OTTAWA, September 20, 2000 —Cognos Incorporated (Nasdaq: COGN; TSE: CSN) today announced results for its second quarter of fiscal year 2001, which ended August 31, 2000. Revenue for the quarter set a new record at $118.2 million, a 34 percent increase over revenue of $88.1 million for the same period last year. Revenue in local currency increased by 39 percent compared with the second quarter of fiscal 2000.

Pretax income was a record for the second quarter at $22.9 million, while net income was $16.5 million or 18 cents per share. This compares with pretax income of $17.8 million and net income of $12.8 million or 15 cents per share in the second quarter of the prior year.

Revenue for the six months ended August 31, 2000 was $226.9 million, 34 percent higher than revenue of $169.8 million in the first six months of last fiscal year. Pretax income for the six-month period was $39.6 million and net income was $28.5 million or 31 cents per share. This compares with pretax income of $32.9 million and net income of $23.7 million or 27 cents per share in the first six months of last fiscal year. All net income per share figures have been adjusted to reflect the two-for-one stock split in April 2000. All figures are stated in U.S. dollars and in accordance with U.S. GAAP.

Revenue growth was again driven by enterprise sales of the Company's award-winning business intelligence platform for intranet and extranet deployments. Total revenue in the quarter from business intelligence was $106.8 million, an increase of 44 percent from the second quarter of last year. Business intelligence revenue increased by 50 percent in local currency in the quarter.

"These results demonstrate the vibrancy of the business intelligence market overall and the sustained strong momentum of Cognos' business throughout the world," said Ron Zambonini, Cognos president and chief executive officer. "Cognos is clearly recognized as the worldwide market leader for business intelligence software.

"We define ourselves as a customer-focused, product-rich company. And we leverage these values through four key assets that are unmatched within our peer group of competitors. These are an experienced and highly focused field force of some 1,350 customer-facing personnel; a world-class R&D team approximately 700 strong; a broad and loyal customer base of more than 15,000 major customers throughout the world; and more than $1 billion of business intelligence products and services sold worldwide, which will provide a solid annuity base for future revenue.

"The Cognos BI product platform is targeted directly at the sweet spot of today's business intelligence market—enterprise-scale deployments for intranets and business-to-business extranets. More than 90 percent of this quarter's enterprise orders for our solution included Web-based BI product. The proportion of our total business comprised of large enterprise orders and the average transaction value both continue to increase. The number of transactions exceeding $50,000 climbed by 42 percent compared with a year ago. These included orders from leading corporations such as General Electric, Qwest, Citigroup, Xerox, Johnson & Johnson, Caterpillar, and Michelin. Having a close relationship with major enterprise customers is critical to ongoing success in this market. Our direct sales force is responsible for these relationships, and this channel delivered 71 percent of our license revenue in the second quarter.

"The strong financial performance this quarter resulted in pretax margins of 19.4 percent. More than a year ago we made the strategic decision to invest in key resource areas, such as sales, support, and other customer-facing functions, as well as R&D. We did this to capitalize on the significant opportunity afforded the market leader in such a robust market. We believe that we are starting to gain leverage from these investments through sales momentum and increased market share.

"We are pleased to achieve such strong momentum in the second quarter and through the first half of the fiscal year," concluded Mr. Zambonini. "Customer demand for our comprehensive solution suite has never been better. The outlook for the e-business intelligence market has also never been better. Our BI solution platform is aimed at the sweet spot of this market—enterprise-scale deployments. We enjoy the number one market share position worldwide. And financially, we continue to have one of the strongest balance sheets in the business intelligence industry. Leveraging these significant assets remains our number one goal."

Certain statements made in this press release that are not based on historical information are forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

This press release contains forward-looking statements relating to: our expectations concerning future revenues and earnings, including future rates of growth, from the licensing of our business intelligence and application development products and related product support and services; our perception of the trends in the business intelligence marketplace in general, and of Web-based solutions in particular, and our ability to deliver business intelligence solutions that respond to changing market requirements; future prospects of our current and future products and our ability to compete in an intensely competitive marketplace.

Forward-looking statements are subject to risks and uncertainties that may cause future results to differ materially from those expected. There can be no guarantee that future results will turn out as expected. Factors that may cause such differences include, but are not limited to: our ability to continue to grow at historical growth rates or to anticipate a decline in revenue from any of our products; fluctuations in quarterly and annual operating results based on historical patterns, which may cause our stock price to fluctuate or decline; the rapid technological change and new product introductions and enhancements that characterize the software markets we target; our reliance on partners and other distribution channels to market and distribute our products and any failure of these parties to do so; unauthorized use of our intellectual property; the loss of rights to use software licensed to us by third parties; the actions of our competitors in an intensely competitive marketplace; risks inherent in international operations; our ability to identify, hire, train, motivate and retain highly qualified management and other key personnel; our ability to identify, pursue and complete acquisitions which could divert management attention and financial resources and not produce desired business results; volatility and fluctuation of our stock price. A detailed discussion of each of these risk factors is contained under the heading "Certain Factors That May Affect Future Results" in our most recent Annual Report on Form 10-K filed with the United States Securities and Exchange Commission.