[February 10, 2014] |
|
Nuance Announces First Quarter Fiscal 2014 Results
BURLINGTON, Mass. --(Business Wire)--
Nuance Communications, Inc. (NASDAQ: NUAN) today announced financial
results for the first quarter of fiscal 2014, ended December 31, 2013.
In the first quarter of fiscal 2014, Nuance reported GAAP revenue of
$470.0 million, compared to $462.3 million in the first quarter of
fiscal 2013. Nuance reported non-GAAP revenue of $490.1 million, which
includes $20.1 million in revenue lost to accounting treatment in
conjunction with acquisitions, compared to $492.4 million in the first
quarter of fiscal 2013. In the first quarter of fiscal 2014, Nuance
reported bookings of $637.3 million, up 26.2% from $504.9 million in the
first quarter of fiscal 2013.
In the first quarter of fiscal 2014, Nuance recognized GAAP net loss of
($55.4) million, or ($0.18) per share, compared with GAAP net loss of
($22.1) million, or ($0.07) per share, in the first quarter of fiscal
2013. In the first quarter of fiscal 2014, Nuance reported non-GAAP net
income of $76.6 million, or $0.24 per diluted share, compared to
non-GAAP net income of $113.0 million, or $0.35 per diluted share, in
the first quarter of fiscal 2013. Nuance's first quarter fiscal 2014
non-GAAP operating margin was 21.6%, down from 29.2% in the first
quarter of fiscal 2013. Nuance reported cash flow from operations of
$78.2 million in the first quarter of fiscal 2014, down from $122.9
million in the first quarter of fiscal 2013. Nuance ended the first
quarter of fiscal 2014 with total deferred revenue of $484.3 million,
compared to $376.3 million a year ago. Nuance ended the first quarter of
fiscal 2014 with a balance of cash, cash equivalents and marketable
securities of $775.1 million. As of December 31, 2013, Nuance had
repurchased 10.988 million shares of common stock at an average price
per share of $18.57, for a total amount of $204.1 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.
"We are pleased with our first quarter performance. We delivered strong
bookings and exceeded targets for revenue and earnings. Increased
deferred revenue and growth in on-demand revenue demonstrate continued
progress in transitioning our model to recurring revenues. We believe
these results, combined with progress toward new solutions and deep
customer engagements, are a strong indication that the business is
well-positioned for renewed growth and profitability," said Tom
Beaudoin, Nuance CFO.
Highlights from the quarter include:
-
Healthcare - For Nuance's healthcare solutions, first quarter
fiscal 2014 non-GAAP revenue was $227.3 million. Key healthcare
customers included Allscripts, Appalachian Regional Healthcare System,
Cerner, Community Health Systems, Imaging Advantage, Meridian Health,
Mission Hospital, RadNet, St. John Health System, University of
Calgary and US Department of Veterans Affairs.
-
Mobile & Consumer - For Nuance's mobile and consumer
solutions, first quarter fiscal 2014 non-GAAP revenue was $115.3
million. Key mobile customers included Denso, Fiat, Fujitsu, GM,
Hitachi, Kapsys, LG, Nokia, Samsung, Volvo, and Yangfeng Visteon.
-
Enterprise - For Nuance's enterprise solutions, first quarter
fiscal 2014 non-GAAP revenue was $89.2 million. Key enterprise
customers included BNY Mellon, CSpire, Delta Airlines, DHL, Eni, ING
Romania, Itau, Jetstar, Jet Multimedia, Korea Telecom, Monte Paschi di
Siena Banca, Telefonica and Turkiye Finans Katilim Bankasi.
-
Imaging - For Nuance's document imaging solutions, first
quarter fiscal 2014 non-GAAP revenue was $58.3 million. Key imaging
customers included ABN AMRO Bank, Canon, Falabella, IKEA, Prince
George, Ricoh, Stinson and Tetrapak.
Conference Call and Prepared Remarks Nuance is providing a
copy of prepared remarks in combination with its press release. These
remarks are offered to provide shareholders and analysts with additional
time and detail for analyzing results in advance of the company's
quarterly conference call. The remarks will be available at http://www.nuance.com/earnings-results/
in conjunction with the press release.
As previously scheduled, the conference call will begin today, February
10, 2014 at 5:00 pm EST and will include only brief comments followed by
questions and answers. The prepared remarks will not be read on the
call. To access the live broadcast, please visit the Investor Relations
section of Nuance's Website at www.nuance.com.
The call can also be heard by dialing (800) 553-0327 or (612) 332-0632
at least five minutes prior to the call and referencing code 316887. A
replay will be available within 24 hours of the announcement by dialing
(800) 475-6701 or (320) 365-3844 and using the access code 316887.
About Nuance Communications, Inc Nuance Communications, Inc.
(NASDAQ: NUAN) is a leading provider of voice and language solutions for
businesses and consumers around the world. Its technologies,
applications and services make the user experience more compelling by
transforming the way people interact with devices and systems. Every
day, millions of users and thousands of businesses experience Nuance's
proven applications. For more information, please visit www.nuance.com.
Trademark reference: Nuance, the Nuance logo, Dragon Medical and
eScription are registered trademarks or trademarks of Nuance
Communications, Inc. or its affiliates in the United States and/or other
countries. All other trademarks referenced herein are the property of
their respective owners.
Definition of Bookings Bookings represent the estimated
gross revenue value of transactions at the time of contract execution,
except for maintenance and support offerings. For fixed price contracts,
the bookings value represents the gross total contract value. For
contracts where revenue is based on transaction volume, the bookings
value represents the contract price multiplied by the estimated future
transaction volume during the contract term, whether or not such
transaction volumes are guaranteed under a minimum commitment clause.
Actual results could be different than our initial estimates. The
maintenance and support bookings value represents the amounts billed in
the period the customer is invoiced. Because of the inherent estimates
required to determine bookings and the fact that the actual resultant
revenue may differ from our initial bookings estimates, we consider
bookings one indicator of potential future revenue and not as an
arithmetic measure of backlog.
Safe Harbor and Forward-Looking Statements Statements in
this document regarding future performance and our management's future
expectations, beliefs, goals, plans or prospects constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Any statements that are not statements of
historical fact (including statements containing the words "believes,"
"plans," "anticipates," "expects," or "estimates" or similar
expressions) should also be considered to be forward-looking statements.
There are a number of important factors that could cause actual results
or events to differ materially from those indicated by such
forward-looking statements, including: fluctuations in demand for our
existing and future products; economic conditions in the United States
and internationally; our ability to control and successfully manage our
expenses and cash position; the effects of competition, including
pricing pressure; possible defects in our products and technologies; our
ability to successfully integrate operations and employees of acquired
businesses; the conversion rate of bookings into revenue; the ability to
realize anticipated synergies from acquired businesses; and the other
factors described in our annual report on Form 10-K for the fiscal year
ended September 30, 2013 and our quarterly reports filed with the
Securities and Exchange Commission. We disclaim any obligation to update
any forward-looking statements as a result of developments occurring
after the date of this document.
The information included in this press release should not be viewed as a
substitute for full GAAP financial statements.
Discussion of Non-GAAP Financial Measures We utilize a
number of different financial measures, both GAAP and non-GAAP, in
analyzing and assessing the overall performance of the business, for
making operating decisions and for forecasting and planning for future
periods. Our annual financial plan is prepared both on a GAAP and
non-GAAP basis, and the non-GAAP annual financial plan is approved by
our board of directors. Continuous budgeting and forecasting for revenue
and expenses are conducted on a consistent non-GAAP basis (in addition
to GAAP) and actual results on a non-GAAP basis are assessed against the
annual financial plan. The board of directors and management utilize
these non-GAAP measures and results (in addition to the GAAP results) to
determine our allocation of resources. In addition and as a consequence
of the importance of these measures in managing the business, we use
non-GAAP measures and results in the evaluation process to establish
management's compensation. For example, our annual bonus program
payments are based upon the achievement of consolidated non-GAAP revenue
and consolidated non-GAAP earnings per share financial targets. We
consider the use of non-GAAP revenue helpful in understanding the
performance of our business, as it excludes the purchase accounting
impact on acquired deferred revenue and other acquisition-related
adjustments to revenue. We also consider the use of non-GAAP earnings
per share helpful in assessing the organic performance of the continuing
operations of our business. By organic performance we mean performance
as if we had owned an acquired business in the same period a year ago.
By continuing operations we mean the ongoing results of the business
excluding certain unplanned costs. While our management uses these
non-GAAP financial measures as a tool to enhance their understanding of
certain aspects of our financial performance, our management does not
consider these measures to be a substitute for, or superior to, the
information provided by GAAP revenue and earnings per share. Consistent
with this approach, we believe that disclosing non-GAAP revenue and
non-GAAP earnings per share to the readers of our financial statements
provides such readers with useful supplemental data that, while not a
substitute for GAAP revenue and earnings per share, allows for greater
transparency in the review of our financial and operational performance.
In assessing the overall health of the business during the three months
ended December 31, 2013 and 2012, and, in particular, in evaluating our
revenue and earnings per share, our management has either included or
excluded items in six general categories, each of which is described
below.
Acquisition-Related Revenue and Cost of Revenue. We provide
supplementary non-GAAP financial measures of revenue, which include
revenue related to acquisitions, primarily from Equitrac, Quantim and
Safecom for the three months ended December 31, 2013 that would
otherwise have been recognized but for the purchase accounting treatment
of these transactions. Non-GAAP revenue also includes revenue that we
would have otherwise recognized had we not acquired intellectual
property and other assets from the same customer. Because GAAP
accounting requires the elimination of this revenue, GAAP results alone
do not fully capture all of our economic activities. These non-GAAP
adjustments are intended to reflect the full amount of such revenue. We
include non-GAAP revenue and cost of revenue to allow for more complete
comparisons to the financial results of historical operations,
forward-looking guidance and the financial results of peer companies. We
believe these adjustments are useful to management and investors as a
measure of the ongoing performance of the business because, although we
cannot be certain that customers will renew their contracts, we have
historically experienced high renewal rates on maintenance and support
agreements and other customer contracts. Additionally, although
acquisition-related revenue adjustments are non-recurring with respect
to past acquisitions, we generally will incur these adjustments in
connection with any future acquisitions.
Acquisition-Related Costs, Net. In recent years, we have
completed a number of acquisitions, which result in operating expenses
which would not otherwise have been incurred. We provide supplementary
non-GAAP financial measures, which exclude certain transition,
integration and other acquisition-related expense items resulting from
acquisitions, to allow more accurate comparisons of the financial
results to historical operations, forward-looking guidance and the
financial results of less acquisitive peer companies. We consider these
types of costs and adjustments, to a great extent, to be unpredictable
and dependent on a significant number of factors that are outside of our
control. Furthermore, we do not consider these acquisition-related costs
and adjustments to be related to the organic continuing operations of
the acquired businesses and are generally not relevant to assessing or
estimating the long-term performance of the acquired assets. In
addition, the size, complexity and/or volume of past acquisitions, which
often drives the magnitude of acquisition-related costs, may not be
indicative of the size, complexity and/or volume of future acquisitions.
By excluding acquisition-related costs and adjustments from our non-GAAP
measures, management is better able to evaluate our ability to utilize
our existing assets and estimate the long-term value that acquired
assets will generate for us. We believe that providing a supplemental
non-GAAP measure which excludes these items allows management and
investors to consider the ongoing operations of the business both with,
and without, such expenses.
These acquisition-related costs are included in the following
categories: (i) transition and integration costs; (ii) professional
service fees; and (iii) acquisition-related adjustments. Although these
expenses are not recurring with respect to past acquisitions, we
generally will incur these expenses in connection with any future
acquisitions. These categories are further discussed as follows:
(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. Professional service fees include
third party costs related to the acquisition, and legal and other
professional service fees associated with disputes and regulatory
matters related to acquired entities.
(iii) Acquisition-related adjustments. Acquisition-related
adjustments include adjustments to acquisition-related 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.
Amortization of Acquired Intangible Assets. We exclude the
amortization of acquired intangible assets from non-GAAP expense and
income measures. These amounts are inconsistent in amount and frequency
and are significantly impacted by the timing and size of acquisitions.
Providing a supplemental measure which excludes these charges allows
management and investors to evaluate results "as-if" the acquired
intangible assets had been developed internally rather than acquired
and, therefore, provides a supplemental measure of performance in which
our acquired intellectual property is treated in a comparable manner to
our internally developed intellectual property. Although we exclude
amortization of acquired intangible assets from our non-GAAP expenses,
we believe that it is important for investors to understand that such
intangible assets contribute to revenue generation. Amortization of
intangible assets that relate to past acquisitions will recur in future
periods until such intangible assets have been fully amortized. Future
acquisitions may result in the amortization of additional intangible
assets.
Costs Associated with IP Collaboration Agreement. In order
to gain access to a third party's extensive speech recognition
technology and natural language and semantic processing technology, we
have entered into IP collaboration agreements, with terms ranging
between five and six years. Depending on the agreement, some or all
intellectual property derived from these collaborations will be jointly
owned by the two parties. For the majority of the developed intellectual
property, we will have sole rights to commercialize such intellectual
property for periods ranging between two to six years, depending on the
agreement. For non-GAAP purposes, we consider these long-term contracts
and the resulting acquisitions of intellectual property from this
third-party over the agreements' terms to be an investing activity,
outside of our normal, organic, continuing operating activities, and are
therefore presenting this supplemental information to show the results
excluding these expenses. We do not exclude from our non-GAAP results
the corresponding revenue, if any, generated from these collaboration
efforts. Although our bonus program and other performance-based
incentives for executives are based on the non-GAAP results that exclude
these costs, certain engineering senior management are responsible for
execution and results of the collaboration agreement and have incentives
based on those results.
Non-Cash Expenses. We provide non-GAAP information relative
to the following non-cash expenses: (i) stock-based compensation; (ii)
certain accrued interest; and (iii) certain accrued income taxes. These
items are further discussed as follows:
(i) Stock-based compensation. Because of varying available
valuation methodologies, subjective assumptions and the variety of award
types, we believe that the exclusion of stock-based compensation allows
for more accurate comparisons of operating results to peer companies, as
well as to times in our history when stock-based compensation was more
or less significant as a portion of overall compensation than in the
current period. We evaluate performance both with and without these
measures because compensation expense related to stock-based
compensation is typically non-cash and the options and restricted awards
granted are influenced by the Company's stock price and other factors
such as volatility that are beyond our control. The expense related to
stock-based awards is generally not controllable in the short-term and
can vary significantly based on the timing, size and nature of awards
granted. As such, we do not include such charges in operating plans.
Stock-based compensation will continue in future periods.
(ii) and (iii) Certain accrued interest and income taxes. We also
exclude certain accrued interest and certain accrued income taxes
because we believe that excluding these non-cash expenses provides
senior management, as well as other users of the financial statements,
with a valuable perspective on the cash-based performance and health of
the business, including the current near-term projected liquidity. These
non-cash expenses will continue in future periods.
Other Expenses. We exclude certain other expenses that are
the result of unplanned events to measure operating performance and
current and future liquidity both with and without these expenses; and
therefore, by providing this information, we believe management and the
users of the financial statements are better able to understand the
financial results of what we consider to be our organic, continuing
operations. Included in these expenses are items such as restructuring
charges, asset impairments and other charges (credits), net. These
events are unplanned and arose outside of the ordinary course of
continuing operations. These items also include adjustments from changes
in fair value of share-based instruments relating to the issuance of our
common stock with security price guarantees payable in cash. Other items
such as gains or losses on non-controlling strategic equity interests
are also excluded.
We believe that providing the non-GAAP information to investors, in
addition to the GAAP presentation, allows investors to view the
financial results in the way management views the operating results. We
further believe that providing this information allows investors to not
only better understand our financial performance, but more importantly,
to evaluate the efficacy of the methodology and information used by
management to evaluate and measure such performance.
Financial Tables Follow
|
|
Nuance Communications, Inc.
|
Condensed Consolidated Statements of Operations
|
(in thousands, except per share amounts)
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
December 31,
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
Product and licensing
|
|
|
$
|
178,437
|
|
|
|
$
|
196,731
|
|
Professional services and hosting
|
|
|
|
218,135
|
|
|
|
|
200,305
|
|
Maintenance and support
|
|
|
|
73,408
|
|
|
|
|
65,232
|
|
Total revenues
|
|
|
|
469,980
|
|
|
|
|
462,268
|
|
|
|
|
|
|
|
|
Cost of revenues:
|
|
|
|
|
|
|
Product and licensing
|
|
|
|
25,438
|
|
|
|
|
26,309
|
|
Professional services and hosting
|
|
|
|
154,580
|
|
|
|
|
125,156
|
|
Maintenance and support
|
|
|
|
12,608
|
|
|
|
|
14,797
|
|
Amortization of intangible assets
|
|
|
|
15,194
|
|
|
|
|
16,310
|
|
Total cost of revenues
|
|
|
|
207,820
|
|
|
|
|
182,572
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
262,160
|
|
|
|
|
279,696
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
Research and development
|
|
|
|
80,470
|
|
|
|
|
68,721
|
|
Sales and marketing
|
|
|
|
118,906
|
|
|
|
|
117,135
|
|
General and administrative
|
|
|
|
44,476
|
|
|
|
|
44,784
|
|
Amortization of intangible assets
|
|
|
|
27,472
|
|
|
|
|
25,426
|
|
Acquisition-related cost, net
|
|
|
|
2,798
|
|
|
|
|
15,733
|
|
Restructuring and other charges, net
|
|
|
|
3,837
|
|
|
|
|
1,667
|
|
Total operating expenses
|
|
|
|
277,959
|
|
|
|
|
273,466
|
|
|
|
|
|
|
|
|
(Loss) income from operations
|
|
|
|
(15,799
|
)
|
|
|
|
6,230
|
|
|
|
|
|
|
|
|
Other expense, net
|
|
|
|
(36,636
|
)
|
|
|
|
(36,887
|
)
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
|
(52,435
|
)
|
|
|
|
(30,657
|
)
|
|
|
|
|
|
|
|
Provision (benefit) from income taxes
|
|
|
|
2,978
|
|
|
|
|
(8,561
|
)
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(55,413
|
)
|
|
|
$
|
(22,096
|
)
|
|
|
|
|
|
|
|
Net loss per share:
|
|
|
|
|
|
|
Basic
|
|
|
$
|
(0.18
|
)
|
|
|
$
|
(0.07
|
)
|
Diluted
|
|
|
$
|
(0.18
|
)
|
|
|
$
|
(0.07
|
)
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
Basic
|
|
|
|
314,818
|
|
|
|
|
312,571
|
|
Diluted
|
|
|
|
314,818
|
|
|
|
|
312,571
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nuance Communications, Inc.
|
Condensed Consolidated Balance Sheets
|
(in thousands)
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
December 31, 2013
|
|
|
September 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
734,656
|
|
|
$
|
808,118
|
Marketable securities
|
|
|
|
40,440
|
|
|
|
38,728
|
Accounts receivable, net
|
|
|
|
396,834
|
|
|
|
382,741
|
Prepaid expenses and other current assets
|
|
|
|
188,745
|
|
|
|
179,940
|
Total current assets
|
|
|
|
1,360,675
|
|
|
|
1,409,527
|
|
|
|
|
|
|
|
Land, building and equipment, net
|
|
|
|
142,971
|
|
|
|
143,465
|
Goodwill
|
|
|
|
3,350,371
|
|
|
|
3,293,198
|
Intangible assets, net
|
|
|
|
954,309
|
|
|
|
953,278
|
Other assets
|
|
|
|
177,387
|
|
|
|
159,135
|
Total assets
|
|
|
$
|
5,985,713
|
|
|
$
|
5,958,603
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
|
$
|
248,518
|
|
|
$
|
246,040
|
Accounts payable and accrued expenses
|
|
|
|
286,302
|
|
|
|
305,441
|
Deferred revenue
|
|
|
|
301,049
|
|
|
|
253,753
|
Total current liabilities
|
|
|
|
835,869
|
|
|
|
805,234
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
2,112,759
|
|
|
|
2,108,091
|
Deferred revenue, net of current portion
|
|
|
|
183,205
|
|
|
|
160,823
|
Other liabilities
|
|
|
|
245,260
|
|
|
|
246,441
|
Total liabilities
|
|
|
|
3,377,093
|
|
|
|
3,320,589
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
2,608,620
|
|
|
|
2,638,014
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
5,985,713
|
|
|
$
|
5,958,603
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nuance Communications, Inc.
|
Consolidated Statements of Cash Flows
|
(in thousands)
|
Unaudited
|
|
|
|
Three months ended
|
|
|
|
December 31,
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(55,413
|
)
|
|
|
$
|
(22,096
|
)
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
55,109
|
|
|
|
|
50,429
|
|
Stock-based compensation
|
|
|
|
47,239
|
|
|
|
|
45,271
|
|
Non-cash interest expense
|
|
|
|
9,661
|
|
|
|
|
9,986
|
|
Deferred tax benefit
|
|
|
|
(1,612
|
)
|
|
|
|
(4,077
|
)
|
Other
|
|
|
|
(6,150
|
)
|
|
|
|
(1,925
|
)
|
Changes in operating assets and liabilities, net of effects from
acquisitions:
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
(6,532
|
)
|
|
|
|
8,815
|
|
Prepaid expenses and other assets
|
|
|
|
(11,095
|
)
|
|
|
|
(9,104
|
)
|
Accounts payable
|
|
|
|
(28,032
|
)
|
|
|
|
(18,692
|
)
|
Accrued expenses and other liabilities
|
|
|
|
7,452
|
|
|
|
|
9,241
|
|
Deferred revenue
|
|
|
|
67,529
|
|
|
|
|
55,100
|
|
Net cash provided by operating activities
|
|
|
|
78,156
|
|
|
|
|
122,948
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
(14,166
|
)
|
|
|
|
(15,104
|
)
|
Payments for business and technology acquisitions, net of cash
acquired
|
|
|
|
(99,496
|
)
|
|
|
|
(446,192
|
)
|
Purchases of marketable securities and other investments
|
|
|
|
(5,063
|
)
|
|
|
|
-
|
|
Proceeds from sales and maturities of marketable securities and
other investments
|
|
|
|
13,372
|
|
|
|
|
456
|
|
Net cash used in investing activities
|
|
|
|
(105,353
|
)
|
|
|
|
(460,840
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Payments of debt
|
|
|
|
(1,307
|
)
|
|
|
|
(144,835
|
)
|
Proceeds from long-term debt, net of issuance costs
|
|
|
|
-
|
|
|
|
|
352,611
|
|
Payments for repurchases of common stock
|
|
|
|
(18,000
|
)
|
|
|
|
-
|
|
Payments for settlement of share-based derivatives
|
|
|
|
(1,032
|
)
|
|
|
|
(177
|
)
|
Payments of other long-term liabilities
|
|
|
|
(904
|
)
|
|
|
|
(1,012
|
)
|
Excess tax benefits on employee equity awards
|
|
|
|
-
|
|
|
|
|
4,974
|
|
Proceeds from issuance of common stock from employee stock plans
|
|
|
|
1,188
|
|
|
|
|
1,906
|
|
Cash used to net share settle employee equity awards
|
|
|
|
(26,506
|
)
|
|
|
|
(43,859
|
)
|
Net cash (used in) provided by financing activities
|
|
|
|
(46,561
|
)
|
|
|
|
169,608
|
|
Effects of exchange rate changes on cash and cash equivalents
|
|
|
|
296
|
|
|
|
|
(389
|
)
|
Net decrease in cash and cash equivalents
|
|
|
|
(73,462
|
)
|
|
|
|
(168,673
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
|
808,118
|
|
|
|
|
1,129,761
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
734,656
|
|
|
|
$
|
961,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nuance Communications, Inc.
|
Supplemental Financial Information - GAAP to Non-GAAP Reconciliations
|
(in thousands, except per share amounts)
|
Unaudited
|
|
|
|
Three months ended
|
|
|
|
December 31
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
GAAP revenue
|
|
|
$
|
469,980
|
|
|
|
$
|
462,268
|
|
Acquisition-related revenue adjustments: product and licensing
|
|
|
|
11,489
|
|
|
|
|
21,599
|
|
Acquisition-related revenue adjustments: professional services and
hosting
|
|
|
|
7,659
|
|
|
|
|
7,063
|
|
Acquisition-related revenue adjustments: maintenance and support
|
|
|
|
917
|
|
|
|
|
1,487
|
|
Non-GAAP revenue
|
|
|
$
|
490,045
|
|
|
|
$
|
492,417
|
|
|
|
|
|
|
|
|
GAAP cost of revenue
|
|
|
$
|
207,820
|
|
|
|
$
|
182,572
|
|
Cost of revenue from amortization of intangible assets
|
|
|
|
(15,194
|
)
|
|
|
|
(16,310
|
)
|
Cost of revenue adjustments: product and licensing (1,2)
|
|
|
|
654
|
|
|
|
|
1,983
|
|
Cost of revenue adjustments: professional services and hosting (1,2)
|
|
|
|
(6,305
|
)
|
|
|
|
(2,088
|
)
|
Cost of revenue adjustments: maintenance and support (1,2)
|
|
|
|
(784
|
)
|
|
|
|
(2,103
|
)
|
Non-GAAP cost of revenue
|
|
|
$
|
186,191
|
|
|
|
$
|
164,054
|
|
|
|
|
|
|
|
|
GAAP gross profit
|
|
|
$
|
262,160
|
|
|
|
$
|
279,696
|
|
Gross profit adjustments
|
|
|
|
41,694
|
|
|
|
|
48,667
|
|
Non-GAAP gross profit
|
|
|
$
|
303,854
|
|
|
|
$
|
328,363
|
|
|
|
|
|
|
|
|
GAAP (loss) income from operations
|
|
|
$
|
(15,799
|
)
|
|
|
$
|
6,230
|
|
Gross profit adjustments
|
|
|
|
41,694
|
|
|
|
|
48,667
|
|
Research and development (1)
|
|
|
|
10,288
|
|
|
|
|
8,860
|
|
Sales and marketing (1)
|
|
|
|
15,244
|
|
|
|
|
16,847
|
|
General and administrative (1)
|
|
|
|
14,039
|
|
|
|
|
14,873
|
|
Amortization of intangible assets
|
|
|
|
27,472
|
|
|
|
|
25,426
|
|
Costs associated with IP collaboration agreements
|
|
|
|
4,937
|
|
|
|
|
5,250
|
|
Acquisition-related costs, net
|
|
|
|
2,798
|
|
|
|
|
15,733
|
|
Restructuring and other charges, net
|
|
|
|
3,837
|
|
|
|
|
1,667
|
|
Other
|
|
|
|
1,132
|
|
|
|
|
-
|
|
Non-GAAP income from operations
|
|
|
$
|
105,642
|
|
|
|
$
|
143,553
|
|
|
|
|
|
|
|
|
GAAP provision (benefit) from income taxes
|
|
|
$
|
2,978
|
|
|
|
$
|
(8,561
|
)
|
Non-cash taxes
|
|
|
|
1,677
|
|
|
|
|
14,766
|
|
Non-GAAP provision for income taxes
|
|
|
$
|
4,655
|
|
|
|
$
|
6,205
|
|
|
|
|
|
|
|
|
GAAP net loss
|
|
|
$
|
(55,413
|
)
|
|
|
$
|
(22,096
|
)
|
Acquisition-related adjustment - revenue (2)
|
|
|
|
20,065
|
|
|
|
|
30,149
|
|
Acquisition-related adjustment - cost of revenue (2)
|
|
|
|
(1,233
|
)
|
|
|
|
(2,483
|
)
|
Acquisition-related costs, net
|
|
|
|
2,798
|
|
|
|
|
15,733
|
|
Cost of revenue from amortization of intangible assets
|
|
|
|
15,194
|
|
|
|
|
16,310
|
|
Amortization of intangible assets
|
|
|
|
27,472
|
|
|
|
|
25,426
|
|
Non-cash stock-based compensation (1)
|
|
|
|
47,239
|
|
|
|
|
45,271
|
|
Non-cash interest expense
|
|
|
|
9,661
|
|
|
|
|
9,986
|
|
Non-cash income taxes
|
|
|
|
(1,677
|
)
|
|
|
|
(14,766
|
)
|
Costs associated with IP collaboration agreements
|
|
|
|
4,937
|
|
|
|
|
5,250
|
|
Change in fair value of share-based instruments
|
|
|
|
4,150
|
|
|
|
|
2,510
|
|
Restructuring and other charges, net
|
|
|
|
3,837
|
|
|
|
|
1,667
|
|
Other
|
|
|
|
(383
|
)
|
|
|
|
-
|
|
Non-GAAP net income
|
|
|
$
|
76,647
|
|
|
|
$
|
112,957
|
|
|
|
|
|
|
|
|
Non-GAAP diluted net income per share
|
|
|
$
|
0.24
|
|
|
|
$
|
0.35
|
|
|
|
|
|
|
|
|
Diluted weighted average common shares outstanding
|
|
|
|
317,462
|
|
|
|
|
323,489
|
|
|
|
|
|
|
|
|
Schedules may not add due to rounding.
|
|
|
Nuance Communications, Inc.
|
Supplemental Financial Information - GAAP to Non-GAAP
Reconciliations, continued
|
(in thousands)
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
December 31,
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
(1) Non-Cash Stock-Based Compensation
|
|
|
|
|
|
|
Cost of product and licensing
|
|
|
$
|
265
|
|
|
|
$
|
185
|
|
Cost of professional services and hosting
|
|
|
|
6,619
|
|
|
|
|
2,403
|
|
Cost of maintenance and support
|
|
|
|
784
|
|
|
|
|
2,103
|
|
Research and development
|
|
|
|
10,288
|
|
|
|
|
8,860
|
|
Sales and marketing
|
|
|
|
15,244
|
|
|
|
|
16,847
|
|
General and administrative
|
|
|
|
14,039
|
|
|
|
|
14,873
|
|
Total
|
|
|
$
|
47,239
|
|
|
|
$
|
45,271
|
|
|
|
|
|
|
|
|
(2) Acquisition-Related Revenue and Cost of
Revenue
|
|
|
|
|
|
|
Revenue
|
|
|
$
|
20,065
|
|
|
|
$
|
30,149
|
|
Cost of product and licensing
|
|
|
|
(919
|
)
|
|
|
|
(2,168
|
)
|
Cost of professional services and hosting
|
|
|
|
(314
|
)
|
|
|
|
(315
|
)
|
Total
|
|
|
$
|
18,832
|
|
|
|
$
|
27,666
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nuance Communications, Inc.
|
Supplemental Financial Information - GAAP to Non-GAAP
Reconciliations, continued
|
(in millions)
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
FY
|
|
|
Q1
|
|
|
|
2013
|
|
|
2013
|
|
|
2013
|
|
|
2013
|
|
|
2013
|
|
|
2014
|
GAAP Revenue
|
|
|
$204.7
|
|
|
$219.1
|
|
|
$230.0
|
|
|
$220.0
|
|
|
$873.8
|
|
|
$221.6
|
Adjustment
|
|
|
$12.7
|
|
|
$10.2
|
|
|
$8.1
|
|
|
$6.7
|
|
|
$37.8
|
|
|
$5.7
|
Non-GAAP Revenue
|
|
|
$217.4
|
|
|
$229.3
|
|
|
$238.1
|
|
|
$226.7
|
|
|
$911.6
|
|
|
$227.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mobile & Consumer
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
FY
|
|
|
Q1
|
|
|
|
2013
|
|
|
2013
|
|
|
2013
|
|
|
2013
|
|
|
2013
|
|
|
2014
|
GAAP Revenue
|
|
|
$128.8
|
|
|
$113.0
|
|
|
$108.7
|
|
|
$117.2
|
|
|
$467.7
|
|
|
$112.5
|
Adjustment
|
|
|
$2.9
|
|
|
$3.2
|
|
|
$2.3
|
|
|
$3.1
|
|
|
$11.5
|
|
|
$2.8
|
Non-GAAP Revenue
|
|
|
$131.7
|
|
|
$116.2
|
|
|
$111.0
|
|
|
$120.3
|
|
|
$479.2
|
|
|
$115.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enterprise
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
FY
|
|
|
Q1
|
|
|
|
2013
|
|
|
2013
|
|
|
2013
|
|
|
2013
|
|
|
2013
|
|
|
2014
|
GAAP Revenue
|
|
|
$83.7
|
|
|
$72.9
|
|
|
$78.1
|
|
|
$85.5
|
|
|
$320.2
|
|
|
$86.6
|
Adjustment
|
|
|
$0.0
|
|
|
$1.6
|
|
|
$0.8
|
|
|
$0.9
|
|
|
$3.3
|
|
|
$2.6
|
Non-GAAP Revenue
|
|
|
$83.7
|
|
|
$74.5
|
|
|
$78.9
|
|
|
$86.4
|
|
|
$323.5
|
|
|
$89.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Imaging
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
FY
|
|
|
Q1
|
|
|
|
2013
|
|
|
2013
|
|
|
2013
|
|
|
2013
|
|
|
2013
|
|
|
2014
|
GAAP Revenue
|
|
|
$45.1
|
|
|
$46.0
|
|
|
$53.0
|
|
|
$49.5
|
|
|
$193.6
|
|
|
$49.3
|
Adjustment
|
|
|
$14.5
|
|
|
$18.0
|
|
|
$9.8
|
|
|
$7.5
|
|
|
$49.8
|
|
|
$9.0
|
Non-GAAP Revenue
|
|
|
$59.6
|
|
|
$64.0
|
|
|
$62.8
|
|
|
$57.0
|
|
|
$243.4
|
|
|
$58.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedules may not add due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|