Nuance Press Release:

Nuance Announces Second Quarter Fiscal 2013 Results

Board of Directors Authorizes $500 Million Stock Repurchase Plan

BURLINGTON, Mass., April 30, 2013 – Nuance Communications, Inc. (NASDAQ: NUAN) today announced financial results for its second quarter fiscal 2013, ended March 31, 2013.

Nuance reported GAAP revenue of $451.0 million in the second quarter fiscal 2013, a 15.6% increase over GAAP revenue of $390.3 million in the second quarter of fiscal 2012.  Nuance reported non-GAAP revenue of $484.0 million, which includes $33.0 million in revenue lost to accounting treatment in conjunction with acquisitions.  Second quarter fiscal 2013 non-GAAP revenue grew 15.9% over non-GAAP revenue of $417.7 million in the second quarter of fiscal 2012.

In the second quarter of fiscal 2013, Nuance reported GAAP net loss of ($25.8) million, or ($0.08) per share, compared with GAAP net income of $0.9 million, or $0.00 per diluted share, in the second quarter of fiscal 2012. In the second quarter of fiscal 2013, Nuance reported non-GAAP net income of $110.4 million, or $0.34 per diluted share, compared to non-GAAP net income of $138.8 million, or $0.43 per diluted share, in the second quarter of fiscal 2012. Nuance’s second quarter fiscal 2013 non-GAAP operating margin was 29.1%, down from 36.8% in the second quarter of fiscal 2012. Nuance reported cash flow from operations of $93.1 million in the second quarter of fiscal 2013, down from $100.5 million in the second quarter of fiscal 2012. Nuance ended the second quarter of fiscal 2013 with a balance of cash and cash equivalents of $1,005.3 million.

Please refer to the “Discussion of Non-GAAP Financial Measures” and to the “GAAP to Non-GAAP Reconciliations,” included elsewhere in this release, for more information regarding the company’s use of non-GAAP measures.

“We are disappointed with our results for the second quarter, which were driven by a combination of execution issues and external factors. We have taken immediate corrective actions to improve the performance of our business and revised our operating plan accordingly,” said Paul Ricci, Nuance Chairman and CEO. “Despite short-term setbacks, we continued to make advancements in the quarter, earning design wins and new bookings in new strategic product areas including our automotive business and Nina solutions for customer care. Our share buyback program announced today underscores our confidence in the business and our focus on shareholder value as we expect growth to accelerate in fiscal 2014.”

Highlights from the quarter include:

• Healthcare – For Nuance’s healthcare solutions, second quarter fiscal 2013 non-GAAP revenue was $229.3 million, up 53.0% from the second quarter of fiscal 2012. We secured new business with key healthcare customers including Adventist Health System, Alberta Health Services, Alexian Brothers Medical Center, Memphis Baptist Memorial Hospital, Meridian Health, Morristown Medical Center, Orlando Health, Pomona Valley Medical Center, Sacred Heart Hospital, St. Joseph Health, St. Luke’s Hospital, University of New Mexico and WellSpan Health.
• Mobile & Consumer – For Nuance’s mobile and consumer solutions, second quarter fiscal 2013 non-GAAP revenue was $116.2 million, up 1.0% from the second quarter of fiscal 2012. We secured new business or design wins with key mobile customers including Apple, Asus, Blackberry, DoCoMo, Ford, Fujitsu, GM, Honda, Kyocera, LG, Samsung and TPV.
• Enterprise – For Nuance’s enterprise solutions, second quarter fiscal 2013 non-GAAP revenue was $74.5 million, down 18.5% from the second quarter of fiscal 2012. We secured new business with key enterprise customers including Caremark, Eastern Bank, E*Trade, Geico, HM Revenue & Customs, KTIM, MetroPCS, QBE, USAA, US Bank, US Social Security Administration and Wells Fargo.
• Imaging – For Nuance’s document imaging solutions, second quarter fiscal 2013 non-GAAP revenue was $64.0 million, up 4.4% from the second quarter of fiscal 2012. We secured new business with key imaging customers including Ericsson, Hong Kong Jockey Club, IBM, P&G, Ricoh, Sharp, Southwick Council, StoraEnso and UPM.

Nuance Authorizes $500 Million Stock Repurchase Plan

Under the plan, Nuance intends to repurchase up to $500 million of its outstanding shares of common stock.

Stock repurchases may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades, accelerated stock repurchase transactions, or any combination of such methods. The timing and the amount of any purchases will be determined by the Company’s management based on its evaluation of market conditions, capital allocation alternatives, and other factors. The share repurchase plan does not require the Company to acquire any specific number of shares and may be modified suspended, extended or terminated by the Company at any time without prior notice. The share repurchase plan is designed to comply with U.S. securities laws, rules and safe harbors for purchases that do not constitute tender offers. These restrictions can lengthen the time it may take for Nuance to acquire its shares under this repurchase plan.

Conference Call and Prepared Remarks

Nuance is providing a copy of prepared remarks in combination with this press release. These remarks are offered to provide shareholders and analysts with additional time and detail for analyzing results in advance of the company’s quarterly conference call. The remarks will be available at http://www.nuance.com/earnings-results/ in conjunction with this press release.

The conference call will begin today, April 30, 2013 at 8:00 am EDT and will include only brief comments followed by questions and answers. The prepared remarks will not be read on the call. To access the live broadcast, please visit the Investor Relations section of Nuance’s Website atwww.nuance.com. The call can also be heard by dialing (800) 288-8968 or (612) 332-0630 at least five minutes prior to the call and referencing code 291523. A replay will be available within 24 hours of the announcement by dialing (800) 475-6701 or (320) 365-3844 and using the access code 291523.

About Nuance Communications, Inc.

Nuance Communications, Inc. (NASDAQ: NUAN) is a leading provider of voice and language solutions for businesses and consumers around the world.  Its technologies, applications and services make the user experience more compelling by transforming the way people interact with devices and systems. Every day, millions of users and thousands of businesses experience Nuance’s proven applications. For more information, please visit www.nuance.com.

Trademark reference: Nuance, the Nuance logo, Dragon Medical and eScription are registered trademarks or trademarks of Nuance Communications, Inc. or its affiliates in the United States and/or other countries. All other trademarks referenced herein are the property of their respective owners.