Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Brent Thill - Citigroup.
Brent Thill - Citigroup
As it relates to your organic guidance for fiscal ’09, can you help us understand? I think you guided 13% to 26% which is a pretty wide range but what should we look for organic growth? I think this year was 16%.
Paul A. Ricci
We never provide organic growth for the forward-looking year especially in this environment. I haven’t done the organic calculation for ’09 so I don’t know.
Brent Thill - Citigroup
If you could maybe help us understand the assumptions you made in drawing that wide range of guidance? What are you assuming for ’09? Are you assuming the macro is getting worse in that environment, stable? If you could give me some assumptions, that would be helpful.
Paul A. Ricci
Just to begin with our written comments, to start we of course approached the year with a sizable amount of recurring revenues and another set of revenues which we think are highly visible that draw upon either a backlog in installations or a backlog in delivered services. That’s the first point.
In the enterprise business we assumed that the macro environment we find ourselves in now will continue, perhaps even worsen. As I said in my comments a moment ago and as we said in our written comments, we do think however that the increased pressures upon institutions to reduce costs related to customer care, at least in our historical experience, has driven people to look more aggressively at speech deployments. There is an unmistakable trend in our enterprise business towards hosted solutions rather than on-premise solutions.
But we assume that the macro environment in our large vertical markets where we sell our enterprise solutions will be very difficult.
We also assume that demand for mobile devices is going to be under pressure this year as our comments indicated and that will result in pressure on our royalty reports from our automotive and handset manufacture customers. We expect this to be a difficult year in terms of price pressure from those companies as they seek to address their own financial issues. Last year was also a fairly difficult year of price pressures from them so that may be somewhat of a continuation of a trend, but it could worsen.
On the other hand we are deploying mobile services this year that will bring growth on line and for which we have committed contracts, so we will see some growth of that. Since we can’t say in advance what the consumer reception to those services will be primarily through carriers, we have to be cautious. But we’re going to see some revenue growth from that.
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