Advent Software Achieves Record Quarterly Revenue of $61.5 Million, a 28% Increase Over Prior Year

Advent Software Achieves Record Quarterly Revenue of $61.5 Million, a 28% Increase Over Prior Year Company Also Announces Quarterly Term Contract Value of $15.7 Million, a 41% Increase Over Prior Year

SAN FRANCISCO – April 29, 2008 – Advent Software, Inc. (NASDAQ: ADVS), the award-winning provider of software and services to the investment management industry, announced today its financial results for the first quarter ended March 31, 2008.

"We are very pleased to announce that Advent had a terrific first quarter, marking a great start to the fiscal year," said Stephanie DiMarco, Founder and Chief Executive Officer of Advent. "Headlining our strong financial results was record quarterly revenue of $61.5 million and a 41% increase in term contract value over the prior year. One of the main drivers behind this quarter's solid financials is the success we’ve had with the term license model, and we're thrilled to see the leverage from the model coming through in our reported results."

GAAP RESULTS
The Company reported record revenue of $61.5 million for the first quarter of 2008, compared to $48.0 million in the first quarter of 2007, a 28% increase.

Income from operations for the first quarter of 2008 was $3.7 million, or 6% of revenue, compared with a loss from operations of $50,000, or 0.1% of revenue, in the first quarter of 2007.

Net income for the first quarter of 2008 was $2.6 million, compared with net income of $0.4 million for the first quarter of 2007.

On a fully diluted basis, earnings per share in the first quarter of 2008 were $0.09, which compares to diluted earnings per share of $0.02 in the first quarter of 2007.

Cash flow from operations in the first quarter of 2008 was $9.3 million, compared with $13.8 million in the first quarter of 2007. Cash and cash equivalents totaled $58.0 million as of March 31, 2008, compared to $49.6 million as of December 31, 2007.

Deferred revenues as of March 31, 2008 were $122.9 million, compared to $120.3 million as of December 31, 2007.

NON-GAAP RESULTS
Non-GAAP income from operations for the first quarter of 2008 was $7.9 million, resulting in non-GAAP operating margin of 13%. This compares to non-GAAP income from operations of $4.3 million and non-GAAP operating margin of 9% in the first quarter of 2007.

On a non-GAAP basis, net income for the first quarter of 2008 was $5.3 million, or $0.19 per diluted share, compared with $3.2 million, or $0.11 per diluted share, for the first quarter of 2007.

The reconciliation between GAAP and non-GAAP financial measures is provided at the end of this press release.

FIRST QUARTER HIGHLIGHTS

  • Benefit of Term Licensing Model: For the first time in the company’s history, total revenue grew from the fourth quarter to the first quarter by $2.1 million, a 3% increase. The success of the transition to term licensing, which Advent started nearly four years ago, has reduced the impact of natural seasonality on revenue. The recurring component of revenue was 80% in the first quarter.
  • Term Contract Value Growth: Advent’s term contract value, including Advent Portfolio Exchange® (APX) migrations, was $15.7 million, which represents 41% growth over the same period last year. With an average term of 2.8 years, the contracts signed in the first quarter will add approximately $5.5 million in annual revenue, an increase of 64% over the same period last year, once they are fully implemented.
  • Product Investment and Innovation: On a GAAP basis, Advent invested 21% of revenue in product development. Highlighting Advent’s role as an innovator in the industry, Advent was named “Leading Provider of Fund Accounting and Reporting Systems” by The Hedge Fund Journal, based on the strength of Geneva®’s reputation, which is strengthened each year by additional product development. The award recognizes the leading service providers for the European hedge fund industry.
  • Customer Momentum for APX and Geneva®: Advent saw continued momentum in customer wins for its award-winning portfolio accounting platforms. The Company sold a first quarter record of 19 APX contracts, bringing the total number of APX contracts sold to 212 worldwide. Advent also sold a first quarter record of 7 new Geneva® contracts, bringing the total number of Geneva® contracts sold to 164 worldwide.

FINANCIAL GUIDANCE 

 

 Q208

 FY08

 Total Revenue ($M)

 $61-$63

 $248-$254

 Non-GAAP Operating Margin     

 12%-14%

  14%-17%

 Non-GAAP Diluted EPS ($) 

 $0.17-$0.20

  $0.89-$1.01

  • The Operating Cash Flow projection for the full year 2008 remains $68 to $71 million.
  • The effective tax rate for the full year 2008 is projected to be in the range of 30% to 35%, and 35% is used for the Company’s calculations of non-GAAP diluted EPS.
  • Diluted weighted average shares outstanding are expected to increase by approximately 0.5% to 1.0% per quarter, and 0.75% growth in diluted weighted average shares outstanding is used for guidance purposes.


Please refer to the tables for the reconciliation between GAAP and non-GAAP financial measures.

INVESTOR CALL
Advent Software, Inc. will host its Q1 2008 quarterly earnings conference call at 5:00 p.m. Eastern time today. A Q1 2008 earnings presentation, including highlights and detailed financial information, is currently available on http://investor.advent.com. To participate via phone, please dial 888-812-3873 and request conference ID #42993709. A replay will be available through midnight, May 6, 2008, by calling 800-642-1687 and referencing conference ID #42993709. The conference call will also be web-cast live and then archived on http://investor.advent.com.

ABOUT ADVENT
Advent Software, Inc. (www.advent.com), a global firm, has provided trusted solutions to the world’s leading financial professionals since 1983. Firms in 60 countries use Advent technology and manage investments totaling nearly US $18 trillion. Advent’s quality software, data, services and tools enable financial professionals to improve service and communication to their clients, allowing them to grow their business while controlling costs. Advent is the only financial services software company to be awarded the Service Capability and Performance certification for being a world-class support organization.

ABOUT NON-GAAP FINANCIAL INFORMATION
This press release includes non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP), please see the accompanying tables entitled “Reconciliation of Selected GAAP Measures to Non-GAAP Measures.”

FORWARD-LOOKING STATEMENTS
The financial projections under Financial Guidance and other forward-looking statements included in this presentation reflect management's best judgment based on factors currently known and involve risks and uncertainties; our actual results may differ materially from those discussed here. These risks and uncertainties include: potential fluctuations in results and future growth rates; continued market acceptance of our APX and Geneva® products; the successful development and market acceptance of new products and product enhancements; continued uncertainties and fluctuations in the financial markets; and other risks detailed from time to time in our SEC reports including, but not limited to, our quarterly reports on Form 10-Q and our 2007 annual report on Form 10-K. The Company disclaims any intention or obligation to publicly update or revise any forward-looking statements including any guidance, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

The Advent logo, Advent Portfolio Exchange and Geneva are registered trademarks of Advent Software, Inc. All other company names or marks mentioned herein are those of their respective owners.


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Media Contact:      
Jessica Miller 
Advent Software, Inc.
(415) 645-1668
jmiller@advent.com 

Investor Relations Contact:
Heidi Flaherty  
Advent Software, Inc.
(415) 645-1145
flaherty@advent.com