Business Objects Reports Record Fourth Quarter & Fiscal Year 2006 Results.

Total Revenues Up 22 Percent for the Fourth Quarter and Up 16 Percent for Fiscal Year 2006

Continued Margin Improvement and Double-Digit Revenue Growth Expected in 2007

SAN JOSE, Calif. & PARIS -- Business Objects (Nasdaq:BOBJ)(Euronext Paris ISIN code FR0004026250 - BOB), the world's leading provider of business intelligence (BI) solutions, today announced results for the fourth quarter and fiscal year ended December 31, 2006.

Total revenues for the fourth quarter of 2006 were $371 million, up 22 percent year-over-year (up 16 percent in constant currencies). License revenues for the fourth quarter of 2006 were $180 million, up 16 percent year-over-year (up 10 percent in constant currencies). Services revenues, including maintenance and global professional services, for the fourth quarter of 2006 were $191 million, up 28 percent year-over-year (up 23 percent in constant currencies).

US GAAP diluted earnings per share for the fourth quarter of 2006 were $0.37, reaching a level equal to a year ago despite including approximately $8 million of additional stock-based compensation expense as required under FAS 123R. Non-GAAP diluted earnings per share for the fourth quarter of 2006 were $0.60, up 43 percent year-over-year.

Total revenues for fiscal year 2006 were $1.254 billion, up 16 percent year-over-year (up 16 percent in constant currencies). US GAAP diluted earnings per share for fiscal year 2006 were $0.79, down year-over-year, after including approximately $42 million of additional stock-based compensation expense as required under FAS 123R. Non-GAAP diluted earnings per share for fiscal year 2006 were $1.64, up 27 percent year-over-year.

"The fourth quarter was terrific and 2006 proved to be a very good year. Importantly, we performed well in all geographies," stated John Schwarz, chief executive officer of Business Objects. "Our installed base business is strong. We have aggressively expanded our product footprint and impact with customers via our BusinessObjects XI platform and smart acquisitions. Our priorities in 2007 are to build on the revenue momentum in end-to-end BI solutions and to further improve our operating margins. We are confident about the business as we head into 2007."

All figures referred to herein are stated in US dollars unless otherwise indicated. The non-GAAP results for the fourth quarter and fiscal year ended December 31, 2006, as defined below in the section "Use of Non-GAAP Financial Measures," differ from results measured under US GAAP as they exclude amortization of intangible assets, write-off of in-process R&D, and stock-based compensation expense. US GAAP numbers for the fourth quarter and fiscal year ended December 31, 2005 do not include stock-based compensation expense under FAS 123(R). A reconciliation of US GAAP to non-GAAP results is included at the end of this press release.

Fourth Quarter and Fiscal Year 2006 Financial Highlights

Double-Digit Revenue Growth in All Geographies in the Fourth Quarter

* Total revenues in the Americas for the fourth quarter of 2006 were $198 million, up 19 percent year-over-year. The Americas closed 6 transactions over $1 million in license revenues in the fourth quarter. For fiscal year 2006, total revenues in the Americas were $688 million, up 26 percent year-over-year.

* Total revenues in Europe, Middle-East and Africa (or EMEA) for the fourth quarter of 2006 were $147 million, up 25 percent year-over-year (up 14 percent in constant currencies). EMEA closed 6 transactions over $1 million in license revenues in the fourth quarter. For fiscal year 2006, total revenues in EMEA were $479 million, up 6 percent year-over-year (up 5 percent in constant currencies).

* Total revenues in Asia-Pacific and Japan (or APJ) for the fourth quarter of 2006 were $25 million, up 26 percent year-over-year. APJ closed 1 transaction over $1 million in license revenues in the fourth quarter. For fiscal year 2006, total revenues in APJ were $87 million, up 8 percent year-over-year.

New Products Drive License Revenues up 16 Percent in the Fourth Quarter

* License revenues for enterprise performance management (EPM) solutions, including planning, budgeting, profit management and dashboard applications, were $30 million for the fourth quarter of 2006, up 91 percent year-over-year. For fiscal year 2006, license revenues for EPM were $78 million, up 92 percent year-over-year.

* License revenues for enterprise information management (EIM) solutions, including data quality and data integration applications, were $23 million for the fourth quarter of 2006, up 214 percent year-over-year. For fiscal year 2006, license revenues for EIM were $54 million, up 98 percent year-over-year.

* License revenues for core BI, including reporting, query and analysis applications, were $127 million for the fourth quarter of 2006, down 4 percent year-over-year. For fiscal year 2006, license revenues for core BI were $428 million, down 4 percent year-over-year, but trending upward over the second half of 2006. Within core BI, strong license sales of BusinessObjects XI (up 25 percent and 60 percent year-over-year in the fourth quarter and fiscal year 2006, respectively) were still offset by declining sales of older product versions. Customer migrations to BusinessObjects XI accelerated during the fourth quarter, with more than 40 percent of the installed base now in progress, building a strong foundation for future return to growth in core BI.

Continued Strength in Maintenance and Consulting Drive Services Revenues

* Maintenance revenues for the fourth quarter of 2006 were $137 million, up 27 percent year-over-year (up 22 percent in constant currencies). For fiscal year 2006, maintenance revenues were $497 million, up 21 percent year-over-year (up 20 percent in constant currencies).

* Global services revenues for the fourth quarter of 2006 were $54 million, up 30 percent year-over-year (up 20 percent in constant currencies). For fiscal year 2006, global services revenues were $196 million, up 31 percent year-over-year (up 30 percent in constant currencies).

Operating Margins Continue to Improve

* Income from operations on a US GAAP basis for the fourth quarter of 2006 grew by 24 percent to $57 million, or 15 percent of total revenues, as compared to $46 million, or 15 percent of total revenues, for the fourth quarter of 2005. For fiscal year 2006, income from operations on a US GAAP basis was $118 million, or 9 percent of total revenues, as compared to $132 million, or 12 percent of total revenues for fiscal year 2005. However, the fourth quarter and fiscal year 2006 included additional stock-based compensation expense as required under FAS 123R.

* Income from operations on a non-GAAP basis for the fourth quarter of 2006 grew by 42 percent to $84 million, or 23 percent of total revenues, as compared to $59 million, or 19 percent of total revenues, for the fourth quarter of 2005. For fiscal year 2006, income from operations on a non-GAAP basis grew by 23 percent to $216 million, or 17 percent of total revenues, as compared to $176 million, or 16 percent of total revenues for fiscal year 2005.

* Lost deferred revenue due to purchase accounting adjustments on acquisitions made during fiscal year 2006 had a negative impact on operating margin of approximately one percentage point for the year.

Strong Balance Sheet and Cash Flow

* Total cash, cash equivalents and short-term investments were $513 million at December 31, 2006, up $175 million from December 31, 2005, after investing $125 million for strategic acquisitions.

* Total deferred revenues were $293 million at December 31, 2006, up $85 million from December 31, 2005.

* Accounts receivable, on a days-sales-outstanding (DSO) basis, were up sequentially to 81 days for the fourth quarter of 2006, which is consistent with historic seasonal patterns.

* Net cash flow from operating activities was $261 million for the year ended December 31, 2006.

Other Business Highlights

* During the quarter, the company added more than 2,100 new customers, bringing the total to over 42,000 worldwide. Notable wins in the enterprise segment for the fourth quarter of 2006 included: AIR FRANCE KLM, AUDI AG, Catholic Healthcare West, Dell Inc., Fannie Mae, Korea Exchange Bank, Pacific Life Insurance Company, Punjab National Bank, Shanghai General Motors Co., Ltd., Sonoco, Taiwan Mobile Co., and Zurich American Insurance Company. Notable customer wins in the mid-market segment for the fourth quarter of 2006 included: Asurion, BankAtlantic, DARVA, Organic Valley, Spansion (China) Ltd, and United Network for Organ Sharing.

* In November 2006, Business Objects and IBM announced the formation of a strategic alliance, the highest level partner relationship for both companies. The new agreement builds on a 12 year partnership and will position Business Objects and IBM to better serve customers in new geographies, industries, and mid-sized businesses.

* The company launched Crystal Reports for Eclipse, one of the most popular integrated development environments among Java developers, and announced in December 2006 that Crystal Reports for Eclipse is available as an integrated reporting solution within the new version of IBM Rational Software Delivery Platform 7.0, desktop products.

* In November 2006, the company announced the acquisition of Nsite Software, Inc., a Sunnyvale, California-based software-as-a-service (SaaS) provider. The acquisition gives Business Objects access to Nsite's on-demand application platform, engineering talent experienced in SaaS offerings, and will greatly accelerate and expand the ability for Business Objects to deliver on-demand business intelligence solutions. With the acquisition of Nsite and the continued growth of crystalreports.com, Business Objects has increased its on-demand subscriber base to more than 38,000.

Business Outlook

The annual guidance reflects continued double-digit revenue growth and margin expansion. Business Objects expects to derive revenue growth from strong execution in all geographies, with particular investment focus in Asia-Pacific and Japan; license revenue growth at or above industry rates, based on the continued migration of customers to the BusinessObjects XI platform and continued growth of the enterprise performance management and enterprise information management solutions; and continued growth in maintenance and services revenue that outpaces license revenue growth. The company expects to experience seasonality in-line with historical trends.

Business Objects offers the following guidance for the fiscal year ending December 31, 2007:

* Total revenues are expected to range from $1.410 billion to $1.435 billion;

* US GAAP diluted earnings per share are expected to range from $1.02 to $1.14;

* Non-GAAP diluted earnings per share are expected to range from $1.90 to $2.02.

US GAAP diluted earnings per share for fiscal year 2007 are expected to include approximately $51 million of stock based compensation expense and approximately $48 million of amortization of intangible assets, which would impact EPS by approximately $0.88 per share, after tax effect.

Business Objects offers the following guidance for the first quarter ending March 31, 2007:

* Total revenues are expected to range from $328 million to $334 million;

* US GAAP diluted earnings per share are expected to range from $0.14 to $0.18;

* Non-GAAP diluted earnings per share are expected to range from $0.35 to $0.39.

US GAAP diluted earnings per share for the first quarter of 2007 are expected to include approximately $13 million of stock based compensation expense and approximately $12 million of amortization of intangible assets, which would impact EPS by approximately $0.21, after tax effect.

The anticipated stock based compensation expense of approximately $13 million in the first quarter of 2007 and $51 million for fiscal year 2007 includes the impact of options assumed in prior acquisitions, as well as prior employee grants and estimated employee grants for the current year. These expected expenses are based on estimates, including future stock price, employee turnover, growth in new employees, grants to current and new employees, stock volatility, and future interest rates.

The outlook for the first quarter and fiscal year 2007 assumes a US dollar to euro exchange rate of $1.30 per [euro]1.00, a US dollar to Canadian dollar exchange rate of $0.86 per CDN $1.00, an effective US GAAP tax rate of 43 percent, and an effective non-GAAP tax rate of 33 percent. The non-GAAP tax rate differs from the US GAAP tax rate due to the elimination of the tax rate effect of the US GAAP expenses that are being excluded to arrive at the non-GAAP expenses.

The above information concerning our forecast for the first quarter and fiscal year 2007 represents our outlook only as of the date hereof, and we undertake no obligation to update or revise any financial forecast or other forward looking statements, as a result of new developments or otherwise.

Conference Call

Business Objects will hold a conference call to discuss its financial results for the fourth quarter and full year 2006 on February 6, 2007. The call will begin at 2:00 p.m. PT (5:00 p.m. ET, 10:00 p.m. GMT, 11:00 p.m. CET). The dial-in numbers are [phone] for North America and [phone] for Europe and Asia, with ID # 6096755. The conference call also will be webcast live, and can be accessed on the investor relations section of the company's website at www.businessobjects.com/company/investors/. A replay of the webcast will be available on the site approximately two hours after the end of the live call.

Accounting Principles

Business Objects prepares its financial statements in accordance with US GAAP. Because the company is listed on both the Eurolist by Euronext[TM] in France and the Nasdaq Global Select Market in the United States, it is required to separately report consolidated financial statements prepared in accordance with both US GAAP and International Financial Reporting Standards ("IFRS"). The most significant identified differences between the two reporting standards for Business Objects relate to the treatment of stock-based compensation expense, the accounting for deferred tax assets on certain intercompany transactions and the accounting for business combinations.

In accordance with French regulations and IFRS, Business Objects filed with the Autorite des Marches Financiers in France its Document de Reference 2005 on April 24, 2006 under the registration number R.06-038, which included its consolidated financial statements for the year ended on December 31, 2005. The Document de Reference 2005 includes the consolidated information that Business Objects published on April 26, 2006 to the Bulletin des Annonces Legales Obligatoires ("BALO") in France. In addition, the company published its mid-year financial statements for the first half of 2006 in accordance with IFRS in the BALO in France on October 20, 2006.

Use of Non-GAAP Financial Measures

The non-GAAP financial measures such as operating income, net income, and earnings per share information for the fourth quarter and full year included in this press release are different from those otherwise presented under US GAAP as these non-GAAP measures exclude certain charges. These charges include the write-off of in-process research and development, amortization of intangible assets, and stock-based compensation expense. The non-GAAP tax rate differs from the US GAAP tax rate due to the elimination of the tax rate effect of the US GAAP expenses that are being eliminated to arrive at the non-GAAP expenses. Business Objects has provided these measures in addition to US GAAP financial results because management believes these non-GAAP measures provide a consistent basis for comparison between quarters and of growth rates year-over-year that are not influenced by certain non-cash charges or impacts of prior period acquisitions, and therefore are helpful in understanding Business Objects' underlying operating results. In addition, this press release also includes non-GAAP measures that use a constant currency to separate the impact of conversion from other foreign currencies to US dollars from other changes in our business. These non-GAAP measures are some of the primary measures Business Objects' management uses for planning and forecasting. These measures are not in accordance with, or an alternative to, US GAAP and these non-GAAP measures may not be comparable to information provided by other companies. Reconciliations of US GAAP to non-GAAP results are presented at the end of this press release.

Forward-Looking Statements

This document contains forward-looking statements that involve risks and uncertainties concerning the company's expected financial performance for the first quarter and full year 2007, the company's expected growth and profitability, the company's product and business strategies, the company's strategic relationships, the company's licensing and adoption of its BusinessObjects XI products, and the company's on-demand business intelligence solutions. Actual events or results may differ materially from those described in this document due to a number of risks and uncertainties. These potential risks and uncertainties include, among others, fluctuations in the company's quarterly and yearly operating results; the company's ability to estimate and sustain or increase its profitability; the company's ability to attract, migrate and retain customers for BusinessObjects XI; the enterprise performance management products and products acquired from nSite Software, Inc.; the company's ability to issue new releases of its products, including those obtained through acquired businesses; the company's ability to integrate acquired businesses successfully; changes to current accounting policies which may have a significant, adverse impact upon the company's financial results, including FAS 123R; completion of the company's 2006 audit; the introduction of new products by competitors or the entry of new competitors into the markets for Business Objects' products; the impact of the pricing of competing technologies; the company's ability to preserve its key strategic relationships; the company's reliance upon selling products only in the Business Intelligence software market; the company's ability to manage large scale deployments; the company's mid-market strategy; and economic and political conditions in the US and abroad. More information about potential factors that could affect Business Objects' business and financial results is included in Business Objects' Form 10-K for the year ended December 31, 2005 and Form 10-Q for the quarter ended September 30, 2006, each of which are on file with the SEC and available at the SEC's website at www.sec.gov. Business Objects is not obligated to undertake any obligation to update these forward-looking statements to reflect events or circumstances after the date of this document.

About Business Objects

Business Objects is the world's leading business intelligence (BI) software company, with more than 42,000 customers worldwide, including over 80 percent of the Fortune 500. Business Objects helps organizations of all sizes create a trusted foundation for decision making, gain better insight into their business, and optimize performance. The company's innovative business intelligence suite, BusinessObjects[TM] XI, offers the BI industry's most advanced and complete solution for performance management, planning, reporting, query and analysis, and enterprise information management. BusinessObjects XI includes the award-winning Crystal line of reporting and data visualization software. Business Objects has also built the industry's strongest and most diverse partner community, and offers consulting and education services to help customers effectively deploy their business intelligence projects.

Business Objects has dual headquarters in San Jose, Calif., and Paris, France. The company's stock is traded on both the Nasdaq (BOBJ) and Euronext Paris (ISIN: FR0004026250 - BOB) stock exchanges. More information about Business Objects can be found at www.businessobjects.com.

Business Objects and the Business Objects logo, BusinessObjects, WebIntelligence, Crystal Reports, Intelligent Question, Xcelsius, and Desktop Intelligence are trademarks or registered trademarks of Business Objects S.A. or its affiliated companies in the United States and/or other countries. All other names mentioned herein may be trademarks of their respective owners.

[TABLE OMITTED]
[TABLE OMITTED]
[TABLE OMITTED]
[TABLE OMITTED]
[TABLE OMITTED]
[TABLE OMITTED]