Related party transaction (Notes)

6 Months Ended

Mar. 31, 2019

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Related Party Transaction

In January 2018, we entered into a software and license agreement (the "License Agreement") with Magnet Systems, Inc. ("Magnet"). A member of the Magnet board of directors also served on our board of directors at the time of the transaction. Pursuant to the License Agreement, Magnet granted Nuance a perpetual software license to certain technology for a one-time payment of $5.0 million in cash, with $3.5 million paid immediately upon the effective date of the License Agreement and $1.5 million payable upon the earlier of (i) the 120-day period following the effective date of the License Agreement or (ii) signature of a statement of work for the engineering services described below. The amount for license was fully paid in fiscal year 2018.

Additionally, we entered into a service agreement (the "Service Agreement") with Magnet, pursuant to which, Magnet would provide engineering services to assist in integrating the licensed technology into certain of our Enterprise solutions. The fees under the Service Agreement total $2.0 million, payable in six equal monthly installments upon the signature of the statement of work, which is to be finalized within 90 days following the effective date of the License Agreement. We have incurred $2.0 million service costs up to date, $0.3 million and $0.9 million of which were incurred during the three and six months ended March 31, 2019, respectively. As of March 31, 2019, capitalized amount related to payments for license and services totaled $9.0 million.