SOW Software AG

Software AG continued to show strong growth in Q2 2010. The high growth was driven by the webMethods business division. In the U.S., webMethods license revenue doubled year-over-year. This confirms the trend of recent quarters that the new webMethods business division is now a driver of earnings growth as well as the traditional Enterprise Transaction Systems business.

The business performance in the second quarter of 2010 totally confirmed the effectiveness of Software AG's growth strategy. The U.S. saw the webMethods business division continue to excel with total revenue growth of 27 percent compared to the same period in 2009. The webMethods business division generated 47 percent of total revenue in the second quarter while the Enterprise Transaction Systems business division (Adabas, Natural) generated 41 percent. The Enterprise Process Innovation division, which represents the IDS Scheer business acquired by Software AG in August 2009, generated 12 percent of the total revenue.

“Software AG returned a stellar second quarter,” said Dean Mericka, President of Sales for the Americas, Software AG. “The webMethods business division in the U.S. saw tremendous growth, complementing our profitable ETS business. We are now seeing full acceptance and transition to innovative software that Integrates business applications and improves business processes through our webMethods suite.”

“We see nothing but great possibilities for the remainder of the year,” said Mark Edwards, Chief Operating Officer and member of the Executive Board, Software AG. “As the U.S. rebounds from a recession, we are witnessing a shift in customer behavior with an increase in the number of large projects and larger deal sizes in an improving economy.

“The integration of IDS Scheer will also strengthen our growth trend,” Edwards added. “The ARIS and webMethods product lines uniquely complement each other and we look forward, over the next two quarters, to a common product portfolio.”

Key figures according to IFRS (unaudited, stated)

in € million     H1 2010     H1 2009     Change     Q2 2010     Q2 2009     Change                   ∆ in %                 ∆ in %                                       Group revenue     517.6     341.7     51     267.3     176.4     52

- Product revenue (licensing and maintenance)

    308.6     256.2     20     161.9     133.7     21 - Service revenue     206.7     84.0     146     104.4     41.7     150 ETS division revenue     185.4     191.5     -3     96.3     100.9     -4 webMethods division revenue     170.7     150.1     14     89.4     75.5     18 EBIT     105.5     82.3     28     58.9     44.2     33 Net income     65.4     54.6     20     37.4     28.9     29 Earnings per share (in €)     2.29     1.92     20     1.32     1.02     29 Free cash flow     96.1     72.8     32     36.3     29.8     22                        

About Software AG

With more than 1,000 U.S.-enterprise customers and 800 employees, Software AG's U.S. operation contributes one third of the company's total revenue and is Software AG's largest market presence and R&D location. Software AG has operated nationwide in the U.S. since 1973 through a fully-owned subsidiary, Software AG USA Inc., which is headquartered in Reston, Virginia – also an R&D hub for the company’s core data management and integration technologies. R&D labs for the development of Software AG’s webMethods product suite – offering SOA integration and BPM solutions – include facilities in San José/Silicon Valley, Seattle and Denver. For more information, visit www.softwareag.com/us.

Software AG is the global leader in Business Process Excellence. Our 40 years of innovation include the invention of the first high-performance transactional database, Adabas; the first business process analysis platform, ARIS; and the first B2B server and SOA-based integration platform, webMethods. We are unique in offering the world’s only end-to-end – and easiest to use – business process management (BPM) solutions, with the lowest Total-Cost-of-Ownership. Our industry-leading brands, ARIS, webMethods, Adabas, Natural and IDS Scheer Consulting, represent a unique portfolio for: process strategy, design, integration and control; SOA-based integration and data management; process-driven SAP implementation; and strategic process consulting and services.

Software AG had revenues of 847 million euro in 2009 and has more than 6,000 employees serving 10,000 enterprise and public institution customers across 70 countries. Our comprehensive software and services solutions allow companies to continuously achieve their business results faster. The company is headquartered in Germany and listed on the Frankfurt Stock Exchange (TecDAX, ISIN DE 0003304002 / SOW).

About IDS Scheer

IDS Scheer is part of the Software AG Group and a leading provider of Business Process Management (BPM) software, solutions and services for corporations and public organizations worldwide. With the ARIS Platform for Process Excellence, the company offers an integrated, comprehensive solution portfolio for the strategy, design, implementation and controlling of business processes, allowing companies to continuously improve their overall business performance. Utilizing the ARIS Value Engineering (AVE) approach, IDS Scheer consultants bridge the gap between corporate strategy, business processes, IT solutions and process controlling.

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