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New words:
addressing, appeal, Azure, calendar, calling, Canton, court, disagree, factual, inconsistency, IP, lieu, partly, remanded, shift, Switzerland, ultimately, upheld, vigorously, Zurich
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accretive, achieving, applied, assisted, Automotive, Cerence, collectibility, comprehensive, computer, derecognized, distribution, Eastern, force, independent, lifetime, module, offering, pro, ranging, rata, ready, reduced, repaid, retired, retrospectively, review, separation, solution, unconsolidated, Update
Financial report summary
?Risks
- Our liquidity, operations, business, financial condition, results of operations and cash flows may be adversely impacted by the novel coronavirus (COVID-19).
- The markets in which we operate are highly competitive and rapidly changing and we may be unable to compete successfully.
- Our operating results may fluctuate significantly from period to period, and this may cause our stock price to decline.
- A significant portion of our revenue and bookings are derived, and a significant portion of our research and development activities are based, outside the United States. Our results could be harmed by economic, political, regulatory, foreign currency fluctuation and other risks associated with these international regions.
- If we are unable to attract and retain key personnel, our business could be harmed.
- Cybersecurity and data privacy incidents or breaches may damage client relations and inhibit our growth.
- Our business is subject to a variety of domestic and international laws, rules, policies and other obligations including data protection, anticorruption and health care reimbursement.
- Interruptions or delays in our services, including from data center hosting facilities, could impair the delivery of our services and harm our business.
- We may be unable to fully capture the expected value from strategic transactions.
- Charges to earnings as a result of our acquisitions may adversely affect our operating results in the foreseeable future, which could have a material and adverse effect on the market value of our common stock.
- Impairment of our intangible assets could result in significant charges that would adversely impact our future operating results.
- We have grown, and may continue to grow, through acquisitions, which could dilute our existing stockholders and/or increase our debt levels.
- Our strategy to transition to cloud-based recurring revenue may adversely affect our near-term revenue growth and results of operations.
- We have a history of operating losses, and may incur losses in the future, which may require us to raise additional capital on unfavorable terms.
- Tax matters may cause significant variability in our financial results.
- The failure to successfully maintain the adequacy of our system of internal control over financial reporting could have a material adverse impact on our ability to report our financial results in an accurate and timely manner.
- Our sales to government clients subject us to risks, including early termination, audits, investigations, sanctions and penalties.
- The announcement and pendency of the Merger may result in disruptions to our business.
- The Merger may not be completed within the expected timeframe, or at all, and the failure to complete the Merger could adversely affect our business, results of operations, financial condition, and the market price of our common stock.
- Third parties have claimed and may claim in the future that we are infringing their intellectual property, and we could be exposed to significant litigation or licensing expenses or be prevented from selling our products if such claims are successful.
- Unauthorized use of our proprietary technology and intellectual property could adversely affect our business and results of operations.
- Our software products may have bugs, which could result in delayed or lost revenue and bookings, expensive correction, liability to our customers and claims against us.
- Our debt agreements contain covenant restrictions that may limit our ability to operate our business.
- Our significant debt could adversely affect our financial health and prevent us from fulfilling our obligations under our credit facility and our convertible debentures.
- Current uncertainty in the global financial markets and the global economy may negatively affect the value of our investment portfolio.
- The market price of our common stock has been and may continue to be subject to wide fluctuations, and this may make it difficult for our stockholders to resell the common stock when they want or at prices they find attractive.
- Future issuances of our common stock could adversely affect the trading price of our common stock and our ability to raise funds in new stock offerings.
- Our business could be negatively affected by the actions of activist stockholders.
Management Discussion
- The geographic split was 81% of total revenues in the United States and 19% internationally for the three months ended December 31, 2021, as compared to 79% of total revenues in the United States and 21% internationally for the three months ended December 31, 2020.
- Hosting revenue for the three months ended December 31, 2021 increased by $23.9 million, or 14.3%, primarily due to a $26.8 million increase in Healthcare, driven by the growth in our Dragon Medical Cloud solutions and our continued transition from a license model to a cloud-based model. As a percentage of total revenue, hosting revenue increased from 48.4% to 59.5% for the three months ended December 31, 2021.
- Professional services revenue for the three months ended December 31, 2021 decreased by $6.0 million, or 20.9%, primarily due to a $4.7 million decrease in Enterprise, driven by an accelerated transition from an on-premise license model to a recurring, cloud-based model, as well as the timing of customer projects for our Voice Engagement suite of products. As a percentage of total revenue, professional services revenue decreased from 8.2% to 7.0% for the three months ended December 31, 2021.