Company delivers record Sales Contracts and fifth consecutive quarter of double-digit year-on-year growth

Vancouver, Canada: November 17, 2011 – Absolute^® Software Corporation (“Absolute” or the “Company”) (TSX: ABT), the leading provider of firmware-embedded endpoint security and management solutions, today announced its financial results for the three-month period ended September 30, 2011. This is the Company’s first set of consolidated financial statements prepared under International Financial Reporting Standards (“IFRS”) and reported in U.S. dollars.  All figures are in U.S. dollars unless otherwise stated.

• Achieved 20% growth in Sales Contracts⁽¹⁾ while reducing expenses 7% year-over-year.
• Increased commercial Sales Contracts by 36% compared to Q1-F2011.
• Generated $5.5 million in cash from operating activities, representing an increase of 60% over Q1-F2011.
• Adjusted Operating Income was $2.7 million, a significant improvement from an Adjusted Operating Loss of $0.3 million in Q1-F2011.
• International sales increased 51% to 9% of total Sales Contracts, compared to 7% in Q1-F2011.
• Announced the integration of Computrace^® persistence technology into the firmware of the Lenovo ThinkPad Tablet.
• Launched support for Mac OS X Lion.
• LoJack for Laptops named Editors’ Choice by PC Magazine.
• Repurchased 683,000 shares for a total of $2.8 million under Company’s Normal Course Issuer Bid.
• Subsequent to quarter end, released Absolute Manage 6.0, which included 60 new features including Windows imaging and:
  • Launch of Mobile Device Management (MDM) for Android;
  • Extension of  MDM support for iOS5 platforms; and
  • Launch of AbsoluteSafe, a ground breaking solution for document control on iOS devices.

“Our Q1 results reflect particularly strong commercial sales, which grew 36% year-over-year.  In addition to our seasonally strong education sales, we experienced double digit growth in all of our major commercial product lines, target market verticals and geographic regions,” said John Livingston, CEO of Absolute. “Our performance in the quarter clearly demonstrates we have the right products and strategy in place, and as a result, we are capturing a larger share of the endpoint security and management market.”

Mr. Livingston continued, “We are particularly excited about the success we are having with our MDM offerings. We are the leading vendor that can provide security and management across PC, Mac, iOS and Android devices, and with the launch of Absolute Safe, we have moved further ahead of the industry curve. Absolute safe provides organizations with a highly sought-after solution to address consumerization.  With these offerings, in combination with our Android persistence and early stage self-encrypting drive solutions, we believe that we are well positioned to deliver long-term growth. ”

Q1 F2012 Financial Review
Absolute’s Q1 F-2011 results are the Company’s first set of consolidated financial statements prepared under IFRS and in U.S. dollars. For more detailed information regarding the Company’s transition to IFRS, including a reconciliation of the Company’s Q1 F-2011 results as originally reported in Canadian Generally Accepted Accounting Principles (CGAAP) to IFRS please refer to the Company’s financial statements and MD&A filings on SEDAR at www.sedar.com.

Q1 F2012 Sales Contracts⁽¹⁾ grew 20% to $25.3 million from $21.1 million in Q1-F2011. The increase was driven by strong commercial sales globally across all of the Company’s target market verticals – education, corporate, government and healthcare. Q1-F2012 Commercial sales were $22.9 million, or 91% of Sales Contracts, up 36% over Q1-F2011.

Commercial Sales Contracts from Absolute’s flagship theft recovery products⁽⁴⁾  in Q1-F2012 grew 18% over Q1-F2011, as market demand for the Company’s unique theft recovery and theft management services remained strong.

Commercial Sales Contracts from Absolute’s non-theft recovery products⁽⁶⁾ (i.e. management, tracking and data protection) grew 142% over Q1-F2011, as demand, particularly for Absolute Manage, MDM and the Company’s Computrace Data Delete offering, gained momentum. The Company believes this to be an indication of its success in diversifying sales and developing new product lines with long-term growth potential.

For Q1-F2012, Sales Contracts for consumer solutions were $2.4 million, or 9% of Sales Contracts, compared to $4.2 million, or 20% of Sales Contracts, in Q1-F2011. The year-over-year decline was expected, and is primarily due to the phase-out of a low margin high volume OEM bundle program.

On the international front, sales increased 51% to $2.2 million in Q1-F2012, or 9% of sales, up from $1.5 million, or 7% of sales, in Q1 F2011.

Revenue for Q1-F2012 was $18.2 million, an increase of 12% from $16.3 million in Q1-F2011. Revenue is typically a lagging performance indicator for Absolute, as it is a function of deferred revenue as opposed to invoiced sales in the quarter. The majority of the revenue from Q1-F2012 Sales Contracts is included in the deferred revenue on the balance sheet at September 30, 2011, which was $118.2 million, compared to $111.2 million at June 30, 2011.

Adjusted Operating Expenses⁽³⁾ for Q1-F2012 were $15.5 million, a decrease of 7% from $16.6 million in Q1 F2011, largely as a result of reductions in certain partner marketing activities as well as the Company’s continued focus on driving growth while tightly managing expenses.

Reflecting the Company’s revenue growth and its ongoing focus on cost control, Absolute generated Adjusted Operating Income⁽⁴⁾ of $2.7 million in Q1-F2012, up from an Adjusted Operating Loss of $0.3 million in Q1-F2011.  Absolute recorded a net loss of $1.9 million in Q1-F2012, compared to a net profit of $0.1 million in Q1-F2011. The current quarter loss was primarily due to foreign exchange losses of $1.9 million in Q1-F2012 on Canadian dollar net asset balances, as compared to a $1.6 million foreign exchange gain in Q1-F2011.

Cash from operating activities increased 60% in Q1-F2012 to $5.5 million, compared to $3.4 million in Q1-F2011.  The increased cash flow reflects the company’s improved operational performance which produced rapidly growing sales contracts and reduced operating expenses.

Quarterly Filings
Management’s discussion and analysis (“MD&A”), consolidated financial statements and notes thereto for Q1 F2012 can be obtained today from Absolute’s corporate website at www.absolute.com. The documents will also be available at www.sedar.com.

Notice of Conference Call
Absolute Software will hold a conference call to discuss the Company’s Q1 F2012 results on Thursday, November 17, 2011 at 2:00 p.m. PT (5:00 p.m. ET). All interested parties can join the call by dialing 647-427-7450, or 1-888-231-8191. Please dial-in 15 minutes prior to the call to secure a line.  The conference call will be archived for replay until Thursday, November 24, 2011 at midnight. 

A live audio webcast of the conference call will be available at www.absolute.com and www.newswire.ca.  Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast.  An archived replay of the webcast will be available for 365 days at www.newswire.ca. To access the archived conference call, please dial 416-849-0833, or 1-855-859-2056 and enter the reservation code 25033930.

Non-IFRS Measures and Definitions
Throughout this press release, we refer to a number of measures which we believe are meaningful in the assessment of the Company’s performance. All these metrics are non-standard measures under International Financial Reporting Standards (“IFRS”), and are unlikely to be comparable to similarly titled measures reported by other companies. Readers are cautioned that the disclosure of these items is meant to add to, and not replace, the discussion of financial results or cash flows from operations as determined in accordance with IFRS.  For a discussion of the purpose of these non-IFRS measures, please refer to the Company’s First Quarter 2012 MD&A on SEDAR at www.SEDAR.com.

These measures, as well as their method of calculation or reconciliation to IFRS measures, are as follows:

1) Sales Contracts

See the “Subscription Business Model” section of the MD&A for a detailed discussion of why we believe Sales Contracts (also known as “bookings”) provide a meaningful performance metric.  Sales Contracts are included in deferred revenue (see Note 8 of the Notes to the Interim Condensed Consolidated Financial Statements), and result from invoiced sales of our products and services.

2) Basic and diluted Cash from Operating Activities per share

As a result of the nature of our revenues (please refer to “Subscription Business Model” in the MD&A), we use Cash from Operating Activities as a measure of profitability. Accordingly, we believe that Cash from Operating Activities per share is a meaningful indicator of profitability per share. Cash from Operating Activities per share is calculated by dividing Cash from Operating Activities by the average number of shares outstanding for the period (basic), or using the treasury stock method (diluted).

3) Adjusted Operating Expenses

A number of significant non-cash expenses are reported in our Cost of Revenue and Operating Expenses.  Management believes that analyzing these expenses exclusive of these non-cash items provides a useful measure of the cash invested in the operations of its business.  The non-cash items excluded in the determination of Adjusted Operating Expenses are share-based compensation and amortization of acquired intangible assets. For a description of the reasons these items are adjusted, please refer to the First Quarter Fiscal 2012 MD&A.

4) Adjusted Operating Income (Loss)

Management believes that analyzing operating results exclusive of significant non-cash items provides a useful measure of the Company’s performance. Adjusted Operating Income (Loss) refers to IFRS operating income excluding charges for share-based compensation and amortization of acquired intangible assets.

5) Theft recovery products

Management defines the Company’s theft recovery product line as all products that include a theft recovery component.

6) Non-theft recovery products

Management defines the Company’s non-theft recovery product line as its Absolute Manage, Absolute Track, Computrace Data Delete and Absolute Secure Drive products.

About Absolute Software

Absolute Software Corporation (TSX: ABT) is the world leader in firmware-embedded endpoint security and management for computers and ultra-portable devices. The Company's Computrace, Absolute Manage, Absolute Secure Drive, and LoJack for Laptops solutions provide organizations with actionable intelligence to prove compliance, generate fast ROI, reduce overhead, and deliver comprehensive visibility and control over all of their endpoints, anywhere, anytime. The Company's software agent is embedded in the firmware of computers, netbooks, and tablets by global leaders, including Acer, ASUS, Dell, Fujitsu, HP, Lenovo, Motion, Panasonic, Samsung, and Toshiba, and the Company has reselling partnerships with these OEMs and others, including Apple. For more information about Absolute Software, visit www.absolute.com and http://blog.absolute.com.

Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements relate to, among other things, the expected performance, functionality and availability of our services and products, and other expectations, intentions and plans contained in this press release that are not historical fact. When used in this press release, the words "plan," "expect," "believe," and similar expressions generally identify forward-looking statements. These statements reflect our current expectations. They are subject to a number of risks and uncertainties, including, but not limited to, changes in technology and general market conditions. In light of the many risks and uncertainties you should understand that we cannot assure you that the forward-looking statements contained in this press release will be realized.

©2011 Absolute Software Corporation. All rights reserved. Computrace and Absolute are registered trademarks of Absolute Software Corporation. LoJack is a registered trademark of LoJack Corporation, used under license by Absolute Software Corporation. LoJack Corporation is not responsible for any content herein. U.S. patents No. 5,715,174, No. 5,764,892, No. 5,802,280, No. 5,896,497, No. 6,087,937, No. 6,244,758, No. 6,269,392, No. 6,300,863, No. 6,507,914, No. 7,818,557, No. 7,818,803, and No. 7,945,709. Canadian patents No. 2,211,735, No. 2,284,806, and No. 2,205,370. U.K. patents No. EP0793823, No. GB2298302, and No. GB2338101. German patent No. 69512534. Australian patent No. 699045. Japanese patent No. JP4067035. The Toronto Stock Exchange has neither approved nor disapproved of the information contained in this news release.

For more information, please contact:

Public Relations:
Kate Ryan, Affect Strategies
kryan@affectstrategies.com or 212.398.9680

Investor Relations:
Dave Mason, CFA, TMX|Equicom
dmason@equicomgroup.com or 416.815.0700 x237

ABSOLUTE SOFTWARE CORPORATION
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ABSOLUTE SOFTWARE CORPORATION
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ABSOLUTE SOFTWARE CORPORATION
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ABSOLUTE SOFTWARE CORPORATION
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