SUNNYVALE, Calif., April 29, 2010— Ariba, Inc. (Nasdaq: ARBA), the leading spend management solutions provider, today announced results for the second quarter of fiscal year 2010 ended March 31.

Quarterly Financial and Operational Highlights:

• Total revenues of $87.1 million
• GAAP EPS of $0.06 and non-GAAP EPS of $0.19 per fully-diluted share
• Subscription software revenue of $42.3 million, up 16% year-over-year
• 12-month subscription software backlog of $140 million, up 9% year-over-year
• Cash flow from operations of $26.4 million, ending cash and investments of $222.9 million
• Number of on-demand deals up 38% year-over-year

“Cost reduction remains a top priority for all companies, and increasingly they recognize the need to collaborate with their suppliers across the value chain. The Ariba Supplier Network is enabling this collaboration and we continue to see strong growth in network volumes,” said Bob Calderoni, Chairman and CEO, Ariba.  “The network growth, coupled with the strong financial performance we delivered in the second quarter puts us in a position to deliver revenue, cash flow and EPS towards the high end of our previously issued guidance for Fiscal 2010, while also building momentum for accelerated growth in Fiscal 2011.”

Results for the Second Quarter of Fiscal Year 2010

Total revenues for the second quarter of fiscal year 2010 were $87.1 million, as compared to $84.7 million for the second quarter of fiscal year 2009. Subscription and maintenance revenues for the current quarter were $58.8 million, as compared to $54.9 million for the second quarter of fiscal year 2009. Within subscription and maintenance revenues, subscription software revenue was $42.3 million for the current quarter, as compared to $36.4 million for the second quarter of fiscal year 2009. Services and other revenues for the current quarter were $28.4 million, as compared to $29.8million for the second quarter of fiscal year 2009.

Net income for the second quarter of fiscal year 2010 was $5.8 million, or $0.06 per fully-diluted share as compared to a net loss for the second quarter of fiscal year 2009 of $4.7 million, or $0.06 per fully-diluted share. Net income for the second quarter of fiscal year 2010 included charges of $1.0 million for amortization of intangible assets, $11.2 million for stock-based compensation, $8.6 million for restructuring related to the Company’s Sunnyvale campus, and benefits of $3.1 million from the reversal of a tax accrual, and $7 million from the receipt of a litigation judgment. Excluding these items, non-GAAP net income for the quarter was $16.5 million, or $0.19 per diluted share.  

Total cash, investments and restricted cash were $222.9 million at March 31, 2010, up $23.4 million from December 31, 2009. Net cash flow from operations for the three months ended March 31, 2010 was $26.4 million, as compared to $16.3 million for the three months ended March 31, 2009. Accounts receivable, on an average days-sales-outstanding basis, were 21 days for the second quarter of fiscal year 2010, as compared to 26 days for the second quarter of fiscal year 2009, and flat with the previous quarter. Total deferred revenues were $125.4 million at March 31, 2010, up $5.9 million from December 31, 2009.

Customer Acquisition and Transactions for the Quarter: 

During the quarter, 211 companies of all sizes purchased Ariba solutions to drive their spend management strategies, including: BNP Paribas, Fomento de Construcciones y Contratas, S. A., Howard Hughes Medical Center, Masco Corporation, Tomkins Industries Inc., Union Bank and Zurich Financial Services.  Ariba added 35 new customers in the second quarter of fiscal year 2010 and closed 13 transactions over $1 million, including 7 deals with a software component of greater than $1 million. On-demand product deals totalled 194.  

Ariba will hold a conference call today at 5:00 p.m. ET / 2:00 p.m. PT to discuss its results for the second quarter of fiscal year 2010. To join the call, please dial (877) 407-8031 in the United States and Canada, or (201) 689-8031 if calling internationally. The conference call also will be webcast live, and can be accessed on the investor relations section of the company’s website at www.ariba.com.

A replay of the conference call will be available for two weeks by calling (877) 660-6853 in the United States and Canada or (201) 612-7415 internationally and entering account number: 286 and conference ID number: 348632.

About Ariba, Inc.

Ariba, Inc. is the leading provider of on-demand spend management solutions. Our mission is to transform the way companies of all sizes, across all industries, and geographies operate by delivering software, service, and network solutions that enable them to holistically source, contract, procure, pay, manage, and analyze their spend and supplier relationships. Delivered on demand, our enterprise-class offerings empower companies to achieve greater control of their spend and drive continuous improvements in financial and supply chain performance. More than 1,000 companies, including more than half of the companies on the Fortune 500, use Ariba solutions to manage their spend from sourcing and orders through invoicing and payment. For more information, visit www.ariba.com

Copyright © 1996 – 2010 Ariba, Inc.

Ariba, the Ariba logo, AribaLIVE, SupplyWatch, Ariba.com, Ariba.com Network and Ariba Spend Management. Find it. Get it. Keep it. are registered trademarks of Ariba, Inc. Ariba Spend Management, Ariba. This is Spend Management, Ariba Solutions Delivery, Ariba Analysis, Ariba Buyer, Ariba Category Management, Ariba Category Procurement, Ariba Contract Compliance, Ariba Contracts, Ariba Contract Management, Ariba Contract Workbench, Ariba Data Enrichment, Ariba eForms, Ariba Invoice, Ariba Payment, Ariba Sourcing, Ariba Spend Visibility, Ariba Travel and Expense, Ariba Procure-to-Pay, Ariba Workforce, Ariba Supplier Network, Ariba Supplier Connectivity, Ariba Supplier Performance Management, Ariba Content Procurement, Ariba PunchOut, Ariba QuickSource, PO-Flip, Ariba Spend Management Knowledge Base, Ariba Ready, Ariba Supply Lines, Ariba Supply Manager, Ariba LIVE, It’s Time for Spend Management and Supplier Lifecycle Management are trademarks or service marks of Ariba, Inc. All other brand or product names may be trademarks or registered trademarks of their respective companies or organizations in the United States and/or other countries.

Safe Harbor Statement under the Private Securities Litigation Reform Act 1995:
Information and announcements in this release involve Ariba's expectations, beliefs, hopes, plans, intentions or strategies regarding the future and are forward-looking statements that involve risks and uncertainties. All forward-looking statements included in this release are based upon information available to Ariba as of the date of the release, and we assume no obligation to update any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to Ariba's operating and financial results to differ materially from current expectations include, but are not limited to: the impact of the credit crises on Ariba’s results of operations and financial condition; delays in development or shipment of new versions of Ariba's products and services; lack of market acceptance of Ariba's existing or future products or services; inability to continue to develop competitive new products and services on a timely basis; introduction of new products or services by major competitors; the ability to attract and retain qualified employees; difficulties in assimilating acquired companies, long and unpredictable sales cycles and the deferrals of anticipated orders; declining economic conditions, including the impact of a recession; inability to control costs; changes in the company's pricing or compensation policies; significant fluctuations in our stock price; the outcome of and costs associated with pending or potential future regulatory or legal proceedings; the impact of our acquisitions, including the disruption or loss of customer, business partner, supplier or employee relationships; and the level of costs and expenses incurred by Ariba as a result of such transactions. Factors and risks associated with its business, including a number of the factors and risks described above, are discussed in Ariba's Form 10-Q filed with the SEC on February 5, 2010.

John Duncan

Ariba, Inc.

Karen Master