Revenue and Earnings Per Share Expected to Exceed Previous Guidance

Pervasive Software® Inc. (NASDAQ:PVSW), a global value leader in embeddable data management and data integration software, today announced that financial results for the first quarter ending September 30, 2008 are expected to exceed the company's financial guidance previously provided on July 22, 2008.

Based on preliminary unaudited financial results, the company now expects total revenue for the first quarter to be in the range of $11.6 million to $11.9 million and GAAP-basis diluted earnings per share of $0.05 to $0.06, representing Pervasive's thirty-first consecutive quarter of profitability. Guidance for the first quarter given in the company's July 22, 2008 press release was for revenue in the range of $10.5 million to $11.5 million and GAAP-basis diluted earnings per share of $0.02 to $0.05. Revenue and GAAP-basis diluted earnings per share for the September quarter of last fiscal year were $10.2 million and $0.03, respectively.

On a non-GAAP basis, Pervasive expects to realize diluted earnings per share of $0.08 to $0.09. Guidance for the first quarter given in the company's July 22, 2008 press release was for non-GAAP diluted earnings per share of approximately $0.04 to $0.07. Non-GAAP diluted earnings per share for the September quarter of last fiscal year was $0.05. Non-GAAP results exclude amortization of purchased intangibles and stock-based compensation expense, and assume a non-GAAP effective tax rate of 34%.

Pervasive expects to report positive cash flow from operations with approximately $2.6 million in the first quarter of fiscal 2008, ending the quarter with approximately $46.8 million in cash and marketable securities representing approximately $2.47 per issued and outstanding share. Issued and outstanding shares of common stock as of September 30, 2008 totaled approximately 19.0 million.

Pervasive acquired approximately 146,000 shares of Pervasive common stock on the open market at a total cost of approximately $605,000, or approximately $4.13 weighted average price per share, during the quarter ended September 30, 2008. The Company has approximately $8.6 million authorized repurchase funds remaining under its $10.0 million stock repurchase program announced in March 2008. Depending on market conditions and other factors, such purchases may be commenced or suspended at any time without prior notice.

"We executed well during the quarter in both of our core product lines, database and integration, and we continue to enjoy profitable operations, positive cash flow and a strong balance sheet," said John Farr, president and CEO, Pervasive Software. “Our database revenues increased in the September quarter from the June quarter and from the September quarter of last year, aided in part by one relatively large transaction with a customer representing approximately $0.7 million in revenue during the September quarter.