Redwood Shores, CA (US), February 2014 – Saba, a global provider of next-generation cloud solutions for talent management, has provided an update on its business momentum and its progress on the restatement of historical financial results. "I am extremely pleased with our strong business momentum and the pace of our product innovation," said Shawn Farshchi, President and CEO, Saba.

"Cloud bookings during the first half of fiscal year 2014 hit a record high, as new Cloud bookings grew 63% in the second quarter of fiscal year 2014 over the same quarter in the prior year.  Enterprises continued to select Saba as their partner of choice, deploying our innovative technologies to address their talent-management needs.  We have over twenty issued or pending patents for our key technological advances such as machine learning, gamification, and domain partitioning. Our latest innovations include Recruiting@Work and The Intelligent Mentor."

While the Company is not yet in a position to report detailed financial results for the first six months of fiscal year 2014, which ended 30 November 2013, as a result of its pending restatement of certain historical financial results, the Company is providing the following selected financial metrics that are not expected to be impacted by the restatement:

• Total Cloud bookings (the annual contract value of Cloud subscription arrangements) grew 23% in the second quarter of fiscal year 2014 over the second quarter of fiscal year 2013 and 12% in the first half of fiscal year 2014 over the first half of fiscal year 2013.
• Cloud renewal rates remained in excess of 90% for the first half of fiscal year 2014.
• A total of 85 new Cloud customers were added in the first six months of fiscal year 2014, including BT, Telstra, Nokia Solutions Network, Mitsubishi Fuso Truck and Bus, Marvell, and Fairchild Semiconductor.
• Cash and cash equivalents were $23 million (after aggregate payments for the first six months of fiscal year 2014, which ended 30 November 2013, of approximately $9 million associated with the accounting review and restatement and $2 million associated with non-recurring and specified items) and total debt was $63 million on 30 November 2013.   
• Cash used from operations was $11 million for the first six months of fiscal year 2014, which ended 30 November 2013, (excluding approximately $9 million of costs associated with the accounting review and restatement and $2 million associated with non-recurring and specified items).  The Company typically generates more cash from renewals in the second half of the fiscal year due to the seasonality of renewal bookings.   

With over twenty issued or pending patents, Saba continues to enhance its next-generation talent-management platform, Saba Cloud, which puts the power of talent management in the hands of managers and employees.  During the first half of fiscal year 2014, key Saba Cloud innovations, centered on social, mobile, intelligence, learning, and end-user engagement, included

• Recruiting@Work, which extends the Saba Cloud talent-management suite to include employee acquisition. Recruiting@Work addresses three core requirements: predictive recruiting, collaborative hiring, and accelerated screening and onboarding.  These requirements allow organizations to quickly discover, hire, and onboard top talent. 
• TIM, The Intelligent Mentor, a personal assistant based on patent-pending machine- learning algorithms. Unique to Saba, TIM helps employees find the content, classes, and experts they need to complete their tasks and advance their career.
• Succession management with social and machine-learning capabilities to improve the identification and development of top-performing employees.
•  Prescriptive rules enhanced for certification and course assignments, as well as more robust assessment capabilities.
• Mobile applications updated with a new user interface and data encryption that add support for offline content consumption, checklist evaluations, messaging, and approvals.

Saba has also announced its expansion of KPMG’s appointment to include serving as Saba’s independent registered public accounting firm with respect to the audit of Saba’s financial statements for the fiscal year that ended 31 May 2012 and the audit of prior period financial statements required to complete its pending restatement.  

As previously announced, KPMG LLP had been appointed to serve as Saba’s independent registered public accounting firm with respect to the audit of its financial statements for the fiscal year that ended 31 May 2013 after the Company’s prior independent registered public accounting firm, Ernst & Young LLP, advised the Company that it would resign from serving as Saba’s independent registered public accounting firm effective upon completion of the audit of Saba's financial statements for the fiscal year that ended 31 May 2012, including the audit of the restated financial statements for the fiscal years that ended 31 May 2011 and 2010 and the review of the Company’s unaudited financial statements for the three months that ended 31 August 2012 and the six months that ended 30 November 2012. 

Saba’s decision to dismiss Ernst & Young and to engage KPMG as its sole independent registered public accounting firm reflects Saba’s desire to complete the pending restatement of its financial statements in an effective manner. Saba continues to work to complete the restatement of its financial statements so that it can file its overdue SEC periodic reports as soon as practicable.

Both the engagement of KPMG and the dismissal of Ernst & Young were approved by the Audit Committee of Saba's Board of Directors. The decision to change audit firms was not the result of any disagreement between Saba and Ernst & Young on any matter of accounting principle or practice, financial statement disclosure, or auditing scope or procedure.