July 20, 2005

NetIQ Announces Realignment to Focus Resources and Improve Profitability

Company Reaffirms Fourth Quarter Fiscal 2005 Revenue and EPS Guidance


Press Release

SAN JOSE, Calif.

NetIQ Corp. (Nasdaq: NTIQ), a leading provider of integrated systems and security management solutions, today announced plans to improve profitability by reducing costs and realigning resources to better deliver on its Knowledge-Based Service Assurance Strategy. In addition, the company reaffirmed fiscal fourth quarter revenue and non-GAAP EPS guidance. GAAP EPS will exceed previously provided guidance due to the effect of the sale of the WebTrends business during the quarter.

As part of the realignment and its Fiscal 2006 plan, the company will reduce its global headcount by approximately 150 employees, or 15 percent of its workforce during Fiscal Year 2006. While the majority of NetIQ's development positions will remain in North America, the company has contracted with Symphony Service Corp. to deliver certain engineering services from Symphony's Bangalore, India global operations center. In addition, the company will move selected business operations from its San Jose, California headquarters to its Houston, Texas facility to improve the efficiency of its operations. These measures will result in restructuring charges in Fiscal Year 2006.

"Following the March quarter, we announced that we were in the process of realigning our business to better execute our Knowledge-Based Service Assurance Strategy. Today, we announced key components of our Fiscal 2006 plan to facilitate that realignment, including a series of actions that will reallocate our corporate resources to our strategic products and enable us to run the company more efficiently," said Chuck Boesenberg, Chairman and CEO, NetIQ Corporation. "The actions we announced today support our commitment to achieve a 9 percent non-GAAP operating margin in the June 2006 quarter. We are also pleased to reaffirm our previously-provided guidance for revenue and non-GAAP EPS for the fiscal fourth quarter 2005. We will provide additional details of our financial results during our next quarter-end conference call on August 3, 2005."

About NetIQ

NetIQ Corporation (Nasdaq: NTIQ) is a leading provider of integrated systems and security management solutions that empower the IT organization with the knowledge and ability to assure IT service. NetIQ's products embed knowledge and best practices to ensure operational integrity, better manage service levels and risk, and ensure policy compliance. NetIQ's modular, best-of-breed solutions for Performance & Availability Management, Security Management, Configuration & Vulnerability Management, and Operational Change Control integrate through an open, service-oriented architecture allowing for common reporting, analytics and dashboards. For more information about NetIQ, visit www.netiq.com or call (888) 323-6768.

Safe Harbor Statement

Statements in this press release regarding future operating results and statements other than statements of historical fact are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. The company's actual fiscal 2005 fourth quarter and future results may differ from the results predicted and from other forward-looking statements made by the company. As well, the company's fourth quarter results should not be considered as an indication of its future performance, due to variety of risks and uncertainties, including (1) the demand for the company's software and services; (2) risks inherent in technology businesses generally, including the timing and successful development of new products, customer acceptance of new product offerings and product strategies, pricing of new products and competition in the company's various product lines, the company's ability to retain and hire technical personnel and other employees, and the company's relationships with customers, suppliers and strategic partners; (3) the amount and impact of the restructuring charges to be incurred by the company in Fiscal Year 2006; and (4) the impact of the expensing of stock options and other stock-based compensation, under Financial Accounting Standards Board's Statement 123, the provisions of which became effective as to the company on July 1, 2005. For a more comprehensive discussion of risks and uncertainties relating to the company's business, please read the discussions of these risks in documents the company files from time to time with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 30, 2004, and its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2005. All of the information in this press release is as of July 20, 2005, and the company undertakes no responsibility to update this information.

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Amy Sachrison
Director
Media and Analyst Relations

Phone: (713) 418-5368
Email: amy.sachrison@netiq.com