BEA Systems, Inc
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BEA AT A GLANCE FINANCIAL PERFORMANCE (as of and for the period ended July 31, 2004) Q2 Total Revenue $262.3 million – 7% increase over last year’s quarter Q2 License Revenue $116.3 million Q2 License/Services Mix 44.3% /55.7% Q2 Customer Support $113.5 million – 78% of services revenue, 25% year over year growth Q2 Operating Margin (a) 19.5% (GAAP Operating Margin 17.9%) Q2 EPS (a)(b) $0.08 (GAAP EPS $0.07) Deferred Revenues $261 million – Down approx. $7 million from Q1 05 Current Cash and Restricted Cash $1.58 billion Q2 Operating Cash Flow $57.2 million – 27th consecutive quarter of positive operating cash flow Days’ sales outstanding 71 days (a) Adjusted to exclude amortization of acquired intangible assets and goodwill; employer payroll taxes on stock options; net gains or losses on investments in equity securities and other non-recurring charges. (b) Amounts presented on a pro forma basis, assuming a tax rate of 30 percent. Background on BEA Systems BEA is the world's leading application infrastructure software company with more than 15,000 customers around the world, including the majority of the Fortune Global 500. Companies turn to BEA to help them evolve their existing enterprise software applications from inflexible, redundant, legacy architectures to highly responsive, mature Web infrastructures. Services Oriented Architecture (SOA) is an industry movement that is transforming IT to an efficient, more responsive function and is improving overall IT economics. SOA enables the service- driven enterprise to efficiently service its constituents – customers, employees, partners—and accelerates the service response time of the business. BEA products enable all of the components of SOA delivery today by providing the platform that brings SOA to mainstream IT, reduces complexity of the migration to SOA and reducing the lifetime cost of the IT infrastructure. The BEA WebLogic Enterprise Platform™ is the industry’s first converged application platform suite. The platform provides the application infrastructure foundation that converges application development and integration, simplifies the flow of information, decreases the costs of managing applications, and makes an enterprise more agile, productive, and connected. BEA's platform is 1 also the de facto standard for system integrators (SIs), independent software vendors (ISVs), and application service providers (ASPs) who partner with BEA to ensure the successful deployment of customer solutions. The BEA WebLogic Enterprise Platform includes the WebLogic family of application servers, a standards-based platform for deployment and integration of enterprise scale applications and Web services; WebLogic Integration, a standards-based platform for workflow, application integration, Web services and business-to-business integration; WebLogic Portal, a sophisticated rules-based infrastructure for rich user interfaces to a wide variety of enterprise data; BEA Liquid Data for WebLogic, a data integration tool providing real-time information visibility into applications, such as customer self-service portals, customer service and support, and supply chain applications; and WebLogic Workshop, which provides a single, unified development and run-time framework—one environment for building and integrating applications, services and business processes, resulting in a higher level of productivity and quality. Business Benefits of the BEA WebLogic Enterprise Platform The convergence of application infrastructure in a unified, simplified and extensible platform enables companies to realize significantly faster time to value for their key business integration initiatives. Faster time to value is enabled by increases in IT productivity, reduced cost of IT ownership and improved ability to leverage existing assets. Increase IT Productivity Today, many specialized skill sets are required for the complex, heterogeneous technologies and systems that have been deployed. Resources are limited, and cannot be quickly and flexibly deployed to high priority projects due to training and skill set mismatches. As a result building and integrating enterprise-class applications is difficult and time consuming. The BEA WebLogic Enterprise Platform delivers a single solution for developing, integrating and managing enterprise applications and business processes. IT can focus training on a single solution for all applications, with more flexibility in deploying resources across different projects. The BEA Platform promotes IT asset reuse and accelerates time to value by delivering a reusable control architecture across the platform whereby technology and business best practices can be captured and re-used across multiple initiatives. The BEA WebLogic Enterprise Platform simplifies development and speeds delivery by delivering a productive IDE that allows all developers to work together on all applications. Reduce IT Cost of Ownership Over half of IT budgets today are devoted to support the demands of existing business applications & infrastructure, much of which is highly specialized and proprietary, requiring scarce and costly resources. In addition, IT has grown increasingly dependent on “serviceware” to integrate this disparate infrastructure and manage complex upgrade cycles. The BEA WebLogic Enterprise Platform reduces support, management, and maintenance costs by providing a unified, simplified and extensible infrastructure solution, comprising tools and solutions for custom application, integration, portal, and web services projects. The BEA Platform is pre-integrated on a common technology foundation, utilizing common management 2 and administration interfaces, all delivered and supported on a common source base and release cycle. This allows IT to focus support on a single, standards-based, technology stack and better leverage resources across multiple applications, while eliminating costly expenditures on services to simply maintain the IT infrastructure. Leverage and Extend Existing Investments Many IT organizations are experiencing a low return on investments in previous technology, as prior investments have not yet delivered as much value as expected. In many cases, business processes are defined by software applications – packaged, custom, or legacy – that have rigid implementations or extensibility restrictions, and proprietary and heterogeneous technologies limit the cost-effectiveness of extending and leveraging current IT assets. The BEA WebLogic Enterprise Platform delivers a unified application infrastructure solution that enables customers to easily integrate and work with existing technologies to preserve current value. BEA’s extensible platform ensures interoperability, flexibility and choice, enabling incremental adoption of all or parts of the BEA Platform, integration with Tuxedo investments, point solutions and existing infrastructure standards, and extensibility through ISV applications and solutions. Distribution BEA sells primarily through a direct sales organization selling directly to end-user companies. In addition, BEA sells through or along with indirect channel partners, such as systems integrators, ISVs, systems platform companies, distributors and value-added resellers. Software distribution through all channels may be provided electronically or by direct shipment of electronic media. Alliances To broaden its capacity and customer coverage, BEA has formed strategic alliances with many of the world's top SIs, ISVs and hardware OEMs as follows: Global SIs such as: Accenture, HP, EDS, Cap Gemini Ernst & Young, CSC, Deloitte Consulting, Bearing Point, Schlumberger, Lockheed Martin, SAIC, Northrop Grumman and some India SIs as Wipro, Mphasis and Satyam. Hardware OEMs include Hewlett-Packard, Intel, Unisys and Sun. ISV partners build applications on BEA’s infrastructure, or provide solutions that complement and complete BEA’s product set. BEA’s top ISVs include solution providers in the following categories: Horizontal Leaders: Content Management: Documentum, Filenet, Fatwire, Factiva, Interwoven B2B Commerce: Cyclone Commerce, Comergent. Tavant CRM: Siebel, Epiphany, Lawson 3 Supply Chain Mgt./Trading Partner Collaboration: Manugustics, Yantra, i2 ERP: SAS, JDEdwards, Peoplesoft Managed Services: Data Return Vertical Leaders: Telco/OSS: Granite, Amdocs, CSG, Telcordia, Metasolv, ADC. Convergys Financial Services: Eontech, Financial Fusion, OnExchange, PaceMetrics, Finaplex, iSpheres, Sunguard, Wellfound Manufacturing/Distribution: MatrixOne, Agile Software, EDS (PLM Division) Retail: JDA, MarketMax, Retek Solution Offerings Telco Service Delivery: Incommit, Ubiquity, Sand Cherry, MobileAware, Leapstone, 4thPass/Motorola Multi-channel banking: Proactivity, Eontech, Documentum Risk Management: Hyperion, FileNet, Business Objects Securities Processing: Financial Fusion, iSpheres, OnExchange Self-service Provisioning: Siebel, Amdocs Indirect Channel Management: Yantra, Manugistics, Comergent RFID / retail: Cyclone Commerce, iSpheres, Yantra Infrastructure Analytics & Reporting: Business Objects/Crystal, Hyperion/Brio, Informatica, Cognos/Adaytum Business Process Modeling: Proactivity, IDS Scheer, iLog Application Modeling & Visualization: iRise Adapter / B2B Connectivity: iWay, Cyclone Commerce, Neon, Attachmate Collaboration: Compoze, Documentum eRoom, Interwoven iManage, Participate High Availability/Load Balancing/ Utility Computing: Veritas OA&M: HP Openview, BMC Web Services Management: Blue Titan, Actional, Mercury Interactive, AmberPoint