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Nuance profit forecast hit by shift to subscriptions

26
Nov
2013

(Reuters) – Software maker Nuance Communications Inc forecast fiscal 2014 profit below expectations as its shift to a subscription-based business model hits margins and the company struggles to hold on to its pricing in the handsets business. Shares of the company, whose software powers the Siri feature on Apple Incs iPhones, fell more than 6 percent after the bell on Monday. We are embracing this transition despite its effect on near term revenues because our customers are demanding it and because we value the recurring nature, predictability and longevity of these revenue streams, Chief Executive Paul Ricci said on a conference call with analysts. Ricci said Nuance had deferred certain deals with phone makers as it had been trying to hold on to its higher pricing, which was reflected in the outlook.

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