Ariba Reports Results For Third Quarter Of Fiscal Year 2012

The following table reconciles financial measures prepared in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP) to the most directly comparable non-GAAP financial measures in the press release.

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 income 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 income 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.

Ariba, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Operating Results
(Unaudited; in thousands, except per share data)
The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP operating results for the period indicated below:
		Three Months Ended						Three Months Ended
		June 30, 2012						June 30, 2011
Expense reconciliation:
GAAP revenue		$	136,964					$	121,917
Less: GAAP net loss			(760	)					(11,934	)
Total GAAP expenses			137,724						133,851
Amortization of intangible assets			(4,720	)					(4,285	)
Stock-based compensation			(18,782	)					(13,999	)
Restructuring costs			-						(13,396	)
Transaction costs			(2,674	)					-
Discontinued operations			330						349
Total non-GAAP operating expenses		$	111,878					$	102,520
		Three Months Ended						Three Months Ended
		June 30, 2012						June 30, 2011
Net income (loss) reconciliation:
GAAP net loss		$	(760	)				$	(11,934	)
Amortization of intangible assets			4,720						4,285
Stock-based compensation			18,782						13,999
Restructuring costs			-						13,396
Transaction costs			2,674						-
Discontinued operations			(330	)					(349	)
Non-GAAP income from continuing operations		$	25,086					$	19,397
		Three Months Ended						Three Months Ended
		June 30, 2012						June 30, 2011
Net income (loss) per share reconciliation:
GAAP net loss per share - basic		$	(0.01	)				$	(0.13	)
Amortization of intangible assets			0.05						0.05
Stock-based compensation			0.19						0.15
Restructuring costs			0.00						0.14
Transaction costs			0.03						0.00
Discontinued operations			(0.00	)					(0.00	)
Non-GAAP income from continuing operations per share - basic		$	0.26					$	0.21
Non-GAAP income from continuing operations per share - diluted		$	0.25					$	0.20
Weighted average shares - basic			96,244						93,101
Weighted average shares - diluted			100,196						96,721

Ariba, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Operating Results
(Unaudited; in thousands, except per share data)
The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP operating results for the period indicated below:
		Nine Months Ended						Nine Months Ended
		June 30, 2012						June 30, 2011
Expense reconciliation:
GAAP revenue		$	394,088					$	321,102
Less: GAAP net income			1,734						30,166
Total GAAP expenses			392,354						290,936
Amortization of intangible assets			(14,117	)					(8,627	)
Stock-based compensation			(55,078	)					(41,044	)
Tax accrual reversal			-						3,942
Restructuring costs			-						(10,704	)
Transaction costs			(2,674	)					(2,471	)
Discontinued operations			1,702						35,556
Total non-GAAP operating expenses		$	322,187					$	267,588
		Nine Months Ended						Nine Months Ended
		June 30, 2012						June 30, 2011
Net income reconciliation:
GAAP net income		$	1,734					$	30,166
Amortization of intangible assets			14,117						8,627
Stock-based compensation			55,078						41,044
Tax accrual reversal			-						(3,942	)
Restructuring costs			-						10,704
Transaction costs			2,674						2,471
Discontinued operations			(1,702	)					(35,556	)
Non-GAAP income from continuing operations		$	71,901					$	53,514
		Nine Months Ended						Nine Months Ended
		June 30, 2012						June 30, 2011
Net income per share reconciliation:
GAAP net income per share - basic		$	0.02					$	0.33
Amortization of intangible assets			0.15						0.09
Stock-based compensation			0.57						0.45
Tax accrual reversal			0.00						(0.04	)
Restructuring costs			0.00						0.12
Transaction costs			0.03						0.03
Discontinued operations			(0.02	)					(0.39	)
Non-GAAP income from continuing operations per share - basic		$	0.75					$	0.59
Non-GAAP income from continuing operations per share - diluted		$	0.73					$	0.57
Weighted average shares - basic			95,284						91,193
Weighted average shares - diluted			98,694						94,697

Discussion of Specific Items Excluded From Non-GAAP Financial Measures

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