DGAP-Ad hoc: Software AG

Ad hoc Disclosure (Inside Information according to article 17 MAR)

SOFTWARE AG PUBLISHES PRELIMINARY Q2 FINANCIAL RESULTS AND RAISES OPERATING PROFIT MARGIN OUTLOOK 2017

- Full-year outlook for operating profit margin (EBITA, non-IFRS) raised from the range of 30.5 to 31.5 percent to now 31.0 to 32.0 percent

- EBIT (IFRS) up 11 percent to EUR48.1 million (2016: EUR43.3 million), operating profit (EBITA, non-IFRS) up 10 percent to EUR61.3 million (2016: EUR 55.8 million)

- DBP product revenue up 4 percent: maintenance up 9 percent, license down 6 percent in Q2

- A&N product revenue stable: license revenue up 14 percent, maintenance revenue down 4 percent in Q2

- 2017 revenue outlook for Digital Business Platform and Adabas & Natural confirmed

The Management Board of Software AG (TecDAX, ISIN DE 0003304002 - WKN 330400 / SOW) decided today to raise the company's operating profit margin outlook. Based on the increased profitability in the second quarter, the business development in the first half of 2017 and the strong pipeline for the second half of the year, Software AG's board now expects the operating profit margin (EBITA, non-IFRS) for the full year 2017 to reach 31.0 to 32.0 percent (prior: 30.5 to 31.5 percent).

The operating profit (EBITA, non-IFRS) increased by 10 percent to EUR61.3 million (2016: EUR55.8 million) in the second quarter, growing overproportionately compared to revenue and driven by high margin maintenance revenues in the digital business. Accordingly the operating profit margin (EBITA, non-IFRS) climbed to 29.5 percent (2016: 27.4) percent.

For the Digital Business Platform (DBP), Software AG reconfirmed its outlook for the full year 2017 with an expected currency-adjusted product revenue increase of between 5 and 10 percent over the previous year. In the second quarter, DBP revenue increased by 4 percent. This growth consists of a 9 percent increase of maintenance revenue to EUR68.4 million (2016: EUR62.5 million) as well as a 6 percent decline of license revenue to EUR35.7 million (2016: EUR38.0 million). In the first half of 2017, DBP product revenue (license + maintenance) increased by 8 percent to EUR209.8 million (2016: EUR195.0 million). This increase is the result of 5 percent license growth and 9 percent maintenance growth. At constant currency, the digital business line grew by 6 percent in the first half of 2017, falling within the outlook corridor.

For the database business Adabas & Natural (A&N), the Group reconfirmed its 2017 outlook and continues to expect a revenue decrease between 2 and 6 percent at constant currency compared to the previous year. A&N maintenance revenue in the second quarter was EUR39.0 million (2016: EUR40.6 million). License revenue improved by 14 percent to EUR13.2 million (2016: EUR11.6 million) in the period under review. Product revenue was EUR52.2 million (2016: EUR52.2 million). At constant currency, product revenue growth for the first half of fiscal 2017 remains, as expected, below the targeted corridor. Based on the strong pipeline in the second half of the year and the solid maintenance business, Software AG remains confident and reconfirms its A&N targets for the full year.

* At constant currency
** After adjusting for non-operating factors (see non-IFRS results)

For additional information on the performance indicators used please refer
to page 35 of the 2016 Annual Report of Software AG at www.software.ag/ar.

A conference call for financial analysts, investors and media representatives will take place on Tuesday, July 18, 2017 at 9:00 am CEST (8:00 BST). Dial-in details will be available at www.SoftwareAG.com/investors.