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Autonomy Corporation plc Announces Results for the Second Quarter and Six Months Ended June 30, 2009

Posted on: Thursday, 16 July 2009, 01:00 CDT

CAMBRIDGE, England, July 16 /PRNewswire-FirstCall/ --

- Autonomy's second quarter conference call will be available live at http://www.autonomy.com on July 16, 2009, at 9:30 a.m. BST/4:30 a.m. EST/1:30 a.m. PST.

Autonomy Corporation plc (LSE: AU. or AU.L), a global leader in infrastructure software, today reported financial results for the second quarter and six months ended June 30, 2009.

Financial Highlights Three Months Ended Six Months Ended (unaudited) (unaudited) June 30, June 30, June 30, June 30, 2009 2008 2009 2008 Results in US$ ($'000s except per share) $'000 $'000 $'000 $'000 Revenues 195,192 125,649 324,971 230,737 Gross profit (adjusted)* 171,564 114,287 288,554 207,751 Gross profit margin (adjusted)* 88% 91% 89% 90% Profit from operations (adjusted)* 92,172 50,382 150,228 81,451 Profit before tax (adjusted)* 89,583 50,778 147,758 81,914 Net profit (adjusted)* 63,571 35,372 103,749 57,056 Gross profit (IFRS) 156,459 109,170 268,095 197,354 Gross profit margin (IFRS) 80% 87% 82% 86% Profit from operations (IFRS) 74,366 43,867 124,665 68,103 Profit before tax (IFRS) 71,692 43,742 121,669 67,355 Net profit (IFRS) 50,875 30,471 85,391 46,916 EPS - basic (adjusted)* $ 0.27 $0.17 $ 0.44 $0.27 - diluted (adjusted)* $ 0.26 $0.16 $ 0.43 $0.26 - basic (IFRS) $ 0.21 $0.14 $ 0.36 $0.22 - diluted (IFRS) $ 0.21 $0.14 $ 0.36 $0.22

* Adjusted results exclude the share of loss of associates, post-acquisition restructuring costs and non-cash charges, namely the amortization of purchased intangibles, share-based compensation and non-cash translational foreign exchange gains and losses and associated tax effects. See reconciliations on page 6.

Quarterly Report and Interim Management Statement Second Quarter 2009 Highlights - Strong adoption of next generation combined Autonomy and Interwoven technologies - Record revenues, up 55% from Q2 2008 including strong organic growth and full quarter post-Interwoven integration - Fully diluted EPS (adj.) of $0.26, up 61% from Q2'08 - Integration of Interwoven essentially complete - Interwoven support and maintenance renewal rates resume strong levels after acquisition disruption, leading to predicted deferred revenue levels - Very strong cash collection and conversion; Q2 cash conversion of 104%, LTM conversion of 92% - Strong organic IDOL growth of 18% - Operational gearing sees operating margins (adj.) at Q2 record of 47%, up from 40% in Q2 2008 - Cash balances hit $190.0 million in quarter, enabling optional early repayment of Barclays' loan of $37.5 million; cash balance at $152.5 million at quarter-end following early repayment - Record profit before tax (IFRS), up 64% from Q2 2008 - 25th consecutive quarter of year-on-year growth - FX changes gave approximately 2% headwind on revenue - Average selling price for meaning-based technologies at $400,000 (Q2 2008: $397,000) - Autonomy now offers powerful analytics capability in social media environments such as Twitter, YouTube and Facebook - Blue chip second quarter wins include Barclays Bank, Burgess Salmon, Commerzbank, Aiken Gump, Standard Chartered Bank, Tesco, Shell, Novell, Kaiser Foundation, AT&T, Morgan Stanley, Johnson & Johnson, EDF, Wolters Kluwer, General Electric, Banco do Brasil, Bayer, Deloitte and eBay, as well as significant deals with multiple government, defence and intelligence agencies around the globe including in the U.S., U.K., Singapore, Croatia, Malaysia and Japan. - 12 OEM deals signed including new deals and extensions with Cisco, CCI, VMS and Siemens - Positive cash flow generated from operations of $65.4 million (Q2 2008: $36.1 million) - Gross margins (adjusted) at 88% (Q2 2008: 91%), at expected levels following Interwoven acquisition - DSOs at 89 days for Q2 2009 (Q1 2009: 88 days) - Deferred revenue at record levels of $170.2 million, sharply up year-on-year and up from Q1 2009 Six Month 2009 Highlights - Record six months revenues, up 41% from 2008 driven by strong organic growth and contribution from acquisitions - Announced and completed Interwoven acquisition - Record profit from operations (adjusted) up 84% from 2008 - Record profit before tax (IFRS), up 81% from 2008 - Gross margins (adjusted) at 89% - Positive cash flow generated from operations of $116.5 million (2008: $61.2 million), up 90%

Commenting on the results, Dr. Mike Lynch, Group CEO of Autonomy said today: "We are pleased to announce another strong set of quarterly results, with strong revenue, profit growth and cash collection, and performance by Interwoven in line with expectations, and with our backlog increasing slightly. During the quarter top line revenues, operating profits, bottom line profit before tax, EPS and deferred revenue all increased significantly, resulting in continued strong cash generation enabling the early repayment of outstanding debt. Autonomy's performance was delivered despite the continued uncertain economic environment and the considerable integration work around the Interwoven acquisition, which is now essentially complete."

Dr. Lynch concluded, "Despite the continued uncertainty in the markets, we remain cautiously optimistic. We are seeing, for example with our recent significant legal hold license deal, the second of the three waves of regulatory technology investment. With the restructuring of the Interwoven business, we expect both Interwoven and Autonomy to show our traditional seasonality in Q3. This quarter's early wins lead us to believe that the new Meaning Based Marketing technologies will be a strong performer in the period immediately following any macro upturn."

Second Quarter and Six Month Financial Highlights

Revenues for the second quarter of 2009 totalled $195.2 million, up 55% from $125.6 million for the second quarter of 2008 due to strong organic growth and the contribution from acquisitions. In the second quarter of 2009, Americas revenues of $133.9 million represented 69% of total revenues, and Rest of World revenues of $61.3 million represented 31% of total revenues. Revenues for the six months ended June 30, 2009, totalled $325.0 million, up 41% from $230.7 million for the six months ended June 30, 2008.

Gross profits (adjusted) for the second quarter of 2009 were $171.6 million, up 50% from $114.3 million in the second quarter of 2008. Gross margins (adjusted) were 88% in the second quarter of 2009, versus 91% in the second quarter of 2008. Gross profits (IFRS) for the second quarter of 2009 were $156.5 million, up 43% from $109.2 million in the second quarter of 2008. Gross margins (IFRS) for the second quarter of 2009 were 80%, compared to 87% in the second quarter of 2008. Gross profits (adjusted) for the six months ended June 30, 2009 were $288.6 million, up 39% from $207.8 million for the six months ended June 30, 2008. Gross margins (adjusted) were 89% in the six months ended June 30, 2009, versus 90% for the six months ended June 30, 2008. Gross profits (IFRS) for the six months ended June 30, 2009 were $268.1 million, up 36% from $197.4 million for the six months ended June 30, 2008. Gross margins (IFRS) for the six months ended June 30, 2009 were 82%, compared to 86% for the six months ended June 30, 2008.

Net profit (adjusted) for the second quarter of 2009 was $63.6 million, or $0.26 per diluted share, compared to net profit (adjusted) of $35.4 million, or $0.16 per diluted share, for the second quarter of 2008. Net profit (IFRS) for the second quarter of 2009 was $50.9 million, or $0.21 per diluted share, compared to net profit (IFRS) of $30.5 million, or $0.14 per diluted share, for the second quarter of 2008.

Net profit (adjusted) for the six months ended June 30, 2009 was $103.7 million, or $0.43 per diluted share, compared to net profit (adjusted) of $57.1 million, or $0.26 per diluted share, for the six months ended June 30, 2008. Net profit (IFRS) for the six months ended June 30, 2009 was $85.4 million, or $0.36 per diluted share, compared to net profit (IFRS) of $46.9 million, or $0.22 per diluted share, for the six months ended June 30, 2008.

Under IAS 38 the company is required to capitalize certain aspects of its research and development activities. The amount of R&D that was capitalized in second quarter of 2009 was $4.1 million. Q2 2009 R&D capitalization is offset by amortization charges of $1.9 million arising from historical R&D capitalization. This results in a net credit (before tax) in the quarter of $2.2 million, and a net margin impact of 1%. R&D capitalization for the six months ended June 30, 2009 was $7.4 million, offset by amortization charges of $3.5 million during the period arising from historical R&D capitalization, resulting in a net credit (before tax) in the period of $3.9 million, and a net margin impact of 1%.

Cash balances were $152.5 million at June 30, 2009, a decrease of $46.7 million from $199.2 million at December 31, 2008. Movements in cash flow during the half year reflect a combination of good cash generation from operating activities, equity and debt financing for the Interwoven acquisition, and proceeds from exercise of share options, offset by the completion of the Interwoven acquisition, scheduled and early repayment of debt, capital expenditure and instalment tax payments.

Trade receivables at June 30, 2009, were $202.0 million, compared to $141.3 million at December 31, 2008. Accounts receivable days sales outstanding were 89 days for the second quarter of 2009, compared to 84 days at December 31, 2008. Deferred revenues were $170.2 million at June 30, 2009, compared with $99.2 million at December 31, 2008.

Intangible assets have increased to $407.1 million from $270.2 million at March 31, 2009. The increase from Q1 2009 to Q2 2009 is a result of a change in the provisional purchase price allocation for the Interwoven acquisition following the issuance of a draft report from the company's independent valuers.

Although IFRS disclosure provides investors and management with an overall view of Autonomy's financial performance, Autonomy believes that it is important for investors to also understand the performance of Autonomy's fundamental business without giving effect to certain specific, nonrecurring and non-cash charges. Consequently, the non-IFRS (adjusted) results exclude share of loss of associates, post-acquisition restructuring costs and non-cash charges for the amortization of purchased intangibles, share-based compensation, foreign exchange gains and losses and associated tax effects. Management uses the adjusted results to assess the financial performance of Autonomy's operational business activities.

Q2 Product Sales

Autonomy's infrastructure technology has been adopted by enterprises to process information across all internal and external data formats and sources. During the second quarter of 2009, major customer wins included: Barclays Bank, Burgess Salmon, Commerzbank, Aiken Gump, Standard Chartered Bank, Tesco, Shell, Novell, Kaiser Foundation, AT&T, Morgan Stanley, Johnson & Johnson, EDF, Wolters Kluwer, General Electric, Banco do Brasil, Bayer, Deloitte and eBay. Q2 2009 business also included new and repeat licenses with multiple government, defence and intelligence agencies around the globe including in the U.S., the U.K., Singapore, Croatia, Malaysia and Japan. Repeat business from existing customers accounted for approximately 50% of revenue for the quarter.

Strategic Partnerships and OEMs

Autonomy's OEM Program continued to grow during Q2 2009. Agreements were signed with 12 customers during the quarter, including new and extended agreements with Cisco, CCI, VMS and Siemens.

Q2 Corporate Developments

During the second quarter of 2009 Autonomy continued to extend its market leadership with the introduction of key new and upgraded technologies, including:

- The world's first meaning based social media analytics, which connects to popular social networks like Facebook, Twitter, and YouTube allowing organizations to automatically listen, understand, and act on social sentiment; - Intelligent recommendation and navigation for eCommerce, which automatically understands the meaning behind product catalogs and builds implicit customer profiles in order to increase online conversions and revenue; - Multichannel optimisation for customer interactions, combining market-leading Web Content Management, contact center and advanced analytics software to improve customer experience across all touch points; - First ever rich media management that understands meaning to automatically retrieve, analyze, and process audio, video and graphic content; - World's first cloud based web content compliance solution, which combines the largest data archive with Autonomy's leading Web Content Management solution to help businesses meet increasing global regulatory requirements; and - The most advanced audio eDiscovery processing solution for law firms, which provides lawyers with unprecedented access to voicemails, depositions, digital dictations, and other audio recordings to improve effectiveness. During the second quarter Autonomy was recognized in multiple ways for its market leadership and unmatched technology, including: - Being ranked as fastest growing of the top four ECM vendors in Gartner's "Market Share: Content Management Software, Worldwide, 2006 - 2008" report, based on performance in document management, web content management, records management, imaging, document-based collaboration, and workflow; - Being named a leader in the June 2009 Forrester Wave(TM) report on Web Content Management for external sites, receiving the highest overall rating for strategy and product direction; - Being named a leader in the June 2009 Forrester Wave(TM) for Records Management; - Reaching a major milestone for the world's largest managed data archive with 10 Petabytes under management; and - Being described by Information Week as: "The world's hottest enterprise software company".

Six Month Important Events

During the first half of 2009 the key events in the company's development have been the implementation of the company's business plan and successful announcement, completion and integration of the Interwoven acquisition. As expected, market drivers of regulatory changes such as the U.S. Federal Rules of Civil Procedure have resulted in a convergence of legal and operational information systems, driving growth in the company's historical and new business areas.

Risk Factors as Required by DTR 4.2.7(2)

As with all businesses, the Group is affected by certain risks, not wholly within our control, which could have a material impact on the Group's long term performance and could cause actual results to differ materially from forecast and historic results.

The principal risks and uncertainties facing the Group have not changed from those set out in the company's most recent prospectus, which does not form part of these interim statements. These include: dependence on our core technology; competition; levels of operational spending versus revenues; average selling price; economic and market conditions; reliance on value added resellers; continued service of our executive directors; hiring and retention of qualified personnel; product errors or defects; problems encountered in connection with potential acquisitions; and intellectual property claims.

In addition to the foregoing, the primary risk and uncertainty related to the Group's performance for the remainder of the year is the challenging macro economic environment, which could have a material impact on the Group's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results. This effect has been offset during the first six months of the year to some extent by the legal, regulatory and compliance issues which have arisen for enterprises in connection with the current economic environment.

About Autonomy Corporation plc

Autonomy Corporation plc (LSE: AU. or AU.L), a global leader in infrastructure software for the enterprise, spearheads the Meaning Based Computing movement. It was recently ranked by IDC as the clear leader in enterprise search revenues, with market share nearly double that of its nearest competitor. Autonomy's technology allows computers to harness the full richness of human information, forming a conceptual and contextual understanding of any piece of electronic data, including unstructured information, such as text, email, web pages, voice, or video. Autonomy's software powers the full spectrum of mission-critical enterprise applications including pan-enterprise search, customer interaction solutions, information governance, end-to-end eDiscovery, records management, archiving, business process management, web content management, web optimization, rich media management and video and audio analysis.

Autonomy's customer base is comprised of more than 20,000 global companies, law firms and federal agencies including: AOL, BAE Systems, BBC, Bloomberg, Boeing, Citigroup, Coca Cola, Daimler AG, Deutsche Bank, DLA Piper, Ericsson, FedEx, Ford, GlaxoSmithKline, Lloyds TSB, NASA, Nestle, the New York Stock Exchange, Reuters, Shell, Tesco, T-Mobile, the U.S. Department of Energy, the U.S. Department of Homeland Security and the U.S. Securities and Exchange Commission. More than 400 companies OEM Autonomy technology, including Symantec, Citrix, HP, Novell, Oracle, Sybase and TIBCO. The company has offices worldwide. Please visit http://www.autonomy.com to find out more.

Autonomy and the Autonomy logo are registered trademarks or trademarks of Autonomy Corporation plc. All other trademarks are the property of their respective owners. Autonomy Corporation plc Condensed Consolidated Income Statement (in thousands, except per share amounts) Three Months Ended S ix Months Ended (unaudited) (unaudited) June 30, June 30, June 30, June 30, 2009 2008 2009 2008 Continuing operations $'000 $'000 $'000 $'000 Revenues (see note 4) 195,192 125,649 324,971 230,737 Cost of revenues (excl. amortization) (23,628) (11,362) (36,417) (22,986) Amortization of purchased intangibles (15,105) (5,117) (20,459) (10,397) Total cost of revenues (38,733) (16,479) (56,876) (33,383) Gross profit 156,459 109,170 268,095 197,354 Operating expenses: Research and development (28,781) (19,778) (48,791) (39,566) Sales and marketing (37,110) (34,507) (65,870) (67,550) General and administrative (15,508) (11,003) (26,796) (22,148) Other costs Post-acquisition restructuring costs - (601) (846) (901) Loss (gain) on foreign exchange (694) 586 (1,127) 914 Total operating expenses (82,093) (65,303) (143,430) (129,251) Profit from operations 74,366 43,867 124,665 68,103 Share of loss of associate (85) (521) (526) (1,211) Interest receivable 168 772 791 1,495 Interest payable (2,757) (376) (3,261) (1,032) Profit before income taxes 71,692 43,742 121,669 67,355 Income taxes (see note 5) (20,817) (13,271) (36,278) (20,439) Net profit 50,875 30,471 85,391 46,916 Basic earnings per share (see note 7) $ 0.21 $0.14 $ 0.36 $0.22 Diluted earnings per share (see note 7) $ 0.21 $0.14 $ 0.36 $0.22 Weighted average number of ordinary shares outstanding 238,815 213,962 235,279 213,697 Weighted average number of ordinary shares outstanding, assuming dilution 242,909 217,577 238,986 217,367 Reconciliation of Adjusted Financial Measures Three Months Ended Six Months Ended (unaudited) (unaudited) June 30, June 30, June 30, June 30, 2009 2008 2009 2008 $'000 $'000 $'000 $'000 Gross profit 156,459 109,170 268,095 197,354 Amortization of purchased intangibles 15,105 5,117 20,459 10,397 Gross profit (adjusted) 171,564 114,287 288,554 207,751 Profit before income taxes 71,692 43,742 121,669 67,355 Post-acquisition restructuring costs - 601 846 901 Loss (gain) on foreign exchange 694 (586) 1,127 (914) Amortization of purchased intangibles 15,105 5,117 20,459 10,397 Share of loss of associate 85 521 526 1,211 Share-based compensation (see note 6) 2,007 1,383 3,131 2,964 Profit before tax (adjusted) 89,583 50,778 147,758 81,914 Provision for income taxes (26,012) (15,406) (44,009) (24,858) Net profit (adjusted) 63,571 35,372 103,749 57,056 Profit from operations 74,366 43,867 124,665 68,103 Loss (gain) on foreign exchange 694 (586) 1,127 (914) Amortization of purchased intangibles 15,105 5,117 20,459 10,397 Share-based compensation (see note 6) 2,007 1,383 3,131 2,964 Post-acquisition restructuring costs - 601 846 901 Profit from operations (adjusted) 92,172 50,382 150,228 81,451 The accompanying notes are an integral part of these consolidated financial statements. AUTONOMY CORPORATION plc CONDENSED CONSOLIDATED BALANCE SHEET As at (unaudited) June 30, Dec 31, 2009 2008 $'000 $'000 ASSETS Non-current assets: Goodwill 1,252,482 796,632 Other intangible assets 407,121 98,694 Property and equipment, net 33,376 27,350 Equity and other investments 11,680 7,441 Deferred tax asset 22,179 13,467 Total non-current assets 1,726,838 943,584 Current assets: Trade receivables, net 201,952 141,252 Other receivables 40,670 35,554 Total trade and other receivables 242,622 176,806 Inventory 553 715 Cash and cash equivalents 152,549 199,218 Total current assets 395,724 376,739 TOTAL ASSETS 2,122,562 1,320,323 CURRENT LIABILITIES Trade payable (18,702) (12,434) Other payables (61,225) (19,511) Total trade and other payables (79,927) (31,945) Bank loan (62,054) (10,637) Tax liabilities (41,016) (27,905) Deferred revenue (160,893) (89,794) Provisions (3,661) (426) Total current liabilities (347,551) (160,707) Net current assets 48,173 216,032 NON-CURRENT LIABILITIES Bank loan (134,505) (26,594) Deferred tax liabilities (60,235) (2,537) Deferred revenue (9,325) (9,414) Other payables (1,153) (1,171) Provisions (7,041) - Total non-current liabilities (212,259) (39,716) Total liabilities (559,810) (200,423) NET ASSETS 1,562,752 1,119,900 Shareholders' equity: Ordinary shares (1) 1,325 1,214 Share premium account 1,119,289 798,279 Capital redemption reserve 135 135 Own shares (903) (905) Merger reserve 27,589 27,589 Stock compensation reserve 17,975 14,846 Revaluation reserve 3,571 2,987 Translation reserve (3,927) (18,261) Retained earnings 397,698 294,016 TOTAL EQUITY 1,562,752 1,119,900

(1) At June 30, 2009, 600,000,000 ordinary shares of nominal value 1/3 pence each authorized, 239,214,577 issued and outstanding; as of December 31, 2008, 600,000,000 ordinary shares of nominal value 1/3 pence each authorized, 215,817,197 issued and outstanding.

The accompanying notes are an integral part of these consolidated financial statements

Autonomy Corporation plc Condensed Consolidated Statements of Cash Flows Three Months Ended Six Months Ended (unaudited) (unaudited) June 30, June 30, June 30, June 30, 2009 2008 2009 2008 $'000 $'000 $'000 $'000 Cash flows from operating activities: Profit from operations 74,366 43,867 124,665 68,103 Adjustments for: Depreciation and amortization 22,081 9,494 32,624 19,190 Share based compensation 2,007 1,383 3,131 2,964 Foreign currency movements 694 (586) 1,127 (914) Post-acquisition restructuring costs - - 596 - Other non-cash items - - 126 - Operating cash flows before movements in working capital 99,148 54,158 162,269 89,343 Changes in operating assets and liabilities (net of impact of acquisitions): Receivables (36,349) (30,471) (44,841) (33,492) Inventories (77) (449) 170 (380) Payables 2,671 12,885 (1,064) 5,765 Cash generated by operations 65,393 36,123 116,534 61,236 Income taxes paid (2,370) (4,262) (13,151) (15,716) Net cash provided by operating activities 63,023 31,861 103,383 45,520 Cash flows from investment activities: Interest received 168 740 791 1,463 Purchase of property, plant and equipment (291) (4,979) (4,364) (8,817) Purchase of investments (1,172) (688) (2,152) (1,338) Expenditure on product development (4,115) (2,736) (7,399) (5,751) Acquisition of subsidiaries, net of cash acquired (10,160) (283) (620,923) (5,705) Net cash used in investing activities (15,570) (7,946) (634,047) (20,148) Cash flows from financing activities: Proceeds from issuance of shares, net of issuance costs 5,106 4,203 12,861 8,637 Proceeds from share placing, net of issuance costs - - 308,512 - Interest on bank loan (2,297) (376) (2,498) (1,032) Repayment of bank loan (37,450) (2,675) (37,450) (5,350) Drawdown of bank loan - - 200,000 - Payment of arrangement fee (346) - (3,846) - Net cash provided by financing activities (34,987) 1,152 477,579 2,255 Net increase in cash and cash equivalents 12,466 25,067 (53,085) 27,627 Beginning cash and cash equivalents 132,315 95,486 199,218 92,571 Effect of foreign exchange on cash and cash equivalents 7,768 848 6,416 1,203 Ending cash and cash equivalents 152,549 121,401 152,549 121,401

The accompanying notes are an integral part of these consolidated financial statements

Condensed Consolidated Statement of Changes in Equity Capital Ordinary Share Redemption Own Merger Sub- shares premium reserve shares reserve total $'000 $'000 $'000 $'000 $'000 $'000 At January 1, 2008 1,196 780,888 135 (981) 27,589 808,827 Retained profit - - - - - - Stock compensation - - - - - - Share options exercised 8 8,433 - - - 8,441 EBT options exercised - - - 57 - 57 Deferred tax on stock options - - - - - - Revaluation of equity investment - - - - - - Translation of overseas ops - - - - - - At June 30, 2008 1,204 789,321 135 (924) 27,589 817,325 Stock Sub-total comp'n Revaluation Translation Retained Forwarded reserve reserve reserve earnings Total $'000 $'000 $'000 $'000 $'000 $'000 At January 1, 2008 808,827 9,438 10,163 23,801 146,084 998,313 Retained profit - - - - 46,916 46,916 Stock compensation - 2,964 - - - 2,964 Share options exercised 8,441 - - - - 8,441 EBT options exercised 57 (57) - - - - Deferred tax on stock options - - - - 8,670 8,670 Revaluation of equity investment - - (6,462) - - (6,462) Translation of overseas ops - - - 1,624 - 1,624 At June 30, 2008 817,325 12,345 3,701 25,425 201,670 1,060,466 Capital Ordinary Share Redemption Own Merger Sub- shares premium reserve shares reserve total $'000 $'000 $'000 $'000 $'000 $'000 At January 1, 2009 1,214 798,279 135 (905) 27,589 826,312 Retained profit - - - - - - Stock compensation - - - - - - Issuance of shares 111 321,010 - - - 21,121 EBT options exercised - - - 2 - 2 Deferred tax movement - - - - - - Revaluation of equity investment - - - - - - Translation of overseas ops - - - - - - At June 30, 2009 1,325 1,119,289 135 (903) 27,589 1,147,435 Stock Sub-total comp'n Revaluation Translation Retained Forwarded reserve reserve reserve earnings Total $'000 $'000 $'000 $'000 $'000 $'000 At January 1, 2009 826,312 14,846 2,987 (18,261) 294,016 1,119,900 Retained profit - - - - 85,391 85,391 Stock compensation - 3,131 - - - 3,131 Issuance of shares 321,121 - - - - 321,121 EBT options exercised 2 (2) - - - - Deferred tax movement - - - - 18,291 18,291 Revaluation of equity investment - - 584 - - 584 Translation of overseas ops - - - 14,334 - 14,334 At June 30, 2009 1,147,435 17,975 3,571 (3,927) 397,698 1,562,752

The accompanying notes are an integral part of these consolidated financial statements

Autonomy Corporation plc

Notes to the Condensed Set of Consolidated Financial Statements for the Three and Six Months Ended June 30, 2009 - Unaudited

1. General information

The information for the year ended December 31, 2008 does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was not qualified, did not draw attention to any matters by way of emphasis and did not contain statements under section 435 and 498 (2) of the Companies Act 2006.

The results of operations for the three and six months ended June 30, 2009, are not necessarily indicative of the operating results for future operating periods. The condensed financial statements should be read in connection with the company's audited Consolidated Financial Statements and the notes thereto for the year ended December 31, 2008.

The group has considerable financial resources together with contracts with a number of customers across different geographic areas and industries. As a consequence, the directors believe that the group is well placed to manage its business risks successfully despite the current uncertain economic outlook.

After making enquiries, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the quarterly consolidated financial statements.

2. Accounting policies

The annual financial statements of Autonomy Corporation plc are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half yearly report has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union. The same accounting policies, presentation methods of computation are followed in the condensed set of financial statements as applied in the Group's latest annual audited financial statements.

3. Acquisition of Interwoven

On March 17, 2009 the group acquired 100% of the issued share capital of Interwoven Inc., a global leader in content management software. The acquisition has been accounted for using the purchase method of accounting.

Interwoven Fair value book value adjustments Fair value $'000 $'000 $'000 Net assets acquired: Purchased intangibles - 311,300 311,300 Other assets 26,942 - 26,942 Cash and cash equivalents 184,349 - 184,349 Trade and other payables (116,010) - (116,010) Deferred tax liability - (53,595) (53,595) 95,281 257,705 352,986 Goodwill 450,485 Total consideration 803,471 Satisfied by: Cash 790,589 Directly attributable costs 12,882 803,471 Net cash outflow arising on acquisition Cash consideration, including costs of acquisition 803,471 Cash and cash equivalents acquired (184,349) 619,122

The purchase price allocation has not yet been finalised although we expect the independent valuation report to be completed during Q3 2009. Management's provisional purchase price allocation has attributed a value of $311.3 million to purchased intangibles, which is based on a draft report received from the company's independent valuers. Purchased intangibles comprises purchased technology, customer contracts and brand names.

It is not practicable to determine the effect of the Interwoven acquisition for the period from acquisition to the end of the financial period. The company's core products and those of the acquired entity have been integrated and the operations merged such that it is not practicable to determine the portion of the result that specifically relates to Interwoven on a stand-alone basis.

4. Segmental information

Whilst the group currently operates under a number of different divisions, the group's core technology, types of revenue and associated costs and returns are comparable. Each of these divisions is founded on the group's unique Intelligent Data Operating Layer, the group's core infrastructure for automating the handling of all forms of unstructured information. As a result, the group maintains only one reportable business segment. The group's operations are located primarily in the United Kingdom, the US and Canada. The company also has a significant presence in a number of other European countries as well as China, Japan, Singapore and Australia.

The following table provides an analysis of the group's sales by geographical market based upon the location of the Group's customers for all periods. Three Months Ended Six Months Ended (unaudited) (unaudited) June 30, June 30, June 30, June 30, 2009 2008 2009 2008 Revenue by region: $'000 $'000 $'000 $'000 Americas 133,928 81,517 219,111 145,419 Rest of World 61,264 44,132 105,860 85,318 Total 195,192 125,649 324,971 230,737 Segment information about these geographical segments is presented below: Three Months Ended June 30, 2009 June 30, 2008 Americas ROW Total Americas ROW Total $'000 $'000 $'000 $'000 $'000 $'000 Segment result 57,930 17,130 75,060 34,749 9,133 43,882 Post-acq'n restruct. costs - (601) (Loss) gain on foreign exch. (694) 586 Operating profit 74,366 43,867 Share of loss of associate (85) (521) Interest receivable 168 772 Interest payable (2,757) (376) Profit before tax 71,692 43,742 Tax (20,817) (13,271) Profit for the period 50,875 30,471 Six Months Ended June 30, 2009 June 30, 2008 Americas ROW Total Americas ROW Total $'000 $'000 $'000 $'000 $'000 $'000 Segment result 96,459 30,179 126,638 52,747 15,343 68,090 Post-acq'n restruct. costs (846) (901) (Loss) gain on foreign exch. (1,127) 914 Operating profit 124,665 68,103 Share of loss of associate (526) (1,211) Interest receivable 791 1,495 Interest payable (3,261) (1,032) Profit before tax 121,669 67,355 Tax (36,278) (20,439) Profit for the period 85,391 46,916 5. Income taxes Three Months Ended Six Months Ended (unaudited) (unaudited) June 30, June 30, June 30, June 30, 2009 2008 2009 2008 Tax charge by region: $'000 $'000 $'000 $'000 UK 12,901 10,354 20,344 15,112 Foreign 7,916 2,917 15,934 5,327 Total 20,817 13,271 36,278 20,439 6. Share based compensation

Share based compensation charges have been charged in the consolidated income statement within the following functional areas:

Three Months Ended Six Months Ended (unaudited) (unaudited) June 30, June 30, June 30, June 30, 2009 2008 2009 2008 $'000 $'000 $'000 $'000 Research and development 539 430 841 952 Sales and marketing 984 653 1,535 1,507 General and administrative 484 300 755 505 Total share based compensation charge 2,007 1,383 3,131 2,964 7. Earnings per share The calculation of the basic and diluted earnings per share is based on the following data: Three Months Ended Six Months Ended (unaudited) (unaudited) June 30, June 30, June 30, June 30, 2009 2008 2009 2008 $'000 $'000 $'000 $'000 Earnings for the purposes of basic and diluted earnings per share being net profit 50,875 30,471 85,391 46,916 Number of shares Weighted average number of ordinary shares for the purposes of basic earnings per share 238,815 213,962 235,279 213,697 Effect of dilutive potential ordinary shares: Share options 4,094 3,615 3,707 3,670 Weighted average number of ordinary shares for the purposes of diluted earnings per share 242,909 217,577 238,986 217,367

Earnings per share (adjusted) is calculated by dividing the net profit (adjusted) amounts shown on page 6 by the share denominators shown above.

8. Related Party Transactions

There have been no related party transactions or changes in related party transactions described in the latest annual report that could have a material effect on the financial position or performance of the Group in the first six months of the financial year.

Statement of Directors' Responsibility

We confirm that to the best of our knowledge:

(a) the condensed set of financial statements has been prepared in accordance with IAS 34 "Interim Financial Reporting";

(b) the interim management report includes a fair review of the information required by DTR 4.2.7 (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

(c) the interim management report includes a fair review of the information required by DTR 4.2.8 (disclosure of related parties' transactions and changes therein).

By order of the Board Dr Michael R Lynch Sushovan T Hussain Chief Executive Officer Chief Financial Officer July 16, 2009 July 16, 2009

Independent Review Report to Autonomy Corporation plc

We have been engaged by the company to review the condensed set of financial statements in the interim financial report for the three and six months ended June 30, 2009 which comprises the consolidated income statement, the consolidated balance sheet, the consolidated statement of changes in equity, the consolidated cash flow statement and related notes 1 to 8. We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of interim financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements 2410 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The interim financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim financial report in accordance with the Disclosure and Transparency Rules of the United Kingdoms' Financial Services Authority.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this interim financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim financial report for the three and six months ended June 30, 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Deloitte LLP Chartered Accountants and Statutory Auditors July 16, 2009 Cambridge, UK Financial Media Contacts: Edward Bridges / Haya Chelhot Financial Dynamics +44-207-831-3113 Analyst and Investor Contacts: Peter Goodman, Investor Relations Officer Autonomy Corporation plc +44-1223-448-000

SOURCE Autonomy Corporation plc

Source: PR Newswire

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