Absolute Software Announces First Quarter Results for Fiscal 2005

Absolute Software Announces First Quarter Results for Fiscal 2005
http://www.absolute.com

Vancouver, BC, November 2, 2004--Absolute Software (TSX-VEN: ABT), the leading provider of PC Theft Recovery and Secure Asset Tracking(TM) solutions, today announced financial results for the first quarter of fiscal 2005 ("Q1'05"), ended September 30, 2004. All amounts are stated in Canadian dollars, unless otherwise indicated.

Highlights for the first quarter:

- Record sales contracts of $3.22 million (US$2.47 million), up 32% from $2.44 million (US$1.78 million) in Q1'04. - Revenue of $1.87 million, down 1% from $1.90 million in Q1'04. - Positive cash flow from operations totaling $563,000 versus cash used in operations of $691,000 in Q1'04. - Net loss of $1 million, or $0.06 per share, compared with a net loss of $0.7 million, or $0.04 per share in Q1'04.

"During the quarter, our continued efforts to become the industry standard in PC Theft Recovery and Secure Asset Tracking through our OEM partners and valued customers led to another milestone quarter for Absolute," said John Livingston, Chairman and Chief Executive Officer. "Our education market focus and compelling value proposition continued to provide the sales momentum to achieve positive cash flow from operations. Further, we made progress on our product, distribution and technology strategies, and believe we are well positioned to realize our cash positive guidance for fiscal 2005." Financial Review

Revenue for the quarter of $1.87 million was down 1% from $1.90 million in Q1'04. Revenue is determined by current and prior period sales contracts due to the deferral and amortization of revenue over the 1 to 4 year term of each contract. Accordingly, while sales contract levels increased in Q1'05 and Q4'04, the impact on current revenue was offset by the overall reduction in sales contracts during fiscal 2004. With sales contracts at record levels in Q1'05 and Q4'04, revenue is expected to begin to rise in the coming quarters. A reconciliation of sales contracts to the financial statements is included in Exhibit A attached hereto.

Regarding sales contract volume, Absolute achieved its second straight record quarter, generating Q1'05 sales contracts of $3.22 million - up 32% from $2.44 million in the same quarter last year. The increase is primarily due to the strength of the market focus and product strategies implemented during the fourth quarter of fiscal 2004. These strategies enabled Absolute to generate sales contracts in excess of total operating expenses in both Q1'05 and Q4'04, which in turn led to positive cash flow from operations in Q1'05 of $563,000.

Absolute reported a Q1'05 net loss of $1 million, or $0.06 per share, compared to a restated net loss of $0.7 million, or $0.04 per share, in Q1'04 primarily due to foreign exchange losses on translation of U.S. dollar cash and receivable balances. Note, prior period results were restated for changes in accounting policies relating to translation of deferred revenue and deferral of direct contract costs as disclosed in the company's Annual Report for fiscal 2004. The prior period restatement information is included in Exhibit A.

Management's discussion and analysis, consolidated interim financial statements and notes thereto for the first quarter financial results 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 contents of this release on November 1st, 2004 at 1:30PM PST / 4:30PM EST. All participants are requested to call 1-877-691-0878 and quote reservation number: 5321789. Playback service will be available on Absolute's website www.absolute.com following the conference call. From November 1 to 8, 2004, playback will also be available by calling 1-877-519-4471 and entering the replay pin number: 5321789.

About Absolute

Absolute(R) Software (TSX VEN: ABT) is the leader in PC Theft Recovery and Secure Asset Tracking(TM) with more than 325,000 subscriptions under management. The company's uniquely patented Computrace(R) technology is optimized for remote and mobile users. Absolute Software provides organizations with simple and cost effective solutions to help track their computing assets, deter computer loss, and reduce incurred liability costs. Absolute Software has a history of delivering first-to-market technology innovations along with a recovery guarantee making it one of the most reliable asset tracking and recovery solutions in the market today. The company also has key partnerships with global leaders, including, Dell, IBM, HP, Toshiba, Gateway, Phoenix Technologies, and Apple.

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements relate to, among other things, plans and timing for the introduction or enhancement 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.

The TSX Venture Exchange has neither approved nor disapproved of the information contained in this news release.

For further information

please contact: John Livingston, Chief Executive Officer, jliving@absolute.com or Rob Chase, Chief Financial Officer, rchase@absolute.com, or Phone: (604) 730-9851 Website: http://www.absolute.com