8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

April 24, 2003

(Date of earliest event reported)

NUANCE COMMUNICATIONS, INC.

(Exact name of registrant as specified in charter)

Delaware	000-30203	94-3208477
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1005 Hamilton Court, Menlo Park, California	94025
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (650) 847-0000

Not Applicable

(Former name or former address, if changed since last report.)

TABLE OF CONTENTS

ITEM 7.    FINANCIAL INFORMATION AND EXHIBITS	3
ITEM 9.    REGULATION FD DISCLOSURE	3
SIGNATURES	4
EXHIBIT INDEX	5
EXHIBIT 99.1

2

ITEM 7:    FINANCIAL INFORMATION AND EXHIBITS

(c)  Exhibits:

Exhibit No.	Exhibit Description
99.1	Press release issued by the Registrant, dated as of April 24, 2003

ITEM 9:    REGULATION FD DISCLOSURE

The information contained in this Item 9 of this Current Report on Form 8-K is being furnished pursuant to “Item 12. Results of Operations and Financial Condition” in accordance with SEC Release No. 33-8216.

On April 24, 2003, the Registrant issued a press release announcing its financial results for the quarterly period ended March 31, 2003. A copy of the earnings release is attached as Exhibit 99.1.

Nuance’s Consolidated Statements of Operations presents non-GAAP (Generally Accepted Accounting Principles) net loss excluding special items and net loss per share (basic and diluted) excluding special items in addition to the presentation of such results in accordance with GAAP. The special items include non-cash compensation expense and restructuring charges (credits). These special items are not necessarily representative of Nuance’s core operations and Nuance management believes that presentation of these non-GAAP financial measures provides useful information to investors regarding the impact of the special items on Nuance’s net loss and net loss per share. Nuance management also uses non-GAAP measurements in certain internal management analyses as the resulting metrics provide useful information regarding the company’s core operations.

3

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: April 24, 2003	Nuance Communications, Inc.
	(Registrant)
	/s/    Karen Blasing
	Karen Blasing
	Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

4

EXHIBIT INDEX

Exhibit No.	Title
99.1	Press release issued by the Registrant, dated as of April 24, 2003

5

EX-99.1

Exhibit 99.1

For More Information:

Investor Contact:	Press Contact:
Karen Blasing	Gwen Murphy
Nuance	Nuance
(650) 847-0000	(650) 847-0000
kblasing@nuance.com	gmurphy@nuance.com

NUANCE REPORTS FIRST QUARTER 2003 RESULTS

First Quarter Revenue Grows 27% Year Over Year

MENLO PARK, Calif., April 24, 2003 – Nuance (Nasdaq: NUAN) today announced results for the quarter ended March 31, 2003. Total revenue for the quarter was $11.6 million, up 27% from $9.1 million in the same period of the previous fiscal year.

Software license revenue for the first quarter was $6.1 million, up 4% from $5.9 million in the same period last year. Service revenue was $2.8 million, up 127% from $1.2 million in the same period last year. Maintenance revenue for the first quarter was $2.7 million, up 35% from $2.0 million in the same quarter last year.

Net loss for the quarter was $4.3 million, or $0.13 net loss per share. This compares to a net loss of $10.6 million, or $0.32 net loss per share in the same period last year. Net loss, excluding non-cash compensation expense of $0.07 million and restructuring credits of $0.94 million, was $5.1 million or $0.15 net loss per share for the quarter compared to net loss excluding non-cash compensation expense of $0.45 million and restructuring charges of $1.3 million was $8.8 million or $0.27 net loss per share in the same quarter last year.

As of March 31, 2003, the Company had $121.9 million in cash, cash equivalents and investments.

“The evolution of our business model and the strengthening of the management team over the past year is clearly paying off and provides a strong foundation for continued revenue growth and our drive towards profitability,” said Chuck Berger, president and CEO. “Nuance’s revenue growth in a tough economic environment demonstrates our leadership position in the speech market. The more than 50% reduction in our net loss compared to a year ago, reflects our revenue growth, improved execution and an ongoing focus on expense control.”

Berger Joins as President and CEO

Chuck Berger was appointed president and CEO of Nuance in April 2003, succeeding Ronald Croen who remains Nuance’s chairman of the board. Berger has more than 25 years of experience in high technology, most recently as president and CEO of Vicinity, Inc., a provider of location-based technology and solutions. He was previously CEO of AdForce, and prior to that was CEO of Radius. Earlier in his career he held senior executive roles at Sun Microsystems, Apple Computer, and Rolm.

Nuance Expands and Enhances Product Line

Responding to the market need for speech solutions that are faster and easier to deploy and generate a rapid return on investment, Nuance recently announced its first packaged speech application, Nuance Call Steering^™ 1.0. Scheduled for release in June 2003, Nuance Call Steering addresses a multi-million-dollar problem that all enterprises and telecommunications carriers face – accurately and cost-effectively routing customer phone calls to the correct customer care destination. Powered by Say Anything^™, Nuance’s natural language understanding technology, Nuance Call Steering is designed to enable companies to consolidate their various customer service phone numbers to one 1-800-number that simply greets callers with “Welcome. What can I do for you today?” A caller may respond by describing their request naturally, rather than awaiting structured prompts. The system can then quickly and automatically route callers to the destination best suited to their needs: such as the billing department, orders department, or store locator.

In February 2003, Nuance announced the general availability of Nuance Voice Platform^™, the industry’s first open, VoiceXML standards-based software platform optimized for speech solutions. A number of leading companies have already selected Nuance Voice Platform as the foundation of their speech solutions. With the delivery of Nuance Voice Platform, Nuance is enabling a new class of resellers to maximize the benefits of speech, including increased automation rates, improved customer satisfaction and faster return on investment.

“Making speech solutions easier to implement is critical to the growth of the overall market,” commented Berger. “Nuance Voice Platform and Nuance Call Steering 1.0 have gained strong initial customer acceptance and reflect the benefits of our evolving business model.”

Nuance continued to demonstrate its commitment to the reseller community with the first quarter announcement of Nuance Vocalizer^™ 3.0, advanced text-to-speech (TTS) software. Nuance Vocalizer 3.0 is designed to improve caller satisfaction while reducing application development time and costs. Nuance is working with a world-class community of partners including Amcom Software, Avaya, Centurion, Gold Systems, Intervoice, Versay, Viecore, WorkForce Technologies, to design and deliver best-of-breed speech solutions that will leverage Nuance Vocalizer 3.0.

Industry Recognition

In the quarter, Nuance Verifier^™ 3.0 was named BiometriTech^™ Product of the Year. The BiometriTech Product of the Year award honors innovative products and services that have made a positive contribution to the growth of biometric technologies. Leading banks, insurance providers, telecommunications service providers, government agencies and others rely on Nuance’s voice authentication engine, Nuance Verifier, as a gateway to password-reset processes and as a means to provide secure access to sensitive information.

Customer Success

During the quarter, Nuance Voice Platform was selected by a number of leading companies, including TELUS, the second largest telecommunications company in Canada, and Z-Tel Technologies, a provider of local, long distance and enhanced telecommunications services. Additionally, Nuance announced British Airways’ and Rogers AT&T Wireless’ successful Nuance-powered speech deployments. Developed by Nuance and Aspect Communications, British Airways’ voice-driven flight information line has helped the airline reduce its call centers’ cost-per-call from $3.00 to $0.16. The solution was implemented in just 16 weeks and delivered a 100% Return-on-Investment within six months. Rogers AT&T Wireless’ VoiceCommand voice-activated dialing service, which was developed by Nuance and Intervoice, eliminates the need for customers to memorize phone numbers, or carry an address book when on the go.

About Nuance

Nuance is the speech expert. Nuance’s speech software solutions enable automated access to everything from account balances to flight information, email reading to voice activated dialing – accessed using nothing more than the power of voice and an ordinary phone. In markets around the world, leading enterprises and telecommunications carriers – including British Airways, Nomura Securities, OnStar, Sprint PCS, United Parcel Service, Vodafone, and many more – work with Nuance to reduce costs, increase customer satisfaction and retention, create new sources of revenue and improve security. Nuance is headquartered in Menlo Park, Calif. and has offices around the world. For more information, visit www.nuance.com or call 1-888-NUANCE-8.

This press release contains forward-looking statements, including, for example, those relating to the continued growth of Nuance’s revenues, the continued success of Nuance’s operating results, the success of Nuance’s business model, customer adoption and deployment of Nuance products and the growth of the market for Nuance technology. There is no assurance that the results contemplated by any forward-looking statements will be realized. The following factors, risks and uncertainties, among others, could cause actual results to differ materially from those described or implied in this press release’s forward-looking statements: the risk that Nuance’s revenues and/or the market for Nuance’s products will not grow or will decline; the risk that Nuance will encounter unplanned expenses or events which may negatively impact operating results, the risk that Nuance’s business model will not achieve anticipated success, the risk that customers may not adopt or deploy Nuance products as planned; the risk that unfavorable economic or other global conditions may negatively impact Nuance’s business and/or the market for Nuance technology; and other factors described in Nuance’s filings with the Securities and Exchange Commission, including but not limited to Nuance’s last-filed annual report on form 10-K. Nuance does not undertake to update any oral or written forward-looking statements that may be made by or on behalf of Nuance.

Nuance is a registered trademark of Nuance Communications, Inc. Nuance Call Steering, Say Anything, Nuance Voice Platform, Nuance Vocalizer and Nuance Verifier are trademarks of Nuance. All other trademarks are the property of their respective owners.

Nuance Communications, Inc.

Condensed Consolidated Statements of Operations

(In Thousands, Except Per Share Amounts)

	Three Months Ended
	March 31, 2003			March 31, 2002
Revenue:
License	$	6,078		$	5,861
Service		2,811			1,236
Maintenance		2,674			1,976
Total revenue		11,563			9,073
Cost of revenue:
License		12			86
Service		2,194			2,018
Maintenance		894			885
Total cost of revenue		3,100			2,989
Gross profit		8,463			6,084
Operating expenses:
Sales and marketing		6,865			8,970
Research and development		3,874			3,685
General and administrative		3,398			3,001
Non-cash compensation expense		74			452
Restructuring charges (credits)		(943	)		1,319
Total operating expenses		13,268			17,427
Loss from operations		(4,805	)		(11,343	)
Interest and other income, net		466			867
Loss before income taxes		(4,339	)		(10,476	)
Provision for (benefits from) income taxes		(64	)		105
Net loss	$	(4,275	)	$	(10,581	)
Basic and diluted net loss per share	$	(0.13	)	$	(0.32	)
Shares used to compute basic and diluted net loss per share		34,169			33,195
Reconciliation of net loss in accordance with generally accepted accounting principles to adjusted net loss:
Net loss	$	(4,275	)	$	(10,581	)
Non-cash compensation expense		74			452
Restructuring charges (credits)		(943	)		1,319
Adjusted net loss	$	(5,144	)	$	(8,810	)
Adjusted basic and diluted net loss per share	$	(0.15	)	$	(0.27	)
Shares used in computing adjusted basic and diluted net loss per share		34,169			33,195

Nuance Communications, Inc.

Condensed Consolidated Balance Sheets

(In Thousands)

	March 31, 2003		December 31, 2002
ASSETS
Current assets:
Cash and cash equivalents	$	43,860	$	43,771
Short-term investments		76,976		80,624
Accounts receivable, net		7,431		8,350
Prepaid expenses and other current assets		5,279		5,249
Total current assets		133,546		137,994
Property and equipment, net		5,878		6,330
Intangible assets		1,302		1,405
Restricted cash		12,393		12,393
Long-term investments		1,053		3,113
Other assets		451		435
Total assets	$	154,623	$	161,670
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,139	$	1,591
Accrued liabilities		8,067		7,249
Current restructuring accrual		9,989		10,453
Accrued vacation		2,018		1,847
Deferred revenue		8,133		8,954
Current portion of capital lease		41		37
Total current liabilities		29,387		30,131
Long-term restructuring accrual		40,004		42,232
Other long-term liabilities		27		34
Total liabilities		69,418		72,397
Stockholders’ equity		85,205		89,273
Total liabilities and stockholders’ equity	$	154,623	$	161,670