AUTOMOTIVE

Fourth quarter 2004 revenue was $71.6 million versus $51.7 million in the fourth quarter of 2003, a 39% increase. License revenue for the quarter was $34.1 million versus $23.4 million in the fourth quarter of 2003, a 46% increase. Net income for the fourth quarter of 2004, determined in accordance with GAAP, was $24.5 million, or $1.43 per share on a diluted basis. Fourth quarter 2004 income from operations was $27.2 million, or 38% of revenue, versus $12.5 million, or 24% of revenue, in the fourth quarter of 2003. MicroStrategy's cash plus short and long-term investments at the end of the fourth quarter of 2004 was $132.5 million versus $51.9 million at the end of the fourth quarter 2003. Full year 2004 revenue was $231.2 million versus $175.6 million in 2003, a 32% increase. License revenue for the full year 2004 was $97.0 million versus $77.2 million in 2003, a 26% increase. Net income for the full year 2004, determined in accordance with GAAP, was $168.3 million, or $9.83 per share on a diluted basis. The full year 2004 tax benefit of $99.0 million included a net non-cash benefit of $102.1 million related to the release of the Company's U.S. and Canadian deferred tax asset valuation allowance and the utilization of non-cash U.S. deferred tax assets. Full year 2004 income from operations was $68.5 million, or 30% of revenue, versus $28.0 million, or 16% of revenue, in 2003. Highlights of the Fourth Quarter 2004 * Customer wins at Albertson's, Alticor, Cingular Wireless, Emory Healthcare, Ingenix, Lending Tree, McGraw-Hill Companies, Metropolitan Life Insurance, Oakwood Homes, Pacific Gas and Electric, PPL Services Corporation, The Bank of New York, The Container Store, and Wausau Benefits * Services revenue increased 33% over the fourth quarter of 2003 * Deferred revenue increased by $14.2 million, or 46% over the fourth quarter of 2003 * The revenue mix for the quarter was 57% domestic and 43% international * License contracts during the quarter totaled approximately 505, an increase of approximately 32% over the fourth quarter 2003 * 29 contracts greater than $500K and 12 contracts greater than $1 million * Days sales outstanding was 52 days * Headcount at the end of the fourth quarter was 945 "MicroStrategy delivered another strong quarter, with record revenues, excellent operating margins, and outstanding license revenue growth," said MicroStrategy President and CEO Michael Saylor. "Sales execution was excellent, and we continued to drive operational efficiency throughout our business. MicroStrategy benefited from a robust new product cycle, including the release of MicroStrategy Report Services, MicroStrategy Office, and MicroStrategy Universal in the past fourteen months. With the scheduled release next week of MicroStrategy 8, we believe we are well positioned for another solid year in 2005." Examples of Noteworthy Customer Deals from Q4 2004: Oncology Therapeutics Network Oncology Therapeutics Network (OTN) is a leading distributor of chemotherapeutic drugs for treatment of cancer. OTN selected MicroStrategy for its ease-of-use, advanced analytical capabilities, and scalability for large databases and thousands of users. Approximately 120 employees will use MicroStrategy to report, analyze and monitor sales and marketing information against an Oracle data warehouse. Such analyses will provide Oncology Therapeutics Network with the insight needed to be more responsive to its customers, increase sales force productivity and support the company's business objectives. Winn-Dixie Stores, Inc. Winn-Dixie Stores, Inc., with headquarters in Jacksonville, FL, is one of the nation's largest food retailers. After an in-depth evaluation of many of the competing products in the industry, Winn-Dixie selected the MicroStrategy platform for its ease-of-use, scalability, and superior Web-based platform. Approximately 50 merchandising analysts, pricing analysts, and category managers will perform sales and customer reporting and analyses against a 3.4-terabyte Teradata data warehouse. The company will utilize MicroStrategy to more effectively monitor pricing and sales in order to improve revenue and profitability. Update on Recently Released MicroStrategy Products MicroStrategy Report Services continued to garner increased customer adoption in 2004. MicroStrategy Report Services allows business users to retrieve information from corporate databases for display in boardroom-quality documents over the web or in email. Since its release in November 2003, hundreds of customers worldwide have adopted MicroStrategy Report Services. MicroStrategy Report Services provides content-rich, user-friendly reports that can enrich existing business intelligence applications and ease the creation of new ones. In June 2004 MicroStrategy launched the MicroStrategy Universal Edition of its business reporting technology. This Universal edition provides the capacity and high-performance needed for thousands of additional business users, ranging from line-workers to top executives, to benefit from business intelligence. This 64-bit software is compatible with Microsoft Windows, IBM AIX and Sun Solaris operating systems. In September 2004, MicroStrategy 8, in development for over two years, went into beta testing. With innovative, easy-to-use functionality and more than 2,000 enhancements across the MicroStrategy Business Intelligence platform, MicroStrategy 8 enables thousands of users throughout an organization to make faster, better-informed business decisions. MicroStrategy 8 raises the bar for BI ease-of-use by providing reporting, analysis, and business monitoring capabilities that users require, as well as an even more sophisticated level of report design and formatting. Additionally, MicroStrategy 8 broadens the data sources available to include data warehouses, data marts, and operational systems. "The OLAP Surveys have consistently found that MicroStrategy sites have the most users, and the highest level of Web-deployment," said Nigel Pendse, author of The OLAP Survey 4 (http://www.survey.com/olap) and The OLAP Report (http://www.olapreport.com/). "MicroStrategy 8 provides further improvements in the Web user interface and better source data connectivity while still providing the only fully integrated product set ideally suited for large scale, complex data analysis, highly formatted reporting, proactive exception reporting and advanced queries." MicroStrategy 8 will be unveiled January 31, 2005 at MicroStrategy World, our annual user's conference. For additional information on the product launch, please visit http://www.microstrategy8.com/