Taleo Announces Record Third Quarter 2005 Financial Results

ï Total revenue grows 30% to $19.9 million
ï 70 customers added during the third quarter
ï Number of active users grows to 500,000

Taleo, the provider of on demand talent management solutions, today announced financial results for its third quarter of fiscal year 2005.

For the quarter ended September 30, 2005, Taleo reported total revenue of $19.9 million, an increase of 30% compared with the third quarter of 2004. Application revenue increased 25% to $16.0 million, while consulting revenue increased 56% to $3.9 million.

Michael Gregoire, President and Chief Executive Officer of Taleo stated, ìWe are very pleased with our third quarter results, which were highlighted by record revenues and expanding profitability.î Gregoire added, ìThe talent management market continues to grow in awareness and importance, and Taleo has emerged as the clear leader from a critical mass and technology perspective. In addition, our leadership position continues to grow due to our momentum with blue chip customer wins, our comprehensive and innovative talent management solutions for businesses of all sizes, and our growing partnership channels.î
Divesh Sisodraker, Chief Financial Officer of Taleo, stated, ìThe operating leverage inherent in our on demand business model has helped us to scale our profitability while we continue to grow the top line at a rapid pace.î Sisodraker added, ìIn addition to growing profitability, the combination of our business momentum and recurring revenue model also provides us with significant visibility as we approach the next calendar year.î

Additional Third Quarter Business Highlights:

Taleo began trading on NASDAQ in an initial public offering that closed in October and raised approximately $70 million in net proceeds.

Taleo added 70 new customers in the quarter across multiple verticals.

High profile customers added during the third quarter were: Areva, Qatar Airways, Praxair, Weyerhaeuser, RadioShack, DirecTV, Revlon, Sumitomo Trust & Banking Co, SEGA of America, Bankers Life and Casualty Co., Atari and Infosys Consulting among others.

Taleo expanded the number of active users during the third quarter to 500,000; up from 475,000 in the second quarter of 2005.

Taleo entered into a strategic relationship with Alexander Mann Solutions, a recognised market leader in international recruitment process outsourcing. As part of this arrangement, Alexander Mann will deliver Taleoís talent management solutions for both permanent and temporary labour to its customers seeking to outsource recruiting and talent management processes throughout Europe and Asia Pacific.

Taleo Contingent 7.0 was introduced, providing significant usability, infrastructure and global enhancements to help customers manage their large and growing contingent workforce. This new release was named the winner in the ì2005 Recruiting & Staffing Best in Class Awardsî by HR IQ, a division of the International Quality & Productivity Center (IQPC).

Taleo and Xerox, a Taleo Contingent Customer, were presented with an award for Best Practices in Category Spend Management for Contract Labor by the Aberdeen Group, an industry analyst firm. This award recognised the increased value and business performance that Xerox achieved through its innovative contractual workforce management programs, underpinned by Taleoís solutions.

Taleo Business Edition 6.1 was introduced, adding further momentum to Taleoís efforts to penetrate the SMB segment of the talent management market. The new release includes several new features and enhanced functionality ñ including interview, task, event, and calendar management ñ in addition to new configurability options and an expanded version of Taleoís Web Services API.

Complete information on Taleoís record third quarter 2005 financial results are available at http://www.taleo.com/news/press-detail.php?id=150