Software Sector: All Round Revenue Growth

Red Hat: Profit Slides

Red Hat, developer of Linux Software and open source provider announced its
second quarter results for its fiscal 2007, ended August 31, 2006. Red Hat
showed an increase of 52% in the revenue for the quarter at $99.7 mn, as
compared to $65.8 mn in the same quarter last year and 19% from the first
quarter, due to the purchase of JBoss, an open-source application server company
along with other recent acquisitions in Argentina, Brazil and India, into its
business and increase in demand for open-source software. Subscription revenue
was $84.9 mn, up 56% y-o-y and 19% sequentially. However, this was offset by
stock-option and merger related expenses. Net profit for the quarter was $11.0
mn as compared to $16.7 mn for the same period last year.

Red Hat acquired JBoss for $350 mn, which affected second-quarter earnings,
as the integration cut into growth in new business and cash flow from operations
slipped to $43.9 mn from $45.8 mn in the same period last year. Operating
expenses for the quarter increased by 75% to $73.8 mn from $42.2 mn in the same
period last year. The company's total deferred revenue balance was $ 284.1 mn,
an increase of 12% as compared to the same quarter last year. Red Hat share
trades at $20.2.

Cognos: Moderate Growth

Cognos, a provider of business intelligence and performance management
solutions, provides enterprise planning and BI software and services to help
companies plan, understand and manage financial and operational performance.

Quarterly revenues stood at $229.9 mn, an increase of 8.5% as compared to
$212.0 mn for the same period last year. License revenue was $78.0 mn as
compared to $78.6 mn in the second quarter of last fiscal year. Operating income
for the quarter was $23.8 mn as compared to $28.5 mn in the same period last
year. Net profit at $23.8 mn showed a decline for the period as compared to
$24.9 mn for the same period last year.

On a annualized basis, the total revenue growth in America was 12% as
compared to 11% in the same period last year, other regions showed a fall as
compared to the same quarter last year. The company's outlook for the third
quarter and full fiscal year 2007 is positive with expected revenues to be in
the range of $950 to $970 mn. Cognos shares change hands at $35.1.

Adobe: Sales Revenue Up

Adobe Systems, which offers business and mobile software and services
worldwide, reported financial results for its third quarter ended August 31,
2006. The Q3 results reflect the acquisition of Macromedia in December 2005, and
are compared with pre-acquisition results. In the third quarter, the company
reported revenue of $602.2 mn, as compared to $487.0 mn in the same quarter last
year and $635.5 mn in the second quarter of fiscal 2006, a 24% revenue growth on
a y-o-y basis.

Net profit for Q3 was $94.4 mn, as compared $144.9 mn in the same period last
year, and $123.1 mn in the second quarter of fiscal 2006. Operating income was
$110.0 mn, as compared to $ 183.6 mn in the same period last year, and $147.9 mn
in the second quarter of fiscal 2006.Operating income was comparatively less due
to increase in restructuring expenses, amortization of purchased intangibles,
amortization of Macromedia deferred compensation. As a per cent of revenues,
operating income was 18.3% as compared to 37.7% in the same period last year.

Adobe is targeting an operating margin of approximately 21% to 24% in the
fourth quarter, and revenue to reach $655 mn to $685 mn, mainly due to the new
products to be launched during the quarter. Shares of Adobe trade at $37.

Oracle: Stellar Growth

Oracle declared its first quarter results for the fiscal 2007 ended August
31, 2006. Its revenue for the first quarter was up 30% to $3,600 mn as compared
to $2770 mn in the same quarter last year, while net profits were up 29% to $670
mn, as compared to $519 mn in the same period last year. Total software revenues
were up 29% to $2,745 mn with database and middleware new license revenues up
15% and applications new license revenues up 80%. Services revenues were up 33%
to $846 mn, compared to the same quarter last year.

Total revenues increased in the first quarter of fiscal 2007 due to gains in
market share across all product lines and geographies, incremental revenues from
acquisitions and an increased demand for service offerings. Excluding the effect
of currency rate fluctuations, software license updates and product support
revenues contributed 53% to the growth in total revenues, services revenues
contributed 26% and new software licenses contributed 21%. Excluding the effects
of currency rate fluctuations, the Americas contributed 60% to the increase in
total revenues, EMEA contributed 28% and Asia Pacific contributed 12%. Total
revenues in the Americas, specifically in the US, increased at a faster rate
than in other regions primarily due to the relative geographical mix of revenues
from our acquired companies. Shares of oracle trade at $17.6.