BEA Reports First Quarter Results; AquaLogic Represents 24% of License Revenue

SAN JOSE, Calif., May 16 /PRNewswire-FirstCall/ -- BEA Systems, Inc., a world leader in enterprise and communications infrastructure software, today announced certain financial results for the fiscal first quarter ended April 30, 2007. BEA reported first quarter total revenues of $345.8 million, up 7% from last year's first quarter. BEA reported first quarter license fees of $114.6 million, down 13% from a year ago, and services revenue of $231.2 million, up 21% from a year ago. BEA reported first quarter cash flow from operating activities of $95.1 million, down 7% from a year ago. BEA reported a balance of cash, cash equivalents, short-term investments and restricted cash of $1.3 billion. BEA also reported deferred revenues of $434.7 million, up 19% from a year ago.

BEA is not providing full GAAP or non-GAAP financials for the first quarter due to the previously announced voluntary internal review of BEA's historical stock option grants, which has been conducted by the Audit Committee of BEA's Board of Directors with the assistance of independent legal counsel. The outcome of that review will require us to change our accounting treatment of certain stock option grants, which will have a material adverse effect on our results of operations for certain historic periods and may have a material adverse effect on our results of operations for the first quarter and certain subsequent periods.

"In the first quarter, we saw a tough selling environment in the Americas, and we made several changes to the Americas field organization. We aligned the organization correctly for the SOA opportunity; however, the changes impacted us in the short-run beyond our expectations. Geographies outside the US performed well, and our Business Interaction Division had a very strong quarter, especially in the Americas, with both their AquaLogic User Interaction and Business Process Management products," said Alfred Chuang, BEA's founder, chairman and chief executive officer. "SOA is an architecture- led sale, and requires a different sales process than development-led projects. There is a platform shift taking place, and BEA is well-poised to lead that shift. We are aligning our field organization with the requirements of the SOA market."

"We are well positioned to continue our leadership position in the SOA market, because of our innovative product offerings. BEA is delivering an SOA fabric that provides customers with the ability to scale applications as needed, to support Web 2.0 technologies, and the ability to consume and correlate real-time events and decision-support systems. We believe we have the strongest and most innovative SOA platform on the market," Chuang said. "I am very optimistic about BEA's future, and I am pleased to announce that our Board of Directors has authorized an additional $500 million for our stock buyback program, giving us a total authorization of approximately $620 million."

BEA Delivers Business Results for Key Customers and Expands Partnerships

Key customer, partner and end-user agreements signed in the quarter included Agire Mortgage, Bank BPH, BHF Bank, BT, Cablevision, Canadian Real Estate Association, Cardinal Health, Carfax, China Eastern Aviation Import and Export, China Mobile, China Unicom, CHS, Circuit City Stores, City of Chicago, Com Hem, ConAgra Foods, Corporate Express, COSMOTE, Deutsche Bank, Edmunds, Emirates Airlines, Fortis Bank, Hilton Hotels, Itaipu Binacional, Lifeline Systems, M. W. Kellogg, Ministerio de Sanidad y Consumo, National Stock Exchange of India, NCS Pearson, Petrobras, Polis Direct, Proquire, Quintiles Transnational, Sainsburys, Seagate Technology, Solectron, Sony Pictures, Tata Consultancy Services, UK Council for the Central Laboratory of the Research Councils, UK North West Development Agency, US Army, US DCGS, US House of Representatives, Verisign, Virgin Atlantic, Visanet, Vodafone, Wachovia, Warner Brothes Entertainment, WebEx Communications, and Wellington Management.

New, renewed or expanded relationships were entered into with VARs, hardware OEMs, systems integrators, ASPs and ISVs, including Amberpoint, Amdocs, Atreus, CA, Cedar Point, Cryptologic, DiagnosisOne, EMC, HP, Iperia, Opsware, Oracle, PanGo Networks, QPass, Reuters, Transware, Verid, Vurv, and Wipro.

About BEA Systems, Inc.

BEA Systems, Inc. is a world leader in enterprise and communications infrastructure software. BEA's SOA 360o platform is the industry's most unified SOA platform for business transformation and optimization, in order to improve cost structures and grow new revenue streams. Information about how BEA is enabling customers to achieve Business LiquidITy(TM) can be found at www.bea.com.

Investors will have the opportunity to listen to BEA's earnings conference call over the Internet on the investor information page of the BEA Web site at http://ir.bea.com/. The Internet broadcast will be available live, and a replay will be available following completion of the live call for 365 days thereafter. In addition, investors will have the opportunity to access a telephone replay of the call through May 23, 2007, by dialing (706) 645-9291, access code 5374138.

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Gary E. Smith
SOA Enterprise Architect