8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 25, 2006

SIEBEL SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Delaware	0-20725	94-3187233
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2207 Bridgepointe Parkway
San Mateo, CA 94404
(Address of principal executive offices, including zip code)

(650) 477-5000
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition.
	Item 8.01. Other Events.
	Item 9.01. Financial Statements and Exhibits.
SIGNATURES
EXHIBIT INDEX
EXHIBIT 99.1

Item 2.02. Results of Operations and Financial Condition.

On January 25, 2006, Siebel Systems, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter ended December 31, 2005. A copy of the press release, dated as of January 25, 2006, is furnished as Exhibit 99.1 to this Current Report and is incorporated in this Item 2.02 by reference.

The press release is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

Item 8.01. Other Events.

To date, approximately 59% of the Company’s outstanding shares have been voted on the proposal to adopt the Agreement and Plan of Merger dated as of September 12, 2005, as amended, by and among Oracle Corporation, the Company, Ozark Holding Inc., Ozark Merger Sub Inc. and Sierra Merger Sub Inc. (the “Merger Agreement”). Of the shares voted, in excess of 98% have been voted in favor of the adoption of the Merger Agreement, which constitutes a majority of the Company’s outstanding shares. Accordingly, the Company expects that its stockholders will approve the adoption of the Merger Agreement at its Special Meeting of Stockholders to be held on January 31, 2006 (the “Special Meeting”). However, because stockholders can revoke their proxies at any time before the close of voting at the Special Meeting, the Company will not know definitively whether the stockholders have approved the adoption of the Merger Agreement until the time of the Special Meeting.

Item 9.01. Financial Statements and Exhibits.

Exhibit
Number	Description
99.1	Press release entitled “Siebel Systems Confirms Financial Results for the Quarter Ended December 31, 2005” dated January 25, 2006.

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SIGNATURES

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

	Siebel Systems, Inc.
Dated: January 25, 2006	By:	/s/ Kenneth A. Goldman
		Kenneth A. Goldman
		Senior Vice President, Finance and Administration and Chief Financial Officer

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EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press release entitled “Siebel Systems Confirms Financial Results for the Quarter Ended December 31, 2005” dated January 25, 2006.

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EX-99.1

EXHIBIT 99.1

NEWS RELEASE

Siebel Systems Confirms Financial Results
For the Quarter Ended December 31, 2005

Confirms License Revenues Up 92% over Third Quarter

Profitability Exceeds Preliminary Results:
Operating Margin Reaches 25%; Operating Income Up 220% over Third Quarter

SAN MATEO, Calif. — January 25, 2006 — Siebel Systems, Inc. (NASDAQ: SEBL), a leading provider of customer-facing solutions, today announced financial results for the fourth quarter and full year ended December 31, 2005. The results reported today exceed preliminary financial results presented on January 12, 2006, original management guidance and analyst consensus expectations, and reflect strong sequential and year over year growth across all revenue and profit measures.

				Q4 2005															Q4 2005 Results vs.
	Q4 2005						Company			Analyst			Q3 2005			Q4 2004			Q4 2005		Company		Analyst		Q3 2005		Q4 2004
($M, except %s, EPS)	Results			Preliminary			Guidance			Consensus			Actual			Actual			Preliminary		Guidance		Consensus		Actual		Actual
Revenues
License		215			214			110-130			124			112			161			+0.5%		+79%		+73%		+92%		+34%
Maintenance		130			131			120-126			126			125			122			-0.8%		+6%		+3%		+4%		+6%
Services & Other		124			124			110-115			114			111			109			-0.2%		+10%		+9%		+12%		+14%
Total Revenues		469			469			340-360			362			348			392			-0.1%		+34%		+29%		+35%		+19%
Operating Income		116			107-111			N/A			N/A			36			65			+6.1%		N/A		N/A		+220%		+77%
Operating Margin		25	%		23%-24	%		13%-16	%		15	%		10	%		17	%		+5.0%		+70%		+68%		+137%		+48%
Net Income		89			N/A			N/A			43			35			54			N/A		N/A		+108%		+156%		+65%
Net Margin		19	%		N/A			N/A			12	%		10	%		14	%		N/A		N/A		+60%		+90%		+38%
Earnings Per Share	$	0.16			N/A			0.07-0.08		$	0.07		$	0.06		$	0.10			N/A		114%		+129%		+167%		+60%

Q4 2005 Guidance as of October 26, 2005. Analyst Consensus as of January 6, 2006. Preliminary results published January 12, 2006.

Fourth Quarter Results

Total revenues for the fourth quarter of 2005 were $469 million, consistent with preliminary results, above analyst consensus expectations by 29%, up 35% sequentially, and up 19% year over year. License revenues for the quarter were $215 million, consistent with preliminary results, above analyst consensus expectations by

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73%, up 92% sequentially, and up 34% year over year. Maintenance revenues were $130 million, consistent with preliminary results, above analyst consensus expectations by 3%, up 4% sequentially, and up 6% year over year. Services and Other revenues were $124 million, consistent with preliminary results, above analyst consensus expectations by 9%, up 12% sequentially, and up 14% year over year. In addition, OnDemand total contract value for the fourth quarter of 2005 was $16 million, up 43% sequentially and 66% year over year.

Operating income was $116 million, $5 million or one percentage point over the high end of the preliminary results range, up $80 million or 220% sequentially and up $50 million or 77% year over year. Financial results for the fourth quarter of 2005 include the impact of $11 million in acquisition-related earnout and intangible asset impairment, merger-related legal, and other charges. Operating margin was 25%, up fifteen percentage points sequentially and up eight percentage points year over year. Net income was $89 million, up $54 million or 156% sequentially and up $35 million or 65% year over year. Net margin was 19%, up nine percentage points sequentially and up five percentage points year over year. Earnings per share for the quarter ended December 31, 2005 were $0.16, a ten cent or 167% increase sequentially and a six cent or 60% increase year over year. The effective tax rate was 33% in the fourth quarter.

Full Year Results

Total revenues for the year ended December 31, 2005 were $1.43 billion, a 7% increase from 2004. For the year, license revenues were $480 million, maintenance revenues were $500 million and services and other revenues were $449 million, representing a 1% decrease, 6% increase and 17% increase, respectively, from 2004.

Operating income and operating margin for the year ended December 31, 2005 were $59 million and 4%, respectively, a $70 million and six percentage point decrease compared with 2004. Financial results for the full year of 2005 include the impact of $111 million in restructuring, acquisition-related earnout, in process research and development and intangible asset impairment, merger-related legal and other charges. Net income and net margin for the year were $70 million and 5%, respectively, a $41 million and three percentage point decrease from 2004. Earnings per share for the year ended December 31, 2005 were $0.13, a seven cent per share decrease from 2004. The effective tax rate for 2005 was 43%.

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Balance Sheet

The company’s cash, cash equivalents and short term investments were $2.39 billion as of December 31, 2005, reflecting net cash generated during the fourth quarter of 2005 of $147 million. Deferred revenues were $411 million as of December 31, 2005, up $96 million over the third quarter. As of December 31, 2005, headcount was 4,686.

“Our fourth quarter and second half of 2005 results clearly affirm the market opportunity in customer facing solutions and business analytics, the improvements we have made to address this market, and customer confidence in the future of Siebel customer solutions and analytics following the proposed Oracle transaction,” said George T. Shaheen, Chief Executive Officer of Siebel Systems. “I am particularly proud of our employee loyalty in serving our customers, addressing our investor commitments, and preserving and enhancing our franchise during this unsettling merger period. As we prepare to combine with Oracle, we remain committed to further improving our financial performance, sustaining and enhancing our product and technology leadership, and helping our loyal and strong network of partners and customers achieve continued success with Siebel customer facing solutions. Every employee can take great pride in a final quarter and transition to Oracle that reflect the professionalism, work ethic and values on which this company was founded.”

The company will not conduct a conference call in conjunction with this earnings press release.

About Siebel Systems

Siebel Systems is a leading provider of software solutions and services that drive value and loyalty in client-customer relationships, providing best-in-class capabilities in on-premise and hosted customer relationship management (CRM), business analytics, and customer data integration. Siebel’s new Customer Adaptive Solutions enable organizations to model their customer-centric business processes in order to drive the most effective customer interactions, gain increased insight over time, and continually realign those processes for systemic and consistent improvement. With more than $2 billion in R&D investments, 13 years of customer software experience, an extensive global ecosystem of alliance partners, and more than 4,000 customers and 3.8 million live users, Siebel is the proven choice in helping organizations of all types and sizes achieve customer-driven business results. For more information, visit www.siebel.com.

Contact:

Terry Lee
Christopher Bunn
Siebel Systems Investor Relations Department
650.295.5656
investor.relations@siebel.com

Siebel is a trademark of Siebel Systems, Inc. and may be registered in certain jurisdictions.

This press release contains forward-looking statements that involve risks and uncertainties. Future operating results of Siebel Systems, Inc. may differ from that forecasted in the forward-looking statements due to factors that include, but are not limited to, risks associated with our pending merger with Oracle Corporation, financial, economic, political and other uncertainties, the business software applications market, dependence on the Internet, risks associated with new versions and new products and risks associated with rapid technological change. Further information on potential factors that could affect the financial results of Siebel Systems, Inc. are included in its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and its other filings with the Securities and Exchange Commission, which are available at www.sec.gov. Siebel Systems assumes no obligation to update the information in this press release.

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SIEBEL SYSTEMS, INC.

Consolidated Statements of Operations
(In thousands, except per share data)

	Three Months Ended					Twelve Months Ended
	December 31,					December 31,
	2004		2005			2004		2005
Revenues:
Software license	$	160,920	$	215,059		$	487,127	$	480,493
Professional services, maintenance and other		231,441		253,689			852,666		948,647
Total revenues		392,361		468,748			1,339,793		1,429,140
Cost of revenues:
Software license		4,262		10,702			13,316		22,809
Professional services, maintenance and other		118,175		125,491			443,585		478,072
Total cost of revenues		122,437		136,193			456,901		500,881
Gross margin		269,924		332,555			882,892		928,259
Operating expenses:
Product development		79,981		74,040			299,051		285,941
Sales and marketing		96,072		111,462			337,690		382,351
General and administrative		27,954		31,773			104,541		107,806
Restructuring and other charges		482		(415	)		6,789		82,629
Purchased in-process product development		—					6,000		10,890
Total operating expenses		204,489		216,860			754,071		869,617
Operating income		65,435		115,695			128,821		58,642
Other income, net		13,670		15,951			46,746		64,216
Income before income taxes		79,105		131,646			175,567		122,858
Income taxes		25,268		42,826			64,899		53,330
Net income	$	53,837	$	88,820		$	110,668	$	69,528
Diluted net income per share	$	0.10	$	0.16		$	0.20	$	0.13
Shares used in diluted share computation		540,874		553,494			540,530		545,616
Basic net income per share	$	0.11	$	0.17		$	0.22	$	0.13
Shares used in basic share computation		508,229		530,508			505,044		521,752

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