||
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
22 |
Three months ended | Twelve months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
GAAP provision (benefit) for income taxes | $ | 9,878 | $ | (10,661 | ) | $ | 31,981 | $ | 14,197 | |||||||
Income tax effect of Non-GAAP adjustments | 44,971 | 38,581 | 184,020 | 158,624 | ||||||||||||
Removal of valuation allowance and other items | (39,058 | ) | 14,018 | (95,515 | ) | (30,517 | ) | |||||||||
Removal of discrete items | 748 | (4,193 | ) | (572 | ) | (4,993 | ) | |||||||||
Non-GAAP provision for income taxes | $ | 16,539 | $ | 37,744 | $ | 119,914 | $ | 137,311 | ||||||||
GAAP net (loss) income | $ | (65,424 | ) | $ | 18,474 | $ | (150,996 | ) | $ | (12,458 | ) | |||||
Acquisition-related adjustment - revenues (2) | 8,742 | 6,244 | 38,029 | 30,690 | ||||||||||||
Acquisition-related adjustment - cost of revenues (2) | — | 1 | — | (925 | ) | |||||||||||
Acquisition-related costs, net | 5,689 | 8,740 | 27,740 | 17,166 | ||||||||||||
Cost of revenue from amortization of intangible assets | 16,366 | 15,799 | 64,853 | 62,876 | ||||||||||||
Amortization of intangible assets | 28,964 | 27,792 | 113,895 | 108,021 | ||||||||||||
Restructuring and other charges, net | 21,405 | 4,967 | 61,054 | 25,224 | ||||||||||||
Stock-based compensation (1) | 32,465 | 40,871 | 154,272 | 163,828 | ||||||||||||
Non-cash interest expense | 16,383 | 13,061 | 59,295 | 47,105 | ||||||||||||
Adjustment to income tax expense | (6,661 | ) | (48,405 | ) | (87,933 | ) | (123,114 | ) | ||||||||
Costs associated with IP collaboration agreements | — | — | — | 4,000 | ||||||||||||
Loss on extinguishment of debt | — | — | 18,565 | 4,851 | ||||||||||||
Other | 2,286 | 3,156 | 10,265 | 16,119 | ||||||||||||
Non-GAAP net income | $ | 60,215 | $ | 90,700 | $ | 309,039 | $ | 343,383 | ||||||||
Non-GAAP diluted net income per share | $ | 0.20 | $ | 0.31 | $ | 1.05 | $ | 1.15 | ||||||||
Diluted weighted average common shares outstanding | 295,004 | 289,371 | 295,129 | 298,292 | ||||||||||||
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
23 |
Three months ended September 30, | Twelve months ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(1) Stock-based compensation | |||||||||||||||
Cost of professional services and hosting | $ | 4,087 | $ | 7,428 | $ | 28,962 | $ | 31,054 | |||||||
Cost of product and licensing | 50 | 90 | 348 | 376 | |||||||||||
Cost of maintenance and support | 650 | 1,064 | 3,767 | 4,138 | |||||||||||
Research and development | 6,564 | 8,615 | 33,061 | 35,671 | |||||||||||
Sales and marketing | 10,845 | 12,041 | 45,813 | 49,064 | |||||||||||
General and administrative | 10,269 | 11,633 | 42,321 | 43,525 | |||||||||||
Total | $ | 32,465 | $ | 40,871 | $ | 154,272 | $ | 163,828 | |||||||
(2) Acquisition-related revenue and cost of revenue | |||||||||||||||
Revenues | $ | 8,742 | $ | 6,244 | $ | 38,029 | $ | 30,690 | |||||||
Cost of professional services and hosting | — | 1 | — | (925 | ) | ||||||||||
Total | $ | 8,742 | $ | 6,245 | $ | 38,029 | $ | 29,765 | |||||||
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
24 |
Three months ended September 30, | Twelve months ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
GAAP operating expenses | $ | 272,005 | $ | 250,248 | $ | 1,033,593 | $ | 980,880 | |||||||
Research and development (1) | (6,564 | ) | (8,615 | ) | (33,061 | ) | (35,671 | ) | |||||||
Sales and marketing (1) | (10,845 | ) | (12,041 | ) | (45,813 | ) | (49,064 | ) | |||||||
General and administrative (1) | (10,269 | ) | (11,633 | ) | (42,321 | ) | (43,525 | ) | |||||||
Acquisition-related costs, net | (5,689 | ) | (8,740 | ) | (27,740 | ) | (17,166 | ) | |||||||
Amortization of intangible assets | (28,964 | ) | (27,792 | ) | (113,895 | ) | (108,021 | ) | |||||||
Restructuring and other charges, net | (21,405 | ) | (4,967 | ) | (61,054 | ) | (25,224 | ) | |||||||
Costs associated with IP collaboration agreements | — | — | — | (4,000 | ) | ||||||||||
Other | (2,285 | ) | (3,156 | ) | (10,265 | ) | (15,145 | ) | |||||||
Non-GAAP operating expenses | $ | 185,984 | $ | 173,304 | $ | 699,444 | $ | 683,064 | |||||||
GAAP research and development expense | $ | 66,978 | $ | 65,618 | $ | 266,097 | $ | 271,130 | |||||||
Stock-based compensation (1) | (6,564 | ) | (8,615 | ) | (33,061 | ) | (35,671 | ) | |||||||
Non-GAAP research and development expense | $ | 60,414 | $ | 57,003 | $ | 233,036 | $ | 235,459 | |||||||
GAAP sales and marketing expense | $ | 105,929 | $ | 101,427 | $ | 398,130 | $ | 390,866 | |||||||
Stock-based compensation (1) | (10,845 | ) | (12,041 | ) | (45,813 | ) | (49,064 | ) | |||||||
Costs associated with IP collaboration agreements | — | — | — | (4,000 | ) | ||||||||||
Non-GAAP sales and marketing expense | $ | 95,084 | $ | 89,386 | $ | 352,317 | $ | 337,802 | |||||||
GAAP general and administrative expense | $ | 43,040 | $ | 41,704 | $ | 166,677 | $ | 168,473 | |||||||
Stock-based compensation (1) | (10,269 | ) | (11,633 | ) | (42,321 | ) | (43,525 | ) | |||||||
Other | (2,285 | ) | (3,156 | ) | (10,265 | ) | (15,145 | ) | |||||||
Non-GAAP general and administrative expense | $ | 30,486 | $ | 26,915 | $ | 114,091 | $ | 109,803 | |||||||
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
25 |
Hosting Revenues | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||||||||
GAAP Revenues | $ | 177.4 | $ | 184.6 | $ | 181.1 | $ | 187.0 | $ | 730.2 | $ | 193.3 | $ | 202.2 | $ | 189.4 | $ | 149.0 | $ | 733.8 | ||||||||||||||||||||
Adjustment | 2.3 | 2.5 | 2.0 | 2.3 | 9.1 | 2.3 | 2.7 | 3.1 | 2.0 | 10.1 | ||||||||||||||||||||||||||||||
Non-GAAP Revenues | $ | 179.7 | $ | 187.1 | $ | 183.2 | $ | 189.3 | $ | 739.2 | $ | 195.6 | $ | 204.8 | $ | 192.5 | $ | 150.9 | $ | 743.9 | ||||||||||||||||||||
Maintenance and Support Revenues | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||||||||
GAAP Revenues | $ | 79.9 | $ | 79.9 | $ | 82.5 | $ | 82.0 | $ | 324.3 | $ | 82.5 | $ | 81.6 | $ | 80.5 | $ | 82.5 | $ | 327.1 | ||||||||||||||||||||
Adjustment | 0.2 | 0.1 | 0.0 | 0.0 | 0.4 | 0.2 | 0.4 | 0.2 | 0.2 | 1.0 | ||||||||||||||||||||||||||||||
Non-GAAP Revenues | $ | 80.2 | $ | 80.0 | $ | 82.5 | $ | 82.0 | $ | 324.7 | $ | 82.7 | $ | 82.0 | $ | 80.7 | $ | 82.7 | $ | 328.1 | ||||||||||||||||||||
Perpetual Product and Licensing Revenues | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||||||||
GAAP Revenues | $ | 115.2 | $ | 88.0 | $ | 80.9 | $ | 99.5 | $ | 383.6 | $ | 78.7 | $ | 76.5 | $ | 73.5 | $ | 77.3 | $ | 306.0 | ||||||||||||||||||||
Adjustment | 2.0 | 2.2 | 1.4 | 1.0 | 6.6 | 0.7 | 0.5 | 0.9 | 0.4 | 2.4 | ||||||||||||||||||||||||||||||
Non-GAAP Revenues | $ | 117.2 | $ | 90.2 | $ | 82.3 | $ | 100.5 | $ | 390.2 | $ | 79.3 | $ | 77.0 | $ | 74.4 | $ | 77.7 | $ | 308.4 | ||||||||||||||||||||
Recurring Product and Licensing Revenues | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||||||||
GAAP Revenues | $ | 63.9 | $ | 70.6 | $ | 72.1 | $ | 79.1 | $ | 285.6 | $ | 73.1 | $ | 82.8 | $ | 80.8 | $ | 92.8 | $ | 329.4 | ||||||||||||||||||||
Adjustment | 4.0 | 3.5 | 3.3 | 2.7 | 13.5 | 5.1 | 7.8 | 5.0 | 6.1 | 24.1 | ||||||||||||||||||||||||||||||
Non-GAAP Revenues | $ | 67.9 | $ | 74.1 | $ | 75.3 | $ | 81.7 | $ | 299.1 | $ | 78.2 | $ | 90.6 | $ | 85.8 | $ | 98.9 | $ | 353.5 | ||||||||||||||||||||
Professional Services Revenues | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||||||||
GAAP Revenues | $ | 49.7 | $ | 55.6 | $ | 61.2 | $ | 58.7 | $ | 225.2 | $ | 60.1 | $ | 56.5 | $ | 62.1 | $ | 64.3 | $ | 243.1 | ||||||||||||||||||||
Adjustment | 0.3 | 0.4 | 0.3 | 0.2 | 1.1 | 0.2 | 0.1 | 0.1 | 0.1 | 0.5 | ||||||||||||||||||||||||||||||
Non-GAAP Revenues | $ | 50.0 | $ | 55.9 | $ | 61.5 | $ | 58.9 | $ | 226.3 | $ | 60.3 | $ | 56.7 | $ | 62.2 | $ | 64.4 | $ | 243.6 | ||||||||||||||||||||
Total Recurring Revenues | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||||||||
GAAP Revenues | $ | 326.1 | $ | 339.6 | $ | 339.7 | $ | 352.1 | $ | 1,357.4 | $ | 353.0 | $ | 370.2 | $ | 354.5 | $ | 328.6 | $ | 1,406.4 | ||||||||||||||||||||
Adjustment | 6.4 | 6.2 | 5.3 | 5.0 | 22.9 | 7.5 | 11.4 | 8.7 | 8.2 | 35.9 | ||||||||||||||||||||||||||||||
Non-GAAP Revenues | $ | 332.5 | $ | 345.8 | $ | 345.0 | $ | 357.1 | $ | 1,380.3 | $ | 360.5 | $ | 381.7 | $ | 363.2 | $ | 336.8 | $ | 1,442.3 | ||||||||||||||||||||
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
26 |
Total Revenues | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||||||||
GAAP Revenues | $ | 486.1 | $ | 478.7 | $ | 477.9 | $ | 506.2 | $ | 1,948.9 | $ | 487.7 | $ | 499.6 | $ | 486.2 | $ | 465.9 | $ | 1,939.4 | ||||||||||||||||||||
Adjustment | 8.8 | 8.7 | 7.0 | 6.2 | 30.7 | 8.4 | 11.5 | 9.4 | 8.7 | 38.0 | ||||||||||||||||||||||||||||||
Non-GAAP Revenues | $ | 494.9 | $ | 487.4 | $ | 484.9 | $ | 512.4 | $ | 1,979.6 | $ | 496.0 | $ | 511.1 | $ | 495.6 | $ | 474.7 | $ | 1,977.4 | ||||||||||||||||||||
Healthcare | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||||||||
GAAP Revenues | $ | 245.4 | $ | 242.1 | $ | 238.8 | $ | 238.1 | $ | 964.4 | $ | 237.7 | $ | 237.3 | $ | 231.2 | $ | 186.7 | $ | 893.0 | ||||||||||||||||||||
Adjustment | 2.7 | 2.3 | 2.2 | 1.7 | 8.9 | 1.5 | 1.2 | 1.4 | 2.3 | 6.3 | ||||||||||||||||||||||||||||||
Non-GAAP Revenues | $ | 248.1 | $ | 244.4 | $ | 241.0 | $ | 239.8 | $ | 973.3 | $ | 239.2 | $ | 238.5 | $ | 232.6 | $ | 189.0 | $ | 899.3 | ||||||||||||||||||||
Mobile | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||||||||
GAAP Revenues | $ | 95.0 | $ | 89.9 | $ | 90.2 | $ | 95.8 | $ | 370.9 | $ | 90.5 | $ | 98.5 | $ | 99.0 | $ | 103.1 | $ | 391.0 | ||||||||||||||||||||
Adjustment | 1.4 | 2.0 | 1.6 | 1.4 | 6.4 | 1.3 | 1.7 | 2.6 | 1.4 | 7.0 | ||||||||||||||||||||||||||||||
Non-GAAP Revenues | $ | 96.4 | $ | 91.8 | $ | 91.8 | $ | 97.2 | $ | 377.3 | $ | 91.8 | $ | 100.2 | $ | 101.5 | $ | 104.5 | $ | 398.0 | ||||||||||||||||||||
Enterprise | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||||||||
GAAP Revenues | $ | 88.3 | $ | 93.7 | $ | 94.9 | $ | 108.1 | $ | 385.0 | $ | 109.3 | $ | 112.5 | $ | 108.1 | $ | 114.3 | $ | 444.1 | ||||||||||||||||||||
Adjustment | 0.5 | 0.8 | 0.3 | 0.9 | 2.5 | 3.7 | 6.9 | 3.9 | 3.7 | 18.2 | ||||||||||||||||||||||||||||||
Non-GAAP Revenues | $ | 88.8 | $ | 94.4 | $ | 95.2 | $ | 109.0 | $ | 387.5 | $ | 112.9 | $ | 119.4 | $ | 112.1 | $ | 117.9 | $ | 462.3 | ||||||||||||||||||||
Imaging | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||||||||
GAAP Revenues | $ | 57.4 | $ | 53.1 | $ | 53.9 | $ | 64.2 | $ | 228.6 | $ | 50.1 | $ | 51.3 | $ | 47.9 | $ | 61.9 | $ | 211.2 | ||||||||||||||||||||
Adjustment | 4.2 | 3.6 | 2.9 | 2.2 | 13.0 | 1.9 | 1.8 | 1.5 | 1.3 | 6.5 | ||||||||||||||||||||||||||||||
Non-GAAP Revenues | $ | 61.6 | $ | 56.7 | $ | 56.8 | $ | 66.4 | $ | 241.6 | $ | 52.1 | $ | 53.0 | $ | 49.4 | $ | 63.2 | $ | 217.7 | ||||||||||||||||||||
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
27 |
Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2016 | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||||||||||||||||||||||||
Total segment revenues | $ | 494.9 | $ | 487.4 | $ | 484.9 | $ | 512.4 | $ | 1,979.6 | $ | 496.0 | $ | 511.1 | $ | 495.6 | $ | 474.7 | $ | 1,977.4 | ||||||||||||||||||||
Acquisition-related revenue adjustments | (8.8 | ) | (8.7 | ) | (7.0 | ) | (6.2 | ) | (30.7 | ) | (8.4 | ) | (11.5 | ) | (9.4 | ) | (8.7 | ) | (38.0 | ) | ||||||||||||||||||||
Total consolidated revenues | $ | 486.1 | $ | 478.7 | $ | 477.9 | $ | 506.2 | $ | 1,948.9 | $ | 487.7 | $ | 499.6 | $ | 486.2 | $ | 466.0 | $ | 1,939.4 | ||||||||||||||||||||
Total segment profit | $ | 168.2 | $ | 168.1 | $ | 160.8 | $ | 180.6 | $ | 677.6 | $ | 161.6 | $ | 184.0 | $ | 163.2 | $ | 128.9 | $ | 637.7 | ||||||||||||||||||||
Corporate expenses and other, net | (30.7 | ) | (35.9 | ) | (30.9 | ) | (30.8 | ) | (128.2 | ) | (31.0 | ) | (30.2 | ) | (31.7 | ) | (33.1 | ) | (125.9 | ) | ||||||||||||||||||||
Acquisition-related revenues and costs of revenues adjustment | (8.6 | ) | (8.5 | ) | (6.5 | ) | (6.2 | ) | (29.8 | ) | (8.4 | ) | (11.5 | ) | (9.4 | ) | (8.7 | ) | (38.0 | ) | ||||||||||||||||||||
Stock-based compensation | (42.3 | ) | (38.2 | ) | (42.4 | ) | (40.9 | ) | (163.8 | ) | (39.1 | ) | (40.3 | ) | (42.3 | ) | (32.5 | ) | (154.3 | ) | ||||||||||||||||||||
Amortization of intangible assets | (42.7 | ) | (42.8 | ) | (41.9 | ) | (43.6 | ) | (170.9 | ) | (43.4 | ) | (45.1 | ) | (44.9 | ) | (45.3 | ) | (178.7 | ) | ||||||||||||||||||||
Acquisition-related costs, net | (2.5 | ) | (1.2 | ) | (4.7 | ) | (8.7 | ) | (17.2 | ) | (9.0 | ) | (5.4 | ) | (7.6 | ) | (5.7 | ) | (27.7 | ) | ||||||||||||||||||||
Restructuring and other charges, net | (7.9 | ) | (6.7 | ) | (5.7 | ) | (5.0 | ) | (25.2 | ) | (6.7 | ) | (19.9 | ) | (13.0 | ) | (21.4 | ) | (61.1 | ) | ||||||||||||||||||||
Costs associated with IP collaboration agreements | (2.0 | ) | (2.0 | ) | — | — | (4.0 | ) | — | — | — | — | — | |||||||||||||||||||||||||||
Other expenses, net | (35.8 | ) | (30.7 | ) | (32.7 | ) | (37.6 | ) | (136.8 | ) | (37.6 | ) | (56.2 | ) | (39.5 | ) | (37.7 | ) | (171.0 | ) | ||||||||||||||||||||
(Loss) income before income taxes | $ | (4.3 | ) | $ | 2.2 | $ | (4.0 | ) | $ | 7.8 | $ | 1.7 | $ | (13.6 | ) | $ | (24.7 | ) | $ | (25.2 | ) | $ | (55.5 | ) | $ | (119.0 | ) | |||||||||||||
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
28 |
Three months ended December 31, 2017 | |||||||
Low | High | ||||||
GAAP revenue | $ | 478,000 | $ | 492,000 | |||
Acquisition-related adjustment - revenue | 8,000 | 8,000 | |||||
Non-GAAP revenue | $ | 486,000 | $ | 500,000 | |||
GAAP net income per share | $ | (0.17 | ) | $ | (0.13 | ) | |
Acquisition-related adjustment - revenue | 0.03 | 0.03 | |||||
Acquisition-related costs, net | 0.02 | 0.02 | |||||
Cost of revenue from amortization of intangible assets | 0.05 | 0.05 | |||||
Amortization of intangible assets | 0.08 | 0.08 | |||||
Non-cash stock-based compensation | 0.13 | 0.13 | |||||
Non-cash interest expense | 0.05 | 0.05 | |||||
Adjustment to income tax expense | (0.06) | (0.07) | |||||
Restructuring and other charges, net | 0.03 | 0.03 | |||||
Other | 0.03 | 0.03 | |||||
Non-GAAP net income per share | $ | 0.19 | $ | 0.22 | |||
Shares used in computing GAAP and non-GAAP net income per share: | |||||||
Weighted average common shares: basic | 292,000 | 292,000 | |||||
Weighted average common shares: diluted | 296,000 | 296,000 |
© 2017 Nuance Communications, Inc. All rights reserved |
2017 fourth quarter and fiscal year results | November 28, 2017 | |
Prepared remarks | ||
29 |
Twelve months ended September 30, 2018 | |||||||
Low | High | ||||||
GAAP revenue | $ | 2,012,000 | $ | 2,062,000 | |||
Acquisition-related adjustment - revenue | 18,000 | 18,000 | |||||
Non-GAAP revenue | $ | 2,030,000 | $ | 2,080,000 | |||
GAAP net income per share | $ | (0.09 | ) | $ | 0.03 | ||
Acquisition-related adjustment - revenue | 0.06 | 0.06 | |||||
Acquisition-related costs, net | 0.09 | 0.09 | |||||
Cost of revenue from amortization of intangible assets | 0.19 | 0.19 | |||||
Amortization of intangible assets | 0.30 | 0.30 | |||||
Non-cash stock-based compensation | 0.55 | 0.55 | |||||
Non-cash interest expense | 0.16 | 0.16 | |||||
Adjustment to income tax expense | (0.29) | (0.32) | |||||
Restructuring and other charges, net | 0.04 | 0.04 | |||||
Other | 0.05 | 0.05 | |||||
Non-GAAP net income per share | $ | 1.06 | $ | 1.15 | |||
Shares used in computing GAAP and non-GAAP net income per share: | |||||||
Weighted average common shares: basic | 295,000 | 295,000 | |||||
Weighted average common shares: diluted | 301,000 | 301,000 |
© 2017 Nuance Communications, Inc. All rights reserved |
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