Nuance Communications, Inc. F1Q09 (Qtr End 12/31/08) Earnings Call Transcript

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2009-02-09 16:36:09.0

Tags: Mobile, Voice Recognition, Nuance Communications Inc., Call Transcript, Earnings, Telephony, Advertising & Promotion, Telecommunications, Networking, Marketing, Seeking Alpha

Question-and-Answer Session

Operator

Thank you. (Operator instructions) Our first question will come from Derek – excuse me. Our first question will come from Richard Davis with Needham & Company. Please go ahead, sir.

Richard Davis – Needham & Company

Thanks. I feel sorry for Derek, but I’ll go ahead and take his place. On the mobile side – or the side that you called mobile and enterprise, if I think about your business, you’re kind of stride two different methodologies. One is kind of server-based voice recognition and one is consumer electronics-based voice recognition. You kind of have a position in both. Which is – I mean, I guess, which is kind of gaining market share do you see one side winning big versus the other, or are you just kind of try to be the tools vendor to both and let the other people cited out?

Paul Ricci

When you say gaining market share, you mean our share?

Richard Davis – Needham & Company

Yes. More like which side – so you sell to both side, and so our handsets becoming voice recognition devices or will it be more of a server-based item? I’m just trying to figure out who is going to win in that proposition. You sell to both sides.

Paul Ricci

You’re from – you've been in this industry a long time and so you know trying to predict the winner between the client and server has proven for carriers business at best. Having said that, our view is that the solution will ultimately involve both speech on the device and speech in the network. And our efforts in particular with telecommunication – with carriers and with our enterprises has been to provide solutions that help them meet the needs of mobile users for their respective businesses that are seamless between those two experiences. So today we see some speech on the device and some speech emerging in early efforts for services from the network that those two will be seamlessly integrated over time. And our technologies intend to provide a platform that enables enterprises to do both.

Operator

Okay, thank you. And our next question will come from Brent Thill with Citi. Please go ahead.

Brent Thill – Citi

Good afternoon. Paul, you certainly lowered your revenue outlook for 2009, but you left your operating margin unchanged. Can you just walk through kind of your confidence on that line item and why you left it unchanged? And then secondly, if you could just kind of dissect the mobile and enterprise business. I think you mentioned it was down 10% year-over-year organically. Where did you see the most stress between the two and what’s your outlook for the rest of the year? Thank you.

 

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