Speech-based solutions provider Nuance Communications, Inc. (NUAN) on Monday reported a net loss for the first quarter that narrowed from last year, aided by a 21% increase in revenues and higher operating margins. On an adjusted basis, earnings per share for the quarter topped analysts' consensus estimate by two cents.
The Burlington, Massachusetts-based company's GAAP net loss for the first quarter narrowed to $4.28 million or $0.02 per share from $26.32 million or $0.11 per share in the year-ago quarter. On a non-GAAP basis, net income for the latest quarter was $84.30 million or $0.29 per share, up from $60.99 million or $0.24 per share in the same period last year. On average, twenty analysts polled by Thomson Reuters expected the company to report earnings of $0.27 per share for the first quarter. Analysts' estimates typically exclude special items.
Nuance reported first-quarter GAAP revenue of $262.98 million, a 21.3% increase over $216.83 million in the prior year quarter. Non-GAAP revenue grew about 16.4% to $284.60 million from $244.44 million in the year-ago period, and topped analysts' consensus revenue estimate of $268.94 million.
Non-GAAP revenue for the latest quarter includes $21.6 million in revenue lost to accounting treatment in conjunction with the company's acquisitions.
Nuance said it benefited from accelerated revenue growth as well as focus on expense controls and synergies from recent acquisitions to significantly improve operating margin, despite increased investments in the business.
Commenting on the results, Paul Ricci, Chairman and Chief Executive Officer of Nuance Communications said, "Nuance achieved increased revenue growth in the quarter, enabled by stronger performance across all of its business lines. In the quarter, operating margins improved year over year, even as we increased investments in R&D, advertising and sales personnel. Our first quarter performance, on-going investments in sales, channels and products, and our leadership position in key markets position Nuance for sustained growth for the balance of fiscal 2010."
Operating margin for the latest quarter rose to 32.6% from 28.8% a year ago.
On a segmental basis, the company's major source of revenues, product and licensing revenue rose to $113.23 million from $85.58 million last year. However, professional services and hosting segment revenues increased to $103.70 million from $90.19 million a year earlier. Quarterly revenue from Nuance's smallest revenue segment, maintenance and support, increased to $46.06 million from $41.07 million in the previous-year quarter.
Operating expenses for the latest quarter were $165.51 million, up from $141.96 million a year ago. Of this, research and development expenses increased to $36.95 million from $30.55 million in the year-ago period, while general and administrative expenses increased to $27.45 million from $25.59 million in the prior-year period. Acquisition-related costs were $12.81 million, up from $5.90 million in the year-ago quarter. Meanwhile, restructuring and other charges dropped to $0.62 million from $2.10 million in the previous-year quarter.
Income from operations for the first quarter was $3.87 million, compared to loss from operations of $7.43 million in the year-ago quarter. Provision for income taxes was $0.34 million, down from $11.61 million in the same period last year.
NUAN closed Monday's regular trading session at $14.91, up $0.23 or 1.57% on a volume of 3.37 million shares.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.