Nuance Communications, Inc. (NUAN) saw its loss widen to $23.93 million, or $0.08 a share for the quarter ended Dec. 31, 2016. In the previous year period, the company reported a loss of $12.06 million, or $0.04 a share. On the other hand, adjusted net income for the quarter stood at $102.53 million, or $0.35 a share compared with $113.01 million or $0.36 a share, a year ago.
Revenue during the quarter went up marginally by 0.32 percent to $487.66 million from $486.12 million in the previous year period. Gross margin for the quarter contracted 126 basis points over the previous year period to 56.44 percent. Total expenses were 95.07 percent of quarterly revenues, up from 93.52 percent for the same period last year. That has resulted in a contraction of 155 basis points in operating margin to 4.93 percent.
Operating income for the quarter was $24.03 million, compared with $31.50 million in the previous year period.
However, the adjusted operating income for the quarter stood at $133.64 million compared to $141.32 million in the prior year period. At the same time, adjusted operating margin contracted 167 basis points in the quarter to 27.40 percent from 29.07 percent in the last year period.
"Nuance delivered strong performance against our guidance in the first quarter as we continued our execution and momentum across the business," said Dan Tempesta, Nuance's chief financial officer. "We produced solid results in each of our key financial metrics including net new bookings, revenue, recurring revenue, deferred revenue, EPS and cash flow from operations. We believe last quarter's groundwork and a robust outlook for the second quarter place the company on track for our FY17 non-GAAP guidance with a return to organic revenue growth, and continued strong cost discipline and profitability."
Operating cash flow declines
Nuance Communications, Inc. has generated cash of $124.90 million from operating activities during the quarter, down 11.51 percent or $ 16.24 million, when compared with the last year period.
The company has spent $97.04 million cash to meet investing activities during the quarter as against cash outgo of $24.17 million in the last year period.
Cash flow from financing activities was $454.60 million for the quarter as against cash outgo of $89.80 million in the last year period.
Cash and cash equivalents stood at $961.61 million as on Dec. 31, 2016, up 89.80 percent or $454.95 million from $506.65 million on Dec. 31, 2015.
Working capital turns negative
Working capital of Nuance Communications, Inc. has turned negative to $124.75 million on Dec. 31, 2016 from positive $431.58 million on Dec. 31, 2015. Current ratio was at 0.93 as on Dec. 31, 2016, down from 1.72 on Dec. 31, 2015.
Days sales outstanding were almost stable at 71 days for the quarter, when compared with the last year period.
Debt increases substantially
Nuance Communications, Inc. has witnessed an increase in total debt over the last one year. It stood at $2,938.69 million as on Dec. 31, 2016, up 38.63 percent or $818.86 million from $2,119.82 million on Dec. 31, 2015. Short-term debt stood at $977.46 million as on Dec. 31, 2016. Total debt was 47.44 percent of total assets as on Dec. 31, 2016, compared with 38.33 percent on Dec. 31, 2015. Debt to equity ratio was at 1.53 as on Dec. 31, 2016, up from 0.93 as on Dec. 31, 2015.
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