BURLINGTON, Mass., Feb. 8, 2021 /PRNewswire/ -- Nuance
Communications, Inc. (NASDAQ: NUAN) today announced financial
results for its first quarter ended December
31, 2020:
- GAAP revenue of $345.8 million
and GAAP earnings per diluted share of $0.02.
- Non-GAAP revenue of $345.8
million and non-GAAP earnings per diluted share of
$0.20.
"We are very pleased with the strong start to the fiscal year,
as we delivered revenue and EPS above our guidance range
expectations," said Mark Benjamin,
Chief Executive Officer at Nuance. "We continued to advance our
strategic initiatives, accelerating our cloud transition across our
core platforms in Healthcare and focusing on our AI-first approach
in Enterprise. In Healthcare, we saw solid performance in our
cloud-based offerings, growing cloud revenue 28% year-over-year. In
particular, we benefited from strong performance in Dragon Medical
& DAX Cloud revenue, which grew 22% year-over-year driven by
the ongoing transition of our installed base to Dragon Medical One,
as well as traction in international, ambulatory and community
hospital markets. Enterprise delivered another record revenue
quarter, up slightly from its previous record in Q1'20, driven by
particularly strong demand for our Security & Biometrics
solutions."
Mr. Benjamin concluded, "In a separate release today, we
announced the acquisition of Saykara, a like-minded healthcare IT
company that aligns well with our technology portfolio and growth
strategy. This acquisition brings together the best and brightest
minds in AI, machine learning, and ambient technologies for
healthcare, and we are pleased to be adding even more leading
scientists and developers to our world-class R&D team."
As previously announced, in the first quarter of 2021 we
announced the sale of our medical transcription and electronic
healthcare record go-live businesses. The sale is on track to close
during Q2 2021. Accordingly, we are now presenting our results on a
continuing and discontinued operations basis, giving effect to the
disposition of these businesses. All commentary is provided
on a continuing operations basis. A reconciliation of continuing
and discontinued operations to total operations is provided in the
accompanying tables.
Q1 2021 Performance Summary
Q1 2021 results for continuing operations include:
- Revenue of $345.8 million,
compared to $361.5 million in the
same period last year.
- Non-GAAP revenue of $345.8
million, compared to $361.6
million in the same period last year.
- GAAP operating income of $31.5
million, compared to $36.0
million in the same period last year.
- Non-GAAP operating income of $91.4
million, compared to $90.4
million in the same period last year.
- GAAP operating margin of 9.1%, compared to 10.0% in the same
period last year.
- Non-GAAP operating margin of 26.4%, compared to 25.0% in the
same period last year.
- GAAP net income of $7.0 million,
compared to a net income of $43.6
million in the same period last year.
- Non-GAAP net income of $62.5
million, compared to $63.5
million in the same period last year.
- GAAP EPS of $0.02, compared to
$0.15 in the same period last
year.
- Non-GAAP EPS of $0.20, compared
to $0.22 in the same period last
year.
- Operating cash flows from continuing operations was
$54.6 million, compared to
$44.7 million in the same period last
year.
Capital Allocation
We remain committed to our balanced capital allocation approach.
In February, we replaced our revolving credit facility, with the
maturity date now extended to 2026 and the facility upsized to
$300 million. We did not repurchase
any shares during the first quarter, and have $261 million remaining under our share repurchase
board authorization. We remain confident in the strength of our
balance sheet and our liquidity position, ending the first quarter
with a cash and marketable securities balance of $374 million, above our target minimum cash
balance range.
For a complete discussion of Nuance's results and business
outlook, including our updated guidance, please see the Company's
Prepared Remarks document available at
https://investors.nuance.com/quarterly-results.
Please refer to the "Discussion of Non-GAAP Financial Measures,"
and "GAAP to Non-GAAP Reconciliations," included elsewhere in this
release, for more information regarding the Company's use of
non-GAAP financial measures.
Conference Call and Prepared Remarks
Nuance will host a conference call today at 5:00 p.m. ET. To participate, please access the
live webcast here, or by dialing 1-888-317-6003 (US and
Canada) or 1-412-317-6061
(international) and referencing code 9035615.
Nuance will provide a copy of Prepared Remarks in combination
with this press release. These remarks are offered to provide
shareholders and analysts additional detail for analyzing the
results. The remarks are available at http://investors.nuance.com
and will not be read on the call.
About Nuance Communications, Inc.
Nuance Communications, Inc. (NASDAQ: NUAN) is a technology
pioneer with market leadership in conversational AI and ambient
intelligence. A full-service partner trusted by 90 percent of U.S.
hospitals and 85 percent of the Fortune 100 across the globe, we
create intuitive solutions that amplify people's ability to help
others.
Trademark reference: Nuance and the Nuance logo 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.
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," "intends" 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 but not limited to: the impact of the
COVID-19 pandemic, the effects of competition, including pricing
pressure, and changing business models in the markets and
industries in which we operate; fluctuations in demand for our
existing and future products; changes to economic, political, and
regulatory conditions in the United
States and internationally; our ability to attract and
retain key personnel; our ability to control and successfully
manage our expenses and cash position; cybersecurity and data
privacy incidents or breaches, and related remediation and
investigation; our ability to comply with applicable domestic and
international laws and policies; fluctuating currency rates;
possible quality issues in our products and technologies; our
ability to realize anticipated synergies from acquired businesses,
to cut stranded costs related to divested businesses, and to
capture the expected value from strategic transactions; and the
other factors described in our most recent Form 10-K, Form 10-Q and
other filings 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.
Discussion of Non-GAAP Financial Measures
We believe that providing non-GAAP ("Generally Accepted
Accounting Principles") 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
not only to better understand our financial performance, but also
to evaluate the efficacy of the methodology and information used by
management to evaluate and measure such performance. The non-GAAP
information included in this press release should not be considered
superior to, or a substitute for, financial statements prepared in
accordance with GAAP.
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 non-GAAP
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 constant currency organic performance, we
mean performance excluding the effect of current foreign currency
rate fluctuations. By continuing operations, we mean the ongoing
results of the business excluding certain unplanned costs.
Consistent with this approach, we believe that disclosing
non-GAAP financial measures to the readers of our financial
statements provides such readers with useful supplemental data
that, while not a substitute for GAAP financial statements, 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, 2020 and 2019, our management has
either included or excluded items in seven general categories, each
of which is described below.
Acquisition-related revenue and cost of revenue.
We provide supplementary non-GAAP financial measures of revenue
that include revenue that we would have recognized but for the
purchase accounting treatment of acquisition transactions. Non-GAAP
revenue also includes revenue that we would have 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.
Restructuring and other costs, net.
Restructuring and other charges, net include restructuring
expenses as well as other charges that are unusual in nature, are
the result of unplanned events, and arise outside the ordinary
course of our business. Restructuring expenses consist of employee
severance costs, charges for the closure of excess facilities and
other contract termination costs. Other charges include litigation
contingency reserves, asset impairment charges, expenses associated
with the malware incident that occurred in the third quarter of
fiscal year 2017 (the "2017 Malware Incident") and gains or losses
on the sale or disposition of certain non-strategic assets or
product lines.
Acquisition-related costs, net.
In recent years, we have completed a number of acquisitions,
which result in operating expenses, that 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 fall into the following
categories: (i) transition and integration costs; (ii) professional
service fees and expenses; 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, and earn-out
payments treated as compensation expense, as well as the costs of
integration-related activities, including services provided by
third parties.
|
|
|
(ii)
|
Professional service
fees and expenses. Professional service fees and expenses include
financial advisory, legal, accounting and other outside services
incurred in connection with acquisition activities, and 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.
Non-cash expenses.
We provide non-GAAP information relative to the following
non-cash expenses: (i) stock-based compensation; and (ii) non-cash
interest. These items are further discussed as follows:
(i)
|
Stock-based
compensation. Because of varying valuation methodologies,
subjective assumptions and the variety of award types, we believe
that excluding 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 our 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)
|
Non-cash interest. We
exclude non-cash interest because we believe that excluding this
expense 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. Non-cash interest expense will
continue in future periods.
|
Other expenses.
We exclude certain other expenses that result from unplanned
events outside the ordinary course of continuing operations, in
order to measure operating performance and current and future
liquidity both with and without these expenses. 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, and losses from
extinguishing our convertible debt. Other items such as consulting
and professional services fees related to assessing strategic
alternatives and our transformation programs, implementation of the
new revenue recognition standard (ASC 606), and expenses associated
with the malware incident and remediation thereof are also
excluded.
Non-GAAP Operating Income
Our non-GAAP operating income includes acquisition-related
revenue adjustments but excludes non-GAAP expenses such as stock
compensation, amortization of intangible assets, restructuring and
other costs, net, acquisition-related costs, net, and certain other
expenses that result from unplanned events outside the ordinary
course of continuing operations.
Non-GAAP income tax provision.
Our non-GAAP income tax provision is determined based on our
non-GAAP pre-tax income. The tax effect of each non-GAAP
adjustment, if applicable, is computed based on the statutory tax
rate of the jurisdiction to which the adjustment relates.
Additionally, as our non-GAAP profitability is higher based on the
non-GAAP adjustments, we adjust the GAAP tax provision to remove
valuation allowances and related effects based on the higher level
of reported non-GAAP profitability. We also exclude from our
non-GAAP tax provision certain discrete tax items as they
occur.
Contact Information
For Investors
Michael Maguire
Nuance Communications, Inc.
Tel: 781-565-4855
Email: michael.maguire@nuance.com
For Press
Nancy
Scott
Nuance Communications, Inc.
Tel: 781-565-4130
Email: nancy.scott@nuance.com
Financial Tables Follow
Nuance
Communications, Inc.
|
Condensed
Consolidated Statements of Operations
|
(in thousands, except
per share amounts)
|
Unaudited
|
|
|
|
Three Months Ended
December 31,
|
|
2020
|
|
2019
|
Revenues:
|
|
|
|
Hosting and
professional services
|
$
195,832
|
|
$
173,921
|
Product and
licensing
|
86,037
|
|
125,015
|
Maintenance and
support
|
63,884
|
|
62,573
|
Total
revenues
|
345,753
|
|
361,509
|
Cost of
revenues:
|
|
|
|
Hosting and
professional services
|
105,615
|
|
101,330
|
Product and
licensing
|
14,415
|
|
33,944
|
Maintenance and
support
|
7,486
|
|
7,863
|
Amortization of
intangible assets
|
4,262
|
|
6,569
|
Total cost of
revenues
|
131,778
|
|
149,706
|
Gross
profit
|
213,975
|
|
211,803
|
Operating
expenses:
|
|
|
|
Research and
development
|
56,457
|
|
54,605
|
Sales and
marketing
|
65,405
|
|
65,776
|
General and
administrative
|
41,145
|
|
38,334
|
Amortization of
intangible assets
|
10,531
|
|
9,189
|
Acquisition-related
costs, net
|
325
|
|
1,220
|
Restructuring and
other charges, net
|
8,566
|
|
6,683
|
Total operating
expenses
|
182,429
|
|
175,807
|
Income from
operations
|
31,546
|
|
35,996
|
Other expenses,
net
|
(22,289)
|
|
(33,669)
|
Income before income
taxes
|
9,257
|
|
2,327
|
Provision (benefit)
for income taxes
|
2,303
|
|
(41,297)
|
Net income from
continuing operations
|
6,954
|
|
43,624
|
Net income from
discontinued operations
|
7,941
|
|
5,061
|
Net
income
|
$
14,895
|
|
$
48,685
|
|
|
|
|
Net income per
common share - basic:
|
|
|
|
Continuing
operations
|
$
0.02
|
|
$
0.15
|
Discontinued
operations
|
0.03
|
|
0.02
|
Total net income per
basic common share
|
$
0.05
|
|
$
0.17
|
|
|
|
|
Net income per
common share - diluted:
|
|
|
|
Continuing
operations
|
$
0.02
|
|
$
0.15
|
Discontinued
operations
|
0.03
|
|
0.02
|
Total net income per
diluted common share
|
$
0.05
|
|
$
0.17
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
Basic
|
283,818
|
|
284,130
|
Diluted
|
314,210
|
|
289,453
|
Nuance
Communications, Inc.
|
Condensed
Consolidated Balance Sheets
|
(in
thousands)
|
Unaudited
|
|
|
|
|
|
December 31,
2020
|
|
September 30,
2020
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
299,446
|
|
$
301,233
|
Marketable
securities
|
74,862
|
|
71,114
|
Accounts receivable,
net
|
216,447
|
|
175,583
|
Prepaid expenses and
other current assets
|
157,482
|
|
152,563
|
Current assets of
discontinued operations
|
35,965
|
|
35,492
|
Total current
assets
|
784,202
|
|
735,985
|
|
|
|
|
Land, building and
equipment, net
|
138,639
|
|
137,299
|
Goodwill
|
2,131,095
|
|
2,120,495
|
Intangible assets,
net
|
153,424
|
|
167,270
|
Right-of-use
assets
|
101,172
|
|
104,839
|
Other
assets
|
262,464
|
|
248,414
|
Long-term assets of
discontinued operations
|
76,689
|
|
79,030
|
Total
assets
|
$
3,647,685
|
|
$
3,593,332
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current portion of
long-term debt
|
$
1,053,011
|
|
$
432,209
|
Contingent and
deferred acquisition payments
|
4,524
|
|
4,224
|
Accounts
payable
|
81,461
|
|
71,833
|
Accrued expenses and
other current liabilities
|
157,779
|
|
199,254
|
Deferred
revenue
|
273,145
|
|
249,484
|
Current liabilities
of discontinued operations
|
26,160
|
|
29,138
|
Total current
liabilities
|
1,596,080
|
|
986,142
|
|
|
|
|
Long-term
debt
|
495,977
|
|
1,104,464
|
Deferred revenue, net
of current portion
|
101,632
|
|
98,696
|
Deferred tax
liability
|
64,094
|
|
70,116
|
Operating lease
liabilities
|
100,339
|
|
103,996
|
Other
liabilities
|
65,085
|
|
64,597
|
Long-term liabilities
of discontinued operations
|
18,099
|
|
21,388
|
Total
liabilities
|
2,441,306
|
|
2,449,399
|
|
|
|
|
Mezzanine
Equity
|
53,343
|
|
-
|
|
|
|
|
Stockholders'
equity
|
1,153,036
|
|
1,143,933
|
Total liabilities and
stockholders' equity
|
$
3,647,685
|
|
$
3,593,332
|
Nuance
Communications, Inc.
|
Consolidated
Statements of Cash Flows
|
(in
thousands)
|
Unaudited
|
|
|
|
Three Months Ended
December 31,
|
|
2020
|
|
2019
|
Cash flows from
operating activities:
|
|
|
|
Net income from
continuing operations
|
$
6,954
|
|
$
43,624
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation
|
7,993
|
|
7,793
|
Amortization
|
14,793
|
|
15,758
|
Stock-based
compensation
|
34,906
|
|
30,402
|
Non-cash interest
expense
|
12,324
|
|
12,744
|
Deferred tax
benefit
|
(5,435)
|
|
(42,900)
|
Loss on
extinguishment of debt
|
-
|
|
15,000
|
Other
|
3,028
|
|
41
|
Changes in operating
assets and liabilities, excluding effects of
acquisitions:
|
|
|
|
Accounts
receivable
|
(40,023)
|
|
(21,164)
|
Prepaid expenses and
other assets
|
(5,892)
|
|
27,414
|
Accounts
payable
|
11,636
|
|
(1,703)
|
Accrued expenses and
other liabilities
|
(9,480)
|
|
(70,017)
|
Deferred
revenue
|
23,814
|
|
27,686
|
Net cash provided by
operating activities - continuing operations
|
54,618
|
|
44,678
|
Net cash provided by
operating activities - discontinued operations
|
6,570
|
|
8,875
|
Net cash provided by
operating activities
|
61,188
|
|
53,553
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(17,400)
|
|
(14,204)
|
Proceeds from
disposition of a business, net of transaction fees
|
-
|
|
-
|
Purchases of
marketable securities and other investments
|
(41,366)
|
|
(86,699)
|
Proceeds from sales
and maturities of marketable securities and other
investments
|
37,582
|
|
82,588
|
Payments for business
and asset acquisitions, net of cash acquired
|
(250)
|
|
-
|
Other
|
(545)
|
|
1,272
|
Net cash used in
investing activities
|
(21,979)
|
|
(17,043)
|
Cash flows from
financing activities:
|
|
|
|
Repurchase and
redemption of debt
|
-
|
|
(313,500)
|
Net distribution from
Cerence upon the spin-off
|
-
|
|
139,090
|
Payments for
repurchase of common stock
|
-
|
|
(92,444)
|
Payments for taxes
related to net share settlement of equity awards
|
(43,729)
|
|
(29,958)
|
Other financing
activities
|
(6)
|
|
(725)
|
Net cash used in
financing activities
|
(43,735)
|
|
(297,537)
|
Effects of exchange
rate changes on cash and cash equivalents
|
2,739
|
|
1,524
|
Net decrease in cash
and cash equivalents
|
(1,787)
|
|
(259,503)
|
Cash and cash
equivalents at beginning of period
|
301,233
|
|
560,961
|
Cash and cash
equivalents at end of period
|
$
299,446
|
|
$
301,458
|
Nuance
Communications, Inc.
|
Supplemental
Financial Information
|
GAAP to Non-GAAP
Reconciliations
|
(in
thousands)
|
Unaudited
|
|
|
|
Three Months Ended
December 31,
|
|
2020
|
|
2019
|
|
|
|
|
GAAP
revenues
|
$
345,753
|
|
$
361,509
|
Acquisition-related
revenue adjustments: hosting and professional services
|
-
|
|
89
|
Non-GAAP
revenues
|
$
345,753
|
|
$
361,598
|
|
|
|
|
GAAP cost of
revenues
|
$
131,778
|
|
$
149,706
|
Cost of revenues from
amortization of intangible assets
|
(4,262)
|
|
(6,569)
|
Cost of revenues
adjustments: hosting and professional services (1)
|
(6,563)
|
|
(4,977)
|
Cost of revenues
adjustments: product and licensing (1)
|
(75)
|
|
(129)
|
Cost of revenues
adjustments: maintenance and support (1)
|
(426)
|
|
(393)
|
Cost of revenues
adjustments: other
|
-
|
|
(66)
|
Non-GAAP cost of
revenues
|
$
120,452
|
|
$
137,572
|
|
|
|
|
GAAP gross
profit
|
$
213,975
|
|
$
211,803
|
Gross profit
adjustments
|
11,326
|
|
12,223
|
Non-GAAP gross
profit
|
$
225,301
|
|
$
224,026
|
|
|
|
|
GAAP income from
operations
|
$
31,546
|
|
$
35,996
|
Gross profit
adjustments
|
11,326
|
|
12,223
|
Research and
development (1)
|
8,440
|
|
8,440
|
Sales and marketing
(1)
|
8,943
|
|
7,025
|
General and
administrative (1)
|
10,459
|
|
9,438
|
Acquisition-related
costs, net
|
325
|
|
1,220
|
Amortization of
intangible assets
|
10,531
|
|
9,189
|
Restructuring and
other charges, net
|
8,566
|
|
6,683
|
Other
|
1,305
|
|
191
|
Non-GAAP income
from operations
|
$
91,441
|
|
$
90,405
|
|
|
|
|
GAAP income before
income taxes
|
$
9,257
|
|
$
2,327
|
Gross profit
adjustments
|
11,326
|
|
12,223
|
Research and
development (1)
|
8,440
|
|
8,440
|
Sales and marketing
(1)
|
8,943
|
|
7,025
|
General and
administrative (1)
|
10,459
|
|
9,438
|
Acquisition-related
costs, net
|
325
|
|
1,220
|
Amortization of
intangible assets
|
10,531
|
|
9,189
|
Restructuring and
other charges, net
|
8,566
|
|
6,683
|
Non-cash interest
expense
|
12,324
|
|
12,744
|
Loss on
extinguishment of debt
|
-
|
|
15,000
|
Other
|
1,077
|
|
(305)
|
Non-GAAP income
before income taxes
|
$
81,248
|
|
$
83,984
|
Nuance
Communications, Inc.
|
Supplemental
Financial Information
|
GAAP to Non-GAAP
Reconciliations, continued
|
(in thousands, except
per share amounts)
|
Unaudited
|
|
|
|
Three Months Ended
December 31,
|
|
2020
|
|
2019
|
|
|
|
|
GAAP provision
(benefit) for income taxes
|
$
2,303
|
|
$
(41,297)
|
Income tax effect of
non-GAAP adjustments
|
12,421
|
|
20,285
|
Removal of valuation
allowance and other items
|
3,409
|
|
41,503
|
Removal of discrete
items
|
620
|
|
-
|
Non-GAAP provision
for income taxes
|
$
18,753
|
|
$
20,491
|
|
|
|
|
GAAP net income
from continuing operations
|
$
6,954
|
|
$
43,624
|
Acquisition-related
adjustment - revenues (2)
|
-
|
|
89
|
Acquisition-related
costs, net
|
325
|
|
1,220
|
Cost of revenue from
amortization of intangible assets
|
4,262
|
|
6,569
|
Amortization of
intangible assets
|
10,531
|
|
9,189
|
Restructuring and
other charges, net
|
8,566
|
|
6,683
|
Stock-based
compensation (1)
|
34,906
|
|
30,402
|
Non-cash interest
expense
|
12,324
|
|
12,744
|
Loss on
extinguishment of debt
|
-
|
|
15,000
|
Adjustment to income
tax expense
|
(16,450)
|
|
(61,788)
|
Other
|
1,077
|
|
(239)
|
Non-GAAP net
income
|
$
62,495
|
|
$
63,493
|
|
|
|
|
Non-GAAP diluted
net income per share
|
$
0.20
|
|
$
0.22
|
|
|
|
|
Diluted weighted
average common shares outstanding
|
314,210
|
|
289,453
|
Nuance
Communications, Inc.
|
Supplemental
Financial Information - GAAP to Non-GAAP Reconciliations,
continued
|
(in
thousands)
|
Unaudited
|
|
|
|
Three Months Ended
December 31,
|
|
2020
|
|
2019
|
(1) Stock-based
compensation
|
|
|
|
Cost of hosting and
professional services
|
$
6,563
|
|
$
4,977
|
Cost of product and
licensing
|
75
|
|
129
|
Cost of maintenance
and support
|
426
|
|
393
|
Research and
development
|
8,440
|
|
8,440
|
Sales and
marketing
|
8,943
|
|
7,025
|
General and
administrative
|
10,459
|
|
9,438
|
Total
|
$
34,906
|
|
$
30,402
|
|
|
|
|
(2)
Acquisition-related revenue
|
|
|
|
Acquisition-related
revenue adjustments
|
$
-
|
|
$
89
|
Total
|
$
-
|
|
$
89
|
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SOURCE Nuance Communications, Inc.