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AUTONOMY CORPORATION...

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AUTONOMY CORPORATION...

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AUTONOMY CORPORATION...

AUTONOMY CORPORATION PLC ANNOUNCES RESULTS FOR FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2004

2004 Full Year Revenues up 18%, Operating Profits up 71%* and Profit Before Tax up 22%*

Autonomy's fourth quarter conference call will be available live at http://www.autonomy.com/ on Wednesday, February 2, 2005 at 9:30 a.m. GMT/4:30 a.m. EST/1:30 a.m. PST

SAN FRANCISCO, California and CAMBRIDGE, England - February 2, 2005 - Autonomy Corporation plc (LSE: AU.), a global leader in infrastructure software for the extended enterprise, today reported financial results for the fourth quarter and year ended December 31, 2004.

Financial Highlights

* Adjusted results exclude non-cash charges for amortization of purchased intangibles and exceptional impairment of equity investment. See page 3 for further details.

** Results are unaudited other than twelve month 2003 GAAP results.

Full Year 2004 Corporate Highlights

Fourth Quarter 2004 Corporate Highlights

Commenting on the results, Dr. Mike Lynch, group CEO of Autonomy said, "We are pleased to announce Autonomy's continued strong performance with Q4 2004 results at the top end of the range discussed during the company's third quarter 2004 conference call of $16 million to $19 million. Top line revenues, operating profits, bottom line profit before tax and EPS are all up significantly quarter-on-quarter and year-on-year, outperforming the sector despite our continued significant investment in research and development for the future. This R&D investment saw returns during 2004 with the launch of industry-leading, major new technologies including IDOL 5.0, a major upgrade of our award-winning core product, and Autonomy's desktop search and Active Folders, delivering the power of Autonomy's award winning IDOL technology to the corporate desktop through the first secure enterprise desktop search. Finally, throughout 2004 Autonomy's R&D department has been working on a new suite of technologies for IPTV culminating in our first application for searching TV channels."

Dr. Lynch continued, "Of particular note in the results, 2004 revenues are up 18% and profit-before-tax (adjusted) is up 22% from 2003. This has lead to a 45% increase in operating margins (adjusted) from 2003. These results are driven by strong organic growth from our core business, and have been delivered despite the weakening dollar which had an approximately 3% positive effect on sales but a detrimental effect of approximately 6% on costs."

Dr. Lynch concluded, "2004 was a year of significant developments for Autonomy, with our software adopted as the corporate standard at world-leading enterprises such as Philips, AstraZeneca, Vodafone, Schneider, Norsk Hydro and Shell, clearly demonstrating that Autonomy is consistently delivering major cost savings and incremental value to employees and customers on a global basis. The net result of a strong 2004 is that our investment and performance means we remain well placed operationally and financially to drive continued growth in 2005."

Fourth Quarter and Full Year 2004 Financial Highlights

Revenues for the fourth quarter totalled $18.6 million, up 9.8% from $17.0 million for the fourth quarter of 2003. U.S./Asia Pac revenues of $9.4 million were 50.5% of total revenues and U.K./European revenues totalling $9.2 million were 49.5% of total revenues in the fourth quarter of 2004. Revenues for the twelve months ended December 31, 2004 totalled $64.8 million, up 18.0% from $54.9 million for the twelve months ended December 31, 2003.

Gross profits (adjusted) for the quarter were $17.9 million, up 11.1% from $16.1 million in the fourth quarter of 2003. Fourth quarter gross margins (adjusted) were 96% compared to 95% for the fourth quarter of 2003. Gross profits (GAAP) for the quarter were $17.7 million, up 12.5% from $15.8 million in the fourth quarter of 2003. Fourth quarter gross margins (GAAP) were 95%, compared to 93% in the fourth quarter of 2003.

Gross profits (adjusted) for the twelve months ended December 31, 2004 were $61.8 million, up 17.5% from $52.6 million for the twelve months ended December 31, 2003. Gross margins (adjusted) for the twelve months ended December 31, 2004, were 95%, compared to 96% for the twelve months ended December 31, 2003. Gross profits (GAAP) for the twelve months ended December 31, 2004, were $60.9 million, up 16.7% from $52.2 million for the twelve months ended December 31, 2003. Gross margins (GAAP) for the twelve months ended December 31, 2004, were 94%, compared to 95% for the twelve months ended December 31, 2003.

Compared to Q4 2003, the weaker U.S. dollar had a detrimental effect of approximately $0.2 million on operating profits. Net profit (adjusted) for the fourth quarter of 2004 was $3.6 million, or $0.03 per diluted share, up 44% compared to net profit (adjusted) for the fourth quarter of 2003 of $2.5 million, or $0.02 per diluted share. Net profit (GAAP) for the fourth quarter of 2004 was $3.0 million, or $0.03 per diluted share, up 43% compared to net profit (GAAP) of $2.1 million, or $0.02 per diluted share, for the fourth quarter of 2003. Net profit (adjusted) for the twelve months ended December 31, 2004, was $7.9 million, or $0.07 per diluted share, up 21% compared to net profit (adjusted) of $6.6 million, or $0.06 per diluted share, for the twelve months ended December 31, 2003. Net profit (GAAP) for the twelve months ended December 31, 2004, was $6.7 million, or $0.06 per diluted share, up 7.9% compared to net profit (GAAP) of $6.2 million, or $0.06 per diluted share, for the twelve months ended December 31, 2003.

Cash balances were $106.8 million at December 31, 2004, an increase of $5.4 million from the prior quarter reflecting a combination of operational cash inflow offset by share repurchases. During the quarter Autonomy continued its share repurchase program, purchasing for cancellation 758,046 shares at an average price of £1.65 per share. In total, Autonomy has purchased for cancellation 20,403,882 million shares at an average price of £1.63 per share. Accounts receivable days sales outstanding decreased from 110 days for the third quarter of 2004 to 99 days for the fourth quarter of 2004. Receivables for the fourth quarter of 2004 were $20.4 million, compared to $18.7 million for the fourth quarter of 2003. Deferred revenues were $5.7 million net at December 31, 2004, compared with $5.6 million net at December 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. Consequently, the non-GAAP results exclude charges not reflective of Autonomy's core ongoing operational business, namely amortization of purchased intangibles and impairment of equity investments. Management uses the adjusted results to assess the financial performance of Autonomy's core business. The calculation of adjusted results has been amended for all comparative periods. Previously reported adjusted results excluded certain specific translational foreign exchange gains and losses and associated tax effects and share-based compensation charges arising in connection with acquisitions.

Strategic Partnerships and OEMs

Autonomy's OEM Program was on target during the year with OEM-derived revenues for the fourth quarter of 2004 of $3.6 million accounting for approximately 18% of revenues, compared to $3.2 million for the fourth quarter of 2003.

Q4 Product Sales

Autonomy's infrastructure technology has been adopted by enterprises to process information across all internal and external data formats and sources. During the quarter, major new wins included: Norwich Union, BUPA, France 2, Gruppo Santander, Shanxi China Mobile, Albertsons, UK Environmental Agency, Choicepoint, Baker Hughes, NetLibrary, State of Utah and Greenpeace, as well as multiple defence and intelligence agencies around the globe including in Australia, Singapore and Spain. Repeat business from existing customers accounted for approximately 25% of revenue for the quarter, and included Boeing, Citibank, Shell, Anheuser Busch, McData, Church of Latter Day Saints, DirecTV and IEEE and several defence and intelligence agencies in the U.S. including the U.S. Air Force.

Q4 Corporate Developments and Awards

During the fourth quarter of 2004 Autonomy continued to extend its market leadership with the introduction of key new and upgraded technologies. Of most importance, in December 2004 Autonomy announced the launch of Autonomy IDOL 5.0, a major upgrade of its award-winning core product, IDOL Server. The launch of IDOL 5.0 is the result of extensive and continued investment in research and development and extensive consultation with Autonomy's 1,000 strong global customer base. IDOL 5.0 features a number of key developments such as a new major algorithm for Automatic Query Guidance which fundamentally advances the way unskilled users find information; the development of a sentient architecture which delivers on the vision of autonomic computing; 50 new IDOL operations; improved installation via a wizard installation facility and an enhancement of IDOL's core capabilities which extends IDOL's ability to handle information intelligently encompassing probabilistic structured information.

Also during the fourth quarter Autonomy led the market with the introduction of desktop search and Active Folders, delivering the power of Autonomy's award winning IDOL technology to the corporate desktop by bringing together a wide variety of information ranging from office documents, email, websites, news and even multimedia content from multiple locations including corporate networks, the web, the desktop and local data sources. IDOL Enterprise Desktop Search is the first integrated tool that uses implicit query, working proactively with users on the corporate desktop to understand the information they require and bring it straight to them at the right time and in the right context.

Finally, 2004 also saw the first application of Autonomy's IDOL IPTV Suite for searching TV, available at www.blinkx.tv.

During the fourth quarter of 2004 Aungate, Autonomy's award-winning division specializing in compliance, litigation and risk technology, continued to lead the market with the introduction of the world's first anti-phishing solution to detect and prevent malicious attempts to defraud customers using online banking services. Finally, Aungate also launched a new sexual harassment and discrimination detection module that is designed to automatically alert the enterprise to acts of sexual harassment and discrimination, by analyzing the content of emails, voice and instant messages.

During the fourth quarter Autonomy was recognized in multiple ways for its market leadership and unmatched technology. For example Autonomy was acknowledged for the second year in a row as one of the EContent 100, a list of companies that matter most in the digital content industry. Autonomy was also included for the fifth consecutive year on the Software 500, Software Magazine's list of the world's foremost software and software and service providers. Finally Autonomy's Audentify division, a leading provider of next-generation contact center technology, was awarded 2004 Product of the Year Award by Technology Marketing Corporation (TMC™)'s Customer Inter@ction Solutions Magazine, the publications' highest honor recognizing exemplary contributions and innovative products that advance the call center and CRM industry.

About Autonomy Corporation plc

Autonomy Corporation plc (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, Citrix, Computer Associates, EDS, IBM Global Services, Novell, Novient, Veritas, Vignette, Supportsoft 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 Annual Report on Form 20-F.

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

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