8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

October 26, 2005

(Date of earliest event reported)

Openwave Systems Inc.

(Exact name of Registrant as specified in its charter)

Delaware	001-16073	94-3219054
(State of incorporation or organization)	(Commission File No.)	(IRS Employer Identification No.)

2100 Seaport Boulevard

Redwood City, CA 94063

(Address of principal executive offices)

(650) 480-8000

(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 Instructions A.2. below):

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

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

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

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

Item 2.02. Results of Operations and Financial Condition

On October 26, 2005, Openwave Systems Inc. issued a press release announcing its financial results for the fiscal quarter ended September 30, 2005. A copy of the press release is furnished as Exhibit 99.1 to this report.

Item 9.01 Financial Statements and Exhibits.

99.1     Press Release issued by Openwave Systems Inc. on October 26, 2005.

SIGNATURE

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, thereto duly authorized.

OPENWAVE SYSTEMS INC.
By:	/s/ HAL COVERT
Name:	Hal Covert
Title:	EVP & Chief Financial Officer

Date: October 26, 2005

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release issued by Openwave Systems Inc. on October 26, 2005.

EX-99.1

Exhibit 99.1

OPENWAVE REPORTS 24% YEAR OVER YEAR QUARTERLY REVENUE GROWTH

Quarter’s Performance Positions Company to Meet or Exceed High End of Calendar 2005 Financial Targets

REDWOOD CITY, Calif. — October 26, 2005 — Openwave Systems Inc. (Nasdaq: OPWV), the leading provider of open software products and services for the communications industry, today announced that revenues for its first fiscal quarter ended September 30, 2005 were $103.3 million, an increase of $19.7 million, or 24%, from $83.6 million during the September quarter in the preceding year, and an increase of $3.0 million, or 3%, from $100.3 million during preceding quarter ended June 30, 2005.

“I am pleased with our performance for the quarter and the fact that we are well-positioned to meet or exceed annual financial targets we set when I joined the company 12 months ago,” said David Peterschmidt, president and CEO of Openwave. “The wireless data markets are active and we are continuing to see good momentum as we grow our core business and introduce new software solutions to the market.”

On a GAAP basis, net loss for the first fiscal quarter ended September 30, 2005 was $7.7 million, or $0.11 per share, compared to a net income of $1.0 million, or $0.01 per share, for the September quarter in the preceding year and a net loss of $62.3 million, or $0.91 per share in the prior quarter.

Net income on a non-GAAP basis, which excludes amortization of intangibles, stock-based compensation, gain on sale of technology, and restructuring and related costs, for the first fiscal quarter ended September 30, 2005 was $8.8 million, or $0.12 per diluted share compared with $4.1 million, or $0.06 per diluted share, September quarter of the prior year and $7.2 million, or $0.10 per diluted share in the prior quarter. A reconciliation between net income (loss) on a GAAP basis and a non-GAAP basis is provided below in a table immediately following the Condensed Consolidated Statements of Operations.

At September 30, 2005, the Company had cash, cash equivalents, short-term and long-term investments totaling $299.0 million, of which $22.2 million is set aside as restricted cash.

Page 2 of 7 — Openwave Reports First Quarter Fiscal 2006

Conference Call Information

Openwave has scheduled a conference call for 5:00 p.m. eastern time today to discuss its financial results for its fiscal first quarter ended September 30, 2005. Interested parties may access the conference call over the Internet through the Company’s web site at www.openwave.com or by telephone at (800) 818-5264 or (913) 981-4910 (international). A replay of the conference call will be available for one week beginning at 8:30 p.m. eastern time on October 26 by calling 888-203-1112. The replay can be accessed internationally by calling 719-457-0820. Reservation number: 7815254.

A live webcast of the call, together with supplemental financial information, will also be available on the Quarterly Earnings section of Openwave’s website at http://investor.Openwave.com/medialist.cfm for at least 12 months.

Non-GAAP Measure

The company’s stated results include a non-GAAP measure, non-GAAP net income (loss), which excludes amortization of intangibles, stock-based compensation, gain on sale of technology, and restructuring and related costs. The company considers this to be an important measure because it provides a useful measure of the operational performance of the company and is used by the company’s management for that purpose. In addition, investors often use a measure such as this to evaluate the financial performance of a company. Non-GAAP net income (loss) results are presented for supplemental informational purposes only for understanding Openwave’s operating results. These non-GAAP results should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies.

About Openwave

Openwave Systems Inc. (Nasdaq: OPWV) is the leading independent provider of open software products and services for the communications industry. Openwave’s breadth of products, including mobile phone software, multimedia messaging software (MMS), email, location and mobile gateways, along with its worldwide expertise enable its customers to deliver innovative and differentiated data services. Openwave is a global company headquartered in Redwood City, California. For more information please visit www.openwave.com.

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Page 3 of 7 — Openwave Reports First Quarter Fiscal 2006

Cautionary Note Regarding Forward Looking Statements

This release and the scheduled conference call may contain forward-looking statements relating to expectations, plans or prospects for Openwave Systems Inc. that are based upon the current expectations and beliefs of Openwave’s management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Notwithstanding changes that may occur with respect to matters relating to any forward looking statements, Openwave does not expect to, and disclaims any obligation to, update such statements. Openwave, however, reserves the right to update such statements or any portion thereof at any time for any reason.

In particular, the following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: (a) the ability to realize our strategic objectives by taking advantage of market opportunities in the Americas, Europe, the Middle East, and Asia; (b) the ability to make changes in business strategy, development plans and product offerings to respond to the needs of our current, new and potential customers, suppliers and strategic partners; (c) risks associated with the development and licensing of software generally, including potential delays in software development, technical difficulties that may be encountered in the development or use of our software, and potential infringement claims by third parties; (d) the effects of our restructurings and the ability to successfully support our operations; (e) the ability to recruit and retain qualified, experienced employees; (f) the willingness of communication service providers to invest and improve their data networks; (g) the ability to successfully partner with other companies; (h) the possibility that our previously announced proposed acquisition of Musiwave will not close or that the closing may be delayed; (i) the ability to successfully manage and integrate Musiwave’s operations and employees and to acquire additional companies and technologies and successfully integrate such acquisitions; (j) increased global competition and pricing pressure on our products; (k) technological changes and developments; (l) general risks of the Internet and wireless and wireline telecommunications sectors; and (m) the uncertain economic and political climate in the United States and throughout the rest of the world and the potential that such climate may deteriorate.

For a detailed discussion of these and other cautionary statements, please refer to the risk factors discussed in filings with the U.S. Securities and Exchange Commission (“SEC”), including but not limited to the Company’s Quarterly Report on Form 10-K for the fiscal year ended June 30, 2005, and any subsequently filed reports. All documents also are available through the SEC’s Electronic Data Gathering Analysis and Retrieval system (EDGAR) at www.sec.gov or from Openwave’s Web site at www.openwave.com

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© 2005 Openwave and the Openwave logo are trademarks and or registered trademarks of Openwave Systems Inc. All other trademarks are the properties of their respective owners.

INVESTOR CONTACTS:	MEDIA CONTACTS:
Mike Bishop Sr. Investor Relations Manager Openwave Systems Inc. (650) 480-4461	Hannah Summers Openwave Systems (650) 480 7119 Hannah.summers@openwave.com

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Page 4 of 7 — Openwave Reports First Quarter Fiscal 2006

OPENWAVE SYSTEMS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS-UNAUDITED

(In thousands)

	September 30, 2005		June 30, 2005
Assets
Current Assets:
Cash, cash equivalents and short-term investments	$	248,233	$	236,555
Accounts receivable, net		143,590		136,865
Other current assets		20,803		21,961
Total current assets		412,626		395,381
Property and equipment, net		17,100		16,765
Long-term investments		28,604		25,909
Restricted cash and investments		22,177		24,293
Intangibles, net and other assets		32,442		34,884
Goodwill		50,769		44,073
	$	563,718	$	541,305
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	6,594	$	10,861
Accrued liabilities		55,960		54,429
Accrued restructuring costs		19,948		20,236
Deferred revenue		65,964		65,623
Total current liabilities		148,466		151,149
Accrued restructuring costs, less current portion		78,569		77,261
Deferred revenue, less current portion		3,833		3,408
Deferred rent obligations		860		691
Deferred tax liabilities, less current portion, net		4,506		5,025
Convertible subordinated notes, net		147,573		147,367
Total liabilities		383,807		384,901
Total stockholders’ equity		179,911		156,404
	$	563,718	$	541,305

Page 5 of 7 — Openwave Reports First Quarter Fiscal 2006

OPENWAVE SYSTEMS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS-UNAUDITED

(In thousands, except per share data)

	Three Months Ended
	September 30, 2005			June 30, 2005			September 30, 2004
Revenues:
License	$	48,714		$	43,172		$	38,185
Maintenance and support services		24,388			24,490			21,498
Professional services		21,926			22,997			16,818
Project/Systems		8,314			9,607			7,067
Total revenues		103,342			100,266			83,568
Cost of revenues:
License		2,220			1,385			81
Maintenance and support services		7,774			9,173			6,637
Professional services		16,688			14,916			12,295
Project/Systems		4,775			6,075			3,051
Amortization of intangible assets		1,581			1,817			1,141
Total cost of revenues		33,038			33,366			23,205
Gross profit		70,304			66,900			60,363
Operating Expenses:
Research and development		24,155			25,773			22,123
Sales and marketing		29,506			23,903			23,044
General and administrative		17,663			13,741			10,551
Restructuring and other related costs		8,275			64,600			907
Amortization of other intangible assets		714			736			525
Gain on sale of technology		(4,299	)		—			—
Total operating expenses		76,014			128,753			57,150
Operating income (loss)		(5,710	)		(61,853	)		3,213
Interest and other expense, net		(330	)		622			(243	)
Income (loss) before provision for income taxes		(6,040	)		(61,231	)		2,970
Income taxes		1,636			1,107			2,013
Net income (loss)	$	(7,676	)	$	(62,338	)	$	957
Basic net income (loss) per share	$	(0.11	)	$	(0.91	)	$	0.01
Diluted net income (loss) per share	$	(0.11	)	$	(0.91	)	$	0.01
Shares used in computing basic net income (loss) per share		70,080			68,264			65,151
Shares used in computing diluted net income (loss) per share		70,080			68,264			68,000
Stock-based compensation by category:
Maintenance and support services	$	401		$	—		$	—
Professional services		387			—			—
Research and development		2,028			404			118
Sales and marketing		4,565			651			123
General and administrative		2,823			1,310			353
	$	10,204		$	2,365		$	594

Page 6 of 7 — Openwave Reports First Quarter Fiscal 2006

OPENWAVE SYSTEMS INC.

RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME

(In thousands, except per share data)

	Three Months Ended
	September 30, 2005			June 30, 2005			September 30, 2004
Reconciliation between GAAP net income (loss) and Non-GAAP:
GAAP net income (loss)	$	(7,676	)	$	(62,338	)	$	957
Exclude:
Restructuring and other related costs		8,275			64,600			907
Amortization of acquisition-related intangibles		2,295			2,553			1,666
Amortization of stock-based compensation		10,204			2,365			594
Gain on sale of technology		(4,299	)		—			—
Non-GAAP net income	$	8,799		$	7,180		$	4,124
Basic net income (loss) per share	$	(0.11	)	$	(0.91	)	$	0.01
Exclude:
Restructuring and other related costs		0.12			0.95			0.01
Amortization of acquisition-related intangibles		0.03			0.04			0.03
Amortization of stock-based compensation		0.15			0.03			0.01
Gain on sale of technology		(0.06	)		—			—
Non-GAAP basic net income per share	$	0.13		$	0.11		$	0.06
Shares used in computing basic earnings per share		70,080			68,264			65,151
Diluted net income (loss) per share*	$	(0.10	)	$	(0.86	)	$	0.01
Exclude:
Restructuring and other related costs		0.11			0.89			0.01
Amortization of acquisition-related intangibles		0.03			0.04			0.03
Amortization of stock-based compensation		0.14			0.03			0.01
Gain on sale of technology		(0.06	)		—			—
Non-GAAP net income per share	$	0.12		$	0.10		$	0.06
Shares used in computing diluted earnings per share		75,026			72,855			68,000

* GAAP net loss divided by non-GAAP “shares used in computing diluted earnings (net loss) per share.”

Page 7 of 7 — Openwave Reports First Quarter Fiscal 2006

OPENWAVE SYSTEMS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS-UNAUDITED

(in thousands)

	Three Months Ended
	September 30, 2005			June 30, 2005			September 30, 2004
Cash flows from operating activities:
Net income (loss)	$	(7,676	)	$	(62,338	)	$	957
Adjustments to reconcile net loss to net cash provided by (used for) operating activities:
Depreciation, amortization of intangibles and stock-based compensation		14,969			7,522			4,947
Accelerated depreciation on restructured property and equipment		414			9,878			—
Provision for (recovery of) doubtful accounts		692			(140	)		1,101
Other non-cash expenses, net		(168	)		155			271
Proceeds from sale of technology		(4,299	)		—			—
Changes in operating assets and liabilities, net of effect of acquisitions		(6,938	)		54,004			(21,739	)
Net cash provided by (used for) operating activities		(3,006	)		9,081			(14,463	)
Cash flows from investing activities:
Purchases of property and equipment, net		(3,319	)		(4,231	)		(1,626	)
Acquisitions, net of cash acquired		—			(167	)		(46,433	)
Proceeds from sale of technology		4,299			—			—
Proceeds (purchases) of investments, net		(12,214	)		9,041			(1,126	)
Restricted cash and investments		2,116			1,501			(205	)
Net cash provided by (used for) investing activities		(9,118	)		6,144			(49,390	)
Cash flows from financing activities:
Net proceeds from issuance of common stock		14,239			11,761			767
Other, net		—			(3,805	)		(4	)
Cash provided by financing activities		14,239			7,956			763
Effect of exchange rates on cash and cash equivalents		—			(526	)		(227	)
Net increase (decrease) in cash and cash equivalents		2,115			22,655			(63,317	)
Cash and cash equivalents at beginning of period		126,462			103,807			153,469
Cash and cash equivalents at end of period	$	128,577		$	126,462		$	90,152

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