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August 27, 2009

Novell swings to profit in Q3

Linux revenue up 22%

By CBR Staff Writer

Novell has reported a net income of $17m, or $0.05 per share for the third quarter of 2009, compared to a net loss of $15m, or $0.04 loss per share in the same period last year.

The company’s net revenue was $216m for the third quarter of 2009, a decrease of 12% compared to net revenue of $245m in the same period of 2008.

During the 2009 quarter, foreign currency exchange rates negatively impacted net revenue by $6m, and favourably impacted operating expenses by $8m and income from operations by $2m compared to the same period last year.

Product revenue from Open Platform Solutions was $40m, of which $38m was from Linux Platform products, up 22% compared to the same period last year. Revenue from Identity and Security Management was $30m of which Identity, Access and Compliance Management was $28m, down 16% compared to the same period last year. Systems and Resource Management revenue was down 15% to $40m while Workgroup product revenue decreased 12% to $81m.

The company’s cash, cash equivalents and short-term investments were $921m as at July 31, 2009. The cash flow from operations was $35m, compared to $29m in the third quarter of fiscal 2008. The company expects double-digit adjusted operating margins for fiscal 2009.

Ron Hovsepian, president and CEO of Novell, said: “Operating margin continued to expand year-over-year due to diligent expense management, however revenue performance was similar to many companies in the software industry. We remain focused on delivering strong operating margins even as we continue to invest to generate long-term revenue growth.”

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