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 2,100 language experts on staff. Nuance has customers worldwide, although most of its revenue comes from the US. In 2018, Nuance began to sell or spin off non-core businesses to focus on AI-powered speech and cloud technologies. Nuance technologies conduct about 16 billion self-service transactions a year.
Nuance's operating segments are healthcare, mobile, enterprise, and imaging.
Its healthcare segment (more than 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 applicationsm as well as for businesses and consumers.
The mobile segment (more than 20% of sales) includes voice command, speech-to-text, and other software for automotive manufacturers, mobile devices, and computers.
The enterprise segment (about 15% 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 (about 10% of sales) offers document, imaging, and print management software.
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 60 international locations and a sales presence in more than 80 countries. Its Automatic Speech Recognition self-service system is available in about 90 languages and dialects. Nuance makes about 70% of its sales to customers in the US.
Sales and Marketing
Nuance sells directly and through distributors, resellers, system integrators, and telecom carriers. Distribution and reseller partners include Avaya, BT, Cisco, DiData, Genesys, Huawei, MoshiMoshi, NICE, Telstra, and Verint.
The company’s customers include American Airlines, Amtrak, Bank of America, Barclays, Dominos, Delta Air Lines, Deutsche Telekom, Lloyds Banking Group, Vodafone, and the US Centers for Medicare and Medicaid.
After revenue hovered around $1.9 billion for four years, Nuance’s sales reached $2 billion in 2018 (ended September) with a 6% increase from 2017.
The healthcare segment provided most of the revenue bump with a 9% sales increase in 2018 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 2018, the company increased spending on research and development and had about $42 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 $740 million.
The company’s cash on hand fell to $316 million in 2018 from $592 million in 2017. Operations generated $444 million in cash while investing activities used $37 million and financing activities used $680 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 things.
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 2018 Nuance acquired Voicebox Technologies, a developer of speech recognition and natural language technologies, for $82 million.
In early 2017 Nuance bought mCarbon, a provider of customer engagement and value-added service products for telecom operators around the world.
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): 10,400
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