News

Autonomy Corporation plc Announces Preliminary Results for the first quarter 2000

May 18, 2000

Autonomy Corporation plc ("Autonomy") is a leading provider of infrastructure technology which automates the handling of vast amounts of unstructured information on the Internet and across the enterprise. Autonomy listed on Nasdaq in May 2000 (NASD: AUTN), having floated on Easdaq (EASD: AUTN) in July 1998.

KEY FEATURES

Results in USD ($000's except per share)	Q1 2000	Q4 1999	Q1 1999

Revenue	11,702	7,197	3,396
Gross profit	10,926	6,600	2,759
Profit (loss) before tax	440	(885)	(921)
Earnings (loss) per share
- basic and diluted	$0.01	($0.03)	($0.02)
		-	-
Results in GBP £000's (except per share)	Q1 2000	Q4 1999	Q1 1999
Turnover	7,335	4,465	2,104
Gross profit	6,848	4,095	1,709
Profit (loss) before tax	275	(549)	(571)
Earnings (loss) per share
- basic and diluted	£0.01	(£0.01)	(£0.01)

Q1 Corporate Highlights

First profitable quarter announced
Gross margin increased again to 93%
US revenue growth continues, up to 56% at $6.5 million
Significant wins in all product areas
OEM strategy bringing in significant contracts, eg: Sybase, Brio, Novient
Continued progress in US Federal market
Results now reported in accordance with US GAAP

AUTONOMY CORPORATION ANNOUNCES RECORD FIRST QUARTER RESULTS FOR 2000

Q1 revenues $11.7 million, up 244%; gross margins increase to 93%

Company posts first quarter of profitability, $0.01 earnings per share

Autonomy Investor Relations Web site: www.autonomy.com

Q1 earnings announcement call live on www.autonomy.com or www.streetfusion.com at 2:00 p.m. BST/9:00 a.m. EST/6:00a.m. PST. Allow 15 minutes prior to the call to visit the sites and download and install any necessary audio software.

Following the Nasdaq listing in May 2000, all financial information including comparatives is presented in accordance with US GAAP.

CAMBRIDGE, England, - 18th May 2000 - Autonomy Corporation plc (NASDAQ: AUTN, EASDAQ: AUTN)

Autonomy today announced first quarter revenue of $11.7 million, up 244% from the first quarter of 1999 and up 63% from the fourth quarter of 1999. US revenues totaling $6.5 million were 56% of total first quarter revenues, up 550% from the first quarter of 1999 and 76% from the fourth quarter of 1999.

First quarter gross margins increased to 93% compared to 81% in the first quarter of 1999 and 92% in the fourth quarter of 1999. Gross profits increased 65% to $10.9 million, up 296% from the first quarter in 1999 and from $6.6 million in the fourth quarter of 1999. The increase over all prior periods reflects the increase of software sales as a percentage of the revenue mix.

The Company moved into profitability this quarter, with net income at $346,000, compared to a net loss of $921,000 in the first quarter of 1999 and a net loss of $1.4 million in the fourth quarter of 1999. First quarter basic and diluted earnings per share were $0.01, compared to a net loss of $0.02 per basic share in the first quarter of 1999 and a net loss of $0.03 per basic share in the fourth quarter of 1999.

Dr. Mike Lynch, CEO of Autonomy, commented:

"The first quarter of 2000 saw an exceptionally strong performance from Autonomy. We moved into profitability and saw excellent revenue growth across all markets. Our operations continue to expand globally, fuelled by OEM and partnership agreements. We saw strong growth in the US, where were particularly pleased to have signed General Motors as a global enterprise customer. Having moved into the region towards the end of last year, our Asia Pacific operations also generated initial revenues during the period.

At the same time, we are delighted that, on May 9 2000, Autonomy successfully completed an listing of 2.2 million shares on NASDAQ and EASDAQ, raising net proceeds to the company of $101 million in the midst of challenging market conditions. Autonomy is now looking to broaden its geographical footprint, extend the brand and pursue an acquisition strategy to drive territorial coverage and extend the reach of the core technology into new markets.

Going forward, we are excited about our future and we will continue to execute our strategy of leveraging our indirect distribution channels to drive forward our business into new markets and our technology into new areas."

First Quarter Operating Highlights

Enterprise Wins

Autonomy's technology has continued to win blue-chip corporate customers, who use Autonomy's technology as the infrastructure for their e-business. Autonomy's new clients include:

General Motors: The world's largest automotive corporation has adopted Autonomy's technology to power a global enterprise portal serving over 100,000 users. Autonomy's technology will enable General Motors to automatically leverage employee knowledge and business-critical information, from both internal sources and the Web, across the entire corporation.
Eli Lilly: The global research-based pharmaceutical corporation, which is active across 179 countries, is piloting Autonomy's technology to enable it to automatically manage, hyperlink, personalise and deliver breaking business news and pertinent scientific information to decision-makers within its 31,000-strong organization.
Fort Point: A leading US e-consultancy company has bought Portal-in-a-Box™ to create an internal portal, leveraging both web and file server content, for over 300 users. Fort Point will also make Autonomy available to its customers as part of an extranet. Fort Point's customers include Nike, jcrew.com, and Hewlett Packard.
Burda: Burda is Germany's most successful magazine and online publisher (with titles including Focus and the German-language version of Elle). It has adopted Autonomy's technology to power its internal knowledge management portal, with features including automatic personalisation and hyperlinking of information from hundreds of internal and external sources.
Nationwide Building Society: The largest building society in the world, and a new entrant in the ISP market, has chosen Autonomy to automate the management of its corporate knowledge through an Enterprise Portal which will provide business-critical information to employees across its core markets, which include mortgage lending, property leasing and banking services.
Druid: High-profile UK, US and Asia-Pacific-based IT management consultancy, now owned by F.I. Group, Druid has bought Autonomy's Portal-in-a-Box™ product to automatically manage, personalise and hyperlink information from both internal sources and the Web. Druid's own clients include Guinness, Hitachi, Honda and Yellow Pages.
Royal Australian Air Force: With the first contract to be signed out of our recently established Asia Pacific operations, the Royal Australian Air Force has implemented Autonomy's technology to deliver personalised, mission-critical information to its personnel. The implementation was carried out by TSA, an Autonomy reseller based in Australia.

New Media Wins

The ability of Autonomy's technology to power Web-facing portals as well as enterprise applications has already been put to good use by high-profile worldwide users such as the BBC, Reuters, Associated Press and News Corporation. In this quarter, Autonomy has added the following users to its portfolio of international customers in the New Media arena:

Screaming Media: As a leading global distributor of digital content on the Web has licensed Autonomy's technology to automatically categorize and deliver more than half a million content feeds monthly to hundreds of Web sites, from publishers including the New York Times, Business Wire and Red Herring. Screaming Media's clients include AOL, Microsoft and Sun Microsystems.
Commonwealth Institute: The Commonwealth Institute, which represents the interests of 1.7 billion people in over 50 Commonwealth countries, has adopted Autonomy's technology to power its e-Commonwealth portal. The portal automatically creates communities of interest for Commonwealth users across areas as diverse as industry and commerce, art and culture, and education and science. The portal also has a WAP capability, powered by Autonomy to keep users updated when they are on the move.
Global News Media: France's established provider of medical and pharmaceutical information has licensed Autonomy to enable it to automatically categorize information from hundreds of sources and to respond to the needs of thousands of medical researchers and clinicians worldwide.
Elsevier Libricum: Formerly known as the Pan European Publishing Company (PEPCO), Elsevier Libricum has over 25 years' experience in vertical sector publishing. It is now using Autonomy's technology to bring the benefits of automatic personalisation, categorization and hyperlinking to its vertical portals, focused on electronics and communications, industrial processes and science and medicine. Elsevier Libricum is part of the Reed Elsevier publishing empire.
Vavo: Europe's special interest portal for over-45s and senior citizens has adopted Autonomy to power the delivery of personalised, interest-focused information to its 45 : 65 audience, across topics as diverse as education, finance, fitness, health, leisure, politics and shopping.

OEM partnerships

New OEM agreements were signed across major software markets, demonstrating how Autonomy's technology is being adopted to provide the infrastructure for a wide range of other software vendors' solutions. Recent OEM agreements include the following:

Brio Technology: Brio licensed Autonomy's technology to integrate within the Brio Portal to deliver an automated, proactive solution for the delivery of structured and unstructured information. The combined offering provides one of the industry's most comprehensive and proactive enterprise portal solution that leverages applications, production and warehouse data.
Sybase: In February, Autonomy announced a partnership with Sybase, one of the largest independent software companies in the world. Sybase has embedded Autonomy's technology into its enterprise product, OpenDoor, a ready-made business portal solution. Autonomy's key components are helping Sybase to add value to its products in a number of proven markets, including telecommunications, financial services, healthcare and the public sector.
Open Market: Already an existing Autonomy OEM, Open Market announced the shipping and immediate availability of its Personalization Centre™, a component of its integrated e-Business Suite.
Novient - Novient has adopted Autonomy's technology to power its own Professional Services Automation solution, which enables corporate information to be automatically categorized, linked and personalized. Novient has 50,000 consultants in 32 countries, and its clients include Hewlett Packard, Compaq and Siemens-Nixdorf.
Ontempo: Ontempo is an ASP (Applications Service Provider) which is using Autonomy to automatically categorize and hyperlink information for use by regional newspapers. The ASP model enables Ontempo to bring the benefits of Autonomy's technology to smaller media that would not previously have had access to it.
Intranet Solutions: Intranet Solutions is a leading provider of WWW-based content management software and has licensed Autonomy for inclusion in its suite of products.
WebPromis: a leading Belgian Internet company has embedded Autonomy's technology into its range of solutions for media asset managements to provide automatic personalisation and hyperlinking of content. Webpromis' clients include Canal+ and Music Choice.

E-commerce wins

This quarter, significant e-commerce business came from the following clients:

Tesco: Europe's largest supermarket chain has licensed a full suite of Autonomy products for their online home delivery service, including i-WAP and Kenjin (branded as MyWeb), to underpin the expansion of its e-commerce activities on the Tesco.com site. Autonomy's technology will power the automatic personalisation of product information, and the suggestion of alternative products. Kenjin will be distributed to Tesco's customers in both on and offline versions.
CERT: a leading logistics company in the retail sector has licensed Autonomy's technology to power the launch of its B2B and B2C commerce sites. The sites will automatically update and maintain large product inventories as well as providing real-time product auctions, special offers and mobile commerce facilities.

New Product Announcements

Kenjin®: In March, Autonomy launched Kenjin®, a free consumer service that removes the need to use traditional keyword search engines. Kenjin® reads along with the pages and documents that the user reads and writes and automatically suggests conceptually related information from over a million sources on the Web and on the user's own local drive.

Kenjin® has been adopted by licensed distribution partners in France, Germany, Spain, Italy and the UK as a downloadable service on their own websites. Kenjin® will deliver general information to the user, but will also suggest appropriate products from the organization's own catalogue of products and services, thus enriching users' online experience.

New significant Kenjin® distribution partners signed up since launch in the first quarter of 2000 include:

Retevision: Spain's leading telecommunications corporation, with over two million users, has signed up as a Kenjin® distributor. A co-branded version of Kenjin® will be available through the company's new lifestyle portal.
Tiscali: Italy's top ISP, with over 1.5 million users, has become a Kenjin® distributor, and is providing a co-branded version of the product on its site. Tiscali is also distributing Kenjin® to its user base and actively promoting it in national print media.
i-WAP™: In February, Autonomy announced the evolution of its core technology to the WAP (Wireless Application Protocol) platform. Autonomy has WAP-enabled its entire range of products across its core markets of new media, enterprise software and e-commerce. Launch clients for Autonomy's i-WAP™ technology include: Ericsson, Talkcast, Breathe and YaTack. Subsequent contracts have also been signed with Tesco and the US Navy.

Strategic Partnerships

In line with Autonomy's strategy of scaling the business through a network of strategic partnerships, Autonomy has entered into strategic partnerships with over 100 partners, including the following recent additions:

Compaq: Under the terms of a global agreement, Autonomy will become the recommended technology of choice for clients of Compaq's Global Services Division requiring solutions for the management of unstructured information. Compaq will recommend Autonomy as the solution for managing and personalising unstructured data in Compaq's clients' applications, across the globe. Compaq will also handle all project support and integration issues, investing in an EMEA (Europe, Middle East and Asia) Knowledge Management Competency Centre based in the U.K and Ireland, which will be staffed by specialists trained in Autonomy's technology.
Sun Microsystems: In March, Autonomy announced that it had partnered with Sun Microsystems, as part of the i-Force initiative. i-Force comprises a select handful of vendors offering best-of-breed products; from these products, Sun helps its clients create customized solutions. The partnership has increased Autonomy's penetration into a vast market made up of new companies seeking easier, faster and safer e-business solutions.
NewsEdge Corporation: NewsEdge and Autonomy have entered into a partnership to sell and market their respective e-content and infrastructure applications to Web portals, corporate intranets, and e-commerce services and business exchanges. As part of the global marketing and sales agreement, both companies will promote and sell NewsEdge's e-content services and Autonomy's automated infrastructure products to their expanding customer bases worldwide.
Razorfish: In February, Autonomy signed a reseller agreement in Central Europe and Germany with international digital communications service provider Razorfish. Razorfish is using Autonomy to automatically personalise the delivery of news, enterprise information, product promotions and advertising to users across a range of markets, including travel, telecommunications, avionics, consumer fashions, financial services, media and entertainment and publishing.
eXpanded Media: eXpanded Media is a prominent Belgium-based leading ISP that offers integrated Internet business solutions. As a VAR, it has adopted Autonomy's technology to provide advanced personalisation and information delivery service to its clients. eXpanded Media has implemented Portal-in-a-Box™ in several of its own projects, the VAR agreement builds on an existing and confident relationship.

US Federal Wins

New penetration into US Federal markets : NASA, US Navy and US Army

Autonomy's US operation reported significant inroads into the US Federal marketplace, including sales to NASA, the US Army and the US Navy.

NASA is using Autonomy to automatically organize, manage and hyperlink the documents in its library - an immense repository of scientific literature. Part of this information, and the Autonomy technology which underlies it, will be made publicly available as part of NASA's public education program.
The US Army has bought Autonomy's Portal-in-a-Box™ to power its internal Combined Arms Lessons Learned portal. The portal will automatically hyperlink and personalise documents detailing past conflicts, to enable users to better understand the decisive factors in warfare.
The US Navy has bought Portal-in-a-Box™ with i-WAP™, to deliver personalised information to Navy recruits via their PDAs and other hand-held devices. The aim of the program, which is known as SWONET, is to use highly targeted information to reinforce recruits' confidence in their decision to enlist.

Industry Recognition

Global Technology Award - In February, Autonomy was awarded the prestigious Technology Pioneer Award at the World Economic Forum in Davos, Switzerland. The award was given in recognition of Autonomy's position "at the forefront of the knowledge economy" and its "excellent growth and innovation in technology." The presentation of the award was made to Autonomy's founder and CEO, Dr. Mike Lynch by Klaus Schwab, President and founder of the World Economic Forum.

Board Changes

As previously announced in January, Ralph Harms joined Autonomy as Chief Financial Officer.

Autonomy is pleased to announce the appointment of the Honorable Richard Perle as a non-executive Board Director. Mr Perle has held various senior United States federal government appointments, the most recent of which was Assistant Secretary of Defense for International Security Policy. He has been a member of the United States Senate Staff in the office of Henry M. Jackson; the Senate Committee of Government Operations; the Committee on Armed Services; and of the Arms Control Subcommittee.

Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties. Due to a variety of factors, actual results could differ materially from those in such forward-looking statements. These factors include [list key risk factors from the S-1 that impact income, revenue, future design wins, OEM partnerships, company expansion, etc.]. These factors and others are discussed in the Company's filings with the Securities and Exchange Commission, including Autonomy's registration statement on Form S-1, File no. 333-11804.

For further information, please contact:

Dr Mike Lynch, Managing Director and CEO
Dominic Johnson, Marketing Director
Autonomy Corporation plc
Tel: 01223 421 220

Edward Bridges / Alastair Hetherington
Financial Dynamics
Tel: 020 7831 3113

Ann Travers
Brainerd Communicators, Inc.
212 986 6667