Taleoís Record Results for the Fourth Quarter Cap Exceptional Year in 2007

Taleo, the provider of on demand talent management solutions, today announced financial results for the fourth quarter and fiscal year ending 31 December 2007. Taleo achieved numerous milestones in 2007 establishing new records for revenues, profits, application backlog, cash flows, and number of new Enterprise and SMB customers. Taleo also introduced ground-breaking new products, increased penetration of the SMB market and expanded business internationally, making 2007 the strongest year in the companyís history.

Business Highlights Include
Record revenues of $128.0 million for 2007, an increase of 32% year-over-year

Quarterly record revenues of $34.5 million for the fourth quarter of 2007, an increase of 30% over the fourth quarter of 2006

Record number of new enterprise customers during the fourth quarter of 2007, with 26 new Taleo Enterprise Editionô customers

Customer base grew to over 1,500 customers, including 37 of the Fortune 100 and over 1,200 Taleo Business Editionô customers

Application backlog increased to approximately $200 million exiting 2007, increasing over 40% compared to last year
GAAP net income of $3.9 million for the year 2007. Non-GAAP net income of $13.5 million for the year 2007

Cash flow from operations of over $30.1 million for the year ended 2007

ìOur strong performance in the fourth quarter of 2007 provided the perfect finish to a record year for Taleo,î stated Michael Gregoire, president and CEO of Taleo. ì2007 was a tremendous year for the company. I am extremely proud of our business execution and financial achievement over the course of the year. We continue to realise strong customer demand illustrated by our expanding market share, strong organic growth, record customer acquisition, and improved business fundamentals.î

Fourth Quarter Business Highlights
Signed a record number of 26 new Taleo Enterprise customers including Analog Devices Inc., Atlanta Public Schools, Canada Revenue Agency, Florida Power & Light Company, Hess Corporation, Kindred Healthcare, NCO Group Inc, Pride International, Raymond James Financial Inc. and Reckitt Benckiser Group,

International revenue was 11% of total revenues for the quarter. New international customers include: PricewaterhouseCoopers France, Reed Elsevier PLC in Europe, and Melco PBL Entertainment in Hong Kong.

Signed 8 deals with a first-year contract value of over $250 thousand, equaling Taleoís largest quarterly total ever.

Signed 167 new Taleo Business Edition customers including Mervyns, Sears Canada, Iovation and United Cerebral Palsy.

Announced partnership with Paychex to offer small and mid-sized businesses an integrated, best-in-class HR solution.

Formed strategic partnership with AIRS to launch Taleo TalentReach CRM and sourcing solution.

Processed more than 300,000 hires from over 6.8 million applicants.

2007 Business Highlights
Signed 795 new customers, including 78 new Taleo Enterprise Edition customers, and 717 new Taleo Business Edition customers, bringing Taleoís customer base to over 1,500 organisations around the world.

Taleo now serves 37 of the Fortune 100, and 108 of the Fortune 500 companies.

The company developed Taleo Performanceô, combining goals management, performance reviews, succession planning and career management with Taleoís industry-leading, on demand talent management platform, and deployed it in limited availability to Freeport-McMoRan Copper & Gold Inc. and TeleTech Holdings.

Taleo released Taleo Enterprise Edition 7.5 featuring new career site capabilities, and web 2.0 technologies that improve talent management processes for recruiters, hiring managers, and job candidates at large enterprises.

The company launched a new business unit focused on small and mid-sized businesses.

Taleo built and delivered a Taleo Business Edition application on the Facebook Platform to allow Taleo Business Edition customers to source passive candidates through their trusted networks.

Taleo strengthened its position within the retail industry with the acquisition of WetFeet, Inc.

Taleo acquired intellectual property of JobFlash, Inc., a leader in on demand, hourly, volume hiring with multilingual telephone interactive voice response (IVR) solutions, and interview scheduling applications.

Taleo processed over 1.2 million hires from over 25 million applicants in over 190 countries and territories around the world.

ìGoing forward, we are well positioned for the market opportunities that lie ahead. In 2007, Taleo laid the groundwork for our unified talent management strategy, which in 2008 will result in companies being able to leverage our industry leading platform that unifies enterprise recruiting and performance management. We believe that our innovative solutions, our continued global expansion efforts, and our penetration into new market segments and verticals will drive significant momentum to our business,î concluded Gregoire.

Taleo delivered the following results for the fourth quarter and year ended December 31, 2007:

Revenue: Total revenue for the fourth quarter was $34.5 million, representing an increase of 30% on a year-over-year basis. Recurring application revenue for the fourth quarter was $28.4 million, an increase of 31% on a year-over-year basis. For the year ended December 31, 2007, total revenue was $128.0 million, an increase of 32%, while recurring application revenue was $105.0 million, an increase of 33% over the prior year.

Net Income / (Loss) and Income / (Loss) Per Share to Common Stockholders: Net income in accordance with accounting principles generally accepted in the United States, or GAAP, was $2.5 million for the fourth quarter, compared to net income of $551,000 for the same period last year. For the year ended December 31, 2007, net income was $3.9 million compared to a net loss of $(2.6) million for the year ended December 31, 2006. Net income per fully diluted share was $0.13 for the year ended December 31, 2007 based on 28.8 million weighted average shares outstanding compared to net loss per fully diluted share of $(0.13) for the year ended December 31, 2006 based on 20.0 million weighted average shares outstanding. Net income for the fourth quarter and year ended December 31, 2007 includes share-based compensation expense of $1.9 million and $6.7 million, respectively, pursuant to the adoption on January 1, 2006 of Financial Accounting Standards Board (FASB) Statement No. 123R, Share-Based Payment (SFAS 123R), which requires companies to expense the fair value of employee stock options and similar stock based compensation awards. Net income per fully diluted share was $0.08 for the fourth quarter of 2007 based on 29.5 million weighted average shares outstanding compared to net income per fully diluted share of $0.02 for the same period in 2006 based on 25.8 million weighted average shares outstanding.

Non-GAAP Net Income and Non-GAAP Income Per Share to Common Stockholders: Non-GAAP net income, which excludes restructuring costs and other charges, loss on disposal of fixed assets, share-based compensation expense pursuant to SFAS 123(R), amortisation of acquired intangibles, and non-cash income tax and tax valuation adjustments, was $4.2 million for the fourth quarter of 2007, compared to $1.5 million in the same period last year. Non-GAAP net income per fully diluted share was $0.14 for the fourth quarter of 2007 based on 29.5 million weighted average shares outstanding compared to non-GAAP net income per fully diluted share of $0.06 for the same period in 2006 based on 25.8 million weighted average shares outstanding. For the year ended December 31, 2007, non-GAAP net income was $13.5 million, compared to non-GAAP net income of $2.9 million for the year ended December 31, 2006. Non-GAAP net income per fully diluted share was $0.47 for the year ended December 31, 2007 based on 28.8 million weighted average shares outstanding compared to non-GAAP net income per fully diluted share of $0.11 for the year ended December 31, 2006 based on 25.6 million weighted average shares outstanding.