Autonomy Corporation Plc Announces Results for the Third Quarter and Nine Months Ended September 30, 2009

Autonomy Corporation Plc Announces Results for the Third Quarter and Nine
Months Ended September 30, 2009

CAMBRIDGE, England, October 20 /PRNewswire-FirstCall/ --
- Record Q3 Results With Strong Organic Growth; Highest Q3 Revenues And
Profits in Autonomy's History; Q3 Revenues Up 51%; Q3 Profit Before Tax
(Adjusted)* Up 20% To $64.3 Million
- Autonomy's Third Quarter Conference Call Will be Available Live at
http://www.autonomy.com on October 20, 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 third
quarter and nine months ended September 30, 2009. Financial Highlights

Three Months Ended Nine Months Ended
(unaudited) (unaudited)
Sept 30, Sept 30, Sept 30, Sept 30,
2009 2008 2009 2008
Results in US$ ($'000s except per $'000 $'000 $'000 $'000
share)
Revenues 191,606 127,105 516,577 357,842
Gross profit (adjusted)* 163,962 117,310 452,516 325,061
Gross profit margin (adjusted)* 86% 92% 88% 91%
Profit from operations (adjusted)* 66,066 53,243 216,294 134,694
Profit before tax (adjusted)* 64,265 53,667 212,023 135,581
Net profit (adjusted)* 48,577 37,495 152,326 94,551

Gross profit (IFRS) 149,372 112,642 417,467 309,996
Gross profit margin (IFRS) 78% 89% 81% 87%
Profit from operations (IFRS) 50,645 47,459 175,310 115,562
Profit before tax (IFRS) 48,640 47,860 170,309 115,215
Net profit (IFRS) 36,766 33,438 122,157 80,354

EPS
- basic (adjusted)* $0.20 $0.17 $0.64 $0.44
- diluted (adjusted)* $0.20 $0.17 $0.63 $0.44

- basic (IFRS) $0.15 $0.16 $0.52 $0.38
- diluted (IFRS) $0.15 $0.15 $0.51 $0.37

-----------
* 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. Third quarter highlights

- Continued strong adoption of next generation combined
Autonomy and Interwoven technologies

- Record Q3 revenues, up 51% from Q3 2008 including strong
organic growth and full quarter post-Interwoven integration

- Launched IDOL SPE with stronger than expected response to
Quick Start program

- Fully diluted EPS (adj.) of $0.20, up 16% from Q3 2008

- Deferred revenue stable at $169m as compared to Q2 2009 (Q3 2008:
$106m)

- Very strong cash collection and conversion; Q3 cash
conversion of 131% (Q3 CFFO / Q3 adj EBITDA) LTM conversion of 86%
(LTM CFFO/ LTM adj EBITDA)

- Strong organic growth of 15%

- Operating margins (adjusted) at 34% despite product launch
expenses higher than announced expectations (Q3 2008: 42%); Operating
margins excluding new product effects at 43%

- Positive cash flow generated from operations of $97.8
million (Q3 2008: $59.6 million); cash balances at $200.7 million at
quarter-end

- Record Q3 net profit (IFRS), up 10% from Q3 2008

- 26th consecutive quarter of year-on-year growth

- Average selling price for meaning-based technologies at
$436,000 (Q3 2008: $395,000)

- Blue chip third quarter wins include Alstom, Arcelor Mittal,
American Medical Association, AT&T, Avid, Bank of America, BBC,
Butterfields, Boeing, Citi, CVR Energy, Eli Lilly, Fidelity, Hammonds,
Ikea, Lockheed Martin, Morgan Stanley, Nikon, Pfizer, Qwest, Sprint,
Staples, Target and Wolters Kluwer, as well as significant deals with
multiple government, defence and intelligence agencies around the globe
including in the U.S., U.K., European Commission, New Zealand, South
Africa and the U.A.E.

- 11 OEM deals signed including new deals and extensions with
Adobe, Kana, Axway and Websense

- Gross margins (adjusted) at 86% (Q3 2008: 92%)

- DSOs at 97 days for Q3 2009 (Q2 2009: 89 days)

Commenting on the results, Dr. Mike Lynch, Group CEO of Autonomy said
today: "I am pleased to announce strong Q3 results in line with the recent
preannouncement that reported results would exceed the then current
estimates. We delivered strong growth despite the usual seasonality and
challenging comparatives against the strong performance in Q3 2008. These
results give us confidence in maintaining our view of the full year. Autonomy
was very busy in the quarter preparing for 2010. We successfully launched
IDOL SPE, which was very positively received by the industry, and generated a
stronger than expected demand on our Quick Start program. We have also
invested in our data centre capacity to allow future growth in the Meaning
Based Marketing (MBM) side of the business, which has already begun to show
good traction. During the quarter we saw some of our large customers promote
Autonomy to strategic supplier status. This has led them to adopt a broader
set of our solutions in a number of significant deals. We were pleased to
note that the cash generation of the business since the beginning of the year
has been so strong that our cash balance already covers the remaining part of
the debt we took out just six months ago to fund the Interwoven acquisition.
We feel that should an upturn start to materialise we are extremely well
positioned to accelerate our growth."
Third Quarter and Nine Month Financial Highlights
Revenues
Revenues for the third quarter of 2009 totalled $191.6 million, up 51%
from $127.1 million for the third quarter of 2008 including strong organic
growth. The effect on revenue in the third quarter of 2009 of movements in
foreign exchange rates was a negative impact of approximately 1% compared to
the third quarter of 2008. The net impact of foreign exchange movements on
operating profit was de minimis. In the third quarter of 2009 the U.S. Dollar
strengthened versus Sterling to an average of $1.64 versus $1.90 in the third
quarter of 2008.
During the third quarter of 2009 there were 13 license transactions over
$1.0 million, compared to 8 for the third quarter of 2008. In the third
quarter of 2009, Americas revenues of $135.7 million represented 71% of total
revenues, and Rest of World revenues of $55.9 million represented 29% of
total revenues.
Revenues for the nine months ended September 30, 2009, totalled $516.6
million, up 44% from $357.8 million for the nine months ended September 30,
2008.
Gross Profits and Gross Margins
Gross profits (adjusted) for the third quarter of 2009 were $164.0
million, up 40% from $117.3 million in the third quarter of 2008. Gross
margins (adjusted) were 86% in the third quarter of 2009, versus 92% in the
third quarter of 2008. The unexpected demand for our new product programs had
a small depressing effect on gross margins. We do not expect this to be a
trend. Gross profits (IFRS) for the third quarter of 2009 were $149.4
million, up 33% from $112.6 million in the third quarter of 2008. Gross
margins (IFRS) for the third quarter of 2009 were 78%, compared to 89% in the
third quarter of 2008.
Gross profits (adjusted) for the nine months ended September 30, 2009
were $452.5 million, up 39% from $325.1 million for the nine months ended
September 30, 2008. Gross margins (adjusted) were 88% in the nine months
ended September 30, 2009, versus 91% for the nine months ended September 30,
2008. Gross profits (IFRS) for the nine months ended September 30, 2009 were
$417.5 million, up 35% from $310.0 million for the nine months ended
September 30, 2008. Gross margins (IFRS) for the nine months ended September
30, 2009 were 81%, compared to 87% for the nine months ended September 30,
2008.
Taxes
The effective tax rate in the third quarter of 2009 was 24%, down from
30% in the third quarter of 2008. The decrease is a result of the utilisation
of newly available losses in the US based on final determination of losses
combined with additional research and development credits as a result of
agreement with the relevant tax authorities. The full year tax rate is
expected to be between 28% and 30%.
Net Profits
Net profit (adjusted) for the third quarter of 2009 was $48.6 million, or
$0.20 per diluted share, compared to net profit (adjusted) of $37.5 million,
or $0.17 per diluted share, for the third quarter of 2008. Net profit (IFRS)
for the third quarter of 2009 was $36.8 million, or $0.15 per diluted share,
compared to net profit (IFRS) of $33.4 million, or $0.15 per diluted share,
for the third quarter of 2008.
Net profit (adjusted) for the nine months ended September 30, 2009 was
$152.3 million, or $0.63 per diluted share, compared to net profit (adjusted)
of $94.6 million, or $0.44 per diluted share, for the nine months ended
September 30, 2008. Net profit (IFRS) for the nine months ended September 30,
2009 was $122.2 million, or $0.51 per diluted share, compared to net profit
(IFRS) of $80.4 million, or $0.37 per diluted share, for the nine months
ended September 30, 2008.
IAS 38 Charges
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 third quarter of 2009 was $11.7 million (Q3 2008: $3.0 million),
increasing year-on-year primarily due to the new IDOL SPE product reaching
commercial exploitation phase, but is expected to return to historical levels
in the fourth quarter. Q3 2009 R&D capitalization is offset by amortization
charges of $2.2 million (Q3 2008: $1.4 million) arising from historical R&D
capitalization. This results in a net credit (before tax) in the quarter of
$9.5 million (Q3 2008: $1.6 million). R&D capitalization for the nine months
ended September 30, 2009 was $19.1 million (2008: $8.7 million), offset by
amortization charges of $5.7 million (2008: $3.3 million) during the period
arising from historical R&D capitalization, resulting in a net credit (before
tax) in the period of $13.4 million (2008: $5.4 million).
Balance Sheet and Cash Flow
Cash balances were $200.7 million at September 30, 2009, an increase of
$35.0 million from $165.7 million at September 30, 2008, and an increase of
$1.5 million from $199.2 million at December 31, 2008 (prior to the
Interwoven acquisition). Movements in cash flow during the nine months
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. In addition, during the quarter the company incurred
capital expenditures of approximately $19 million relating primarily to data
centre expansion in preparation for 2010.
Trade receivables at September 30, 2009, were $218.5 million, compared to
$141.3 million at December 31, 2008. Accounts receivable days sales
outstanding were 97 days for the third quarter of 2009, compared to 84 days
at December 31, 2008. Significant extra revenues, not originally in our
forecast for the quarter, arrived on the last day of the quarter, and late
payment of one day by a large debtor gave rise to the movement. We expect
DSOs to return to normal levels. Deferred revenues were $169 million at
September 30, 2009, compared with $99 million at December 31, 2008,
displaying usual seasonality.
Accrued income at September 30, 2009 was not material, at under 5% of
revenues. Provision for doubtful accounts at September 30, 2009 was not
material, at well under 10% of debtors, our flagging range.
Comments
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, non-recurring
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.
Supplemental Metrics
Autonomy is supplying supplemental metrics to assist in the understanding
and analysis of Autonomy's business.
Three Months Ended Sept. 30, 2009
Product including hosted and OEM* $125m
Service revenues* $9m
Deferred revenue release (primarily maintenance)* $58m
OEM derived revenues* $24m
Organic Growth* 15%
Deals over $1 million 13
Tax rate 24%
Available tax losses* $218m
Cash conversion (Q3 CFFO/Q3 adj EBITDA**) 131%
Cash conversion (lagged to account for growth and seasonality of 99%
the business)

Twelve Months Ended Sept. 30, 2009
Cash conversion (LTM CFFO/LTM adj EBITDA**) 86%
Cash conversion (lagged to account for growth and seasonality of 91%
the business)
Cash conversion as a percentage of the theoretical maximum (90%) 96%

- LTM revenue with terms >365 days in normal range (<2% of revenues)

- Accrued income in normal range (<5% of revenues)

* The above items are provided for background information and may include
qualitative estimates.

** Adj EBITDA is defined as operating cashflow before movements in
working capital.

Q3 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 third quarter of 2009, major customer wins included:
Alstom, Arcelor Mittal, American Medical Association, AT&T, Avid, Bank of
America, BBC, Butterfields, Boeing, Citi, Coffeyville Resources, Eli Lilly,
Fidelity, Hammonds, Ikea, Lockheed Martin, Morgan Stanley, Nikon, Pfizer,
Qwest, Sprint, Staples, Target, Virgin Media and Wolters Kluwer. Q3 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., European Commission, Australia, The Netherlands, New Zealand, South
Africa and the U.A.E. Repeat business from existing customers accounted for
approximately 45% of revenue for the quarter.
Strategic Partnerships and OEMs
Autonomy's OEM Program continued to grow during Q3 2009. Agreements were
signed with 11 customers during the quarter, including new and extended
agreements with Adobe, Kana, Axway and Websense.
Q3 Corporate Developments
During the third quarter of 2009 Autonomy continued to extend its market
leadership with the introduction of key new and upgraded technologies,
including the launches of:
- IDOL SPE, ushering the $18 billion database market into the era of
Meaning Based Computing;

- The world's first hosted web landing page solution, enabling online
marketers to rapidly build and optimize landing pages in a secure,
private cloud;

- The first cloud-based archiving solution tailored for law firms,
enabling law firms to reduce costs and rapidly respond to eDiscovery
requests; and

- Autonomy's Automatic Spoken Language Identification (ASLI) module,
enabling call centres, media organizations and global enterprises to
instantly recognize the spoken language in media files and live calls.

During the third quarter Autonomy was recognised in multiple ways for its
market leadership and unmatched technology, including being:
- Identified by IDC as the fastest growing of the top three Search and
Discovery vendors with the largest market share by far;

- Positioned as leader in Gartner's 2009 Information Access Technology
Magic Quadrant;

- Presented with the "Best Innovation Award" 2009 for its ground-breaking
MBM solutions portfolio;

- Recognised as a "2009 Trend-Setter" by KMWorld Magazine;

- Ranked as one of the world's largest software companies by Software
Magazine; and

- Bestowed the outstanding achievement of the year award by Cambridge
Business Magazine.

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 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 Nine Months Ended
(unaudited) (unaudited)
Sept 30, Sept 30, Sept 30, Sept 30,
2009 2008 2009 2008
Continuing operations $'000 $'000 $'000 $'000
Revenues (see note 3) 191,606 127,105 516,577 357,842
Cost of revenues (excl.
amortization) (27,644) (9,795) (64,061) (32,781)
Amortization of purchased
intangibles (14,590) (4,668) (35,049) (15,065)
Total cost of revenues (42,234) (14,463) (99,110) (47,846)
Gross profit 149,372 112,642 417,467 309,996
Operating expenses:
Research and development (23,853) (19,985) (72,644) (59,551)
Sales and marketing (59,306) (35,390) (125,176) (102,940)
General and administrative (16,785) (10,080) (43,581) (32,228)
Other costs
Post-acquisition restructuring
costs - (256) (846) (1,157)
Gain on foreign exchange 1,217 528 90 1,442
Total operating expenses (98,727) (65,183) (242,157) (194,434)
Profit from operations 50,645 47,459 175,310 115,562
Share of loss of associate (204) (23) (730) (1,234)
Interest receivable 184 794 975 2,289
Interest payable (1,985) (370) (5,246) (1,402)
Profit before income taxes 48,640 47,860 170,309 115,215
Income taxes (see note 4) (11,874) (14,422) (48,152) (34,861)
Net profit 36,766 33,438 122,157 80,354
Basic earnings per share (see
note 6) $0.15 $ 0.16 $0.52 $ 0.38
Diluted earnings per share (see
note 6) $0.15 $ 0.15 $0.51 $ 0.37

Weighted average number of
ordinary shares outstanding 239,474 215,052 236,693 214,152
Weighted average number of
ordinary shares outstanding,
assuming dilution 243,081 218,357 240,158 217,118

Reconciliation of Adjusted Financial Measures

Three Months Ended Nine Months Ended
(unaudited) (unaudited)
Sept 30, Sept 30, Sept 30, Sept 30,
2009 2008 2009 2008
$'000 $'000 $'000 $'000
Gross profit 149,372 112,642 417,467 309,996
Amortization of purchased
intangibles 14,590 4,668 35,049 15,065
Gross profit (adjusted) 163,962 117,310 452,516 325,061

Profit before income taxes 48,640 47,860 170,309 115,215
Post-acquisition restructuring
costs - 256 846 1,157
Gain on foreign exchange (1,217) (528) (90) (1,442)
Amortization of purchased
intangibles 14,590 4,668 35,049 15,065
Share of loss of associate 204 23 730 1,234
Share-based compensation (see note
5) 2,048 1,388 5,179 4,352
Profit before tax (adjusted) 64,265 53,667 212,023 135,581
Provision for income taxes (15,688) (16,172) (59,697) (41,030)
Net profit (adjusted) 48,577 37,495 152,326 94,551

Profit from operations 50,645 47,459 175,310 115,562
Gain on foreign exchange (1,217) (528) (90) (1,442)
Amortization of purchased
intangibles 14,590 4,668 35,049 15,065
Share-based compensation (see note
5) 2,048 1,388 5,179 4,352
Post-acquisition restructuring
costs - 256 846 1,157
Profit from operations (adjusted) 66,066 53,243 216,294 134,694

AUTONOMY CORPORATION plc

CONDENSED CONSOLIDATED BALANCE SHEET

As at
(unaudited)
Sept 30, Dec 31,
2009 2008
$'000 $'000
ASSETS
Non-current assets:
Goodwill 1,260,953 796,632
Other intangible assets 400,782 98,694
Property and equipment, net 38,273 27,350
Equity and other investments 12,780 7,441
Deferred tax asset 25,051 13,467
Total non-current assets 1,737,839 943,584
Current assets:
Trade receivables, net 218,490 141,252
Other receivables 43,939 35,554
Total trade and other receivables 262,429 176,806
Inventory 453 715
Cash and cash equivalents 200,732 199,218
Total current assets 463,614 376,739
TOTAL ASSETS 2,201,453 1,320,323

CURRENT LIABILITIES
Trade payable (17,928) (12,434)
Other payables (91,997) (19,511)
Total trade and other payables (109,925) (31,945)
Bank loan (52,279) (10,637)
Tax liabilities (37,621) (27,905)
Deferred revenue (159,729) (89,794)
Provisions (3,814) (426)
Total current liabilities (363,368) (160,707)
Net current assets 100,246 216,032

NON-CURRENT LIABILITIES
Bank loan (144,760) (26,594)
Deferred tax liabilities (57,065) (2,537)
Deferred revenue (9,150) (9,414)
Other payables (1,153) (1,171)
Provisions (5,667) -
Total non-current liabilities (217,795) (39,716)
Total liabilities (581,163) (200,423)
NET ASSETS 1,620,290 1,119,900

Shareholders' equity:
Ordinary shares (1) 1,329 1,214
Share premium account 1,123,790 798,279
Capital redemption reserve 135 135
Own shares (903) (905)
Merger reserve 27,589 27,589
Stock compensation reserve 20,023 14,846
Revaluation reserve 5,466 2,987
Translation reserve (8,037) (18,261)
Retained earnings 450,898 294,016
TOTAL EQUITY 1,620,290 1,119,900

------------
(1) At September 30, 2009, 600,000,000 ordinary shares of nominal value
1/3 pence each authorized, 239,787,030 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.
AUTONOMY CORPORATION plc

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended Nine Months Ended
(unaudited) (unaudited)
Sept 30, Sept 30, Sept 30, Sept 30,
2009 2008 2009 2008
$'000 $'000 $'000 $'000
Cash flows from operating
activities:
Profit from operations 50,645 47,459 175,310 115,562
Adjustments for:
Depreciation and amortization 22,969 9,642 55,593 28,832
Share based compensation 2,048 1,388 5,179 4,352
Foreign currency movements (1,217) (528) (90) (1,442)
Post-acquisition restructuring
costs - - 596 -
Other non-cash items 1 - 127 -
Operating cash flows before
movements in
working capital 74,446 57,961 236,715 147,304
Changes in operating assets and
liabilities (net
of impact of acquisitions):
Receivables (20,534) 4,600 (65,375) (28,892)
Inventories 98 175 268 (205)
Payables 43,834 (3,146) 42,770 2,619
Cash generated by operations 97,844 59,590 214,378 120,826
Income taxes paid (13,032) (8,212) (26,183) (23,928)
Net cash provided by operating
activities 84,812 51,378 188,195 96,898

Cash flows from investment
activities:
Interest received 184 794 975 2,257
Purchase of property,plant and
equipment and intangibles (19,034) (1,988) (23,398) (10,805)
Purchase of investments - (989) (2,152) (2,327)
Expenditure on product development (11,749) (2,993) (19,148) (8,744)
Acquisition of subsidiaries, net of
cash acquired (7,607) (354) (628,530) (6,059)
Net cash used in investing
activities (38,206) (5,530) (672,253) (25,678)

Cash flows from financing
activities:
Proceeds from issuance of shares,
net of issuance costs 4,335 6,854 17,196 15,491
Proceeds from share placing, net of
issuance costs - - 308,512 -
Interest on bank loan (1,462) (370) (3,960) (1,402)
Repayment of bank loan - (2,675) (37,450) (8,025)
Drawdown of bank loan - - 200,000 -
Payment of arrangement fee - - (3,846) -
Net cash provided by financing
activities 2,873 3,809 480,452 6,064

Net increase in cash and cash
equivalents 49,479 49,657 (3,606) 77,284
Beginning cash and cash equivalents 152,549 121,401 199,218 92,571
Effect of foreign exchange on cash
and cash equivalents (1,296) (5,363) 5,120 (4,160)
Ending cash and cash equivalents 200,732 165,695 200,732 165,695

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Capital
Ordinary Share redemption Merger
shares premium reserve Own shares reserve Sub-total
$'00 $'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 16 15,362 - - - 15,378
EBT options
exercised - - - 70 - 70
Deferred tax on
stock options - - - - - -
Revaluation of
equity investmen. - - - - - -
Translation of
overseas ops - - - - - -
At Sept 30, 2008 1,212 796,250 135 (911) 27,589 824,275

Sub-total Stock Revaluation
comp'n 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 - - - - 80,354 80,354
Stock
compensation - 4,352 - - - 4,352
Share options
exercised 15,378 - - - - 15,378
EBT options
exercised 70 (70) - - - -
Deferred tax
on stock
options - - - - 13,302 13,302
Revaluation
of equity
investment - - (3,020) - - (3,020)
Translation
of overseas
ops - - - (12,809) - (12,809)
At Sept 30,
2008 824,275 13,720 7,143 10,992 239,740 1,095,870

Capital
Ordinary Share redemption Own Merger
shares premium reserveshares reserve Sub-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 115 325,511 - - - 325,626
EBT options
exercised - - - 2 - 2
Deferred tax
movement - - - - - -
Revaluation of
equity investment - - - - - -
Translation of
overseas ops - - - - - -
At Sept 30, 2009 1,329 1,123,790 135 (903) 27,589 1,151,940

Sub-total Stock Revaluation
comp'n 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 - - - - 122,157 122,157
Stock
compensation - 5,179 - - - 5,179
Issuance of
shares 325,626 - - - - 325,626
EBT options
exercised 2 (2) - - - -
Deferred tax
movement - - - - 34,725 34,725
Revaluation
of equity
investment - - 2,479 - - 2,479
Translation
of overseas
ops - - - 10,224 - 10,224
At Sept 30,
2009 1,151,940 20,023 5,466 (8,037) 450,898 1,620,290

AUTONOMY CORPORATION plc
NOTES TO THE CONDENSED SET OF CONSOLIDATED FINANCIAL STATEMENTS FOR THE
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 - UNAUDITED
1. General information
Quarterly information is unaudited, but reflects all normal adjustments
which are, in the opinion of management, necessary to provide a fair
statement of results and the company's financial position for and as at the
periods presented. The results of operations for the three and nine months
ended September 30, 2009, are not necessarily indicative of the operating
results for future operating periods. The quarterly 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 information for the year ended December 31, 2008 does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. A copy of the statutory accounts for that year has been delivered to
the Registrar of Companies. The auditors reported on those accounts; their
report was unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under section 237(2) or (3) of the
Companies Act 1985.
2. Accounting policies
The accompanying quarterly consolidated financial statements of Autonomy
Corporation plc have been prepared in conformity with the recognition and
measurement criteria of International Financial Reporting Standards ("IFRS")
as adopted by the EU. The accounting policies applied are consistent in all
material respects with those applied in the Company's Annual Report for the
year ended December 31, 2008. Whilst the financial information included in
this quarterly announcement has been computed in accordance with
International Financial Reporting Standards (IFRSs) and IAS 34 Interim
financial reporting, this announcement does not itself contain all of the
disclosures required by IFRSs and IAS 34.
Basis of preparation
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.
The same accounting policies, presentation and methods of computation are
followed in the condensed set of financial statements as applied in the
Group's latest annual audited financial statements, except for as described
below.
Adoption of new and current standards
In the current financial year, the Group has adopted International
Financial Reporting Standard 8 "Operating Segments" as required, and applied
these principles throughout the year. IFRS 8 requires operating segments to
be identified on the basis of internal reports about components of the Group
that are regularly reviewed by the Chief Executive to allocate resources to
the segments and to assess their performance. In contrast, the predecessor
Standard (IAS 14 "Segment Reporting") required the Group to identify two sets
of segments (business and geographical), using a risks and rewards approach,
with the Group's system of internal financial reporting to key management
personnel serving only as the starting point for the identification of such
segments. The adoption of this standard has resulted in no changes in the
segmental disclosures provided in note 3 of this condensed set of financial
statements, or in any prior periods.
3. 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.
3. Segmental information (continued)
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 Nine Months Ended
(unaudited) (unaudited)
Sept 30, Sept 30, Sept 30, Sept 30,
2009 2008 2009 2008
Revenue by region: $'000 $'000 $'000 $'000
Americas 135,733 83,146 354,844 228,565
Rest of World 55,873 43,959 161,733 129,277
Total 191,606 127,105 516,577 357,842

Segment information about these geographical segments is presented below:

Three Months Ended
Sept 30, 2009 Sept 30, 2008
Americas ROW Total Americas ROW Total
$'000 $'000 $'000 $'000 $'000 $'000
Segment result 39,767 9,661 49,428 37,374 9,813 47,187
Post-acq'n
restruct. costs - (256)
Gain on foreign
exch. 1,217 528
Operating profit 50,645 47,459
Share of loss of
associate (204) (23)
Interest receivable 184 794
Interest payable (1,985) (370)
Profit before tax 48,640 47,860
Tax (11,874) (14,422)
Profit for the
period 36,766 33,438

Nine Months Ended
Sept 30, 2009 Sept 30, 2008
Americas ROW Total Americas ROW Total
$'000 $'000 $'000 $'000 $'000 $'000
Segment result 136,226 39,840 176,066 90,122 25,155 115,277
Post-acq'n
restruct. costs (846) (1,157)
Gain on foreign
exch. 90 1,442
Operating profit 175,310 115,562
Share of loss of
associate (730) (1,234)
Interest receivable 975 2,289
Interest payable (5,246) (1,402)
Profit before tax 170,309 115,215
Tax (48,152) (34,861)
Profit for the
period 122,157 80,354

4. Income taxes

Three Months Ended Nine Months Ended
(unaudited) (unaudited)
Sept 30, Sept 30, Sept 30, Sept 30,
2009 2008 2009 2008
Tax charge by region: $'000 $'000 $'000 $'000
UK 3,507 9,226 23,851 24,338
Foreign 8,367 5,196 24,301 10,523
Total 11,874 14,422 48,152 34,861

5. Share based compensation
Share based compensation charges have been charged in the consolidated
income statement within the following functional areas:
Three Months Ended Nine Months Ended
(unaudited) (unaudited)
Sept 30, Sept 30, Sept 30, Sept 30,
2009 2008 2009 2008
$'000 $'000 $'000 $'000
Research and development 550 399 1,391 1,350
Sales and marketing 1,004 676 2,539 2,184
General and administrative 494 313 1,249 818
Total share based compensation 2,048 1,388 5,179 4,352
charge

6. Earnings per share
The calculation of the basic and diluted earnings per share is based on
the following data:

Three Months Ended Nine Months Ended
(unaudited) (unaudited)
Sept 30, Sept 30, Sept 30, Sept 30,
2009 2008 2009 2008
$'000 $'000 $'000 $'000
Earnings for the purposes of basic
and
diluted earnings per share being
net profit 36,766 33,438 122,157 80,354

Number of shares
Weighted average number of
ordinary shares for the purposes
of basic earnings per share 239,474 215,052 236,693 214,152
Effect of dilutive potential
ordinary shares:
Share options 3,607 3,305 3,465 2,966

Weighted average number of
ordinary shares for the purposes
of diluted earnings per share 243,081 218,357 240,158 217,118

Earnings per share (adjusted) is calculated by dividing the net profit
(adjusted) amounts shown on page 6 by the share denominators shown above.
7. 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
nine months of the financial year.
INDEPENDENT REVIEW REPORT TO AUTONOMY CORPORATION PLC
We have been engaged by the company to review the condensed set of
financial statements in the quarterly financial report for the three and nine
months ended September 30, 2009, which comprises the income statement, the
balance sheet, the statement of changes in equity, the cash flow statement
and related notes 1 to 7. We have read the other information contained in the
quarterly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the
condensed set of 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 quarterly financial report is the responsibility of, and has been
approved by, the directors.
As disclosed in note 2, the annual financial statements of the company
are prepared in accordance with the recognition and measurement criteria of
IFRSs as adopted by the European Union. The condensed set of financial
statements included in this quarterly financial report have been prepared in
accordance with the accounting policies the group intends to use in preparing
its next annual financial statements.
Our responsibility
Our responsibility is to express to the Company a conclusion on the
condensed set of financial statements in the quarterly 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 quarterly
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 accompanying quarterly financial information is not
prepared, in all material respects, in accordance with the recognition and
measurement criteria of IFRSs as adopted for use in the EU and the basis set
out in note 2. Deloitte LLP
Chartered Accountants and Registered Auditor

Financial Media Contacts:
Edward Bridges / Haya Chelhot
Financial Dynamics
+44-(0)20-7831-3113

Analyst and Investor Contacts:
Marc Geall, Head of IR and Corporate
Strategy
Autonomy Corporation plc
+44-(0)1223-448-000

SOURCE Autonomy Corporation plc

Financial Media Contacts: Edward Bridges / Haya Chelhot, Financial Dynamics,
+44-(0)20-7831-3113. Analyst and Investor Contacts: Marc Geall, Head of IR and
Corporate, Strategy, Autonomy Corporation plc, +44-(0)1223-448-000