Nuance Announces First Quarter Fiscal 2012 Results

Nuance Communications, Inc. (NASDAQ: NUAN) today announced financial results for its first quarter of fiscal 2012, ended December 31, 2011.

Nuance reported GAAP revenue of $360.6 million in the first quarter of fiscal 2012, an 18.7% increase over GAAP revenue of $303.8 million in the first quarter of fiscal 2011. Nuance reported non-GAAP revenue of $382.0 million, which includes $21.4 million in revenue lost to accounting treatment in conjunction with acquisitions. First quarter fiscal 2012 non-GAAP revenue grew 20.4% over non-GAAP revenue of $317.3 million in the same quarter last year.

In the first quarter of fiscal 2012, Nuance recognized GAAP net income of $9.3 million, or $0.03 per diluted share, compared with GAAP net loss of ($0.0) million, or ($0.00) per diluted share, in the first quarter of fiscal 2011. In the first quarter of fiscal 2012, Nuance reported non-GAAP net income of $108.5 million, or $0.34 per diluted share, compared to non-GAAP net income of $86.1 million, or $0.28 per diluted share, in the first quarter of fiscal 2011. Nuance’s first quarter fiscal 2012 non-GAAP operating margin was 32.5%, up from 30.5% in the first quarter of fiscal 2011. Nuance reported cash flow from operations of $89.5 million in the first quarter of fiscal 2012, compared to $63.3 million in the first quarter of fiscal 2011. Nuance ended the first quarter of fiscal 2012 with a balance of cash and marketable securities of $883.8 million.

Please refer to the “Discussion of Non-GAAP Financial Measures” and to the “GAAP to Non-GAAP Reconciliations,” included elsewhere in this release, for more information regarding the company’s use of non-GAAP measures.

In the first quarter, Nuance delivered 20% revenue growth and 41% operating cash flow growth, driven by strong performance in our healthcare, mobile and consumer, and imaging business lines. Customer interest in voice applications is increasing rapidly, driven in part by recently released virtual assistant capabilities and high-profile announcements at the recent Consumer Electronics Show. Across our business lines, customers are turning to Nuance for help building the next generation of conversational, natural-language voice applications. Recently, our relationships with mobile customers have become more comprehensive and complex, which has resulted in delayed revenues in some cases, due in part to revenues deferred until completion of certain deliverables and in part to longer negotiation cycles.