What: Shares of voice recognition specialist Nuance Communications (NASDAQ:NUAN) jumped nearly 11% in February, according to data provided by S&P Global Market Intelligence, after the company reported strong fiscal first-quarter earnings.
So what: Revenue in the first quarter came in at $494.9 million on an adjusted basis, which translated into non-GAAP net income of $113 million, or $0.36 per share. While the Street was expecting $491.2 million in revenue, investors were pleased that the company beat the bottom-line forecast of $0.32 per share in adjusted profit. Bookings were also up 7% on a constant currency basis.
Now what: Nuance has traded within a relatively flat range for the past few years, but the company's renewed emphasis on growth and margin expansion is starting to pay off. While the core healthcare business didn't put up much growth, Nuance enjoyed gains in other operating segments such as its mobile division, which saw sales jump 10%. Nuance also continues to make progress with transitioning toward a recurring revenue model, as recurring revenue is increasing as a percentage of total revenue.
Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool recommends Nuance Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.