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Ariba, Inc. (Nasdaq: ARBA), the leading provider of collaborative business commerce solutions, today announced results for the third quarter of fiscal year 2010 ended June 30.

Quarterly Financial and Operational Highlights:

• Total revenues of $93.2 million
• GAAP EPS of $0.05 and non-GAAP EPS of $0.19 per fully-diluted share
• Subscription software revenue of $44.0 million, up 16% year-over-year
• 12-month subscription software backlog of $141.0 million, up 9% year-over-year
• Cash flow from operations of $17.3 million, ending cash and investments of $239.2 million
• Number of on-demand deals up 9% year-over-year

“As businesses return to growth mode, they are looking for solutions that can help them reach the next level of productivity. And as evidenced by our solid quarterly results, they continue to rely on Ariba,” said Bob Calderoni, Chairman and CEO, Ariba. “During the quarter, we strengthened our offerings with the launch the Ariba® Commerce Cloud, a platform that enables companies to drive more efficient and effective inter-enterprise commerce.”

Results for the Third Quarter of Fiscal Year 2010

Revenue:

Total revenues for the third quarter of fiscal year 2010 were $93.2 million, as compared to $83.9 million for the third quarter of fiscal year 2009. Subscription and maintenance revenues for the current quarter were $60.8 million, as compared to $55.4 million for the third quarter of fiscal year 2009. Within subscription and maintenance revenues, subscription software revenue was $44.0 million for the current quarter, as compared to $37.9 million for the third quarter of fiscal year 2009. Services and other revenues for the current quarter were $32.5 million, as compared to $28.5 million for the third quarter of fiscal year 2009.

Earnings Per Share:

Net income for the third quarter of fiscal year 2010 was $4.3 million, or $0.05 per fully-diluted share as compared to $3.9 million or $0.05 per fully diluted share for the third quarter of fiscal year 2009. Net income for the third quarter of fiscal year 2010 included charges of $1.0 million for amortization of intangible assets and $11.5 million for stock-based compensation. Excluding these items, non-GAAP net income for the quarter was $16.8 million, or $0.19 per diluted share.

Balance Sheet and Cash:

Total cash, investments and restricted cash were $239.2 million at June 30, 2010, up $16.3 million from March 31, 2010. Net cash flow from operations for the three months ended June 30, 2010 was $17.3 million, as compared to $20.0 million for the three months ended June 30, 2009. Accounts receivable, on an average days-sales-outstanding basis, were 20 days for the third quarter of fiscal year 2010, as compared to 25 days for the third quarter of fiscal year 2009, and down one day with the previous quarter. Total deferred revenues were $114.6 million at June 30, 2010, down $10.8 million from March 31, 2010.

Customer Acquisition and Transactions for the Quarter:

During the quarter, 237 companies of all sizes purchased Ariba solutions to drive their spend management strategies, including: AT&T Inc., ExxonMobil Corporation, Grupo Posadas, S.A. de C.V., Macquarie Group Limited, Live Nation, Inc., Saks Incorporated, Spark Energy LP, State Farm Insurance Companies, and Under Armour, Inc. and Zep, Inc. Ariba added 39 new customers in the third quarter of fiscal year 2010 and closed 13 transactions over $1 million, including eight deals with a software component of greater than $1 million. On-demand product deals totalled 187.

Conference Call Information

Ariba will hold a conference call today at 5:00 p.m. ET / 2:00 p.m. PT to discuss its results for the third quarter of fiscal year 2010. To join the call, please dial (877) 407-8031 in the United States and Canada, or (201) 689-8031 if calling internationally. The conference call also will be webcast live, and can be accessed on the investor relations section of the company’s website at www.ariba.com.

A replay of the conference call will be available for two weeks by calling (877) 660-6853 in the United States and Canada or (201) 612-7415 internationally and entering account number: 286 and conference ID number: 353662.

About Ariba, Inc.

Ariba, Inc. is the leading provider of collaborative business commerce solutions. Ariba combines industry-leading software as a service (SaaS) technology to optimize the complete commerce lifecycle with the world's largest web-based community to discover, connect and collaborate with a global network of trading partners and expert capabilities to augment internal resources and skills, delivering everything needed to control costs, minimize risk, improve profits and enhance cash flow and operations – all in a cloud-based environment. Whether you’re buying, selling or managing cash, you can do it more efficiently and effectively in the Ariba® Commerce Cloud. Over 300,000 companies, including more than 80 percent of the Fortune 500, use Ariba’s solutions to drive more efficient inter-enterprise commerce. Why not join them? For more information on Ariba commerce solutions and the results they deliver, visit www.ariba.com

Copyright © 1996 – 2010 Ariba, Inc.

Ariba, the Ariba logo, AribaLIVE, SupplyWatch, Ariba.com, Ariba.com Network, Ariba Spend Management. Find it. Get it. Keep it. and PO-Flip are registered trademarks of Ariba, Inc. Ariba Procure-to-Pay, Ariba Buyer, Ariba eForms, Ariba PunchOut, Ariba Services Procurement, Ariba Travel and Expense, Ariba Procure-to-Order, Ariba Procurement Content, Ariba Sourcing, Ariba Savings and Pipeline Tracking, Ariba Category Management, Ariba Category Playbooks, Ariba StartSourcing, Ariba Spend Visibility, Ariba Analysis, Ariba Data Enrichment, Ariba Contract Management, Ariba Contract Compliance, Ariba Electronic Signatures, Ariba StartContracts, Ariba Invoice Management, Ariba Payment Management, Ariba Working Capital Management, Ariba Settlement, Ariba Supplier Information and Performance Management, Ariba Supplier Information Management, Ariba Discovery, Ariba Invoice Automation, Ariba PO Automation, Ariba Express Content, Ariba Ready, and Ariba LIVE are trademarks or service marks of Ariba, Inc. All other brand or product names may be trademarks or registered trademarks of their respective companies or organizations in the United States and/or other countries.

Ariba Safe Harbor

Safe Harbor Statement under the Private Securities Litigation Reform Act 1995: Information and announcements in this release involve Ariba's expectations, beliefs, hopes, plans, intentions or strategies regarding the future and are forward-looking statements that involve risks and uncertainties. All forward-looking statements included in this release are based upon information available to Ariba as of the date of the release, and we assume no obligation to update any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to Ariba's operating and financial results to differ materially from current expectations include, but are not limited to: the impact of the credit crises on Ariba’s results of operations and financial condition; delays in development or shipment of new versions of Ariba's products and services; lack of market acceptance of Ariba's existing or future products or services; inability to continue to develop competitive new products and services on a timely basis; introduction of new products or services by major competitors; the impact of any acquisitions or dispositions; the ability to attract and retain qualified employees; difficulties in assimilating acquired companies, long and unpredictable sales cycles and the deferrals of anticipated orders; declining economic conditions, including the impact of a recession; inability to control costs; changes in the company's pricing or compensation policies; significant fluctuations in our stock price; the outcome of and costs associated with pending or potential future regulatory or legal proceedings; the impact of our acquisitions, including the disruption or loss of customer, business partner, supplier or employee relationships; and the level of costs and expenses incurred by Ariba as a result of such transactions. Factors and risks associated with its business, including a number of the factors and risks described above, are discussed in Ariba's Form 10-Q filed with the SEC on May 6, 2010.

Non-GAAP Financial Measures

The accompanying press release dated July 29, 2010 contains non-GAAP financial measures. The following table reconciles the non-GAAP financial measures in the press release to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP). These non-GAAP financial measures include non-GAAP revenues, non-GAAP cost of revenues, gross profit, operating expenses, income from operations, net income and net income per share amounts.

Non-GAAP financial measures should not be considered as a substitute for, or superior to, GAAP financial measures, which should be considered as the primary financial metrics for evaluating our financial performance. Significantly, non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. Instead, they are based on subjective determinations by management designed to supplement our GAAP financial measures. They are subject to a number of important limitations and should be considered only in conjunction with our consolidated financial statements prepared in accordance with GAAP. For example, our non-GAAP financial measures have the effect of excluding a purchase accounting adjustment, costs and expenses from our operating results that should be properly considered under a system of accrual accounting. In addition, our non-GAAP financial measures differ from GAAP measures with the same names, may vary over time and may differ from non-GAAP financial measures with the same or similar names used by other companies. Accordingly, investors should exercise caution when evaluating our non-GAAP financial measures.

Despite these limitations, we believe our non-GAAP financial measures provide meaningful supplemental information about our operating results, primarily because they exclude a purchase accounting adjustment and costs and expenses that we do not believe are indicative of the ongoing operating performance of our business and our senior management. Although these items should properly be considered in our GAAP financial measures, we believe they should be excluded when evaluating our current operating performance. The non-GAAP financial measures disclosed in the accompanying press release are used by our Board of Directors and senior management to evaluate our current operating performance, are used in evaluating the performance of our senior management, and are used in our budget and planning processes. We believe that our non-GAAP financial measures are helpful to investors by facilitating comparisons of our current and prior operating results and by facilitating comparisons of our operating results with those of other software companies.