NUAN - Earnings call transcript Q2 2019 | Nuance Communications, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Nuance's Second Quarter of Fiscal Year 2019 Conference Call. [Operator Instructions]. Thank you. At this time, I would like to turn the call over to Tracy Krumme, Senior Vice President of Investor Relations at Nuance. Please go ahead.

Tracy Krumme

everyone. evening, Good joining year for on second our Thank conference us call. fiscal XXXX quarter you today With the and Benjamin; Chief Vice me Officer, and Financial Executive on President Officer, call today Dan Revenue Tempesta; Chief Rob Executive Chief Dahdah, Officer. is Mark

this reminder, recorded. being is call a As

Please includes These that Before begin, results. statements statement a SEC in to and otherwise uncertainties discussion unless are cause recent like expectations material and our stated. everyone that are to results results. subject to we estimates, remind other can filings differences of would non-GAAP discussion income our All I our predictions, refer forward-looking statements. risks to references for these

found intended today. And As comments Mark, release, in like please go issued noted call of remarks to on our the website. this I that, Mark. prepared we to press over These remarks our turn supplement on call IR can our are this now would in be with advance call ahead. which to

Mark Benjamin

Tracy. and that our EPS. Good margins quarter strong to continued said. on and pleased made joining and for initiatives our delivered quarter I'm results. our end everyone, for say to expectations We you, discuss our QX high guidance reported doing us results. of what second another progress of at we Thanks, delivered We revenue strategic we thank afternoon, the and exceeded

operating and flow. strategic growth, to focus generate areas, meaningful is end, and our to points executing which good to plan diligently to are To continue feel towards achieved. theme of last favorable here approach that shifts on overarching towards from cash some disciplined benefit invest announced our we've November. significantly strategic The We solutions us free management cloud we in our revenue key margins we're allocation. and our expense how about progress I capital scale mix allow

and to $XXX few million the unlock fourth, of investments part and million outstanding or X.X good making target second, repurchase as I'll remaining focusing third, March, of first we of Healthcare Enterprise. brings auto shares growth are ahead focused a down value promised, we minutes; million This more company our our half X.X% a on for completed all that efforts should of with Nuance This profile our and we our a debt our on approximately in on continue fifth, in is and repurchased and Devices the down Imaging to business; sale exceeded day; all which we March program. our expectations shares our noncore on SRS spin, XX wind paid progress total stakeholders; finally, in detail of First, activities which of our segment X.X February successfully savings the we X, includes made shares. we year; Other in cost

large that subscription-based and and executing I sales he us markets, with personally. track quality where one growth further recently our company, to moving EVP and America, EMEA, a where confident public roles Chief Centralizing international and Global benefits I'm growth he's be focus delighted position a and As the sales accelerate paramount he Fleetmatics, Latin served into with accelerate Sales. companies and worked EVP customer plans. customers he's a include down and a the we am call strong will removing for from APAC deliver Earlier, over that role. have at the to we I like XX hired building years plan, including culture, future. our Rob ambitious exceed experience and to leader and organization markets. a ADP, silos and and execute newly our him three of at go-to-market a a into as Benefitfocus, success end, I'd company unify SMBs. to firm nearly SaaS tenure To Rob. global we under Dahdah brings on high system expectations in key scalable, a as which XX-year strategies joining just sales our an transform of SaaS-based developing will I'm in of execute and turn He record I integrate expansion Revenue Officer. organization leader management sales with joined experience meaningful a us our SunGard the in leadership held we brings in and strong He a market sales scalable He created to sales consistent solutions. and growth. right models weeks has opportunity call the where in sales Rob our define believer on of Without ado, help

Robert Dahdah

about thrilled is I'm AI Mark. be leader Thanks, the conversational Nuance opportunity. our to technologies. and here excited in worldwide

a innovations a skilled great team highly of We and to relationships have industry, the deploy. ready customer sales pipeline deepest the in

whole business As it's we an and our unique leverage an Mark, look deepen for geographies with exceptional to company. forward our time new and undergo the to you, for our I team create the working relationships, customer exciting to transformation, this strengths customers. experience scale to the

Mark Benjamin

Thank you, Rob.

Healthcare businesses. Medical EHR calls, higher-margin declines in in transcription anticipated solutions about growth seeing Dragon the moving HIM spoken lower right services in cloud lines implementation As We're some are and the we and past segment trend direction. our our in have within margin

to of growth. The Medical cloud a platform well healthy for key margins and $XXX guidance recurring is driver remain this Our in We strong bodes in cash flow. that revenue million. Medical $XXX ARR strength Dragon and remains generate our confident our Dragon pipeline of million

physicians our settings American are which in acute North up greenfield and Dragon care Medical opportunities. ambulatory to We expanding cloud more opens new

EMR Nordics, seen these regions. One, also previously. improve of are we cycle and of are a and In We've systems markets outcomes. the and cloud increasing discussed continued progress significantly as offerings We of Combined, in are made Medical for Dragon in PowerScribe entering and international launched adoption long-term cloud-based these we are expanding we radiologist experience growth have robust offerings recently also QX. our markets U.K., solutions. the One, adds have Dragon the their believe expansion adoption which Germany, our France need Medical functionality superior internationally transitioning use growing our new our radiology clinical and to to financial as radiology, great our in improve into TAM, CAPD the solution We our and in a

cycle look pivot the In the period. our momentum excited significant in or addition, have examples deploy advanced AI transition clinical which One, documentation the We're launch CDE clients business, started gaining today. of to These transition cloud-based of is the to in Nuance CDI cloud on-premise our is are to the cloud with the improvement, into workflow. we to solutions revenue cloud of underway that further technologies two just customers the coming as

innovation contributors feel with gain become more meaningful solutions good we in the impressive reinforced as our intelligence, it strong at clinical then our of which total. about had no experience team milestone attending enthusiasm. in traction states health most career. of Summit opportunities industry Canadian February. Healthcare one event, XX more presented was own hosted the the We power our room care in User seen of and & our our our these my and providers is results, As witnessed customers in leaders. ACI the quarter presence Leadership with and during ACI, Nashville me, spend and division we with numerous and exam is will HIMSS, a At and hundred There events executives the care several and the people I X,XXX time in our was partners X displays doubt provinces. the AI-powered from Healthcare it working positioning introduced received solutions ambient largest of them IT several was was of event to or for include for health ARR future. financial We hosted at personally prototype I vision room the our attended Conference and to incredible which the with our over I've

ACI of or, room ACI game more left of industry my needs industry exited to joy recaptured out to We're the favorite, attendees amazing. or serves back in Pretty were, whole. bring broadly as Exactly medicine." quotes changer. milestone a a for as seen. practicing live want is goosebumps," health the entering with "This as I've care demo thing best number and "I Some I roll the and of expect betas what course, of innovation the now," a it the a for the year commitments. the XXXX with this "Hands-down, It Nuance and experience significant customer confirmed

now strong Turning quarter. another Enterprise, to team the had

security voice, engagement our for continue We and customer span excellent demand biometrics. to services solutions which digital, AI-powered see omnichannel and

today As services, technology and of use XXX including across leading more. we care telecom financial brands health companies Fortune XX% solutions shared have our and previously, the communications, or

Our not speed conversational intelligent care. cloud innovation creation AI to cloud new uses reserved enhancements engagement announced unveiled our health two are ambitions its the Pathfinder, kind the logs We In first quarter, dialogues. platform. that for just of a chat to we of

recommendations We also enabling be providing launched with them and AI, faster more Agent to a new contact and workflows, technology center productive. agents bundle automated for

security we provide We and we to biometric progress. details are bringing and solutions cloud our more also as the will

China, globe and We secured America, lines new reflecting Garmin in is a as or Toyota, across within Auto, customers new logo. business and well. to Auto which wins our existing delivered Moving such Bose, solid Volkswagen, Japan Chrysler, quarter the Ford, design as a North models Europe, new

new electric brands the Series. and of new We vehicle including BMW saw vehicle into models existing our some production also Daimler's from move X

strategic Banma, a business nicely. to and Our including with which grow wins Alibaba. had SAIC a between in JV is continues several We China win

in important with auto SAIC Internet-enabled for to its continue in brand markets. Nuance also car. the fastest-growing India, expanded build These momentum Hector, and China partnership wins worldwide, of China MG our our are bring to cars MG we starting as We assistance world's to India's with mobility first

value are the have business. spinoff built unlocking of We we the proud to business forward this through look and the of we

our separation. allows is X this year made We've on an excellent front. clean and are track new for We progress a October aligned financial for The fiscal on spin. timing with

CFO we've the as with systems. CEO further example, the we and appointment the providing of look other the get with implementation hired you completed momentum a and majority key building this we've as and are asset we've largely and The directors the begun already. splits CHRO good with we're headway human We've for activities. towards several of to begun search capital ERP are For our made forward hiring updates underway on our few commitments weeks. pleased defined selected publicize his the We've allocation we Board of technical We've closer. spin and Overall, within assembling from will well. and executives next

line my the call the to Dan, turn marked I anniversary with last year Nuance. Before week one

thoughtful, my lot We've strategic of As progress incredibly here, I work lifting that am reflect portfolio to of made time and has of upon implementation from the a the I comprehensive heavy our proud the done. team reviews initiatives. the hard

culture, our by the We in on These, was across a we and drive value. our have and redesigned focused Human our teams. is business-led corporate will tighter leading as Rights on responsibility vitally for with delivering and customers. on in creating culture for of driven top focused the structure, was that innovation, with and work Corporate at We in power new recognized Quality a giving purpose a important Nuance internal growth perfect recently turn, to recognized score social programs. diversity Canada create create alignment Campaign. and incremental our Nuance by Index a solutions It's number place company introduced that purpose

the come right a taking organization. an long a year steps in way We and have as are

to more team With have to have confidence turn that strategies it have I'll to work we deliver for right all that, but We and do value full I the stakeholders. Dan.

Daniel Tempesta

afternoon, and halfway year. strong quarter pleased Like and our where with everyone. I'm our performance Thanks, through stand we Mark, good fiscal Mark, second

in due $X offerings. revenue omnichannel for notable the our strength cloud Our million second guidance by our midpoint to quarter Enterprise of the exceeded

with our performed Our Automotive also were segments line expectations. Healthcare and well in and

we again over few during QX. experienced within the Healthcare, the Specifically, once quarters occurred trends last

Medical sequential quarterly cloud Dragon First, continued revenue growth. its

Second, licenses Dragon One with in Medical expectations our line Dragon maintenance to Medical as declined Medical we our cloud-based and legacy platform. Dragon transition business support our

that of services, XX% Third, was never QX of This the as to a HIM of business. decline revenue than release to compare incurred this long-term business we resulting the related our were malware faster continued quarter, guidance although that was our finally, as lower-than-expected to anticipated, our XX%. in primarily to in due customer experience EHR incident. pace to implementation related our transcription to credits XXXX low-margin Mark And volatility XXXX in continue mentioned, difficult

XXX came slightly mix Non-GAAP and business. to points better Enterprise the for to the within was expected. gross was favorable margin XX.X%, than up and discussed, our year-over-year part the management. gross due margin This the overperformance due year-over-year, company. basis benefits to with XXX we basis margins and operating Healthcare XX.X%, just was Turning expense in better up coupled than positive shift was operating Non-GAAP points expected, margin in

pleased are will we we investments third our to While with expense discipline, quarter. the operating ramp during continue

our As was a margins EPS too range combined The against strong aggressively actions at allocation caution periods. result, future with guidance $X.XX high quarter $X.XX. net end robust, the our to will of which results. expansion of capital led effect while came We $X.XX, remain to above these during any operating I in into margin of extrapolating items, the

sheet to our balance Finally, improve. continues

highlighted, X/X the bonds, of sale. As close our after of shortly Mark the million X $XXX Imaging we repurchased

in leverage say year leverage XXXX. of We have net profile, represents X.Xx, since our happy ending ratio ratio this quarter I'm made lowest real at progress our year-end. to with from the fiscal X.Xx debt down

balance generated the cash and flow $XXX the share with million year. debt of This quarter operation and $XXX in $XX million is $XXX During QX, million down pay and marketable in million continuing in the of ended the cash after we repurchases first half after from securities.

allocation. to to generate both shareholders. point our reinvest last exceptional flows Our business return and flexibility on One capital cash value ability to in us gives strong our

the levered. an we we to be keep with we to will look bring automotive to Nuance completion net ahead Auto continue Nuance of cash expectation that standalone business This the will spin, to enable will us the that leverage-neutral. believe upon transaction As back

Our following effective to objective companies the immediately capital is for structures spin. have both

guidance. turning to Now

range tightening end are $X.XXX $X.XXX we the of each billion of full by maintaining for updated year of For our but $X billion million to revenue, range $X.XXX midpoint the guidance an billion.

not our midpoint in strength which contribution the is we entirely EHR revenue services $XX has the given the half. almost $XX Although the first offset driven anticipated lowering Healthcare increased business. Enterprise implementation by our segment have by by is by changed, of This our million, million, service

our maintaining ARR Medical range $XXX $XXX million. are We to cloud of million Dragon

by This changes a XX accelerating guidance to $X.XX favorable flow is EPS, due XXXX expense margin holding EPS basis investments. are XX% margin gross to $X.XX. We our growth-related points at to XX.XX%. through and continued while our $X.XX operating increasing are range margin and to increase to guidance raising our of for These management, we our guidance by

marketable our In very balance focused far. $XXX to million. of of this continues I end of and range the million to Mark year In our are $XXX achieved are the change to addition, $XXX cash $XXX XXXX and be strategic through closing, flow a thus we've at remains pleased And guidance execution. performance million with and maintaining year million free we securities the the projected unchanged in for cash

America During Investors the the weeks, to XX line We please May May conference be of you few we Conference Craig-Hallum for Vegas in look Bank healthcare Minneapolis. XX and Institutional questions. open Operator, seeing the on on there. Las next forward at the will in

Operator

Instructions]. [Operator

Your first the of question of comes Kalia from Barclays. Saket line

Saket Kalia

full the the of Maybe about provide just bit strategy of maybe of very services Mark, that versus off, business just that a robust a margin you normalization just EHR that that business? tailwind really little deliberate Can you, year of to nice see a to business much XXXX after is for EHR talk sort more in for start deemphasizing how guide.

Mark Benjamin

much compares. when the fact, the something, EMR it a And paying been margin of dependent And rate essentially It's that, and single lives. it's attention largest appreciate back out really went and banner came not the question. creates growth we've in at a business. Saket, is upon a know business. the 'XX, go that 'XX. where business we business lower, large cycle look so to tough if it's at EHR And dollar for Healthcare in to, looked obviously, business. you all Well, contributed that all is Sure. And so like people-related certainly It certainly I of the you of that zero also growth year

offerings, company's for way Dragon And cloud we're others. our at Medical the another of really a end, historically those on as to But among using stay that dependent EMR. well installs to looked So the ours they're us really customers. the are customers we've business close and high-value as in

to So tough certainly sustainable strategic lines previous any closely the as And this to profiles all pipeline year. us on any and And business the of necessarily deemphasized the going margin really we're where recurring I something it's We're growth at of of robust we the the decisions haven't nonstrategic it's focus that and as we a it's differentiation. on not resource incurring come far drivers strategy. we've durable as into the key throughout And revenues, cloud and seen that much really the has compare. as been business mix energy subscription have similar may really consistent, revenues, think ours. the of put about looking with that exist, want are take you've made focused how our revenue review. while have really certainly we And sustainable, in business that the or to it revenues reducing been

back Saket, of So a the and half the it's I the think think I year. we combination two, have of

same amount license and million by Services, first a by $XX in revenues, by the quarter. taking the Professional the in quarter, first remember you combined while year, If driven the DMO raised for revenues we down Dragon EHR

an line the we back of EHR revenues and pipeline the and of execute some you'll we'll $XX additional the quarter, I year. half see sight back year, million. come revenues think to have on take to The by the us continue down This in of

guidance business coming think I for You've witnessed into and XXXX, overall holding to EHR. we'll we're our the strategic alternatives consider

Saket Kalia

it. really that Maybe staying That's theme Got helpful. cloud just there. with

business what saw like the looked saw looks to a For year-over-year of you, accelerating quarter. Dan, similar actually like we growth off last radiology pretty comparable what

And as healthier that maybe from much flywheel talk is coming a you that acceleration versus that license cloud seen question how example? quarter, is of just we've can to of revenue much so is effect about that how perpetual transitions that from coming the for

Daniel Tempesta

That's and we had, the think X% you're the Saket, tech see in taken that X% a quarter, second radiology other I offerings the question. referring really The haven't growth in Sure. to cloud good first I quarter. off.

As Mark CDE out mentioned, cloud just and we CDI also our PowerScribe One One, we're rolling rolling which start just offering. is our

our So those growth XXXX, to early you're really will be modest other have seeing but radiology business that are going radiology year. stages. just and fundamentals is a impact from in business. CDI impact this good That an our it They're in and

Operator

Your Dan next the Wedbush of Ives comes Securities. line from question from

Daniel Ives

obviously, So pretty Rob, X there's the my question call thing let's Obviously, first see, think success that of you some fruit. or months for good you, in you've it low-hanging X what's a to Mark, the Benefitfocus. you lot and at got

Robert Dahdah

that built a question. the not for lot already of in I momentum. there And places company's the are just but a in see number execution strategy. Obviously, of Thanks opportunity

the all you're that's work familiar transformation think done the the that's I to get been been done, with very work underway. hard

to to that business to see the kind organization, that silos at along that, process showing opportunity some to up entire have we'll already the the best help early right some you'll think leverage to with able have continue the just talent some within broken to be I down. I strength start of implementation sharing across And practice some been scale We'll the of and the that those, infrastructure. I'm some we time bear. think So then of business start implementation, bring to on, accelerate

getting see it's opportunity really forward and So work. exciting what on I'm we me of to to for to early have looking kind

Mark Benjamin

this is Mark. Dan,

other with here And dissimilar a successful ADP. management him that to Rob leader within our quite joined. technology here excited Rob, infrastructure this to since excited you like R&D that been comes at had from working think have about we've of I around system to adding hired our know, having or role promoted I'm as I've centralizing the not obviously, like So and roles of I Nuance, leader and benefit and with and the the leader, honestly,

very capable and force large and very sales markets. multiple a have across disciplines We

having this large experience, someone who's international done scale, transaction sales I Rob, at think enterprise, developing force. his high his organizations, sales SMB volume-based high like experience, very ticket

is but all us, like the really I sake scale, acceleration going for So I the of for just for for you bring think of think, and me of not and to these help, together someone Rob growth. everyone, sake

few. have to thrilled him feel was to here. questions him ask super But for free because hard we're So he very hoping a

Operator

comes line from of next Stanley. Morgan question of Sanjit Your the Singh

Sanjit Singh

for margin of start Really looking around certainly script. ambient able far I'd the sayings lot expressed a see your you the a hearing thus to Mark, sort be of with year. this to you, I'm in question positive trajectory feedback high-level intelligence. that clinical

can you if for frame frame probably it's be maybe wondering us. was business out essentially, know I us? I way be you're but this to near of any sort term, thinking so the that of contributor a out for percentage terms the of opportunity revenue to revenue in opportunity over Healthcare big could sort not how whether time, Nuance for And or opportunity going of

Mark Benjamin

would Sure, you and that for ACI I desperately in Sanjit. script. it your And with words do tried question. thrilled to the the made I market me I'm say nervous you're Dan But Thanks question. the reaction question don't justice. asking the really because

to relative physician-patient you inefficient. massively quite So know, revenue is hearing as And you're the which, I exists that as today something the the really ability it cycle system it well - health care think similar. change glad has to the is interaction I'm industry as

a TAM, would with a the the but rollout think anticipate rollout the rollout room starts have curve, change which assistant have to will to our ACI. our XXXX, that say transforms significantly So an the wouldn't continue some I technology existing essentially it of it the so it roadmap and although TAM as in momentum. we will it early gains this of hit sorts looking and shape is the for in multiyear this specialties market, pricing X% we more with shape to that not X% have certainly power effect we're as exam of be of of significant a I the would opportunity that strategy, will we We virtual similar coming to - as technology ACI multiplier start early We But necessarily with of contributor then do something expect contributions as that powerful it of multiplying having to impact the and type really expansion. incremental view of internationally well. domestically and XXXX

So aggressively. there's one a promise strategic that's in of lot our the we're very the budgeted. investments And It's product of investing great in been market.

very We alike programs, for early pilot and early health beta. have some asking large IDNs care network

loyal base a want you with have - among, we new I have. customer a what exactly very happen solution it's that So think, occur to

Sanjit Singh

And be Would fair to vast the or just your in a terms it follow-up, of applicability to characterize the hospital of physician that ACI? appeal customer majority base? Mark. of the Would

Mark Benjamin

room surgical And think, the - that one the outpatient or the yes. or facilities popular top benefits are you within just as take today. primary that get ambulatory Certainly, necessarily the of were if the the or not there's I emergency mature department, includes doesn't, you the that's locations that specialties, exam specialties or take full not solution. to care largely say to and I'd get room, XX

and - doc, practice. down single two doc-type practice, one the So even to

believes So is real it's a the changer. we - this - game along Nuance, that industry, with

Sanjit Singh

if invitation the I I'll ask take maybe And a Understood. question, to might. up Robert

the start, think So to was Robert, as joining view I heterogeneous Nuance CEO, historically, prior pretty that company. operating to a maybe Mark was

a vertical speech a on perspective, strategy done in business. But What longer-term the that of are or fruits an that company cohesive initiatives go-to-market can some about job of from sort your your common helping very the Mike's are had across distinct was what operating framework bring sales outstanding business? end? that to simplify to and be the going markets. unifying what the And of initiatives recognition are low-hanging You

Robert Dahdah

for the asked. extra for for it question. thanks first, Mark Thanks like the and hard, questions, Well, making me including thanks in

kidding. Just

is are specific So But but expertise some that it's success those we something to the the industry. actual of of have industry. obviously areas a important still and work there business deep domain areas. deep very that very that's number regardless can scale Certainly, in functional think not to and early, our we in - concepts also I would that that's specific the an had across expertise necessarily

at to And so cycles I'm going benefited whatever different have over looking initially we we we underway plan sales into to to time. the that Also, tap larger skill sets have developing from a relative that into expand markets.

I'll internationally. lot but industry-specific, experience only that, but especially we but and sales, I that, with existing again, account, domestically value in bring apply have account across systems that can be bring not a of in hopefully are best with sales practices And things so that of in mid-market that deploy not we we those can enterprise new that that a can are to able some leverage and can are,

market organization a areas more And of scale can So be I we number at whole can the deploy that think that can so we available organization. enable in that as to get benefit. us leverage agile well. can there's tools look systems, as we the will are and We a a

we industry that can opportunity to think pretty work specific quickly. that put to is there's not So definitely I

Operator

line Your next Rhee question of Craig-Hallum Jeff comes the Van of from Capital.

Jeffrey Van Rhee

Real nice numbers, looks great. A me. couple for

how customer has some obviously, cloud just take standpoint, a can well term/prem minute PowerScribe play rev you've rec on transition, the transition First, revenue success you the And cloud? and on from does on look P&L? and a big to a nice the when does been now. got what or PowerScribe Dragon uplift that the recap But the we're impact goes a that into like through and the transition

Daniel Tempesta

Sure.

PowerScribe and on-premise our in base have we both term. So today,

Dragon. support, is and that probably to the to maybe really in paying to go, And you're and some When also see, you maintenance uplift. have PowerScribe a saw period. moves, on-premise year they're from they for that term-based, as you're going they're sort that's support price when most So they're how cloud paying so to going and of what going subscription per over, you going say, to maintenance similar on uplift some report see a customer five part likely

And You're base higher the going the of I get majority perpetual get term, side. on uplift uplift both. the tell that is perpetual you're the from than the to you but on to going a from are would you

there think real good that should we you shift. economics when So make

Mark Benjamin

Yes, Mark. is this Jeff,

aware In you're and XX% - that, position today rather, within are radiologists our additional power share base PowerScribe, is I of XXX% our this, that to on-prem. think of

and be to it per or charge - report forward. And base go we pricing as per solution, pricing image we essentially as a there image roll of we basis. the to a per Dan the the PowerScribe cloud as that and said, One comes a on So to do expect base upgrade multiple power,

sales speed the that opportunities certainly yet. contributing have nothing about early, the very take numbers radiology Again, to force, transition think in to ARR. it's that ramp with today. one of as XXXX and more not it's exciting our in likely we but some So We'll begins

Jeffrey Van Rhee

back just the have Yes, be then said, a game clinical seems like ambient intelligence. to to sure. And changer. Yes. for the you Obviously, potential,

good. details in but XXXX. What group like it what look look cetera? you here the missed process do early Just talking Just are can the in trials have may I like? pieces? How big does gaps So from would there? beta, et the to be just the fill some specialties you're earlier

Mark Benjamin

Yes.

collection. So part early data is the of process

start and So assistant, it it the And have very that we certainly, care really early broad some catalog, scribes will we smaller that build specialties care first take will. you if jumping use to of and virtual by specialty. we will, universe, start a into with virtual catalog you has if a primary medical a perhaps

them. use smarter So early more select that these us about you'll walk. machines specialties, we'll a with few that ENT, handful the ortho, AI-enabled And solutions start and part see of nice adopters the to is they our we a of early get begin

look scale that some So to partner us. we accelerate operations with

get driven from and be great in So Dragon with cloud again, for walk be ACI I other Dragon think will. you will business. if a because base, worth, ourselves yet just I happening we Medical just don't to family, The have what of us it and the it's the the multiyear ahead trends want will

becomes an services and it So really solutions. extension of existing

this before I to we nice on been those started just know we're at months talk have But So to with is The it's well not it's and what it brought a point this showed really cases days. try working the a has three We my give the justice on you be go benefit. in the will, start and execute. us upgrade probably lot ACI about to remarks, again, very be it able to last my of if say, over, to here - XX really has years to team ago massive arrival of initiative view they've I'd do credit a you it. team on HIMS, to I so lightning where bottle of one in it able a early it's a that that the of but we bit to progress Jeff, made, again, catch really

Jeffrey Van Rhee

legacy Yes. Great. business, the me, this obviously, more quarter. expected one than for HIMSS, transcribe lines down Last the

that update the getting that thoughts particular, you be floor? some of now do think I go but something as I think were about forward, reasoning how pace Dan a helpful. and that the and with Dragon, decline there the behind you know you were little would terms of in where's in attached gave just there

Mark Benjamin

Sure.

tough we related a million credits through true had in we for set Last that of came a year, about right, some remarks. compare mentioned $X did You're - ups to I the last have opening malware.

around for So it that call it XX%. to you XX% a the the should compare. be year sort threw off of of you guided as But exclude down, decline. but for adjusted year-over-year, We XX% that, we're credits, if those down think

next really think a - the near can to for think do I but in said, of there of XX%. XX% future, So decline several in volatility be with that the years, some the

as far business to this that goes As floor, the a isn't zero.

speed in little think in the slow several years, bit. decline a will I

that get it as hundreds to. think a low business you of So probably sort could you of

Operator

next You're Stifel. the Tom comes question line Roderick of from of

Jeffrey Lane

Tom. for Lane in Parker It's actually

with So called and a Medical Europe Dragon the - cloud you you offering. Northern called Europe traction couple in of Western some solid

could that So there? of that of incremental America challenges North sort just how discuss unique investments some wondering What go-to-market if you from differs the and market? of to make particular you in environment have the really competitive

Mark Benjamin

behind over European the certainly, of thanks the of already. much increase by markets that's the need EMR digitize the as will system. solutions And an Parker. number to start certainly system really of how peer exists question. relative tailwind important part grows, of and country U.S. rates years EMR part their we're And systems that really of will mean the become they is care that and Sure, regardless as market health Yes, to it adoption there, for medical for adoption. become seeing a the country, I

investment of throughout in. our operate really our countries heightened cloud specific data laws, care. country strict very health we So and relative will privacy to by And is it's up I regulations. build think the and part other relative solutions to to very the Certainly, stand country

and looking U.S.'s the to Europe, HIPAA, get when differently. body one own you we're their many that obviously, and one across information govern regarding you're body privacy countries health privacy governed So

think some for we So our something that's skill. experience It's opportunity the not with of that and complexity. an it's from. away shy someone We

have the said think growing do country, of Dragon with. that we're Dragon cloud the by Europe, country outside within Medical. growing. force Parker, good And far certainly past, U.K. business one as in sales to existing focused an which France, momentum we've up, happy is up see as a have on year-over-year Nordics. is We as the gets the think Rob license And Medical on U.K., basis the Germany, market already a stood still It's we as

to the us. to for begin DMO But and that's contribution beginning forward. ARR will just really see You going the

We right up Australia cloud standing some in countries We're Dragon Medical I have opportunities. on Cerner partnering just mentioned with more internationally. than other the geographies now as speak, we

believe we by existing in U.S. that's way, that TAM really, said So is And of part is the the we this days. this early very the script, again, adoption contributor long-term it's a really think we of the benefit as in a from cycle we

opportunity that So we do like for aspects growth. the of

Operator

Instructions]. [Operator

Saket line of Your the next question comes Barclays. Kalia of from

Saket Kalia

in asked, I got after I health some you, wanted to the M*Modal? The the is big I segment was about number sort sure for but this maybe of competitor CDI business. any more that Mark. preliminary to the been a Nuance? services becoming feedback wouldn't care know part that sure acquisition make or in make you question certainly indicate investing of they've competitive us XM's Can there. for perhaps that talk you They've any compete disruption just opportunity want is asked, question do to pressure the see a them of

Mark Benjamin

our we rates. very and M*Modal, It's competitors a and from XM say dynamic, great question sales from I not win a and competitive all sales shift watch our and a we of closely our pipeline general and certainly, have and very market success much. certainly would really seen

competitive sides products It now performance. the some, be a that have is companies. those at right we a customer Is create where pressures priorities. that to bolster I represent think relative all in there of making from will that we'll bundled coin this where just company, like more of currently I our of think could that least the We approach continue confusion distraction, part think Typically, think, front, I feedback, think truly view. we in sell transcription now But even of competing watch our our you competitive market larger the like and fact separated. part those we're I the we our with two lot both suggest. this and business our competitively, could overlapping could on potential closely. position and continue these be there pleased very are investments I services think markets. that the now And it to We and And a position, Nuance, our to are the position market the year are timed much of I they're

Operator

closing will CEO, further call no questions for at are this turn Mark I Benjamin, back There time. Mr. to remarks. over the

Mark Benjamin

thank Okay. seeing to I joining want But evening, you this very to much. coming we at everyone the and months. just look weeks forward for in thanks us events and

Operator

our concludes evening. this That call

lines. You now may your disconnect

Nuance Communications (NUAN) 8 May 192019 Q2 Earnings call transcript