update software AG: announcement of the results for the second quarter of 2010

Vienna, Frankfurt, 20 July 2010 +++ update software AG, a leading provider of CRM solutions listed on the Frankfurt Stock Exchange, has released its 2010 second-quarter results. Sales revenue for the quarter just ended was EUR 6.233 million, while operating earnings improved 5.1% year-on-year.

Focus on transition to new business model

In the second quarter of this year the Company continued to focus on building sustainable recurring revenues with the new Software as a Service model. Although this approach has currently affected the results, business has developed according to management expectations.
In terms of sales revenue, update software AG posted a decrease of 19.2% year-on-year, with EUR 6.233 million in the second quarter of 2010 compared to EUR 7.715 million one year earlier. With operating earnings (EBIT) of EUR -0.581 million, the Company reported an improvement of 5.1% year-on-year (Q2 2009: EUR -0.612 million). The corresponding EBT was EUR -0.487 million (Q2 2009: EUR -0.477 million).
Aggregate revenue for the first half of 2010 totaled EUR 13.009 million, decreasing 16.6% compared to the first 6 months of 2009 (EUR 15.608 million). For the same period, Group EBIT was EUR -1.771 million (compared to EUR -0.900 million one year earlier), the main reason for this decrease being the bad debt allowance of EUR 1.0 million recognized in the first quarter.

Increase in cash position and solid equity base
Cash on hand as of 30 June 2010 was EUR 14.315 million, up 12.8% compared to the cash position at the end of the second quarter of 2009 (EUR 12.689 million).

Commentary text:
“Despite the difficult economic environment, we continue to focus on our goal of establishing an innovative and forward-looking business model in the market and strengthening the position of update in a sustainable way.
With our transition to Software as a Service we are well on our way to reaching that goal. The success that we are currently achieving step by step will, however, be noticeable in our financial figures only with a certain delay."

New customers gained in the second quarter of 2010 include, among others, the Dutch publishing house NDC/VBK, the Austrian companies G.L Pharma and Absolute Portfolio Management AG, as well as smartpharm GmbH and TRIMET ALUMINIUM AG in Germany.

Investor Relations Contact:
Kerstin Schabhüttl
update software AG
Operngasse 17-21
1040 Vienna, Austria
Phone: +43 1 878 55 512
Fax.: +43 1 878 55 9512
Kerstin.Schabhuettl@update.com
www.update.com