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Graphisoft Announces Preliminary 1998 Results Exceed Analyst Expectations

Operating income will exceed exceptional 1997 levels as ARCHICAD market broadens

Budapest ­ February 3, 1999

Graphisoft (Frankfurt Neuer Markt: GPH) today announced that it expects fourth quarter 1998 and FY 1998 financial results to exceed analyst expectations. Revenue in 1999 will be approximately DM 44M representing between 14% and 15% growth over 1997. Operating income will be more than DM 10M, slightly exceeding the company's exceptionally high income figure of 1997. Final figures will be released on March 11, 1999.

"1998 was a year of huge transition and the most successful year in our history," states Graphisoft President and CEO Gábor Bojár. "We launched ARCHICAD 6.o, moved to our new headquarters, opened three additional subsidiary offices and entered the Frankfurt Stock Exchange. At the same time, we are very pleased that we achieved our 15th consecutive year of double-digit growth and profits and surpassed consensus analyst expectations."

Revenue growth was lead by Europe where sales increased approximately 38%. Growth in Germany was almost 50%, and exceptional growth was also achieved in the UK (almost 60%), France (almost 60%) and Italy (almost 70%). North American sales also grew approximately 35%, more than three times the overall growth of the North American AEC market according to independent sources. While growth in Asia/Pacific was negative, ARCHICAD made significant market share gains against local Japanese competitors in a very difficult year for the entire region.

Meanwhile, ARCHICAD continued to win accolades in 1998 with the Software Publishers Association's Codie Award, CADENCE magazine's "Top Gun" and Editors' Choice Awards, and as the top medal winner for the third consecutive year at the Boston CAD Shootout.

"Underlying our strong 1998 revenue gains is growth in ARCHICAD unit sales," reports Graphisoft Vice President of Marketing and Sales Gábor Kazar. "Graphisoft sold almost 14,000 new units of ARCHICAD in 1998 and more than 15,000 upgrade units. Our user base is not only vibrant, but growing rapidly."

Graphisoft also made important inroads in 1998 to expand its business beyond ARCHICAD sales with the first implementation of its object-based retailing solution "SalesCAD" at Europe's bauMax-x stores. SalesCAD will continue to develop in 1999 as will "ARCHICAD for building management," a new initiative to broaden Graphisoft's Virtual Building concept to building management. In addition to developing new markets around ARCHICAD technology in 1998, Graphisoft released the first Software Development Kit (SDK) allowing third party developers to create programs that will work inside ARCHICAD 6.o and add specific functions such as shadow calculation, wood framing, piping and molding.

Graphisoft opened 1999 with the acquisition of the German AEC software Bauplan from Wiechers & Partner GmbH, expanding its German client base by more than 700 architectural offices and annual sales potential in Germany by at least 1 Million EURO. Graphisoft anticipates further acquisitions in 1999 to strengthen its position in leading AEC markets, broaden its market within the building industry and consolidate leading CAD technology around its object-based "Virtual Building" model.

Graphisoft is a leading provider of computer-aided design (CAD) software solutions for the architectural profession and the building industry. Founded in 1982 in Budapest, Hungary, Graphisoft is ranked today among the largest AEC CAD software developers in the world with offices in Budapest, Munich, San Francisco, Tokyo, Hong Kong, London and Madrid. Graphisoft's flagship product, ARCHICAD, is used by more than 55,000 architects worldwide and distributed in 25 languages and 80 countries. Shares of Graphisoft are traded on the Frankfurt Stock Exchange Neuer Markt under the symbol GPH. More information about Graphisoft is available at www.graphisoft.com.

This press release contains statements that are forward looking. These statements are based on current expectations that are subject to risks and uncertainties. Actual results may vary because of factors such as technological shifts; customer demand; competitive products and pricing; shipping schedules; litigation; and other issues.

Graphisoft and ARCHICAD are registered trademarks of Graphisoft R&D Rt. All other trademarks mentioned are the properties of their respective owners.