Compuware Delivers ''One Heck of a Second Quarter''

Compuware Beats Q2 Consensus Analyst EPS Estimate by 70 Percent, Grows Distributed Products License Fees by 45.5 Percent and Total Revenue by 4.7 Percent Year-over-year

DETROIT--October 24, 2007--Compuware Corporation (NASDAQ: CPWR) today announced financial results for its second quarter ended September 30, 2007.

"After a near-disastrous Q1, Compuware produced one heck of a second quarter," said Compuware Chairman and CEO Peter Karmanos, Jr. "With dramatic year-over-year increases in EPS and distributed products license fees--as well as growth in year-over-year revenues for the third time in the past four quarters--Compuware significantly exceeded analysts’ estimates for performance in Q2. And we beat those estimates even with $18.7 million in restructuring charges this quarter.

"These accomplishments put Compuware on strong footing for attaining its goals in FY ’08," continued Karmanos. "I want to thank all of the Compuware employees who have worked so hard to produce these results and encourage them to continue working diligently to attain our goals for the fiscal year."

Second Quarter Fiscal 2008 Results

Compuware reports second quarter revenues of $302.0 million, compared to $288.5 million in the same quarter last year.

Compuware increased EPS--before restructuring charges--to 17 cents per share in Q2, an increase of approximately 143 percent over the same period last year. On a GAAP basis, earnings per share (diluted computation) were 13 cents, an increase of 86 percent from seven cents in the same quarter last year, based upon 295.4 million and 364.5 million shares outstanding, respectively.

Compuware incurred $18.7 million in restructuring charges in the second quarter. In the first six months of the fiscal year, Compuware incurred $34.8 million in restructuring charges.

Compuware’s net income--before restructuring charges--was $49.6 million, an increase of 100 percent from net income of $24.8 million in the same period last year. On a GAAP basis, Compuware delivered net income of $37.4 million in Q2, an increase of 51 percent from Q2 last year.

During the company’s second quarter, software license fees were $70.0 million, compared to $56.7 million in the same quarter last year. Maintenance fees were $116.3 million, compared to $115.1 million in Q2 last year. Revenue from professional services in the quarter was $115.7 million, compared to $116.7 million in the same quarter last year.

The company will host a conference call at 5:00 p.m. Eastern time (21:00 GMT) today to discuss these results.

Second Quarter Fiscal Year 2007 Highlights

During the second quarter, Compuware:

announced that the company’s Board of Directors authorized the repurchase of an additional $200 million of the company’s common stock.
announced the centralization--to the company’s Detroit headquarters--of product development activities for the company’s Strobe product family, Vantage Service Management product and Optimal Trace product.
announced the development of the Covisint Collaboration Portal, an on-demand platform that provides a highly secure, hosted service for business users who require real-time information and application sharing. The Collaboration Portal is an enhancement to the existing Covisint portal used by more than 250,000 subscribers at 30,000 companies in 86 countries.
continued to build upon Covisint’s on-demand security platform, extending the company’s introduction of Covisint Trusted Identity Broker by launching Covisint Trusted Authorization Manager.
announced that its Vantage IT Service Management solution now supports ITIL Version 3 continual service improvement for automated service measurement and quality improvement.
announced with Wipro a partnership to enable organizations to continually improve service quality by leveraging ITIL v3 and Six Sigma. Wipro’s Business Service Analysis, Transformation and Optimization consulting solution includes Compuware’s Vantage Service Manager, the first service management product to automate Six Sigma techniques.
announced that Jenner & Block, a full-service law firm with 460 lawyers and offices in Chicago; Washington, D.C.; New York and Dallas, uses Compuware Vantage to help ensure that its IT systems are always available.
recorded an income tax benefit of approximately $12 million related to the state of Michigan’s enactment of the Michigan Business Tax (MBT) as a replacement for the Single Business Tax, which expires at the end of 2007. This benefit relates primarily to the recognition of Brownfield Redevelopment credits that existed prior to the MBT enactment and are available to offset MBT liabilities through the company’s fiscal year 2022.

Use of Non-GAAP Financial Information

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, this press release uses non-GAAP measures of net income, earnings per share and revenue. The net income and earnings per share disclosures on a non-GAAP basis excluded the impact of restructuring charges and capitalized software impairment. The non GAAP revenue disclosures provide information on total product commitments. Compuware management believes the non-GAAP financial information provided in this release is useful to investors’ understanding and assessment of Compuware's on-going core operations and prospects for the future. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Management uses both GAAP and non-GAAP information in operating and evaluating its business and as such has determined that it is important to provide this information to investors. A reconciliation of non-GAAP and GAAP earnings is contained in the financial statements following this release.

Compuware Corporation

Compuware Corporation (NASDAQ: CPWR) is a world leader in delivering software and services that enable businesses to manage their enterprises and maximize the value of their IT assets. Compuware solutions accelerate the development, improve the quality and enhance the performance of business-driving applications. Founded in 1973, Compuware serves the world's leading IT organizations, including more than 90 percent of the Fortune 100 companies. Learn more about Compuware at http://www.compuware.com/.

Conference Call Information

Compuware will host a conference call today to discuss these results at 5:00 p.m. Eastern time (21:00 GMT). Interested parties from the United States should call 877-260-8897. For international access, the conference call number is +1-612-288-0340.

A conference call replay will also be available. The United States replay number will be 800-475-6701, and the international replay number will be +1 320-365-3844. The replay passcode will be 886458. Additionally, investors can listen to the conference call via webcast by visiting the Compuware Corporation Investor Relations web site at http://www.compuware.com/.