Autonomy Corporation Plc Quarterly Results Announcement For The Ist Quarter Ended 31 March 1999

May 17, 1999

For more information, please contact:

Dr Mike Lynch, Managing Director and CEO
Dominic Johnson, Marketing Director
Jonathan Spira, Chief Financial Officer
AUTONOMY CORPORATION plc
Tel: 01223 421 220

Edward Bridges/Victoria Springett
FINANCIAL DYNAMICS
Tel: 0171 831 3113

Autonomy Corporation plc ("Autonomy") is a leading provider of Knowledge Management and New Media technology products which automate the handling of vast amounts of unstructured information on the Internet and across the enterprise. Autonomy floated on Easdaq (EASD: AUTN) in July 1998.

Key Features

Q1 1999 versus Q1 1998

Turnover up 261% to GBP 2.5 million (Q1 1998: GBP 0.70 million)
Gross margin improved 4 percentage points to 84% (Q1 1998: 80%)
Gross profits increased 279% to GBP 2.12 million (Q1 1998: GBP 0.56 million)
Loss before and after tax of GBP 0.12 million, retained loss after minority interest of GBP 0.17 million (Q1 1998: loss before and after tax of GBP 0.52 million)
Loss per share for Q1 1999 of 0.4p (Q1 1998: loss per share of 1.8p)

Q1 1999 versus Q4 1998

Turnover up 40% to GBP 2.51 million (Q4 1998: GBP 1.79 million)
Gross margins up one percentage point from 83% to 84%
Gross profits increased 41% to GBP 2.12 million (Q4 1998: GBP 1.50 million)
Loss before and after tax of GBP 0.12 million, retained loss after minority interest of GBP 0.17 million (Q4 1998: loss before and after tax of GBP 0.50 million)
Loss per share of 0.4p (Q4 1998: loss per share of 1.2p)

Corporate highlights

Contract wins with Proctor and Gamble, Novartis, Nationwide Building Society, Alcatel, Boston Herald and the BBC.
Autonomy's largest New Media contract signed with Talkcast.com
Continued development of US Federal government market. Sales to the Pentagon in Q1 1999 follows the first federal success earlier this year.

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

"I am pleased with the progress made in building the management: team who will help Autonomy to further penetrate its three key markets: Knowledge Management, New Media and E.commerce. Following a period of significant investment in people and infrastructure, as well as into continuing research and development, the challenge now is to use this investment to continue to drive sales forward.

Autonomy has experienced high levels of interest in our new Portal-in-a-Box™ and Autonomy ActiveKnowledge™ products."

Record First Quarter 1999 Shows 261% Year-on-Year Increase and 40% Quarterly Revenue Growth

Cambridge, England and San Francisco, California, Monday, May 17, 1999

Autonomy Corporation plc (EASDAQ: AUTN) today announced net revenue for its 1st quarter ended March 31, 1999 of GBP 2.5 million, a 261% increase on the comparable period in 1998. This also represents an increase of 40% over the 4th quarter of 1998.

Gross margins increased from 80% in the 1st quarter of 1998 to 84% in the 1st quarter of 1999. The net loss narrowed to GBP 169,498 in the 1st quarter of 1999 from a 1st quarter net loss in 1998 of GBP 520,570 and a net loss in the 4th quarter of 1998 of GBP 497,777. The net loss per share improved to 0.4p as compared to the net loss per share reported in the 1st quarter of 1998 of 1.8p. The net loss per share in the 4th quarter of 1999 was 1.2p.

"We continued to show strong quarter-on-quarter growth, as a result of the demand across our core lines of business," said Dr Mike Lynch, Managing Director and CEO. "We are particularly pleased about our increasing recognition in the US market during the last quarter and our award at the Internet World Industry Event in April 1999. This recognition has been demonstrated through the increased revenue contribution from our US operations. I am also pleased that we added new clients such as Proctor and Gamble, Novartis, Nationwide Building Society, Alcatel and the Boston Herald to our growing customer list."

Autonomy entered into agreements in both its New Media and Knowledge Management markets. In New Media, contracts were signed with Talkcity, Portera and the Boston Herald in the US, and two new contracts were signed in the UK with the BBC. The largest New Media contract to-date was secured with Talkcast.com, a convergent Internet service combining voice telephony and Internet content delivery through a unified messaging interface. Talkcast.com's service is due to launch in the Autumn of 1999.

In Knowledge Management, a significant OEM deal was reached in the US with Intraspect, as well as direct federal sales to the Pentagon. European pilot projects were initiated with Proctor and Gamble, Nationwide Building Society and Novartis, additionally, Alcatel have been recruited as integration partners in France. Following the acquisition by Autonomy of a stake in Intracon, recently launched as Autonomy Nordic, Autonomy Nordic has signed its first customers which include Packard Bell, selling Autonomy's core products into the channel in Scandinavia.

In an important development, Autonomy signed its first e.commerce contract in Dubai during the quarter.

"Autonomy continues to focus on the building of a direct and indirect international sales channel. The reception of our products by the indirect channel, including a new OEM partner, has been encouraging and we look forward to attracting more partners in the future." Dr Lynch commented.

The launch of Autonomy's ActiveKnowledge™ enterprise software took place on April 7,1999 and has been well received by customers, industry analysts and the IT trade in general. Delphi Group's Director of Research, Hadley Reynolds, stated that "Autonomy ActiveKnowledge™ is really a breakthrough product in knowledge management." This product is the first to fully integrate knowledge management into an organization's IT systems and business processes.

The management team has been strengthened with the promotion of Autonomy's US Director of Operations, Thomas Unger, to the position of Chief Operating Officer. Jeff McEachern has also joined the company as VP of Marketing, having previously worked at Oracle Corporation as Director of Worldwide Alliances and Marketing. Autonomy has also retained top Silicon Valley recruitment consultancy, Heidrick and Struggles, to search for two major US non-executive Board members. European sales operations have been expanded with the addition of five new appointments, including Karlyn Griggs as Head of Partner Management, having previously worked at Wang and Dataware and Derek Puplett, who previously ran Olivetti UK's software division.

Dr Mike Lynch commented, "I am pleased with the progress made in building the management: team who will help Autonomy to further penetrate its three key markets: Knowledge Management, New Media and E.commerce. Following a period of significant investment in people and infrastructure, as well as into continuing research and development, the challenge now is to use this investment to continue to drive sales forward."Autonomy's new Annual Report is now available. Please contact Autonomy at 01223 421220.

Further corporate and investor relations information on Autonomy can found on http://www.autonomy.com/

Except for historical information contained herein, the matters discussed in this news release may be considered forward-looking statements that may involve risks and uncertainties. Factors which may affect the Company's operating results are detailed in the Company's Prospectus, relating to the admission to trading of Autonomy's ordinary shares on EASDAQ, published on 10 July 1998. These documents identify important factors that could cause actual events or results to differ materially from those contained in any forward-looking statements.

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