MetaSolv Reports 6% Increase in First Quarter Revenues; License Revenues Increase 20%

MetaSolv, Inc. (Nasdaq:MSLV), a global leader in
comprehensive operations support system solutions for next-generation
communications service providers, today announced financial results
for the first quarter ended March 31, 2006.
   Revenues for the quarter increased 6% to $22.6 million, compared
to first quarter 2005 revenues of $21.4 million. License revenues for
the quarter increased 20% to $7.2 million compared to $6.0 million in
the first quarter of 2005, and Professional Services revenue increased
17% to $6.2 million compared to $5.3 million. Maintenance revenues for
the quarter declined 9% to $9.2 million compared to $10.1 million in
the first quarter of 2005.
   MetaSolv reported a net loss for the first quarter of $388
thousand, or $0.01 per share, an 81% improvement compared to a net
loss of $2.1 million, or $0.05 per share, in the first quarter of
2005. The net loss under Generally Accepted Accounting Principles
("GAAP") for the first quarter of 2006 includes stock-based
compensation expense related to the implementation of Statement of
Financial Accounting Standard (SFAS) 123R which was adopted effective
January 1, 2006. Net loss for the first quarter of 2005 includes
stock-based compensation expense computed under APB 25. Earnings
before interest, taxes, depreciation and amortization ("EBITDA") for
the first quarter were $1.4 million, compared to negative EBITDA in
the first quarter of 2005 of $488 thousand.
   Non-GAAP net income for the quarter was $852 thousand, or $0.02
per share, excluding $1.2 million in non-cash charges, comprised of
$1.0 million in stock-based compensation expense and $230 thousand in
amortization of intangible assets. Non-GAAP net loss for the first
quarter of 2005 was $1.3 million, or $0.03 per share, excluding $297
thousand in stock-based compensation expense and $423 thousand in
amortization of intangible assets. Please see the final table below
for a complete reconciliation of non-GAAP net income (loss) and EBITDA
to net income (loss) reported under GAAP and an explanation of these
measures.
   "Our first quarter results represent solid performance with
continued revenue growth, positive EBITDA and non-GAAP net income,"
said T. Curtis Holmes, MetaSolv's President and Chief Executive
Officer. "Service providers worldwide continue to place their
confidence in MetaSolv to support their next-generation service
delivery, driving our third consecutive quarter of growth in license
revenues at a rate in the high teens or above."
   Highlights of MetaSolv's first quarter operating and financial
results include:

   --  License revenue growth of 20% over first quarter 2005;

   --  Record revenues from Europe, including a license extension
        with a tier 1 operator in the U.K to enable the consolidation
        of their global IP VPN networks and to enable VoIP service
        delivery;

   --  The selection of Provisioning 5 by an incumbent Tier 1
        operator in the U.K. to facilitate the deployment and
        coordination of their transport infrastructure to enable
        global optical and IP service delivery;

   --  A new customer win with M6, MetaSolv's next-generation order
        and inventory management solution, with a U.S-based regional
        carrier to enable Ethernet, optical and IP services;

   --  A new customer win with a Tier 1 mobile operator in Greece to
        support the provisioning of next-generation mobile IP
        services;

   --  A license extension with a leading Tier 1 operator to
        facilitate their IP VPN services growth worldwide; and

   --  A new license extension with a customer in our Caribbean and
        Latin America region to support automated provisioning of
        broadband DSL services.

   "Our first quarter serves as a solid foundation as we continue to
expect double-digit revenue growth and double-digit operating margins
in 2006. Our growth strategy is underscored by our leading market
position, our sound balance sheet and our global customer base of some
170 operators worldwide. In addition, we continue to witness large,
IP-centric network transformation projects underway on a global basis,
which represent a significant market opportunity for MetaSolv,"
concluded Holmes.
   Based on the company's results for the first quarter, the pipeline
of potential contracts, and expectations concerning the business
environment, MetaSolv today established its guidance for revenues for
the second quarter of 2006 in a range of $23.5 million to $25.5
million, compared with $23.4 million for the second quarter of 2005.
The company also established guidance for its net income for the
period of between $0.00 and $0.03 per share. Net income guidance for
the second quarter of 2006 includes approximately $1.2 million in
stock compensation expense computed under SFAS 123R. Excluding stock
compensation expense, the company expects to report non-GAAP net
income of between $0.02 and $0.05 per share for the second quarter of
2006.

   Conference call notice

   MetaSolv will hold a conference call to discuss this press release
today at 5:00 p.m. Eastern time. Investors may listen to the
conference call over the Internet at www.metasolv.com and clicking
Investors, or by going to www.streetevents.com. Please visit the web
site at least 15 minutes early to register, download, and install any
necessary audio software. A dial-in telephone replay of the conference
call will be available from 8:00 p.m. ET on Thursday, April 27,
through Thursday, May 4. The dial-in replay number is 719-457-0820,
and the confirmation number is 4158940.

   About MetaSolv

   MetaSolv, Inc. (Nasdaq:MSLV) is a global leader in comprehensive
operational support system solutions for communications service
providers. MetaSolv's multi-service order management, inventory
management, and service activation capabilities automate the
order-to-activate provisioning process for traditional and
next-generation IP-based wireline and mobile service providers. More
than 170 global service providers -- including Brasil Telecom, BT,
Cable & Wireless, Nextel, O2, T-Mobile, Vodafone, and others -- use
MetaSolv's solutions to achieve increased revenues, reduced costs, and
enhanced customer service. MetaSolv is a global company, headquartered
in Plano, Texas.
   MetaSolv is a registered trademark. The MetaSolv logo is a
trademark of MetaSolv Software, Inc. All other trademarks are property
of their respective owners.

   This press release contains forward-looking statements, including
guidance regarding future financial results, that are based upon
current expectations and assumptions and involve a number of risks and
uncertainties. The words "estimates," "expects," "anticipates,"
"projects," "plans," "intends," "believes," "forecasts," "may,"
"should," "guidance," and variations of such words or similar
expressions are intended to identify forward-looking statements. These
statements are not guarantees of future performance. Actual results
could differ materially from MetaSolv's current expectations. MetaSolv
assumes no obligation to update any such forward-looking statement.
Using the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, MetaSolv cautions you that these
statements may be affected by the important factors, among others,
described in the documents and reports filed by MetaSolv from time to
time with the Securities and Exchange Commission, including the
Company's Annual Report on Form 10-K for 2005, and subsequent
Quarterly Reports on Form 10-Q, as well as by other factors,
including, but not limited to: the variance of quarterly operating
results; the Company's ability to successfully manage and integrate
acquisitions; the Company's reliance on sales of its software; the
need to expand sales and distribution capabilities; the need to expand
to new customer markets; the Company's continued use of strategic
relationships; its ability to manage growth; the Company's
international operations; its ability to meet customer expectations;
the quality of the Company's software delivered; competition;
consolidation within the telecommunications industry; limitations on
the ability of customers to obtain adequate financing; and the
Company's ability to reduce its cost structure. The Company assumes no
obligation to update the information contained in this press release.
-0-
*T

                            METASOLV, INC.
                     Summary Financial Information
                 (In thousands, except per share data)
                              (Unaudited)

                                                       Three Months
                                                           Ended
                                                         March 31,
                                                     -----------------
                                                      2006     2005
                                                     -------- --------
Revenues                                             $22,598  $21,360
Loss from operations                                   $(498) $(2,057)
Net loss                                               $(388) $(2,055)
Basic and diluted loss per share                      $(0.01)  $(0.05)
Basic and diluted weighted average
   shares outstanding                                 49,749   40,829


Non-GAAP information(1)
Net income (loss)                                       $852  $(1,335)
Basic and diluted income (loss) per share              $0.02   $(0.03)


(1) See the final table below for a complete reconciliation of
    non-GAAP results with those reported under Generally Accepted
    Accounting Principles.


                            METASOLV, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In thousands, except per share data)
                              (Unaudited)
                                                   Three Months Ended
                                                       March 31,
                                                  --------------------
                                                    2006       2005
                                                  ---------- ---------
Revenues:
   License                                           $7,158    $5,951
   Services                                           6,203     5,294
   Maintenance                                        9,237    10,115
                                                  ---------- ---------
           Total revenues                            22,598    21,360

Cost of revenues:
   License                                              195        59
   Services and maintenance (1)                       9,527     9,598
   Amortization of intangible assets                    230       423
                                                  ---------- ---------
           Total cost of revenue                      9,952    10,080
                                                  ---------- ---------
Gross profit                                         12,646    11,280

Operating expenses:
   Research and development (1)                       4,553     5,320
   Sales and marketing (1)                            5,465     5,529
   General and administrative (1)                     3,126     2,488
                                                  ---------- ---------
           Total operating expenses                  13,144    13,337
                                                  ---------- ---------

Loss from operations                                   (498)   (2,057)
Interest and other income, net                          366       251
                                                  ---------- ---------
Loss before taxes                                      (132)   (1,806)
Income tax expense                                      256       249
                                                  ---------- ---------
Net loss                                              $(388)  $(2,055)
                                                  ========== =========

Basic and diluted loss per share                     $(0.01)   $(0.05)
Basic and diluted weighted average shares
 outstanding                                         49,749    40,829


(1) Includes amortization of stock compensation
     expense as follows:
       Cost of revenues - services and maintenance     $214       $57
       Research and Development                         229       101
       Sales and marketing                              207        34
       General and administrative                       360       105
                                                  ---------- ---------
       Total stock compensation expense              $1,010      $297
                                                  ========== =========


                            METASOLV, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                            (In thousands)

                                               March 31,  December 31,
                                                2006         2005
                                             ------------ ------------
                                             (Unaudited)
       Assets
Current assets:
   Cash and cash equivalents                     $12,007      $13,314
   Marketable securities                          43,879       44,839
   Trade accounts receivable, less allowance
    for doubtful accounts of $1,894 in 2006
    and $1,805 in 2005                            15,368       13,582
   Unbilled receivables                            2,663        2,461
   Prepaid expenses                                1,892        1,847
   Other current assets                              588          669
                                             ------------ ------------
          Total current assets                    76,397       76,712

Property and equipment, net                        5,538        5,529
Intangible assets                                    860        1,090
Other assets                                         807          786
                                             ------------ ------------
          Total assets                           $83,602      $84,117
                                             ============ ============
       Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable                               $3,808       $4,775
   Accrued expenses                               18,445       20,512
   Deferred revenue                                9,899        8,068
                                             ------------ ------------
          Total current liabilities               32,152       33,355

Fair value of warrants to purchase common
 stock                                                --        3,442

Temporary equity - Unregistered common stock,
 $.005 par value, 7,666,667 shares issued and
 outstanding                                          --       17,863


Stockholders' equity:
   Preferred stock, $.01 par value,
    10,000,000 shares authorized, no shares
    issued or outstanding                             --           --
   Common stock, $.005 par value, 100,000,000
    shares authorized, shares issued and
    outstanding: 50,002,123 in 2006, and
    49,961,132 in 2005                               251          213
   Additional paid-in capital                    173,219      151,443
   Deferred compensation                              --         (328)
   Accumulated other comprehensive income            799          560
   Accumulated deficit                          (122,819)    (122,431)
                                             ------------ ------------
          Total stockholders' equity              51,450       29,457
                                             ------------ ------------
          Total liabilities and stockholders'
           equity                                $83,602      $84,117
                                             ============ ============


                            METASOLV, INC.
                      RECONCILIATION OF NET LOSS
               TO NON-GAAP NET INCOME (LOSS) AND EBITDA
                      (Unaudited) (In thousands)
                                                   Three Months Ended
                                                        March 31,
                                                   -------------------
                                                     2006      2005
                                                   --------- ---------

Net loss                                              $(388)  $(2,055)
    Amortization of intangible assets                   230       423
    Stock compensation expense                        1,010       297
                                                   --------- ---------
Non-GAAP net income (loss)                             $852   $(1,335)
                                                   ========= =========
Net loss                                              $(388)  $(2,055)
         Depreciation expense                           637       849
    Amortization of intangible assets                   230       423
    Amortization of stock compensation expense        1,010       297
         Interest and other income, net                (366)     (251)
    Income tax expense                                  256       249
                                                   --------- ---------
EBITDA                                               $1,379     $(488)
                                                   ========= =========
*T

   In addition to reporting its financial results in accordance with
accounting principles generally accepted in the United States
("GAAP"), MetaSolv has also provided in this release non-GAAP net
income (loss), non-GAAP net income (loss) per share, and EBITDA.
Non-GAAP net income (loss), and Non-GAAP net income (loss) per share
are adjusted to exclude non-cash expenses for stock compensation
expense and amortization of purchased intangible assets. Management
uses these non-GAAP financial measures to evaluate performance, to
analyze trends in cash-based expenses and to establish operational
goals and allocate resources. Stock-based compensation has been
excluded when computing non-GAAP net income (loss) because the
accounting treatment for stock-based compensation has changed with the
adoption of SFAS 123R. Management believes that excluding stock-based
compensation is useful in order to offer consistent information that
is comparable to information MetaSolv has publicly disclosed in prior
periods for which stock-based compensation was expensed under APB 25.
In addition, MetaSolv has excluded the effects of amortization of
purchased intangible assets because these amounts have declined from
period to period as certain asset classifications become fully
amortized. Non-GAAP financial measures should not be considered a
measure of financial performance under generally accepted accounting
principles. Items excluded from these results are significant
components in understanding and assessing financial performance, and
there are material limitations associated with the use of this data,
including the fact that the amortization of intangible assets results
from the purchase of assets that constitute a material portion of
MetaSolv's revenue. MetaSolv believes that inclusion of the non-GAAP
financial measures is useful to investors in allowing for greater
transparency of supplemental information used by management in its
financial and operational decision-making. Non-GAAP results are not a
measurement determined in accordance with generally accepted
accounting principles and are thus susceptible to varying
calculations, and they may not be comparable, as presented, to other
similarly titled measures of other companies. Net income (loss) is the
financial measure calculated and presented in accordance with
generally accepted accounting principles that is most comparable to
MetaSolv's non-GAAP results, as defined.