About Nuance Communications, Inc.
Nuance Communications helps machines navigate the subtleties of human speech. The company develops speech recognition systems for applications in customer service, consumer electronics, healthcare, financial services, and automotive. It employs artificial intelligence, cognitive science, and machine learning in developing its products with some 2,000 language experts on staff. Nuance has customers worldwide, although most of its revenue comes from the US.
Nuance's operating segments are healthcare, enterprise, and automotive.
Its healthcare segment (more than half of sales) provides intelligent systems that support a more natural and insightful approach to clinical documentation, freeing clinical to spend more time caring for patients. It healthcare solutions communicate to more than 300 million patient stories each year, helping more than 500,000 clinicians in 10,000 global healthcare organizations. Its Automatic Speech Recognition self-service system is available in about 90 languages and dialects.
The enterprise segment (about 30% 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.
The automotive segment (more than 15% of sales) provides automotive manufactures and their suppliers personalized, branded and connected services for cars. The company spun-off its automotive segment in 2019.
Overall, sales to professional services and hosting accounts for more than 55% of total sales while, product and licensing generates nearly a third and maintenance and support accounts the rest.
Nuance is based in Burlington, Massachusetts, and has an international headquarters in Dublin, Ireland. The company operates specialized data centers in Massachusetts, Washington, and Texas in the US, as well as in China with smaller facilities around the world.
The company counts more than 80 international locations and a sales presence in more than 85 countries.
Nuance makes about three-quarters of its sales to customers in the US.
Sales and Marketing
Nuance sells directly and through distributors, resellers, system integrators, e-commerce websites, and telecom carriers. Distribution and reseller partners include Avaya, Cisco, Genesys, Telstra, and Verint.
Healthcare segment customers include Cleveland Clinic, Johns Hopkins, and Partners Healthcare. The Enterprise segment customers include American Airlines, Barclays, Coca-Cola, Delta Airlines, Esurance, FedEx, HSBC, and Jetstar. While, Automotive segment customers include major automotive OEMs, such as Ford, Daimler, BMW, Toyota, Fiat Chrysler, Volkswagen, and Geely.Nuance advertising costs were $17.2 million, $16.5 million and $19.4 million for fiscal years 2019, 2018 and 2017, respectively.
Nuance's sales took a dip in 2019 (ended September) with a 1% decrease from 2018. The company's revenue went from $1.842 billion in the previous year, to $1.823 billion of the current year.
The healthcare segment provided most of the revenue bump with a 9% sales decreased in 2019 from deeper market penetration, growth of the Dragon Medical cloud-based products, and more EHR implementations. The enterprise segment also grew, but the automotive, imaging, and other segments posted lower revenue year-to-year.
Nuance continued to lose money in 2018 with a net loss of about $160 million, about $9 million more than its 2017 loss. In 2019, the company decreased spending on research and development and had about $80 million in restructuring costs. Nuance has lost money for the past six years and eight out of the last 10; its accumulated deficit is about $293 million.
The company's cash on hand fell to $561 million in 2019 from $316 million in 2018. Operations generated $401 million in cash while investing activities used $296 million and financing activities used $452 million.
There's little nuance in Nuance's strategy: the company is focusing on its speech capabilities, developed with artificial intelligence methods and delivered via cloud computing. To do that, the company is spinning off its automotive business into a separate public company, selling its imaging business to Kofax, and winding down its mobile operator services and devices business.
Nuance is investing in domain-specific and embedded conversational AI, which, the company expects, will increase the size of its healthcare addressable market. Specifically, the company is getting its Dragon Medical Cloud platform to more doctors in North America and international markets. It also speeding up its conversational AI technology, Computer-Assisted Physician Documentation that brings real-time intelligence to physicians at the point of care.
The company is expanding its sales force to reach under-penetrated and new markets. In the enterprise segment, it is increasing its sales capabilities for voice biometrics in authentication and fraud detection services.
Nuance's restructuring included job cuts and facility closures.
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 thing
1 Wayside Rd
Burlington, MA 01803-4609
Phone: 1 (781) 565-5000
Employer Type: Publicly Owned
Stock Symbol: NUAN
Stock Exchange: , NASDAQ
Chairman and CEO: Paul A. Ricci
Chief Technology Officer: Vlad Sejnoha
EVP and CFO: Daniel D. Tempesta
Employees (This Location): 550
Employees (All Locations): 6,700
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