Nuance Communications (NUAN) Reports In-Line Q3 EPS, Revenues Beat; Lifts FY18 EPS Outlook

Nuance Communications (NASDAQ: NUAN) reported Q3 EPS of $0.27, in-line with the analyst estimate of $0.27. Revenue for the quarter came in at $506 million versus the consensus estimate of $495.9 million.

“We delivered solid Q3 18 results, including non-GAAP revenue above the high end of our guidance, non-GAAP diluted EPS slightly above the midpoint of our guidance, and 7% net new bookings growth,” said Mark Benjamin, Nuance’s chief executive officer. “In addition, we made significant changes to our Board of Directors and governance and acted on our commitment to rebalance our capital allocation strategy, repurchasing 8.1 million shares, or approximately 3% of our total shares outstanding.”

“We also made meaningful progress with our portfolio and business reviews in the quarter,” continued Benjamin. "We are acting with urgency and driving toward a simplified and more efficient business, capable of sustainable, long-term revenue and earnings growth with resources keenly focused on opportunities that leverage Nuance’s core strengths in key vertical markets. As we committed last quarter, we will discuss Nuance’s next phase of growth and the evolution of our business in more detail when we report our fiscal fourth quarter and full year 2018 results.”

Third Quarter Performance Summary

On a non-GAAP basis:

• Non‑GAAP revenue of $506.0 million as reported, up 2% compared to $495.6 million in the third quarter of fiscal year 2017
• Organic revenue grew 1% in the quarter to $506.0 million from $502.8 million in the prior year period
• Non-GAAP recurring revenue of 73% of­ total non-GAAP revenue, consistent with the year-ago period
• Non-GAAP net income of $79.6 million, or $0.27 per diluted share, compared to non-GAAP net income of $79.2 million, or $0.27 per diluted share, in the third quarter of fiscal year 2017
• Non‑GAAP operating margin of 24.7%, compared to 27.0% in the third quarter of fiscal year 2017
• Cash flow from operations of $99.7 million, or 125% of non-GAAP net income
• Net new bookings growth of 7%, to $471.1 million, up from $438.5 million a year ago

GUIDANCE:

Nuance Communications sees FY2018 EPS of $1.11-$1.15, versus the consensus of $1.11.

For earnings history and earnings-related data on Nuance Communications (NUAN) click here.

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