update software AG: Record revenue and earnings in 2006

Ad-hoc release according to §15 WpHG

Full Year Results 2006/Quartaly Results

update software AG: Record revenue and earnings in 2006
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Vienna, Frankfurt, 24 January 2007 +++ update software AG, a leading European CRM solutions provider listed on the Frankfurt stock exchange, has released its preliminary results for the 2006 financial year. With total revenue for the year of EUR 23.366 million and operating profit (EBIT) of EUR 2.439 million, update looks back on the most successful year in its history.

27-percent revenue growth in Q4 2006
With sales revenue totalling EUR 7.155 million, the fourth quarter of 2006 is the company’s most successful quarter to date. Compared to Q4 2005 (EUR 5.653 million), revenue soared by 26.6 %. This historic result is also reflected in the company’s profitability: EBIT totalled EUR 1.086 million, up 39.9 % from Q4 2005 (EUR 0.776 million), while EBT increased 25.8 % to EUR 1.034 million (Q4 2005: EUR 0.822 million).

Cash outflow in Q4 2006 was EUR 1.148 million, compared to EUR 1.310 million in Q4 2005.

Annual revenue up almost 26 %
update increased its revenue for the 2006 financial year by 25.6 % to EUR 23.366 million, compared to EUR 18.600 million in 2005. Broken down by segments, revenue grew as follows: Licenses (+ 28.1 %), Services (+ 40.0 %) and Maintenance (+ 9.6 %).

This annual growth resulted in the best operating income the company has ever reported: update’s preliminary EBIT soared to a record EUR 2.439 million, up 18.8 % year-on-year (2005: EUR 2.053 million). Net income for 2006 cannot be announced before deferred taxes have been computed.

Liquid assets as of the 2006 balance sheet closing date were EUR 7.114 million, which corresponds to a decrease of around 7 % year-on-year. Cash outflow for the 2006 financial year was EUR 0.572 million, compared to a positive cash flow of EUR 1.930 million one year earlier. This is due to payments for the two acquisitions in 2005 and 2006 and the extension of payment terms for some major projects. The EUR 2.449 million capital increase in early 2005 also needs to be taken into account in this context.

update software AG’s equity capital as of 31 December 2006 totalled EUR 14.942 million, up 22.1 % from EUR 12.236 million on 31 December 2005.

Commentary text:
“update is proud to have generated the best revenue and earnings results in the company’s history. 2006 is yet another year in which the company grew significantly faster than the market and the competition. We are confident that we will be able to continue this success in the future,” says CEO Thomas Deutschmann, commenting the results.

The success was buoyed by projects with both new and existing customers. New customers in 2006 were, among others: Johanniter Unfallhilfe (Germany); Wilhelm Schimmel Pianofortefabrik GmbH (Germany); Sodexho Pass (Poland); Geertsema Staal B.V. (Netherlands); DRINKS UNION a.s. (beverage producer in the Czech Republic); Trumpf Werkzeugmaschinen (Sweden); National Bank AG (Germany) and Raiffeisen Centrobank (Austria) in the financial sector; and Actavis (Austria and Switzerland) and Boehringer Ingelheim CHC (International) in the pharmaceutical sector.

IR contact:
Jochen Zemroser
update software AG
Operngasse 17-21
A-1040 Vienna, Austria
Tel.: +43 1 878 55 512
Fax: +43 1 878 55 505
Jochen.Zemroser@update.com
www.update.com

This is a translation from German into English.