OTTAWA, December 21, 2000 — Cognos Incorporated (Nasdaq: COGN; TSE: CSN), the world's largest and most successful business intelligence company, today announced results for the Company's third quarter of fiscal year 2001, which ended November 30, 2000. Revenue for the quarter set a new record at $124.6 million, a 28 percent increase compared with revenue of $97.8 million for the same period last year. Revenue in local currency increased by 35 percent compared with the third quarter of last fiscal year.

Net income from operations for the third quarter of fiscal 2001, excluding non-operating charges for purchased in-process research and development and amortization of goodwill and other intangible assets associated with two acquisitions completed during the quarter, was $17.0 million, or $0.18 per share. Including these acquisition-related charges, net income for the quarter was $13.6 million, or $0.15 per share. This compares with net income of $13.9 million, or $0.16 per share for the third quarter of last fiscal year.

Revenue for the nine-month period ended November 30, 2000 was $351.5 million, 31 percent higher than revenue of $267.5 million in the first nine months of last fiscal year. Excluding non-operating charges related to the two acquisitions completed during the third quarter, net income for the nine-month period was $45.5 million, or $0.49 per share.

Including these acquisition-related charges, net income for the first nine months of fiscal 2001 was $42.1 million or $0.46 per share. This compares with net income of $37.6 million or $0.43 per share for the nine-month period 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 business intelligence (BI) platform. BI revenue in the quarter was also a record at $112.8 million, 35 percent higher than in the third quarter of last year. Third quarter business intelligence revenue increased by 43 percent in local currency. Revenue in the more mature ADT (application development tools) product line declined by 15 percent, as expected.

"While BI sales were modestly below our expectation in the quarter, we remain very positive with respect to the health and growth prospects for the business intelligence market, and the Company's leadership position within this market," said Ron Zambonini, Cognos president and chief executive officer.

"Demand for Cognos products continued to expand this quarter. The Internet has created a new breed of customer, and intranets and business-to-business extranets are expanding the base of customers for our solution. The Cognos BI product platform is targeted at the sweet spot of today's business intelligence market - highly scalable enterprise deployments through which organizations are leveraging business intelligence to create added value throughout the supply chain. More than 90 percent of this quarter's enterprise orders were for Web-based deployments.

"The proportion of our total business comprised of large enterprise orders continues to grow, as our products are increasingly deployed over Web infrastructures by stakeholders, both within the organization and beyond, in collaborative environments. The number of transactions exceeding $50,000 climbed by 35 percent compared with a year ago. Even more important, the number of transactions greater than $200,000 grew by more than 125 percent, to reach an all-time high. Large enterprise scale orders were received from leading corporations such as Qwest, Toshiba, Wells Fargo, Honeywell, Raytheon, Nortel Networks, Coca-Cola, Lafarge, and France Telecom. This strong growth in large orders is a positive indicator because it is in lockstep with the direction in which the business intelligence market is moving, towards enterprise scale deployments to enable collaborative decision-making.

"Having a close relationship with major enterprise customers is critical to ongoing success in this market. Customers deploying BI software on an enterprise scale require an end-to-end product solution—which plays into the strength of our comprehensive platform offering. But they want more than this. Customers are looking to Cognos to deliver a full suite of services and support, as complementary key elements of a broad and deep relationship. Our direct sales force takes the lead in these relationships. This channel delivered 68 percent of our license revenue in the third quarter. We believe this positions us well for the future, as more and more of our business is derived from enterprise BI solutions. In addition, our experienced field force of customer-facing personnel now numbers more than 1,400—a valuable resource in delivering a total solution, and one that is unmatched within our peer group of competitors.

"The Company's vision, simply stated, is to make all Cognos customers the best decision makers in the world. This vision is built upon two core values: an unwavering focus on total customer satisfaction and a commitment to delivering innovative, end-to-end product solutions. On the product front, we recently introduced new versions of Cognos Query and DecisionStream^TM. Customer response to both products has been enthusiastic. And we continue to bring to market new pre-packaged applications to leverage our customers' investments in their ERP, SCM, and CRM systems. I am pleased with the progress in our analytic applications business, where we are beginning to see a measurable return on our investment. In the third quarter alone, we delivered Cognos e-Application packages to more than 15 customers.

"Still on the product development front, some 20 percent of the 100 employees we added in the third quarter were in product development, which is our lifeblood, bringing our world-class R&D team to over 700 strong. This is another asset of the Company that is unmatched by our peer group competitors and positions us well for continued growth.

"We remain positive and confident," concluded Mr. Zambonini. "Overall financial performance this quarter delivered pretax margins of 19 percent, excluding acquisition-related charges. We will continue to manage our business in a prudent manner, and we remain committed to leveraging our significant financial, human, and strategic partnership assets to drive future growth and market share."

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: the Company's expectations concerning future revenues and earnings, including future growth rates from the licensing of its business intelligence and application development products and related product support and services; the trends and growth rates in the business intelligence market generally, and of Web-based solutions in particular; the Company's ability to deliver business intelligence solutions that respond to changing market requirements; the future prospects of the Company's current and future products, and the Company's ability to compete in an intensely competitive marketplace.

These forward-looking statements are neither promises nor guarantees, but involve risks and uncertainties that may cause future results to differ materially from those in the forward-looking statements. Factors that may cause such differences include, but are not limited to: the Company's ability to continue to grow at historical growth rates or to anticipate a decline in revenue from any of its products; fluctuations in its quarterly and annual operating results based on historical patterns, which may cause its stock price to fluctuate or decline; rapid technological change and new product introductions and enhancements in the business intelligence software market; the Company's reliance on partners and other third party distribution channels to market and distribute its products; unauthorized use of the Company's intellectual property; claims by third parties that the Company's software infringes their intellectual property; the Company's ability to compete in an intensely competitive marketplace; the risks inherent in international operations, such as currency exchange rate fluctuations; the Company's ability to identify, hire, train, motivate and retain highly qualified management and other key personnel; the Company's ability to identify, pursue and complete acquisitions which could divert management attention and financial resources and not produce desired business results; as well as the risk factors discussed in the Company's most recent Annual Report on Form 10-K filed with the United States Securities and Exchange Commission. Readers should not place undue reliance on any such forward-looking statements which speak only as of the date they are made. The Company disclaims any obligation to publicly update or revise any such statement to reflect any change in the Company's expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

Cognos will hold an earnings webcast at 5:15 p.m. Eastern Time on Thursday, December 21, 2000. The webcast will be available for replay until January 21, 2001. The session may be accessed at http://www.cognos.com/company/investor/earnings_fy01q3.html.