Business Objects Reports Record Q4 and Fiscal 2005 Revenues and EPS Results

-- Q4 Revenues Grew 14 Percent Year over Year

-- Q4 GAAP Operating Margin Reached 15 Percent

-- Non-GAAP Reached 19 Percent

-- BusinessObjects XI Drives License Revenue Growth of 14% in Q4

Business Objects (Nasdaq: BOBJ)(Euronext Paris ISIN codeFR0004026250 - BOB), the world's leading provider of businessintelligence (BI) solutions, today announced results for the fourthquarter and year ended December 31, 2005.

For the fourth quarter of 2005, the company reported totalrevenues of $305 million, the highest in the company's history, whichgrew 14 percent year over year. US GAAP diluted earnings per sharewere $0.37 and non-GAAP diluted earnings per share were $0.42 in thefourth quarter of 2005. The total revenues and diluted earnings pershare (US GAAP and non-GAAP) exceeded the company's guidance for thequarter.

Operating income was also a record high, on both a US GAAP andnon-GAAP basis during the fourth quarter of 2005. On a US GAAP basis,income from operations was $46 million or 15 percent of totalrevenues, up 22 percent year over year. On a non-GAAP basis, incomefrom operations was $59 million or 19 percent of total revenues, up 26percent year over year, due to increased revenue coupled withefficiency of operations.

For 2005, the company reported total revenues of $1.077 billion,up 16 percent from 2004. US GAAP diluted earnings per share were $1.00in 2005 and non-GAAP diluted earnings per share were $1.29. The totalrevenues and diluted earnings per share (US GAAP and non-GAAP)exceeded the company's guidance for 2005.

Operating income improved significantly on both a US GAAP andnon-GAAP basis during 2005. On a US GAAP basis, income from operationsfor 2005 was $132 million or 12 percent of total revenues, up 62percent from 2004. On a non-GAAP basis, income from operations from2005 was $176 million, or 16 percent of total revenues, up 45 percentfrom 2004.

All figures referred to herein are stated in US dollars unlessotherwise indicated. Fourth quarter of 2005 and full year 2005non-GAAP results as defined in the section "Use of Non-GAAP FinancialMeasures" below differ from results measured under US GAAP as theyexclude $10.4 million and $36.7 million, respectively, of amortizationof intangible assets and restructuring costs; and $3.1 million and$6.9 million respectively, of stock-based compensation expense.Reconciliations of US GAAP to non-GAAP results are included at the endof this press release.

"By any measure, our fourth quarter and 2005 results weretremendous," said John Schwarz, chief executive officer of BusinessObjects. "In the fourth quarter, we reported the largest singlequarter in our company's history, both in revenue and profit. Therobust license growth and profitability achieved in the quarteremphasizes the success of BusinessObjects XI in the market. At theconclusion of my first full quarter as CEO, I am very impressed withthe quality of the team we have assembled at Business Objects and I amvery confident in our ability to deliver another great year in 2006."

"In 2005, we exceeded $1 billion in annual revenue, which is avery important milestone for an enterprise software company," saidBernard Liautaud, chairman and chief strategy officer of BusinessObjects. "And achieving great Q4 results is a good indicator of asmooth and successful transition of the company to John's leadership."

Business Highlights

-- With $234 million in license revenue in 2005, BusinessObjects XI represented one of the most successful product introductions in the history of the business intelligence industry.

-- Business Objects grew faster than the BI market, with 16 percent year over year revenue growth for 2005.

-- The company's global OEM business grew 23 percent year over year in the fourth quarter of 2005, and the company also entered into agreements with 28 new OEMs. These companies will embed BusinessObjects XI in their business applications, allowing Business Objects to expand its footprint in key industry verticals.

-- License revenue from transactions over $1 million grew 50 percent year over year in 2005, demonstrating the company's ability to drive BI enterprise standardization.

-- License revenue from deals between $200,000 and $1 million grew 25 percent year over year in 2005, demonstrating the company's ability to grow business in this important part of its business.

-- The company made three key acquisitions in 2005 - SRC Software, Infommersion, and Medience. All three provided an immediate positive impact on the company's ability to win business and strengthened the company's overall product offering.

-- During the year, Business Objects received widespread praise and garnered several awards, including the Computer Reseller News product of the year award for best business application, the Intelligent Enterprise readers' choice award for the best business intelligence suite, the Nucleus Research number one ranking for return on investment, and a VARBusiness mid-market product of the year award.

Fourth Quarter 2005 Highlights

BusinessObjects XI Momentum Remains Strong

-- License revenues totaled more than $155 million in the fourth quarter of 2005, up 29 percent versus the third quarter of 2005 and up 14 percent versus the fourth quarter of 2004.

-- Customer acceptance of the BusinessObjects XI product family continued to grow with over $98 million in license revenues, or 63 percent of total license revenue in the fourth quarter.

-- Business Objects' license growth continues to significantly outpace the competition.

Broader Customer Adoption Reflected in the Increase in Large Dealsand Customer Wins

-- There were 14 license revenue transactions over $1 million in the fourth quarter of 2005, up from 10 transactions in the third quarter of 2005 and compared to 14 in the fourth quarter of 2004.

-- Notable customer wins in the fourth quarter of 2005 included: Advanced Micro Devices, Inc., Assurance France Generali, CSX Technology, Inc., Monster Worldwide, Inc., National Offender Management Service, Principal Financial Group, Sisters of Mercy Health System, Societe Generale Corporate & Investment Banking, University of Michigan, and Volvo.

-- Many of these customer purchases were driven by BusinessObjects XI and BusinessObjects XI Release 2, and by improving our services capability.

The Americas and EMEA Reported Accelerating Growth

-- Revenues in the Americas reached $167 million in the fourth quarter of 2005, up 27 percent year over year. Americas closed 7 transactions over $1 million in license revenues.

-- Revenues in EMEA (Europe, Middle East, and Africa) totaled $118 million in the fourth quarter of 2005, up 3 percent year over year (up 13 percent in constant currency at 99 million in euros). EMEA closed 6 transactions over $1 million in license revenues.

-- Revenues in APJ (Asia Pacific, and Japan) in the fourth quarter of 2005 totaled $20 million, down 6 percent year over year (although up 7% sequentially and up 8% for 2005). APJ closed 1 transaction over $1 million in license revenues.

Strong Demand Across Software and Services Due to New Products

-- Sales of core business intelligence products including query, reporting, and analysis resulted in $133 million in license revenues in the fourth quarter of 2005, up 9 percent year over year.

-- Enterprise performance management applications led license growth, reaching $16 million in license revenues in the fourth quarter of 2005, up 63 percent year over year.

-- Data integration products reached $7 million in license revenues in the fourth quarter of 2005, up 50 percent year over year.

-- Services revenues totaled $149 million in the fourth quarter of 2005 up 14 percent year over year.

-- Within the services revenues, maintenance revenues totaled $108 million in the fourth quarter of 2005, up 11 percent year over year, reflecting a continued high rate of maintenance renewals and outstanding customer loyalty. Professional services revenues, including consulting and training, totaled $42 million and were up 23% year over year, reflecting our continued focus on vertical business solutions.

Profits Continued to Grow; Earnings Per Share Up Year over Year

-- On a US GAAP basis, operating income was $46 million in the fourth quarter of 2005, up 22 percent year over year, representing a US GAAP operating margin of 15 percent. In the fourth quarter of 2005, US GAAP net income was $35 million and US GAAP diluted earnings per share were $0.37 per share.

-- On a non-GAAP basis, operating income was $59 million in the fourth quarter of 2005, up 26 percent year over year, representing a non-GAAP operating margin of 19 percent. In the fourth quarter of 2005, non-GAAP net income was $40 million and non-GAAP diluted earnings per share were $0.42 per share.

Fiscal Year 2005 Highlights

-- For 2005, revenues were $1.077 billion, up 16 percent year over year on both a reported and constant currency basis. The company recorded 46 transactions over $1 million in 2005, up from 33 in 2004.

-- License revenues were $516 million in 2005, up 9 percent year over year.

-- Operating income performance in 2005 was primarily driven by the leverage of the company's growing business and more efficient use of internal resources. On a US GAAP basis, operating income was $132 million in 2005, or 12 percent of revenues, up 62 percent year over year. On a non-GAAP basis, operating income was $176 million in 2005, or 16 percent of revenues, up 45 percent year over year.

-- On a US GAAP basis, net income was $93 million in 2005 or 9 percent of revenues, up 97 percent year over year. On a non-GAAP basis, net income was $120 million or 11 percent of revenues, up 68 percent year over year.

-- On a US GAAP basis for 2005, diluted earnings per share were $1.00 and on a non-GAAP basis they were $1.29 per share.

Balance Sheet Remains Strong

-- Total cash and investments (cash, cash equivalents, and short-term investments) were $337 million at December 31, 2005. The $39 million year to year net increase in cash reflects approximately $209 million of cash inflows (net of foreign exchange), less outflows of approximately $129 million for acquisitions and $41 million of other capital investments.

-- Deferred and long-term deferred revenues totaled $209 million at December 31, 2005, up 4 percent year over year.

-- Days sales outstanding (DSO) were 79 days as of December 31, 2005, improved from 84 days at December 31, 2004.

Business Outlook

Business Objects offers the following guidance for the quarterending March 31, 2006:

-- Total revenues are expected to range from $278 million to $283 million.

-- US GAAP diluted earnings per share are expected to range from $0.10 to $0.13.

-- Non-GAAP diluted earnings per share are expected to range from $0.27 to $0.30.

Non-GAAP diluted earning per share for the quarter ending March31, 2006, are expected to add back approximately $9 million ofamortization of intangible assets, and approximately $14 million ofstock based compensation expense, which is an increase ofapproximately $0.17 per share, after tax effect.

Business Objects offers the following guidance for the year endingDecember 31, 2006:

-- Total revenues are expected to range from $1.210 billion to $1.230 billion.

-- US GAAP diluted earnings per share are expected to range from $0.77 to $0.87.

-- Non-GAAP diluted earnings per share are expected to range from $1.45 to $1.55.

Non-GAAP diluted earning per share for the year ending December31, 2006, are expected to add back approximately $35 million ofamortization of intangible assets, and $50 million of stock basedcompensation expense, which is an increase of approximately $0.68 pershare, after tax effect.

The above guidance include for the first time, stock basedcompensation expense from the application of FAS 123R. This stockbased compensation expense of approximately $14 million in the quarterended March 31, 2006, and $50 million for the full year 2006, includesthe impact of options assumed in prior acquisitions, as well as prioremployee grants, and estimated employee grants for the current year.These expenses are based on estimates, including future stock price,employee turnover, growth in new employees, grants to current and newemployees, stock volatility, and future interest rates.

The outlook for the quarter ending March 31, 2006 and full year2006 assumes a U.S. Dollar to euro exchange rate of $1.22 per EUR1.00, a U.S. dollar to Canadian dollar exchange rate of $0.88 per CDN$1.00 and an effective US GAAP tax rate of 47 percent, and a non-GAAPtax rate of 37 percent.

The above information concerning our forecast for the firstquarter and full year 2006 represents our outlook only as of the datehereof, and we undertake no obligation to update or revise anyfinancial forecast or other forward looking statements, as a result ofnew developments or otherwise.

Conference Call

Business Objects will hold a conference call to discuss itsfinancial results for the fourth quarter of 2005 and fiscal year 2005on February 1, 2006. The call will begin at 2:00 p.m. PT (5:00 p.m.New York, 11:00 p.m. Paris, 10:00 p.m., London). The call-in numbersare (800) 399-7988 for North America and (706) 634-5428 for Europe andAsia with ID #4051008. The conference call also will be webcast live,and can be accessed on the company's website -www.businessobjects.com. A replay of the webcast will be available onthe site approximately two hours after the end of the live call.

Accounting Principles

Business Objects prepares its financial statements in accordancewith US GAAP. Because the company is listed on both the Eurolist byEuronext(TM) in France and the Nasdaq National Market in the UnitedStates, it is required to separately report consolidated financialstatements prepared in accordance with both US GAAP and InternationalFinancial Reporting Standards ("IFRS"). The most significantidentified differences between the two reporting standards forBusiness Objects relate to the treatment of stock-based compensationexpense, the accounting for deferred tax assets on certainintercompany transactions and the accounting for businesscombinations.

In accordance with French regulations and IFRS, Business Objectsreported its consolidated financial statements for the first half of2005 on October 28, 2005. In addition, Business Objects expects toreport its consolidated financial statements for the full year 2005 inApril 2006. Business Objects filed with the Autorite des MarchesFinanciers in France its 2004 Document de Reference which included theopening balance sheet of the Company as of January 1, 2004, preparedin accordance with IFRS. In addition, the Company has published netsales for its second quarter in accordance with IFRS in the Bulletindes Annonces Legales Obligatoires in France on August 12, 2005.

Use of Non-GAAP Financial Measures

The non-GAAP financial measures such as operating income, netincome, and earnings per share information for the fourth quarter andfull year included in this press release are different from thoseotherwise presented under US GAAP as these non-GAAP measures excludecertain charges. These charges include a write-off of in-processresearch and development, amortization of intangible assets,stock-based compensation expense, and restructuring charges. BusinessObjects has provided these measures in addition to US GAAP financialresults because management believes these non-GAAP measures provide aconsistent basis for comparison between quarters and of growth ratesyear-over-year that are not influenced by certain non-cash charges orimpacts of prior period acquisitions, and therefore are helpful inunderstanding Business Objects' underlying operating results. Inaddition, this press release also includes non-GAAP measures that usea constant currency to separate the impact of conversion from otherforeign currencies to US dollars from other changes in our business.These non-GAAP measures are some of the primary measures BusinessObjects' management uses for planning and forecasting. These measuresare not in accordance with, or an alternative to US GAAP and thesenon-GAAP measures may not be comparable to information provided byother companies. Reconciliations of US GAAP to non-GAAP results arepresented at the end of this press release.

About Business Objects

Business Objects is the world's leading business intelligence (BI)software company. With more than 35,000 customers worldwide, includingover 80 percent of the Fortune 500, Business Objects helpsorganizations gain better insight into their business, improvedecision making, and optimize enterprise performance. The company'sbusiness intelligence platform, BusinessObjects(TM) XI, offers the BIindustry's most advanced and complete platform for performancemanagement, planning, reporting, query and analysis, and dataintegration. BusinessObjects XI includes Crystal Reports(R), theindustry standard for enterprise reporting. Business Objects has builtthe industry's strongest and most diverse partner community, and alsooffers consulting and education services to help customers effectivelydeploy their business intelligence projects.

Business Objects has dual headquarters in San Jose, Calif., andParis, France. The company's stock is traded on both the Nasdaq (BOBJ)and Euronext Paris (ISIN: FR0004026250 - BOB) stock exchanges. Moreinformation about Business Objects can be found atwww.businessobjects.com.

Forward-Looking Statements

This document contains forward-looking statements that involverisks and uncertainties concerning the company, including thecompany's expected financial performance for the first quarter andfull year 2006 and the company's product and business strategies.Actual events or results may differ materially from those described inthis document due to a number of risks and uncertainties. Thesepotential risks and uncertainties include, among others, fluctuationsin the company's quarterly and yearly operating results; the company'sability to sustain or increase its profitability; the company'sability to attract and retain customers for BusinessObjects XI; thecompany's ability to issue new releases of BusinessObjects XI on otherplatforms; changes to current accounting policies which may have asignificant, adverse impact upon the company's financial results;risks related to the company's integration of past and futureacquisitions; the introduction of new products by competitors or theentry of new competitors into the markets for Business Objects'products; the impact of the pricing of competing technologies; thecompany's ability to preserve its key strategic relationships; thecompany's reliance upon selling products only in the BusinessIntelligence software market; and economic and political conditions inthe US and abroad. More information about potential factors that couldaffect Business Objects' business and financial results is included inBusiness Objects' Form 10-K for the year ended December 31, 2004 andBusiness Objects' Form 10-Q for the quarter ended September 30, 2005,each of which are on file with the SEC and available at the SEC'swebsite at www.sec.gov. Business Objects is not obligated to undertakeany obligation to update these forward-looking statements to reflectevents or circumstances after the date of this document.

Business Objects and the Business Objects logo, BusinessObjects,WebIntelligence, Crystal Reports, Intelligent Question, and DesktopIntelligence are trademarks or registered trademarks of BusinessObjects S.A. or its affiliated companies in the United States and/orother countries. All other names mentioned herein may be trademarks oftheir respective owners.

BUSINESS OBJECTS S.A.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per ordinary share and ADS data)


Three Months Ended Year Ended
December 31, December 31,
2005 2004 2005 2004
--------- --------- ---------- ---------
Revenues: (unaudited) (unaudited)
Net license fees $155,320 $135,993 $515,637 $473,373
Services 149,266 130,695 561,514 452,258
--------- --------- ---------- ---------
Total revenues 304,586 266,688 1,077,151 925,631
Cost of revenues:
Net license fees 8,129 7,502 29,715 28,272
Services 57,610 46,589 216,626 172,133
--------- --------- ---------- ---------
Total cost of
revenues 65,739 54,091 246,341 200,405
--------- --------- ---------- ---------
Gross margin 238,847 212,597 830,810 725,226
Operating expenses:
Sales and marketing 122,301 113,801 434,432 406,796
Research and
development 42,574 38,979 166,124 150,562
General and
administrative 27,932 21,635 97,910 83,947
Restructuring costs 298 677 150 2,169
--------- --------- ---------- ---------
Total operating
expenses 193,105 175,092 698,616 643,474
--------- --------- ---------- ---------
Income from operations 45,742 37,505 132,194 81,752
Interest and other income
(expense), net 3,831 (1,550) 14,304 (4,220)
--------- --------- ---------- ---------
Income before provision for
income taxes 49,573 35,955 146,498 77,532
Provision for income taxes (14,660) (14,609) (53,873) (30,409)
--------- --------- ---------- ---------
Net income $34,913 $21,346 $92,625 $47,123
========= ========= ========== =========

Basic net income per
ordinary share and ADS $0.38 $0.24 $1.02 $0.53
========= ========= ========== =========

Diluted net income per
ordinary share and ADS $0.37 $0.24 $1.00 $0.52
========= ========= ========== =========

Ordinary shares and ADSs
used in computing
basic net income per
ordinary share and ADS 91,588 88,769 90,405 88,748
========= ========= ========== =========

Ordinary shares and ADSs and
equivalents used in computing
diluted net income per
ordinary share and A 95,086 90,390 93,036 91,077
========= ========= ========== =========



BUSINESS OBJECTS S.A.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except nominal value per ordinary share)



Dec. 31, Dec. 31,
2005 2004
----------- -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $332,777 $293,485
Restricted cash 22,157 7,089
Short-term investments 4,651 3,831
Accounts receivable, net 265,672 248,957
Prepaid and other current assets 74,485 54,903
----------- -----------

Total current assets 699,742 608,265

Goodwill 1,166,043 1,067,694
Other intangible assets, net 110,512 124,599
Property and equipment, net 74,116 64,053
Deposits and other assets 52,087 51,363
Long-term restricted cash 20,858 6,954
----------- -----------

Total assets $2,123,358 $1,922,928
=========== ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $45,777 $40,939
Accrued payroll and related expenses 83,332 84,918
Income taxes payable 79,820 85,000
Deferred revenues 201,788 194,366
Other current liabilities 72,098 83,544
Escrows payable 21,728 6,654
----------- -----------

Total current liabilities 504,543 495,421

Long-term escrows payable 10,902 -
Other long-term liabilities 11,724 14,047
Long-term deferred revenues 6,734 6,316
----------- -----------
Total liabilities 533,903 515,784

Shareholders' equity
Ordinary shares, Euro 0.10 nominal value 10,359 10,312
Additional paid-in capital 1,217,473 1,167,336
Treasury and Business Objects Option LLC
shares (3,223) (53,335)
Retained earnings 342,345 249,720
Unearned compensation (12,243) (8,079)
Accumulated other comprehensive income 34,744 41,190
----------- -----------
Total shareholders' equity 1,589,455 1,407,144
----------- -----------

Total liabilities and
shareholders' equity $2,123,358 $1,922,928
=========== ===========




BUSINESS OBJECTS S.A.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)



Year Ended
December 31,
----------------------
2005 2004
----------- ---------
(unaudited)

Operating activities:
Net income $92,625 $47,123
Adjustments to reconcile net income to net
cash provided by
operating activities:
Depreciation and amortization of property
and equipment 31,691 32,493
Amortization of other intangible assets 32,851 30,780
Stock-based compensation expense 6,942 6,687
Acquired in-process research and
development 3,584 -
Loss on retirements of property and
equipment 972 -
Deferred income taxes (5,786) 14,708
Tax benefit from employee stock plans 8,510 8,812
Changes in operating assets and liabilities:
Accounts receivable, net (26,296) (51,809)
Prepaid and other current assets (15,684) (15,042)
Deposits and other assets 14,181 (30,777)
Accounts payable 6,596 (8,660)
Accrued payroll and related expenses 319 (7,090)
Income taxes payable 4,335 (9,948)
Deferred revenues 17,288 58,186
Other liabilities (8,655) 13,177
Short-term investments classified as
trading (820) (499)

----------- ---------
Net cash provided by operating
activities 162,653 88,141
----------- ---------

Investing activities:
Purchases of property and equipment (41,079) (30,273)
Business acquisitions, net of acquired
cash (128,814) (279)

----------- ---------
Net cash used in investing
activities (169,893) (30,552)
----------- ---------

Financing activities:
Issuance of shares 53,113 40,586
Purchase of treasury shares - (40,231)
Increase in escrows payable 25,976 -
Transfer of cash (to) from restricted
cash accounts (28,972) 5,200
Payments on escrows payable - (3,074)

----------- ---------
Net cash provided by financing
activities 50,117 2,481
----------- ---------

Effect of foreign exchange rate changes on cash
and cash equivalents (3,585) (1,965)

----------- ---------
Net increase in cash and cash
equivalents 39,292 58,105
Cash and cash equivalents, beginning of the
period 293,485 235,380
----------- ---------

Cash and cash equivalents, end of the period $332,777 $293,485
=========== =========



BUSINESS OBJECTS S.A.
STATEMENT OF INCOME -- Reconciliation of US GAAP to Non-GAAP Results
Three Months Ended December 31, 2005
(in millions, except per ordinary share and ADS data)
(Unaudited)




Add back:
Amortization
of intangible
assets and Add back: Non-
restructuring Stock-based GAAP
US GAAP costs compensation Results
------- ------------- -------------------
Revenues:
Net license fees $155.3 $155.3
Services 149.3 149.3
------- ------------- ----------- -------
Total revenues 304.6 - - 304.6
Cost of revenues:
Net license fees 8.1 (6.1) 2.0
Services 57.7 (2.5) (0.2) 55.0
------- ------------- ----------- -------
Total cost of
revenues 65.8 (8.6) (0.2) 57.0
------- ------------- ----------- -------
Gross margin 238.8 8.6 0.2 247.6

Gross margin % 78% 81%

Operating expenses:
Sales and marketing 122.3 (0.3) (0.4) 121.6
Research and
development (1) 42.6 (1.2) (0.3) 41.1
General and
administrative 27.9 (2.2) 25.7
Restructuring costs 0.3 (0.3) -
------- ------------- ----------- -------
Total operating
expenses 193.1 (1.8) (2.9) 188.4
------- ------------- ----------- -------
Income from operations 45.7 10.4 3.1 59.2
Interest and other income
(expense), net 3.9 3.9
------- ------------- ----------- -------
Income before provision for
income taxes 49.6 10.4 3.1 63.1
Provision for income taxes (14.7) (22.7)
------- -------
Net income $34.9 $40.4
======= =======

Basic net income per
ordinary share and ADS $0.38 $0.44
======= =======

Diluted net income per
ordinary share and ADS $0.37 $0.42
======= =======


(1) includes acquired in-process research and development for
Infommersion


BUSINESS OBJECTS S.A.
STATEMENT OF INCOME -- Reconciliation of US GAAP to Non-GAAP Results
For the Year Ended December 31, 2005
(in millions, except per ordinary share and ADS data)
(Unaudited)


Add back:
Amortization
of intangible
assets and Add back:
restructuring Stock-based Non-GAAP
US GAAP costs compensation Results
-------- ------------- ------------ --------
Revenues:
Net license fees $515.6 $515.6
Services 561.5 561.5
-------- ------------- ----------- --------
Total revenues 1,077.1 - - 1,077.1
Cost of revenues:
Net license fees 29.7 (22.0) - 7.7
Services 216.6 (9.5) (0.8) 206.3
-------- ------------- ----------- --------
Total cost of
revenues 246.3 (31.5) (0.8) 214.0
-------- ------------- ----------- --------
Gross margin 830.8 31.5 0.8 863.1

Gross margin % 77% 80%

Operating expenses:
Sales and marketing 434.4 (0.7) (1.8) 431.9
Research and
development (1) 166.1 (3.6) (1.2) 161.3
General and
administrative 97.9 (0.7) (3.1) 94.1
Restructuring costs 0.2 (0.2) - -
-------- ------------- ----------- --------
Total
operating
expenses 698.6 (5.2) (6.1) 687.3
-------- ------------- ----------- --------
Income from operations 132.2 36.7 6.9 175.8
Interest and other
income (expense), net 14.3 14.3
-------- ------------- ----------- --------
Income before provision
for income taxes 146.5 36.7 6.9 190.1
Provision for income
taxes (53.9) (70.0)
-------- --------
Net income $92.6 $120.1
======== ========

Basic net income per
ordinary share and ADS $1.02 $1.33
======== ========

Diluted net income per
ordinary share and ADS $1.00 $1.29
======== ========


(1) includes acquired in-process research and development for SRC,
Medience, and Infommersion



BUSINESS OBJECTS S.A.
Q4 FISCAL 2005 SUPPLEMENTAL INFORMATION
(in millions, except per ordinary share and ADS data)
(Unaudited)


---------------------------------------------------------------------
Fiscal 2004
-----------------------------------
Q1 Q2 Q3 Q4 Total
---------------------------------------------------------------------
SUPPLEMENTAL INCOME STATEMENT INFORMATION

Revenues
Net license fees $114.5 $117.2 $105.7 $136.0 $473.4
Maintenance 73.8 75.6 84.4 97.0 330.8
Consulting and training 28.9 29.4 29.4 33.7 121.4
-----------------------------------
Total revenues 217.2 222.2 219.5 266.7 925.6
-----------------------------------

Total expenses
Cost of net license fees 2.5 1.0 2.1 2.4 8.0
Cost of services revenues 39.0 38.8 39.9 44.1 161.8
Sales and marketing 96.5 98.6 95.9 113.2 404.2
Research and development 39.1 36.1 34.9 38.7 148.8
General and administrative 20.9 18.6 20.9 21.1 81.5
Amortization of intangible
assets 7.8 7.6 7.6 7.7 30.7
Stock-based compensation (1) 2.1 1.7 1.5 1.4 6.7
Restructuring costs - 1.5 - 0.7 2.2
-----------------------------------
Total expenses 207.9 203.9 202.8 229.3 843.9

-----------------------------------
Income from operations 9.3 18.3 16.7 37.4 81.7
-----------------------------------
Interest and other income
(expense), net (4.0) 0.3 1.1 (1.6) (4.2)
Income before provision for
income taxes 5.3 18.6 17.8 35.8 77.5

Provision for income taxes (2.0) (7.1) (6.8) (14.5) (30.4)
Effective tax
rate 38% 38% 38% 41% 39%

-----------------------------------
Net income 3.3 11.5 11.0 21.3 47.1
===================================
Net income per ordinary share
and ADS
Basic 0.04 0.13 0.12 0.24 0.53
Diluted 0.04 0.13 0.12 0.24 0.52
Ordinary shares and ADSs
used in computing net income
per share (000's)
Basic 88,632 89,095 88,495 88,769 88,748
Diluted 92,305 91,061 89,792 90,390 91,077

---------------------------------------------------------------------

Amortization of intangible assets
Cost of net license fees 5.2 5.0 5.0 5.1 20.3
Cost of services revenues 2.3 2.3 2.3 2.3 9.2
Sales and marketing - - - - -
Research and development - - - - -
General and administrative 0.3 0.3 0.3 0.3 1.2
-----------------------------------
Total 7.8 7.6 7.6 7.7 30.7
===================================

Stock-based compensation (1)
Cost of services revenues 0.3 0.3 0.3 0.2 1.1
Sales and marketing 0.7 0.7 0.6 0.6 2.6
Research and development 0.6 0.4 0.4 0.4 1.8
General and administrative 0.5 0.3 0.2 0.2 1.2
-----------------------------------
Total 2.1 1.7 1.5 1.4 6.7
===================================

---------------------------------------------------------------------

Non-GAAP income from
operations(2) 19.2 29.1 25.8 47.2 121.3
-----------------------------------
% of total revenues 9% 13% 12% 18% 13%

Interest and other income
(expense), net (4.0) 0.3 1.1 (1.6) (4.2)
Income before provision for
income taxes 15.2 29.4 26.9 45.6 117.1

Provision for income taxes (5.8) (11.2) (10.2) (18.3) (45.5)
Effective tax rate 38% 38% 38% 40% 39%

-----------------------------------
Non-GAAP net income 9.4 18.2 16.7 27.3 71.6
===================================
% of total revenues 4% 8% 8% 10% 8%

Non-GAAP net income per ordinary share and ADS
Basic 0.11 0.20 0.19 0.31 0.81
Diluted 0.10 0.20 0.19 0.30 0.79



---------------------------------------------------------------------
Fiscal 2005
------------------------------------
Q1 Q2 Q3 Q4 Total
---------------------------------------------------------------------
SUPPLEMENTAL INCOME STATEMENT INFORMATION

Revenues
Net license fees $115.2 $124.9 $120.3 $155.3 $515.7
Maintenance 100.1 100.7 103.5 107.8 412.1
Consulting and training 33.5 36.8 37.6 41.5 149.4
------------------------------------
Total revenues 248.8 262.4 261.4 304.6 1,077.2
------------------------------------

Total expenses
Cost of net license fees 1.7 1.9 2.0 2.0 7.6
Cost of services revenues 48.9 50.3 52.3 55.0 206.5
Sales and marketing 103.2 104.3 102.8 121.6 431.9
Research and development 40.0 40.1 40.2 41.1 161.4
General and administrative 24.4 21.9 22.2 25.7 94.2
Amortization of intangible
assets 8.1 7.9 10.2 10.1 36.3
Stock-based compensation (1) 1.2 1.1 1.6 3.1 7.0
Restructuring costs (0.1) - - 0.3 0.2
------------------------------------
Total expenses 227.4 227.5 231.3 258.9 945.1

------------------------------------
Income from operations 21.4 34.9 30.1 45.7 132.1
------------------------------------
Interest and other income
(expense), net 4.4 3.2 2.9 3.9 14.4
Income before provision for
income taxes 25.8 38.1 33.0 49.6 146.5

Provision for income taxes (10.8) (15.0) (13.4) (14.7) (53.9)
Effective tax rate 42% 39% 41% 30% 37%

------------------------------------
Net income 15.0 23.1 19.6 34.9 92.6
====================================
Net income per ordinary share
and ADS
Basic 0.17 0.26 0.22 0.38 1.02
Diluted 0.16 0.25 0.21 0.37 1.00
Ordinary shares and ADSs used
in computing net income per
share (000's)
Basic 89,424 90,030 90,552 91,588 90,405
Diluted 91,184 92,089 93,455 95,086 93,036

-------------------------------- ------------------------------------

Amortization of intangible assets
Cost of net license fees 5.5 5.3 5.2 6.1 22.1
Cost of services revenues 2.3 2.3 2.3 2.5 9.4
Sales and marketing - - 0.3 0.3 0.6
Research and development - - 2.4 1.2 3.6
General and administrative 0.3 0.3 - - 0.6
------------------------------------
Total 8.1 7.9 10.2 10.1 36.3
====================================

Stock-based compensation (1)
Cost of services revenues 0.2 0.2 0.2 0.2 0.8
Sales and marketing 0.5 0.5 0.5 0.4 1.9
Research and development 0.3 0.3 0.3 0.3 1.2
General and administrative 0.2 0.1 0.6 2.2 3.1
------------------------------------
Total 1.2 1.1 1.6 3.1 7.0
====================================

---------------------------------------------------------------------

Non-GAAP income from
operations(2) 30.6 43.9 41.9 59.2 175.6
------------------------------------
% of total revenues 12% 17% 16% 19% 16%

Interest and other income
(expense), net 4.4 3.2 2.9 3.9 14.4
Income before provision for
income taxes 35.0 47.1 44.8 63.1 190.0

Provision for income taxes (12.9) (17.4) (17.0) (22.7) (70.0)
Effective tax rate 37% 37% 38% 36% 37%

------------------------------------
Non-GAAP net income 22.1 29.7 27.8 40.4 120.0
====================================
% of total revenues 9% 11% 11% 13% 11%

Non-GAAP net income per
ordinary share and ADS
Basic 0.25 0.33 0.31 0.44 1.33
Diluted 0.24 0.32 0.30 0.42 1.29

---------------------------------------------------------------------

(1) Represents stock-based compensation expense primarily relating to
the assumption of unvested options in Crystal Decisions acquisition
and in Q4 2005 to grants to new CEO.

(2) Non-GAAP measures are reconciled from US GAAP figures. Non- GAAP
measures exclude in-process research and development, amortization of
intangible assets, non-cash stock-based compensation expense, and
restructuring costs.



BUSINESS OBJECTS S.A.
Q4 FISCAL 2005 SUPPLEMENTAL INFORMATION
(in millions, except for number of transactions, DSO and headcount
information)
(Unaudited)



Fiscal 2004
-----------------------------------
Q1 Q2 Q3 Q4 Total
---------------------------------------------------------------------
REVENUE ANALYSIS

Total revenues by geography

Americas $104.1 $104.3 $113.8 $131.0 $453.3
EMEA 96.4 99.6 87.6 114.2 397.7
Asia Pacific,
including Japan 16.7 18.3 18.1 21.5 74.6
-----------------------------------
Total $217.2 $222.2 $219.5 $266.7 $925.6

---------------------------------------------------------------------

Analysis of currency impact
(year-over-year)(3)

Reported revenue
growth rate 13% 7% 4% 13% 9%
Constant currency
growth rate 5% 3% -1% 7% 4%
-----------------------------------
Impact of foreign currency on
growth rate 9% 4% 4% 6% 6%


---------------------------------------------------------------------
Fiscal 2004
-----------------------------------
Q1 Q2 Q3 Q4 Total
---------------------------------------------------------------------
LICENSE REVENUE ANALYSIS

License revenues by
channel

Direct 53% 55% 49% 50% 52%
Indirect 47% 45% 51% 50% 48%
-----------------------------------
Total 100% 100% 100% 100% 100%

---------------------------------------------------------------------

Number of transactions by size

Over $1 million 7 8 4 14 33
Over $200 thousand 104 91 78 103 376


---------------------------------------------------------------------
Fiscal 2004
----------------------------
Q1 Q2 Q3 Q4
---------------------------------------------------------------------
SELECTED BALANCE SHEET ITEMS

Cash and cash equivalents,
restricted cash, and
short-term investments $269 $256 $263 $311
DSO (Days sales outstanding) 75 81 75 84

---------------------------------------------------------------------
HEADCOUNT

Total headcount 3,756 3,707 3,815 3,834



---------------------------------------------------------------------
Fiscal 2005
-------------------------------------
Q1 Q2 Q3 Q4 Total
---------------------------------------------------------------------
REVENUE ANALYSIS

Total revenues by geography

Americas $118.1 $123.6 $137.6 $166.7 $546.1
EMEA 111.2 116.5 104.9 117.7 450.2
Asia Pacific,
including Japan 19.5 22.3 18.9 20.2 80.9
-------------------------------------
Total $248.8 $262.4 $261.4 $304.6 $1,077.2

---------------------------------------------------------------------

Analysis of currency impact
(year-over-year) (3)

Reported revenue
growth rate 15% 18% 19% 14% 16%
Constant currency
growth rate 11% 15% 18% 19% 16%
-------------------------------------
Impact of foreign currency on
growth rate 3% 3% 1% -5% 1%


---------------------------------------------------------------------
Fiscal 2005
-------------------------------------
Q1 Q2 Q3 Q4 Total
---------------------------------------------------------------------
LICENSE REVENUE ANALYSIS

License revenues by
channel

Direct 47% 49% 48% 48% 48%
Indirect 53% 51% 52% 52% 52%
-------------------------------------
Total 100% 100% 100% 100% 100%

---------------------------------------------------------------------

Number of transactions by size

Over $1 million 9 13 10 14 46
Over $200 thousand 101 96 121 147 465


---------------------------------------------------------------------
Fiscal 2005
----------------------------
Q1 Q2 Q3 Q4
---------------------------------------------------------------------
SELECTED BALANCE SHEET ITEMS

Cash and cash equivalents,
restricted cash, and
short-term investments $392 $384 $369 $380
DSO (Days sales
outstanding) 66 72 69 79

---------------------------------------------------------------------
HEADCOUNT

Total headcount 3,944 4,039 4,320 4,418

---------------------------------------------------------------------

(3) For 2004, reported revenue growth rates are calculated on a
Non-GAAP basis including the impact of inclusion of Crystal Decisions'
operations for fiscal 2003. Certain information on constant currency
to separate out the impact of conversion from other foreign currencies
to US dollars from other changes in our business is also presented.
The impact of foreign currency on growth rate is calculated from
absolute amounts and thus this presentation in full percentages does
not always tie to the sum of the separate line items.