News

AUTONOMY CORPORATION PLC ANNOUNCES RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 2006

Record Results With Highest Revenues and Profits in Autonomy's History; Revenues up 203%; Profit Before Tax (adjusted)* up 134% to record $10.3 million.

Autonomy's first quarter conference call will be available live at www.autonomy.com on April 24, 2006, at 9:30 a.m. GMT/4:30 a.m. EST/1:30 a.m. PST.

Cambridge, England - April 24, 2006 - Autonomy Corporation plc (LSE: AU. or AU.L), a global leader in infrastructure software, today reported financial results for the first quarter ended March 31, 2006.

Financial Highlights

	Three Months Ended
	(unaudited)
	March 31, 2006	March 31, 2005
Results in US$ ($'000s except per share)	$'000s	$'000s
Revenues	56,141	18,529
Gross profit (adjusted)*	50,588	17,734
Gross profit margin (adjusted)*	90%	96%
Profit before tax (adjusted)*	10,308	4,404
Net profit (adjusted)*	7,009	3,106

Gross profit (IFRS)	48,565	17,522
Gross profit margin (IFRS)	87%	95%
Profit before tax (IFRS)	7,092	3,818
Net profit (IFRS)	4,823	2,693

EPS
- basic (adjusted)*	$ 0.04	$ 0.03
- diluted (adjusted)*	$ 0.04	$ 0.03

- basic (IFRS)	$ 0.03	$ 0.02
- diluted (IFRS)	$ 0.03	$ 0.02

* Adjusted results exclude the amortization of purchased intangibles, share-based compensation and non-cash translational foreign exchange gains and losses and associated tax effects. See reconciliations on page 4.

First Quarter 2006 Highlights

Record quarterly revenue, up 203% from Q1 2005
Completed integration of Verity acquisition - sales force, product, operations - with no notable internal or market disruption
Record profit from operations (IFRS) up 158% from Q1 2005
Record quarterly profit before tax (adjusted), up 134% from Q1 2005
R&D investment up 336% from Q1 2005
12th consecutive quarter of year-on-year revenue growth
25th consecutive quarter of profitability
Gross margins (adjusted) at 90%
Continued adoption of IDOL 5.0 leading to extremely high competitive win rate
Successfully increased Verity transaction values, leading to stable average selling price for meaning-based technologies of $309,000
Blue chip first quarter wins include KPMG, BBC, Peugeot, Ticketmaster, Xerox, Standard Life, Linklaters, Metropolitan Police, Cadence, Caterpillar, GlaxoSmithKline, Bell South and Sprint, as well as sales to multiple government, defence and intelligence agencies around the globe including in the U.S. and U.K.
13 OEM deals signed include new deals and extensions with Interwoven, Kana and Zantaz
Positive cashflow from operations of $12.8 million, up from $0.1 million in Q1 2005
Aungate seeing strong traction with key new customers including Fidelity and NASD
Strong start to Chinese consumer operation, already holding #1 spot for Chinese video search

Commenting on the results, Dr. Mike Lynch, Group CEO of Autonomy said today: "We are delighted to announce our record first quarter results, our twelfth consecutive quarter of year-on-year growth. With record top and bottom line results, driven by a combination of strong organic growth and recent acquisitions, Autonomy continues to demonstrate its undisputed leadership position in one of the most interesting technology sectors. This success was achieved whilst completing the integration of the Verity acquisition, which is consistent with our history of rapid acquisition integration together with sales and operations success without any real internal or market disruptions. This integration success is also demonstrated by the 90% gross margin, which reflects the termination of non-going forward and lower margin businesses, as planned."

Dr. Lynch concluded: "With record results and strong core business growth, and the completed development of the next generation of Verity’s K2 (IDOL K2 7), Autonomy has laid a strong foundation for our continued growth into 2006. We remain confident in our long-term outlook."

First Quarter Financial Highlights

Revenues for the first quarter of 2006 totalled $56.1 million, up 203% from $18.5 million for the first quarter of 2005. This is driven by a combination of strong organic growth and recent acquisitions. In the first quarter of 2006, Americas revenues of $37.1 million represented 66% of total revenues, and Rest of World revenues of $19.0 million represented 34% of total, geographically split as anticipated following the Verity and etalk acquisitions.

Gross profits (adjusted) for the first quarter of 2006 were $50.6 million, up 185% from $17.7 million in the first quarter of 2005. Gross margins (adjusted) were 90% in the first quarter of 2006, versus 96% in the first quarter of 2005. Gross profits (IFRS) for the first quarter of 2006 were $48.6 million, up 177% from $17.5 million in the first quarter of 2005. Gross margins (IFRS) for the first quarter of 2006 were 87%, compared to 95% in the first quarter of 2005.

Net profit (adjusted) for the first quarter of 2006 was $7.0 million, or $0.04 per diluted share, compared to net profit (adjusted) of $3.1 million, or $0.03 per diluted share, for the first quarter of 2005. Net profit (IFRS) for the first quarter of 2006 was $4.8 million, or $0.03 per diluted share, compared to net profit (IFRS) of $2.7 million, or $0.02 per diluted share, for the first quarter of 2005.

Cash balances were $90.9 million at March 31, 2006, an increase of $22.4 million from the prior quarter. Movements in cash flow during the quarter reflect a combination of record cash generation from operating activities and proceeds from exercise of share options, offset by the first quarterly repayment of Autonomy’s bank loan and payments associated with the Verity acquisition such as advisors’ fees. As of March 31, 2006, Autonomy had no net debt.

Receivables for the first quarter of 2006 were $54.3 million, compared to $55.4 million for the prior quarter. Deferred revenues were $52.6 million at March 31, 2006, compared with $51.9 million at December 31, 2005.

Although IFRS 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 fundamental business without giving effect to certain specific non-cash charges. Consequently, the non-IFRS (adjusted) results exclude non-cash charges for the amortization of purchased intangibles, share-based compensation and foreign exchange gains and losses and associated tax effects. Management uses the adjusted results to assess the financial performance of Autonomy's operational business activities.

Q1 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 first quarter of 2006, major new wins included: Ticketmaster; KPMG; Dublin Airport; Jane’s; AMD; WebMD; and Tumbleweed. Repeat business from existing customers accounted for approximately 40% of revenue for the quarter, and included: GE; BBC; Xerox; Caterpillar; Cadence; Peugeot; DirecTV; Linklaters; Metropolitan Police, GSK; Bell South; Sprint and Telus Mobility. Q1 2006 business also included new and repeat licenses with multiple government, defence and intelligence agencies around the globe including in the U.S. and the U.K.

Strategic Partnerships and OEMs

Autonomy's OEM Program continued to grow during Q1 2006. Agreements were signed with 13 customers during the quarter, including new and extended agreements with Interwoven, Novatix, Kana and Zantaz.

Q1 Corporate Developments

During the previous quarter Autonomy announced and completed the acquisition of Verity, Inc., cementing Autonomy’s position as the acknowledged industry leader and further extending the adoption of Autonomy’s IDOL infrastructure. The integration of the acquisition was successfully completed during Q1 2006.

During the first quarter Autonomy was recognized in multiple ways for its market leadership and unmatched technology. Awards received during the quarter included being named One of KMWorld Magazine's "100 Companies that Matter in Knowledge Management" for the sixth consecutive year; “Customer Inter@ction Solutions® Magazine's ‘Product of the Year’ Award for 2005” for Autonomy’s etalk division; and an Autonomy-powered ABN AMRO system was named Compliance Project of the Year at the Financial Sector Technology Awards 2006.

About Autonomy Corporation plc

Autonomy Corporation plc (LSE: AU. or AU.L) 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 comprises more than 16,000 global companies and organizations including, among others, BAE Systems, Ford, Ericsson, Shell, Nestle, AOL, BBC, Reuters, Hutchison 3G, Royal Sun Alliance, Sun Microsystems, Philips, Boeing, Schneider Electric, Coca Cola, GlaxoSmithKline, Citigroup, ABN AMRO, Deutsche Bank, Nomura, the New York Stock Exchange, Daimler Chrysler, Kraft Foods, Lloyds TSB, the U.S. Department of Homeland Security, the U.S. Securities and Exchange Commission, NASA and the U.S. Department of Energy. Strategic reseller and OEM partners include leading companies such as BEA, Business Objects, Citrix, EDS, IBM, Novell, Veritas, Vignette, Supportsoft and Sybase. The company has offices worldwide.

The Autonomy Group includes: Aungate, a leader in technology for Real-Time Enterprise Governance; Virage, a leading supplier and visionary in Rich Media Management technology; etalk, a leading provider of enterprise-class contact center products, and Cardiff, a leader in content capture and business process management solutions

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

Download the full PDF version of the Q1 2006 Report