NUAN - Earnings call transcript Q3 2020 | Nuance Communications, Inc.

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Operator

Good day and welcome to the Nuance Communications' third quarter 2020 earnings call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. is event this note, being recorded. Please

would Michael Maguire, I sir. like Please to to over conference the Head ahead, turn go Now of Relations. Investor

Michael Maguire

afternoon times. call. QX healthy Good remaining to everyone and these hope is XXXX during safe welcome and I our

the General to discuss on Diana Manager CEO, of results our Executive and today Dan CFO, Healthcare, Benjamin, Tempesta call Vice me QX are Joining Mark President and Nole.

Dahdah. Chief of the call, will Revenue the Officer, during by Rob Q&A portion Additionally, be we joined

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

our in turn intended this call, And noted over remarks this issued have of that, call website. As material advance Mark. IR to available call release, in will comments I on press our with supplement our That are prepared which the today. we on to is

Mark Benjamin

Mike welcome Thanks and Nuance. to

to excited and you onboard. joining And have good thank afternoon us. everyone you for are We

by like would Before we affected opportunity the that to share thoughts take begin, I and Nuance continue COVID-XX. to who to been those have this community my entire of those be with

are working are those and the for to our nurses helping all on extend those deepest tirelessly like need. care also who lines, for in to We who the especially gratitude front staff clinical doctors, all of

maintained Despite our deeper and In COVID-XX work the the high-end of before our our delivered growth to effectiveness environment. for and to Medical our to prioritize of which and a growth. few from strong continue home the challenges, like our expectations contributed our ARR in on health be of with employees, We our our therefore workforce. turning solutions majority QX performance, pleased executive exceeded we mention context global of safety employees communities Dragon EPS. for team, healthcare Overall, in highlights continue very and guidance an continued we productivity As virtual guidance customers results. in this and our providing I would to have cloud-based healthcare, and to we newer revenue the One

Our enterprise We performance repaid provide our has deeper, would to Diana $XXX accelerate a and of a you you on borrowed COVID-XX engagement introduce with hired solutions solid and lasting their I the intelligent million the with of transformation brief amidst that was had revolver standards, serve. finally, And continues Digging about EVP healthcare are our business who we like so little business our value I Nole hear we high principles, General strategies published commitment the report making to upholding to difference highlighting our ethical see employees, our the Manager into as our and under as of later a communities creating March, many XXXX. allocation positive for our our and business, to companies digital pandemic. will effect update. ESG inaugural know those interested in fully In adoption line our capital call. in I we

few our began the this As advance to months. the strategic past unfold initiatives in over we to that you saw prepared remarks, our amidst continued quarter pandemic

elective previously to shifted than faster procedures a care care was of healthcare deferral effects the at expected, felt health partially expected. of business COVID-XX and address rebounded This elective procedures mitigated systems preventative disruption resources as the a we rate patients. critical the As in disruption our of widespread services as

largely anticipated. both environment we is proud deployment increasing of we some business, with impacts, our as our them experienced success trends live. and projects these could I a quickly all an adapt the And been times year-over-year hospitals transformation. in partnering for though true they resiliency The work and while as team certain we have as and COVID implementations, we adapting Our and hard AI supporting learn did have and to originally as but delays digitalization not benefited to In agility testament have such did from we business. initiatives Overall, have be a organization enterprise toward remotely. of our project non-strategic challenging to the impact due legacy we they been of through saw new we EHR our our manage employees these to see decline their see which healthcare license not deferrals as in sales severe

that believe are company associated short longer We nature our and term to pandemic seeing. capitalize the that in headwinds the on trends to continue well-positioned is with we term that are

beginning in products fit for observe are believe models as we hospitals strategically and of many act rates pandemic. as volumes financial Similarly, our care further our the while to can later which increased this within our in are our a of to digital continue as face-to-face enterprise accelerate platform well are example, intelligent business, strategies provide well transformation we call. on telehealth volumes For our the companies to implications strategy, conjunction an and business solutions and we even details virtual investing Dan tailwind rise down. our interest in in biometric their will with look care patient COVID as security the as in in engagement on seeing fraud

to the the we unpredictable in clear global of nature are customers, directly our while continued facing our that particularly face recognize However, to related that I do COVID-XX. of some solutions resiliency healthcare to-date, continue pressures show want strategic do of to the be pandemic in

a her global provider for Executive as healthcare a of to closer in and she new our these problems be Medical confident continue the excited solutions global I Nole all leading billion impact stand oversaw in them already foremost will President the team Diana to support months Health, communities will Taking global Solutions of first provider made division to over than during propelling as sites. more the serving software am billion for and leading healthcare Carestream served software $X all and teams that, am she her and have the business $X.X as XX and healthcare Diana? and first delighted AI Wolter the us experience Vice solutions them healthcare to you. We information, with few the Digital business. at she care on I role. General for of healthcare Kluwers' here of will Prior they where who with Manager in delivering challenging like without where hand I am of the our our business, has services recently development most forward positive to would operations ado, President most look are as welcome call healthcare that call to feels further thoughts division Executive equipment, to global today times. operations, I our by her pressing services. for to invaluable global Diana integrated experience operations share of Healthcare she Chief healthcare's and of for the Diana Officer with oversaw years brings our a

Diana Nole

between patient conversations transformative trust is some long physicians, the challenges excited few record to and is history. with helping that but be it am more company's time these to fierce Throughout you track enhance AI the my innovations to already my a clinical the the staff their relationship healthcare to powered everyone Mark. experience. of months was a to and the and When innovating was in company's the how of prioritize joined to be I than the doctor-patient I such solutions speech healthcare I driven industry's in decades essential more joining Nuance, patients. here, and shares passion I part good complex Thank solve that first even for care truly a for clear team that central of familiar at with most familiar providers, positive

always then alongside many advancing see the to the it more of it's as talented brand now am I I in, and future vision from here these employees outsider issues and an to inside and look our I impressive. strategic to fact, and of with able be Nuance's to In looking tackle loyalty customer thrilled healthcare. forward so was continue I impressed even

Mark Benjamin

Thank you Diana.

performance We expanding cloud, the continue are QX very execute a our you against standpoint, to excited and healthcare strategic us. with we From international to have presence down market. pivoting to of deepening plans our

our call, saw we the I in XX% growth up Medical strong last mentioned year. compared As One Dragon to solution, of beginning the at

our expanding the seeing expand And and during capabilities and to quarter, as well as Cloud deals the ambulatory continue positive our as in of internationally Norway traction as with Germany we launch with offerings are Dragon Community our Finland. community in into wins first new focus environments, well closing such strategic DMO of Hospital. in Auburn cloud-based We hospitals our go-to-market

them to from while results and a helping as our of our of these to to solid recover cloud-based suspension the the business, important as to initiatives San delivering from international our Lee care innings. the ambulatory work These ability in powered Systems our should radiologists of AI see with drivers deals and our Novant, continue non-urgent Antonio diagnostics solutions Just temporary tangible several were growth Healthcare wins remotely. result healthcare are two and are Methodist ability community the future productivity new that deliver refresher, demand Health. you affording early In of increase for we for

combined PowerScribe drive on a metric. solutions investment strong benefit clients tracking as top healthcare our our such by our strength in others healthcare will of these and of return as offering health The platform Additionally, cloud-based such findings. lives which from CDE save and follow-ups ARR our radiology manager, helps follow-up on with our providing One systems sits solutions for add-on incidental on One failed persistent DMO

commitment believe in are we of to-date still offerings, our to the seen subscription-based revenue we with transition traction recurring cloud have these a validates many model. we While highly the creating early

raising to ARR results, up our XX to guidance guidance. days to year great XX% just With the XX% us range actually growth, puts back XX% we pre-COVID way all that XX% these now This nearly year full our ARR forecasted full guidance to new are ago. we from

we results. force's say, with pleased So our quite sales needless are to

technology Physician concerns our tasks solution intensified only that We itself. documentation in burnout DAX. are the have challenging the of through clinical time-consuming excited Ambient of the DAX when documentation hospitals the reductions in-person and XX% high time virtual Dragon in and latest with throughput DAX offering visits, patient are are allows are The scores even we administrative significant eXperience a face-to-face doctors able or to shine also AI have users satisfaction leverage day. writes we to to exhaustion down. for impact to seen documentation times. and about this also physician continues through volumes from also and the maintain for clinical Since these primary increase a in that with for eliminates quarter advancements made physician's progress or through telehealth and due exam support encounters

app implemented mobile exams, as regardless device capture automatically or part and use Additionally, of our physicians with type. of securely encounters notes on leverage our their patient solution, patient and smartphone to easily can that other clinical and their

the Although signed early Atlanta Boston very several Network. recognized Hospital Lehigh Health, DAX Children's commercially proposition exciting WellSpan still stages, of customers, and of Valley Health new the Children's have is Hospital, value and in including we being

including expansion We nephrology offerings quarter, the on of out rolling continue DAX this to new for and neurology. progress specialties

these reminder, included are our sales ARR Just a not as guidance. bookings in yet

existing can from data to This a several This clinicians on our their with Cerner to Medical more Cerner a saw customers computers. to selected time and improve Dragon factors the spend our deep you certification assistant to upon retrieve week, our Cerner's understanding and patient and virtual conversational superior the as with trust technology cognitive platform deep to EHR sensitive natural on relationship using patient our our competitive and speech virtual experience. that remain assistant to their integration less integration and reduce we ability including testament ensure support time the and allows win their AI was patients our us our information Building secure platform technology, teams has care and the for now existing our just language and announced Cerner, platform. high Millennium, within state-of-the-art between Finally, last utilize navigate burden voice.

intelligent just that timing as from how our enterprise half news we service other demand remain resiliency With week, year. we largely Cerner on to moratoriums state-of-the-art decline progressed temporary are would the expected, increasingly and first domestically segment of revenues last service the projects and of Latin the the project with in some in to owned press professional demand our banks for the online turn Banco due engagement on Nuance first many where for Despite X% confident Macro, of spend on deferrals we the release purchases, ahead business we of partnership. in like saw of products, year-over-year quarter sale landing for from quarter, our the largest licensing directly experienced they we plan solutions. I our channels strong with seeking Just to in one forward step digital the customers and America our highly Argentina. heard during the consumers excited customer in now this and during overall

times volumes, hold routed our needs by With quarter centers. resulting customers at in automatically to this agents customer the message satisfaction increased centers forefront. in that to a messaging call a surge leave facing allowing agent understood contact our always, is put to to eliminates transcribed, reduced and in voice detailed call and contact As we volumes customer continue

We support integrate new agents alike. also Messages and with directly a experience for service added platforms, creates seamless their consumers which organizations integrated, for Google fully customer Business to

seconds I tangible receive as National recognition of customers proud to technology fraud and the prints. spike Additionally, such and benefits with our customers healthcare to we this from across innovation customer Australia stories detection the Gatekeeper of biometrics am voice as customer team enhancing organizations both more utilizing Gatekeeper, who activity authenticate added We experience providing prioritized cost gain a solution both security. in Bank, demand such our continue is added our added validations. the pandemic, our pride are also for with for the seeing extremely savings are further Telefónica market to what as take we enterprise well of saw layer and with solutions to in than persistent in service biometrics Customers protection. within with AI Advancements offering and XXX,XXX enables security doing third-party success using our already protection, quarter the solution. age us of continue fraudulent cloud-based seniors as which our as notable

in report, Healthcare for to XXXX. & Artificial have the Wave thrilled New op recently Solutions Service Frost are we AI in Radar: fact, Frost In Sullivan's well leader Forrester latest Leader as Digital-First been as named a analyst the Healthcare Global, Customer Intelligence Innovation IT,

of have to for the environmental, Nuance as number Board publication governance the inaugural a support with of me. Before making continues this a from and think report. opportunity to taken experience quarter. a great perspective employee Dan, be from be, take know our that company social priority team, including most executive a of internally business few call an the corporate can share to turn this, I over well to the additional to want as that end, best we place do actions and the highlights Nuance it To I By of in now, the both you recent

As ongoing value employees, serve. difference ethical on believe a underscores for initiatives, the upholding high and commitment and standards, we to formally positive our our and creating document published making lasting these communities report we those progress our first

creed support is to we high and our strongly actively we ethical we which very to is company, continue race, know value, we as I look thought, the we of are, more As and a these orientation, This personally diverse stronger also that about. celebrate something uphold gender, why standards, are the feel differences perspectives.

my on inclusive I communities more employees, Pledge for the Action and support and commitment signed society our which recently Inclusion act our at workplace Diversity to large. and CEO is So for a

this and a resources create equitable towards and to devote to effort our all reach the continue will where environment just empowered to necessary feel of employees their potential. time We full

culture quarter, to like Best over for to made build and I upon our Best turn LGBTQ to Top have to to we for to discuss and to year-over-year as part that good recognized are place done in participation Additionally list rate can United XXXX, well have had we Companies received that work The marks For Award being pleased understand opinion so to were work have Power, of a by that, will to great it's Dan a of increased sales companies employees which improve. results Employer to Employers results executive Best work, to and being where the annual strides we continue these for Work the to Work in named our accolade We which that of Equality, areas outcomes. XX performance. we very accolades And and to customer business prouder includes indication across they the couldn't magazine call current publishes Dads strength team best we the Selling to-date efforts and supportive the am to highly fourth In great Nuance employees, as externally. also positively and The to with to help States. like Nuance that I of of metric. award. single focused a hard we our what recently with is I make Boston, and is annual engaged internally Sell Top as work strongest success. one behind our are designed we every receiving on pleased To force create positive be employee we the important us conducted would for opportunity cutting-edge driving share just our this such as sixth solutions Work these superior an technology are our ability Choice companywide financial the areas we which Of survey work our sell is in to Places Montreal's our the deliver our as have certified positive best that and identify places Places we Places This as for to continue management

Dan Tempesta

Thanks thanks Mark us and everyone today. for joining

want off by I team. what to start Nuance Diana and Mark the welcome First, echoing to said

are our help done seen healthcare reiterate more company within want passion the drive create already to even more Diana will more a being of great the mind, to are to to accelerate supportive customers. momentum employees. efforts are and I better, and creating will recognition that also our business. excited empowering value work outcomes for results. meaningful faster have a only and our drive And but culture that with turn innovation our focused for our helping unlock These We environment her to across collaborative not now I we also Mark's our from watch in QX and

As Overall, document. the in COVID will our QX in also range. finally, high-end detailed is comparisons coming which earnings prepared guidance by in remarks above ongoing of businesses. per guidance, million along Mark our have our of affects with of the revenues that were the share discussion both I ranges conclude year we of I our will And updated discussing addressing mentioned, $X.XX, with performance, be results having in XXXX our our to $XXX favorable non-GAAP our and fiscal

Our organic the declined implementation to experienced year-over-year. and healthcare revenue while our healthcare an impact year-over-year, of primarily excludes XX% of strategic revenue X% HIM COVID which business due decline EHR

X% due to declined year-over-year, business primarily of the timing our license enterprise sales. Our

where time, activity, cloud we were back our is of to implementations professional license and last as refresh a and earnings COVID impact At in and to diving on services to healthcare expected deeper our that the business. results, take everyone of volume we May. purchases call Before step deferred our important deferred reduced lead in into it

transcription the HIM and to radiology normal volume with Specifically, lines volume to XX% regard were during levels. XX% in from reports April, activity, down trough

third generated. exited of XX% HIM volume of being our quarter However, volumes pre-COVID for levels at volume and reports levels improved these quarter, and for activity transcription the XX% our about we throughout over pre-COVID radiology

ARR on the this by our hospitals immediate We growth. as related well We also reprioritization pressure new cloud some anticipated virus. that and both reprioritizing to discussed bookings address projects near could how hospitals as impact were cause to term license their needs

license impact I ARR, quarter, is deliver. which this was of our a we felt critical better-than-expected both that business revenues testament value throughout in and resiliency the and the the results did models encouraging products While to experience believe our

discuss As mentioned, our shortly. a are result, I raising as guidance, which will ARR Mark we

consider and further services we some the defer On is revenue. as on side, It services lead and healthcare that that hospitals worth see electronic our to to non-strategic anticipate this business. we noting we professional implementation to to EHR record continue health will our pressure have projects services implementation continue

to $XX revenue segment. in performance the We Looking of healthcare our priorities our Medical this million revenue continue through had over strategic which effects Dragon we advance COVID, Cloud in quarter. another revenue, within generated strong

new Medical Additionally, One our as growing One for demand our within as One, including we experienced cloud-based PowerScribe Dragon international solutions, well CDE markets.

products their and these combination of the our will to offerings in year-over-year forward. we Radiology and cloud, other progress still revenue excited a topline the many of these are factors. feel due about far early to are moving seen drive transition While performance so to continue declined

previously impacts professional COVID to revenue. lead and lower the services First, license discussed

third often we impact planned term cloud cloud In the our our term fluctuation particular, quarter to revenue during note, to to finally, category revenue we had of And as CDE is term migration of number solutions. subject we timing install new of the the license a Second, due our due base licenses. to ongoing offering. near customers on a multiyear to converted on-premise new One CDI this

fast as look will services is aggressively important cloud a and offerings non-cash come for services to reduction of continue ratable term recurring performed. $X For to possible. license as accounting license we exchange cloud to in revenue migration services will convert purposes, this opportunities to cloud in in the result million are from This for our conversion term and current as customers that strategically

this due an are in these other the and growth the solid we pleased overall performance radiology experience revenue in and to in with category. cloud ARR we While revenue cloud XX% factors, decline and

some the well quarter, projects COVID large related license implementation related declined the primarily timing Turning Revenue due of to temporary revenue deferrals. to as year-over-year as X% enterprise during project and the business.

subject timing particular an activity. dynamics we by fluctuation our these remain As a revenues performance of With always encourage enterprise offset the the revenue license enterprise engagement reminder, our investors were license of from period-to-period first with related in partially to XXXX, half virtual revenue assess strong in strength of Because and the to the quarter said, growth basis. saw from and we to assistant annual our agent intelligent revenue in on license offerings, declines particular that businesses. the live in

sheet. on our Moving to balance

As XX, we balance of of June million. had a cash and marketable $XXX securities

recall, will abundance preserve draw COVID you to impacts million made as our to decision be As of $XXX out to just caution felt. starting the in March, we from revolver of of were an liquidity the

we better at we our had As we to COVID our impacted of third decision quarter, the liquidity of end interest quarter the made business therefore year. the down our the for pay profile, exited how and expense understanding the remainder revolver our the of a reducing

for repurchase and share announced credit our suspended program no we which debt on will XXXX. April moving the will extension one also note retirement. share evaluate down, a final XX-month pay opportunities now revolver. mature on in facility Today, we is forward, the and With continuously longer repurchase our revolving And

in quarter revenue was impacts down Our on $XX the and cash to flow million, billings. year-over-year COVID from operations due both

remained at strong due regarding of extended days. cash request our to XX the some discussed potential quarter our flow the hospitals DSOs DSOs previously expansion as risks we payment for possible While terms,

now our updated turn to Let's guidance.

strategic advancements impact and decisions. committed Investor tenets still We the business our to these for term. reiterate the COVID virus cloud share sales, however, hold will most well and during remain a continue and and true we all models strategy when has out responsible continue from strategic R&D past of making to our perspective. lesser In our the expected. our allocation in term, The our businesses although capital of the resiliency our Day you in that More business healthcare. a model migrating the laid combination results, basic across operational than us position while and impacts. Collectively, business financial near First, long to market the the are to previously of specifically, expand we look mid while to investments extent enhancing both the

Before assumptions. into framework numbers, our following the guidance getting includes the XXXX

cautious and low-end For of California slight event the business, in like and positive our in to-date. in experienced back a expert opinion of high-end of states reopening This regions. and we the businesses guidance scale down The a growing is volumes Florida, of trends the saw improvement slow approach of parts other the our result trends to the step states reverse of outbreaks certain QX. assumes in or the assumes continuation volume radiology HIM back a guidance the Texas, our

have our extend the our the and we performance healthcare quarter across businesses, fourth project assumed ship For both we deferrals similar to and expect book and enterprise into to experience in third quarter.

pressure implementation on EHR our continue to timelines. project bookings services term near and business, our expect we particularly services For business,

guidance in committed are are to and discretionary into reduced continue travel. we decisions as we our hiring with and consideration, Taking to XXXX, priorities while these assumptions Finally, operate and strategic our follows. investments we spend, updating

year-over-year of our at implying billion $X.XX by We the a billion, $X.XX are to revenue to than the X% organic decline This better $XX range midpoint at previously expected impact at reflects of update full-year raising million the COVID. guidance midpoint.

We from with of a full million. $X.XX reinstituting are in narrowing year the operations guidance range range guidance our full resulting $XXXmillion are $X.XX $XXX $X.XX of we to to flow cash $X.XX. And EPS of to from year guidance

Turning to guidance. segment our

a guidance up previous million the guidance. at $XXX million $XXX range are midpoint to million, to our revenue We $XX healthcare of from our raising

upcoming quarter in last investors We the remind compare a we this the on license also product and fourth will to would compare difficult Medical to license of that evident year, had quarter. Dragon Medical line. This resulting uplift Dragon a revenue significant be in fourth

at midpoint million the Our $XXX $X is revenue guidance. from million $XXX updated enterprise our million, guidance to previous up

our guidance range ARR the raising midpoint original of adjustments. are prior million. $XXX end to to This guidance to healthcare COVID updated brings We our $XXX also million low the our to

our to we offerings. from supports As the cloud strong Mark results highlighted, the are related seeing force this sales

document Additional be in color website. on on our our remarks our updated prepared investor found can guidance available

your Lastly, on I Technology, hope to the will we the would and attending Finance there. With opening that to you let to the to Conference to like operator conferences you Oppenheimer Leveraged see to XX Conference questions, before These held the on turn over & virtually be Deutsche like and Communications be October X. would August Internet know call I the will take call that, back we questions. Bank

Operator

Saket first Kalia And question from with Please ahead. will come today the [Operator Instructions]. Barclays. go

Saket Kalia

taking and guys. the Hi here to Mike to both Diana Great. welcome team. for questions and my Thanks Okay.

Mark Benjamin

Hi Saket. How are you, Saket?

Saket Kalia

dig can Hi to pipeline you. Mark. does Understanding maybe are maybe there, you lot about Sorry, the versus broad in DAX he just with there? a comment been that. you early, brushes has on if just start go-to-market there? as there there that on rest business? is going is how the but make Hi would to with room, as how to market How to sense? go-to-market Dragon of are And going pricing? some Dahdah the bit Maybe well Rob it's the What reception can more. just a little into love I Dan. give Mark, you

Mark Benjamin

question. Good the Yes, to you. I appreciate hear totally. from

made in to shores really, the quarter, late starters, in today's only its know first it's new just days, we to we because COVID sometime with go as about super did mentioned call. Saket, way calendar the U.S. handful of of really them. GA So mentioned on we to are And you, early the February product the you just logos That's for excited you a that remind as

really would not do but obviously, remarkably timing product say is performing make a the best So launch, that well. despite all I to to DAX

mean, as solution with go-to-market teams, itself critically from technology well. is I the biometrics will really important R&D solution as teams, and far get most exceeding even me internal internally the is our your the our Let as to expectations performance. I start technology. is the aggressive

solution, adopters, really So early which and are that quite exams pleased relative important the and I the fallen solution with super think, through also, Plus AI models. the counts to the the really the we for and from modeling have capabilities and Saket, ML seeing continues differentiated we back are data come and have effective. its are patient make quite to

comment, we there. Rob that level, all So is other still will the in place our also, way market amount of interest so distractions tremendous been aspects, with are in surprised facing COVID seeing all incredibly we with healthcare are have provider taking positive he here, a a and these we really at DAX. doing And

a We first live. new them. great And within are again, handful as at really follow number really this product us is are that that's presentations, of conducting this of you because you wins volumes just a quarter, quarter our saw demonstrations And DAX. closely, mentioning DAX

market. would I is to really exciting from quite So the proving be say, the go-to-market

handful being far are to as a across as measured taking be. what approach are these that the As we doing And Saket. the say, starting specialties the early providers institutions I docs solution really XX have getting think, measured really far how many the we in high or can with about, their of getting these some early ways, we of ROI a very, in ROI solution, specialties, XX, as signings, of talked XX these using them different front and seeing

the throughput comes the physician satisfaction, patient patient to and clinical the from and productivity note satisfaction, of solution. accuracy that documentation from So back

the with with that many incredibly just many, drive ROI some customers. there results and So of are measurement these points early strong is these seeing we really pilots

color to So on Rob, maybe add some go-to-market? you want

Rob Dahdah

challenges patients, the customers a reception suite covered, pipeline. even with chance the ability, have discussions in very they be we also the with able most any given he product to Mark. there. a which us we salesman them in Yes. former Thanks to physicians. environment, have the our got response our say, really to the and It's a we get reception a pleased health as around are an phone their pick of really up we the had work this covered we there. how and solidify and helped Mark it's will the opportunity with C-suite around But elevation I to have prospects us with with the And pricing But their the always current meaningful answer been transform delivering for to institution. has obvious great

up of held has environment. true if And and anything, been the in so all current has that firmed

here on. pleased early very are we So

Mark Benjamin

very add thing have these early Yes. Saket, customers, big all these pilots them is that, with of would with the I one the new ambitions solutions.

with proposition XXth So or early this XX from them XXth to the a none XX. of early the really the us to is, this the to delivering. to really give to XX XX It's physician the And thing is maybe early and these solution over time. docs planting are much in using even just customers days, to bigger looking XX, start feedback results docs, the XX, first

Rob Dahdah

their customer journey Yes, a last. literally first has this with is one steps their is absolutely. the that Not us. first taking Like and indicated signup

Saket Kalia

that for but trajectory after understand thinking detail. Slightly That's the I are Dan. it. of do about follow-up life think a before? different perhaps And long is term? business, on we it. just you I the great that get you specifically in tough HIM COVID? here, we transcription year-over-year perhaps sort question sneak transcription you thinking business, of for that typical can if impacts Got back guess how the but appreciate is, post-COVID can really in that seeing a were trajectory, I I you part that COVID about the that Maybe do of guess general, think HIM basis, to Or decline again I normalized

Dan Tempesta

question. of Good important to course, model. you. thank Saket, Yes. is And it

we we Of are XXXX, number thought the we course, year at be entered at. this in year when less year the we fiscal to a going than end would

original million the to with. our as be $XX started less we $XX guidance in originally than to somewhere neighborhood what we of the probably exit going So year million

a number, at year and to it into year gets et it's ending XX% are of decline XX% it probably would next decline lower level. think back for to build XX% we model you say, cetera. XXXX, a that normally should and thereafter, So would I XX% thereafter but that maybe the Because I say, a the as

in business. permanent are changes we or really not in differences So that any that trajectory seeing

of to think back thereafter. a get normal decline it I trajectory So does

Saket Kalia

I helpful, Got it. guys. Very will you. get back in Thank queue.

Mark Benjamin

Saket. right you. Thank All

Dan Tempesta

Thank you.

Operator

And the Please come with Singh question Morgan from will Stanley. ahead. next Sanjit go

Sanjit Singh

questions and taking for the you the to raise congrats for Thank team the healthcare ARR year. on the

original the We what back guidance are was. to almost

well. I for DAX anyway, difficult market start do there. you in We So of Mark as wanted sort as in-person DAX And see impressive you see out the Is telehealth opportunity earliest extremely versus can there DAX? actually can or Peter, on the do a follow-up to of the what as gaining And on you environment. what frame traction? sort bigger opportunity?

Mark Benjamin

Yes.

of is start have may input will she Rob quite become here. made and driven. I Diana virtual But or have telemedicine the is DAX to and patient with I excited and And about, some here Sanjit, we exam, same popular. virtual certainly, and course very and So telehealth exams actually are serve in-room really app a we solution. is really designed both And DAX the exam think first,

of can So platforms these that may DAX. use really providers with integrate quite any efficiently

during they physician the I really the can versus are use you for So want exam, if to are both. using it it to in-room assure exam for virtual the they one, going

thing non-acute go would models proposition hard the that old value is is, of it doing DAX something. that's patient. capable, say does way, the the appointment make you non-emergent So become with will, between telemedicine in of of life the physician the the regarding coupled interaction to a to other I back way much Sanjit, and productivity for telemedicine meaning telemedicine quickly very telehealth general or a if

that such of model. you burden for that of argue, much is even documentation administrative, alleviates So as heavy DAX could value is type that higher actually, the anything proposition clinical

proposition we either to reason, could the to it it use some while believe the for just accelerate ways model and enhanced for, relative value heavy in reasons. some as happen could think expand of So it DAX, that but we same a

anything to So Diana, I am not sure add? if you have

Diana Nole

observation. customers telehealth is all, and just what of about are far. first And they are. have stay so talked my would with talk wanting to I say, to reinforce I Mark, platforms the Yes. here some they

your And telehealth. to whether or they always been, platform, use want point, so to the in-office my it's has an a experience same

well-positioned So for we be will that.

thing And good one so I that's for think us.

always agnostic platform are We the have. of sort is that also to interface a very we that

the to build various solutions nature always the the of in by considered solutions our it, us And of what video physician types differentiates all terms of so of and with into work application really the terms think we in our provider. but being embedded of that may I that the backend selected the is be solution HR it's of

Sanjit Singh

super That's helpful.

we sort that are you to were in larger some specialties patient XX% And to. throughput, got we customers, these increased sort mentioning talked we of frankly guys as on a early of of follow-up. feedback of some definitely talking When DAX than that that these much

the for about How piece? timeline gets transcription the evolve, you just in do in What how map, there going to of automated, terms the way terms In that human is about doctor? think, have and the just that the intervention thinking pieces DAX even more still between of some summary think when are is the of particularly it. like or of DAX road summary, is conversation conversation the there to turnaround automation some the any for the

Mark Benjamin

Yes.

So it's the right question, Sanjit.

So note for receives is an or physician quality they note on review and highly check all a an also from element is starters, just there get that's the accurate there's the the whether our understand that in runs actually the the element accuracy do, using DAX. what day clinical doctor one they automated DAX themselves, physician really or which of through

to So that's, now. I important think,

if you a not accuracy of and than heard it's many them, It note. I as as note they good it's getting from of are checks, lower actually ramp. a quality note. done quality some automation is as better have their really rates So note have market think And own very the high we the the

incredibly other Dragon is really the One, and that certainly, as models, nets a to as important things gap automation roll, rates. like amounts incredible we and So neural ways with And that's, are conversational to improve think, But started to close the much And now, around baseline. solution. saw the I time we our with data help advances automation, helped have DAX and we Medical the have the technological learning like the over richer specialties have many data then this. model of certainly collecting in

promise. that example, an some the was earlier kind was like our rollout, on with or review happen, intimating own are our And is but a always over or hence even over So ENT much process. ortho like I at higher. will time, as specialty measurements, automation clear, really of will quality specialties, be beginning, the rates the that what or be the showing, technology of great internal time, to there And notes

and go technological are sign capability the to ultimately clinical but again, very off specialty. automation matter what talking people's rates. then encouraging of the no and from has will And on about the it by a or ramp kind We we provider the up lives physician as note,

Sanjit Singh

Mark. And the for and the I back update, will yield step you floor. Thank

Mark Benjamin

right, Thank you. Sanjit. All

Operator

go come will question next ahead. with Please SVB. from the Davis Stephanie And

Stephanie Davis

Congrats guys. on Hi the quarter.

expected the So we are the facing space, which beneficial to seeing vendors. across faster hospital effects recovery had than some IT health hospital has

to are out translate So beyond into to a timeline that do call in is anything there the conversations that, hospitals again? traction there? buying as wins, of about follow-up ARR, healthcare sort And what your have pickup these to considering now

Rob Dahdah

is Yes. Hi Stephanie. This Rob.

Stephanie Davis

Rob. Hi

Rob Dahdah

the answer question. To Hi.

were even nature know kind discussions the darker we you in the to because hours I are have our So we like of solutions, because actually able able to just COVID were observation. to their definitely of critical right have, we success. of feel of I the mean

of good that And those maybe for overall, definitely, DAX think have the These in the saw been are that think as I extended. so it's conversations us solutions of happening were frequency. and other greater I conversations it's having more us. of we more for reflected, terms definitely But been you some with numbers, in positive

we of we what out to are are how them. of any to they is going pipeline. And going about to climb this them very have or dampening important and helping don't think they of think from revenue be more ROI an as more I tempering So seeing because delivered that

before the this crisis position of nature along, forward. So if a overall, and I think really in put we well good said this positioned going anything, has were very you as all very we us

Mark Benjamin

Yes. Hi Mark. Stephanie. This is

So add I just little. will maybe a

pipeline a I So cloud ARR recovery, of, our hence improvement to and have we relative the seen relative those those in in ARR. are aware guess contribute will, expansion, if a to actual that are the initiatives to to number relative our go-to-market, also, sales you of all international deals, faster the think, to radiology, raise. conversions again, I like activity, you

sooner As or are, manage than therefore either effect they it, the to learned it with live has COVID an they and they us continue had example, Europe been, you have to choose.

And there. some so are seeing strength we

also that with radiology. are We staying

great I solutions ever now Rob the the So have provider ROI, as of importance challenged mentioned, they the within to have meaningful systems, certainly think to been, the system, economics the never the pressure which were now have with the on begin and most ROI.

any requires Fortunately, are none CapEx our any they it ROI. require solutions of upfront of none capital, or and cost higher

the tell Rob, just So the Right, as I fish in Rob? jump of back the boat.

Rob Dahdah

Yes. Piece cake. of

Stephanie Davis

the Cerner that? What think Rob deals. the economics does Cerner to sales force? there. an for about is we question enabled to something of Rob is going and client? could mean power hospital be collaboration other of the this to Mark, one keep closing Or existing if your should share And has only leverage those on sort this got that be that is able joint

Mark Benjamin

Okay.

if two in So mind. I think parts, will you I don't that, answer

Stephanie Davis

Sure.

Mark Benjamin

the starting of So the Nuance relationship. baseline with Cerner

obvious. And They the the a have because say, I and really approach. and really been, with of proud something really, play co-sell. We Cerner point code essentially enjoyed integrations product Cerner our the We at go-to-market of level a have quite you been some. go-to-market with go-to-market multi-decade are relationship on could and mutual our think DMO companies approach resell and others. has both We that results are

solution relationship been very to announcement EHR would respond set their the announcement, continue. expand So successful that's us first and part so a of is, with which Medical virtual their with. top were The super they their And will One. market. with build around platform any top in was Cerner they or competitive top in on really Cerner that a and They assistant that what and our of looking recent it's is for view, exciting most the I sit for their virtual really solution around their Dragon assistant integrate in skills on and could wanted, of sit with VA ultimately could and the on looking Cerner

relationship. anyone the wanted business. to else, like we, love We So the win

have We nearly were we them, their XX%, to have, created solutions. along with call go I And they high of customers customers think, customers now them capability the win the for to share allow XX%, a to get are Cerner to with. Nuance have using VA Nuance now Cerner and with get base VA the market we to exactly not, go if to their and not or again, excited whether to overlap customer our DMO with

win So with. thrilled we it a was were

Stephanie Davis

Thank right. That's helpful. super guys. All you

Mark Benjamin

All right, Stephanie. Thank you.

Operator

Jeff next Craig-Hallum. go question Rhee ahead. And the from come Please with will Van

Jeff Van Rhee

sounded you here. the I times revenue just, are taking remember you the for cloud outlook you with changed Dan, I from was math, was a uplift. I headwind it like to the out X.X your I will And believe about apologies, a to migration I in kind there? one Have to have radiology. uplift. my talked jumped of some questions. Thanks in migration. migration sneak know X.X Hi. as midstream starting Maybe calling paths math on try here. one But and that couple it term And to

Dan Tempesta

all. at No. Not

term revenue the revenue making license take a migration term say rules, any of the so let's are you you have the middle five-year If and in a upfront. license, all you under

as some the but a in cloud once to you going one you X.X have drop-down, going remaining enjoy left turn have so adjustment, on. of it you are non-cash to times are payments license term and change you in three, that to services that adjustment are you of say, all it's If we like enjoy, to an still uplift that on that

a validation we going of Day is is what and this at we really, do are to talked it. this more Investor So exactly about

Jeff Van Rhee

the then, guess DAX like It it's back Got great enough. changing it. quick just I to game for think And a sounds industry. progress obviously and a I Fair second. product for

to percent Dragon maybe XX you of specialties will an in I DAX know available out primed what XX look what quickly have your take users to solution fairly XXX,XXX, XXX,XXX that's, users, you are those that's Dragon of months, XXX,XXX relevant cloud, to out here. percent When If or rolling them? call you you it DAX

Mark Benjamin

Well, I mean, we, quite know you I product the think if well. and Jeff

fluent you realize point. pretty this I at So are

have quarters, the I that that use market to the I going release, think addressable and few today. like the win. multi-disciplined what start systems. would using, the mentioned is to XXX,XXX physicians actually market and XXX,XXX use for essentially think that ultimately, ultimately others one with all And hospital one us names which these a the Rob cover addressable are of to But is ambulatory cover specialties, you to pressure DAX they we some so specialties numbers with Dragon to And solution quarter. I largely the drive are quarter, will said to seeing numbers to go likes three when will, as expand we previous every you specialties pitch the expanding ultimately the team multi-special R&D are if are every in today the puts SAM, always the that and because per specialties on two are The like use we we teams. we and I it

Jeff Van Rhee

touch last, Got it. in channels I have Maybe Yes. just voice pipes a those the pipe and contrasted digital and enterprise progressed, the one Obviously, seen for specifically you both respective progress I to of Helpful. second wanted as shifting business to am enterprise. curious, channels. progressed, with you through digital gears, has just here? how have channels the year a got on segments how with the bifurcated voice as

Mark Benjamin

security or includes anything. intelligent think will agent bio at engagement really as comment our very out engagement good and Dan maybe in strength we I we voice on had we growth virtual LAVA our digital will our which laid the category actually as as comment live out, well within I others from and coming our But And business. Yes. Rob Investor have solutions, is laid Day, the as bio, platform. the quarter, or intelligent in agent,

play hard exactly expected, last numbers the it year's QX. this seeing out and including versus are compare quarter a including we we as So

the of higher Dan So to original we even any essentially will We things. pleased. end moved well. in think are range of cover color enterprise very and will the pipeline up Rob the as I side And add year the business

Rob Dahdah

Yes. question. Thanks Mark. pipe the for progress. thanks The to And continues

And were across opportunity we true the which environment. solutions we or really. mentioned, more healthcare have the so holds think whole enterprise. in as now, even for an current on offer side, always spectrum, the The relevant it I we even

we as good we like are And these so spectrum our we in position feel needs across a address for very customers. the

Dan Tempesta

Yes.

only We IVR the said, that intelligent pipeline the really Jeff, towards that And in that's and our would model then nicely. category. definitely Investor the think think, voice if about And really out add would think you of come is, well. be space and is are business I we out year XX% tracking would that laid be the intelligent bookings engagement what trending engagement. see Day, XX% we I we planning this in probably we

about. three-year in us XX% to that So grow we that timeframe that talked that helps

So feeling good about it.

Jeff Van Rhee

guys. Real Great job Very it. nice Got here. helpful. execution

Mark Benjamin

Thanks Jeff.

Operator

And Please with Daniel will our ahead. go question Ives next Wedbush. come from

Daniel Ives

Thanks. Yes.

the hiring, given healthcare just that and on activities Is in you Rob pipeline? for talk to about Mark, in side, step given the opportunities? could of So just continued that's that just of sales up, especially something terms the just terms

Mark Benjamin

were the had see throughout not kind the people. side But Dan. as front it Yes. only the growth Obviously really that we on saw were we we of super Absolutely. have the have early we but and in because opportunities, the had we possible our with support Thanks investment cautious of only always this. on, it's as systems we

are hiring. yes, so, we And

there unfortunately We great or talent they us. We are, coming, for of available, being fortunate ate is selective. course, where think but for fortunately

it's and up the business across and So not we it's domestic just are stepping thing. hiring a our

group to We especially opportunities, there. out we continue grow to have grow internationally as our

have So planned. forward moving been we as

Daniel Ives

and And can Dan obviously both then chime you too. in for of

you especially pipeline across in just to just standardization just that deal, the a deals start of of the terms of just discernible trend of board, terms the see In the think of next-gen larger, scope are the cloud larger terms is you scale platform, and in about deals? when where are deals in starting something hospital the to size like more in that

Mark Benjamin

to It's once big bang, scale they no-go. a of we The of all and check. the talk system where the have customer, have enterprise go, the to Like, conditions we everything with the in Like, are terms write deals, side. much have every every we pretty size the the even really on and not offer flex a fortunate. like to at opportunity something and

So you don't need to go all-in.

I discussions, deals. meaningful think because served begin well sign able been have to we have really that's us implementations,

I number increasing. think if is anything, the deals, of

expanded opportunities in to expanded as into as mid-market, have opportunity we number So that partners take weren't we get of we a the places Microsoft, we on before. have overseas, these like we as great we

the the excited. scale say, scope, of are where definitely would And in terms volume that's I So has increased. really we

Daniel Ives

Great. And Mark, does Rob wears three-piece suits on June calls too? Thanks.

Mark Benjamin

of suit he months. here. a time the the put today, stolen has I on couple Rob And it's in has his think like Yes. first show yes, fashion

is So pretty happy. he

Rob Dahdah

good. pretty Feels

Operator

will question next Please go Oppenheimer. out with And come Eyal Shaul from ahead.

Shaul Eyal

guys. Thank you. afternoon Good

to all of about Let me trusted this and now. both couple is healthcare know, not with topic but partnership if doubt, decades change Google like Diana also within how and is Clearly partner providers of the cloud staying But I on? echo going Microsoft, with put. And a actually Diana. start Mike the a any as thinking my Nuance, is past public without subject? the arena. for wonder we want great welcome Amazon, to there

Diana Nole

you, in is, me find is under has on tell healthcare think had relationships I I XX with success to in experience I years have two one, you key the with would attracted always of have I Nuance would Well, will I mean months just belt, the what the healthcare probably have more you providers. and what rely to to and my the

very base. We very have a satisfied. large It's install

of so relationships thing That's I be have just those against The competitive and I physician undervalued. like the with and leverage I our conversational track that data think of we demanded we expertise play we think record within of on They amount is, tremendous ability is, to the continued you be sort have of EHR. which working field type do. that EHR the will we what amounts for in we any not is rely other in to we have have the And of have the competitor. that the AI, think deep terms in. the to workflow have other massive a of enhancements these are a vendors to that that what we proven the moats continue to wants, thing successful

Mark Benjamin

This Yes. Mark, is Shaul.

for three say, is repeat would fact at the least So as she that it answered thing I that far software is the has the probably almost the she been as probably And hardest would this if even I company most months. vertical we But It's here meaning a domains. challenged within one think thing. as I the perfectly. it's domain deep that's of healthcare specialized are expertise, highly one

us highly data too, years their And years are with matters. have solutions the really, is a difference we is and being not expert that would big and market-leading built have data just I domain I relationships experience to we too. really our that operations our small differentiation. as that is trust the say, trust are protected we better a create allows And But make differentiator. a the as critical the it's think, from customers and healthcare Our that and

Shaul Eyal

execution. Congrats enough. on Well you. and done. fair quarter Thank That's a good

Mark Benjamin

Thank you.

Rob Dahdah

Thanks Shaul.

Operator

our And Kesavabhotla will from Guggenheim. ahead. question Vikram come with next Please go

Vikram Kesavabhotla

pace you I Thank from and some can And healthcare, Thanks. want Yes. within thinking taking color ambulatory feedback there, if international just give of adoption newer question. you initiatives on to and more ask those the some helpful? for with you hospitals. particularly of the are that about the would channels us how the about specifically community be

Rob Dahdah

Yes.

out to lot all Obviously, delivering question. is out is are what specifically you you do and get. early I Rob. and Thanks set have will there of research promise on, to go this those And a areas. So for you the strike see and excited. start with then really We in it. we you growth the

really, new that a we to to. to still up and relatively far we of stood now really the some get market clouds so able Obviously, but internationally pleased. been on-prem we been have have operated go base have it's or we in just and always And want key cloud

We hired markets. those now out teams we everyone have key have a And win in already there. our of

early get the very space. will But we pleased say, will we in are go. we certainly and better international days So we as

On with for opportunistic area really plan. were there specific that out community set Again, us. the mid-market hospital new we totally a was space, We prior. very

team pleasing results but early our environment, other side to a are the this. there value happy customers be been difficult have set we in could are a only we and very very to there. up really bring able not going have and We we the of And see to

Our story is very well.

very all those in promising here it's So areas.

Vikram Kesavabhotla

Great. we Okay. about sounds should in quick DAX XXXX from we as talk lines, time are color about further be you you contribution how thinking in your like just the a driver be you. on helpful. there fiscal or would the in particular, encouraging And stages. financial maybe Thank in It curious should results? And just thinking seeing that? be this Any DAX. beyond a follow-up traction here But the early if can some about

Dan Tempesta

Vikram. It's Dan. Hi

consistent been have the not on impacts. financial really this this we We at that commenting are on point

quarter quarter what Although give this in really to seeing. we color are are we trying about next and

the in more economics Those broader definitely as XXXX, We rollout talk will, excluded point, about are impacts, still when to year this November this impacts. are some model. the for maybe we we up go-to-market. going But the well revenue at at on point, gearing as the we are the ARR

level will and financials we continue going but to later. that still of are do will to give experience We color

Vikram Kesavabhotla

Great. Thank you.

Mark Benjamin

Vikram. Thanks

Operator

to conference remarks. any would the Benjamin Mark session. And like question-and-answer will turn this closing our I conclude over back to for

Mark Benjamin

just everyone interesting and safety you these and to joining wish I thank your during right. families All today us for want times.

you. thank So

Operator

has conference concluded. the And now

Nuance Communications (NUAN) 6 Aug 202020 Q3 Earnings call transcript