News

AUTONOMY CORPORATION PLC ANNOUNCES RESULTS FOR THIRD QUARTER ENDED SEPTEMBER 30, 2001

Remains Profitable Despite Difficult Trading Conditions

Autonomy's third quarter conference call will be available live on the World Wide Web at www.autonomy.com on Thursday, October 25, 2001 at 9:30 a.m. BST/4:30 a.m. EST/1:30 a.m. PST

SAN FRANCISCO, California and CAMBRIDGE, England - October 25, 2001 - Autonomy Corporation plc (Nasdaq: AUTN, LSE: AU., Nasdaq Europe: AUTN), a global leader in infrastructure software for the extended enterprise, today reported financial results for the third quarter ended September 30, 2001.

Financial Highlights

	Three Months Ended			Nine Months Ended
Results in US$	Sept. 30, 2001	June 30, 2001	Sept. 30, 2000	Sept. 30, 2001	Sept. 30, 2000
($000's except per share)
Revenues	$ 10,264	$ 14,192	$ 17,635	$ 39,114	$ 43,961
Gross profit	$ 10,053	$ 13,839	$ 16,724	$ 37,836	$ 40,876
Gross profit margin	98%	98%	95%	97%	93%
Adjusted net profit+	$ 323	$ 2,069	$ 4,731	$ 3,962	$ 7,113
Earnings per share*+
- basic	$ 0.00	$ 0.01	$ 0.05	$ 0.06	$ 0.08
- diluted	$ 0.00	$ 0.01	$ 0.05	$ 0.06	$ 0.08

* All share information reflects a 3-for-1 stock split effective August 1, 2000.

+ EPS includes, and adjusted net profit excludes, translational foreign exchange gains and losses and associated tax effects.

Third Quarter Corporate Highlights

Company remains profitable despite difficult trading conditions
Margins remain high at 98%
Autonomy OEM program on track with four new partners, including Computer Associates
Blue chip third quarter wins include Bank of Montreal, Nestle, ABN Amro, Siemens Financial Services, Voicestream, Consignia and the United States Department of Commerce
Average contract size remains stable at $360,000 despite deferral of larger deals beyond Q3
Company is cash generative
Balance sheet remains strong with approximately $146 million in cash
New York office re-opened after September 11th damage

Commenting on the results, Dr. Mike Lynch, group CEO of Autonomy said, "While the events of September 11th interrupted our normal third quarter pattern that traditionally combines a slower August and compensating September, we have continued to witness a strong improvement in the pipeline and increased visibility of revenue from that pipeline. In particular, larger deals that were temporarily delayed are now maturing at an encouraging pace. This slow yet consistent increase in visibility provides us with significant reason to be encouraged about the future and remain positive about our medium term prospects as the immediate effect of events in the U.S. abate."

Dr. Lynch continued, "Even in the face of difficult market conditions, Autonomy has continued to maintain profitability that has contributed to a growing cash balance of more than $146 million. The effect of larger deals moving beyond the end of the quarter has only marginally affected our average contract size that remains stable at approximately $360,000. Significant business from both new and repeat blue chip customers, including Bank of Montreal, Nestle, ABN AMRO, Consignia, Kaiser Permanente and the United States Department of Commerce are being secured in the face of an increasingly stringent procurement environment which often includes exhaustive ROI and detailed business case studies. We welcome this due diligence process because it has enabled us to demonstrate the hard commercial benefits of using Autonomy and firmly entrench our position as a business efficiency tool delivering tangible benefits of automation, further confirming Autonomy as the market leader."

Describing the road ahead, Richard Gaunt, Chief Technology Officer and co-founder of Autonomy said, "Going forward, we are increasing our investment in research and development, and with a workforce of approximately 200 people worldwide and a strong cash position, we see no need to reduce or restructure the shape of our organization. The combined effect of a competitive landscape that continues to become more benign and a low cost base leaves us well positioned for future growth".

Third Quarter Financial Highlights

Revenues for the third quarter totalled $10.3 million, down 28% from $14.2 million for the second quarter of 2001, and down 42% from $17.6 million for the third quarter of 2000. U.S. revenues of $4.8 million were 47% of total revenues in the third quarter of 2001. U.K./European revenues totalling $5.5 million were 53% of total revenues in the third quarter of 2001.

Gross profits for the quarter were $10.1 million, down 27% from $13.8 million in the second quarter of 2001, and down 40% from $16.7 million in the third quarter of 2000. Third quarter gross margins were 98%, compared to 95% in the third quarter of 2000 and compared to 98% in the second quarter of 2001.

Adjusted net income for the third quarter of 2001 was $0.3 million, compared to adjusted net income of $2.1 million for the second quarter of 2001. Adjusted net income excludes translational foreign exchange gains and losses and associated tax effects for all periods. Net income for the third quarter of 2001 was $0.1 million, or $0.00 per diluted share, compared to net income of $1.5 million, or $0.01 per diluted share, for the second quarter of 2001, and compared to net income of $6.5 million or $0.05 per diluted share for the third quarter of 2000.

Cash and cash equivalents totalled $146.2 million at September 30, 2001, compared to a balance of $137.3 million at June 30, 2001. The increase in cash and cash equivalents was primarily due to positive cash flow from operations and a favourable translation effect of sterling cash balances.

Receivables for the third quarter were $12.3 million compared to $15.3 million for the second quarter of 2001. Deferred revenues were $7.6 million gross ($3.2 million net) at September 30, 2001, compared with $8.2 million gross ($3.6 million net) at June 30, 2001.

Product Sales

Autonomy's infrastructure technology has been adopted by enterprisesto process information across all internal and external data sources. During the quarter, major wins included: Bank of Montreal, Consignia, Siemens Financial Services, JD Edwards, Kaiser Permanente and the U.S. Department of Commerce. Repeat business from existing customers, such as ABN AMRO, Voicestream, Intel, Nestle, United States Army and Hewlett Packard, accounted for approximately 34% of revenue for the quarter.

Increasingly detailed ROI and business case studies are assisting the sales process in a number of unexpected ways. In the face of such stringent scrutiny, potential competitors are challenged to defend technologies that continue to require significant manual support. Conversely, while Autonomy's technology is able to provide significant return on investment in basic areas such as support and maintenance and reduced manualisation, the scrutiny of ROI and thorough business case proposals is ensuring that the technology is deployed in sophisticated and innovative ways that further prove Autonomy's market leader status.

Strategic Partnerships and OEMs

Autonomy's OEM Program continues to progress according to plans with the addition of four new OEMs, including a significant new relationship with Computer Associates. Ongoing OEM royalty revenues for the third quarter of 2001 were $0.4 million compared to $0.7 million during the second quarter of 2001. In addition, Autonomy signed new reseller partners including KPMG in Germany and Satyam.

Corporate Developments

Autonomy received recognition from Federal Computer Week as one of the "Top Ten Companies to Watch" in the public sector technology market. Federal Computer Week, which provides federal information technology buyers with information that will enable them to make intelligent buying decisions, chose Autonomy as one of its top ten companies based on Autonomy's ability to improve federal worker productivity, to adapt to changing federal IT regulations and to anticipate the demands of federal customers so they can operate efficiently. Autonomy's selection was also based on the company's continued success with government agencies and partners in the public sector. Currently, 35 U.S. federal agencies use Autonomy's technology.

About Autonomy Corporation plc

Autonomy Corporation plc (Nasdaq: AUTN; LSE: AU.; Nasdaq Europe: AUTN) is a global leader in infrastructure software for the enterprise. Autonomy's technology powers applications dependent upon unstructured information including: e-commerce, customer relationship management, knowledge management, enterprise information portals, enterprise resource planning and online publishing. Autonomy's customer base includes more than 475 global companies, including Astra Zeneca, British Aerospace, Clorox, Deutsche Bank, Ericsson, General Motors, Lucent, Royal SunAlliance, Sun Microsystems and public sector agencies including the United States Department of Defense, NASA and the United States Department of Energy. Strategic reseller and OEM partners include leading companies such as BEA, Business Objects, Hewlett Packard, IBM Global Services, Oracle, Vignette and Sybase. The company has offices in North America, Europe, Asia and Australia and is on the Web at http://www.autonomy.com/.

Caution Concerning Forward-Looking Statements

With the exception of historical information, the matters set forth in this news release are forward-looking statements that involve risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. These factors include, among others, technology risks, including dependence on core technology; fluctuations in quarterly results; dependence on new product development; rapid technological and market change; reliance on sales by others; management of growth; dependence on key personnel; rapid expansion; growth of the Internet; financial risk management; and future growth subject to risks. These factors and other factors which could cause actual results to differ materially are also discussed in the company's filings with the United States Securities and Exchange Commission, including Autonomy's Annual Report on Form 20-F and Registration Statements on Form F-1.

Autonomy and the Autonomy logo are registered trademarks or trademarks of Autonomy Corporation plc. All other trademarks are the property of their respective owners.

Financial Media Contacts:	Analyst and Investor Contacts:
Kris Marubio, Director of Public Relations Autonomy Corporation plc +1 (415) 350-7339	Sushovan Hussain, Chief Financial Officer Autonomy Corporation plc +44 (0) 1223 448 000
Ann Travers Brainerd Communicators, Inc. +1 (212) 986-6667 +1 (917) 687-6263 (mobile)	John Buckley Brainerd Communicators, Inc. +1 (212) 986-6667 +1 (917) 543-3622 (mobile)
Alastair Hetherington/Edward Bridges Financial Dynamics +44 (0)20 7831 3113	Edward Bridges/Alastair Hetherington Financial Dynamics +44 (0)20 7831 3113

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