PERSBERICHT

t.a.v. de fin-ec. redactie Maarssen 18 januari 2001

Mercury Interactive, marktleider in oplossingen voor webprestatiebeheer, rapporteert vandaag haar vierde kwartaal record resultaten. In het vierde kwartaal (t/m 31 december) is een omzet gerealiseerd van $ 97.5 mln, oftwel 62% hoger dan vorig jaar ($ 60.1 mln). De winst van Mercury Interactive bedroeg in het vierde kwartaal $ 25.8 mln , een toename van 73% t.o.v. het derde kwartaal en 73% hoger dan dezelfde periode van vorig jaar ($ 14.9 mln).

In het gehele jaar 2000 bedroeg de omzet $ 307 mln , +64% ten opzichte van 1999 ($187.7 mln). De winst bedroeg in 2000 $ 64.7 mln, een toename van 73% ten opzichte van 1999 ($34.7 mln) . Het originele persbericht treft u hieronder integraal aan.

Mercury Interactive is marktleider in oplossingen voor webprestatiebeheer, die e-commercebedrijven in staat stelt hun cliënten optimale gebruiksvriendelijkheid te bieden. Mercury Interactive biedt oplossingen waarmee ondernemingen de prestaties van hun webtoepassingen, de schaalbaarheid en de gebruiksvriendelijkheid tot competitief speerpunt kunnen maken. De producten voor prestatiebeheer en de hostingdiensten van het Mercury Interactive zijn open en geïntegreerd, zodat bedrijfskritische web-toepassingen op optimale wijze kunnen worden getest en gecontroleerd. Meer dan 10.000 b2b- en b2c-bedrijven, isp's , aps's, systeemintegratoren, consultants en andere cliënten gebruiken de door Mercury Interactive geboden oplossingen.
Naast de hoofdvestiging in Sunnyvale, Californië heeft Mercury Interactive wereldwijd veertig andere vestigingen. Het bedrijf is te vinden via www.mercuryinteractive.com
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Voor nadere informatie: Mercury Interactive, Jack van Pamelen, tel.: 030-241.70.90, email: jvpamelen@mercury-eur.com
Effect adviesgroep, Tjarko Rookmaker, tel. 023-547 07 97; email: m-i@effect-europr.nl

For Immediate Release:
Mercury Interactive Reports Record Fourth Quarter and 2000 Results Announces Fourth Quarter Revenue of $97.5 million and EPS of $0.28

SUNNYVALE, Calif. - January 17, 2001 -Mercury Interactive Corporation (Nasdaq: MERQ), the leading provider of web performance management solutions, today reported results for the fourth quarter and year ended December 31, 2000.
Revenue for the fourth quarter of 2000 was $97.5 million, an increase of 62 percent, over the $60.1 million reported in the fourth quarter of 1999. Net income of $25.8 million, or $0.28 per diluted share represents growth of 73 percent and 65 percent, respectively, compared to a pro forma net income of $14.9 million, or $0.17 per diluted share for the same period in 1999. The pro forma net income excludes the Conduct Ltd. merger related expenses of $2.0 million in the fourth quarter of 1999.
For the year ended December 31, 2000, revenue was $307.0 million, a 64 percent increase over revenue of $187.7 million in 1999. Net income of $64.7 million, or $0.70 per diluted share represents growth of 86 percent and 71 percent, respectively, compared to a pro forma net income of $34.7 million, or $0.41 per diluted share in 1999.
"Mercury Interactive's record fourth quarter results top another outstanding year of accelerated growth," said Amnon Landan, chairman, CEO and president of Mercury Interactive. "Our dominance in the testing market, coupled with the rapid growth in our application performance management and hosted services businesses, makes Mercury Interactive uniquely positioned to address the internet infrastructure and application performance challenges faced by Global 2000 corporations."
During the fourth quarter, Mercury Interactive announced both testing and monitoring solutions for streaming media applications in partnership with RealNetworks and Microsoft. In addition, Akamai agreed to resell Mercury Interactive's hosted testing and monitoring services, extending its existing partnership. Also, the company announced that it had performed over 1,000 hosted load tests using ActiveTest, delivering on average over 400% improvement in web site performance.
Mercury Interactive (www.mercuryinteractive.com) is the leading provider of Web performance management solutions that help businesses deliver a positive user experience. Mercury Interactive solutions enable its customers to turn Web application performance, scalability and user experience into competitive advantage. The company's performance management products and hosted services are open and integrated to best test and monitor business-critical Web applications.
Mercury Interactive is headquartered in Sunnyvale, California and has more than 40 offices worldwide. The company's common stock trades on the Nasdaq National Market tier of The Nasdaq Stock Market under the symbol MERQ. The comments above regarding the company's financial and competitive outlook are forward looking statements and are subject to risks and uncertainties which could cause actual results to differ materially from those anticipated. These factors include the company's ability to successfully introduce and sell new products and services and new versions of existing products and services, increase international sales as well as increase sales of its existing products and services. In addition, the company's success depends in significant part upon the continued service of its key management, sales and technical personnel. Mercury Interactive's operating results are subject to a variety of risks specific to the company or characteristic of the software industry, including the impact of economic conditions on its customers, increased competition, rapid technological change and an absence of significant order backlog. In particular, the company has historically received a substantial portion of its orders at the end of the quarter and if an order shortfall occurs at the end of a quarter, the company's operating results for that quarter could be materially and adversely affected. The company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof. For a discussion of these and other related risks please refer to the company's SEC reports, including the Form 10-K for the year ended December 31, 1999 and the Form 10-Q for the quarter ended September 30, 2000.
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Editor's Note
Tables Attached: Condensed Consolidated Statements of Operations, Condensed Consolidated Balance Sheets

WinRunner, LoadRunner, TestDirector and Astra are registered trademarks and QuickTest, Topaz, ActiveWatch and ActiveTest are trademarks of Mercury Interactive Corporation, Sunnyvale, California. Product and company names are used herein for identification purposes only, and may be trademarks of their respective companies.

Mercury Interactive
1325 Borregas Avenue, Sunnyvale, CA 94089
Tel: (408) 822-5200 Fax: (408) 822-5300

MERCURY INTERACTIVE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

Three months ended Twelve months ended December 31, December 31,
(unaudited) (audited)

2000 1999 2000 1999
Revenue:
License
$ 71,400 $ 43,500 $ 216,100 $ 130,900
Service 26,100 16,600 90,900 56,800
Total revenue 97,500 60,100 307,000 187,700
Cost of revenue:
License 5,350 2,190 17,138 7,736
Service 7,199 4,536 24,679 16,957
Total cost of revenue 12,549 6,726 41,817 24,693

Gross profit 84,951 53,374 265,183 163,007
Operating expenses:
Research and development 8,350 5,828 32,042 23,484 Marketing and selling 45,030 27,608 151,897 89,874 General and administrative 5,608 3,193 17,831 11,662 Merger related expenses - - 2,000
Total operating expenses 58,988 38,629 201,770 127,020

Income from operations
25,963 14,745 63,413 35,987
Other income, net 6,294 1,925 17,462 6,026
Income before provision for income taxes
32,257 16,670 80,875 42,013
Provision for income taxes 6,451 3,334 16,175 8,869 Net income
$ 25,806 $ 13,336 $ 64,700 $ 33,144

Net income per share (basic) $ 0.32 $ 0.17 $ 0.81 $ 0.44

Net income per share (diluted) $ 0.28 $ 0.15 $ 0.70 $ 0.39

Weighted average common shares (basic) 80,996 77,824 79,927 76.112
Weighted average common shares
and equivalents (diluted) 92,728 87,794 91,938 85,208

MERCURY INTERACTIVE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(audited)

December 31, December 31,
2000 1999

ASSETS
Current assets:
Cash and short-term investments $ 628,743 $ 171,327 Trade accounts receivable, net 62,989 40,399 Other receivables 13,233 6,325
Prepaid expenses and other assets 18,976 16,702 Total current assets 723,941 234,753

Long-term investments 153,623 15,555
Property and equipment, net 82,895 46,910
Other assets, net 13,576 -

$ 974,035 $ 297,218

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 12,931 $ 8,469
Accrued liabilities 58,942 33,433
Income taxes payable 34,262 19,945
Deferred revenue 77,673 35,840
Total current liabilities 183,808 97,687

Convertible subordinated notes 500,000 - Total liabilities 683,808 97,687

Stockholders' equity:
Common stock 162 156
Capital in excess of par value 177,427 148,826
Notes receivable from issuance of stock (7,528) (5,090) Accumulated other comprehensive loss (1,415) (1,242)
Retained earnings 121,581 56,881
Total stockholders' equity 290,227 199,531
$ 974,035 $ 297,218