OTTAWA, CANADA, APRIL 6, 2000—Cognos Incorporated (Nasdaq:COGN; TSE:CSN) today announced financial results for the fourth quarter and full fiscal year 2000, which ended February 29, 2000. Revenue for the quarter set a new record at $118.1 million, a 36 percent increase over revenue of $86.9 million for the same period last year. Pretax income was $29.5 million, compared to $21.3 million in the fourth quarter of last year. Net income was $21.3 million or 47 cents per share, compared to $17.2 million or 39 cents per share for the same period of the prior year. (All figures are stated in U.S. dollars and in accordance with U.S. GAAP.)

Revenue for the full fiscal year 2000 was $385.6 million, an increase of 28 percent compared with revenue of $301.1 million for the previous year. Pretax income for the year was $81.7 million, compared to $71.6 million for the previous year. Net income for fiscal year 2000 was $58.8 million or $1.34 per share, compared with the previous year’s net income of $58.4 million or $1.31 per share, based on an income tax rate of 28 percent for fiscal year 2000, versus 18 percent for fiscal year 1999.

Net income for the fourth quarter and full fiscal year 1999 was affected by an after-tax charge of $3.3 million related to the writedown of in-process research and development associated with acquisitions. Excluding the effect of these charges, net income for the fourth quarter of fiscal 1999 was $20.5 million or 47 cents per share, and for the full fiscal year 1999, $61.8 million or $1.39 per share.

"By all measures, these are superb results," said Ron Zambonini, President and Chief Executive Officer of Cognos. "The Company has long held the leadership position in delivering business intelligence solutions. With 50 percent growth in business intelligence license revenue and overall pretax profit margins of 25 percent, the fourth quarter results clearly demonstrate that we continue to strengthen our leadership position."

Total revenue from business intelligence products for the quarter was $104.9 million and full year revenue from these products was $328.0 million. The Company saw a steep rise in the rate of growth for business intelligence revenue, both in the quarter itself and for the full fiscal year. Total business intelligence revenue grew by 49 percent in the fourth quarter of fiscal year 2000, compared with 33 percent for the same period of the prior fiscal year. On a full year basis, the growth rate for business intelligence revenue increased to 42 percent in fiscal 2000, versus 31 percent the previous year.

"The shift in the market to the e-business model - as companies combine the benefits of business intelligence and the Internet to further leverage their business information and develop deeper relationships with their customers, suppliers and other stakeholders - is playing right into our strength," continued Mr. Zambonini. "Advantages of the Cognos solution include the unparalleled breadth, depth, scalability, and capabilities of our integrated decision support product platform. Only Cognos has multidimensional analysis, managed reporting, ad hoc query, visualization, an integrated portal and a single point of administration available over the Web. These competitive strengths are exactly what are required in the enterprise market today.

"The Company is seeing a dramatic swing on the part of customers to our Web-based business intelligence solutions. This, in turn, is resulting in a significant increase in the number of large enterprise orders, with 415 transactions exceeding $50,000 during the quarter - a jump of over 50 percent from a year ago. More than 90 percent of these orders encompass our Web-based solutions for deployment in intranet and extranet environments. These included orders from leading corporations such as Cisco Systems, Qwest Communications, Merrill Lynch, American Express, Visa International, British Energy, and Thompson CSF of France, underscoring the attractiveness of Cognos products to e-business intelligence.

"We continue to invest in the future by growing resources in key areas, including R&D, sales, customer service, and marketing. Our focused investments in sales and service coverage, in particular, are already reaping benefits with an accelerating growth rate for significant new customers to our sizable installed base."

Operationally and financially, the fourth quarter capped a year of unparalleled performance for the Company. Fourth quarter results demonstrated very strong, balanced growth across all of the Company’s major North American, European and Asia/Pacific markets. North America contributed 60 percent of business intelligence revenue in the quarter, Europe accounted for 32 percent, and the rest of the world represented 8 percent.

"The performance of Cognos on all fronts throughout the entire fiscal year 2000 was impressive," concluded Mr. Zambonini. "There is no doubt that, in today’s hyper-competitive e-world, enterprises around the globe increasingly view e-business intelligence as a strategic imperative. We are enthusiastically looking forward to building on our success by leveraging the unique capabilities that Cognos brings to bear on the market opportunity in front of us."

Forward-looking statements in this press release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This news release contains forward-looking statements concerning the future prospects of the Company’s current and future products and the Company’s positioning in the business intelligence and application development tools marketplace. Investors are cautioned that these forward-looking statements, like all forward-looking statements, are subject to risks and uncertainties that may cause future results to differ materially from those expected. There can be no guarantee that future results will turn out as expected. Such risks include, but are not limited to: the Company’s ability to maintain revenue growth at current levels or anticipate a decline in revenue from any of its products; changes in product mix and the ability to anticipate shipment patterns based on historical quarterly performance levels; the Company’s ability to identify and develop new technologies and to commercialize those technologies into new products; the Company’s ability to accurately select appropriate business models and strategies, including investment of the Company’s resources in targeted programs and organizations within the Company, to position the Company for further growth; the Company’s ability to identify, hire, train, motivate and retain highly qualified personnel in a growth environment, and to achieve productivity levels in an aggressive and efficient manner; the Company’s ability to identify and complete the acquisition of complementary technologies, successful integration of the acquired operations and technologies, and the ability to appropriately value the acquired in-process research and development; the introduction of new products in a timely manner and the Company’s ability to generate demand for, and gain market acceptance of, those products in an intensely competitive marketplace; the Company’s ability to identify, develop and deliver product enhancements which anticipate market demand and address customer needs; the Company’s ability to establish and maintain a competitive advantage; the Company’s reliance on third party distribution channels as part of its sales and marketing strategy; the Company’s ability to enforce its intellectual property rights; and other risks detailed under the heading "Certain Factors That May Affect Future Results" in the Company’s most recent Annual Report on Form 10-K filed with the United States Securities and Exchange Commission.

Cognos is the leading vendor of enterprise business intelligence solutions for e-business. Business intelligence software makes corporate data easily accessible to everyone in an organization, so they can better coordinate decision-making across the entire enterprise, and improve the performance of the business. Cognos products are available directly from Cognos and through an extensive network of channel partners. The Company also develops, markets and supports software tools for application development.

Founded in 1969, Cognos is a publicly traded company with offices around the world and headquartered in Ottawa, Canada. For more information, visit the Cognos Web site at http://www.Cognos.com.

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Fourth Quarter and Full Year Results

All figures are reported in thousands of United States dollars (except per share amounts)
and in accordance with U.S. GAAP.

^(A)Includes the writedown of acquired in-process technology from Relational Matters and LEX2000 both of which occurred in the fourth quarter ended February 28, 1999.

^(B)Excludes the writedown of acquired in-process technology from Relational Matters and LEX2000 both of which occurred in the fourth quarter ended February 28, 1999.

^(A)Includes the writedown of acquired in-process technology from Relational Matters and LEX2000 both of which occurred in the fourth quarter ended February 28, 1999.

^(B)Excludes the writedown of acquired in-process technology from Relational Matters and LEX2000 both of which occurred in the fourth quarter ended February 28, 1999.