Company Anticipates Growth in Revenue and Earnings, Before Amortization, of Approximately 25 Percent and 35 Percent Respectively in 2003

PEABODY, Mass., January 27, 2003 - ScanSoft, Inc. (Nasdaq: SSFT), a leading supplier of digital imaging, speech and language solutions, today announced that it expects net revenue for the year ended December 31, 2002, to be approximately $106.5 million to $107.0 million. The company expects earnings before amortization of acquisition-related intangibles and restructuring charges to be $0.25 per diluted share. After including amortization of acquisition-related intangibles and restructuring charges, the company expects earnings to be approximately $0.08 per diluted share. By comparison, for the full year 2001, the company reported net revenue of $62.7 million with earnings of $0.19 per diluted share, before amortization of acquisition-related intangibles, and a net loss of $0.34 per diluted share, after including amortization of acquisition-related intangibles.

These preliminary results are based on ScanSoft's initial review of operating results for the fourth quarter and full year 2002, and are being announced consistent with the company's disclosure in its amended S-1 registration statement. Previously, ScanSoft had provided guidance for 2002 of $107 million to $108 million in revenue and earnings before amortization of acquisition-related intangibles and restructuring charges of $0.26 per diluted share. ScanSoft expects to report its final results for the fiscal year 2002 in mid-February 2003.

"We are pleased with our preliminary results for the full-year and fourth quarter 2002, generating record revenue and earnings in each respective period," said Paul Ricci, chairman and CEO of ScanSoft. "Our fourth quarter results were helped by an especially strong performance in international markets and growth from our largest digital imaging partners, offset in part by sluggish purchasing in corporate and VAR markets in North America. As we enter 2003, we remain enthusiastic about our growth opportunities. We expect to enjoy a record number of product releases this year, as well as the benefit from solutions acquired from Philips. We also expect to see the benefit of continuing investments in channel expansion."

ScanSoft expects revenue for the full-year 2003, including the effect of the acquisition of the Philips Speech Processing business units, to be approximately $135 million to $140 million, an increase of more than 25 percent over full-year 2002. ScanSoft anticipates 2003 earnings per diluted share, before amortization of acquisition-related intangibles, to be $0.33 to $0.35, representing approximately 35 percent growth. After including amortization of acquisition-related intangibles, the company expects 2003 earnings per diluted share to be $0.20 to $0.22. ScanSoft expects revenue and earnings growth to be weighted toward the second half of 2003 as it completes the integration of the Philips Speech Processing businesses. The acquisition, announced in October 2002, is expected to close on or about January 31, 2003.

About ScanSoft, Inc.

ScanSoft, Inc. (Nasdaq: SSFT) is a leading supplier of imaging, speech and language solutions that are used to automate a wide range of manual processes - saving time, increasing worker productivity and improving customer service. For more information regarding ScanSoft products and technologies, please visit www.scansoft.com.

Trademark reference: ScanSoft and the ScanSoft logo are registered trademarks or trademarks of ScanSoft, Inc. in the United States and other countries. All other company or product names mentioned may be the trademarks of their respective owners.

Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding the following: future revenues, earnings and earnings per share; existing products and services as well as the introduction of new products and services; the future performance of the speech and language business and the digital imaging business; the ability of ScanSoft to close the acquisition of the Philips Speech Processing Voice Control and Telephony business units and to realize the anticipated benefits from the acquisition and ScanSoft's relationship with Philips; and future prospects regarding product lines, sales channels and international operations. Such statements are based on current expectations that are subject to a number of risks and uncertainties, and actual results may differ materially. These risks and uncertainties include, without limitation, the following: economic conditions in the United States and abroad; ScanSoft's ability to control and successfully manage its expenses, inventory and cash position; fluctuations in demand for ScanSoft's existing and future products; the effects of competition, including pricing pressure; possible defects in products and technologies; ScanSoft's dependence on OEM customers; and difficulties with integrating product plans and operations of acquired businesses. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in ScanSoft's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2001, its most recent quarterly report on Form 10-Q for the quarter ended September 30, 2002 and its S-1 Registration Statement, amended as of January 27, 2003. ScanSoft undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this document.

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