Day Software Reports Q1 2006 Financial Results

Company Delivers Record Profitability on Strong Revenue Growth.

Basel, Switzerland – May 10, 2006 – Day Software Holding AG (SWX: DAYN, OTC:DYIHY), a leading provider of global content management software and JavaTM content repositories, today announced financial results for the First Quarter ending March 31, 2006.

Financial Summary:

* Revenue of CHF 5.2 million
o 26% increase in total revenue y/o/y
o Highest Q1 revenue in operating history
* Net Income of TCHF 915
o 663% increase in quarterly net income y/o/y
o Highest quarterly net income in operating history
o Net income in Q1 2006 higher than total net income of 2005
* Generated CHF 1.7M of cash flow from operations

The company reported a record first quarter, reporting a 26% growth in total revenue over the same period in 2005. Revenues for the first quarter totaled CHF 5.2 million, compared with revenues of CHF 4.13 million for the first quarter of 2005. License revenues increased by 8% over last year, totaling CHF 2.1 million, compared with license revenues of CHF 1.9 million for the same period last year. The company increased its gross profit to CHF 4.1 million compared to CHF 3.04 million for the same period in the previous year. Net income for Q1 of 2006 was TCHF 915 compared to TCHF 120 in Q1 2005. During the first quarter of 2006 the company adopted SFAS123r which requires the recording of non-cash expense charges for stock options. The total amount of stock based compensation expense during the quarter was TCHF 125.
”Day had an excellent first quarter with significant growth, record revenues and the highest quarterly net income in the company’s operating history,” said Michael Moppert, CEO and Chairman of Day. “We are driving growth through the continued investments into our highly innovative product portfolio, the relationships we have with our customers, by expanding our sales capacity and adding new distribution channels. These elements prove to be a solid foundation for the successful development of the company. For 2006 we will continue to grow our business by making investments in R&D, customer support and sales in all our geographic regions.”

“Our core business - enterprise content management solutions – provided a healthy revenue basis for the quarter. In addition, we saw increased activity from our software infrastructure products, diversifying our offerings and opening up new revenue opportunities for the company,” continued Moppert. “Based on our highly innovative product portfolio we were able to forge new, important OEM relationships that now begin to make a substantial contribution to our revenues. At the same time our costs and expenses remained well under control. As a result, we were able to increase profitability appreciably. For the remainder of 2006 we continue to expect some quarterly volatility in both revenue and profitability, as has been our historical experience. However, based on our excellent Q1 results, the general improvement in IT spending and a good pipeline we expect to be on track for further solid growth and healthy profitability for 2006.”

The company added several new customers in the first quarter, representing a number of key markets. The automotive sector continued to be an important vertical for Day with Mitsubishi Motors Company added as a new customer. After an extensive evaluation Mitsubishi Motors Company chose Day to support their initiatives to increase corporate transparency, and to enhance their ability to interact with customers and investors. The exceptional flexibility of Day’s solutions, as well as, proven multi-language capabilities were key factors in Mitsubishi’s decision to invest in Day.

After several new customer additions in the United States in Media and Entertainment, the company added an important European customer in the segment. Rundfunk Brandenburg Berlin belongs to ARD, the leading public network of television and radio stations in Germany. RBB has chosen Day Software to expand their web-based communication channels. In the United States, Day added Data Transmission Network (DTN) as a new Media customer. The company delivers on-demand market information, commodity cash prices, industry news and in-depth analysis, and location-specific weather to over 120,000 subscribers.

In Singapore, Day expanded its presence in the public sector with DSTA and MinDef. DSTA represents a new CRX (Content Repository Extreme) enterprise account for Day. DSTA will use the standards based content repository to support the Singapore Government’s e-procurement website, providing infrastructure for several billion dollars in government contracts each fiscal year. MinDef, Singapore’s Ministry of Defense, is delivering a new Communiqué based portal to provide an important communication point between the Singapore government and its service men and reservists.

Based on the innovative product portfolio the company also added new revenue streams from OEM contracts. Day’s OEM agreement with FileNet to provide Web Content Management capabilities for the FileNet P8 platform began to generate revenues in the first quarter. This partnership was well received by industry analysts and FileNet’s customers as they can now leverage the power of JSR 170 and a whole range of new web centric innovations within the FileNet P8 platform.

A new OEM agreement was also signed in the first quarter was with Acquity Group, who is marketing and selling their Content OnDemand solution. The OnDemand solution was created as a direct result of over 15 successful joint implementations between Acquity Group and Day Software with worldwide brands such as McDonald’s, Johnson Controls and Shimano. Acquity Group offers this solution through a hosted, subscription-based model, allowing customers the ability to leverage Day’s world class Content Management Solution.

“Acquity Group’s Content OnDemand offering is helping organizations quickly deploy the power of Day Software with minimum operational burdens,” says Acquity Group CEO Chris Dalton. “Our OnDemand solution is focused on the small to medium business community that may not have the resources available to deploy a solution of this nature. The advantages for our customers are huge from a time, cost and ease of use perspective.”

About Day - www.day.com
Day is a leading provider of integrated content, portal and digital asset management software. Day’s technology Communiqué offers a comprehensive, rapidly deployable framework to unify and manage all digital business data, systems, applications and processes through the web. Communiqué’s content-centric architecture, and its innovative ContentBus, turns the entire business into a virtual repository, bringing together content from any system, regardless of location, language or platform.
Day is an international company, founded in 1993, and listed on the SWX Swiss Exchange (SWX: DAYN) since April 2000. Day’s customers are some of the largest global corporations and include Audi, Credit Suisse First Boston, DaimlerChrysler, Deutsche Bank, Deutsche Post World Net, Intercontinental Hotels Group, McDonald’s and Volkswagen.

A warning regarding forward-looking statements
This press-release may contain forward-looking statements regarding future events or the future performance of Day Software Holding AG and its subsidiaries (the “Company”). Words such as “expects,” “plans,” “believes,” “may,” “will,” and variations of these words or similar expressions are intended to identify forward-looking statements. These statements speak only as of the date hereof. Such information is subject to change, and we will not necessarily inform you of such changes. Actual events or results, of course, could differ materially and adversely from those expressed in any forward-looking statement. There is currently no public trading market in the United States for the Company’s stock, and the Company does not make filings (e.g., Forms 10-K and 10-Q) with the Securities and Exchange Commission under the Securities Exchange Act of 1934.

The English text of this press release represents the binding version.

Contact Information

Peter Nachbur

Press Contact

Day Software AG

Contact via E-mail