J.P. MORGAN HEALTHCARE CONFERENCE · SECULAR TRENDS DRIVING DEMAND FOR NUANCE SOLUTIONS 43% Administrative overload Of workday spent on clinical documentation $30M Stressed quality

J.P. MORGAN HEALTHCARE CONFERENCE

01.10.19

© 2019 Nuance Communications, Inc. All rights reserved

2 © 2019 Nuance Communications, Inc. All rights reserved

Statements in this presentation regarding future performance and our management’s future expectations, beliefs, goals, plans or prospects constitute forward-looking statements

within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words

“believes,” “plans,” “anticipates,” “expects,” "intends" or “estimates” or similar expressions) should also be considered to be forward-looking statements. There are a number of

important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including but not limited to: the ability to effect

the separation and spin-off of our Auto business; our ability to close the sale of our Imaging business, our ability to successfully wind-down certain products or business lines,

fluctuations in demand for our existing and future products; fluctuations in the mix of products and services sold in specific periods; further unanticipated costs resulting from the FY17

malware incident including potential costs associated with litigation or governmental investigations that may result from the incident; our ability to control and successfully manage our

expenses and cash position; our ability to develop and execute in a timely manner our productivity and cost initiatives; the effects of competition, including pricing pressure, and

changing business models in the markets and industries we serve; changes to economic conditions in the United States and internationally; uncertainties associated with the

transition of our chief executive officer, and the addition of a number of new directors; the imposition of tariffs or other trade measures particularly between the United States and

China; potential future impairment charges related to our newly reorganized business reporting units; fluctuating currency rates; possible quality issues in our products and

technologies; our ability to successfully integrate operations and employees of acquired businesses; the conversion rate of bookings into revenue; the ability to realize anticipated

synergies from acquired businesses; and the other factors described in our most recent Form 10-K, Form 10-Q and other filings with the Securities and Exchange Commission. We

disclaim any obligation to update any forward-looking statements as a result of developments occurring after the date of this document.

This presentation also includes certain financial measures that are not calculated in accordance with U.S. generally accepted accounting principles, or GAAP. These non-GAAP

financial measures are in addition to, and not as a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. There are a number of

limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. We have provided a reconciliation of non-GAAP measures to the most

directly comparable GAAP measures, which is available in the earnings press release and the prepared remarks furnished as exhibits to the Company’s Form 8-K submitted to the

SEC on November 19, 2018. This presentation should be read in conjunction with the earnings release, prepared remarks and Form 10-K.

FORWARD-LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURES


Mark BenjaminChief Executive Officer

INTRODUCTION


AI technology company with increasing focus on Healthcare and an accelerating SaaS transition

Deep and wide moats in the markets we serve

Long runway of growth and margin expansion ahead

NUANCE HIGHLIGHTS


UNLOCKING VALUE AT NUANCE

Revenue ‘Old’ Nuance

Healthcare Enterprise Imaging Auto Other

Revenue ‘New’ Nuance

Healthcare Enterprise

New CEO and leadership

New BOD and strong governance

Strategic actions to simplify and focus


Transcription Speech recognition

Voice command and control

Clinical guidance and decision support

Virtual assistants

Ambient clinical intelligence

Cloud-based speech recognition,image and data exchange, and analytics

Real-time intelligence

NUANCE HEALTHCARE TRANSFORMING PATIENT CARE, WHERE CLINICIANS TAKE CARE OF

THEIR PATIENTS WITHOUT TECHNOLOGY GETTING IN THE WAY


NUANCE HEALTHCAREOptimizing clinical and financial outcomes with solutions that capture, improve

and communicate the patient story and support decision making

$1.0 billion total revenue estimated for FY19, including $200m SaaS business growing at ~50%

Broad AI-based portfolio moving to the cloud

Significant market footprint and clinician loyalty

Deep partnerships with leading EHR vendors

Strong, and improving, margin and cash flow profile

DMO

MaintenanceProduct

HIM

Clinical Documentation Capture

Clinical Documentation Capture

Radiology& Other

ProfessionalServices

Other M&S2019E Healthcare Revenue


SECULAR TRENDS DRIVING DEMAND FOR NUANCE SOLUTIONS

43%

Administrative overload

Of workday spent on clinical documentation

$30M

Stressed quality of care

Estimated care variation margin improvement opportunity per $1B net revenue

90%

Compliance risks

Of Medicare payments tied to quality or value

92%

Patient expectations

Of hospitals struggle to meet patient satisfaction goals

-15.8%

Revenue pressures

Margin by 2021 for hospitals operating business as usual

HEALTHCARE PROVIDER ORGANIZATIONS FACE INCREASING PRESSURE


DRAGON MEDICAL ONE (CLOUD) TRANSITION

HIMConversion

On Premise Conversion

Greenfield Expansion

2.5x profit uplift over 5 years, revenue neutral

2 - 2.5x revenue and profit uplift per year

100% Accretive

Dragon Medical CloudMulti-Tenant

SaaS Offering


Nuance Others Greenfield

DRAGON MEDICAL ONE MARKET EXPANSION

$550 million $1.15 billion $2 billion

DMOUS

+DMO International

+CAPD


OUR RIGHT TO WINSTRONG DIFFERENTIATION

AND COMPETITIVE ADVANTAGE

1. Technology and data

2. Embedded in clinical workflows

3. Integration with EHR vendors


DRAGON MEDICAL CLOUD ANNUAL RECURRING REVENUE (ARR)

Annual recurring revenue is the annual run rate of recurring revenue for all existing clients at a given point in time. The difference between ARR and subscription revenue is a matter of timing. Subscription revenue begins, on average, 90 days after we sign a contract and is recognized ratably over the lifetime of that contract. ARR shows the annual recurring revenue at a particular point in time.

$245M to $255M

$44.3M

$109.4M

$186.1M

0

20

40

60

80

100

120

140

160

180

200

2016 2017 2018

2019 ARR Guidance

($ in millions)


MARGIN PROFILE

DMO Mix

Transcription Mix

Margin


CASH FLOW PROFILE

$390 MILLION – $435 MILLION

CASH FLOW FROM OPERATIONS

FY’19 GUIDANCE


FREE CASH FLOW

FY’19 GUIDANCE


PROFORMA CASH AT 9/30/2019


AI technology company with increasing focus on Healthcare and an accelerating SaaS transition

Deep and wide moats in the markets we serve

Long runway of growth and margin expansion ahead

NUANCE HIGHLIGHTS

01.10.19


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J.P. MORGAN HEALTHCARE CONFERENCE · SECULAR TRENDS DRIVING DEMAND FOR NUANCE SOLUTIONS 43% Administrative overload Of workday spent on clinical documentation $30M Stressed quality