[Starlight]

Ariba 4th Quarter Loss Narrows, Revenue Up 4.3%

Quarterly Financial and Operational Highlights


Record subscription software bookings, backlog up 53% year-over-year
Subscription software revenue of $19 million up 27% year-over-year
Q4 operating cash flow of $7 million up 71% year-over-year
Signed definitive agreement to acquire Procuri Inc.
"Ariba delivered another solid quarter to end a fiscal year in which we successfully transitioned to an on-demand business model,” said Bob Calderoni, Chairman and CEO, Ariba. "As evidenced by our results, we continue to execute well against our strategy to be the leading on-demand provider of spend management solutions. We have a backlog of subscription software revenues of $130 million, which is up 53% year-over-year, and on the revenue side, our subscription software revenues grew 27% year-over-year to $19 million,” Calderoni continued. “With our recent announcement of a definitive agreement to acquire Procuri Inc., we look forward to starting a new fiscal year as one of the fastest growing on-demand solution providers, and extending our leadership by accelerating our penetration in the fastest growing segment of this market – the mid-market.”

Results for the Fourth Quarter of Fiscal Year 2007

Revenue: Total revenues for the fourth quarter of fiscal year 2007 were $75.5 million, as compared to $72.4 million for the fourth quarter of fiscal year 2006. Subscription and maintenance revenues for the quarter were $37.5 million, as compared to $33.4 million for the fourth quarter of fiscal year 2006. Within subscription and maintenance revenues, subscription software revenue was $18.8 million for the quarter, as compared to $14.7 million for the fourth quarter of fiscal year 2006. Services and other revenues for the quarter were $38.1 million, as compared to $39.1 million for the fourth quarter of fiscal year 2006.

Earnings Per Share: Net loss for the fourth quarter of fiscal year 2007 was $3.8 million, or $0.05 per share, as compared to a net loss for the fourth quarter of fiscal year 2006 of $10.1 million, or $0.15 per share. The net loss for the fourth quarter of fiscal year 2007 included charges of $3.4 million for amortization of intangible assets and $6.2 million for stock-based compensation and a $0.4 million benefit in the restructuring cost line. Excluding these items, non-GAAP net income was $5.4 million, or $0.07 per diluted share.

Cash: Cash flow from operations for the fourth quarter of fiscal year 2007 was approximately $7 million, as compared to approximately $4 million for the fourth quarter of fiscal year 2006. At September 30, 2007, total cash, cash equivalents, marketable securities, and investments were approximately $183 million.

Results for Fiscal Year 2007

Revenue: Total revenues for fiscal year 2007 were $301.7 million, as compared to $296.0 million for the fiscal year 2006. Subscription and maintenance revenues were $142.3 million, as compared to $130.1 million for fiscal year 2006. Services and other revenues were $159.4 million, as compared to $166.0 million for the fiscal year 2006.

Earnings Per Share: Net loss for fiscal year 2007 was $15.0 million, or $0.21 per share, as compared to a net loss for fiscal year 2006 of $47.8 million, or $0.73 per share. The net loss for fiscal year 2007 included charges of $14.6 million for amortization of intangible assets and $32.4 million for stock-based compensation and a $4.2 million benefit in the restructuring cost line. Excluding these items, non-GAAP net income was $27.9 million, or $0.37 per diluted share.

Cash: Cash flow from operations for the fiscal year 2007 was approximately $17 million, as compared to approximately $23 million for the fiscal year 2006.

Continued Global Growth

More than 600 companies worldwide leverage Ariba’s technology, expertise and services to control costs, minimize risk, improve profits and drive competitive advantage. During the fourth quarter, Ariba continued to accelerate its global growth. 200 companies of all sizes across geographies purchased Ariba solutions to drive their spend management strategies, including: AstraZeneca PLC, JLG Industries, Inc., Pfizer, Inc., Schering-Plough Corporation, Commonwealth Bank of Australia, Nestle SA, RTE, Tyco Electronics Corporation, Telefonica S.A., Nippon Life Insurance Company, AXA, Jindal Stainless, and Air Products and Chemicals, Inc.