This is a summary of the first quarter fiscal 2009 earnings call conducted by BMC Software, Inc. (BMC: chart) on July 24, 2008.

Management:
CEO: Bob Beauchamp
CFO: Stephen Solcher
IR: Derrick Vializ

Key Investor Issues:

- Quarterly net income fell to $1.2 million, or 1 cent per share, from $55 million, or 27 cents, a year ago on acquisition-related charges.
- BMC took $97.6 million in charges related to the purchase of BladeLogic, which was offset by a tax benefit of $16.4 million.
- Revenue for the quarter grew 14% to $437.5 million from $385 million last year.
- The company reiterated full-year earnings outlook and expects to post growth in bookings and revenue in the low double digits.

First Quarter Highlights:

Management Changes:
- Dev Ittycheria, President and CEO of BladeLogic joined BMC as Senior Vice President for Strategy and Corporate Development.
- John McMahon formerly BladeLogic’s Chief Operating Officer joined as Senior VP leading the Enterprise Service Management worldwide sales and services organization.
- Luca Lazzaron was appointed Vice President and General Manager of EMEA.

Total revenue increased by 14% with growth in all major geographies.

BMC Software saw accelerated growth in total revenue for the fifth consecutive quarter. The company saw significant year-over-year growth in ESM license bookings on both a total and organic basis. This contributed to the strong year-over-year growth in total license revenues of 19%.

Non-GAAP operating margin was 25% for the quarter, up from 23% in the year ago period.

Non-GAAP diluted EPS for the quarter was up 19% compared to the year ago period and BMC Software continued to repurchase shares. At quarter end the company had over $1 billion in cash and investments. The continuing success in terms of increased bookings, revenue, non-GAAP operating margins and non-GAAP diluted EPS reflect the strategic decisions that the company has made and continue to make as it delivers on its BSM strategy.

The strong momentum in BSM is also reflected in recent sales wins.

During the quarter, BMC Software signed important new contracts with VMware, the United States Air Force, Unisys and affiliated computer services. Following a comprehensive competitive process, VMware, a leader in virtualization technology selected BladeLogic as their service automation standard. RSA, another division of EMC, also selected BladeLogic as their standard last quarter.

The contract with the U.S. Air Force, which is the single largest public sector, wins the company’s ESM business and has attained calls for a range of support for the combat information transport system program office.

- Channels partners continue to be an important part of BMC sales mix. Units have standardized these outsourcing services in Asia-Pacific on the company’s BSM platform.
- ACS has also standardized on the company’s solutions.
- EDS also standardized on BMC''s Atrium configuration management database CMDB in Asia-Pacific.

Customer acceptance of the value drivers for BSM is no longer restricted to early adopters.

The acquisition of ITM software this quarter is another step forward in the company’s strategy. ITM offers a unique integrated solution that provides customers with a single, comprehensive view of all the applications that an IT organization needs to run itself as a true business unit.

BMC Software focused its BSM offerings around three disciplines: service support, service assurance and service automation.

The first, service support, reduces complexity and makes customers support change management and asset management integrated and efficient. The second, service assurance, delivers automated and predicted technology across the customer''s entire enterprise. The third, discipline, is service automation. The extraordinary opportunity here is being driven by the increased complexity of IT environments, the sheer numbers of virtual and physical servers being deployed today.

Service oriented architectures, new software platforms and applications all combine to make IT management more time consuming, more air prone and ultimately more expensive. These new scaling issues make the old ways of management grossly insufficient. The promise of capital expense savings of the new platforms such as virtualization spring, can be more than offset by the increased operating cost of managing those new virtual servers. To capture these savings, enterprise has increasingly recognized the need to adopt BSM service automation tools before the virtualization environments are placed into production.