ADVENT SOFTWARE INC /DE/ - FORM 10-Q

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended March 31, 2011

o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number: 0-26994

ADVENT SOFTWARE, INC.

(Exact name of registrant as specified in its charter)

Delaware		94-2901952
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

600 Townsend Street, San Francisco, California 94103

(Address of principal executive offices and zip code)

(415) 543-7696

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer x

Non-accelerated filer o		Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The number of shares of the registrant’s Common Stock outstanding as of April 29, 2011 was 52,424,099.

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INDEX

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets
	Condensed Consolidated Statements of Operations
	Condensed Consolidated Statements of Cash Flows
	Notes to Condensed Consolidated Financial Statements
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.	Quantitative and Qualitative Disclosures About Market Risk
Item 4.	Controls and Procedures
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings
Item 1A.	Risk Factors
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.	Defaults Upon Senior Securities
Item 4.	Removed and Reserved
Item 5.	Other Information
Item 6.	Exhibits
Signatures

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ADVENT SOFTWARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	March 31			December 31
	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	74,301		$	81,948
Short-term marketable securities	58,936			70,075
Accounts receivable, net	50,199			49,960
Deferred taxes, current	16,441			16,358
Prepaid expenses and other	20,572			17,864
Total current assets	220,449			236,205
Property and equipment, net	40,446			41,524
Goodwill	163,860			145,580
Other intangibles, net	31,610			19,772
Long-term marketable securities	7,633			—
Deferred taxes, long-term	34,641			33,591
Other assets	11,124			12,059
Noncurrent assets of discontinued operation	2,029			2,095

Total assets	$	511,792		$	490,826

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	6,095		$	6,737
Accrued liabilities	29,287			34,080
Deferred revenues	150,096			147,896
Income taxes payable	3,829			1,691
Current liabilities of discontinued operation	1,644			165
Total current liabilities	190,951			190,569
Deferred revenue, long-term	6,426			6,337
Other long-term liabilities	16,859			14,844
Noncurrent liabilities of discontinued operation	4,937			5,228

Total liabilities	219,173			216,978

Commitments and contingencies (See Note 14)

Stockholders’ equity:
Common stock	524			520
Additional paid-in capital	418,074			411,600
Accumulated deficit	(137,159		)	(146,887		)
Accumulated other comprehensive income	11,180			8,615
Total stockholders’ equity	292,619			273,848

Total liabilities and stockholders’ equity	$	511,792		$	490,826

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ADVENT SOFTWARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	Three Months Ended March 31
	2011		2010

Net revenues:
Recurring revenues	$	67,327	$	60,119
Non-recurring revenues	7,999		6,569

Total net revenues	75,326		66,688

Cost of revenues:
Recurring revenues	14,788		12,427
Non-recurring revenues	7,239		6,657
Amortization of developed technology	1,516		1,516

Total cost of revenues	23,543		20,600

Gross margin	51,783		46,088

Operating expenses:
Sales and marketing	18,184		16,860
Product development	12,642		12,061
General and administrative	9,084		9,551
Amortization of other intangibles	320		315
Restructuring charges	26		29

Total operating expenses	40,256		38,816

Income from continuing operations	11,527		7,272

Interest and other income (expense), net	31		(706		)

Income from continuing operations before income taxes	11,558		6,566
Provision for income taxes	3,654		2,323

Net income from continuing operations	$	7,904	$	4,243

Discontinued operation:
Net income (loss) from discontinued operation (net of applicable taxes of $1,344 and $(33), respectively)	1,824		(48		)

Net income	$	9,728	$	4,195

Basic net income (loss) per share:
Continuing operations	$	0.15	$	0.08
Discontinued operation	0.03		(0.00		)
Total operations	$	0.19	$	0.08

Diluted net income (loss) per share:
Continuing operations	$	0.14	$	0.08
Discontinued operation	0.03		(0.00		)
Total operations	$	0.18	$	0.08

Weighted average shares used to compute net income per share:
Basic	52,201		51,748
Diluted	55,339		54,277

The accompanying notes are an integral part of these condensed consolidated financial statements.

Net income per share is based on actual calculated values and totals may not sum due to rounding.

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ADVENT SOFTWARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months Ended March 31
	2011				2010
Cash flows from operating activities:
Net income	$		9,728		$	4,195
Adjustment to net income for discontinued operation	(1,824			)	48
Net income from continuing operations	7,904				4,243

Adjustments to reconcile net income to net cash provided by operating activities from continuing operations:
Stock-based compensation	4,459				4,285
Depreciation and amortization	4,417				4,331
Provision for doubtful accounts	71				25
Reduction of sales returns	(706			)	(168		)
Deferred income taxes	(72			)	(9		)
Other	38				111
Effect of statement of operations adjustments	8,207				8,575
Changes in operating assets and liabilities:
Accounts receivable	509				2,031
Prepaid and other assets	(1,453			)	1,692
Accounts payable	(670			)	4,435
Accrued liabilities	(5,773			)	(6,404		)
Deferred revenues	961				(3,974		)
Income taxes payable	1,908				1,938
Effect of changes in operating assets and liabilities	(4,518			)	(282		)

Net cash provided by operating activities from continuing operations	11,593				12,536

Cash flows from investing activities:
Cash used in acquisitions, net of cash acquired	(24,648			)	(4,719		)
Purchases of property and equipment	(1,436			)	(4,308		)
Capitalized software development costs	(1,612			)	(1,197		)
Purchases of marketable securities	(26,140			)	(3,000		)
Sales and maturities of marketable securities	29,408				3,000

Net cash used in investing activities from continuing operations	(24,428			)	(10,224		)

Cash flows from financing activities:
Proceeds from common stock issued from exercises of stock options	3,161				3,113
Withholding taxes related to equity award net share settlement	(2,608			)	(534		)
Excess tax benefits from stock-based compensation	1,344				—
Repurchase of common stock	—				(10,542		)

Net cash provided by (used in) financing activities from continuing operations	1,897				(7,963		)

Net cash transferred from (to) discontinued operation	3,078				(54		)

Effect of exchange rate changes on cash and cash equivalents	213				(157		)

Net change in cash and cash equivalents from continuing operations	(7,647			)	(5,862		)
Cash and cash equivalents of continuing operations at beginning of period	81,948				57,877

Cash and cash equivalents of continuing operations at end of period	$		74,301		$	52,015

Supplemental disclosure of cash flow information
Cash flow from discontinued operation:
Net cash provided by (used in) operating activities	$	74			$	(319	)
Net cash provided by investing activities	3,004				—
Net cash transferred (to) from continuing operations	(3,078			)	54
Effect of exchange rates on cash and cash equivalents	—				(1		)
Net change in cash and cash equivalents from discontinued operations	—				(266		)
Cash and cash equivalents of discontinued operation at beginning of period	—				266
Cash and cash equivalents of discontinued operation at end of period	$	—			$	—

The cash flows from the discontinued operation, as presented in the condensed consolidated statement of cash flows, relate to the operations of MicroEdge.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ADVENT SOFTWARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1—Basis of Presentation

The condensed consolidated financial statements include the accounts of Advent Software, Inc. (“Advent” or the “Company”) and its wholly owned subsidiaries. All inter-company balances and transactions have been eliminated.

Advent has prepared these condensed consolidated financial statements in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial information. Certain information and footnote disclosures included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted in these interim statements pursuant to such SEC rules and regulations. These interim financial statements should be read in conjunction with the audited financial statements and related notes included in Advent’s Annual Report on Form 10-K for the year ended December 31, 2010. Interim results are not necessarily indicative of the results to be expected for the full year, and no representation is made thereto.

On December 13, 2010, we announced that our Board of Directors declared a two-for-one stock split of our common stock, payable in the form of a 100% stock dividend. On January 18, 2011, one additional share of common stock was distributed for each share held of record as of the close of business on January 3, 2011. Unless otherwise indicated, all references to number of shares and to per share information (except shares authorized) have been adjusted to reflect the stock split on a retroactive basis.

Effective with the first quarter of 2011, the Company changed its presentation of the components of net revenues to recurring and non-recurring to reflect the recurring nature of the Company’s business model. Recurring revenues are comprised of term license, maintenance from perpetual arrangements and other recurring revenues. Non-recurring revenues are comprised of perpetual license fees, professional services and other revenues. Prior periods have been reclassified to reflect this change.

These condensed consolidated financial statements include, in the opinion of management, all adjustments necessary to state fairly the financial position and results of continuing operations for each interim period shown. All such adjustments occur in the ordinary course of business and are of a normal, recurring nature.

Note 2—Recent Accounting Pronouncements

There have been no recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 31, 2011, as compared to the recent accounting pronouncements described in Advent’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010, that are of significance, or potential significance, to the Company.

Note 3—Cash Equivalents and Marketable Securities

At March 31, 2011, cash equivalents and marketable securities primarily consisted of money market mutual funds, US government and US Government Sponsored Entities (GSE’s) and high credit quality corporate debt securities that are guaranteed by the US government. The Company’s marketable securities are classified as available-for-sale, with long-term investments, if applicable, having a maturity date greater than one year from the date of the balance sheet.

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Marketable securities are summarized as follows (in thousands):

					Gross			Gross
					Unrealized			Unrealized
			Gross		Losses			Losses
	Amortized		Unrealized		Less than			12 Months		Aggregate
Balance at March 31, 2011	Cost		Gains		12 Months			or Longer		Fair Value

Corporate debt securities	$	21,219	$	8	$	(1	)	$	—	$	21,226
US government debt securities	45,330		14		(1		)	—		45,343
Total	$	66,549	$	22	$	(2	)	$	—	$	66,569

					Gross			Gross
					Unrealized			Unrealized
			Gross		Losses			Losses
	Amortized		Unrealized		Less than			12 Months		Aggregate
Balance at December 31, 2010	Cost		Gains		12 Months			or Longer		Fair Value

Corporate debt securities	$	22,597	$	6	$	(3	)	$	—	$	22,600
US government debt securities	47,466		12		(3		)	—		47,475
Total	$	70,063	$	18	$	(6	)	$	—	$	70,075

The following table summarizes marketable securities with unrealized losses by contractual maturity dates at March 31, 2011 (in thousands):

	Less than 12 months					Greater than 12 months				Total
			Gross					Gross				Net
	Amortized		Unrealized			Amortized		Unrealized		Amortized		Unrealized
	Cost		Losses			Cost		Losses		Cost		(Losses)/Gains

Corporate debt securities	$	2,033	$	(1	)	$	—	$	—	$	2,033	$	(1	)
US government debt securities	5,297		(1		)	—		—		5,297		(1		)
Total	$	7,330	$	(2	)	$	—	$	—	$	7,330	$	(2	)

Advent regularly reviews its investment portfolio to identify and evaluate investments that have indications of possible impairment. Factors considered in determining whether a loss is temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition, credit quality and near-term prospects of the investee, and Advent’s ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.

The gross unrealized losses related to investments are primarily due to a decrease in the fair value of debt securities as a result of an increase in interest rates since the acquisition of the securities. For fixed income securities that have unrealized losses as of March 31, 2011, the Company has determined that (i) it does not have the intent to sell any of these investments and (ii) it is not more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. In addition, the Company has evaluated these fixed income securities and has determined that no credit losses exist. As of March 31, 2011, all securities in an unrealized loss position have been in an unrealized loss position for less than one year. The Company’s management has determined that the unrealized losses on its fixed income securities as of March 31, 2011 were temporary in nature.

During the first quarter of 2011 and 2010, $29.4 million and $3.0 million, respectively, of marketable securities matured, which did not have any associated gross realized gains or losses.

Note 4—Derivative Financial Instruments

The Company enters into foreign currency forward contracts with financial institutions to reduce the risk that the Company’s cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations. These forward contracts are not designated for trading or speculative purposes.

The Company uses foreign currency forward contracts to hedge a portion of the balances denominated in Euro, Swedish Krona, British Pounds, South African Rand and Norwegian Kroner. These derivative instruments are not designated as hedging instruments. The Company recognizes gains and losses on these contracts, as well as related costs, in “Interest and other income (expense), net” along with the gains and losses of the related hedged items. The Company records the fair value of derivative instruments as either “Prepaid expenses and other” or “Accrued liabilities” on the accompanying condensed consolidated balance sheets based on current market rates.

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At March 31, 2011, net derivative assets associated with the forward contracts of approximately $14,000 were included in “Prepaid expenses and other.” At March 31, 2011, net derivative liabilities associated with forward contracts of approximately $6,000 were included in “Accrued liabilities.” The effect of the derivative financial instruments on the condensed consolidated statements of operations for the three months ended March 31, 2011 was to reduce foreign exchange gains by approximately $90,000.

As of March 31, 2011, the Company had the following forward contracts outstanding to sell the following notional amounts (in thousands):

	March 31, 2011

Euro (EURO)	€	1,800
South AfricanRand (ZAR)	R		2,200

Note 5 — Acquisition of Syncova Solutions Ltd. (“Syncova”)

On February 28, 2011, Advent acquired all the outstanding shares of Syncova, a privately held, United Kingdom-based company, which now operates as a wholly-owned subsidiary of the Company. Syncova provides margin management and financing software to hedge funds and prime brokers. Syncova’s solutions enable hedge funds and prime brokers to calculate expected margin, reconcile and control differences. Syncova’s product offerings will be a part of Advent’s solution for the alternative and high end asset management markets.

The total purchase price of $24.6 million, net of cash acquired of $0.8 million was paid in cash. Of the proceeds, $4.8 million will be held in escrow subject to claims through February 2013. The Company recognized $0.3 million in recurring revenues and $0.4 million of operating expenses that were reflected in the Company’s condensed consolidated statement of operations for the three months ended March 31, 2011.

Preliminary Purchase Price Allocation

The acquisition was accounted for in accordance with the purchase method of accounting. The total purchase price was allocated to net tangible and intangible assets based on their estimated fair values as of February 28, 2011. The excess purchase price over the value of the net tangible and identifiable intangible assets was recorded as goodwill. The allocation of the purchase price is preliminary because Syncova’s final tax filings are not yet complete. The preliminary allocation of the purchase price and the estimated useful lives associated with certain assets was as follows:

		Preliminary
	Estimated	Purchase Price
	Useful Life	Allocation
	(Years)	(in thousands)
Identifiable intangible assets:
Developed research and development	6	$	8,580
In-process research and development	*	1,133
Customer relationships	8	2,104
Non-competition agreements	3	162
Goodwill		15,991
Deferred tax asset		1,128
Deferred tax liability		(2,996		)
Deferred revenues		(2,035		)
Net tangible assets		581

Purchase price, net of cash acquired		$	24,648

* In-process research and development relates to costs attributed to a pending product version release expected in the second quarter of 2011. Once released, the Company will evaluate the useful life of the technology and amortize such costs accordingly on a straight-line basis.

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Tangible assets and current liabilities

Syncova’s tangible assets and liabilities as of February 28, 2011 were reviewed and adjusted to their fair value as necessary. Current assets are primarily comprised of accounts receivable and deferred tax assets. Non-current assets were primarily comprised of facility deposits and fixed assets. Current liabilities were fair valued and include accrued liabilities, deferred tax assets and deferred revenues. In connection with the acquisition of Syncova, Advent assumed Syncova’s contractual obligations related to its deferred revenues. Syncova’s deferred revenues were derived primarily from term license arrangements, and service and maintenance related to perpetual licenses. As a result, Advent recorded an adjustment to reduce the carrying value of deferred revenues to represent the Company’s estimate of the fair value of the contractual obligations assumed.

Identifiable intangible assets

Developed research and development relates to Syncova’s products that have reached technological feasibility. Advent is amortizing the fair value of these assets to cost of revenues in the consolidated statement of operations on a straight-line basis over their estimated lives of 6 years.

In-process research and development relates to costs attributed to a pending product version release expected in the second quarter of 2011. Once released, the Company will evaluate the useful life of the technology and amortize such costs accordingly on a straight-line basis.

Customer relationships represent existing contracts and the underlying customer relationships. Advent is amortizing the fair value of these assets to operating expenses in the consolidated statement of operations on a straight-line basis over an estimated life of 8 years.

Non-competition agreements represent agreements which allow Advent to operate without competition from specified Syncova employees. Advent is amortizing the fair value of this asset to operating expenses in the consolidated statement of operations on a straight-line basis over an estimated life of 3 years.

Goodwill

Approximately $16.0 million of the purchase price has been allocated to goodwill. Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and intangible assets. The goodwill was attributed to the premium paid for the opportunity to better leverage Syncova’s technology utilizing Advent’s broader market reach in order to achieve greater long-term growth opportunities.

In accordance with the purchase method of accounting, goodwill will not be amortized but instead will be tested for impairment at least annually or more frequently if certain indicators are present as part of the Advent Investment Management segment. In the event that management determines that the fair value of goodwill has become impaired, the Company would incur an accounting charge for the amount of impairment during the fiscal quarter in which the determination is made.

Note 6—Discontinued Operation

During 2009, the Company decided to discontinue the operations of its MicroEdge subsidiary, which provided products and services to the not-for-profit business community, to concentrate on its core investment management business. In connection with this decision, the Company completed the sale of MicroEdge on October 1, 2009 to an affiliate of Vista Equity Partners III, LLC (“Purchaser”). The Company sold net assets in MicroEdge totaling $3.0 million. The total consideration received by the Company in connection with the divestiture was approximately $30.0 million in cash, of which $27.0 million in cash was paid on the closing date. The remaining $3.0 million of the Purchase Price was held in escrow and was released to the Company in March 2011, resulting in the Company recording a gain of $1.7 million in “net income from discontinued operation, net of applicable taxes” in the first quarter of 2011.

As part of the disposition, certain assets and obligations of the Company’s discontinued operation were excluded from the sale and are reflected on the Company’s balance sheet as of March 31, 2011 and December 31, 2010. Assets excluded from the sale include cash and deferred tax assets. Liabilities excluded from the sale include sales tax and other tax-related obligations, future payments related to a two year service and maintenance agreement, and continuing lease obligations included as part of the restructuring noted below.

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In connection with the sale of MicroEdge, the Company vacated its MicroEdge facilities in New York and entered into a sub-lease agreement with the Purchaser, whereby the Purchaser contracted to sub-lease the premises for two years with the option to extend the sub-lease term through the end of the lease term in 2018. The sub-lease agreement was amended during the first quarter of 2011. Under the amended sub-lease agreement, the Purchaser will sub-lease the premises through the end of the lease term, with an option to terminate. As a result of the amendment to the sub-lease agreement, the Company revised its facility exit assumptions and recorded a net restructuring accrual adjustment benefit of $166,000 in its discontinued operations results during the first quarter of 2011.

The following table sets forth an analysis of the components of the restructuring charges related to the Company’s discontinued operation and the payments and non-cash charges made against the accrual during the first quarter of 2011 (in thousands):

	Facility Exit
	Costs

Balance of restructuring accrual at December 31, 2010	$	5,249

Restructuring benefit	(208		)
Cash payments	(12		)
Adjustment of prior restructuring costs	42

Balance of restructuring accrual at March 31, 2011	$	5,071

Net revenues and net income from the Company’s discontinued operation were as follows for the following periods (in thousands):

	Three Months Ended March 31
	2011		2010

Net revenues	$	—	$	—

Income (loss) from operation of discontinued operation (net of applicable taxes of $65 and $(13), respectively)	$	99	$	(18	)

Gain (loss) on disposal of discontinued operation (net of applicable taxes of $1,279 and $(20), respectively)	1,725		(30		)

Net income (loss) from discontinued operation	$	1,824	$	(48	)

The following table sets forth the assets and liabilities of the MicroEdge discontinued operation included in the condensed consolidated balance sheets of the Company (in thousands):

	March 31		December 31
	2011		2010

Assets:
Deferred taxes, long-term	$	2,029	$	2,095
Total noncurrent assets of discontinued operation	$	2,029	$	2,095

Liabilities:
Total current liabilities of discontinued operation	$	1,644	$	165

Accrued restructuring, long-term portion	$	4,937	$	5,228
Total noncurrent liabilities of discontinued operation	$	4,937	$	5,228

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Note 7—Stock-Based Compensation

Equity Award Activity

A summary of the status of the Company’s stock option and stock appreciation right (“SAR”) activity for the period presented follows:

					Weighted
			Weighted		Average	Aggregate
	Number of		Average		Remaining	Intrinsic
	Shares		Exercise		Contractual Life	Value
	(in thousands)		Price		(in years)	(in thousands)

Outstanding at December 31, 2010	6,780		$	15.73
Options & SARs granted	89		$	27.64
Options & SARs exercised	(348	)	$	12.27
Options & SARs canceled	(10	)	$	20.21
Outstanding at March 31, 2011	6,511		$	16.07	6.04	$	82,195
Exercisable at March 31, 2011	4,151		$	13.69	4.79	$	62,269

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the Company’s closing stock price of $28.69 as of March 31, 2011 for options and SARs that were in-the-money as of that date.

The weighted average grant date fair value of options and SARs granted (as determined under ASC 718), total intrinsic value of options and SARs exercised and cash received from option exercises during the first quarter of 2011 and 2010 were as follows (in thousands, except weighted average grant date fair value):

	Three Months Ended March 31
	2011		2010
Options and SARs
Weighted average grant date fair value	$	10.14	$	7.68
Total intrinsic value of awards exercised	$	5,892	$	3,594

Options
Cash received from exercises	$	3,161	$	3,113

The Company settles exercised stock options and SARs with newly issued common shares.

A summary of the status of the Company’s restricted stock unit (“RSU”) activity for the three months ended March 31, 2011 is as follows:

			Weighted
	Number of		Average
	Shares		Grant Date
	(in thousands)		Fair Value

Outstanding and unvested at December 31, 2010	1,308		$	19.58
RSUs granted	10		$	29.16
RSUs vested	(206	)	$	18.40
RSUs canceled	(12	)	$	19.75
Outstanding and unvested at March 31, 2011	1,100		$	19.88

The weighted average grant date fair value was determined based on the closing market price of the Company’s common stock on the date of the award. The aggregate intrinsic value of RSUs outstanding at March 31, 2011 was $31.5 million, using the closing price of $28.69 per share as of March 31, 2011.

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Stock-Based Compensation Expense

Stock-based employee compensation expense recognized on Advent’s condensed consolidated statement of operations for the first quarter of 2011 and 2010 was as follows (in thousands):

	Three Months Ended March 31
	2011			2010
Statement of operations classification
Cost of recurring revenues	$	503		$	414
Cost of non-recurring revenues	247			290
Total cost of revenues	750			704

Sales and marketing	1,500			1,298
Product development	1,175			1,209
General and administrative	1,034			1,074
Total operating expenses	3,709			3,581

Total stock-based compensation expense	4,459			4,285

Tax effect on stock-based employee compensation	(1,862		)	(1,926		)

Effect on net income from continuing operations, net of tax	$	2,597		$	2,359

Advent capitalized stock-based employee compensation expense of $0.1 million during first quarter of 2011 associated with the Company’s software development, internal-use software and professional services implementation projects.

As of March 31, 2011, total unrecognized compensation cost related to unvested awards not yet recognized under all equity compensation plans, adjusted for estimated forfeitures, was $26.0 million and is expected to be recognized through the remaining vesting period of each grant, with a weighted average remaining period of 2.2 years.

Valuation Assumptions

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option valuation model and the straight-line attribution approach with the following assumptions:

	Three Months Ended March 31
Stock Options & SARs	2011	2010
Expected volatility	37.2% - 39.6%	36.1% - 37.8%
Expected life (in years)	4.95	4.96
Risk-free interest rate	1.9% - 2.4%	2.5% - 2.7%
Expected dividends	None	None

The expected stock price volatility was determined based on an equally weighted average of historical and implied volatility of the Company’s common stock. Advent believes that a blend of implied volatility and historical volatility is more reflective of the market conditions and a better indicator of expected volatility than using purely historical volatility. The expected life was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The risk-free interest rate is based on the US Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. The dividend yield assumption is based on the Company’s history of not paying dividends and the resultant future expectation of dividend payouts.

Note 8—Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income by the sum of weighted average number of common shares outstanding and the potential number of dilutive common shares outstanding during the period, excluding the effect of any anti-dilutive securities. Potential common shares consist of the shares issuable upon the exercise of stock options and

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SARs, the vesting of restricted stock awards and from withholdings associated with the Company’s employee stock purchase plan. Potential common shares are reflected in diluted earnings per share by application of the treasury stock method, which in the current period includes consideration of unamortized stock-based compensation and windfall tax benefits.

The following table sets forth the computation of basic and diluted net income (loss) per share for continuing operations and the Company’s discontinued operation (in thousands, except per-share data):

	Three Months Ended March 31
	2011		2010
Numerator:
Net income (loss):
Continuing operations	$	7,904	$	4,243
Discontinued operation	1,824		(48		)
Total operations	$	9,728	$	4,195

Denominator:
Denominator for basic net income (loss) per share- weighted average shares outstanding	52,201		51,748

Dilutive common equivalent shares: Employee stock options and other	3,138		2,529

Denominator for diluted net income (loss) per share- weighted average shares outstanding, assuming exercise of potential dilutive common shares	55,339		54,277

Net income (loss) per share: (1)
Basic:
Continuing operations	$	0.15	$	0.08
Discontinued operation	0.03		(0.00		)
Total operations	$	0.19	$	0.08

Diluted:
Continuing operations	$	0.14	$	0.08
Discontinued operation	0.03		(0.00		)
Total operations	$	0.18	$	0.08

(1) Net income per share is based on actual calculated values and totals may not sum due to rounding.

For the first quarters of 2011 and 2010, weighted average stock options, SARs and RSUs of approximately 0.3 million and 2.9 million, respectively, were excluded from the calculation of diluted net income (loss) per share because their inclusion would have been anti-dilutive.

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Note 9—Goodwill

The changes in the carrying value of goodwill for the three months ended March 31, 2011 were as follows (in thousands):

	Goodwill

Balance at December 31, 2010	$	145,580
Additions from Syncova acquisition	15,991
Translation adjustments	2,289

Balance at March 31, 2011	$	163,860

Foreign currency translation adjustments totaling $2.3 million reflect the general weakening of the US dollar versus the Pound Sterling, Euro and other European currencies during the first quarter of 2011.

Note 10—Other Intangibles

The following is a summary of other intangibles as of March 31, 2011 (in thousands):

	Weighted
	Average
	Amortization	Other					Other
	Period	Intangibles,		Accumulated			Intangibles,
	(Years)	Gross		Amortization			Net

Purchased technologies	5.0	$	36,728	$	(19,677	)	$	17,051
In-process research and development	*	1,122		—			1,122
Product development costs	3.0	15,410		(10,077		)	5,333

Developed technology sub-total		53,260		(29,754		)	23,506

Customer relationships	6.0	29,712		(22,285		)	7,427
Other intangibles	4.1	1,751		(1,074		)	677

Other intangibles sub-total		31,463		(23,359		)	8,104

Balance at March 31, 2011		$	84,723	$	(53,113	)	$	31,610

The following is a summary of other intangibles as of December 31, 2010 (in thousands):

	Weighted
	Average
	Amortization	Other					Other
	Period	Intangibles,		Accumulated			Intangibles,
	(Years)	Gross		Amortization			Net

Purchased technologies	5.0	$	28,118	$	(18,730	)	$	9,388
Product development costs	3.0	13,714		(9,477		)	4,237
Developed technology sub-total		41,832		(28,207		)	13,625

Customer relationships	6.0	27,589		(22,006		)	5,583
Other intangibles	4.0	1,585		(1,021		)	564

Other intangibles sub-total		29,174		(23,027		)	6,147

Balance at December 31, 2010		$	71,006	$	(51,234	)	$	19,772

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The changes in the carrying value of other intangibles during the three months ended March 31, 2011 were as follows (in thousands):

	Other					Other
	Intangibles,		Accumulated			Intangibles,
	Gross		Amortization			Net

Balance at December 31, 2010	$	71,006	$	(51,234	)	$	19,772
Additions	13,675		—			13,675
Amortization	—		(1,836		)	(1,836		)
Translation adjustments	42		(43		)	(1		)

Balance at March 31, 2011	$	84,723	$	(53,113	)	$	31,610

Additions to intangible assets of $13.7 million during the three months ended March 31, 2011 include additions of $12.0 million from the acquisition of Syncova and capitalized product development costs of approximately $1.7 million.

Based on the carrying amount of intangible assets as of March 31, 2011, the estimated future amortization is as follows (in thousands):

	Nine
	Months Ended
	December 31		Years Ended December 31
	2011		2012		2013		2014		2015		Thereafter		Other (1)		Total
Estimated future amortization of:
Developed technology	$	5,604	$	6,660	$	4,856	$	1,888	$	1,700	$	1,676	$	—	$	22,384
In-process research and development	—		—		—		—		—		—		1,122		1,122
Other intangibles	1,119		1,492		1,447		1,267		1,259		1,520		—		8,104

Total	$	6,723	$	8,152	$	6,303	$	3,155	$	2,959	$	3,196	$	1,122	$	31,610

(1) In-process research and development relates to costs attributed to a pending product version release expected in the second quarter of 2011. Once released, the Company will evaluate the useful life of the technology and amortize such costs accordingly on a straight-line basis.

Note 11—Balance Sheet Detail

The following is a summary of prepaid expenses and other (in thousands):

	March 31		December 31
	2011		2010

Prepaid commission	$	5,473	$	5,729
Prepaid contract expense	7,360		6,043
Prepaid royalty	1,043		803
Other	6,696		5,289
Total prepaid expenses and other	$	20,572	$	17,864

The following is a summary of other assets (in thousands):

	March 31		December 31
	2011		2010

Long-term investment	$	500	$	500
Long-term prepaid commissions	3,519		3,756
Deposits	2,878		2,889
Prepaid contract expense, long-term	4,227		4,914
Total other assets	$	11,124	$	12,059

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Long-term investment is an equity investment in a privately held company. This equity investment is carried at the lower of cost or fair value at March 31, 2011 and December 31, 2010. Deposits include restricted cash balances of $1.4 million at each of March 31, 2011 and December 31, 2010 related to the Company’s San Francisco headquarters, and facilities in Boston and New York.

The following is a summary of accrued liabilities (in thousands):

	March 31		December 31
	2011		2010

Salaries and benefits payable	$	14,429	$	22,236
Accrued restructuring, current portion	793		809
Other	14,065		11,035
Total accrued liabilities	$	29,287	$	34,080

Accrued restructuring charges are discussed further in Note 13, “Restructuring Charges”. Other accrued liabilities include accruals for royalties, sales and business taxes, and other miscellaneous items.

The following is a summary of other long-term liabilities (in thousands):

	March 31		December 31
	2011		2010

Deferred rent	$	11,038	$	11,123
Accrued restructuring, long-term portion	333		531
Deferred taxes, long-term	3,466		308
Other	2,022		2,882
Total other long-term liabilities	$	16,859	$	14,844

Note 12—Comprehensive Income and Accumulated Other Comprehensive Income

The components of comprehensive income (loss) were as follows for the periods presented (in thousands):

	Three Months Ended March 31
	2011		2010

Net income from continuing operations	$	7,904	$	4,243
Unrealized gain on marketable securities, net of taxes	6		60
Foreign currency translation adjustment	2,558		(2,523		)
Comprehensive income from continuing operations	10,468		1,780
Comprehensive income (loss) from discontinued operation	1,825		(48		)
Total comprehensive income	$	12,293	$	1,732

The Company recorded taxes of $3,000 and $41,000 during the first quarter of 2011 and 2010, respectively, related to the marketable securities component of other comprehensive income.

The components of accumulated other comprehensive income, net of related taxes, were as follows (in thousands):

	March 31		December 31
	2011		2010

Accumulated net unrealized gain on marketable securities	$	13	$	7
Accumulated foreign currency translation adjustments	11,167		8,608
Accumulated other comprehensive income, net of taxes	$	11,180	$	8,615

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Note 13—Restructuring Charges

Minor restructuring initiatives were implemented in the Company’s Advent Investment Management segment since 2006 to reduce costs and improve operating efficiencies. These initiatives have resulted in restructuring charges comprised primarily of costs related to properties abandoned in connection with facilities consolidation and associated write-down of leasehold improvements. Advent’s restructuring charges included accruals for estimated losses on facility costs based on the Company’s contractual obligations net of estimated sublease income. Advent reassesses this liability periodically based on market conditions.

During the first quarter of 2011 and 2010, Advent recorded restructuring charges of $26,000 and $29,000, respectively, which related to the present value amortization of facility exit obligations, partially offset by adjustments to other facility exit assumptions.

The following table sets forth an analysis of the components of the payments and restructuring charges made against the accrual during the first quarter of 2011 (in thousands):

	Facility Exit
	Costs

Balance of restructuring accrual at December 31, 2010	$	1,340
Restructuring charges	17
Cash payments	(241		)
Adjustment of prior restructuring costs	9
Balance of total restructuring accrual at March 31, 2011	$	1,125

Of the remaining restructuring accrual of $1.1 million at March 31, 2011, $0.8 million and $0.3 million are included in accrued liabilities and other long-term liabilities, respectively, on the accompanying condensed consolidated balance sheet. The remaining excess facility costs of $1.1 million are stated at estimated fair value, net of estimated sub-lease income of approximately $1.1 million. Advent expects to pay the remaining obligations associated with the vacated facilities over the remaining lease terms, which expire on various dates through 2012.

Note 14—Commitments and Contingencies

Lease Obligations

Advent leases office space and equipment under non-cancelable operating lease agreements, which expire at various dates through June 2025. Some operating leases contain escalation provisions for adjustments in the consumer price index. Advent is responsible for maintenance, insurance, and property taxes. Excluding leases and associated sub-leases for MicroEdge facilities, as of March 31, 2011, Advent’s remaining operating lease commitments through 2025 are approximately $64.4 million, net of future minimum rental receipts of $1.2 million to be received under non-cancelable sub-leases.

In connection with the sale of MicroEdge, the Company entered into a sub-lease agreement with the Purchaser, whereby Purchaser will sub-lease approximately 24,000 square feet of the 29,000 square feet of office space located at 619 West 54th Street in New York, New York from the Company. The Purchaser will sub-lease the premises through the end of the lease term in 2018, with an option to terminate early. The sub-lease agreement became effective upon the close of sale of MicroEdge on October 1, 2009. The operating lease commitment related to this discontinued operation facility is approximately $5.8 million, less estimated sub-lease income of $3.3 million. With the exception of the MicroEdge facilities in New York City, the leases related to MicroEdge have been transferred to the Purchaser.

Indemnifications

As permitted or required under Delaware law and to the maximum extent allowable under that law, Advent has certain obligations to indemnify its current and former officers and directors for certain events or occurrences while the officer or director is, or was serving, at Advent’s request in such capacity. These indemnification obligations are valid as long as the director or officer acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The maximum potential amount of future payments Advent could be required to make under these indemnification obligations is unlimited; however, Advent has a director and officer insurance policy that mitigates Advent’s exposure and enables Advent to recover a portion of any future amounts paid. The Company believes the estimated fair value of these indemnification obligations is minimal.

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Legal Contingencies

On March 8, 2005, certain of the former shareholders of Kinexus Corporation and the shareholders’ representative filed suit against Advent in the Delaware Chancery Court. The complaint alleges that Advent breached the Agreement and Plan of Merger dated as of December 31, 2001 pursuant to which Advent acquired all of the outstanding shares of Kinexus due principally to the fact that no amount was paid by Advent on an earn-out of up to $115 million. The earn-out, which was payable in cash or stock at the election of Advent, was based upon Kinexus meeting certain revenue targets in both 2002 and 2003. The complaint seeks unspecified compensatory damages, an accounting and restitution for unjust enrichment. Advent advised the shareholders’ representative in January 2003 that the earn-out terms had not been met in 2002 and accordingly no earn-out was payable for 2002 and would not be payable for 2003. After nearly two years of inactivity, plaintiff contacted Advent in November 2010, seeking to continue discovery in the case. Advent has filed a motion to dismiss the case for plaintiff’s failure to prosecute in a timely manner and a ruling on the motion is pending. Advent disputes the plaintiffs’ claims and believes that it has meritorious defenses and intends to vigorously defend this action. Management has not determined that any potential loss associated with this litigation is either probable or reasonably estimable at this time and accordingly has not accrued any amounts for any potential loss.

From time to time, Advent is involved in claims and legal proceedings that arise in the ordinary course of business. Based on currently available information, management does not believe that the ultimate outcome of these unresolved matters, individually and in the aggregate, is likely to have a material adverse effect on the Company’s financial position or results of operations. However, litigation is subject to inherent uncertainties and the Company’s view of these matters may change in the future. Were an unfavorable outcome to occur, there exists the possibility of a material adverse impact on the Company’s financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods.

Note 15—Income Taxes

The following table summarizes the activity relating to the Company’s unrecognized tax benefits during the first quarter of 2011 (in thousands):

	Total

Balance at December 31, 2010	$	9,501

Gross increases related to current period tax positions	439
Balance at March 31, 2011	$	9,940

At March 31, 2011 and December 31, 2010, Advent had $9.9 million and $9.5 million of gross unrecognized tax benefits, respectively. During the three months ended March 31, 2011, Advent increased the amount of unrecognized tax benefits by approximately $0.4 million relating to federal and California research credits, and California enterprise zone credits. If recognized, the total unrecognized tax benefits would decrease Advent’s tax provision and increase net income by $8.3 million. The impact on net income reflects the liabilities for unrecognized tax benefits, net of the federal tax benefit of state income tax items. The Company’s liabilities for unrecognized tax benefits relate to federal research credits, California research and enterprise zone tax credits and various state net operating losses.

Advent is subject to taxation in the US and various states and foreign jurisdictions and is currently undergoing a State of California franchise tax examination for the 2006 and 2007 tax years. Advent is not under examination in any other income tax jurisdiction at the present time and does not anticipate the total amount of its unrecognized tax benefits to significantly change over the next 12 months. The material jurisdictions that are subject to examination by tax authorities include federal for tax years after 2006 and California for tax years after 2005.

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Note 16—Fair Value Measurements

The accounting guidance for fair value measurements establishes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

Level Input		Input Definition

Level 1		Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2		Inputs other than quoted prices included within Level 1 that are observable for the asset or liability through corroboration with market data at the measurement date.

Level 3		Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

In general, and where applicable, the Company uses quoted prices in active markets for identical assets or liabilities to determine fair value. The Company applied this valuation technique to measure the fair value of the Company’s Level 1 investments, such as treasury obligation money market mutual funds and US government debt securities. Money market funds consist of cash equivalents with remaining maturities of three months or less at the date of purchase and are composed primarily of US government debt securities and treasury obligation money market mutual funds. Advent’s US government debt securities are securities sponsored by the federal government.

If quoted prices in active markets for identical assets or liabilities are not available to determine fair value, then the Company uses quoted prices for similar assets and liabilities or inputs other than the quoted prices that are observable either directly or indirectly. The Company classifies its corporate debt securities as having Level 2 inputs. These corporate debt securities are guaranteed by the US government. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models, such as discounted cash flow techniques and incorporate non-performance risk of the counterparty. The Company’s procedures include controls to ensure that appropriate fair values are recorded such as comparing prices obtained from multiple independent sources.

The Company measures certain financial assets and liabilities at fair value on a recurring basis, including available-for-sale securities. The fair value of these certain financial assets was determined using the following inputs as of March 31, 2011 (in thousands):

	Fair Value Measurements at Reporting Date Using
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Assets
Money market funds (1)	$	44,056	$	44,056	$	—	$	—
US government debt securities (2)	60,593		60,593		—		—
Corporate debt securities (2)	21,616		—		21,616		—

Total	$	126,265	$	104,649	$	21,616	$	—

(1)	Included in cash and cash equivalents on the Company’s condensed consolidated balance sheet.
(2)	Included in cash and cash equivalents, short-term and long-term marketable securities on the Company’s condensed consolidated balance sheet.

There were no material transfers between Level 1 and Level 2 assets during the first quarter of 2011 and the Company does not have any significant assets that utilize unobservable or Level 3 inputs.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value based on the short-term maturities of these instruments.

The Company also has a direct investment in a privately-held company accounted for under the cost method which is not reported in the table of assets measured at fair value above. This investment, which has a carrying value of $0.5 million at March 31, 2011, is periodically assessed for other-than-temporary impairment. If Advent determines that an other-than-temporary impairment has occurred, the Company writes down the investment to its fair value. Advent estimates fair value using a variety of valuation methodologies. Such methodologies include comparing the private company with publicly traded companies in similar lines of business, applying revenue and price/earnings multiples to estimated future operating results for the private company and estimating discounted cash flows for that company.

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Note 17—Subsequent Event

The Company evaluated subsequent events after the balance sheet date of March 31, 2011 through May 9, 2011, the date the condensed consolidated financial statements were issued, noting no subsequent events or transactions that required recognition or disclosure in the financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

You should read the following discussion in conjunction with our consolidated financial statements and related notes. The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended, including, but not limited to statements referencing our expectations relating to future revenues, expenses and operating margins. Forward-looking statements can be identified by the use of terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” or other similar terms and the negative of such terms regarding beliefs, plans, expectations or intentions regarding the future. Forward-looking statements include, among others, statements regarding the future of the investment management market and opportunities for us related thereto, expansion, acquisition, or investment in other businesses and the benefits there from, projections of revenues, future cost and expense levels, expected timing and amount of amortization expenses related to past acquisitions, the adequacy of resources to meet future cash requirements, estimates or predictions of actions by customers, suppliers, competitors or regulatory authorities, future client wins, future hiring and future product introductions and acceptance. Such forward-looking statements are based on our current plans and expectations and involve known and unknown risks and uncertainties which may cause our actual results or performance to be materially different from any results or performance expressed or implied by such forward-looking statements. Such factors include, but are not limited to the “Risk Factors” set forth in “Item 1A. Risk Factors” in this Form 10-Q, as well as other risks identified from time to time in other Securities and Exchange Commission (“SEC”) reports. You should not place undue reliance on our forward-looking statements, as they are not guarantees of future results, levels of activity or performance and represent our expectations only as of the date they are made.

Unless expressly stated or the context otherwise requires, the terms “we”, “our”, “us”, the “Company” and “Advent” refer to Advent Software, Inc. and its subsidiaries.

Overview

We offer integrated software products and services for automating and integrating data and work flows across the investment management organization, as well as between the investment management organization and external parties. Our products are intended to increase operational efficiency, improve the accuracy of client information and enable better decision-making. Each solution focuses on specific mission-critical functions of the front, middle and back offices of investment management organizations and is designed to meet the needs of the particular client, as determined by size, assets under management and complexity of their investment process. Unless otherwise noted, discussion in this document pertains to our continuing operations.

Current Economic Environment

During the first quarter of 2011, our pipeline continued to benefit from an improved economic environment which began during the last half of 2009. The conversion of pipeline to bookings in the first quarter of 2011 was slower than expected, leading to lower bookings compared to the first quarter of 2010. However, we grew revenues during the first quarter of 2011 as compared to 2010. We maintain our expectations of an improved demand environment for 2011, and are expecting to grow revenues by 9% to 12% in fiscal 2011 as a result of booking activity and our improved renewal rates from the prior 12 months. As the current economic situation evolves, we will continue to evaluate its impact on our business and we will remain focused on delivering innovative solutions for our customers. We remain positive about our market position, current product portfolio and future product pipeline. We intend to remain focused on executing in the areas we can influence by continuing to provide high value products while managing our expenses and headcount growth.

Operating Overview

Operating highlights of our first quarter of 2011 include:

· Improvement in Renewal Rate. Our initially disclosed renewal rate is reported one quarter in arrears and improved to 95% for the fourth quarter of 2010. This represents a 6-point improvement over the initially reported renewal rate for the fourth quarter of 2009.

· International traction and expansion. We continue to execute on our international growth strategy, with revenues from international sources totaling 17% in the first quarter of 2011. This represents a 3-point increase over

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the same period in 2010 as a result of bookings from the prior 12 months. Advent signed new contracts in Hong Kong, Saudi Arabia, France, Scandinavia, Switzerland and the United Kingdom in the first quarter of 2011.

· New product releases. We launched Geneva 8.5, which offers comprehensive instrument coverage, full financial general ledger, and industry-standard integration tools enabling firms to manage complex investment vehicles, multiple investment strategies, and tiered fund structures. We also launched Moxy 7.1, which is designed to support the growing trends towards model-driven portfolio construction and management, combined with increased concerns about compliance.

· New and incremental bookings. The term license and Advent OnDemand contracts signed in the first quarter of 2011 will contribute approximately $5.1 million in annual revenue (“annual contract value” or “ACV”), once they are fully implemented. This represents a 30% decrease from the $7.3 million of ACV booked from term license and Advent OnDemand contracts signed in the first quarter of 2010.

· Acquisition of Syncova Solutions, Ltd. In February 2011, Advent Software, Inc. acquired Syncova Solutions, Ltd. (“Syncova”), a United Kingdom-based company that provides margin management and debt finance reconciliation and optimization software. Cash consideration of $24.6 million, net of cash acquired, was paid upon closing in February 2011.

Term License and Term License Deferral/Recognition

We are substantially through the process of converting the Company’s license revenues from a perpetual license model to a term license model. When a customer purchases a term license together with implementation services, we do not recognize any revenue under the contract until the implementation services are complete and the remaining services are substantially complete. If the implementation services are still in progress as of quarter-end, we will defer all of the contract revenues to a subsequent quarter. At the point professional services are substantially completed, we recognize a pro-rata amount of the term license revenue, professional services fees earned and related expenses, based on the elapsed time from the start of the term license to the substantial completion of professional services. Term license revenue for the remaining contract years and the remaining deferred professional services revenue and related expenses are recognized ratably over the remaining contract length.

The term license component of the deferred revenue balance related to implementations in process will increase or decrease in the future depending on the amount of new term license bookings relative to the number of implementations that reach substantial completion in a particular quarter. For the three months ended March 31, 2011 and 2010, the net term license deferral/recognition (decreased) increased the Company’s revenues as follows (in millions):

	Three Months Ended March 31
	2011			2010			Change

Term license revenues	$	(1.5	)	$	(0.7	)	$	(0.8	)
Professional services and other	(1.7		)	0.2			(1.9		)

Total net revenues	$	(3.2	)	$	(0.5	)	$	(2.7	)

During the first quarter of 2011, we deferred net revenues of $3.2 million and directly-related expenses of $1.7 million associated with our term licensing model. The impact of these deferrals on our operating income was approximately $1.5 million. During the first quarter of 2011, we experienced an increase in the net term license revenue deferral due to more projects in the implementation phase as a result of strong bookings in the latter half of 2010.

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Amounts of revenues and directly-related expenses deferred as of March 31, 2011 and December 31, 2010 associated with our term licensing deferral were as follows (in millions):

	March 31		December 31
	2011		2010
Deferred revenues
Short-term	$	25.7	$	22.7
Long-term	5.5		5.2

Total	$	31.2	$	27.9

Directly-related expenses
Short-term	$	8.2	$	6.6
Long-term	2.9		2.8

Total	$	11.1	$	9.4

Deferred net revenue and directly-related expenses are classified as “Deferred revenues” (short-term and long-term), and “Prepaid expenses and other,” and “Other assets,” respectively, on the condensed consolidated balance sheets.

Financial Overview

The components of net revenue from continuing operations during the first quarters of 2011 and 2010, and associated dollar and percentage fluctuations were as follows (in thousands, except % change):

	Three Months Ended March 31						$			%
	2011			2010			Change			Change

Term license revenues	$	30,442		$	24,899		$	5,543		22	%
Maintenance revenues	18,066			18,477			(411		)	-2	%
Other recurring revenues	18,819			16,743			2,076			12	%
Total recurring revenues	67,327			60,119			7,208			12	%
Recurring revenue as % of total revenue	89		%	90		%

Perpetual license fees	1,119			1,034			85			8	%
Professional services and other	6,880			5,535			1,345			24	%
Total non-recurring revenues	7,999			6,569			1,430			22	%

Total net revenues	$	75,326		$	66,688		$	8,638		13	%

Total net revenues increased by $8.6 million or 13% during the first quarter of 2011, which was primarily attributed to an increase in term license revenues of $5.5 million due to our recent bookings activity from the previous 12 months, growth in sales of our Geneva and APX products and our improved renewal rates. Additionally, other recurring revenues increased by $2.1 million or 12% during the first quarter of 2011 compared to the same period of 2010, as we experienced growth in revenue from our data services, Advent OnDemand, Assets Under Administration (“AUA”) fees and Alliance Program. These increases were partially offset by a decrease of $0.4 million in perpetual maintenance revenues primarily resulting from perpetual license customers’ migration to term licenses and, and to a lesser extent, to maintenance de-activations due to perpetual license customer attrition.

Total recurring revenues increased by $7.2 million and represented 89% of total net revenues during the first quarter of 2011, compared to 90% in the same period in 2010. The increase in absolute dollars was driven by the increase in term license and other recurring revenues. During the first quarter of 2011, we experienced an increase in new service engagements resulting in revenue increases in consulting services and the slight decrease in recurring revenue percentage.

Perpetual license fees in the first quarter of 2011 were up slightly compared to the first quarter of 2010 as we licensed additional seats and modules to our existing perpetual client base and some clients continue to select the option of purchasing a perpetual license. Professional services and other revenues increased $1.3 million or 24% primarily due to greater consulting activity as a result of strong bookings in the latter half of 2010 driving implementations during the first quarter of 2011.

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The components of cost of revenues and operating expenses, operating income, interest and other income (expense) net, provision for income taxes and net income from continuing operations during the first quarters of 2011 and 2010, and associated dollar and percentage fluctuations, were as follows (in thousands, except % change):

	Three Months Ended March 31					$			%
	2011		2010			Change			Change
Cost of revenues:
Recurring revenues	$	14,788	$	12,427		$	2,361		19	%
Non-recurring revenues	7,239		6,657			582			9	%
Amortization of developed technology	1,516		1,516			—			0	%

Total cost of revenues	23,543		20,600			2,943			14	%

Operating expenses
Sales and marketing expense	18,184		16,860			1,324			8	%
Product development	12,642		12,061			581			5	%
General and administrative	9,084		9,551			(467		)	-5	%
Amortization of other intangibles	320		315			5			2	%
Restructuring charges	26		29			(3		)	-10	%

Total operating expenses	40,256		38,816			1,440			4	%

Income from continuing operations	11,527		7,272			4,255			59	%

Interest and other income (expense), net	31		(706		)	737			-104	%

Income from continuing operations before income taxes	11,558		6,566			4,992			76	%

Provision for income taxes	3,654		2,323			1,331			57	%

Net income from continuing operations	$	7,904	$	4,243		$	3,661		86	%

Total expenses from continuing operations, including cost of revenues, increased to $63.8 million in the first quarter of 2011 from $59.4 million in the first quarter of 2010. This increase largely reflects an increase in payroll and related costs as we hired additional personnel and to a lesser extent, increases in headcount from our acquisition of Syncova, which we acquired in February 2011.

Our operating income from continuing operations in the first quarter of 2011 increased to $11.5 million or 15% of revenue from $7.3 million or 11% of revenue in the first quarter of 2010, which is reflective of improved leverage in our operating expenses. As a percentage of revenue, sales and marketing, product development, and general and administrative costs were all down by at least one percentage point compared to the same period last year.

Interest and other income (expense), net was $31,000 in the first quarter of 2011 compared to $(0.7) million in the comparable period of 2010. The change was primarily due to the foreign exchange loss incurred during the first quarter of 2010 as the US dollar strengthened against the Pound Sterling, Euro and other foreign currencies.

Our continuing operations’ income tax expense was $3.7 million resulting in an effective tax rate of 32% during the first quarter of 2011, compared to $2.3 million or 35%, respectively, in the first quarter of 2010. The decrease in the effective tax rate in the first quarter of 2011 compared with the first quarter of 2010 primarily reflects the availability of the federal Credit for Increasing Research Activities in the first quarter of 2011.

Net income from continuing operations was $7.9 million, resulting in diluted earnings per share of $0.14 for the first quarter of 2011, compared to $4.2 million or $0.08 in the first quarter of 2010.

Our continuing operations generated operating cash flow of $11.6 million in the first quarter of 2011, compared to $12.5 million in the first quarter of 2010.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements and related notes, which have been prepared in accordance with accounting principles generally accepted in the United States of America. We review the accounting policies used in reporting our financial results on a regular

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basis. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities.

On an ongoing basis, we evaluate the process we use to develop estimates. We base our estimates on historical experience and on other information that we believe is reasonable for making judgments at the time the estimates are made. Actual results may differ from our estimates due to actual outcomes being different from those on which we based our assumptions.

We believe the following accounting policies contain the more significant judgments and estimates used in the preparation of our condensed consolidated financial statements.

· Revenue recognition and deferred revenues;

· Income taxes;

· Stock-based compensation;

· Restructuring charges and related accruals;

· Business combinations;

· Disposition;

· Goodwill;

· Impairment of long-lived assets;

· Legal contingencies; and

· Sales returns and accounts receivable allowances

With the exception of those discussed below, there have been no significant changes in our critical accounting policies and estimates during the three months ended March 31, 2011 as compared to the critical accounting policies and estimates disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2010.

Revenue recognition and deferred revenues. We recognize revenue from term license, maintenance and other recurring; perpetual license fees, professional services and other. We offer a wide variety of products and services to a large number of financially sophisticated customers. While many of our lower-priced license transactions, maintenance contracts, subscription-based transactions and professional services projects conform to a standard structure, many of our larger transactions are complex and may require significant review and judgment in our application of generally accepted accounting principles.

We recognize revenue from the licensing of software when persuasive evidence of an arrangement exists, the product has been delivered, the fee is fixed or determinable and collection of the resulting receivable is probable. We generally use a signed agreement as evidence of an arrangement. Sales through our distributors are evidenced by a master agreement governing the relationship together with binding order forms and signed contracts from the distributor’s customers. Revenue is recognized once delivery to the distributor’s customer has taken place and when all other revenue recognition criteria have been met. Delivery occurs upon notification that software is available for electronic download through our fulfillment vendor, or when a product is delivered to a common carrier F.O.B shipping point, or upon confirmation that product delivered F.O.B shipping destination has been received. Some of our arrangements include acceptance provisions; if such acceptance provisions are present, delivery is deemed to occur upon acceptance. We assess whether the fee is fixed or determinable based on the payment terms associated with the transaction. We assess whether the collectability of the resulting receivable is probable based on a number of factors, including the credit worthiness of the customer determined through a credit review process, including credit reporting agency reports, publicly available customer information, financial statements and other available information and pertinent country risk if the customer is located outside the United States. Our standard payment terms are due at 180 days or less, but payment terms may vary based on the country in which the agreement is executed.

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We categorize our revenues into two reporting elements: recurring and non-recurring revenues.

Recurring Revenues

Term licenses. Term license contracts include both the software license and maintenance. We offer multi-year term licenses by which a customer makes a binding commitment that typically spans three years. For multi-year term licenses, we have not established vendor specific objective evidence, or VSOE, of fair value for the software license and maintenance components and, as a result, in situations where we are also performing related professional services, we defer all revenue and directly related expenses under the arrangement until the implementation services are complete and the remaining services are substantially complete. At the point professional services are substantially completed, we recognize a pro-rata amount of the term license revenue, professional services fees earned and related expenses, based on the elapsed time from the start of the term license to the substantial completion of professional services. We determine whether services are substantially complete by consulting with the professional services group and applying management judgment. Term license revenue for the remaining contract years and the remaining deferred professional services revenue and related expenses are recognized ratably over the remaining contract length. When multi-year term licenses are sold and do not include related professional services, we recognize the entire term license revenue ratably over the period of the contract term from the effective date of the license agreement assuming all other revenue recognition criteria have been met.

Perpetual License Maintenance. We offer annual maintenance programs on perpetual licenses that provide for technical support and updates to our software products. Maintenance fees are bundled with perpetual license fees in the initial licensing year and charged separately for renewals of annual maintenance in subsequent years. Fair value for maintenance is based upon either renewal rates stated in the contracts or separate sales of renewals to customers. We recognize maintenance revenue ratably over the contract term.

Other Recurring Revenues. We offer subscription or transaction-based services which primarily include the provision of software interfaces to download securities information from third party data providers, partial or full business process outsourcing, account aggregation, reconciliation, reference data management, and hosting of hardware and/or software. We recognize revenue from recurring revenue transactions either ratably over the subscription period or as the transactions occur based on the terms of the arrangement.

Certain of our perpetual and term license contracts include asset-based fee structures that provide additional revenues based on the assets that the client manages using our software (“Assets Under Administration” or “AUA”). Contracts containing an AUA fee structure have a defined measurement period which requires the client to self-report actual AUA in arrears of the specified period. AUA fees above the stated minimum fee for the same period are considered incremental fees. Because incremental fees are not determinable until the conclusion of the measurement period, they are both earned and recognized upon completion of the measurement period, on a quarterly or annual basis. Incremental fees from AUA contracts are included in other recurring revenues because although these fees are variable, the measurement of these fees occurs consistently. The Company recognizes AUA contract minimum fees ratably over the period of service.

Non-Recurring Revenues

Perpetual licenses. We allocate revenue to delivered elements, normally the license component of the arrangement, using the residual method, based on VSOE of fair value of the undelivered elements (generally the maintenance and professional services elements), which is specific to us. We determine the fair value of the undelivered elements based on the historical evidence of the Company’s stand-alone sales of these elements to third parties and/or renewal rates. If VSOE of fair value does not exist for any undelivered elements, then the entire arrangement fee is deferred until delivery of that element has occurred unless the only undelivered element is maintenance. Revenues from perpetual licenses are included in “Non-recurring revenues” on the condensed consolidated statement of operations.

Professional services and other revenues. We offer a variety of professional services that include project management, implementation, data conversion, integration, custom report writing and training. We establish VSOE of fair value for professional services upon separate sales of these services to customers. Our professional services are generally billed based on hourly rates together with reimbursement for travel and accommodation expenses. Assuming all other revenue recognition criteria has been met, we recognize revenue as professional services are performed except when sold with term license contracts. Certain professional services arrangements involve acceptance criteria or other contingencies and in these cases, revenue and related expenses are recognized upon acceptance. Professional services and other revenues also include revenue from our user conferences.

Recent Accounting Pronouncements

There have been no recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 31, 2011, as compared to the recent accounting pronouncements described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010, that are of significance, or potential significance, to the Company.

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RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

The following table sets forth, for the periods indicated, certain financial information as a percentage of total net revenues. The financial information and the ensuing discussion should be read in conjunction with the accompanying condensed consolidated financial statements and notes thereto:

	Three Months Ended March 31
	2011		2010

Net revenues:
Recurring revenues	89	%	90	%
Non-recurring revenues	11		10

Total net revenues	100		100

Cost of revenues:
Recurring revenues	20		19
Non-recurring revenues	10		10
Amortization of developed technology	2		2

Total cost of revenues	31		31

Gross margin	69		69

Operating expenses:
Sales and marketing	24		25
Product development	17		18
General and administrative	12		14
Amortization of other intangibles	*		*
Restructuring charges	*		*

Total operating expenses	53		58

Income from continuing operations	15		11
Interest and other income (expense), net	*		*

Income from continuing operations before income taxes	15		10
Provision for income taxes	5		3

Net income from continuing operations	10		6

Discontinued operation:
Net income (loss) from discontinued operation	2		*

Net income	13	%	6	%

Percentages are based on actual values. Totals may not sum due to rounding.

* Less than 1%.

NET REVENUES

	Three Months Ended March 31
	2011		2010		Change

Total net revenues (in thousands)	$	75,326	$	66,688	$	8,638

We derive our revenues from two sources: recurring revenues and non-recurring revenues. Recurring revenues are comprised of term license, maintenance perpetual arrangements and other recurring revenue (which includes incremental Assets

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Under Administration (“AUA”) fees). The revenues from a term license, which includes both software license and maintenance services, are earned under a time based contract. Maintenance revenues are derived from maintenance fees on perpetual license arrangements. Other recurring revenues are derived from our subscription-based and transaction-based services as well as AUA fees for certain perpetual arrangements. Non-recurring revenues consists of professional services and other revenue and perpetual license fees. Professional services and other revenues include fees for consulting, fees from training, and project management services and our client conferences. Perpetual license revenues are derived from the licensing of software products under a perpetual arrangement. Sales returns, which we generally do not provide to customers, are accounted for as deductions to these two revenue categories based on our historical experience.

Since fiscal 2008, recurring revenues have grown and conversely non-recurring revenues have decreased as follows:

				YTD
				March
As a percentage of net revenues	2008	2009	2010	2011

Revenues from recurring sources	84%	88%	89%	89%

Revenues from non-recurring sources	16%	12%	11%	11%

As we continue to sign term license agreements for new customers, grow our subscription, data management and outsourced services revenues, and our customers renew their term license or perpetual maintenance, we expect our recurring revenue to continue to represent over 89% of our total net revenues.

Total net revenues increased $8.6 million in the first quarter of 2011 compared to the same quarter in 2010. The year-over-year growth in total net revenues for the first quarter of 2011 was due to higher revenues from recurring sources, primarily term license and other recurring revenues, which reflected $7.2 million or 12% growth in the first quarter of 2011 compared to the same quarter in 2010. The increase in recurring revenues is primarily due to our bookings activity from the previous 12 months, growth in sales of our Geneva and APX products and our improved renewal rates. Additionally, contributing to the increase in recurring revenues is growth from our data services, outsourced services, AUA fees for certain perpetual arrangements and revenues associated with our Alliance Program. The increase in non-recurring revenues was due to greater consulting activity as we experienced an increase in new service engagements during the first quarter of 2011 as a result of bookings from the two previous quarters driving implementations.

Revenues derived from international sales grew from $9.5 million in the first quarter of 2010 to $12.8 million in the first quarter of 2011. The increase primarily reflects increase in new business in international locations due to an improvement in economic conditions in those regions, and to a lesser extent, increases in the market values of AUA balances for our EMEA customers. We plan to continue expanding our international sales efforts, both in our current markets and elsewhere. The revenues from customers in any single international country did not exceed 10% of total net revenues.

We expect total net revenues from continuing operations to be between $75 million and $77 million in the second quarter of 2011, and to be between $310 million and $317 million for fiscal 2011.

Recurring Revenues

(in thousands, except percent of	Three Months Ended March 31
total net revenues)	2011			2010			Change

Term license revenues	$	30,442		$	24,899		$	5,543
Maintenance revenues	18,066			18,477			(411		)
Other recurring revenues	18,819			16,743			2,076

Total recurring revenues	$	67,327		$	60,119		$	7,208

Percent of total net revenues	89		%	90		%

Revenues from term licenses, which include both the software license and maintenance services for term licenses, increased $5.5 million during the first quarter of 2011 compared to the same quarter of 2010. The growth of term license revenues reflects continued market acceptance of our Geneva, APX, Partner, Tamale and Moxy products, the continued layering of incremental annual contract value (ACV) sold in the previous 12 months into our term revenue, and our improved renewal rates.

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The increase was partially offset by the net term license revenue deferral during the first quarter of 2011. For the three months ended March 31, 2011 and 2010, the term license deferral decreased the Company’s term license revenues as follows (in millions):

	Three Months Ended March 31
	2011			2010			Change

Term license revenues	$	(1.5	)	$	(0.7	)	$	(0.8	)

For our term licenses, we defer all revenue on new bookings until our implementation services are complete. During the three months ended March 31, 2011 and 2010, the revenue deferred from projects being implemented exceeded recognized revenue from completed implementations, resulting in a net deferral of term license revenue. The increase in the term license deferral of $0.8 million is primarily due to more projects in the implementation phase during the first quarter of 2011 when compared to 2010, as a result of strong bookings in the latter half of 2010.

Maintenance revenues decreased $0.4 million during the three months ended March 31, 2011, when compared to the same quarter of 2010. The decrease in maintenance revenues was attributable to maintenance de-activations from customer attrition, maintenance level downgrades, reductions in products licensed or number of users by clients, perpetual license customers migrating to term licenses, and continued decrease in new perpetual license customers, partially offset by the impact of price increases.

Other recurring revenues, which primarily include revenues from incremental assets under administration fees from perpetual licenses, data services and Advent OnDemand, increased $2.1 million during the three months ended March 31, 2011 when compared to the same quarter of 2010. The increase in other recurring revenues is primarily due to growth in revenues from outsourced services, data services and Alliance Program. In addition, incremental assets under administration fees from perpetual licenses increased as clients experienced growth in the market value of AUA balances during 2011 due to improved market conditions.

Our renewal rates are based on cash collections. The initial renewal rate is disclosed one quarter in arrears in order to include substantially all payments received against the invoices for that quarter. We also update our renewal rates from the initially disclosed rates to include all cash collections subsequent to the initial disclosure. The following summarizes our initial and updated renewal rates (operational metric) since the fourth quarter of 2009:

	Renewal Quarter
Renewal Rates	Q111		Q410		Q310		Q210		Q110		Q409
Based on cash collections relative to prior year collections

Initially Disclosed Renewal Rate (1)		(2)	95	%	91	%	91	%	90	%	89	%
Updated Disclosed Renewal Rate (3)	n/a		n/a		93	%	97	%	97	%	94	%

(1) “Initially Disclosed Renewal Rate” is based on cash collections and reported one quarter in arrears

(2) The initially disclosed renewal rate for the first quarter of 2011 is not currently available as it is disclosed one quarter in arrears in order to include substantially all payments against invoices for this quarter.

(3) “Updated Disclosed Renewal Rate” reflects initially disclosed rate updated for subsequent cash collections

We expect our revenue from recurring sources to continue to represent over 89% of our total net revenues as we continue to sign term license agreements and Advent OnDemand contracts with new customers.

Non-Recurring Revenues

(in thousands, except percent of	Three Months Ended March 31
total net revenues)	2011			2010			Change

Perpetual license fees	1,119			1,034			85
Professional services and other revenues	$	6,880		$	5,535		$	1,345

Total non-recurring revenues	$	7,999		$	6,569		$	1,430

Percent of total net revenues	11		%	10		%

Non-recurring revenues consists of perpetual license fees, professional services and other revenue. Perpetual license revenues are derived from the licensing of software products under a perpetual arrangement. Professional services and other revenues include fees for consulting, custom integration, fees from training and project management services. Total non-recurring

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increased to 11% of total net revenues during the three months ended March 31, 2011, compared to 10% in the same quarter in 2010. The slight increase as a percentage of total net revenues to 11% during the first quarter of 2011 reflects growth in professional service revenues.

Professional services and other revenues fluctuated due to the following (in thousands):

	Change From
	Q1 10 to Q1 11

Increased consulting services	$	2,305
Increased custom reports	538
Increased project management	213
Increased net term license implementation deferral	(1,955		)
Various other items	244

Total change	$	1,345

The increase in professional services and other revenues during the three months ended March 31, 2011 primarily reflects increased revenue from consulting services, partially offset by the revenue deferral impact associated with in-process term license implementations. During the first quarter of 2011, we experienced an increase in demand for consulting services as a result of bookings from the latter half of 2010 driving implementations.

Professional services projects related to Axys, Moxy and Partner products generally can be completed in a two- to six-month time period, while services related to Geneva and APX products may require a four- to twelve-month implementation period. We defer professional services revenue for services performed on term license implementations that are not considered substantially complete. Service revenue is deferred until the implementation is complete and remaining services are substantially completed. Upon substantial completion, we recognize a pro-rata amount of professional services fees earned based on the elapsed time from the start of the term license to the substantial completion of professional services. The remaining deferred professional services revenue is recognized ratably over the remaining contract length

The impact of our term license implementation recognition on professional services revenues for the three months ended March 31, 2011 and 2010 were as follows (in thousands):

	Three Months Ended March 31
	2011			2010		Change
Net (deferral) recognition of professional services revenue related to term license implementations	$	(1,709	)	$	246	$	(1,955	)

During the three months ended March 31, 2011, the revenue deferred from projects being implemented exceeded the revenue recognized from completed projects. The net deferral of $1.7 million in the first quarter of 2011 was primarily due to relatively more projects in the implementation phase as a result of strong bookings in the latter half of 2010. During the three months ended March 31, 2010, the net impact of the term license implementation recognition was minimal as the revenue recognized from completed implementations was offset by revenue deferred from implementations in process at March 31, 2010.

Total perpetual license fees increased slightly in the three months ended March 31, 2011, as we licensed additional seats and modules to our existing perpetual client base.

COST OF REVENUES

	Three Months Ended March 31
	2011			2010			Change

Total cost of revenues (in thousands)	$	23,543		$	20,600		$	2,943
Percent of total net revenues	31		%	31		%

Our cost of revenues is made up of three components: cost of recurring revenues, cost of non-recurring revenues and amortization of developed technology. The increase in total cost of revenues in absolute dollars for the three months ended March 31, 2011 was due principally to increases in payroll and related from headcount additions in our client support and services groups and fees paid to third party consultants to support our increase in demand for technical support and consulting services. Cost of

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revenues as a percent of total net revenues remained consistent for the three months ended March 31, 2011 as compared to the same period in 2010.

Cost of Recurring Revenues

	Three Months Ended March 31
	2011			2010			Change

Cost of recurring revenues (in thousands)	$	14,788		$	12,427		$	2,361
Percent of total recurring revenue	22		%	21		%

Cost of recurring revenues consists primarily of royalties and other fees paid to third parties, the fixed direct labor and third-party costs involved in producing and distributing our software, and cost of product media including duplication, manuals and packaging materials. It also consists of the direct costs related to providing and supporting our outsourced services, providing technical support services under maintenance agreements and other services for recurring revenues, and royalties paid to third party subscription-based and transaction-based vendors.

Cost of recurring revenues fluctuated due to the following (in thousands):

	Change From
	Q1 10 to Q1 11

Increased payroll and related costs	$	1,018
Increased allocation-in of facility and infrastructure expenses	987
Increased travel and entertainment	193
Increased depreciation	111
Various other items	52

Total change	$	2,361

The overall increase in absolute dollars and as a percentage of total recurring revenue for the first quarter of 2011 was due primarily to increases in payroll and related costs, and the allocation-in of facility and infrastructure expenses. The increase in payroll and related costs resulted from increases in salary costs and headcount which enables us to deliver the technical support services we provide to our growing number of clients in their day-to-day use of our software. Headcount increased from 280 at March 31, 2010 to 307 at March 31, 2011. We allocate facility and infrastructure expenses based on headcount and consistent with the increase in departmental headcount, we allocated more of these costs to our recurring revenue department. The increase in travel and entertainment costs resulted from increased international travel associated with providing technical support services.

Cost of Non-Recurring Revenues

	Three Months Ended March 31
	2011			2010			Change

Cost of non-recurring (in thousands)	$	7,239		$	6,657		$	582

Percent of total non-recurring revenues	90		%	101		%

Cost of non-recurring revenues consists of expenses associated with perpetual license fees and professional services. Costs associated with perpetual license fees consists primarily of royalties and other fees paid to third parties, the fixed direct labor and third party costs involved in producing and distributing our software, and cost of product media including duplication, manuals and packaging materials. Costs associated with professional services and other revenue consists primarily of personnel related costs associated with the client services organization in providing consulting, custom report writing and conversions of data from clients’ previous systems. Also included are direct costs associated with third-party consultants. Additionally, we defer revenues and direct costs associated with services performed on term license implementations until the project is substantially complete. Indirect costs such as management and other overhead expenses are recognized in the period in which they are incurred.

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Cost of non-recurring revenues fluctuated due to the following (in thousands):

	Change From
	Q1 10 to Q1 11

Increased outside contractors	$	1,052
Increased payroll and related costs	430
Increased allocation-in of facility and infrastructure expenses	357
Increased travel and entertainment	233
Increased service cost deferral related to term implementations	(1,461		)
Various other items	(29		)

Total change	$	582

The increase in the first quarter of 2011 reflects increases in outside contractors expense, payroll and related expenses, and to a lesser extent travel expenses resulting from an increase in demand for consulting services. We increased our utilization of third-party contractors during the first quarter of 2011 which contributed to the increase in outside contractors expense. Additionally, we increased headcount in our client services and consulting group to 124 at March 31, 2011 from 103 at March 31, 2010 which increased payroll and related expenses. We allocate facility and infrastructure expenses based on headcount and consistent with the increase in departmental headcount, we allocated more of these costs to our professional services and other department.

We defer direct costs associated with services performed on term license implementations until a project reaches substantial completion. Indirect costs such as management and other overhead expenses are recognized in the period in which they are incurred, with no revenue to offset them. At the point professional services are substantially completed, we recognize a pro-rata amount of the term license revenue, professional services fees earned and related expenses, based on the elapsed time from the start of the term license to the substantial completion of professional services. Term license revenue for the remaining contract years and the remaining deferred professional services revenue and related expenses are recognized ratably over the remaining contract length.

The impact of our term license implementations on the recognition of professional services costs for the three months ended March 31, 2011 and 2010 was as follows (in thousands):

	Three Months Ended March 31
	2011			2010		Change
Net (deferral) recognition of professional services costs related to term license implementations	$	(1,406	)	$	55	$	(1,461	)

During the three months ended March 31, 2011, we returned to our prior trend of deferring costs, as the cost deferred from projects being implemented exceeded the costs recognized from completed implementations. The increase in the net deferral of $1.5 million during the first quarter of 2011 was primarily due to relatively more projects in the implementation phase as a result of strong bookings in the latter half of 2010.

Compared to the first quarter of 2011, we expect the cost of non-recurring revenues to increase in dollar amount and as a percentage of revenue in the second quarter of 2011 as we expect less cost deferral related to our term license implementations.

Amortization of Developed Technology

	Three Months Ended March 31
	2011			2010			Change
Amortization of developed technology (in thousands)	$	1,516		$	1,516		$	—
Percent of total net revenues	2		%	2		%

Amortization of developed technology represents amortization of acquisition-related intangibles, and amortization of capitalized software development costs previously capitalized under ASC 985. Amortization remained consistent between the first quarter of 2011 when compared to the same period in 2010, as a result of the additional amortization from software development costs capitalized during 2010 and 2011, and to a lesser extent, amortization from technology related intangible assets associated with Goya AS and Syncova, which we acquired in March 2010 and February 2011, respectively, which were offset by decreased amortization from other developed technology assets that were fully amortized during 2010.

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OPERATING EXPENSES

Sales and Marketing

	Three Months Ended March 31
	2011			2010			Change

Sales and marketing (in thousands)	$	18,184		$	16,860		$	1,324
Percent of total net revenues	24		%	25		%

Sales and marketing expenses consist primarily of the costs of personnel involved in the sales and marketing process, sales commissions, advertising and promotional materials, sales facilities expense, trade shows, and seminars.

Sales and marketing expense fluctuated due to the following (in thousands):

	Change From
	Q1 10 to Q1 11

Increased payroll and related costs	$	1,007
Increased marketing	311
Increased travel and entertainment	137
Various other items	(131		)

Total change	$	1,324

The increase in sales and marketing expenses for the first quarter of 2011 reflects the growth of our sales and marketing efforts during the first quarter of 2011. The increase in payroll and related costs was due principally to headcount growth to 207 at March 31, 2011 from 199 at March 31, 2010, salary increases and payroll taxes. The increase in marketing, and travel and entertainment expenses reflects more activity by our sales personnel during the first quarter of 2011.

Compared to the first quarter of 2011, we expect sales and marketing expenses to increase in dollar amount in the second quarter of 2011 due to expenses related to our annual EMEA client conference as well as other marketing programs.

Product Development

	Three Months Ended March 31
	2011			2010			Change

Product development (in thousands)	$	12,642		$	12,061		$	581
Percent of total net revenues	17		%	18		%

Product development expenses consist primarily of salary and benefits for our development staff as well as contractors’ fees and other costs associated with the enhancements of existing products and services and development of new products and services.

Product development expenses fluctuated due to the following (in thousands):

	Change From
	Q1 10 to Q1 11

Increased payroll and related costs	$	751
Increased allocation-in of facility and infrastructure expenses	294
Increased capitalization of product development	(416		)
Decreased outside services	(88		)
Various other items	40

Total change	$	581

The increase in total product development expenses during the first quarter of 2011 was primarily due to an increase in payroll and related costs resulting from increases in headcount to help us continue the enhancement of our existing product suite including new versions of Geneva, APX, Moxy, Advent Rules Manager, Advent Revenue Center, Partner and Tamale RMS. Headcount increased to 301 (8 from Syncova) at March 31, 2011 from 277 at March 31, 2010. The fluctuation in the capitalization of our product development costs is attributable to timing of product releases during the three months ended March 31, 2011 as we

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capitalized $1.7 million, primarily associated with Geneva 8.5, Revenue Center 3.2 and Moxy 7.1, as compared to $1.2 million of costs associated in the comparable period of 2010 primarily associated with Geneva 8.0, Axys 3.8 and APX 3.0. The decrease in outside services reflects decreased usage of third party contractors during the first quarter of 2011.

Compared to the first quarter of 2011, we expect product development expenses to increase in dollar amount and as a percentage of revenue in the second quarter of 2011, as we expect less cost deferral related to software development.

General and Administrative

	Three Months Ended March 31
	2011			2010			Change

General and administrative (in thousands)	$	9,084		$	9,551		$	(467	)
Percent of total net revenues	12		%	14		%

General and administrative expenses consist primarily of personnel costs for information technology, finance, administration, human resources, operations and general management, as well as legal and accounting expenses.

General and administrative expenses fluctuated due to the following (in thousands):

	Change From
	Q1 10 to Q1 11

Increased allocation-out of facility and infrastructure expenses	$	(1,466	)
Decreased facilities	(175		)
Increased legal and professional	611
Increased payroll and related costs	388
Various other items	175

Total change	$	(467	)

The decrease in total general and administrative expenses in absolute dollars during the three months ended March 31, 2011 is primarily due to the increase in the allocation-out of corporate expenses to other departments. Corporate expenses, such as facility and information costs, are initially recognized in our general and administrative department and then allocated out to other departments based on headcount. As our facility costs increased and headcount in our other departments grew at a higher rate than our general and administrative department, we allocated-out more facility and information technology costs resulting in less general and administrative expense during the first three months of 2011 when compared to the same period in 2010.

The decrease in facilities costs during the three months ended March 31, 2011 was due to the consolidation of facility space in New York and Boston in 2010. During 2009, we signed lease agreements for our new facilities in New York City and Boston, and commenced the build-out of those facilities in the first quarter of 2010. We continued to occupy our former facilities in New York and Boston until the build-out of our new facilities was completed. As a result, we incurred rent and utilities expense in both our former and new facilities during the first quarter of 2010. We completed the build-out of our new facilities in New York and Boston in May and August 2010, respectively, and moved our operations to consolidate our facility space in both locations. These cost decreases were partially offset by increased legal and professional fees related to the acquisition of Syncova which we acquired in February 2011. Payroll and other related costs increased during the three months ended March 31, 2011 as a result of lower capitalization of payroll costs associated with our internally developed software projects, higher salary expense and payroll taxes due to additional headcount and annual merit increases.

Amortization of Other Intangibles

	Three Months Ended March 31
	2011			2010			Change
Amortization of other intangibles (in thousands)	$	320		$	315		$	5
Percent of total net revenues	0		%	0		%

Amortization of other intangibles represents amortization of non-technology related intangible assets. The slight increase during the first quarter of 2011 is a result of increased amortization from intangible assets associated with Goya AS and Syncova, which we acquired in March 2010 and February 2011, respectively. The increase was partially offset by the decrease in amortization due to the customer list from East Circle Solutions, Inc. which we acquired in December 2006, becoming fully amortized in

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November 2010 and the non-compete agreement from Tamale Software, Inc., which we acquired in October 2008, becoming fully amortized in September 2010.

Restructuring Charges

	Three Months Ended March 31
	2011			2010			Change

Restructuring charges (in thousands)	$	26		$	29		$	(3	)
Percent of total net revenues	0		%	0		%

During the first quarter of 2011 and 2010, we recorded restructuring charges of $26,000 and $29,000, respectively, which related to the present value amortization of facility exit obligations partially offset by adjustments to facility exit assumptions.

For additional analysis of the components of the payments and charges made against the restructuring accrual during the first quarter of 2011, see Note 13, “Restructuring Charges” to our condensed consolidated financial statements.

Interest and Other Income (Expense), Net

	Three Months Ended March 31
	2011			2010			Change
Interest and other income (expense), net (in thousands)	$	31		$	(706	)	$	737
Percent of total net revenues	0		%	-1		%

Interest and other income (expense), net consists of interest expense and income, realized gains and losses on investments and foreign currency gains and losses.

Interest and other income (expense), net fluctuated due to the following (in thousands):

	Change From
	Q1 10 to Q1 11

Decreased foreign exchange losses	$	690
Decreased interest income	(11		)
Various other items	58

Total change	$	737

Foreign exchange losses decreased during the first quarter of 2011, primarily due to the foreign exchange loss incurred during the first quarter of 2010 as the US dollar strengthened against the Pound Sterling, Euro and other foreign currencies compared to the same period in 2009.

The decrease in interest income during the first quarter of 2011 reflects lower interest rates during the first quarter of 2011 compared to the same period in 2010.

Provision for Income Taxes

	Three Months Ended March 31
	2011			2010			Change
Provision for income taxes (in thousands)	$	3,654		$	2,323		$	1,331
Effective tax rate	32		%	35		%

The decrease in effective tax rate for the three months ended March 31, 2011 compared to the first three months of 2010 primarily reflects the availability of the federal Credit for Increasing Research Activities in the first quarter of 2011 as this credit was not available in the first quarter of 2010.

We currently expect our annual effective tax rate for 2011 to be between 30% and 35%.

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Discontinued Operation

	Three Months Ended March 31
	2011		2010

Net revenues	$	—	$	—

Income (loss) from operation of discontinued operation (net of applicable taxes of $65 and $(13), respectively)	$	99	$	(18	)

Gain (loss) on disposal of discontinued operation (net of applicable taxes of $1,279 and $(20), respectively)	1,725		(30		)

Net income (loss) from discontinued operation	$	1,824	$	(48	)

In connection with the sale of our MicroEdge subsidiary in the fourth quarter of 2009, $3.0 million of the proceeds had been placed in escrow. As this $3.0 million was released from escrow and received by the Company in March 2011, our discontinued operation recorded a gain of $1.7 million in “net income from discontinued operation, net of applicable taxes” in the first quarter of 2011.

LIQUIDITY AND CAPITAL RESOURCES

The following is a summary of our cash, cash equivalents and marketable securities (in thousands):

	March 31		December 31
	2011		2010

Cash and cash equivalents	$	74,301	$	81,948
Short-term and long-term marketable securities	$	66,569	$	70,075

Cash and cash equivalents, and short-term and long-term marketable securities primarily consist of money market mutual funds, US government and US Government Sponsored Entities (GSE’s) and high credit quality corporate debt securities. Cash and cash equivalents are comprised of highly liquid investments purchased with an original or remaining maturity of 90 days or less at the date of purchase. Our short-term and long-term marketable securities are classified as available-for-sale, with long-term investments having a maturity date greater than one year from the end of the period.

The table below, for the periods indicated, provides selected cash flow information (in thousands):

	Three Months Ended March 31
	2011			2010

Net cash provided by operating activities from continuing operations	$	11,593		$	12,536
Net cash used in investing activities from continuing operations	$	(24,428	)	$	(10,224	)
Net cash provided by (used in) financing activities from continuing operations	$	1,897		$	(7,963	)
Net cash provided by (used in) operating activities from discontinued operation	$	74		$	(319	)
Net cash provided by investing activities from discontinued operation	$	3,004		$	—

Cash Flows from Operating Activities for Continuing Operations

Our cash flows from operating activities represent the most significant source of funding for our operations. The major uses of our operating cash include funding payroll (salaries, commissions, bonuses and benefits), general operating expenses (marketing, travel, computer and telecommunications, legal and professional expenses, and office rent) and cost of revenues. Our cash provided by operating activities generally follows the trend in our net revenues and operating results.

Our cash provided by operating activities from continuing operations of $11.6 million during the three months ended March 31, 2011 was primarily the result of our net income plus non-cash charges including stock-based compensation, and depreciation and amortization. Cash flows resulting from changes in assets and liabilities included a decrease in accounts receivable and accrued liabilities and an increase in deferred revenue. Days’ sales outstanding were 60 days during the first quarter of 2011, compared to 61

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days in the fourth quarter of 2010 and 57 days in the first quarter of 2010. The decrease in accrued liabilities reflected cash payments of fiscal 2010 liabilities including year-end bonuses, commissions, and payroll taxes. The increase in deferred revenue reflected additional billings associated with recent bookings, maintenance renewals and the deferral of professional services revenue. Other changes in assets and liabilities included an increase in prepaid and other assets, income taxes payable and a decrease in accounts payable.

Our cash provided by operating activities from continuing operations of $12.5 million during the three months ended March 31, 2010 was primarily the result of our net income plus non-cash charges including stock-based compensation, and depreciation and amortization. Cash flows resulting from changes in assets and liabilities included decreases in accounts receivable, accrued liabilities and deferred revenues. Days’ sales outstanding were 57 days during the first quarter of 2010, compared to 61 days in the fourth quarter of 2009 and 62 days in the first quarter of 2009. The decrease in deferred revenue primarily reflected the recognition during the first quarter of 2010 of previously deferred revenue, partially offset by deferred revenue additions from new bookings in the first quarter of 2010. The decrease in accrued liabilities reflected cash payments of fiscal 2009 liabilities including year-end bonuses, commissions, and payroll taxes. Other changes in assets and liabilities included a decrease in prepaid and other assets, and an increase in accounts payable and income taxes payable.

We expect that cash provided by operating activities may fluctuate in future periods as a result of a number of factors including fluctuations in our net revenues and operating results, new bookings that increase deferred revenues, collection of accounts receivable, and timing of payments. We also expect that cash provided by operating activities will be between $81 million and $85 million during fiscal year 2011.

Cash Flows from Investing Activities for Continuing Operations

Net cash used in investing activities from continuing operations of $24.4 million for the first quarter of 2011 reflects net cash used of $24.6 million related to the acquisition of Syncova Solutions, Ltd, purchases of short term and long term marketable securities of $26.1 million, capital expenditures of $1.4 million primarily related to the computer equipment purchases and capitalized software development costs of $1.6 million. These expenditures were offset by proceeds received from the sale and maturity of marketable securities of $29.4 million.

Net cash used in investing activities from continuing operations of $10.2 million for the first quarter of 2010 reflects net cash used of $4.7 million related to the acquisition of Goya AS, purchases of marketable securities of $3.0 million, expenditures of $1.2 million for internal use software development costs and capital expenditures of $4.3 million primarily related to the build-out of our new facilities in New York and Boston and, to a lesser extent, computer and software equipment purchases. These expenditures were offset by proceeds received from the sale of short-term and long-term marketable securities of $3.0 million.

Cash Flows from Financing Activities for Continuing Operations

Net cash provided by financing activities from continuing operations for the first quarter of 2011 of $1.9 million reflects cash received from the exercise of employee stock options of $3.2 million and tax benefits relating to excess stock-based compensation deductions of $1.3 million, which represents the reduction in income taxes payable resulting from tax deductions from stock-based compensation. This was partially offset by payments totaling $2.6 million to satisfy withholding taxes on equity awards that are net share settled.

Net cash used in financing activities from continuing operations for the first quarter of 2010 of $8.0 million reflects the repurchase of approximately 497,000 shares of our common stock for $10.5 million and payments totaling $0.5 million to satisfy withholding taxes on equity awards that are net share settled. This was partially offset by cash received from the exercise of employee stock options of $3.1 million.

Cash Flows from Operating Activities for Discontinued Operation

Our cash provided by operating activities from discontinued operation of $74,000 during the three months ended March 31, 2011 was primarily the result of our net income from discontinued operation, partially offset by the gain of $3.0 million from the release of funds held in escrow in connection with the sale of MicroEdge on October 1, 2009. Other changes in assets and liabilities include an increase in income taxes payable.

Our cash used in operating activities from discontinued operation of $0.3 million during the three months ended March 31, 2010 was primarily the result of our net loss. Cash flows resulting from changes in assets and liabilities included decreases in prepaid and other assets and accrued liabilities. The decrease in accrued liabilities primarily reflects cash payments of sales taxes. Other changes in assets and liabilities include a decrease in income taxes payable.

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Cash Flows from Investing Activities for Discontinued Operation

Net cash provided by investing activities from discontinued operation of $3.0 million during the three months ended March 31, 2011 reflects cash received from the release of proceeds held in escrow in connection with the sale of MicroEdge on October 1, 2009.

Working Capital

At March 31, 2011, we had working capital of $31.1 million, compared to working capital of $45.8 million at December 31, 2010. The decrease in our working capital at March 31, 2011 is primarily due to the cash paid to acquire Syncova of $24.6 million, partially offset by the generation of operating cash flow of $11.6 million. Our working capital at December 31, 2010 was primarily due to the generation of annual operating cash flow of $76.2 million, and the shift of $28.5 million of marketable securities from long-term to short-term, partially offset by common stock repurchases of $35.9 million, capital expenditures of $17.4 million, and cash paid to acquire Goya AS of $4.7 million. Excluding deferred revenues and deferred taxes, we had working capital of $164.8 million at March 31, 2011, compared to $177.3 million at December 31, 2010.

We believe our existing cash, cash equivalents, short-term and long-term marketable securities, together with cash expected to be generated from operations, will be sufficient to fund our operating activities, anticipated capital expenditures and authorized stock repurchases.

Common Stock Repurchases

On October 30, 2008, our Board authorized the repurchase of up to 6.0 million shares of the Company’s common stock. In May 2010, Advent’s Board authorized the repurchase of up to an additional 2.0 million shares of the Company’s common stock. There were no common stock repurchases during the three months ended March 31, 2011. At March 31, 2011, there remained approximately 2.3 million shares authorized by the Board for repurchase.

Off-Balance Sheet Arrangements and Contractual Obligations

The following table summarizes our contractual cash obligations, excluding cash obligations for our MicroEdge discontinued operation, as of March 31, 2011 (in thousands):

	Nine
	Months Ended
	December 31		Years Ended December 31
	2011		2012		2013		2014		2015		Thereafter		Total
Operating lease obligations, net of sub-lease income	$	6,993	$	7,634	$	6,983	$	7,345	$	7,539	$	27,891	$	64,385

As of March 31, 2011, MicroEdge had operating lease commitments totaling $5.8 million, less sublease income of $3.3 million, which are not reflected in the above table. On October 1, 2009, we completed the sale of our MicroEdge subsidiary. In connection with the sale of MicroEdge, the Company entered into a sublease agreement with Microedge LLC, whereby Microedge LLC will sub-lease approximately 24,000 square feet of office space located at 619 West 54th Street in New York, New York from the Company. Microedge LLC will sub-lease the premises through the end of the lease term in 2018, with an option to terminate early. The sub-lease agreement became effective upon the close of sale of MicroEdge on October 1, 2009. With the exception of the MicroEdge facilities in New York City, the leases related to MicroEdge have been transferred to the Purchaser.

At March 31, 2011 and December 31, 2010, we had a gross liability of $9.9 million and $9.5 million for uncertain tax positions. Since almost all of this liability relates to reserves against deferred tax assets that we do not expect to utilize in the short term, we cannot estimate the timing of potential future cash settlements and have not included any estimates in the table of contractual cash obligations above. Additionally, our cash payments for federal income taxes will remain nominal through 2012 as we have significant net operating losses, capital losses and tax credit carryforwards to utilize.

At March 31, 2011 and December 31, 2010, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

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Other Liquidity and Capital Resources Considerations

As noted above, we expect our cash payments for federal income taxes to remain nominal over the next few years as we have significant net operating losses and tax credit carryforwards to utilize against current income taxes. However, our cash payments for federal income taxes could increase as early as fiscal 2013.

Our liquidity and capital resources in any period could be affected by the exercise of outstanding employee stock options and issuance of common stock under our employee stock purchase plan, as cash received from these transactions would increase our liquidity. Conversely, our liquidity is negatively affected by an employee’s vesting of restricted stock units and exercise of stock-settled stock appreciation rights, as our cash is used to satisfy tax and exercise withholding obligations on these net share-settled equity awards. The resulting increase in the number of outstanding shares could also affect our per share results of operations. However, we cannot predict the timing or amount of proceeds from the exercise of these securities, or whether they will be exercised at all.

We expect that for the next year, our operating expenses will continue to constitute a significant use of cash flow. In addition, we may use cash to fund other acquisitions, repurchase additional common stock, or invest in other businesses, when opportunities arise. Based upon the predominance of our revenues from recurring sources, bookings performance and current expectations, we believe that our cash and cash equivalents, and cash generated from operations will be sufficient to satisfy our working capital needs, capital expenditures, investment requirements, stock repurchases and financing activities for the next year.

If we identify opportunities that exceed our current expectation, we may choose to seek additional capital resources through debt or equity financing. However, such financing may not be available at all, particularly in an uncertain economic environment, or if available may not be obtainable on terms favorable to us and could be dilutive.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Since the acquisitions of Advent Denmark, Advent Norway, Advent Sweden, Advent Netherlands, Goya AS, Syncova Solutions, Ltd. and Advent Europe’s remaining distributors in the United Kingdom and Switzerland, and the opening of offices in Hong Kong, China and Singapore, whose service and certain license revenues and capital spending are transacted in local country currencies, we have greater exposure to foreign currency fluctuations. As of March 31, 2011, approximately $71.8 million of goodwill and intangible assets from the acquisition of these entities are denominated in foreign currency. Therefore, a hypothetical change of 10% could increase or decrease our assets and equity by approximately $4 million. Additionally, as of March 31, 2011, approximately $8 million of monetary assets and liabilities are denominated in foreign currency. Therefore, a hypothetical change of 10% would cause the revaluation of these amounts resulting in a gain or loss of approximately $0.8 million on our condensed consolidated results of operations.

We maintain an investment portfolio of various holdings, types, and maturities. Our interest rate risk relates primarily to our investment portfolio, which consisted of $140.9 million in cash and cash equivalents, and short-term and long-term marketable securities as of March 31, 2011. Our short-term and long-term securities are generally classified as available-for-sale and, consequently, are recorded on our condensed consolidated balance sheet at fair value with unrealized gains or losses reported as a separate component of accumulated other comprehensive income.

Fluctuations in interest rates have a direct impact on the fair value of our investment portfolio. As interest rates increase, the fair value of our investment portfolio decreases, and conversely, as interest rates decrease, the fair value of our investment portfolio increases. We do not currently hedge these interest rate exposures.

The following table presents hypothetical changes in fair value of our US government and corporate debt securities of $82.2 million at March 31, 2011. For March 31 2011, the market changes reflect an immediate hypothetical parallel shifts in the yield curve of plus or minus 25 basis points (“BPS”), 50 BPS and 100 BPS. For balances at March 31, 2011, the hypothetical fair values were as follows (in millions, except percentages):

	Decrease in Interest Rates									Increase in Interest Rates
	-100 Basis Points			-50 Basis Points			-25 Basis Points			25 Basis Points			50 Basis Points			100 Basis Points
Total Fair Value	$	82.3		$	82.1		$	82.0		$	81.8		$	81.7		$	81.5
% Change in Fair Value	0.47		%	0.24		%	0.12		%	-0.12		%	-0.24		%	-0.47		%

We have also invested in several privately-held companies. These non-marketable investments are classified as other assets on our condensed consolidated balance sheets. Our investments in privately-held companies could be affected by an adverse movement in the financial markets for publicly-traded equity securities, although the impact cannot be directly quantified. These investments are inherently risky as the market for the technologies or products these privately-held companies have under development are typically in the early stages and may never materialize. It is our policy to review investments in privately held companies on a regular basis to evaluate the carrying amount and economic viability of these companies. This policy includes, but is not limited to, reviewing each of the companies’ cash position, financing needs, earnings/revenue outlook, operational performance, management/ownership changes and competition. The evaluation process is based on information that we request from these privately held companies. This information is not subject to the same disclosure regulations as US publicly traded companies, and as such, the basis for these evaluations is subject to timing and the accuracy of the data received from these companies.

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Our investments in privately held companies are assessed for impairment when a review of the investee’s operations indicates that a decline in value of the investment is other-than-temporary. Such indicators include, but are not limited to, limited capital resources, limited prospects of receiving additional financing, and prospects for liquidity of the related securities. Impaired investments in privately held companies are written down to estimated fair value. We estimate fair value using a variety of valuation methodologies. Such methodologies include comparing the private company with publicly traded companies in similar lines of business, applying revenue and price/earnings multiples to estimated future operating results for the private company and estimating discounted cash flows for that company. We could lose our entire investment in these companies. At March 31, 2011 and December 31, 2010, our net investment in a privately-held company totaled $0.5 million.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures.

The Company’s management evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of the Company’s disclosure controls and procedures, as such term is defined under Rule 13a-15(f) of the Securities and Exchange Act of 1934, as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded our disclosure controls and procedures were effective as of March 31, 2011 to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (ii) is accumulated and communicated to Advent’s management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting.

There were no changes in our internal control over financial reporting which were identified in connection with the evaluation required by Rule 13a-15(e) of the Exchange Act that occurred during the first quarter ended March 31, 2011 that have materially affected, or are reasonably likely to materially affect, Advent’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

On March 8, 2005, certain of the former shareholders of Kinexus Corporation and the shareholders’ representative filed suit against Advent in the Delaware Chancery Court. The complaint alleges that Advent breached the Agreement and Plan of Merger dated as of December 31, 2001 pursuant to which Advent acquired all of the outstanding shares of Kinexus due principally to the fact that no amount was paid by Advent on an earn-out of up to $115 million. The earn-out, which was payable in cash or stock at the election of Advent, was based upon Kinexus meeting certain revenue targets in both 2002 and 2003. The complaint seeks unspecified compensatory damages, an accounting and restitution for unjust enrichment. Advent advised the shareholders’ representative in January 2003 that the earn-out terms had not been met in 2002 and accordingly no earn-out was payable for 2002 and would not be payable for 2003. After nearly two years of inactivity, plaintiff contacted Advent in November 2010, seeking to continue discovery in the case. Advent has filed a motion to dismiss the case for plaintiff’s failure to prosecute in a timely manner and a ruling on the motion is pending. Advent disputes the plaintiffs’ claim and believes that it has meritorious defenses and intends to vigorously defend this action. Management believes that any potential loss associated with this litigation is neither probable nor reasonably estimable at this time and accordingly has not accrued any amounts for any potential loss.

From time to time, we are involved in claims and legal proceedings that arise in the ordinary course of business. Based on currently available information, management does not believe that the ultimate outcome of these unresolved matters, individually or in the aggregate, is likely to have a material adverse effect on the Company’s financial position or results of operations. However, litigation is subject to inherent uncertainties and our view of these matters may change in the future. Were an unfavorable outcome to occur, there exists the possibility of a material adverse impact on our financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods.

Item 1A. Risk Factors

Investors should carefully consider the risks described below before making an investment decision. The trading price of our common stock could decline due to any of, but are not limited to, these risks. In assessing these risks, investors should also refer to the other information contained or incorporated by reference in this Quarterly Report on Form 10-Q filed with the SEC, including our condensed consolidated financial statements and related notes thereto and our Annual Report on Form 10-K for the year ended December 31, 2010.

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If our existing customers do not renew their term license, perpetual maintenance or other recurring contracts, our business will suffer.

Total recurring revenues, which we define as term license, maintenance from term and perpetual arrangements, other recurring revenue and Asset Under Administration (AUA) fees for certain perpetual arrangements, represented 89%, 89% and 88% of total net revenues during the first quarter of 2011, fiscal 2010 and 2009, respectively. We expect to continue to derive a significant portion of our revenue from our clients’ renewal of term license, perpetual maintenance and other recurring contracts and such renewals are critical to our future success. Some factors that may affect the renewal rate of our contracts include:

· The impact of the economic environment and market volatility on our clients and prospects;

· The impact of customers consolidating or going out of business;

· The price, performance and functionality of our solutions;

· The availability, price, performance and functionality of competing products and services;

· The effectiveness of our maintenance and support services; and

· Our ability to develop complementary products and services.

Most of our perpetual license customers have historically renewed their annual maintenance although our customers have no obligation to renew such maintenance after the first year of their license agreements. In addition, our customers may select maintenance levels less advantageous to us upon renewal, which may reduce recurring revenue from these customers. Market downturns, such as the downturn beginning in the fall of 2008, caused, and may in the future cause, some clients not to renew their maintenance or reduce their level of maintenance, which affects our renewal rates and revenue. Our renewal rates are based on cash collections and are disclosed one quarter in arrears. Our reported renewal rates may fluctuate. For example, our renewal rates for our quarterly periods of 2009 and first three quarters of 2010 were below the levels we disclosed for our corresponding quarterly periods of 2008, while the rates for all four quarters of 2010 exceeded the previous corresponding 2009 periods. The decreases in renewal rates reflect reduced maintenance expenditures, customer attrition, and reductions in products licensed or number of users by clients, as well as from slower payments received from renewal clients.

Since we commenced renewing term license contracts in the third quarter of 2007, we have limited experience with renewals of our term license contracts. These were the first three-year term license contracts to be renewed by Advent since our transition to a term pricing model began. Our customers have no obligation to renew their term license contracts and given the smaller number of term license contracts subject to renewal that were renewed in the second half of 2007 through 2010, we cannot yet conclude whether customers will renew at a rate consistent with our perpetual maintenance customers. Additionally, we cannot predict whether the renewals will be less advantageous to us than the original term contract. For example, the renewal periods for our term license contracts are typically shorter than our original term license contract and customers may request a reduction in the number of users or products licensed, resulting in a lower annual term license fee. Further, customers may elect to not renew their term license contracts at all. We may incur significantly more costs in securing our term license contract renewals than we incur for our perpetual maintenance renewals. If our term license contract customers renew under terms less favorable to us or choose not to renew their contracts, or if it costs significantly more to secure a renewal for us, our operating results may be harmed.

Our sales cycle is long and we have limited ability to forecast the timing and amount of specific sales and the timing of specific implementations.

The purchase of our software products often requires prospective customers to provide significant executive-level sponsorship and to make major systems architecture decisions. As a result, we must generally engage in relatively lengthy sales and contracting efforts. Sales transactions may therefore be delayed during the customer decision process because we must provide a significant level of education to prospective customers regarding the use and benefit of our products. Our business and prospects are subject to uncertainties in the financial markets that can cause customers to remain cautious about capital and information technology expenditures, particularly in uncertain economic environments, or to decrease their information technology budgets as an expense reduction measure. The sales cycle associated with the purchase of our solutions is typically between two and twelve months depending upon the size of the client, and is subject to a number of significant risks that have impacted our sales and over which we have little or no control, including broader financial market volatility, adverse economic conditions, customers’ budgeting constraints, internal selection procedures, and changes in customer personnel, among others.

As a result of a lengthy and unpredictable sales cycle, we have limited ability to forecast the timing and amount of specific perpetual license sales, or term license and Advent OnDemand sales which we report quarterly as annual contract value (ACV). The timing of large individual license sales is especially difficult to forecast, and we may not be successful in closing large license transactions on a timely basis or at all. Customers may postpone their purchases of our existing products or product enhancements in advance of the anticipated introduction of new products or product enhancements by us or our competitors. Accordingly, our level of ACV bookings and perpetual license revenue in any particular period is subject to significant fluctuation. For example, during 2010, our ACV bookings and perpetual license revenue increased by 25% and 5%, respectively, compared to 2009. During the first quarter of

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2011, our ACV bookings and perpetual license revenue decreased by 51% and 17%, respectively, compared to the fourth quarter of 2010.

When a customer purchases a term license together with implementation services, we do not recognize any revenue under the contract until the implementation services are substantially complete. The timing of large implementations is difficult to forecast. Customers may delay or postpone the timing of their particular projects due to the availability of resources or other customer specific priorities. If we are not able to complete an implementation project for a term license in a quarter, it will cause us to defer all of the proportionate contract revenues to a subsequent quarter. Because our expenses are relatively fixed in the near term, any shortfall from anticipated revenues could result in a significant variation in our operating results from quarter to quarter.

Our current operating results may not be reflective of our future financial performance.

During the first quarter of 2011 and fiscal years 2010 and 2009, we recognized 89%, 89% and 88%, respectively, of total net revenues from recurring sources. We generally recognize revenue from these sources ratably over the terms of these agreements, which typically range from one to three years. As a result, almost all of our revenues in any quarter are generated from contracts entered into during previous periods.

Consequently, a significant decline in new business generated in any quarter may not materially affect our results of operations in that quarter but will have an impact on our revenue growth rate in future quarters. We also experience fluctuations and seasonality in our new business generated each quarter. For example, ACV in the first quarter of 2011 decreased by 30% compared to ACV bookings in the comparable 2010 period and decreased by 51% compared to the fourth quarter of 2010. Additionally, a decline in renewals of term agreements, maintenance or data and other subscription contracts during a quarter will not be fully reflected in our financial performance in that quarter. For example, because we recognize revenue ratably, the non-renewal of term agreements or maintenance contracts late in a quarter may have very little impact on revenue for that quarter, but will reduce revenue in future quarters. In addition, we may be unable to adjust our costs in response to reduced revenue.

Further, because of the large percentage of revenue from recurring sources in our term license business model, our historical operating results on a generally accepted accounting principles (GAAP) basis will not necessarily be the sole or most relevant factor in predicting our future operating results. Accordingly, we report certain non-GAAP or operational information, including our quarterly bookings metrics (expressed as ACV) and maintenance renewal rates, that is intended to provide investors with certain of the information that management uses as a basis for planning and forecasting of future periods. However, we believe that undue reliance should not be placed upon non-GAAP or operating information because this information is neither standardized across companies nor subjected to the same control activities and audit procedures that produce our GAAP financial results.

Uncertain economic and financial market conditions adversely affect our business.

The market for investment management software systems has been and may in the future be negatively affected by a number of factors, including reductions in capital expenditures by customers and volatile performance of major financial markets. For example, the market downturn and fluctuations arising in fall 2008, dissolution and acquisitions of our clients and prospects, the decline in Assets Under Administration (AUA) or Assets Under Management (AUM) as a result of significant declines in asset values of our clients and the accompanying market uncertainty affected both our ability to sell our solutions and the amount of revenue we received from such sales. We experienced some clients and prospects delaying or cancelling additional license purchases and others went out of business, reduced personnel, or were acquired, which we expect to experience should the financial markets face future hardship. The target clients for our products include a range of financial services organizations that manage investment portfolios. The success of many of our clients is intrinsically linked to the health of the financial markets. The demand for our solutions has been and continues to be disproportionately affected by fluctuations, disruptions, instability and downturns in the economy and financial services industry, which may cause clients and potential clients to exit the industry or delay, cancel or reduce any planned expenditures for investment management systems and software products.

In addition, the failure of existing investment firms or the slowdown in the formation of new investment firms could cause a decline in demand for our solutions. Consolidation of financial services firms and other clients will result in reduced technology expenditures or acquired customers using the acquirer’s own proprietary software and services solutions or the solutions of another vendor. In some circumstances where both acquisition parties are customers of Advent, the combined entity may require fewer Advent products and services than each individually licensed, thus reducing our revenue. Challenging economic conditions may also cause our customers to experience difficulty with gaining timely access to sufficient credit or our customers may become unable to pay for the products or services they have purchased, which could result in their inability to fulfill or make timely payments to us. If that were to occur, our ability to collect receivables would be negatively affected, and our reserves for doubtful accounts and write-offs of accounts receivable may increase.

We have in the past experienced a number of market downturns in the financial services industry and resulting declines in information technology spending, which has caused longer sales and contracting cycles, deferral or delay of information technology

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projects and generally reduced expenditures for software and related services. The severity of the market downturn and volatility and uncertainty in the financial markets and the financial services sector in the last several years makes it difficult for us to forecast operating results and may result in a material adverse effect on our revenues and results of operations in the longer term.

The market downturn beginning in the Autumn of 2008 caused, and other downturns in the future may cause clients not to renew their term licenses or perpetual license maintenance. Also, significant declines in market value of our clients affect their Assets Under Administration (AUA) or Assets Under Management (AUM). Consequently, we may also experience a decline in the ACV of bookings since the pricing of some of our products is based upon our client’s AUA or AUM. Furthermore, we have some contracts for which clients pay us fees based on the greater of a negotiated annual minimum fee or a calculated fee that is determined by the client’s AUA or AUM. If a client previously paid us based on the calculated fee, rather than the annual minimum fee, we would experience a decline in revenue as a result of any decline in those clients’ AUA or AUM.

We operate in a highly competitive industry.

The market for investment management software is competitive and highly fragmented, is subject to rapid change and is sensitive to new product introductions and marketing efforts by industry participants. Our largest single source of competition is from proprietary systems used by existing and potential clients, many of whom develop their own software for their particular needs and therefore may be reluctant to license software products offered by third party vendors such as Advent. We also face significant competition from other providers of software and related services as well as providers of outsourced services. Many of our competitors have longer operating histories and greater financial, technical, sales and marketing resources than we do. In addition, consolidation has occurred among some of the competitors in our markets. Competitors vary in size, scope of services offered and platforms supported. In recent years, many of our competitors have merged with each other or with other larger third parties, and it is possible that even larger companies will emerge through additional acquisitions of companies and technologies. Consolidation among our competitors may result in stronger competitors in our markets and may therefore either result in a loss of market share or harm our results of operations. In addition, we also face competition from potential new entrants into our markets that may develop innovative technologies or business models. Furthermore, competitors may respond to weak market conditions by lowering prices, offering better contractual terms and attempting to lure away our customers and prospects with lower cost solutions. We cannot guarantee that we will be able to compete successfully against current and future competitors or that competitive pressure will not result in price reductions, reduced operating margins or loss of market share, any one of which could seriously harm our business. We must continue to introduce new products and product enhancements.

The market for our products is characterized by rapid technological change, changes in customer demands, evolving industry standards and new regulatory requirements. New products based on recent technologies or new industry standards can render existing products obsolete and unmarketable. As a result, our future success will continue to depend upon our ability to develop new products or product enhancements that address the future needs of our target markets and respond to their changing standards and practices. We continue to release numerous products and product upgrades and we believe our future success depends on continuing such releases. Additionally, in October 2008, we acquired Tamale Software which enables us to offer a new product in the nascent research management field and in March 2010, Advent Norway AS acquired Goya AS to allow us to provide transfer agency-related solutions to mutual fund managers and mutual fund distributors. In addition, in February 2011, Advent Software, Inc. acquired Syncova Solutions, Ltd., a United Kingdom-based company that provides margin management and debt finance reconciliation and optimization software. However, it is too early to know whether these products will meet anticipated sales or will be broadly accepted in the market, that a market will develop as expected for these new products or that we will continue to introduce more products.

We may not be successful in developing, introducing, marketing and licensing our new products or product enhancements on a timely and cost effective basis, or at all, and our new products and product enhancements may not adequately meet the requirements of the marketplace or achieve market acceptance. Delays in the commencement of commercial shipments of new products or enhancements or delays in client implementations or migrations may result in client dissatisfaction and delay or loss of product revenues. Additionally, existing clients may be reluctant to go through the process of migrating from our Axys product to our APX product, which may slow the migration of our customer base to APX. In addition, clients may delay purchases in anticipation of new products or product enhancements. Our ability to develop new products and product enhancements is also dependent upon the products of other software vendors, including certain system software vendors, such as Microsoft Corporation, database vendors and development tool vendors. If the products of such vendors have design defects or flaws, are unexpectedly delayed in their introduction, are unavailable on acceptable terms, or the vendors exit the business, our business could be seriously harmed.

We depend heavily on our Axys®, Geneva®, APX and Moxy® products.

We derive a majority of our net revenues from the license and maintenance revenues from our Axys, Geneva, APX and Moxy products. In addition, Moxy and many of our applications, such as Partner and various data services, have been designed to provide an integrated solution with Axys, Geneva and APX. As a result, we believe that for the foreseeable future a majority of our net revenues will depend upon continued market acceptance of Axys, Geneva, APX, and Moxy, and upgrades to those products. This is particularly true as a result of our divestiture of our MicroEdge grants management products, which further concentrates our revenue streams.

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Our operating results may fluctuate significantly.

Revenues from recurring sources have grown from 88% in 2009, to 89% in 2010 and in the first quarter of 2011, respectively. During the first quarter of 2011 term license revenues comprised approximately 45% of recurring revenues as compared to approximately 44% and 44% in fiscal 2010 and 2009, respectively. Term license contracts are comprised of both software licenses and maintenance services. Individual perpetual software licenses vary significantly in value, and the value and timing of these transactions can therefore cause our quarterly perpetual license revenues to fluctuate. As we continue to sign term license agreements for new customers, grow our subscription, data management and outsourced services revenues, and our customers renew their perpetual maintenance, we expect our revenue from recurring sources to continue to increase slightly as a percent of net revenues.

When a customer purchases a term license together with implementation services, we do not recognize any revenue under the contract until the implementation services are substantially completed and then we recognize revenue ratably over the remaining length of the contract. If the implementation services are still in progress as of quarter-end, we will defer all of the contract revenues to a subsequent quarter. At the point professional services are substantially completed, we recognize a pro-rata amount of the term license revenue, professional services fees earned and related expenses, based on the elapsed time from the start of the term license to the substantial completion of professional services. During 2009, the revenue recognized from completed implementations exceeded the revenue deferred from projects being implemented, resulting in a net recognition of revenue of $6.1 million for fiscal 2009, composed of $3.5 million of term license revenue and $2.6 million of professional services revenue. Subsequently in 2010 and during the first quarter of 2011, we returned to our prior trend of net term license revenue deferral. In future periods, our revenues related to completed implementations may vary depending on the number of projects that reach substantial completion during the quarter. Term license revenue for the remaining contract years and the remaining deferred professional services revenue and related expenses are recognized ratably over the remaining contract length. The term license component of the deferred revenue balance will increase or decrease in the future depending on the amount of new term license bookings relative to the number of implementations that reach substantial completion in a particular quarter. Although our substantial revenue from recurring sources under our term license model provides us with longer term stability and more visibility in the short term, our quarterly net revenues and operating results may still fluctuate significantly depending on these and other factors. Our expense levels are relatively fixed in the short-term. Due to the fixed nature of these expenses, combined with the relatively high gross margin historically achieved on our products, an unanticipated decline in net revenues in any particular quarter may adversely affect our operating results.

In addition, we experience seasonality in our licensing. We believe that this seasonality results primarily from customer budgeting cycles and expect this seasonality to continue in the future. The fourth quarter of the year typically has more licensing activity. That can result in term license bookings and perpetual license fee revenue being the highest in the fourth quarter, followed by lower term license bookings and perpetual license revenue in the first quarter of the following year. This seasonality has been, and may be in the future, adversely affected by market downturns and uncertain economic conditions. Also, term licenses entered into during a quarter may not result in recognition of associated revenue until later quarters, as we begin recognizing revenue for such licenses when the related implementation services are substantially complete. In addition, we may incur commission and bonus expenses in the period in which we enter into a license, but not recognize the associated revenue until later periods.

Because of the above factors, we believe that quarter-to-quarter comparisons of our operating results are not necessarily reliable indicators of future performance.

Our stock price may fluctuate significantly.

Like many other companies, our stock price has been subject to wide fluctuations in recent quarters as a result of market volatility. If net revenues or earnings in any quarter or our financial guidance for future periods fail to meet the investment community’s expectations, our stock price is likely to decline. Even if our revenues or earnings meet or exceed expectations, our stock price is subject to decline in periods of high market volatility because our stock price is affected by trends in the financial services sector and by broader market trends unrelated to our performance. Unfavorable or uncertain economic and market conditions, which can be caused by many factors, including declines in economic growth, business activity or investor or business confidence; limitation on the availability or increases in the cost of credit or capital; increases in inflation, interest rates, exchange rate volatility, default rates or the price of basic commodities; corporate, political or other scandals that reduce investor confidence in capital markets; outbreaks of hostilities or other geopolitical instability; natural disasters or pandemics; or a combination of these or other factors, have adversely affected, and may in the future adversely affect, our business, profitability and stock price.

If our relationship with Financial Times/Interactive Data is terminated, our business may be harmed.

Many of our clients use our proprietary interface to retrieve pricing and other data electronically from Financial Times/Interactive Data (“FTID”). FTID pays us a commission which we classify as other recurring revenues. The commission is based on their revenues from providing this data to our clients. Our software products have been customized to be compatible with their system and our software would need to be redesigned to operate with additional alternative data vendors if FTID’s services were

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unavailable for any reason. Non-renewal of our current agreement with FTID would require at least two years’ prior notice by either us or them and the agreement may be terminated upon 90 days’ advance notice for an uncured material breach of the other party. While we have contracts with other data vendors for substantially similar financial data with which our products can be used, if our relationship with FTID was terminated or their services were unavailable to clients for any reason, we cannot be certain that we could enter into contracts with additional alternative data providers, or that other relationships would provide similar commission rates to us or if the amount of data used by our clients would remain the same, and our operating results could suffer or our resources could be constrained from the costs of redesigning our software.

If our large subscription-based clients or if our revenue sharing relationships are terminated, our business may be harmed.

In recent years, Advent has periodically entered into contracts relating to our subscription, data management revenue streams and outsourced services with contract values that are substantially larger than we have customarily entered into in the past, including our agreement with TIAA-CREF. We do not know whether we will be able to continue to sign large recurring revenue contracts of this nature or if such clients will renew their contracts at similar rates, if at all. Some of these agreements are subject to milestones, acceptance and penalties and there is no assurance that these agreements will be fully implemented. In addition, we have revenue sharing agreements with other companies that provide revenue to Advent for our clients’ use of those companies’ services and products. Our operating results could be adversely impacted if these agreements are not fully implemented, terminated or not renewed, or if we are unable to continue to generate similar opportunities and enter similar or larger sized contracts in the future.

Our outsourcing and data integration services are subject to risks that may harm our business.

Our clients rely on our outsourcing and data services to meet their operational needs, including account aggregation and reconciliation. Because our services are complex, because we utilize third party data and other vendors, and because our clients use our services in a variety of ways, our services may have undetected errors or defects, service disruptions, delays, or incomplete or incorrect data that could result in unanticipated downtime for our customers, failure to meet service levels and service disruptions. In addition, our security measures could be breached or unauthorized access to our information or our customers’ information could occur. Such potential errors, defects, delays, disruptions or other performance problems may damage our clients’ business, harm our reputation, result in losing future sales, cause clients to withhold payment or terminate or not renew their agreements with us, and subject us to litigation and other possible liabilities.

We must recruit and retain key employees.

We believe that our future success is dependent on the continued employment of our senior management and our ability to identify, attract, motivate and retain qualified technical, sales and other personnel. Members of our executive management team have acquired specialized knowledge and skills with respect to Advent. We need technical resources such as our product development engineers to develop new products and enhance existing products; we rely upon sales personnel to sell our products and services and maintain healthy business relationships; we must recruit professional service consultants to support our implementations; we must hire client services personnel to provide technical support to our growing installed base of customers; and we must attract and retain financial and accounting personnel to comply with our public company reporting requirements. We need to identify, attract, motivate and retain such employees with the requisite education, backgrounds and industry experience. However, experienced high quality personnel in the information technology industry continue to be in high demand and competition for their talents remains intense, especially in the San Francisco Bay Area where the majority of our employees are located.

We have relied on our ability to grant equity compensation as one mechanism for recruiting and retaining such highly skilled personnel. In making employment decisions, particularly in the high-technology industries and San Francisco Bay Area, job candidates often consider the value of the equity awards they are to receive in connection with their employment and market downturns may result in our equity incentives becoming less valuable. Additionally, accounting regulations requiring the expensing of equity compensation impair our ability to provide these incentives without reporting significant compensation costs.

We may also choose to create additional performance and retention incentives in order to retain our employees, including the granting of additional stock options, restricted stock, restricted stock units, stock appreciation rights, performance shares or performance units to employees or issuing incentive cash bonuses. Such incentives may either dilute our existing stockholder base or result in unforeseen operating expenses, which may have a material adverse effect on our operating results, could result in our stock price falling or may not be valued as highly by our employees which may create retention issues.

We face challenges in expanding our international operations.

We market and sell our products in the United States and, to a growing extent, internationally. From 2001 through 2005, we acquired the subsidiaries of our independent distributor. In addition, we have begun to expand our sales in relatively new jurisdictions for us, such as the Middle East, Eastern Europe, and Asia. In 2006, we opened a branch office of Advent Europe Ltd. in the United Arab Emirates, and we established Advent Software (Asia) Ltd., a subsidiary of Advent Software, Inc., in Hong Kong in 2008. In

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addition, we established a subsidiary of Advent Software (Asia), Ltd. in Beijing, China and established Advent Software Singapore Pte. Ltd., a subsidiary of Advent Software, Inc. in April 2010. In March 2010, our wholly-owned Norwegian subsidiary, Advent Norway AS, acquired the entire share capital of Goya AS, a Norwegian software company that provides transfer agency-related solutions to mutual fund managers and mutual fund distributors. In addition, in February 2011, Advent Software, Inc. acquired Syncova Solutions, Ltd., a United Kingdom-based company that provides margin management and debt finance reconciliation and optimization software.

We cannot be certain that establishing businesses in other countries will produce the desired levels of revenues, such as in the case of our former Greek subsidiary, Advent Hellas, which produced less than satisfactory revenues and profitability before its sale by Advent in 2005. Also, worldwide volatility in financial markets may disrupt our sales efforts in overseas markets. We currently have limited experience in developing localized versions of our products and marketing and distributing our products internationally. In other instances, we may rely on the efforts and abilities of foreign business partners in such markets. For example, we previously outsourced certain engineering activities to a business partner located in China until we transitioned those contract developers to become employees of our Beijing office. In addition, international operations are subject to other inherent risks, including:

· The impact of recessions and market fluctuations in economies outside the United States;

· Adverse changes in foreign currency exchange rates;

· Greater difficulty in accounts receivable collection and longer collection periods;

· Difficulty of enforcement of contractual provisions in local jurisdictions;

· Unexpected changes in foreign laws and regulatory requirements;

· US and foreign trade-protection measures and export and import requirements;

· Difficulties in successfully adapting our products to the language, regulatory and technology standards of other countries;

· Resistance of local cultures to foreign-based companies and difficulties establishing local partnerships or engaging local resources;

· Difficulties in and costs of staffing and managing foreign operations;

· Reduced protection for intellectual property rights in some countries;

· Foreign tax structures and potentially adverse tax consequences; and

· Political and economic instability.

The revenues, expenses, assets and liabilities of our international subsidiaries are primarily denominated in local foreign currencies. Future fluctuations in currency exchange rates may adversely affect revenues and accounts receivable from international sales and the US dollar value of our foreign subsidiaries’ revenues, expenses, assets and liabilities. Our international service revenues and certain license revenues from our European subsidiaries are generally denominated in local foreign currencies.

Difficulties in integrating our acquisitions and expanding into new business areas have impacted and could continue to impact our business adversely and we face risks associated with potential acquisitions, investments, divestitures and expansion.

Periodically we seek to grow through the acquisition of additional complementary businesses. In October 2008, we completed the acquisition of Tamale Software, Inc., which provides research management software. More recently in March 2010, our wholly-owned Norwegian subsidiary, Advent Norway AS, acquired the entire share capital of Goya AS, a Norwegian software company that provides transfer agency-related solutions to mutual fund managers and mutual fund distributors. In addition, in February 2011, Advent Software, Inc. acquired Syncova Solutions, Ltd., a United Kingdom-based company that provides margin management and debt finance reconciliation and optimization software.

The process of integrating our acquisitions has required and will continue to require significant resources, particularly in light of our relative inexperience in integrating acquisitions, potential regulatory requirements and operational demands. In particular, our Tamale acquisition reflects our entry into the research management software market, where we have no prior experience. Integrating these acquisitions in the past has been time-consuming, expensive and disruptive to our business. This integration process has strained our managerial resources, resulting in the diversion of these resources from our core business objectives, and may do so in the future. Failure to achieve the anticipated benefits of these acquisitions or to integrate the operations of these entities successfully has harmed and could potentially harm our business, results of operations and cash flows in future periods. The assumptions we made in determining the value and relative risks of these acquisitions could be erroneous. For example, in the first quarter of 2003, we closed our Australian subsidiary because it failed to perform at a satisfactory profit level and similarly in the fourth quarter of 2005, we disposed of our Advent Hellas subsidiary in Greece because of less than satisfactory profitability. In addition, as we have expanded into new business areas and built new offerings through strategic alliances and internal development, as well as acquisitions, some of this expansion has required significant management time and resources without generating required revenues. We have had difficulty and may continue to have difficulty creating demand for such offerings. Furthermore, we may face other unanticipated costs from our acquisitions, such as disputes involving earn-out and incentive compensation amounts.

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We may make additional acquisitions of complementary companies, products or technologies in the future. In addition, we periodically evaluate the performance of all our products and services and may sell or discontinue current products, product lines or services, particularly as we focus on ways to streamline our operations. For example, in October 2009, we divested our MicroEdge subsidiary. Failure to achieve the anticipated benefits of any acquisition or divestiture could harm our business, results of operations and cash flows. Furthermore, we may have to incur debt, write-off investments, infrastructure costs or other assets, incur severance liabilities, write-off impaired goodwill or other intangible assets or issue equity securities to pay for any future acquisitions. Financing may not be available to us on sufficiently advantageous terms, or at all, and we do not have a current credit facility. The issuance of equity securities could dilute our existing stockholders’ ownership. Finally, we may not identify suitable businesses to acquire or negotiate acceptable terms for future acquisitions.

If we are unable to protect our intellectual property, we may be subject to increased competition that could seriously harm our business.

Our success depends significantly upon our proprietary technology. We currently rely on a combination of copyright, trademark, patent and trade secret law, as well as confidentiality procedures and contractual provisions to protect our proprietary rights. We have registered trademarks and copyrights for many of our products and services and will continue to evaluate the registration of additional trademarks and copyrights as appropriate. We generally enter into confidentiality agreements with our employees, customers, resellers, vendors and others. We seek to protect our software, documentation and other written materials under trade secret and copyright laws. We also have three issued patents. Despite our efforts, existing intellectual property laws may afford only limited protection. It may be possible for unauthorized third parties to copy certain portions of our products or to reverse engineer or otherwise obtain and use our proprietary information. In addition, we cannot be certain that others will not develop or acquire substantially equivalent or superseding proprietary technology, equivalent or better products will not be marketed in competition with our products, or others may not design around any patent that we have or that may be issued to us or other intellectual property rights of ours, thereby substantially reducing the value of our proprietary rights. We cannot be sure that we will develop proprietary products or technologies that are patentable, that any patent, if issued, would provide us with any competitive advantages or would not be challenged by third parties, or that the patents of others will not adversely affect our ability to do business. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use information that we regard as proprietary. In addition, the laws of some foreign countries do not protect proprietary rights to as great an extent as do the laws of the United States and so our expansion into international markets may expose our proprietary rights to increased risks. Litigation may be necessary to protect our proprietary technology which may be time-consuming and expensive, with no assurance of success. As a result, we cannot be sure that our means of protecting our proprietary rights will be adequate.

If we infringe the intellectual property rights of others, we may incur additional costs or be prevented from selling our products and services.

We cannot be certain that our products or services do not infringe the intellectual property rights of others. As a result, we may be subject to litigation and claims, including claims of misappropriation of trade secrets or infringement of patents, copyrights and other intellectual property rights of third parties that would be time-consuming and costly to resolve and may lead to unfavorable judgments or settlements. If we discovered that our products or services violated the intellectual property rights of third parties, we may have to make substantial changes to our products or services or obtain licenses from such third parties. We might not be able to obtain such licenses on favorable terms or at all, and we may be unable to change our products successfully or in a timely or cost-effective manner. Failure to resolve an infringement matter successfully or in a timely manner would damage our reputation and force us to incur significant costs, including payment of damages, redevelopment costs, diversion of management’s attention and satisfaction of indemnification obligations that we have with our clients, as well as prevent us from selling certain products or services.

Our investment portfolio may become impaired by deterioration of the capital markets.

Our cash equivalent and short-term investment portfolio as of March 31, 2011 and December 31, 2010 consisted of US government and commercial debt securities. We follow an established investment policy and set of guidelines to monitor and help mitigate our exposure to interest rate and credit risk. The policy sets forth credit quality standards and limits our exposure to any one issuer, as well as our maximum exposure to various asset classes.

As a result of adverse financial market conditions, investments in some financial instruments may pose risks arising from recent market liquidity and credit concerns. As of March 31, 2011 and December 31, 2010, we had no impairment charges associated with our short-term investment portfolio relating to such adverse financial market conditions. Although we believe our current investment portfolio has very little risk of material impairment, we cannot predict future market conditions or market liquidity and can provide no assurance that our investment portfolio will remain materially unimpaired. In addition, the decrease in interest rates has materially decreased the interest income we receive on our investments.

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Catastrophic events could adversely affect our business.

We are a highly automated business and rely on our network infrastructure and enterprise applications, internal technology systems and our website for our development, marketing, operational, support, and sales activities. A disruption or failure of these systems in the event of major earthquake, fire, telecommunications failure, cyber-attack, terrorist attack or other catastrophic event could cause system interruptions, reputational harm, delays in our product development and loss of critical data and could affect our ability to sell and deliver products and services and other critical functions of our business. Our corporate headquarters, a significant portion of our research and development activities, our data centers and certain other critical business operations are located in the San Francisco Bay Area, which is a region of seismic activity. We have developed certain disaster recovery plans and certain backup systems to reduce the potentially adverse effect of such events, but a catastrophic event that results in the destruction or disruption of any of our data centers or our critical business or information technology systems could severely affect our ability to conduct normal business operations and, as a result, our future operating results could be adversely affected. Further, such disruptions could cause further instability in the financial markets or the spending of our clients and prospects upon which we depend.

In addition to the recent severe market conditions, other catastrophic events such as abrupt political change, terrorist acts, conflicts or wars may cause damage or disruption to the economy, financial markets and our customers. The potential for future attacks, the national and international responses to attacks or perceived threats to national security and other actual or potential conflicts, wars or political unrest, which has occurred recently in the Middle East, Egypt, Libya and Tunisia, have created many economic and political uncertainties. Although it is impossible to predict the occurrences or consequences of any such events, they could unsettle the financial markets or result in a decline in information technology spending, which could have a material adverse effect on our revenues.

Undetected errors or failures found in new products and services may result in loss of or delay in market acceptance of our products and services that could seriously harm our business.

Our products and services may contain undetected errors or scalability limitations at any point in their lives, but particularly when first introduced or as new versions are released. For example, during 2010, we released new versions of Axys, Geneva, APX and Tamale RMS. Despite testing by us and by current and potential customers, errors may not be found in new products and services until after commencement of commercial shipments or use, resulting in a loss of or a delay in market acceptance, damage to our reputation, customer dissatisfaction and reductions in revenues and margins, any of which could seriously harm our business. Additionally, our agreements with customers that attempt to limit our exposure to liability claims may not be enforceable in jurisdictions where we operate, particularly as we expand into new international markets.

Two of our principal stockholders have an influence over our business affairs and may make business decisions with which you disagree and which may adversely affect the value of your investment.

Our Chief Executive Officer and the Chairman of our board of directors own or control, indirectly or directly, a substantial number of shares of our common stock (approximately 6% and 30%, respectively, as of February 28, 2011). As a result, if these parties were to act together, they would have the ability to exert significant influence on matters submitted to our stockholders for approval, such as the election or removal of directors, amendments to our certificate of incorporation or the approval of a business combination. These actions may be taken even if they are opposed by other stockholders or it may be difficult to approve these actions without their consent. This concentration of ownership may also have the effect of delaying or preventing a change of control of our company or discouraging others from making tender offers for our shares, which could prevent our stockholders from receiving a premium for their shares.

Changes in securities laws and regulations may increase our costs or may harm demand.

Most of our customers operate within a highly regulated environment. In light of the recent conditions in the US financial markets and economy, Congress and regulators have increased their focus on the regulation of the financial services industry. The information provided by, or resident in, the software or services we provide to our customers could be deemed relevant to a regulatory investigation or other governmental or private legal proceeding involving our customers, which could result in requests for information from us that could be expensive and time consuming for us. In addition, clients subject to investigations or legal proceedings may be adversely impacted possibly leading to their liquidation, bankruptcy, receivership, reductions in Assets Under Management or Assets Under Administration, or diminished operations that would adversely affect our revenues and collection of receivables.

Our customers must comply with governmental, self-regulatory organization and other rules, regulations, directives and standards. New legislation or changes in such rules, regulations, directives or standards may reduce demand for our services or increase our expenses. We develop, configure and market products and services to assist customers in meeting these requirements. New legislation, or a significant change in rules, regulations, directives or standards, could cause our services to become obsolete, reduce demand for our services or increase our expenses in order to continue providing services to clients.

The recently enacted Dodd-Frank Wall Street Reform and Protection Act of 2010 (“Dodd-Frank Act”) represents a comprehensive overhaul of the financial services industry within the United States, establishes the new federal Bureau of Consumer Financial Protection (the “BCFP”), and will require the BCFP and other federal agencies to implement many new rules. While the

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general framework of the reforms is set forth in the Dodd-Frank Act, it provides for numerous studies and reports and the adoption and implementation of rules and regulations by regulatory agencies over the following four years to clarify and implement the Act’s requirements fully.

We believe that it is too early to know the precise long-term impact on our business of the increased regulation of financial institutions. While it could lead to increased demand for Advent’s products and services, demand could be negatively impacted by the deferral of purchase decisions by our customers until the new regulations have been adopted and the full impact and expense of the new regulatory environment is more clearly understood. The Dodd-Frank Act contains numerous other provisions affecting financial institutions of all types, many of which may have an impact on our operating environment in substantial and unpredictable ways. Accordingly, it is difficult to predict at this time what specific impact the Dodd-Frank Act and the forthcoming implementing rules and regulations will have on our business and the financial services industry.

Additionally, as a publicly-traded company, we are subject to significant regulations including the Dodd-Frank Act and the Sarbanes-Oxley Act (“the Sarbanes-Oxley Act”) of 2002. There are significant corporate governance and executive compensation-related provisions in the Dodd-Frank Act that require the SEC to adopt additional rules and regulations in these areas. Our efforts to comply with these requirements could result in an increase of our operating and compliance costs.

The Sarbanes-Oxley Act of 2002 required changes in some of our corporate governance and securities disclosure and/or compliance practices. As part of the Act’s requirements, the SEC enacted new rules on a variety of subjects, and the Nasdaq Stock Market enacted new corporate governance listing requirements. These developments have increased and may in the future increase our accounting and legal compliance costs and could also expose us to additional liability if we fail to comply with these or other new rules and reporting requirements. In fiscal 2010, 2009 and 2008, we incurred approximately $0.4 million, $0.5 million and $0.8 million, respectively, in Sarbanes-Oxley related expenses consisting of external consulting costs. In addition, such developments may make retention and recruitment of qualified persons to serve on our board of directors, or as executive officers, more difficult.

Changes in, or interpretations of, accounting principles could result in unfavorable accounting charges.

We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. These principles are subject to interpretation by us, the SEC and various bodies formed to interpret and create accounting principles. A change in these principles or a change in the interpretations of these principles can have a significant effect on our reported results and may even retroactively affect previously reported transactions. Some of our accounting principles that have been or may be affected include:

· Software revenue recognition;

· Accounting for stock-based compensation;

· Accounting for income taxes; and

· Accounting for business combinations and related goodwill.

Changes in, or interpretations of, tax rules and regulations may adversely affect our effective tax rates.

We are a US based multinational company subject to tax in multiple US and foreign tax jurisdictions. Unanticipated changes in our tax rates could affect our future results of operations. Our future effective tax rates could be unfavorably affected by changes in, or interpretation of, tax rules and regulations in the jurisdictions in which we do business, by unanticipated decreases in the amount of revenue or earnings in countries with low statutory tax rates, by lapses of the availability of the US research and development tax credit, or by changes in the valuation of our deferred tax assets and liabilities.

In addition, we could be subject to examination of our income tax returns by the Internal Revenue Service and other domestic and foreign tax authorities. These examinations would be expected to focus on areas where considerable judgment is exercised by the Company. We regularly assess the likelihood of outcomes resulting from an examination to determine the adequacy of our provision for income taxes and have reserved for potential adjustments that may result from an examination. We believe such estimates to be reasonable; however, there can be no assurance that the final determination of any of these examinations will not have an adverse effect on our operating results and financial position.

Security risks may harm our business.

Maintaining the security of computers, computer networks, hosted solutions and the transmission of confidential information over public networks is essential to commerce and communications, particularly in the market in which Advent operates. Efforts of others to seek unauthorized access to Advent’s or its clients’ information, computers and networks or introduce viruses, worms and other malicious software programs that disable or impair computers into our systems or those of our customers or other third parties, could disrupt or make our systems and services inaccessible or allow access to proprietary information and data of Advent or its clients. Advances in computer capabilities, new discoveries in the field of cryptography or other events or developments, could also result in

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compromises or breaches of our security systems. Our security measures may be inadequate to prevent security breaches, exposing us to a risk of data loss, financial loss, harm to reputation, business interruption, litigation and other possible liabilities, as well as possibly requiring us to expend significant capital and other resources to protect against the threat of security breaches or to alleviate problems caused by such breaches.

Potential changes in securities laws and regulations governing the investment industry’s use of soft dollars may reduce our revenues.

Some of our clients utilized trading commissions (“soft dollar arrangements”) to pay for software products and services. During each of fiscal 2010, 2009 and 2008, the total value of Advent products and services paid with soft dollars was approximately 3% of our total billings. Such soft dollar arrangements could be impacted by changes in the regulations governing those arrangements.

In July 2006, the SEC published an Interpretive Release that provides guidance on money managers’ use of client commissions to pay for brokerage and research services under the safe harbor set forth in Section 28(e) of the Securities Exchange Act of 1934. The Interpretive Release clarifies that money managers may use client commissions (“soft dollars”) to pay only for eligible brokerage and research services. Among other matters, the Interpretive Release states that eligible brokerage includes those products and services that relate to the execution of the trade from the point at which the money manager communicates with the broker-dealer for the purpose of transmitting an order for execution, through the point at which funds or securities are delivered or credited to the advised account. In addition, for potentially “mixed-use” items (such as trade order management systems) that are partly eligible and partly ineligible, the Interpretive Release states that money managers must make a reasonable allocation of client commissions in accordance with the eligible and ineligible uses of the items. Based on this guidance, our customers may change their method of paying all or a portion of certain Advent products or services from soft to hard dollars, and as a result reduce their usage of these products or services in order to avoid increasing expenses, which could cause our revenues to decrease.

If we fail to maintain an effective system of internal control, we may not be able to report our financial results accurately or our filings may not be timely. As a result, current and potential stockholders could lose confidence in our financial reporting, which would harm our business and the trading price of our stock.

Effective internal control is necessary for us to provide reliable financial reports. If we cannot provide reliable financial reports, our business and operating results could be harmed. We have in the past discovered, and may in the future discover, areas of our internal control that need improvement including control deficiencies that may constitute material weaknesses.

We do not expect that our internal control over financial reporting will prevent all errors or fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Controls can be circumvented by individual acts of some persons, by collusion of two or more people, or by management override of the controls. Over time, controls may become inadequate because changes in conditions or deterioration in the degree of compliance with policies or procedures may occur. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Any failure to implement or maintain improvements in our internal control over financial reporting, or difficulties encountered in the implementation of these improvements in our controls, could cause significant deficiencies or material weaknesses in our internal controls and consequently cause us to fail to meet our reporting obligations. Any failure to implement or maintain required new or improved internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative impact on the trading price of our stock.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Our Board of Directors (the “Board”) has approved common stock repurchase programs authorizing management to repurchase shares of the Company’s common stock in the open market. The timing and actual number of shares subject to repurchase are at the discretion of management and are contingent on a number of factors, including the price of our stock, general market conditions and alternative investment opportunities. The purchases are funded from available working capital or debt.

On October 30, 2008, Advent’s Board authorized the repurchase of up to 6.0 million shares of the Company’s outstanding common stock. In May 2010, Advent’s Board authorized the repurchase of up to an additional 2.0 million shares of the Company’s common stock. During the first quarter of 2011, Advent did not make any repurchases of common stock. At March 31, 2011, there remained approximately 2.3 million shares authorized by the Board for repurchase.

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We withheld shares through net share settlements during the three months ended March 31, 2011. The following table provides a month-to-month summary of the purchase activity upon the employee vesting of restricted stock units and the exercise of stock-settled stock appreciation rights under our equity compensation plan to satisfy tax and exercise withholding obligations during the three months ended March 31, 2011 (in thousands, except per share data):

	Total			Maximum Number
	Number	Average		of Shares that May
	of Shares	Price Per		Yet Be Purchased
Month	Purchased (1)	Share		Under the Plan

January	5	$	29.99	—
February	78	$	29.93	—
March	4	$	27.34	—

Total	87	$	29.81	—

(1) These purchases represent shares cancelled when surrendered in lieu of cash payments for tax and exercise obligations due from employees. These shares were not purchased as part of a publicly announced program to purchase shares.

Item 3. Defaults Upon Senior Securities

None.

Item 5. Other Information

None.

Item 6. Exhibits

31.1 Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification of Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002

32.2 Certification of Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ADVENT SOFTWARE, INC.


Dated: May 9, 2011	By:	/s/ James S. Cox
		James S. Cox
		Senior Vice President and
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

Attached files

ADVENT SOFTWARE INC /DE/ Reports

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