Autonomy announces fourth quarter results 1998

For more information, please contact:

Dr Mike Lynch, Managing Director and Chief Executive Officer
Jonathan Spira, Chief Financial Officer
Dominic Johnson, Marketing Director
Autonomy Corporation plc
Tel: 001 415 243 9955

Edward Bridges
Financial Dynamics
Tel: 0171 831 3113

Cambridge, England and San Francisco, California, March 18, 1999 - Autonomy Corporation plc (EASDAQ: AUTN), today announced an increase in turnover in the fourth quarter ending December 1998 of £1.79 million, 156 per cent up compared to the same quarter in the previous year.Gross margins increased 19 percentage points on the same quarter last year. Autonomy now has net assets of £22.0 million, an increase from £2.9 million last year. Gross Profits increased 230 per cent to £4.48 million from £1.36 million in 1997. Revenues continue to be well balanced across our two core markets with Knowledge Management and New Media products contributing 46 per cent and 53 per cent of revenues respectively. Average contract value has increased substantially to £55,000 in 1998 - up 22 per cent on the previous year. Cash represented 76 per cent of the Group's net assets at the end of 1998. The net loss per share in the fourth quarter was 1.24 pence compared to a net loss per share of 2.20 pence in Q4 1997.

25% of contracts in 1998 came from repeat customers.
Significant contracts signed - British Aerospace; Clorox; Merrill Lynch; Reuters; Lucent; BBC Online; Los Alamos Laboratories; Internet.com; World Online.
International expansion and investment in the US, Europe and Asia; a large contract signed in Germany with Weka and also a large contract in Thailand in 1998.
OEM licenses signed in major markets including: document management; e-mail security and e-commerce.
Significant investment in international expansion into the US and Europe.
Expansion into Scandinavia with acquisition of Intracon, Australia and Japan also targeted in 1999.

Commenting on the results Dr Mike Lynch, Managing Director and Chief Executive Officer of Autonomy Corporation plc today said:

"This has been an important year with the successful flotation on EASDAQ. A number of strategic milestones were achieved - notably the adoption of our Knowledge Management products by major customers such as British Aerospace, Merrill Lynch and Lucent. In addition, we have made a significant investment in our European and US operations in order to provide Autonomy with the foundations for future growth.

The next step is to capitalise on the strength of our products, in particular the language independence of the technology, with international expansion throughout Europe, into Asia and the Pacific Rim as well as across the Middle East and Africa. With the acquisition of a controlling stake in Intracon in Scandinavia, and, with significant sales into Germany, South Africa and Asia, the progress made in establishing Autonomy internationally is looking very encouraging.

With the signing of additional key blue-chip clients and continuing industry recognition, Autonomy remains well positioned to further exploit its growing markets on a global basis. The current year has started well with a record pipeline of new business, and the company is performing in line with current expectations."