News

AUTONOMY CORPORATION PLC ANNOUNCES RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 2004

Record Q1 Revenues; Revenues up 37% and Profit Before Tax (adjusted) up 111% year-on-year

Autonomy's first quarter conference call will be available live on the World Wide Web at www.autonomy.com on Wednesday, April 21, 2004 at 9:30 a.m. BST/4:30 a.m. EST/1:30 a.m. PST

SAN FRANCISCO, California and CAMBRIDGE, England - April 21, 2004 - Autonomy Corporation plc (Nasdaq: AUTN, LSE: AU.), a global leader in infrastructure software for the extended enterprise, today reported financial results for the first quarter ended March 31, 2004.

Financial Highlights

	Three Months Ended
	(unaudited)
Results in US$	March 31, 2004	Dec. 31, 2003	March 31, 2003
($000's except per share)
Revenues	$ 16,364	$ 16,960	$ 11,955
Gross profit (adjusted)*	15,594	16,142	11,518
Gross profit margin (adjusted)*	95%	95%	96%
Profit before tax (adjusted)*	$ 2,692	$ 2,811	$ 1,274
Net profit (adjusted)*	$ 2,241	$ 2,546	$ 850
Gross profit (GAAP)	15,379	15,751	11,518
Gross profit margin (GAAP)	94%	93%	96%
Profit before tax (GAAP)	$ 1,804	$ 2,368	$ 1,958
Net profit (GAAP)	$ 1,528	$ 2,089	$ 1,329
EPS
- basic (adjusted)	$ 0.02	$ 0.02	$ 0.01
- diluted (adjusted)	$ 0.02	$ 0.02	$ 0.01
- basic (GAAP)	$ 0.01	$ 0.02	$ 0.01
- diluted (GAAP)	$ 0.01	$ 0.02	$ 0.01

* Adjusted results exclude predominantly certain specific non-cash translational foreign exchange gains and losses and associated tax effects in all periods, as well as non-cash charges in Q1 2004 and Q4 2003 for amortization of purchased intangibles and share-based compensation arising in connection with the acquisition of Virage, Inc. in September 2003. See page 5 for further details.

First Quarter 2004 Corporate Highlights

Revenues ahead of and profits in line with consensus
Record Q1 revenues, up 37% year-on-year
Profit Before Tax (adjusted) up 111% year-on-year
Operating margins (adjusted) up more than ninefold year-on-year
Seventeenth consecutive quarter of profitability
Gross margins (adjusted) remain high at 95%
Blue chip first quarter wins include Shell, Vodafone, the U.K. National Health Service, France Television, Singapore Civil Defence Forces, Sony, Chinese National Information Agency, ABN Amro, Citicorp, EMC, AT&T and CNN, as well as various U.S. Federal government agencies, such as the U.S. Department of Justice, the U.S. Department of Energy and the U.S. Army's Army Knowledge Online.
Average selling price remains stable at $350,000
Deferred revenue at record levels
OEM revenues up 36% year-on-year
DSOs at 104 days
R&D continues to increase year-on-year, up 40% from Q1 2003

Commenting on the results, Dr. Mike Lynch, group CEO of Autonomy said, "We are pleased to announce Autonomy's continued strong performance with record Q1 results, revenues ahead of market consensus and profits in line with consensus, all during a seasonally weak quarter. Continuing from our strong performance in Q4 2003, Q1 2004 results are significant improvements from Q1 2003. Our sales results demonstrate again that our software is consistently delivering major cost savings and incremental value to employees and customers on a global basis. We've delivered these results despite effects from the weakening U.S. dollar, causing an 8% adverse cost effect with increased costs of operations of $0.6 million and charges of $0.6 million from translational foreign exchange losses, countered by a nominal benefit of 2% on revenues. Of particular note, operating margins (adjusted) for Q1 2004 increased more than ninefold from Q1 2003, offering continued validation of the geared nature of our business model. R&D continued to increase year-on-year, up 40% from Q1 2003. Cash collection during the quarter was also strong."

Dr. Lynch continued, "In Q1 2004 we saw a continued trend towards standardization in the industry as large organizations implement comprehensive systems that can adapt to the ever-increasing volumes of unstructured information. We've seen leading organizations realize that their strategy for handling unstructured information is as fundamental as their decisions on the database. As a result companies such as AstraZeneca, Philips and Shell have all recently standardized on Autonomy, just as they may have made decisions in the past to standardize on vendors such as Oracle or SAP."

First Quarter 2004 Financial Highlights

Revenues for the first quarter totalled $16.4 million, down 4% from $17.0 million for the fourth quarter of 2003 reflecting traditional seasonality, and up 37% from $12.0 million for the first quarter of 2003. U.S./Asia Pac revenues of $8.5 million were 52% of total revenues and U.K./European revenues totalling $7.9 million were 48% of total revenues in the first quarter of 2004. After the successful integration of Virage and the winding-down of its services operations, rich media sales were running at approximately 15% up from approximately 10% in Q1 2003.

Gross profits (adjusted) for the quarter were $15.6 million, down 3% from $16.1 million in the fourth quarter of 2003, and up 35% from $11.5 million in the first quarter of 2003. First quarter gross margins (adjusted) were 95%, compared to 95% in the fourth quarter of 2003 and 96% in the first quarter of 2003. Gross profits (GAAP) for the quarter were $15.4 million, down 2% from $15.8 million in the fourth quarter of 2003, and up 34% from $11.5 million in the first quarter of 2003. First quarter gross margins (GAAP) were 94%, compared to 93% in the fourth quarter of 2003 and 96% in the first quarter of 2003.

Net profit (adjusted) for the first quarter of 2004 was $2.2 million, or $0.02 per diluted share, compared to net profit (adjusted) of $2.5 million, or $0.02 per diluted share, for the fourth quarter of 2003 and compared to net profit (adjusted) of $0.9 million, or $0.01 per diluted share, for the first quarter of 2003. Net profit (GAAP) for the first quarter of 2004 was $1.5 million, or $0.01 per diluted share, compared to net profit (GAAP) of $2.1 million, or $0.02 per diluted share, for the fourth quarter of 2003 and compared to net profit (GAAP) of $1.3 million, or $0.01 per diluted share, for the first quarter of 2003.

Cash balances were $108.1 million at March 31, 2004, an increase of $5.8 million in the quarter. Accounts receivable days sales outstanding increased to 104 days for the first quarter of 2004, compared to 99 days for the fourth quarter of 2003 and 134 days for the first quarter of 2003. Receivables for the first quarter were $19.0 million, compared to $18.7 million for the fourth quarter of 2003 and $17.8 million for the first quarter of 2003. Deferred revenues were at record levels at $6.4 million net at March 31, 2004, compared with $5.6 million net at December 31, 2003, and compared with $4.8 million net at March 31, 2003.

Although GAAP 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 core business, such as the sale of its software products and services and operating profits without giving effect to certain specific non-cash charges. Consequently, the non-GAAP results exclude charges not reflective of Autonomy's core ongoing operational business, namely the periods Q1 2004 and Q4 2003 exclude amortization of purchased intangibles and share-based compensation arising in connection with the acquisition of Virage, Inc. in September 2003 and all periods exclude non-cash translational foreign exchange gains and losses and associated tax effects. Management uses the adjusted results to assess the financial performance of Autonomy's core business.

Q1 Product Sales

Autonomy's infrastructure technology has been adopted by enterprises to process information across all internal and external data sources. During the quarter, major new wins included: the Irish Government; the U.K. National Health Service; Iberdrola; France Television; Singapore Civil Defence Forces; Sony; Chinese National Information Agency; Warner Brothers; and the World Bank. Repeat business from existing customers accounted for approximately 37% of revenue for the quarter, and included customers such as Shell; Vodafone; ABN Amro; Athens Olympic Games; Schneider; Unisys; Lloyds TSB; Citicorp; Norsk Hydro; EMC; AT&T; and CNN, as well as various U.S. Federal government agencies, such as the U.S. Department of Justice; the U.S. Department of Energy and the U.S. Army's Army Knowledge Online.

Strategic Partnerships and OEMs

Autonomy's OEM Program continued on track during the first quarter, with four contracts, including agreements with Vignette and Captiva. OEM-derived revenues for the first quarter of 2004 of $3.0 million accounted for approximately 18% of revenues, compared to $3.2 million for the fourth quarter of 2002. Q1 2004 also saw new products shipping from Autonomy OEM customers including Veritas and Captiva.

Q1 Corporate Developments

During the first quarter Autonomy was recognized in multiple ways for its market leadership and unmatched technology.

During the first quarter, Autonomy was included in KMWorld magazine's annual "100 Companies that Matter in Knowledge Management" issue for the fourth year in a row. During Q1 Autonomy was also distinguished as a leader by Transform Magazine with the 2003 Product of the Year award for the enterprise search category for Autonomy's Aungate. Aungate offers the world's first automated solution for enterprise compliance and litigation support. Finally, during Q1 Software Magazine ranked Autonomy as one of the world's foremost software providers for the fourth consecutive year.

About Autonomy Corporation plc

Autonomy Corporation plc (Nasdaq: AUTN; LSE: AU.) is a global leader in infrastructure software for the enterprise. Autonomy's technology powers applications dependent upon unstructured information including call center, customer relationship management, knowledge management, enterprise portals, enterprise resource planning, online publishing and security applications. Autonomy's customer base includes more than 1,000 global companies including BAE Systems, Ford, Ericsson, Royal Sun Alliance, Sun Microsystems and public sector agencies including the U.S. Department of Defense, NASA and the U.S. Department of Energy. Strategic reseller and OEM partners include leading companies such as ATG, BEA, Business Objects, Brio, Citrix, Computer Associates, EDS, IBM Global Services, iManage, Novell, Novient, Vignette and Sybase. The company has offices worldwide.

The Autonomy Group includes: Aungate, a leading supplier of electronic communications management technology for regulatory compliance in the enterprise; Audentify, a leading supplier of next-generation contact center technology; and Virage, a leading provider of rich media communication and content management software.

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 latest Annual Report on Form 20-F.

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:
Dominic Johnson Autonomy Corporation plc +44 (0)1223 448 000	Sushovan Hussain, Chief Financial Officer Autonomy Corporation plc +44 (0)1223 448 000
Edward Bridges Financial Dynamics +44 (0)20 7831 3113	Edward Bridges Financial Dynamics +44 (0)20 7831 3113

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