Nuance Communications (NASDAQ: NUAN), a business devoted to speech recognition technologies and document solutions, reported Q2 earnings earlier this week. Those of you who own this stock know that the company oftentimes puts forth a complicated earnings release, full of GAAP and non-GAAP stats. This is due, in part, to the company's acquisition strategy (not long ago, I wrote about Nuance's purchase of eScription). So, on a GAAP basis, don't expect much. Net loss per diluted share expanded to $0.13 versus a net loss per diluted share of $0.01 in last year's second fiscal quarter (there was a significant non-cash-stock-based compensation charge included in the current quarter). Top-line revenue did well on a GAAP basis, however, rising 54%. Again, though, this growth was due to acquisitions.

On a non-GAAP basis, things look much brighter. Revenues rose 63%, and net income per diluted share increased 50% to $0.18. According to Reuters, this figure matched analyst expectations (I would have liked to have seen Nuance beat expectations, but it is what it is). Of course, Nuance stimulates a classic bull-bear discussion in terms of when GAAP profitability becomes more of an issue than non-GAAP success. As a Nuance shareholder, I definitely would like to see GAAP profits on a consistent basis, but I am well aware that management intends to gamble on acquisitions as a method for creating shareholder value, and for now, I am willing to be patient and watch how the company proceeds.

Nuance could be considered a risky, speculative stock in many ways, but I think it has a good chance of doing well over time with its technologies. You'd probably sleep better with competitors Microsoft (NASDAQ: MSFT) and IBM (NYSE: IBM) in your portfolio, but since I own it from around $9 per share, I'm willing to wait and see how the share price moves from this point forward (admittedly, I was considering booking profits recently, but decided against such action). Anyone thinking of getting in now might want to perform a lot of due diligence and wait for the proverbial pullback.

Disclosure: I own shares in Nuance Communications; positions can change at any time.

It's not a terribly exciting day today in terms of the market averages, but there are some stocks doing well. Nuance Communications (NASDAQ: NUAN) is one of them.

Nuance, which provides technologies for speech recognition and solutions for document needs, is up 5% on better-than-average volume as I write this. The catalyst? It appears to be a deal -- what else is new? Nuance is definitely an asset collector, and its business model is based, in part, on leveraging its various acquisitions to drive long-term shareholder value. It needs to do this as effectively as possible to compete with big guns such as Microsoft (NASDAQ: MSFT) and IBM (NYSE: IBM). That can be risky, but so far, the stock has done well for me -- I've owned this for a while, and my cost basis is somewhere around $9 per share. Lately, though, I've been thinking of selling, as the stock still has yet to break through its 52-week high of $22.55 (shares are currently trading around $18.60) -- I thought that event would have happened a while ago, but I was wrong.

The acquisition announced today was for eScription, a business involved in transcription services for the medical industry. Sounds good to me -- anything to do with helping health care become more efficient should be valuable over time. The price tag was pegged at $400 million. I'll be watching the price action on Nuance -- hopefully it'll make a fresh run toward that 52-week high soon.

Disclosure: I own shares in Nuance Communications; positions can change at any time.