Nuance Announces Fourth Quarter And Fiscal Year 2016 Results

Nuance Communications, Inc. (NASDAQ: NUAN) today announced financial results for its fiscal 2016 and fourth quarter, ended September 30, 2016. In fiscal 2016 Nuance saw improvement across numerous key metrics as the business continued to transition toward recurring revenue models, executed on transformation initiatives, and positioned the company for future long-term growth.

Nuance delivered a strong fourth quarter and ended fiscal 2016 with excellent performance and momentum as demonstrated by the following:
  • Delivered record net new bookings in the quarter of $516.9 million, up 45% compared to Q4 15, and for the year $1,502.3 million, up 4% compared to FY15;
  • Reported strong non-GAAP revenue of $512.4 million in Q4 16 and $1,979.6 million in FY16 and GAAP revenue of $506.2 million in Q4 16 and $1,948.9 million in FY16;
  • Increased recurring revenue both for the quarter and the year to 70% of total revenue, an increase of 400 basis points year over year from FY15, on both a non-GAAP and GAAP basis;
  • Delivered non-GAAP operating margin of 28.5% and GAAP operating margin of 7.1% for FY16;
  • Generated Q4 16 non-GAAP diluted EPS of $0.41 and FY16 non-GAAP diluted EPS of $1.52 and Q4 16 GAAP diluted EPS of $0.06 and FY16 GAAP diluted EPS of $(0.04); and,
  • Delivered record Cash Flow From Operations (CFFO) for FY16 of $565.8 million, up 16% from FY15.

Fourth Quarter of Fiscal 2016 PerformanceIn the fourth quarter of fiscal 2016, Nuance reported GAAP revenue of $506.2 million, compared to $504.1 million a year ago. Nuance reported non-GAAP revenue of $512.4 million, which includes revenue lost to accounting treatment in conjunction with acquisitions, compared to $513.3 million in the fourth quarter of fiscal 2015. In the fourth quarter of 2016, total recurring revenue represented 70% of total revenue, compared to 68% a year ago, on both a GAAP and non-GAAP basis. In the fourth quarter of fiscal 2016, Nuance reported net new bookings of $516.9 million, up 45% from $357.4 million a year ago.

In the fourth quarter of fiscal 2016, Nuance reported GAAP net income of $18.5 million, or $0.06 per diluted share, compared to GAAP net loss of $(11.0) million, or $(0.04) per basic share, in the fourth quarter of fiscal 2015. Nuance reported non-GAAP net income of $118.6 million, or $0.41 per diluted share, flat from non-GAAP net income of $129.6 million, or $0.41 per diluted share, in the fourth quarter of fiscal 2015. Nuance's fourth quarter fiscal 2016 GAAP operating margin was 9.0% up from 5.7% in the fourth quarter of fiscal 2015. Nuance's fourth quarter fiscal 2016 non-GAAP operating margin was 29.9%, down from 30.2% in the fourth quarter of fiscal 2015. Nuance reported cash flow from operations of $138.9 million in the fourth quarter of fiscal 2016, down 8% from $151.6 million in the fourth quarter of fiscal 2015.

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