Software AG Reports Strongly Rising Profits in the First Quarter

Business Wire, April 22, 2008

* Group earnings increased by 37% (at constant currency rates)

* Licensing revenues grew 28% (at constant currency rates)

* U.S.A. grows stronger than Europe

* EBIT growth of 44%

* Earnings per share rise to EU0.79

* Forecast for the year confirmed

RESTON, Va. -- Software AG's (Frankfurt TecDAX:SOW) first-quarter business development showed no discernable influence of the weakening economy on IT demand. In particular, the U.S., the company's most important market, remained robust. The data management business of the core ETS business division achieved its ambitious goals with growth of 9% globally, at constant currency rates. In the new webMethods business division, the full extent of revenue potential in Europe and Asia has yet to be reached, while in the United States, the revenue for integration software showed substantial growth. Due to rising process efficiencies created by the synergy effects of the webMethods acquisition, operating results (EBIT) rose by 44% and EBIT margin rose to 22.6% (20.0% in Q1, 2007). Earnings per share (EPS) of EU0.79 are a new record for the first quarter and give Software AG a very good start towards achieving its full year target.

Group revenues (IFRS) amounted to EU159.4 million (2007: EU124.7 million). Foreign currency based revenue reached a new record of 67%. Revenues increased by 37%, at constant currency rates, licensing revenues (currency adjusted) were up 28% to EU55.4 million (2007: EU46.9 million), and EBIT improved by 44% to EU36.0 million (2007: EU25.0 million).

Karl-Heinz Streibich, CEO of Software AG, explains: "Our core business of data management is running successfully worldwide. In the field of integration software, we are doing very well in the U.S. market, contrary to the general trend. In addition, we have successfully concluded deals with large customers in other regions and we have further growth potential."

CFO Arnd Zinnhardt adds: "The strong EBIT growth supports our ambitious, projected target operating margins. We are compensating for the current strength of the euro by shifting costs to countries with weaker currencies and further raising the efficiency of our organization."

Total licensing revenue for the webMethods business division was EU22.2 million (EU13.8 million in Q1, 2007), up 80% at constant currency rates. The webMethods' earnings were significantly improved, contributing EU21.7 million, before administration and R&D costs, to the company's operating results against zero contribution in 2007. The success in the important U.S. IT market underscores the quality of the products, the efficiency of the U.S. sales organization and the successful integration of the acquired U.S. company. The development of the business division in other regions should follow the dynamic U.S. performance in the course of 2008. Contributing factors include a series of larger projects currently in development and the resulting raised awareness amongst customers and partners for the capabilities of the leading edge webMethods product suite.

The ETS business division reported revenues up 9% (at constant currency rates) to EU90.7 million in the first quarter, (EU88.3 million in Q1, 2007), which represents 57% of total revenue. License operating revenues were EU33.5 million (EU33.1), up 8% net of currency effects. Of particular significance was the growth of maintenance revenue, up 7% at constant currency rates.

On the basis of the first quarter business development, the Executive Board confirmed the forecast for 2008: growth of Group revenue of between 24-27% (at constant currency) and an EBIT margin expected to reach 24%.

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About Software AG

Software AG's 4,000 global customers achieve measurable business results by modernizing and automating their IT systems and rapidly building new systems to meet growing business demands. The company's industry-leading product portfolio includes best-in-class solutions for managing data, enabling service oriented architecture, and improving business processes. By combining proven technology with industry expertise and best practices, our customers improve and differentiate their businesses - faster.

Software AG has more than 38 years of global IT experience and over 3,600 employees serving customers in 70 countries. The company is headquartered in Germany and listed on the Frankfurt Stock Exchange (TecDAX, ISIN DE 0003304002 / SOW). Software AG posted total revenues of EU621 million in 2007 (IFRS, unaudited).