Peoplesoft Announces Record Quarterly Revenue; License Revenue Up 51 Percent, Net Income Up 188 Percent

Business Wire, July 24, 2001

Business Editors

PLEASANTON, Calif.--(BUSINESS WIRE)--July 24, 2001

PeopleSoft Inc. (Nasdaq:PSFT) today announced record financial results for the quarter ended June 30, 2001. Total revenue increased 27 percent over the second quarter of last year to $533 million. It was the highest revenue in company history and the fifth consecutive record quarter.

Continued market demand for PeopleSoft's collaborative enterprise applications drove second quarter license revenue up 51 percent over the second quarter of last year to $166 million. Service revenues rose 20 percent over the same quarter of last year to $337 million as customer adoption of PeopleSoft 8 drove increased demand for the Company's service offerings.

Net income from recurring operations increased sharply, rising 188 percent to $46 million, or $0.14 per share, up from $16 million, or $0.06 per share, in the same quarter of 2000.

Including non-recurring items, second quarter net income rose to $47 million, or $0.15 per share. The second quarter of 2001 includes two non-recurring items; a favorable after-tax adjustment to existing restructuring reserves of $2.6 million and an after-tax charge of $1.1 million related to the acquisition of SkillsVillage.

The company's cash and investments were $1.4 billion at June 30, 2001, an increase of $247 million during the quarter. Day's sales outstanding (DSO) improved to 68 days from 77 days over the same period.

Management Commentary

"PeopleSoft's strong performance in this challenging economic environment is a direct result of continued market acceptance of PeopleSoft 8 enterprise applications and our diligent focus on precision management and execution," said President and CEO Craig Conway.

"In this difficult market, customers are particularly concerned with increasing productivity and reducing costs," Conway said. "Moving enterprise applications to the internet enables companies to immediately realize these business benefits. PeopleSoft 8, based on a pure internet architecture, is the technology that is driving this dramatic shift.

"In June, PeopleSoft delivered PeopleSoft 8 CRM, the first and only CRM solution to run entirely on the internet," Conway said. "The on-time delivery of this next generation CRM solution further demonstrates PeopleSoft's continued leadership in providing integrated, best-of-breed applications.

"In addition to delivering industry-leading products and services, PeopleSoft continues to be an extremely well-managed company," Conway concluded. "Our cash position and DSO are the strongest in PeopleSoft's history. At a time when our competitors are reporting slower growth, PeopleSoft continues to demonstrate market leadership and report strong financial results."

Customer Wins

PeopleSoft won significant deals against its competitors in the second quarter in all product lines and across all geographies. Enterprises buying PeopleSoft enterprise applications included: 24 Hour Fitness, AT&T Wireless, Credit Suisse Group, Dana Farber Cancer Institute, U.S. Department of Defense, France Telecom, Hewlett Packard Co., Morgan Stanley Dean Witter & Co., Nextel Communications Inc., PricewaterhouseCoopers LLP, Ross Stores Inc., Siemens Business Services Inc., TD Waterhouse Group Inc., Tiffany & Co. and Waste Management Inc.

About PeopleSoft

PeopleSoft Inc. (Nasdaq:PSFT) is a world leader in providing eBusiness applications that enable people -- customers, suppliers, and employees -- to power the internet. PeopleSoft's pure internet Customer Relationship Management, Supply Chain Management, and Enterprise management solutions provide the industry's most open and flexible e-commerce platform. PeopleSoft employs more than 8,500 people worldwide, including 2,500 eBusiness consultants. More than 4,700 organizations in 107 countries run on PeopleSoft eBusiness applications. For more information, visit us at www.peoplesoft.com.

PeopleSoft and the PeopleSoft logo are registered trademarks. All other company and product names may be trademarks of their respective owners.

Statements made in this press release that state the Company's or management's intentions, beliefs, expectations, or predictions for the future are forward-looking statements. Readers are cautioned that these statements are only predictions and may differ materially from actual future events or results. The specific forward-looking statements relate to such matters as the Company's plans for the development and marketing of certain products and services and the competitive position and market acceptance of existing products and services, as well as those under development. Such forward-looking statements are subject to a number of risks, assumptions and uncertainties that could cause the Company's actual results to differ materially from those projected in such forward-looking statements. These risks, assumptions and uncertainties include: economic conditions in the U.S. and abroad; the ability to complete and deliver products and services within currently estimated time frames and budgets; the ability to achieve revenues from products and services that are under development; competitive and pricing pressures; and other risks referenced from time to time in the Company's filings with the Securities and Exchange Commission. Please refer to the Company's annual report to shareholders (Form 10-K) and subsequent filings on Form 10-Q for more information on the risk factors that could cause actual results to differ.