About Nuance Communications, Inc.

Nuance Communications helps machines hear and understand the subtleties of what people say to them. The company provides speech recognition systems used to provide customer service, embedded systems used in automobiles and consumer electronics, and medical dictation systems. It employs artificial intelligence, cognitive science, and machine learning in developing its products. Nuance sees as well as listens with a digital imaging line of document creation, editing, and conversion tools. It serves clients worldwide in a range of industries, including healthcare, telecommunications, financial services, and government. The company generates most of its sales in the US.

Operations

Nuance's operating segments are healthcare, mobile, enterprise, and imaging. Its healthcare segment (around 45% of sales) includes dictation and transcription software for medical information management. Among its products is the line of Dragon speech recognition products for medical applications as well as for businesses and consumers. The mobile segment (about 20% of sales) includes voice command, speech-to-text, and other software for automotive manufacturers, mobile devices, and computers. The enterprise segment (25% of sales) provides customer service through voice, mobile, web and messaging channels, with inbound and outbound customer service and engagement, voice biometrics, and virtual assistant capabilities. Imaging (an eighth of sales) offers document, imaging, and print management software.

Geographic Reach

Nuance generates about 70% of its sales from the US. Internationally, it has principal locations in Australia, Austria, Belgium, Brazil, Canada, China, Germany, Hungary, India, Ireland, Italy, Japan, and the UK. The company's Automatic Speech Recognition self-service system is available in about 90 languages and dialects.

Sales and Marketing

Nuance sells directly and through distributors, resellers, system integrators, and telecom carriers. Distribution and reseller partners across all segments include Avaya, Cerner, Cisco, HP, Epic, McKesson, Cleveland Clinic, and Xerox, while customers include American Airlines, Amtrak, Bank of America, Barclays, Dominos, Delta Air Lines, Deutsche Telekom, Lloyds Banking Group, and Vodafone.

Financial Performance

Nuance's revenue has been around $1.9 billion in the past five years and that continued in 2017 (ended September) when the company posted sales of $1.94 billion, off from $1.95 billion in 2016. Its mobile and enterprise units reported higher revenue from deeper penetration of the automotive market (mobile) and increased demand for on-demand products and services (enterprise). A malware incident was responsible for some of the lower revenue from healthcare while imaging sales also fell for the year. The company blamed lower sales of Dragon Medical products on the transition from licensing to subscription and cloud-based offerings.

Nuance's net loss widened to $151 million in 2017 from loss of $12.5 million in 2016 because of the malware incident and a higher tax bill for 2017 compared to 2016.

Cash flow from operations was about $379 million in 2017, a drop from $565 million in 2016. In 2017, Nuance has unfavorable changes in working capital and a decrease in cash from deferred revenue.

Strategy

Nuance has been a pioneer in helping people talk to machines. Doctors dictate patient notes that are transcribed by Nuance technology through its Dragon brand products and people wend their way through customer service options by talking to a Nuance system. About 45% of the company's revenue comes from its healthcare products. Now Nuance is aggressively moving into the growing field of providing the technology for talking to all kinds of machines, including cars. As technology has made the turn from speech recognition to speech understanding, Nuance has made the transition with investments in artificial intelligence, natural language, and cognitive science. While voice command technology is increasingly available in a number of applications, it means more competition for Nuance from companies like Google, Amazon, and Apple (even if Nuance software was part of Apple's Siri digital assistant).

Nuance has moved beyond the hospital and now provides voice-command technology for a number of automakers including BMW and Fiat Chrysler. The company's mobile division, which includes the automotive products, provide about a fifth of revenue. The company works with firms such as Here (mapping) and Parkopedia (which helps locate a parking space) to provide information to drivers.

Other areas where the company intends to produce more revenue are voice biometrics, omni-channel customer care, unified print and scan solutions, Dragon Medical, clinical document improvement (CDI) for medical documents, and diagnostics.

The company is in another transformation: switching its revenue model to one dependent on recurring revenue gained from its cloud-based operations. Recurring revenue accounted for more than 70% of the total in 2017, an increase from 2016. Nuance expects the percentage to increase as current and new products replace its older, installed base of perpetual license applications.

Nuance is well established in the medical community but emerging competition threatens it in other fields. Digital assistants like Amazon's Alexa, Google Home, and Apple's Siri have found users for applications that include smart home elements of the internet of things. Amazon has made its software available to developers who design additional applications and Google's software is available through the Android mobile operating system. While Nuance has maintained a tight leash on it systems, it has integrated its Nina virtual assistant into Amazon's Alexa.

Mergers and Acquisitions

An aggressive acquisition strategy has been among the keys to Nuance's success. The company continues to strengthen its product offerings and expand its geographic reach via acquisitions.

In early 2017 Nuance bought mCarbon, a provider of customer engagement and value-added service products for telecom operators around the world.

In 2016, the company acquired TouchCommerce, a developer of digital customer service and engagement products for $210. Nuance and TouchCommerce have worked together and the acquisition should amplify their products.

- Show Less + Show Full Description

Company News and Press Releases

- Show Less + Show More News and Press Releases

Nuance Communications, Inc.

1 Wayside Rd
Burlington, MA 01803-4609
Phone: 1 (781) 565-5000
Fax: 1 (781) 565-5001

Stats

  • Employer Type: Public
  • Stock Symbol: NUAN
  • Stock Exchange: NASDAQ
  • Chairman and CEO: Paul A. Ricci
  • Chief Technology Officer: Vlad Sejnoha
  • EVP and CFO: Daniel D. Tempesta
  • 2017 Employees: 11,600

Major Office Locations

  • Burlington, MA

Other Locations

  • Menlo Park, CA
  • Oakley, CA
  • Sunnyvale, CA
  • Melbourne, FL
  • Plantation, FL
  • Berkley, MA
  • Billerica, MA
  • Farmington Hills, MI
  • Mahwah, NJ
  • White Plains, NY
  • Austin, TX
  • Hampton, VA
  • Lynchburg, VA
  • Seattle, WA
  • Tukwila, WA
  • Ieper, Belgium
  • Merelbeke, Belgium
  • Waterloo, Canada
  • Ulm, Germany
  • Moscow, Russia
- Show Less + Show More