BURLINGTON, Mass., February 7, 2017 – Nuance Communications, Inc. (NASDAQ: NUAN) today announced financial results for its first quarter fiscal 2017, ended December 31, 2016. In the first quarter of fiscal 2017 Nuance delivered strong results across key financial metrics. The Company’s Q1 17 performance was led by increased bookings and revenue for its enhanced solutions that combine speech and natural language technologies with artificial intelligence, particularly in Enterprise, automotive, and clinical documentation.
Nuance delivered a strong first quarter with continued solid performance and momentum across our business as demonstrated by the following:
- Net new bookings in the quarter of $380.3 million, up 23% compared to Q1 16;
- Reported GAAP revenue of $487.7 million and non-GAAP revenue of $496.0 million;
- Recurring revenue was 72% of total GAAP revenue in Q1 17, an increase of 500 basis points from Q1 16. Recurring revenue for the quarter was 73% of total non-GAAP revenue, an increase of 600 basis points from Q1 16;
- GAAP diluted EPS of $(0.08) and Non-GAAP diluted EPS of $0.35; and,
- Cash Flow from Operations (CFFO) of $124.9 million with CFFO as a percent of non-GAAP net income at 122%.
First Quarter of Fiscal 2017 Performance
In the first quarter of fiscal 2017, Nuance reported GAAP revenue of $487.7 million, compared to $486.1 million a year ago. Nuance reported non GAAP revenue of $496.0 million, which includes revenue lost to accounting treatment in conjunction with acquisitions, compared to $494.9 million in the first quarter of fiscal 2016. In the first quarter of fiscal 2017, total recurring revenue represented 72% of total GAAP revenue. On a non-GAAP basis, total recurring revenue represented 73% of¬ total non-GAAP revenue, compared to 67% a year ago. In the first quarter of fiscal 2017, Nuance reported net new bookings of $380.3 million, up 23% from $308.7 million a year ago.
In the first quarter of fiscal 2017, Nuance reported GAAP net loss of $(23.9) million, or $(0.08) per share, compared to GAAP net loss of $(12.1) million, or $(0.04) per share, in the first quarter of fiscal 2016. Nuance reported non-GAAP net income of $102.5 million, or $0.35 per diluted share, down from non-GAAP net income of $113.0 million, or $0.36 per diluted share, in the first quarter of fiscal 2016. Nuance’s first quarter fiscal 2017 GAAP operating margin was 4.9% down from 6.5% in the first quarter of fiscal 2016. Nuance’s first quarter fiscal 2017 non GAAP operating margin was 26.9%, down from 28.6% in the first quarter of fiscal 2016. Nuance reported cash flow from operations of $124.9 million in the first quarter of fiscal 2017, down 12% from $141.1 million in the first quarter of fiscal 2016.
“Nuance delivered strong performance against our guidance in the first quarter as we continued our execution and momentum across the business,” said Dan Tempesta, Nuance’s CFO. “We produced solid results in each of our key financial metrics including net new bookings, revenue, recurring revenue, deferred revenue, EPS and cash flow from operations. We believe last quarter’s groundwork and a robust outlook for the second quarter place the company on track for our FY17 non-GAAP guidance with a return to organic revenue growth, and continued strong cost discipline and profitability.”
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.