2. Financial performance

1/3 forward

Continued significant growth in Group revenue

Software AG’s group revenue was €168.8 million in Q2 2008 (Q2 2007: €152.2 million), exceeding the previous year’s figure by 11 percent, or 18 percent following currency adjustment. The comparative values from the previous year only contain a part of the webMethods sales which were consolidated from May 25, 2007 onwards.

Product revenue (licenses and maintenance) increased by 13 percent to €123.2 million in Q2 2008 (Q2 2007: €108.7 million). Currency-adjusted growth totaled 22 percent.

The licensing revenue, included in product revenue, rose 15 percent following currency adjustment, or 7 unadjusted, to €61.4 million in Q2 2008 (Q2 2007: €57.3 million). Maintenance revenue grew by 30 percent following currency adjustment (unadjusted: 20 percent) to €61.8 million (Q2 2007: €51.4 million).

The Professional Services area generated revenue of €44.8 million in Q2 2008, thus increasing its result by 7 percent (currency-adjusted: 12 percent) compared to Q2 2007 (€41.7 million).

Revenues by division

webMethods within plan
The webMethods division increased its revenue significantly in Q2, 2008, by 25 percent (currency-adjusted: 34 percent) to €76.7 million. The prior-year figure of €61.6 million includes revenue by webMethods, Inc. up to May 25, 2007. webMethods licensing revenue improved slightly in the EMEA region in Q2 2008, and the US business continued to demonstrate robust growth. The webMethods division expects growth of approximately 40 to 45 percent for the year as a whole. webMethods contributed 45 percent to Group revenue in Q2.

ETS shows stable growth
Revenue in the ETS division grew by 2 percent to €92.1 million in Q2 (Q2 2007: €90.6 million). Following currency adjustment, this figure rose to 7 percent. Licensing revenue in this division was €34.7 million (Q2 2007: €32.8 million), a currency-adjusted increase of 11 percent. The ETS division saw particularly noteworthy growth in Brazil, where Software AG took over sole distribution at the beginning of the year. We signed 22 contracts in recent months with a total volume of more than €12 million, €6 million of which was booked in Q2 2008. We expect a significant expansion of business in the second half of the year. Based on the current situation, we project an overall 12 to 14 percent revenue increase following currency adjustment for ETS for the fiscal year as a whole. The ETS division contributed 55 percent to total revenue in Q2 2008.

REVENUES BY DIVISION

IFRS, unaudited
in € million
January 1 -
June 30, 2008
January 1 -
June 30, 2007
Change
in %

Q2|2008

Q2|2007

Change
in %

webMethods





Licenses

48.8 38.3 27 26.6 24.5 9

Maintenance

43.5 18.0 142 22.5 11.8 91

Service

52.5 39.9 32 27.5 24.1 14
Other 0.5 1.8 -72 0 1.2 100
Total 145.3 98.0 48 76.7 61.6 25
ETS





Licenses

68.0 65.9 3 34.7 32.8 6

Maintenance

77.6 77.9 0 39.3 39.6 -1

Service

36.2 34.4 5 17.3 17.7 -2
Other 1.1 0.7 57 0.8 0.5 60
Total 182.9 178.9 2 92.1 90.6 2