Software AG is continuing its upward trend. Both sales and earnings rose considerably based on significant increases in the strategically important licensing business. The expansion of our portfolio to include new products, such as our crossvision SOA suite, ensured dynamic growth rates. The excellent market response to this new product was accompanied by explicit recognition from industry analysts and IT market research institutes. Forrester Research, for instance, has ranked Software AG as one of the world leaders in the category of Enterprise Service Bus (ESB), a core element of service-oriented architectures (SOA).

In the second quarter of 2006, Group sales increased by 10 percent to €121.0 million (Q2 2005: €110.5 million), with sales volumes growing in all business segments. The highest increase was seen in licensing revenues, which grew by 29 percent to €41.3 million, representing more than one-third of total revenues.

ETS potential confirmed
Enterprise Transaction Systems (ETS) benefited from sustained high demand for solutions to modernize legacy systems. Both companies and public authorities require products that are able to adapt mainframe applications to meet modern requirements. Total licensing revenue of Enterprise Transaction Systems climbed to €30.5 million (prior year: €24.0 million), accelerated by our product offer, which has been optimized to include Adabas 2006 and Natural 2006, as well as our intensified marketing efforts. This represents an increase of 27 percent over the second quarter of 2005.

crossvision grows by 63 percent
We achieved even higher growth in our crossvision business line, where licensing revenues grew by 63 percent (currency-adjusted by 65 percent) to €10.1 million (2005: €6.2 million). The rapid growth generated in this business line, both in comparison with the second quarter of 2005 and the first quarter 2006 (up 58 percent), also reflects the successful introduction of our new crossvision products.

Today, all integration products of Software AG have been combined under the crossvision brand. The full range of the crossvision suite has been available since mid-May and consists of six integrated components which may be used separately and map a complete SOA life cycle. This process-oriented approach makes crossvision particularly attractive, which increasingly benefits sales volumes.

Upward trend in maintenance revenues
The maintenance business, which had been stable over a long period of time, showed a slight increase of 3 percent to €46.6 million (prior year: €45.3 million). This growth confirms the development experienced in the first quarter, in which licensing revenues accelerated significantly for the first time as a result of sustained sales growth in the licensing business. Sales in the professional services segment were slightly above the previous year’s level, increasing by 1 percent to €32.7 million (prior year: €32.4 million).