Cognos reports record first quarter results

June 23, 2003 - Cognos Incorporated, the world leader in business intelligence (BI) and corporate performance management solutions, has announced record results for the company’s first quarter of fiscal year 2004, ended May 31, 2003. Revenue for the quarter was $150.6 million, an increase of 25% from the first quarter of last year, when revenue was $120.1 million.

Net income for the first quarter of fiscal 2004 was $12.4 million, resulting in diluted earnings per share of $0.14. This is an increase of 25% compared with net income of $9.9 million and diluted earnings per share of $0.11 for the first quarter of last year.

BI revenue achieved strong growth in the quarter, reaching $143.7 million, an increase of 29% from the first quarter of last year, when BI revenue was $111.6 million. BI licence revenue increased 18% to $56.7 million, compared to $48.0 million in the same period last year.

Cognos’ balance sheet remains strong. The company increased cash, cash equivalents, and short-term investments by $21.6 million to $263.9 million at the end of the first quarter, which included operating cash flow of $10.5 million in the quarter.

Highlights of the Quarter

- Nine contracts greater than $1 million, an all-time high for the Company

- 58 contracts greater than $200,000 and 445 contracts greater than $50,000, an increase of 38% and 32%, respectively, over the first quarter of last year

- Double-digit percentage growth for BI revenue in all three major geographies - North America, Europe, and Asia-Pacific

- Positive customer response to the Cognos Corporate Performance Management (CPM) solution, including recent new product offerings Series 7 Version 2, Cognos Metrics Manager, and Cognos Enterprise Planning Series

- Major customer wins at BASF, Bear Stearns & Company, British Gas, DHL Systems Ltd., Deltek Systems, Electrolux, Fujitsu, J.P. Morgan Chase, Kennametal, SunTrust Bank, Verizon Wireless, Visa International, and Wells Fargo

- Strong momentum with major strategic partners throughout the world, including a major new global marketing and reseller agreement with IBM, and a marked advancement in strategic relationships with Deloitte & Touche, Fujitsu, and Accenture

- Unanimous industry analyst recognition of Cognos’ leadership in technology, vision, strategy, and market share, including number one positions with Gartner, Meta, Forrester, and IDC.

"We are pleased with the results for the first quarter," said Cognos Chief Executive Officer Ron Zambonini. "The strong financial and operational performance, despite the negative impact of currency changes in the quarter and a difficult economic and IT purchasing environment, demonstrates solid execution on all fronts.

"Our business strategy is focused, clear, and consistent. The foundation for the strategy is strong, beginning with the unmatched quality of both the Cognos team and our customer base. The Cognos R&D and sales force teams are second-to-none in the BI industry. As a result, we further extended our lead in the BI market and established the lead in corporate performance management. Our sales pipeline is up, our sales force is confident, the integration of Adaytum is essentially complete, and with our strongest new product cycle ever, we are confident we can continue to build on our market-leading positions in BI and CPM."

Business Outlook

Management offers the following outlook for the second quarter of fiscal 2004, ending August 31, 2003:

- Revenue is expected to be in the range of $155 million to $159 million

- Diluted earnings per share are expected to be in the range of $0.15 to $0.18.

Certain statements made in this press release that are not based on historical information are forward-looking statements which are made pursuant to the safe harbour provisions of the Private Securities Litigation Reform Act of 1995.

For further information

About Cognos

About Cognos, an IBM Company
Cognos, an IBM company, is the world leader in business intelligence and performance management solutions.

It provides world-class enterprise planning and BI software and services to help companies plan, understand and manage financial and operational performance.
Cognos was acquired by IBM in January 2008.

For more information, visit http://www.ibm.com/software/data/ and http://www.cognos.com/uk/

For further information about Cognos, please contact:
Katy Lyons or Farimah Saadat at LEWIS, the PR agency

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