For the second straight quarter (previous), Nuance (NUAN) has beat quarterly estimates and provided below-consensus guidance. In prepared remarks, the voice recognition software leader guides for FQ1 revenue of $477M-$487M and EPS of $0.18-$0.21, below a consensus of $494.7M and $0.33. Also, Nuance is guiding for FY14 (ends Sep. '14) revenue of $2.03B-$2.09B and EPS of $1.05-$1.15, largely below a consensus of $2.08B and $1.41.
One bright spot: Nuance forecasts FY14 bookings of $2.15B-$2.25B, up from an FY13 level of $1.92B and implying a book-to-bill above 1 (FY13 book-to-bill was 0.98).
Nuance once more says the transition to cloud/subscription-based sales from up-front licenses is hurting near-term revenue. The company also states ongoing weakness in healthcare transcription sales (previous), smartphone consolidation (gives Apple/Samsung more control), and the adoption of services-based mobile models (such as Siri) will hurt FY14 sales. Meanwhile, major mobile, cloud, and healthcare R&D investments will pressure EPS.
On the other hand, Nuance expects growth in the enterprise, automotive, diagnostics, and managed print services markets, as well as for its DragonTV, Clintegrity (clinical documentation), and voicemail-to-text offerings.