IONA Reports Full Year And Fourth Quarter 2007 Results

DUBLIN, Ireland & WALTHAM, Mass. - January 24, 2008 - IONA® Technologies (NASDAQ: IONA), a world leader in distributed service-oriented architecture (SOA) infrastructure solutions for performance-demanding IT environments, today announced full year 2007 revenue of $77.7 million and fourth quarter 2007 revenue of $18.1 million.

On a U.S. generally accepted accounting principles (GAAP) basis, IONA reported a 2007 net loss of $0.7 million, or a loss of $0.02 per share. For the fourth quarter of 2007, IONA reported a net income of $0.2 million, or $0.01 per share.

Net loss for 2007 includes SFAS 123R share-based compensation expense of $4.7 million, amortization of purchased intangible assets of $0.7 million, a one-time facilities related charge of $1.2 million and a deferred tax benefit of $1.9 million. Excluding SFAS 123R share-based compensation expense, amortization, the facilities charge and the deferred tax benefit, net income and earnings per share for 2007 was $3.9 million and $0.11 per share.

Net income for the fourth quarter includes SFAS 123R share-based compensation expense of $0.6 million, amortization of purchased intangible assets of $0.2 million, a one-time facilities related charge of $1.2 million and a deferred tax benefit of $1.9 million. Excluding SFAS 123R share-based compensation expense, amortization, the facilities charge and the deferred tax benefit, net income and earnings per share in the fourth quarter of 2007 were $0.3 million and $0.01 per share. A complete reconciliation between net income (loss) and earnings (loss) per share on a GAAP basis and on a non-GAAP basis for the year and fourth quarter ended December 31, 2007 is provided in the financial tables at the end of this press release.

"In 2007, our CORBA business remained predictable and profitable," said Peter Zotto, CEO, IONA Technologies. "Our two acquisitions, C24 and LogicBlaze, have performed well while adding two new lines of business and diversifying our revenue base. We expect the new products will provide growth in two attractive market segments and will complement our existing Artix product line." Mr. Zotto added that, "intense reviews of bigger deals toward the end of the year resulted in delays with specific customers at quarter-end, impacting our overall results and Artix, in particular."

"We are going into 2008 with a very solid financial base," said Christopher Mirabile, CFO, IONA Technologies. "IONA generated $11.7 million of cash from operations in 2007. Our two acquisitions are on track to be accretive in 2008. To protect our profitability and achieve our target operating margin, we have taken action to reduce our projected annualized expenses by approximately $8 million."

Highlights

• In 2007 IONA generated positive cash flow from operations of $11.7 million and increased year-end cash and marketable securities to $56.5 million.
• For 2007 Artix revenue grew 26% and total Artix customers increased to 129 in our target markets.
• The early 2007 acquisitions of LogicBlaze and C24 diversified our product and revenue streams and led to 30 new customers in 2007.
• Delivered a major upgrade to Artix™, the advanced SOA infrastructure suite, with enhanced interoperability, active governance and expanded support.
• Announced that leading international bank, DZ Bank selected Artix Registry/Repository to actively govern the use of services across the company's SOA infrastructure.
• Received "Positive" ratings for Vision and Momentum by Current Analysis; rated "Visionary" in two integration Magic Quadrant segments by Gartner, Inc.
• Introduced FUSE™ HQ to provide systems management and monitoring across the FUSE family of Open Source products from IONA.
• Announced the deployment of FUSE ESB by the Belgium Ministry of Education

Looking Forward
The company expects total revenue for 2008 to be in the range of $80-$85 million. The company expects total expenses for 2008, including cost of revenue, operating expenses, the cost of share-based compensation and amortization, to be in the range of $79 - $81 million. SFAS 123R share-based compensation expense in 2008 is expected to be approximately $5.2 million and amortization of purchased intangible assets in 2008 is expected to be approximately $0.8 million. In addition to these expenses, the Company also expects to incur one-time charges during 2008 associated with the restructuring announced earlier this month.

Conference Call
IONA will host a conference call today at 10:00 a.m. Eastern Time to discuss the company's fourth quarter and full year 2007 results. Investors and other interested parties may dial into the call using the toll free number 888-790-1807 or +1-210-839-8792 internationally. This call is being Webcast by CCBN and can be accessed at www.iona.com/investors. The pass code is IONA. Following the conclusion of the call, a rebroadcast will be available at IONA's Web site (www.iona.com/investors) or by calling 800-793-2382 or +1-402-280-1607 internationally until February 22, 2008.

About IONA

For more than a decade, IONA® Technologies (NASDAQ: IONA) has been a world leader in delivering high-performance integration solutions for Global 2000 IT environments. IONA pioneered standards-based integration with its CORBA-based Orbix® products. IONA's Artix™, an advanced SOA infrastructure suite enables customers to leverage service-oriented architecture to streamline and modernize IT environments. The FUSE™ family of open source distributed SOA infrastructure products allows customers to take advantage of the economic benefits associated with the use of open source software.

IONA is headquartered in Dublin, Ireland, with U.S. headquarters in Waltham, Massachusetts and offices worldwide. For additional information about IONA, visit our Web site at http://www.iona.com.

Click here to view the financial tables.