Tuesday August 19, 5:03 pm ET

Acquisition Expands and Accelerates Nuance Strategy for Mobile Care;

Provides Extraordinary Economic Returns for Mobile Operators and Corporations Worldwide

BURLINGTON, Mass.--(BUSINESS WIRE)--Nuance Communications, Inc. (NASDAQ: NUAN [1] - News [2]) today announced a definitive agreement to acquire privately-held SNAPin, a provider of mobile device and server self-service technology. With the strengths and resources of Nuance and SNAPin, the combined organization can deliver innovative, highly scalable mobile customer care solutions that transform the way mobile operators and enterprises interact with consumers in real-time on mobile devices.

With this acquisition Nuance is uniquely positioned to address the significant global opportunity in customer care as it converges around the mobile phone as the primary consumer access point. Companies worldwide will employ more than six million agents and spend more than $100 billion in customer care in 2008. In addition, estimates suggest that more than 200 billion calls are placed into customer service numbers around the world every year. An estimated one-third of those calls are placed from mobile phones and the number is expected to grow to two-thirds before the end of the decade. A Nuance and SNAPin combination can deliver effective care for cents-per-call compared to agent-assisted calls that approximate $4.50 per call on average.

"The integration of Nuance's mobile solutions and enterprise speech solutions allows Nuance to sharply reduce the costs of customer care and improve the quality of customer experience for mobile operators and large enterprises," said Steve Chambers, president of the mobile and consumer services division at Nuance. "Leveraging the proliferation of mobile devices worldwide, Nuance's solutions, combined with powerful technology from SNAPin, enable Nuance to deliver the economies of Web-based self-service to the growing expanse of mobile consumers."

By combining SNAPin's key intellectual property, mobile expertise and established device and operator relationships with Nuance's robust capabilities in customer care and handset solutions and longstanding mobile and enterprise relationships, the Company is positioned to deliver superior mobile care solutions and fulfill a significant global opportunity that has captured the interest of the world's largest mobile operators.

As an example, Vodafone is using SNAPin's software to provide its customers with the ability to automatically resolve common requests - diagnose and repair configuration problems, make account inquiries and solve problems - directly on their mobile phone. "Delivering a superior customer experience at all touch points for our subscriber is key to how we acquire and retain loyal customers," said Adam Spence, group self service development manager for Vodafone Group. "We are excited by the joining of Nuance and SNAPin as it reinforces our strategy to offer our customers the most innovative and powerful mobile self-service experience across all of our established and emerging markets."

Nuance expects the acquisition in fiscal 2009 to add between $29 million and $32 million in non-GAAP revenue; $19 million and $22 million in GAAP revenue after adjusting revenue lost to purchase accounting; non-GAAP earnings between $0.01 and $0.02; and a GAAP loss between $(0.05) and $(0.06) including amortization and stock-based compensation. See "Discussion of non-GAAP Financial Measures" below for further information. SNAPin solutions are delivered through the handset in a revenue model based on the value of transactions or calls served on the handset. Nuance has experienced rapid growth in its mobile business for the last several years and now anticipates combined mobile revenues in Fiscal Year 2009 between $260 and $275 million.

Under the terms of the agreement, consideration for the transaction is approximately $180 million in Nuance common stock. SNAPin's shareholders will be eligible for additional earn-out consideration based upon the achievement of certain financial and operational milestones. The transaction is expected to close in October 2008, subject to customary closing conditions and approvals, and is expected to be accretive in fiscal 2009.

SNAPin is a pioneer in the field of on-device self-service and customer care, with patented technology that provides mobile operators with solutions that help subscribers automatically resolve common problems directly on their handset. Additionally, the software delivers interactive offers and promotions in a relevant, context sensitive way based on how the handset is being used in order to help mobile operators boost usage levels, increase revenue and enhance loyalty. For a demonstration of the SNAPin solutions, please visit http://www.snapin.com/prod_click_thru.html [3].

"We are excited to join Nuance, a dynamic company that shares our commitment to deliver innovative technology and compelling user experiences for the world's mobile consumers," said Robert Lewis, SNAPin president and chief executive officer. "Joining Nuance will help accelerate the adoption of our mobile care technology by providing us deeper relationships with carriers and every major handset vendor, access to expansive complementary mobile technologies, broad intellectual property, deep mobile talent and experience from thousands of successful care implementations worldwide."

"The addition of SNAPin brings many advantages and synergies that are expected to benefit Nuance and complement its presence among carriers, enterprises and mobile OEMs," said Mikael Berner, vice president and general manager, Mobile Care, at Nuance. "SNAPin has successfully completed numerous commercial deployments and pilots with leading mobile operators and through partners including, EDS, IBM, KPN, Microsoft, Nokia, Orange UK, Symbian, T-Mobile USA and Vodafone Group. They have in place long term contracts representing more than 250 million subscribers worldwide."

The SNAPin acquisition brings key intellectual property that complements Nuance's IP portfolio. SNAPin has been awarded U.S. patent #7,353,016, titled "Call Intercept Methods, Such as for Customer Self-Support on a Mobile Device," that provides strong IP position in this robust market and validates a foundation of innovation at SNAPin. The patent covers among other things the call intercept feature in SNAPin's SelfService Care product, which intercepts a subscriber's call to customer care. After the call is intercepted, a personalized menu is displayed to help the subscriber solve their own problem, directly on the device.

In addition to an innovative product portfolio, SNAPin brings an experienced and dedicated team of engineers, business leaders and industry experts in the field of mobile technology. Combining the technical expertise of this talented team with the global resources and market strength of Nuance will create a combined organization that can accelerate the delivery of innovative customer care solutions for the mobile market.

About SNAPin Software

SNAPin Software, provider of on-device self-service software, allows operators to interact with their subscribers in real-time and in the context of their current mobile behavior. The company's handset-based SelfService product suite enables the delivery of interactive promotions, the resolution of most customer support problems and allows operators to deliver a branded service experience to their subscribers. For more information, visit www.snapin.com. [4]

About Nuance Communications, Inc.

Nuance Communications, Inc. (NASDAQ: NUAN [5] - News [6]) is a leading provider of speech and imaging solutions for businesses and consumers around the world. Its technologies, applications and services make the user experience more compelling by transforming the way people interact with information and how they create, share and use documents. Every day, millions of users and thousands of businesses experience Nuance's proven applications. For more information, please visit www.nuance.com [7].

Trademark reference: Nuance and the Nuance logo are registered trademarks or trademarks of Nuance Communications, Inc. or its affiliates in the United States and/or other countries. All other trademarks referenced herein are the property of their respective owners.

Safe Harbor and Forward-Looking Statements

Statements in this press release regarding Nuance's proposed acquisition of SNAPin Software, the product and service capabilities of the combined company and the market for those products and services, the expected timetable for completing the transaction, benefits and synergies of the transaction, future opportunities for the combined company, future financial and operating results, expectations that the acquisition will be accretive to Nuance's results, and any other statements about managements' future expectations, beliefs, goals, plans or prospects constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words "believes," "plans," "anticipates," "expects," estimates and similar expressions) should also be considered to be forward looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward looking statements, including: the ability of Nuance to successfully integrate the product and service offerings of the combined company, the ability to retain SNAPin Software's partners and customers, and the other factors described in Nuance's Annual Report on Form 10-K for the fiscal year ended September 30, 2007 and other filings with the U.S. Securities and Exchange Commission. Nuance disclaims any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this document.

Discussion of Non-GAAP Financial Measures

Nuance management utilizes a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of Nuance's business, for making operating decisions and for forecasting and planning for future periods. Nuance management considers the use of non-GAAP revenue helpful in understanding the performance of its business, as it excludes the purchase accounting impact on acquired deferred revenue. Nuance management also considers the use of non-GAAP earnings per share helpful in assessing the organic performance of the continuing operation of Nuance's business from a cash perspective. By organic performance Nuance means performance as if the company had not incurred certain costs and expenses associated with acquisitions. By continuing operations Nuance mean the ongoing results of its business excluding certain unplanned costs. While Nuance management uses these non-GAAP financial measures as a tool to enhance their understanding of certain aspects of Nuance's financial performance, Nuance management does not consider these measures to be a substitute for, or superior to, the information provided by GAAP revenue and earnings per share. When evaluating the prospects of a transaction, one factor Nuance management considers is the impact on, accretion or dilution of, our GAAP and non-GAAP revenue and earnings per share. Consistent with this approach, Nuance believes that disclosing non-GAAP revenue and accretion / dilution of non-GAAP earnings per share to the readers of its financial statements provides such readers with useful supplemental data that, while not a substitute for revenue determined in accordance with GAAP and accretion / dilution of GAAP earnings per share, allows for greater transparency in the review of our financial and operational performance. In assessing the impact of our potential acquisition of SNAPin Software, Nuance's management has either included or excluded items in three general categories, each of which are described below.