Software AG

Quarterly Report • Oct 30, 2019

Quarterly Statement Q3|2019

Software AG: Strong Quarterly Revenue and Profit

Group Guidance ranges for FY 2019 confirmed

• Total product revenue at €179.2 million, up 5 percent (acc, at constant currency) year-on-year
• Group operating EBITA margin (non-IFRS) at 30.5 percent
• Strong Group EBIT at €59.0 million
• Adabas & Natural (A&N): continued strong quarterly performance, with 15 percent (acc) growth in product revenue driven in part by early closing of several deals
• Digital Business Platform (DBP) excluding Cloud & IoT: revenue recovered slightly and was on previous year's level due to continued strength in EMEA and first positive developments in North America
• Cloud & IoT: 17 new IoT customers in Q3, with continued growth in maintenance and SaaS revenue, which was offset by the absence of large deals which are now expected in Q4
• Helix strategy implementation fully underway and beginning to show demonstrable momentum; new strategic OEM relationship with Adobe company, Marketo; partnership further demonstrates growth in Software AG's expanding partner ecosystem as part of the Helix program
• Full-year guidance confirmed for FY 2019, with confidence in plan to deliver sustainable growth over the long term

Revenue

• License revenue: €64.1 million
• Product revenue: €179.2 million
• Total revenue: €224,2 million

Segments

• Digital Business Platform: €117.4 million in revenue, thereof €8.6 million from DBP Cloud & IoT and €42.9 million from ARR Cloud & IoT
• Adabas & Natural: €62.0 million in revenue and
• Professional Services1: €44.8 million in revenue and segment margin at 10.6 percent

Earnings

• EBIT: €59.0 million
• Operating EBITA (non-IFRS): €68.4 million
• Operating profit margin (non-IFRS): 30.5 percent
• Earnings per share (EPS, non-IFRS): €0.69

¹ Consulting until 2018; realigned for solution implementation in

Table of Contents

Management's Assessment of Third-Quarter Results	4
Business Line Development	5
Total Revenue and Earnings Development	6
Employees	6
2019 Outlook	6
Key Figures	7
Consolidated Income Statement	8
Consolidated Balance Sheet	9
Consolidated Statement of Cash Flows	11
Segment Report	12
DBP Segment with Revenue Split	14
Statement of Comprehensive Income	16
Safe Harbor Statement	17

Management's Assessment of Third-Quarter Results

The end of this quarter marks eight months into Helix, our multi-year transformation strategy to return Software AG to sustainable, profitable growth. We are seeing the emergence of the first operational and financial benefits of the Helix transformation, helping us win with pace and power in the market and delivering strong Group-level performance in both revenue and profit. As a result, the Management Board has confirmed its financial guidance for the full year 2019.

For the third quarter, Group revenue was €224.2 million, 5 percent (acc) higher than Q3 last year. Within that, total product revenue grew 5 percent (acc) to reach €179.2 million; and total license revenue was above the previous year at €64.1 million (Q3 2018: €56.7 million), up 9 percent (acc). Q3 Group EBIT was €59.0 million (Q3 2018: €54.5 million), an increase of 8 percent. The non-IFRS EBITA margin was 30.5 percent, consistent with the prior year and in line with our guidance for the year as a whole.

The Group's Adabas & Natural (A&N) business continued its recent run of strong performance supported by good momentum in North America. Our Adabas & Natural 2050+ program continues to resonate with customers, including our new zIIP and rehosting technologies, evidenced by wins such as the University of Texas, Austin. Adabas & Natural's positive performance was reflected in 15 percent growth at constant currency in product revenue, driven in part by early closing of deals which were originally expected for the fourth quarter of fiscal 2019.

The Group's Digital Business Platform (DBP, excluding Cloud & IoT) saw a slight recovery in performance during Q3. License sales were consistent with previous-year levels, with positive developments in North America and continued strength in the EMEA region. This led to an overall 1 percent revenue increase to €108.7 million

Cloud & IoT showed weak performance against a strong prior year because of the absence of large deals which are now expected for Q4. Importantly, momentum in new logo acquisition continued to build in the quarter, and maintenance and SaaS showed strong double-digit growth. Overall, business line revenue declined by 6 percent (acc) to €8.6 million, compared to €9.1 million in Q3 2018.

If we look at DBP including Cloud and IoT, in line with our Helix commitment to improve the quality of our revenue and earnings over time, SaaS and Subscription commitments now account for 63 percent of all bookings. Our Annual Recurring Revenue (ARR) is now €334.0 million which is 6 percent higher than in Q2 and 12 percent higher year on year.

Our An Helix, eight months of tough decisions, disciplined focus and sharper execution are starting to make an impact and deliver early results. With ongoing work around our three strategic pillars—Focus, Execution and Team—we have started to deliver against our initial Helix commitments, around quality of earnings, product strength, focus in R&D, sales and marketing execution, the shift to subscription sales and the build-out of our partner ecosystem.

• In focus, we continue to build our reputation for having the very best products in the market. Our focused R&D has driven our product innovation and development velocity, resulting in recognition from major industry analysts and the launch of two new products, webMethods.io B2B platform and ARIS Cloud. In addition, Software AG now has a cloud offering available for each major product.
• In execution, we have steadied our business in North America, and we have made excellent progress with our subscription sales model roll-out. We also won 83 new logos in the period including: Ernst & Young, Dubai Smart City Government and the U.S. Navy.
• In team: A significant element of our transformation efforts is being invested in evolving and deepening our partner ecosystem, the strategic OEM relationship we announced with Adobe company, Marketo is a solid proof point of this achievement. Investing in our own team remains of paramount importance. We are delighted that our new Chief HR Officer, Dr. Elke Frank, is now in place, driving further evolutions in our culture and development opportunities for our teams.

As we enter the final quarter of the year, the Management Board feels that with these results we have taken an important step towards our transformation. In Q4, we look forward to fulfill our committed guidance (see section Outlook on p. 6) and to continue the transformation of our business in the years to come.

"Eight months into our Helix transformation program, I am encouraged to see the first benefits of our tough decisions, disciplined focus and sharper execution showing through. There is much still to do—but strong growth in recurring revenue, a full cloud suite for all of our major products, strong momentum in new logo wins and a steadying of our business in North America all show that we are pointing in the right direction. I am delighted to see us extend our partnership ecosystem further today, with our new Marketo OEM relationship extending the deep bonds we have already built with Adobe. Our position in the key 'hybrid integration' market is getting stronger, and we remain focused as a team on the initiatives that will see us deliver on our long-term growth ambitions," said Sanjay Brahmawar, CEO of Software AG.

"We have made great progress with our subscription model conversion program and we remain on solid financial footing to support this and our other Helix priorities moving forward," commented Arnd Zinnhardt, CFO of Software AG.

Business Line Development

Software AG's A&N business performed well for the quarter, generating revenue of €62.0 million (Q3 2018: €52.3 million) as a result of good momentum in North America. In A&N, customers are responding to our Adabas & Natural 2050+ program. A&N license sales increased by 48 percent net of currency compared to the prior year, to €25.0 million (Q3 2018: €16.1 million). A&N maintenance reached €36.8 million in Q3 2019, consistent to €36.0 million in Q3 2018.

Software AG's DBP excluding Cloud & IoT, delivered revenue growth of 1 percent (acc) to €108.7 million (Q3 2018: €104.7 million). License revenues were flat with €37.9 million from €37.1 million. The performance in this segment was driven by strong, licence growth in EMEA and first positive developments in North America in the quarter.

Professional Services revenue was €44.8 million (Q3 2018: €42.7 million) in Q3 2019.

Total Revenue and Earnings Development

In the quarter under review, Software AG reported €224.2 million (Q3 2018: €208.8 million) in total revenue in the period, an increase of 5 percent net of currency. Group license revenue grew 9 percent (acc) to €64.1 million (Q3 2018: €56.7 million). Group maintenance revenue totalled €109.3 million (Q3 2018: €104.7 million), or 2 percent growth (acc). Accordingly, Software AG's total third-quarter product revenue (licenses and maintenance) was €179.2 million (Q3 2018: €165.9 million), which reflects 5 percent growth (acc).

The company's earnings before interest and taxes (EBIT), amounted to €59.0 million (Q3 2018: €54.5 million) in the quarter under review. This reflects an EBIT margin of 26.3 percent (Q3 2018: 26.1 percent). At €68.4 million (Q3 2018: €63.8 million), operating EBITA (non-IFRS) also performed well in the quarter. Subsequently, the operating profit margin (non-IFRS) was 30.5 percent (Q3 2018: 30.5 percent).

Employees

As of September 30, 2019, Software AG had 4,883 (2018: 4,714) employees worldwide (full-time equivalents). Of that total, 1,890 (2018: 1,903) worked in Professional Services.

2019 Outlook

As the business embarks on its long-term strategy to deliver sustainable growth, Software AG reiterates its outlook for the 2019 fiscal year and in the Helix strategy.

The Management Board continues to anticipate for the 2019 fiscal year:

• An operating profit margin (EBITA, non-IFRS) between 28 and 30 percent
• DBP (excl. Cloud & IoT) revenue growth between –6 and 0 percent
• DBP Cloud & IoT revenue growth between 75 and 125 percent
• A&N revenue growth between –3 and +3 percent

The table below shows the full forecast for the 2019 fiscal year:

	FY 2018 in € mn	FY 2019 Outlook as of Jan. 31, 2019 as %	FY 2019 Outlook as of July 18, 2019 as %
DBP revenue	464.7	—	—
DBP excl. DBP Cloud & IoT	434.4	+3 to +71	–6 to +01
DBP Cloud & IoT	30.3	+75 to +1251	+75 to +1251
A&N revenue	218.3	–5 to 01	–3 to +31
Operating margin (EBITA, non-IFRS)2	31.5%	28.0 to 30.0	28.0 to 30.0

Outlook for Fiscal Year 2019

¹ At constant currency

² Adjusted for non-operating factors (see non-IFRS earnings definition in the 2018 Annual Report on p. 48)

Key Figures

As of September 30, 2019 (IFRS, unaudited)

in € millions (unless otherwise stated)	9M 2019 (as stated)	9M 2018 (as stated)	+/– as %	+/– as % acc1	Q3 2019 (as stated)	Q3 2018 (as stated)	+/– as %	+/– as % acc1
Revenue	635.6	601.2	6	4	224.2	208.8	7	5
DBP (incl. Cloud & IoT)	327.6	316.7	3	1	117.4	113.8	3	1
Thereof DBP (excl. Cloud & IoT)	296.6	296.0	0	–2	108.8	104.7	4	1
Thereof DBP (Cloud & IoT)	31.0	20.7	50	47	8.6	9.1	–5	–6
A&N	169.7	149.6	13	12	62.0	52.3	19	15
Licenses	156.9	144.4	9	7	64.1	56.7	13	9
Maintenance	323.9	308.8	5	3	109.3	104.7	4	2
SaaS	16.0	12.6	27	25	5.8	4.5	28	26
Recurring revenue portion DBP (incl. Cloud & IoT)	82%				79%
Bookings DBP (incl. Cloud & IoT)	196,5				86,3
ARR DBP (incl. Cloud & IoT) 2	334.0	290.3
Thereof ARR DBP (Cloud & IoT)2	42.9	27.0
Operating EBITA (non-IFRS)	176.1	176.5	0		68.4	63.8	7
as % of revenue	27.7	29.4			30.5	30.5
DBP segment earnings	80.3	95.7	–16		35.3	38.2	–8
Segment margin	24.5%	30.2%			30.1%	33.6%
A&N segment earnings	119.6	104.5	14		43.7	35.8	22
Segment margin	70.5%	69.8%			70.5%	68.4%
Net income (non-IFRS)	126.6	123.4	3		51.0	44.7	14
Earnings per share (non-IFRS)3	1.71	1.67	3		0.69	0.60	14
Operating cash flow	124.0	133.7	–7		33.4	38.6	–13
CapEx4	9.5	8.7			3.5	2.2
Repayments of lease liabilities	11.6	—			3.9	—
Free cash flow	102.9	125.0	–18		26.0	36.4	–29
Adjusted operational free cash flow	118.9	—			26.3	—
as % of revenue	18.7	—			11.7	—
Adjusted operational free cash flow per share	1.61	—			0.36	—
Balance sheet	Sept. 30, 2019	Dec. 31, 2018	+/– as %
Total assets	2,103.9	2,007.9	5
Cash and cash equivalents	518.9	462.3	12
Net cash	178.4	149.0	20
Employees (FTE)	4,883	4,763	3

¹ acc = At constant currency

² Annual recurring revenue

³ Based on weighted average shares outstanding (basic) 9M 2019: 74.0 mn/9M 2018: 74.0 mn/Q3 2019: 74.0 mn/Q3 2018: 74.0 mn

⁴ Cash flow from investing activities adjusted for acquisitions and investments in debt instruments

Because the figures in this report are stated in accordance with commercial rounding principles, totals and percentages may not always be exact.

Consolidated Income Statement

For the Nine Months and Quarter Ended September 30, 2019 (IFRS, unaudited)

in € thousands	9M 2019	9M 2018	+/– as %	Q3 2019	Q3 2018	+/– as %
Licenses	156,896	144,378	9	64,142	56,743	13
Maintenance	323,937	308,848	5	109,273	104,680	4
SaaS	16,021	12,577	27	5,765	4,515	28
Professional Services	138,241	134,814	3	44,801	42,714	5
Other	496	534	–7	176	165	7
Total revenue	635,591	601,151	6	224,157	208,817	7
Cost of sales	–148,058	–143,721	3	–49,455	–45,845	8
Gross profit	487,533	457,430	7	174,702	162,972	7
Research and development expenses	–96,444	–88,545	9	–32,450	–30,167	8
Sales, marketing and distribution expenses	–189,502	–169,356	12	–63,944	–58,894	9
General and administrative expenses	–54,337	–54,248	0	–19,125	–19,218	0
Other taxes	–4,100	–4,813	–15	–1,188	–1,602	–26
Operating earnings	143,150	140,468	2	57,995	53,091	9
Other income/expenses, net	1,644	3,477	–53	–229	–208
Financing expenses, net	4,912	3,444	43	2,027	1,357	49
Earnings before income taxes	149,706	147,389	2	59,793	54,240	10
Income taxes	–42,601	–43,488	–2	–15,785	–16,113	–2
Net income	107,105	103,901	3	44,008	38,127	15
Thereof attributable to shareholders of Software AG	106,909	103,709	3	43,982	38,044	16
Thereof attributable to non-controlling interests	196	192		26	83
Earnings per share (€, basic)	1.45	1.40	4	0.59	0.51	16
Earnings per share (€, diluted)	1.45	1.40	4	0.59	0.51	16
Weighted average number of shares outstanding (basic)	73,979,889	73,978,064	—	73,979,889	73,979,889	—
Weighted average number of shares outstanding (diluted)	73,979,889	73,980,545	—	73,979,889	73,982,289	—

Consolidated Balance Sheet

As of September 30, 2019 (IFRS, unaudited)

Assets

in € thousands	Sept. 30, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	518,922	462,362
Other financial assets	7,633	15,302
Trade and other receivables	190,496	207,494
Other non-financial assets	24,176	20,109
Income tax receivables	21,815	19,680
	763,042	724,947
Non-current assets
Intangible assets	123,663	136,972
Goodwill	992,399	964,377
Property, plant and equipment	103,984	71,023
Other financial assets	15,691	19,563
Trade and other receivables	72,983	68,675
Other non-financial assets	3,696	2,924
Income tax receivables	11,226	9,416
Deferred tax receivables	17,220	10,007
	1,340,862	1,282,957

Total Assets	2,103,904	2,007,904

Equity and Liabilities

in € thousands	Sept. 30, 2019	Dec. 31, 2018
Current liabilities
Financial liabilities	139,198	111,888
Trade and other payables	31,278	38,831
Other non-financial liabilities	105,542	145,839
Other provisions	26,765	30,630
Income tax liabilities	38,090	37,953
Deferred income	145,430	123,276
	486,303	488,417
Non-current liabilities
Financial liabilities	201,288	201,432
Trade and other payables	24	3,245
Other non-financial liabilities	448	266
Other provisions	6,738	10,320
Provisions for pensions and similar obligations	34,377	34,621
Income tax liabilities	3,048	2,898
Deferred tax liabilities	19,487	11,398
Deferred income	8,740	16,245
	274,150	280,425
Equity
Share capital	74,000	74,000
Capital reserves	22,580	22,612
Retained earnings	1,253,174	1,201,689
Other reserves	–6,078	–59,138
Treasury shares	–757	–757
Attributable to shareholders of Software AG	1,342,919	1,238,406
Non-controlling interests	532	656
	1,343,451	1,239,062
Total Equity and Liabilities	2,103,904	2,007,904

Consolidated Statement of Cash Flows

	For the Nine Months and Quarter Ended September 30, 2019 (IFRS, unaudited)

in € thousands	9M 2019	9M 2018	Q3 2019	Q3 2018
Net income	107,105	103,901	44,008	38,127
Income taxes	42,601	43,488	15,785	16,113
Net financial income/expense	–4,912	–3,444	–2,027	–1,357
Amortization/depreciation of non-current assets	35,526	24,174	13,022	8,203
Payments for optional cash-settled claims to share-based compensation	–32	–53	–9	–53
Other non-cash income/expense	73	–1,925	17	–4
Changes in receivables and other assets	20,132	54,165	–31,260	–16,165
Changes in payables and other liabilities	–36,735	–46,152	–2,234	–501
Income taxes paid/received	–44,794	–43,385	–5,887	–7,039
Interest paid	–4,636	–4,923	–1,456	–1,381
Interest received	9,641	7,835	3,410	2,665
Net cash flow from operating activities	123,969	133,681	33,369	38,608
Proceeds from the sale of property, plant and equipment/intangible assets	1,564	268	1,297	48
Purchase of property, plant and equipment/intangible assets	–9,502	–6,337	–4,420	–2,078
Proceeds from the sale of non-current financial assets	490	250	59	0
Purchase of non-current financial assets	–1,938	–2,835	–364	–161
Proceeds from the sale of current financial assets	318	271	68	83
Purchase of current financial assets	–877	–885	–75	–351
Payments for acquisitions, net	–5,135	–46,800	0	–17,191
Net cash flow from investing activities	–15,080	–56,068	–3,435	–19,650
Use of treasury shares	0	88	0	0
Dividends paid	–52,846	–48,348	0	0
Payments from changes in other current financial liabilities	–9,549	12,441	–33,570	626
Repayment of lease liabilities	–11,648	0	–3,913	0
Proceeds from non-current financial liabilities	0	100,028	0	15
Repayment of non-current financial liabilities	–5	–100,011	–5	0
Net cash flow from financing activities	–74,048	–35,802	–37,488	641
Change in cash and cash equivalents due to business activities	34,841	41,811	–7,554	19,599
Change in cash and cash equivalents from currency translation	21,719	–734	16,562	–679
Net change in cash and cash equivalents	56,560	41,077	9,008	18,920
Cash and cash equivalents at beginning of period	462,362	365,815	509,914	387,972
Cash and cash equivalents at end of period	518,922	406,892	518,922	406,892
Free cash flow	102,935	125,027	26,028	36,417

Segment Report

For the Nine Months Ended September 30, 2019 (IFRS, unaudited)

		DBP (incl. Cloud & IoT)			A&N			Professional Services1			Reconciliation	Total
	9M 2019	9M 2019	9M 2018	9M 2019	9M 2019	9M 2018	9M 2019	9M 2019	9M 2018	9M 2019	9M 2018	9M 2019	9M 2019	9M 2018
in € thousands	as stated	at constant currency	as stated	as stated	at constant currency	as stated	as stated	at constant currency	as stated	as stated	as stated	as stated	at constant currency	as stated
Licenses	97,926	95,980	101,728	58,970	58,002	42,650						156,896	153,982	144,378
Maintenance	213,666	208,843	202,352	110,271	108,467	106,496						323,937	317,310	308,848
SaaS	16,021	15,723	12,577	0	0	0						16,021	15,723	12,577
Product revenue	327,613	320,546	316,657	169,241	166,469	149,146	0	0	0	0	0	496,854	487,015	465,803
Professional Services	0	0	0	0	0	0	138,241	135,918	134,814			138,241	135,918	134,814
Other	0	0	41	496	497	489	0	0	4			496	497	534
Total revenue	327,613	320,546	316,698	169,737	166,966	149,635	138,241	135,918	134,818	0	0	635,591	623,430	601,151
Cost of sales	–28,898	–28,620	–26,175	–5,733	–5,666	–4,628	–107,213	–105,340	–106,837	–6,214	–6,081	–148,058		–143,721
Gross profit	298,715	291,926	290,523	164,004	161,300	145,007	31,028	30,578	27,981	–6,214	–6,081	487,533		457,430
Sales, marketing and distribution expenses	–140,963	–138,046	–123,700	–25,400	–25,045	–23,109	–12,906	–12,672	–12,661	–10,233	–9,886	–189,502		–169,356
Segment contribution	157,752	153,880	166,823	138,604	136,255	121,898	18,122	17,906	15,320	–16,447	–15,967	298,031		288,074
Research and development expenses	–77,439	–71,975	–71,115	–19,005	–18,615	–17,430	0	0	0	0	0	–96,444		–88,545
Segment earnings	80,313	81,905	95,708	119,599	117,640	104,468	18,122	17,906	15,320	–16,447	–15,967	201,587		199,529
General and administrative expenses												–54,337		–54,248
Other taxes												–4,100		–4,813
Operating earnings												143,150		140,468
Other income/expense, net												1,644		3,477
Net financial income/expense												4,912		3,444
Earnings before income taxes												149,706		147,389
Income taxes												–42,601		–43,488
Net income												107,105		103,901

¹ Consulting until 2018; realigned for solution implementation in cooperation with customers and partners as of 2019

Segment Report

For the Third Quarter of 2019 (IFRS, unaudited)

		DBP (incl. Cloud & IoT)			A&N			Professional Services1		Reconciliation		Total
	Q3 2019	Q3 2019	Q3 2018	Q3 2019	Q3 2019	Q3 2018	Q3 2019	Q3 2019	Q3 2018	Q3 2019	Q3 2018	Q3 2019	Q3 2019	Q3 2018
in € thousands	as stated	at constant currency	as stated	as stated	at constant currency	as stated	as stated	at constant currency	as stated	as stated	as stated	as stated	at constant currency	as stated
Licenses	39,159	37,814	40,630	24,983	23,810	16,113						64,142	61,624	56,743
Maintenance	72,433	71,011	68,656	36,840	36,012	36,024						109,273	107,023	104,680
SaaS	5,765	5,684	4,515	0	0	0						5,765	5,684	4,515
Product revenue	117,357	114,509	113,801	61,823	59,822	52,137	0	0	0	0	0	179,180	174,331	165,938
Professional Services	0	0	0	0	0	0	44,801	43,803	42,714			44,801	43,803	42,714
Other	0	0	0	176	176	165	0	0	0			176	176	165
Total revenue	117,357	114,509	113,801	61,999	59,998	52,302	44,801	43,803	42,714	0	0	224,157	218,310	208,817
Cost of sales	–9,962	–9,886	–8,471	–1,711	–1,684	–1,949	–35,776	–34,987	–33,331	–2,006	–2,094	–49,455		–45,845
Gross profit	107,395	104,623	105,330	60,288	58,314	50,353	9,025	8,816	9,383	–2,006	–2,094	174,702		162,972
Sales, marketing and distribution expenses	–46,436	–45,607	–42,854	–9,775	–9,484	–8,651	–4,291	–4,199	–4,023	–3,442	–3,366	–63,944		–58,894
Segment contribution	60,959	59,016	62,476	50,513	48,830	41,702	4,734	4,617	5,360	–5,448	–5,460	110,758		104,078
Research and development expenses	–25,636	–22,480	–24,248	–6,814	–6,597	–5,919	0	0	0	0	0	–32,450		–30,167
Segment earnings	35,323	36,536	38,228	43,699	42,233	35,783	4,734	4,617	5,360	–5,448	–5,460	78,308		73,911
General and administrative expenses												–19,125		–19,218
Other taxes												–1,188		–1,602
Operating earnings												57,995		53,091
Other income/expense, net												–229		–208
Net financial income/expense												2,027		1,357
Earnings before income taxes												59,793		54,240
Income taxes												–15,785		–16,113
Net income												44,008		38,127

¹ Consulting until 2018; realigned for solution implementation in cooperation with customers and partners as of 2019

DBP Segment with Revenue Split

For the Nine Months Ended September 30, 2019 (IFRS, unaudited)

						DBP (incl. Cloud & IoT)
9M 2019	9M 2019	9M 2018	9M 2019	9M 2019	9M 2018	9M 2019	9M 2019	9M 2018
as stated	at constant currency	as stated	as stated	at constant currency	as stated	as stated	at constant currency	as stated
9,983	9,895	5,558	87,943	86,085	96,170	97,926	95,980	101,728
4,969	4,915	2,571	208,697	203,928	199,781	213,666	208,843	202,352
16,021	15,723	12,577	0	0	0	16,021	15,723	12,577
30,973	30,533	20,706	296,640	290,013	295,951	327,613	320,546	316,657
0	0	0	0	0	0	0	0	0
0	0	0	0	0	41	0	0	41
30,973	30,533	20,706	296,640	290,013	295,992	327,613	320,546	316,698
						–28,898	–28,620	–26,175
						298,715	291,926	290,523
						–140,963	–138,046	–123,700
						157,752	153,880	166,823
						–77,439	–71,975	–71,115
						80,313	81,905	95,708
		DBP (Cloud & IoT)				DBP (excl. Cloud & IoT)

DBP Segment with Revenue Split

For the Third Quarter of 2019 (IFRS, unaudited)

						DBP (incl. Cloud & IoT)
Q3 2019	Q3 2019	Q3 2018	Q3 2019	Q3 2019	Q3 2018	Q3 2019	Q3 2019	Q3 2018
as stated	at constant currency	as stated	as stated	at constant currency	as stated	as stated	at constant currency	as stated
1,241	1,221	3,565	37,918	36,593	37,065	39,159	37,814	40,630
1,630	1,617	996	70,803	69,394	67,660	72,433	71,011	68,656
5,765	5,684	4,515	0	0	0	5,765	5,684	4,515
8,636	8,522	9,076	108,721	105,987	104,725	117,357	114,509	113,801
0	0	0	0	0	0	0	0	0
0	0	0	0	0	0	0	0	0
8,636	8,522	9,076	108,721	105,987	104,725	117,357	114,509	113,801
						–9,962	–9,886	–8,471
						107,395	104,623	105,330
						–46,436	–45,607	–42,854
						60,959	59,016	62,476
						–25,636	–22,480	–24,248
						35,323	36,536	38,228
		DBP (Cloud & IoT)				DBP (excl. Cloud & IoT)

Statement of Comprehensive Income

For the Nine Months and Quarter Ended September 30, 2019 (IFRS, unaudited)

9M 2019	9M 2018	Q3 2019	Q3 2018
107,105	103,901	44,008	38,127
54,627	7,275	40,769	2,990
–2,348	–9,883	–1,289	–553
846	1,343	0	272
53,125	–1,265	39,480	2,709
65	44	–48	78
65	44	–48	78
53,190	–1,221	39,432	2,787
160,295	102,680	83,440	40,914
160,099	102,488	83,414	40,831
196	192	26	83

Safe Harbor Statement

This document includes forward-looking statements based on the beliefs of Software AG management. Such statements reflect current views of Software AG with respect to future events and results and are subject to risks and uncertainties. Actual results may vary materially from those projected here, due to factors including changes in general economic and business conditions, changes in currency exchange, the introduction of competing products, lack of market acceptance of new products, services or technologies and changes in business strategy. Software AG does not intend or assume any obligation to update these forward-looking statements.

This document constitutes neither an offer nor recommendation to subscribe or buy in any other way securities of Software AG or any of the companies that are members of the Group at present or in the future, nor does it form part of such an offer and it should not be understood as such. This presentation does not constitute an offer of sale of securities in the United States of America. Securities may not be offered or sold in the United States of America without registration or exemption from registration in accordance with the U.S. Securities' Act of 1933 in its currently valid form.

Publication Credits

Publisher

Software AG Corporate Communications Uhlandstraße 12 | 64297 Darmstadt | Germany

Tel.+49 6151 92-0 Fax+49 6151 92-1191

press@softwareag.com SoftwareAG.com

Concept and Layout

MPM Corporate Communication Solutions Mainz, Düsseldorf www.mpm.de

About Software AG

Software AG offers Freedom as a Service. We reimagine integration, spark business transformation and enable fast innovation on the Internet of Things so you can pioneer differentiating business models. We give you the freedom to connect and integrate any technology—from app to edge. We help you free data from silos so it's shareable, usable and powerful—enabling you to make the best decisions and unlock entirely new possibilities for growth.

Software AG has more than 4,700 employees, is active in 70 countries and had revenues of €866 million in 2018.

To learn more about Software AG and Freedom as a Service, visit SoftwareAG.com

Contact

Investor Relations Uhlandstraße 12 64297 Darmstadt

Tel. +49 6151 92-1900 Fax +49 6151 9234-1900 investor.relations@softwareag.com SoftwareAG.com