Outlook Commentary

“Looking forward to the remainder of FY’10, we are increasing our full-year revenue target to $1,015 million and non-GAAP EPS target to $1.00,” continued Moses. “We are now expecting 30% year over year license revenue growth, with our maintenance and services business flat to modestly up on a year over year basis. We are increasing our non-GAAP operating margin target to 16%, but also intend to continue to invest in our business to leverage our technology leadership position and capitalize on our long-term growth opportunity. We expect to pay down the remaining $57 million on our revolving credit facility and repurchase $60 million worth of shares during FY’10.” For FY’10 the GAAP operating margin target is 7.5% and the GAAP EPS target is $0.50.

The FY’10 targets assume a non-GAAP tax rate of 25%, a GAAP tax rate of 17% and 120 million diluted shares outstanding. The FY’10 non-GAAP guidance excludes approximately $49 million of stock-based compensation expense, $35 million of acquisition-related intangible asset amortization and the related income tax effects.

“For Q2 we are initiating guidance of $235 to $245 million in revenue with non-GAAP EPS of $0.14 to $0.20, Moses added. “We are again expecting approximately 50% year-over-year growth in our license revenue in Q2. We expect our maintenance and services lines of business to be down slightly in Q2, but we expect to see growth in these businesses in the second half of FY’10.”

The Q2 guidance assumes a non-GAAP tax rate of 28%, a GAAP tax rate of 25% and 120 million diluted shares outstanding. The Q2 non-GAAP guidance excludes approximately $12 million of stock-based compensation expense, $9 million of acquisition-related intangible asset amortization expense and the related income tax effects.

Q1 Earnings Conference Call and Webcast

Supplemental financial and operating metric information and prepared remarks for the conference call have been posted to the investor relations section of our website. The prepared remarks will not be read live; the call will be primarily Q&A.