26 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Fiscal 2002 Quarter Ending Fiscal 2003 Quarter Ending Sep. 30 Dec. 31 Mar. 31 June 30 Sep. 30 Dec. 31 Mar. 31 Sep. 30 (In thousands) Revenues Software licenses $ 19,231 $39,939 $37,380 $37,363 $29,646 $36,781  $34,883 $38,549 Service and other 46,960 47,057 46,086 46,588 47,604 46,192 44,846 44,220 Total revenues 66,191 86,996 83,466 83,951 77,250 82,973 79,729 82,769 Expenses: Cost of software licenses 2,444 3,054 3,165 3,167 3,335 3,511 2,891 4,179 Cost of service and other 30,142 30,261 29,969 29,600 28,008 26,823 25,745 26,292 Selling and  marketing 26,624 28,451 29,521 30,629 29,154 27,031 24,455 25,243 Research and  development 17,999 17,829 19,585 19,045 17,745 15,997 15,727 15,617 General and  administrative 7,422 7,520 8,678 10,638 9,821 8,923 8,893 9,044 Goodwill  impairment charge — — — — — 74,715 — — Restructuring and other charges 2,642 — (500) 13,941 — 60,529 2,100 18,533 Charge for  in-process research hand development — — — 14,900 — — — — Total expenses 87,273 87,115 90,418 121,920 88,063 217,529 79,811 98,908 Income (loss) from operations (21,082) (119) (6,952) (37,969) (10,813) (134,556) (82) (16,139) Interest income, net 753 144 103 177 581 268 349 155 Write-off of investments — — — (8,923) — — — — Other income, (expense) net (184) (171) (152) (386) (501) (313) 64 154 Income (loss)  before provision for (benefit from) taxes(20,513) (146) (7,001) (47,101) (10,733) (134,601) 331 (15,830) Provision for (benefit from) income taxes (6,154) (44) (2,100) 10,702 — — — — Net income (loss) (14,359) (102) (4,901) (57,803) (10,733) (134,601) 331 (15,830) Accretion of preferred stock discount and dividend — — (4,140) (2,161) (2,234) (2,287) (2,291) (2,372) Net income (loss) applicable to common stockholders $(14,359) $ (102) $ (9,041) $(59,964) $(12,967) $(136,888) $ (1,960) $(18,202) Basic and diluted income(loss)  applicable to common shareholders $ (0.45) $ 0.00 $ (0.17) $ (1.60) $ (0.34) $ (3.59) $ (0.05) $ (0.47) Basic and diluted weighted average Shares outstanding 31,760 31,748 31,948 37,438 37,994 38,128 38,795 39,026