ILOG ANNOUNCES 2007 THIRD QUARTER RESULTS

Paris, France and Mountain View, Calif. – 26 April 2007

ILOG® (NASDAQ: ILOG; Euronext: ILO, ISIN: FR0004042364) today announced its fiscal third quarter results with revenues of $40.0 million, compared with revenues of $37.4 million in the same quarter last year. U.S. GAAP earnings per share (EPS) for the third quarter were $0.04 (diluted) compared with a diluted EPS of $0.14 for the third quarter last year.

“For the first time, ILOG passed the $40 million mark in quarterly revenues. I am pleased that we have grown our revenues to reach this milestone, although the mix of our license and consulting revenues generated less profit than we had hoped,” said ILOG Chairman and CEO, Pierre Haren. “However, since the beginning of April, several significant license deals have already been closed, and we are confident that license revenue growth will improve in the current quarter.”

Revenues in Europe grew 18% year over year at current exchange rates or 7% year over year at constant exchange rates, due to good performance across all key markets, particularly the UK and Germany. Revenues in the U.S. were essentially flat compared to a strong third quarter in the prior year, while Asia-Pacific grew 22% backed by a significant contribution from professional services.
The visualization component product line grew 23% year over year, fueled by demand for monitoring applications in the manufacturing and telecommunications sectors. Key customers for visualization included Alcatel, where ILOG JViews was selected for a new network management system for W-CDMA networks, and the Mercury Interactive division of Hewlett Packard.

Driven by service-oriented architecture initiatives, Business Rule Management Systems (BRMS) grew 5% overall for the quarter, mainly in the financial services sector in the U.S., and included a $1 million deal for a new policy administration system for a major U.S. insurance company. Europe’s largest BRMS deal was with a world-leading information services company which will leverage ILOG JRules for an analytics application that can be maintained by data operations analysts.

ILOG’s Optimization business, including supply chain applications as well as tools and engines was down 21% year over year. Optimization revenues came from SAP and a large number of smaller deals, whereas in the same quarter last year a large deal augmented these revenues.

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