This summary is based on the fourth quarter fiscal 2007 earnings call conducted by BMC Software Inc. (BMC: chart) on May 29, 2007.

Investor Relations: Derrick Vializ

President, Chief Executive Officer, Director: Robert E. Beauchamp

Chief Financial Officer: Stephen B. Solcher

Key Investors Issues

- Earnings per share were 30 cents compared to 24 cents in the prior year quarter.
- Quarterly revenue increased 3% over the previous year to $419 million.
- For fiscal 2008, the firm expects non-GAAP EPS in the range of $1.64 to $1.74.

Fourth Quarter Fiscal 2007 Financial Highlights

Total revenues for the quarter were $419 million, a 3% increase compared to the fourth quarter of fiscal 2006, in line with the previous guidance.

License revenues in the fourth quarter were $166 million, an increase of 3% compared to the year-ago. During the quarter, the percentage of license bookings that were deferred was 56%, which represents an historical high and was considerably higher than the 43% in the year-ago period. Obviously the higher ratable rate affects the amount of revenue that the firm recognizes in the current period at the same time it increases deferred license revenue and adds visibility into the revenue stream going forward. If the firm had the same ratable percentage in the fourth quarter as it did in the year-ago, it would have recognized $28 million more of license revenue in the current period. If it looks at all of fiscal 2007, its license bookings ratable rate was 49%, which is up 7 percentage points over the prior year. The firm expects the deferral rate to increase slightly in fiscal 2008. The firm had an exceptionally strong license revenue performance in Europe and Asia-Pacific during the quarter

- Maintenance revenues in the fourth quarter of 2007 were $230 million, an increase of 5% compared to the year-ago.
- Professional services revenues were $24 million in the fourth quarter, compared to $28 million in the year-ago period
The firm had strength in all its major geographies with revenues rising during the quarter and the year in North America, Europe, and Asia-Pacific.

The non-GAAP net earnings for the fourth quarter were $84 million, an increase of 39% over fiscal 2006.

Non-GAAP diluted EPS for the period was 40 cents, up 43% compared to the year-ago period. This reflects a non-GAAP effective tax rate for the quarter of 26% compared to the guidance of 30%. These non-GAAP results reflect diluted shares outstanding in the fourth quarter of 208 million versus 216 million in prior year period.

GAAP net income and fully diluted EPS were $63 million and 30 cents compared to $52 million and 24 cents in the fourth quarter of fiscal 2006.

GAAP operating income in the fourth quarter was $55 million, compared to $59 million in the year-ago period.

In the fourth quarter, non-GAAP operating income increased by 28% from $71 million to $90 million. Non-GAAP operating margin increased to 21% from 17% in the year-ago quarter.

The company saw continued strength in the quarter in relation to total bookings, license bookings, and core BSM license bookings.

Total bookings of $565 million were up 22% compared to the year-ago period. This marks the third consecutive quarter of greater than 10% growth in total bookings. Particular strength in the fourth quarter came from license bookings, which rose 25% in the quarter.

With the increase in bookings and after normalizing for contract length, annualized bookings for fiscal 2007 were $704 million, an 8% increase over the prior period. This is now the fifth consecutive quarter in which the firm has achieved annualized bookings growth on a trailing 12 month basis.

For the ESM business unit, license bookings are the best measure of performance. Total ESM license bookings were $114 million in the fourth quarter, up 25% over the year-ago period. Within the ESM business unit, license bookings of the firm’s core BSM product group are a key indicator of the success of the company’s business service management strategy. Core BSM license bookings were up 29% in the fourth quarter. This marks the third quarter in a row in which core BSM license bookings growth exceeded 25%.

In the fourth quarter, total MSM bookings on a trailing 12 month basis increased 11% to $717 million, with an average contract of 3.2 years. In the year-ago period, total MSM bookings were $643 million, with an average contract length of 2.9 years. Total annualized MSM bookings for the trailing 12 months were up 2% to $224 million. The company’s original goal was for fiscal 2007 total annualized MSM bookings to decline by no more than 5%.

The firm had another good quarter of controlling its expenses.

This was the eighth consecutive quarter in which non-GAAP operating expenses have decreased or remained relatively flat on a year-over-year basis. Non-GAAP operating expenses were $329 million, about $8 million lower than in the year-ago period. Excluding the expenses from Identify Software, which was acquired last May, operating expenses were down 6%.