Boston, MA 11/27/2013 (wallstreetpr) – Nuance Communications Inc. (NASDAQ:NUAN) is building for the future in its shift from package system to subscription system. While this is taking a toll on the company’s near term profits, the end will certainly justify the means. This is why investors should give this voice and language solutions company time to get its act in order.
The company leaves no doubt about its intent for the future and efforts to return big money to investors. The two high profile acquisitions which NUAN made last year are testimony to this. In Dec. 2012, the company took over Ditech Networks Inc. (NASDAQ:DITC). And six months earlier, it had acquired Vlingo Corporation. These companies come as technology and market assets for Nuance Communications Inc. (NASDAQ:NUAN) which is easily the market leaders but with dreams of getting the cost from its assets and technologies.
So far the company’s relation with iPhones maker Apple Inc. (NASDAQ:AAPL) for software powering Siri is one of the high profile connections which the company is seeking to improve its top and bottom line. The fact that the digital world is shifting more to mobile platforms is a growth opportunity for Nuance Communications Inc. (NASDAQ:NUAN) because it thrives in this segment with its voice and language solutions. More importantly, the company’s diversification into healthcare, enterprise and consumer services widens its revenue opportunities as all these segments are experiencing growth.
It is now easy to understand why the company’s shift to subscription is important for its future. For this reason, the low future profits forecast is something that is expected to be short-lived, but what will happen after this transition will be amazing long term benefit for the investors.
The migration to subscription is something that customers are demanding and Nuance Communications Inc. (NASDAQ:NUAN) has no option but to comply. According to the company’s CEO Paul Ricci, the company is pursuing longevity in revenue streams and predictability of earnings. Obviously these are important for planning the company’s future growth which is an amazing thing at this point.