A June cyberattack that shut down Nuance’s healthcare transcription services for more than a month put a $53 million dent in revenue during the fourth quarter of 2017, and executives expect the aftershocks of the incident will trickle into 2018.
The malware attack cost the company approximately $68 million over the course of the fiscal year primarily tied to production downtime and credits issued to customers, according to year-end financials released (PDF) on Tuesday. However, the fourth-quarter impact came in below initial projections, which ranged from $65 million to $75 million.
The company’s healthcare segment posted its worst quarter of the year as revenue dropped to $186.7 million, a 22% decline from the previous year. Healthcare revenues totaled $893 million for the year, a 7% decline from 2016.
Revenues for the company’s healthcare transcription business declined $100 million in 2017 due to the malware attack and segment erosion.
The attack, known as “Petya” or “NotPetya,” struck several industries around the globe over the summer, including hospitals in West Virginia and Pennsylvania along with the N.J.-based pharmaceutical giant Merck. Last month, Rep. Greg Walden, R-Ore., who chairs the House Committee on Energy and Commerce, requested additional information from Nuance regarding the circumstances surrounding the attack.
On a conference call, Nuance Executive Vice President and Chief Financial Officer Dan Tempesta estimated the company would continue to feel the effects on revenue in 2018, to the tune of $60 million to $65 million.
Still, CEO Paul Ricci said he was “pleased” with the company’s performance in 2017 despite the impact that caused notable workflow disruptions for hospitals that use Nuance’s transcription services. He pointed to record bookings within the healthcare segment during the fourth quarter, as well as the success of Dragon Medical, the company’s cloud-based speech recognition solution. The company also made up ground in its other business lines to balance out the losses in healthcare.
“Fiscal 2017 was a remarkable year for Nuance, one that bore witness to numerous milestone amidst our recovery from a devastating malware attack,” he said. “I’m confident we exited fiscal ‘17 as a stronger organization owing both to our success and the challenge we endured.”