NT 10-Q

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SEC FILE NUMBER

CUSIP NUMBER

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 12b-25

NOTIFICATION OF LATE FILING

(Check one):	o  Form 10-K o  Form 20-F o  Form 11-K þ  Form 10-Q o  Form 10-D o  Form N-SAR o  Form N-CSR
	For Period Ended:	September 30, 2006
	o   Transition Report on Form 10-K
	o   Transition Report on Form 20-F
	o   Transition Report on Form 11-K
	o   Transition Report on Form 10-Q
	o   Transition Report on Form N-SAR
	For the Transition Period Ended:

Read Instruction (on back page) Before Preparing Form. Please Print or Type.

Nothing in this form shall be construed to imply that the Commission has verified any information contained herein.

If the notification relates to a portion of the filing checked above, identify the Item(s) to which the notification relates:

PART I — REGISTRANT INFORMATION

webMethods, Inc.

Full Name of Registrant

N/A

Former Name if Applicable

3877 Fairfax Ridge Road, South Tower

Address of Principal Executive Office (Street and Number)

Fairfax, Virginia 22030

City, State and Zip Code

PART II — RULES 12b-25(b) AND (c)

If the subject report could not be filed without unreasonable effort or expense and the registrant seeks relief pursuant to Rule 12b-25(b), the following should be completed. (Check box if appropriate)

þ
	(a)	The reason described in reasonable detail in Part III of this form could not be eliminated without unreasonable effort or expense
	(b)	The subject annual report, semi-annual report, transition report on Form 10-K, Form 20-F, Form 11-K, Form N-SAR or Form N-CSR, or portion thereof, will be filed on or before the fifteenth calendar day following the prescribed due date; or the subject quarterly report or transition report on Form 10-Q or subject distribution report on Form 10-D, or portion thereof, will be filed on or before the fifth calendar day following the prescribed due date; and
	(c)	The accountant’s statement or other exhibit required by Rule 12b-25(c) has been attached if applicable.

PART III — NARRATIVE

State below in reasonable detail why Forms 10-K, 20-F, 11-K, 10-Q, 10-D, N-SAR, N-CSR, or the transition report or portion thereof, could not be filed within the prescribed time period.

The preparation of the Company’s financial statements for the three and six months ended September 30, 2006 was delayed because of the additional time needed to determine the purchase price allocation and related accounting treatment for its acquisition of Infravio, Inc., which was completed on September 27, 2006, and its acquisition of technology and other assets of Cerebra, Inc., which was completed on August 16, 2006. As a result, the Company is unable to file its Form 10-Q for the three months ended September 30, 2006 within the prescribed time period. The Company expects to file the form 10-Q on or before November 14, 2006, as prescribed by Rule 12b-25.

SEC 1344 (03-05) Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

(Attach extra Sheets if Needed)
PART IV — OTHER INFORMATION

(1) Name and telephone number of person to contact in regard to this notification

Mark Wabschall	(703)	460-2500
(Name)	(Area Code)	(Telephone Number)

(2)	Have all other periodic reports required under Section 13 or 15(d) of the Securities Exchange Act of 1934 or Section 30 of the Investment Company Act of 1940 during the preceding 12 months or for such shorter period that the registrant was required to file such report(s) been filed? If answer is no, identify report(s).
	Yes þ     No o

(3)	Is it anticipated that any significant change in results of operations from the corresponding period for the last fiscal year will be reflected by the earnings statements to be included in the subject report or portion thereof?
	Yes þ     No o
	If so, attach an explanation of the anticipated change, both narratively and quantitatively, and, if appropriate, state the reasons why a reasonable estimate of the results cannot be made.
	See Exhibit 1.

webMethods, Inc. 

(Name of Registrant as Specified in Charter)

has caused this notification to be signed on its behalf by the undersigned hereunto duly authorized.

Date November 9, 2006 By /s/ Mark Wabschall

EX-1

webMethods, Inc. (the “Company”)
Exhibit 1

     The Company expects to report the following results in its Quarterly Report on Form 10-Q for the three months ended September 30, 2006. These expected results are subject to completion of the Company’s financial statements for the three and six months ended September 30, 2006.

     For the three months ended September 30, 2006, the Company’s net loss was $4.1 million, or a loss of $0.07 per share, as compared to net income of $2.6 million, or earnings of $0.05 per share, for the prior year period. This $6.6 million increase in net loss is primarily due to a $2.8 million increase in stock-based compensation expense, a $2.6 million increase in other operating expenses, a $2.3 million increase in other professional services cost of revenue and a $1.2 million charge for the amounts allocated to the acquired in-process research and development associated with our acquisition of Infravio, Inc. in September 2006, partially offset by a $1.6 million increase in total revenue and a $0.6 million increase in interest and other income, net.

     For the six months ended September 30, 2006, the Company’s net loss was $9.9 million, or a loss of $0.18 per share, as compared to net income of $2.0 million, or earnings of $0.04 per share, for the prior year period. This $11.9 million increase in net loss is primarily due to a $5.5 million increase in stock-based compensation expense, a $3.8 million increase in other total cost of revenue, a $3.1 million increase in other operating expenses and a $1.2 million charge for the amounts allocated to the acquired in-process research and development associated with our acquisition of Infravio, Inc. in September 2006, partially offset by a $1.7 million increase in interest and other income, net.