Ariba (ARBA) 8-K Ariba Reports Preliminary Results for the Second Quarter of Fiscal Year 2006

Exhibit 99.1

Ariba Reports Preliminary Results for the Second Quarter of Fiscal Year 2006

Company continues transition to on-demand; grows subscription software revenue to $12.8M

SUNNYVALE, Calif., April 26, 2006 — Ariba^®, Inc. (Nasdaq: ARBA), the leading spend management solutions provider, today announced preliminary results for the second quarter of fiscal year 2006 ended March 31, 2006.

Financial Results

Total revenues for the second quarter of fiscal year 2006 were $73.7 million, as compared to $81.3 million for the second quarter of fiscal year 2005. Software license revenues for the quarter were $6.1 million, as compared to $12.6 million for the second quarter of fiscal year 2005. Subscription and maintenance revenues for the quarter were $30.6 million, as compared to $31.2 million for the second quarter of fiscal year 2005. Within subscription and maintenance revenues, subscription software revenue was $12.8 million for the quarter, as compared to $11.8 million for the second quarter of fiscal year 2005. Services and other revenues for the quarter were $37.0 million, as compared to $37.4 million for the second quarter of fiscal year 2005.

Net loss for the second quarter of fiscal year 2006 was $4.4 million, or $0.07 per share, as compared to a net loss for the second quarter of fiscal year 2005 of $6.9 million, or $0.11 per share. The net loss for the second quarter of fiscal year 2006 included charges of $3.9 million for amortization of intangible assets, and $9.4 million for stock-based compensation, and $730,000 for restructuring costs. Excluding these items, non-GAAP net income was $9.7 million, or $0.13 per diluted share.

“The investments we are making to transition our company to an on-demand model continue to pay off,” said Bob Calderoni, CEO, Ariba. “During the quarter, demand for our spend management solutions remained strong among both large enterprises and mid-market companies, and we saw growth in our subscription software revenue. We will continue to focus on completing this transition in the months ahead to further strengthen our business and enhance our prospects for future growth.”

Companies Continue to Invest in Ariba Spend Management

Ariba added 23 new customers during the second quarter of fiscal year 2006, as companies of all sizes seek access to solutions that enable them to build spend management as a core competency and achieve excellence. Overall, nearly 180 companies across the globe purchased Ariba Spend Management^™ solutions to drive their efforts, including: AXA, Bongrain SA, Five Star Quality Care, Inc., Kohlberg & Company, Nissan Motor, Orkla ASA, PolyOne, The PNC Financial Services Group, Toshiba America, University of Miami and V&M Star among others.

Ariba On-Demand is In Demand

Ariba continued to gain traction with its on-demand offerings during the second quarter, as more companies are demanding flexible, scalable solutions to drive their spend management initiatives. Ariba’s on-demand solutions combine technology, commodity expertise and services in a single package to help companies gain control of their spend and deliver results.

Innovation and Leadership Recognized

Ariba created spend management and continues to lead the market with its robust technology, deep commodity expertise and comprehensive spend management services. During the quarter, the company was ranked as a leader in contract management solutions in a report by Forrester Research, (The Forrester Wave^™: Contract Life-Cycle Management, Q1 2006, Forrester Research, Inc., March 2006). The company was also recognized as the “Best Electronic Bill Presentment and Payment Services Provider” by Global Finance Magazine.

Setting the Stage for the Future

Next month, Ariba will host AribaLIVE, the premier spend management conference, at the Mandalay Bay Resort & Casino in Las Vegas. From May 9-11, executives and procurement professionals from some of the world’s leading and largest organizations will gather to share their thoughts on the future of spend management and the solutions and capabilities that will be required for success. For more information on the event, or to register, visitwww.aribalive.com

Conference Call Information

Ariba will hold a conference call today at 2:00 p.m. PDT / 5:00 p.m. EDT to discuss the second quarter of fiscal year 2006 results. To join the call, please dial (877) 407-8031 in the United States and Canada, or (201) 689-8031 if calling internationally. There will also be a live web broadcast available on the investor relations section of the company’s website at www.ariba.com or at www.vcall.com. A replay of this call will be available at approximately 5:00 p.m. PDT / 8:00 p.m. EDT today through Wednesday, May 3, 2006 by calling (877) 660-6853 in the United States and Canada or (201) 612-7415 internationally and entering account number: 286 and conference ID number: 199287.

# # #

Copyright^© 1996 – 2006 Ariba, Inc.

Ariba, the Ariba logo, AribaLIVE and SupplyWatch are registered trademarks of Ariba, Inc. Ariba Spend Management, Ariba Spend Management. Find it. Get it. Keep it., Ariba. This is Spend Management, Ariba Solutions Delivery, Ariba Analysis, Ariba Buyer, Ariba Category Management, Ariba Category Procurement, Ariba Contract Compliance, Ariba Contracts, Ariba Contract Management, Ariba Contract Workbench, Ariba Data Enrichment, Ariba eForms, Ariba Sourcing, Ariba Invoice, Ariba Travel & Expense, Ariba Workforce, Ariba Supplier Network, Ariba Supplier Connectivity, Ariba Supplier Performance Management, Ariba PunchOut, Ariba QuickSource, PO-Flip, Ariba Settlement and Ariba Spend Management Knowledge Base, Ariba Ready, Ariba Supply Lines, Ariba Supply Manager, and It’s Time for Spend Management are trademarks or service marks of Ariba, Inc. Ariba Proprietary and Confidential. All rights reserved. Patents pending. All other trademarks are property of their respective owners.

Ariba Safe Harbor

Safe Harbor Statement under the Private Securities Litigation Reform Act 1995: Information and announcements in this release involve Ariba’s expectations, beliefs, hopes, plans, intentions or strategies regarding the future and are forward-looking statements that involve risks and uncertainties. All forward-looking statements included in this release are based upon information available to Ariba as of the date of the release, and we assume no obligation to update any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to Ariba’s operating and financial results to differ materially from its current expectations include, but are not limited to: delays in development or shipment of new versions of Ariba’s products and services; lack of market acceptance of Ariba’s existing or future products or services; inability to continue to develop competitive new products and services on a timely basis; introduction of new products or services by major competitors; the ability to attract and retain qualified employees; difficulties in assimilating acquired companies; long and unpredictable sales cycles and the deferrals of anticipated orders; declining economic conditions; inability to control costs; changes in the company’s pricing or compensation policies; significant fluctuations in our stock price; the outcome of and costs associated with pending or potential future

2

regulatory or legal proceedings; the impact of our acquisitions, including the disruption or loss of customer, business partner, supplier or employee relationships; and the level of costs and expenses incurred by Ariba as a result of such transactions. Factors and risks associated with its business, including a number of the factors and risks described above, are discussed in Ariba’s Form 10-K filed December 7, 2005 and in its Form 10-Q filed February 8, 2006.

Investor Contact:

Elaine Kitagawa

Ariba, Inc.

(650) 390-1000

ekitagawa@ariba.com

Media Contact:

Karen Master

Ariba, Inc.

(412) 719-0807

kmaster@ariba.com

3

Ariba, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited; in thousands)

	March 31, 2006			September 30, 2005
ASSETS
Current assets:
Cash and cash equivalents	$	74,403		$	60,909
Short-term investments		56,549			50,520
Restricted cash		1,568			1,381
Accounts receivable, net		37,116			41,890
Prepaid expenses and other current assets		11,483			10,080
Total current assets		181,119			164,780
Property and equipment, net		16,750			17,999
Long-term investments		—			2,731
Restricted cash, less current portion		30,496			31,894
Goodwill		326,101			328,692
Other intangible assets, net		32,853			41,562
Other assets		3,091			2,986
Total assets	$	590,410		$	590,644
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	12,721		$	11,031
Accrued compensation and related liabilities		26,395			30,046
Accrued liabilities		22,142			23,461
Restructuring obligations		14,689			18,144
Deferred revenue		45,496			39,548
Deferred income - Softbank		13,569			13,368
Total current liabilities		135,012			135,598
Deferred rent obligations		22,747			22,184
Restructuring obligations, less current portion		63,085			68,356
Deferred revenue, less current portion		21,670			21,056
Deferred income - Softbank, less current portion		7,351			13,925
Total liabilities		249,865			261,119
Minority interests		—			—
Stockholders’ equity:
Common stock		149			143
Additional paid-in capital		5,007,546			5,023,965
Deferred stock-based compensation		—			(35,537	)
Accumulated other comprehensive income		2,946			3,011
Accumulated deficit		(4,670,096	)		(4,662,057	)
Total stockholders’ equity		340,545			329,525
Total liabilities and stockholders’ equity	$	590,410		$	590,644

Ariba, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited; in thousands, except per share data)

	Three Months Ended March 31,						Six Months Ended March 31,
	2006			2005			2006			2005
Revenues:
License	$	6,135		$	12,615		$	12,757		$	29,737
Subscription and maintenance		30,588			31,224			62,389			62,652
Services and other		37,018			37,429			74,827			75,808
Total revenues		73,741			81,268			149,973			168,197
Cost of revenues:
License		499			1,054			1,067			1,748
Subscription and maintenance		7,785			7,361			15,409			14,828
Services and other		32,921			32,732			64,295			63,422
Amortization of acquired technology and customer intangible assets		3,696			5,281			8,309			9,981
Total cost of revenues		44,901			46,428			89,080			89,979
Gross profit		28,840			34,840			60,893			78,218
Operating expenses:
Sales and marketing		16,379			21,080			34,989			47,866
Research and development		12,794			12,735			24,747			25,582
General and administrative		8,280			8,649			17,098			18,104
Other income - Softbank		(3,393	)		(2,795	)		(6,794	)		(2,795	)
Amortization of other intangible assets		200			213			400			398
Restructuring and integration costs		730			2,282			1,003			4,099
Litigation provision		—			—			—			37,000
Total operating expenses		34,990			42,164			71,443			130,254
Loss from operations		(6,150	)		(7,324	)		(10,550	)		(52,036	)
Interest and other income, net		1,947			640			2,836			3,255
Net loss before income taxes and minority interests		(4,203	)		(6,684	)		(7,714	)		(48,781	)
Provision for income taxes		171			205			325			4,844
Minority interests in net income of consolidated subsidiaries		—			2			—			18
Net loss	$	(4,374	)	$	(6,891	)	$	(8,039	)	$	(53,643	)
Net loss per share - basic and diluted	$	(0.07	)	$	(0.11	)	$	(0.12	)	$	(0.85	)
Weighted average shares - basic and diluted		65,298			63,518			65,310			63,113

Ariba, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (1)

(Unaudited; in thousands, except per share data)

	Three Months Ended March 31,									Three Months Ended March 31,
	2006 Reported			Adj			2006 Non- GAAP			2005 Reported			Adj			2005 Non- GAAP
Revenues:
License	$	6,135		$	—		$	6,135		$	12,615		$	—		$	12,615
Subscription and maintenance		30,588			—			30,588			31,224			—			31,224
Services and other		37,018			—			37,018			37,429			—			37,429
Total revenues		73,741			—			73,741			81,268			—			81,268
Cost of revenues:
License		499			—			499			1,054			—			1,054
Subscription and maintenance (2)		7,785			(495	)		7,290			7,361			(245	)		7,116
Services and other (2)		32,921			(2,095	)		30,826			32,732			(1,115	)		31,617
Amortization of acquired technology and customer intangible assets (3)		3,696			(3,696	)		—			5,281			(5,281	)		—
Total cost of revenues		44,901			(6,286	)		38,615			46,428			(6,641	)		39,787
Gross profit		28,840			6,286			35,126			34,840			6,641			41,481
Operating expenses:
Sales and marketing (2)		16,379			(3,140	)		13,239			21,080			(1,731	)		19,349
Research and development (2)		12,794			(1,579	)		11,215			12,735			(475	)		12,260
General and administrative (2)		8,280			(2,110	)		6,170			8,649			(712	)		7,937
Other income - Softbank		(3,393	)		—			(3,393	)		(2,795	)		—			(2,795	)
Amortization of other intangible assets (3)		200			(200	)		—			213			(213	)		—
Restructuring and integration costs (4)		730			(730	)		—			2,282			(2,282	)		—
Total operating expenses		34,990			(7,759	)		27,231			42,164			(5,413	)		36,751
(Loss) income from operations		(6,150	)		14,045			7,895			(7,324	)		12,054			4,730
Interest and other income, net		1,947			—			1,947			640			—			640
(Loss) income before income taxes and minority interests		(4,203	)		14,045			9,842			(6,684	)		12,054			5,370
Provision for income taxes		171			—			171			205			—			205
Minority interests in net income of consolidated subsidiaries		—			—			—			2			—			2
Net (loss) income	$	(4,374	)	$	14,045		$	9,671		$	(6,891	)	$	12,054		$	5,163
Net (loss) income per share
Basic	$	(0.07	)				$	0.15		$	(0.11	)				$	0.08
Diluted	$	(0.07	)				$	0.13		$	(0.11	)				$	0.08
Weighted average shares
Basic		65,298						65,298			63,518						63,518
Diluted		65,298						73,868			63,518						65,908

(1) To supplement our financial results presented on a GAAP basis, we use non-GAAP measures of net income and earnings per share, which exclude expenses that we believe are helpful in understanding our past financial performance and prospects for the future. Management uses the non-GAAP financial results as one factor in its planning and forecasting of future periods. The non-GAAP financial results are presented here with the intent of providing additional information about our operating results and trends. We believe the non-GAAP measures are useful in that they enable investors to compare our results to our performance in periods prior to our acquistions. The presentation of non-GAAP financial results is not meant to be considered in isolation or as a substitute for net income or earnings per share prepared in accordance with GAAP. Investors should be aware that non-GAAP measures have inherent limitations and should be read only on conjunction with our consolidated financial statements prepared in accordance with GAAP.

(2) Non-GAAP adjustment respresents stock-based compensation associated with stock options and restricted shares issued to employees.

(3) Non-GAAP adjustment respresents the amortization of intangible assets in connection with our acquisitions.

(4) Non-GAAP adjustment primarily reflects adjustments to lease abandonments and severance and related benefits.