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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended
    April 30,
    2010ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission file number:
    001-33923
 ArcSight, Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

52-2241535(State or Other Jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification No.)   5 Results Way
 Cupertino, California 95014
 (Address of Principal Executive
    Offices, including Zip Code)
  (408) 864-2600
 (Registrants Telephone
    Number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, par value $0.00001 per share


NASDAQ Global Market   Securities registered pursuant to Section 12(g) of the
    Act:
  None
 (Title of Class)
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer o

Accelerated filer þ

Non-accelerated filer o

Smaller reporting company o(Do not check if a smaller reporting company)   Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE
  Form 10-K.




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##### 





FISCAL
    2010 ANNUAL REPORT ON
    FORM 10-K
  TABLE OF
    CONTENTS
   
 PagePART IItem 1.


Business


4Item 1A.


Risk Factors


14Item 1B.


Unresolved Staff Comments


31Item 2.


Properties


31Item 3.


Legal Proceedings


31Item 4.


(Removed and Reserved)


31PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


31Item 6.


Selected Financial Data


35Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


36Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


59Item 8.


Financial Statements and Supplementary Data


61Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


94Item 9A.


Controls and Procedures


94Item 9B.


Other Information


96PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


96Item 11.


Executive Compensation


96Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


96Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


96Item 14.


Principal Accounting Fees and Services


96PART IVItem 15.


Exhibits and Financial Statement Schedules


97Signatures


98EX-10.13EX-10.14EX-21.1EX-23.1EX-31.01EX-31.02EX-32.01EX-32.02   2




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Forward
    Looking Statements
  Form 10-K Form 10-K Form 10-K.
 3




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PART I  Item 1.
    Business  Overview
      
    capturing event data from any network-connected system;
    managing and storing event data;
    analyzing events in real time;
    identifying unusual behavior; and
    responding quickly to prevent loss.   4




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ArcSight
    Enterprise Threat and Risk Management Platform
  
       5




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Our
    Strategy
    
    grow our customer base by further penetrating the Global 2000,
    expanding into new geographies and continuing to reach into the
    mid-market;
    further penetrate our existing customers by expanding their use
    of our platform across the enterprise and extending their use of
    our products to new use cases;
    extend and broaden our partner network, in particular with
    systems integrators, and continue to improve the effectiveness
    of our channel partners;
    extend our expertise in security and compliance best practices
    and launch new and innovative applications that open up
    additional markets or address specific security and compliance
    needs and use cases;
    continue to extend our value proposition to business use cases
    beyond traditional IT security and compliance, as with our
    recent IdentityView and FraudView products;
    extend our product offerings so that they are available in the
    form factor desired by the customer, including both software and
    appliance versions.  Our
    Solutions and Products
    
    Enterprise-Class Technology and
    Architecture.  We design our solutions to serve
    the needs of the largest organizations, which typically have
    highly complex, geographically dispersed and heterogeneous
    business and technology infrastructures. We deliver
    enterprise-class solutions by providing interoperability,
    flexibility, scalability and efficient archiving.
    Intelligent Correlation.  Our correlation
    engine intelligently distills millions of events occurring daily
    into information that allows customers to identify, analyze,
    prioritize and respond to specific threats, compliance
    violations and other events of interest.
    Comprehensive View.  We have designed our
    architecture to allow it to be extended for collection,
    consolidation and correlation of information from any
    network-connected system, enabling customers to potentially
    address business risk and operational effectiveness beyond the
    security and compliance use cases to which our products have
    traditionally been applied.
    Cost-Effective Consolidation and Storage.  Our
    log management suite provides easy, scalable, cost-effective
    storage and enables customers to demonstrate the integrity and
    availability of log data both in transit and at rest,
    facilitating automated compliance reporting and reducing the
    cost of audits. 6




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
    Reporting and Visualization.  We present
    threat, compliance risk and other event information through a
    rich and intuitive graphical user interface, through which
    customers can view risk across their organization in a variety
    of ways, address internal and external compliance requirements
    and communicate the value and effectiveness of the
    organizations security operations.  002-009.
  ArcSight ESM.
  
    ArcSight Manager.  ArcSight Manager, available
    as software or as an appliance, manages event aggregation and
    storage, controls the various elements of our platform and
    provides the engine for high-speed real-time correlation and
    incident response workflow. ArcSight Manager comes with standard
    rules that address common compliance and security issues and
    business risks. It also provides an intuitive system that
    enables customers to write customized rules that apply an
    organizations compliance and security policies into the
    real-time analytics of the correlation engine, as well as
    seamless integration with rules generated by our ArcSight Threat
    Detector product. ArcSight Manager enables real-time
    collaboration and case management among security analysts, to
    track risk-prioritized response and remediation. In addition, it
    provides case resolution metrics to demonstrate compliance and
    security process and control effectiveness. Our case management
    system also can integrate with third-party trouble ticketing
    systems, such as the Remedy Service desk system from BMC
    Software. Our architecture was designed to allow customers to
    scale from a single centralized deployment to a distributed,
    global deployment by deploying additional Managers that work in
    concert.
    ArcSight Console, ArcSight Web and ArcSight
    Viewer.  ArcSight Console is the primary user
    interface to interact with and control ArcSight ESM. Through its
    intuitive interface, the Console provides administrators,
    analysts and operators with graphical data summaries and an
    intuitive interface to perform tasks ranging from real-time
    monitoring and analysis to incident investigation and response
    to system administration and authoring of new content. The
    Console is highly configurable to reflect individual customer
    environments and can display threat and risk information in a
    wide variety of formats including by geography, by division or
    line of business, by type of threat, and by compliance or policy
    initiative. With ArcSight Console, customers can run a wide
    variety of reports to answer internal and external compliance
    audits and communicate the value and effectiveness of the
    organizations security operations. We also provide an
    authoring system that customers can use to create new reports to
    meet their specific business needs. ArcSight ESM contains
    hundreds of standard report templates that immediately address
    common compliance, security and business risk reporting
    requirements. To facilitate remote access for IT administrators
    as well as provide a portal for
    line-of-business
    viewing of status summaries and scheduled reports, our ArcSight
    Web product provides browser-based access to all Console
    functions and content, except administration and authoring, and
    our ArcSight Viewer product provides browser-based read-only
    access to all Console content.  ArcSight Logger.
 7




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peer-to-peer
  ArcSight Express.
  ArcSight Connectors.
  ArcSight EnterpriseView Applications.
  
    ArcSight IdentityView.  ArcSight IdentityView
    is a software application that enables customers to detect
    increased risk from activities performed by employees,
    contractors and other users of internal corporate systems. It
    allows enterprise customers to address insider threat and fraud
    risks as well as compliance and audit needs. IdentityView
    includes specialized connectors to leading identity and access
    management, or IAM, systems and directories and pre-built
    capabilities for correlating multiple user accounts to a single
    identity. From that, pre-built or user-defined rules for fraud
    detection and unauthorized actions analyze this information to
    determine if the user is performing unauthorized activities. The
    pre-packaged reports and dashboards include access rights and
    group membership analysis, user risk analysis by department or
    job function and comprehensive activity reporting for any user
    over any time period. IdentityView also utilizes the technology
    underlying our ArcSight Threat Detector module to automatically
    create new risk profiles employing IAM information.
    ArcSight FraudView.  The ArcSight FraudView
    appliance enables our financial services customers to detect and
    prevent or mitigate online fraud by evaluating and scoring
    financial transactions in real-time (rather than simply
    performing after the fact forensic analysis). It evaluates risk
    factors related to the type of transaction, the account
    involved, the destination and the device involved to address
    account takeover, fraudulent transaction initiation and false
    account creation. That helps reduce the financial
    institutions penalty fees, revenue loss and operating
    expenses. ArcSight FraudView correlates activity across multiple
    financial transaction channels to detect sophisticated fraud
    schemes that span online, ATM, telephone and branch activity, as
    well as correlating and adjusting risk profiles over time.
    ArcSight FraudView can 8




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aggregate information from a variety of risk and fraud scoring
    products already available to a financial firm, such as a
    blacklist feed, to create a single, high-level risk score of any
    transaction, as it occurs. As a result, banks can better
    leverage their investments in legacy fraud detection
    technologies. The pre-packaged reports and dashboards include
    automatic watchlist and case creation, as well as analyst
    desktop tools that facilitate incident investigation and
    annotation, case management, notification and response. ArcSight
    FraudView also utilizes the technology underlying our ArcSight
    Threat Detector module to automatically update or create new
    risk profiles and rules and to enable multi-path detection.  ArcSight Compliance Applications. 002-009, 800-53)
  ArcSight Threat Detector.
  ArcSight Interactive Discovery
  ArcSight TRM (Threat Response
    Manager). out-of-policy
  ArcSight NCM (Network Configuration
    Manager).
  Maintenance
    and Professional Services
   9




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day-to-day
  24-hour
  Research
    and Development
    Sales and
    Marketing
     10




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e-mail
  Competition
         11




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12




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Intellectual
    Property
    Patents and Patent Applications.
  Oracle License Agreement.
  and/or
  Employees
    Corporate
    History and Information
  (408) 864-2600.
   13




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Available
    Information
  Form 10-K, Form 10-Q, Form 8-K 1-800-SEC-0330
  Item 1A.
    Risk
    Factors  Risk
    Related to Our Business and Industry
  Our
    future operating results may fluctuate significantly and our
    current operating results may not be a good indication of our
    future performance.
  period-to-period
    
    the timing of our sales during the quarter, particularly since a
    large portion of our sales occurs in the last few weeks of the
    quarter and loss or delay of a few large contracts may have a
    significant adverse impact on our operating results;
    changes in the mix of revenues attributable to higher-margin
    revenues from ESM products as opposed to lower-margin revenues
    from sales of our appliance products;
    the timing of satisfying revenue recognition criteria,
    including, for example, establishing (1) vendor-specific
    objective evidence of fair value, or VSOE, for new products and
    maintaining VSOE for maintenance and services, particularly
    where we accrue the associated commission expense in a different
    period, and (2) sufficient history with respect to our
    newly introduced appliance licensing model such that revenue 14




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recognition criteria would be met on shipment of our appliances,
    rather than delaying revenue recognition until payment for these
    transactions which we will be required to do until such history
    is established;  
    changes in the renewal rate of maintenance agreements;
    our ability to estimate warranty claims accurately;
    general economic conditions, both domestically and in our
    foreign markets, and economic conditions specifically affecting
    industries in which our customers participate, such as the
    impact of the continuing instability in global and
    U.S. economic and financial market conditions, including
    the recent instability in Europe; and
    the impact of Accounting Standards Codification, or ASC, Topic
    ASC 740-10,
    Accounting for Uncertainty in Income Taxes, which
    requires us to establish reserves for uncertain tax positions
    and accrue potential tax penalties and interest.  Our
    sales cycle is long and unpredictable, and our sales efforts
    require considerable time and expense. As a result, our revenues
    are difficult to predict and may vary substantially from quarter
    to quarter, which may cause our operating results to
    fluctuate.
      If we
    fail to enhance and manage our distribution channels, our
    revenues could decline and our growth prospects could
    suffer.
   15




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We
    operate in an evolving market that has not yet reached
    widespread adoption and have a history of losses, and we may not
    be profitable in the future.
    If we
    are unable to successfully develop and market new products, make
    enhancements to our existing products or expand our offerings
    into new markets, our business may not grow and our operating
    results may suffer.
   16




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sub-version
    Our
    business depends, in part, on sales to the public sector, and
    significant changes in the contracting or fiscal policies of the
    public sector could have a material adverse effect on our
    business.
    
    changes in fiscal or contracting policies or decreases in
    available government funding;
    changes in government programs or applicable requirements;
    the adoption of new laws or regulations or changes to existing
    laws or regulations;
    changes in political or social attitudes with respect to
    security issues; and
    potential delays or changes in the government appropriations
    process, including actions such as spending freezes implemented
    to address political or fiscal policy concerns,   17




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We
    face intense competition in our market, including with larger,
    better-known companies, and we may be unable to simultaneously
    compete effectively for enterprise threat and risk management
    opportunities at both the large enterprise level and for smaller
    mid-size customers.
    
    custom internal efforts;
    specialized startup companies; and
    large software companies.        e-Security,
    
    greater name recognition and longer operating histories; 18




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
    larger sales and marketing budgets and resources;
    the capacity to leverage their sales efforts and marketing
    expenditures across a broader portfolio of products;
    broader distribution and established relationships with
    distribution partners;
    access to larger customer bases;
    greater customer support;
    greater resources to make acquisitions;
    wider geographic presence;
    lower labor and development costs; and
    substantially greater financial, technical and other resources.        We may
    not be able to compete effectively with companies that integrate
    or bundle products similar to ours with their other product
    offerings.
   19




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If we
    are unable to maintain and further develop our relationships
    with our existing customers, our operating results may
    decline.
    If we
    are not able to maintain and enhance our brand, our business and
    operating results may be harmed.
      We may
    have difficulty forecasting demand for our appliance products
    and, because we primarily rely on a single contract manufacturer
    for manufacture and fulfillment of our appliance products, we
    may be unable to fulfill orders for these appliance
    products.
   20




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We
    face risks related to customer outsourcing to managed security
    service providers.
    Seasonality
    may cause fluctuations in our operating results.
    
    the timing of our annual sales club for top
    performers and annual training for our entire sales force in our
    first fiscal quarter;
    the fiscal year end procurement cycle of our government
    customers;
    the budgeting, procurement and work cycles of our customers,
    including customers in the public sector;
    seasonal reductions in business activity during the summer
    months in the United States, Europe and certain other
    regions; and
    the structure of our direct sales incentive and compensation
    program, which may reinforce the tendency of our direct sales
    team to book the largest volume of deals toward the end of our
    fiscal year.     21




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Failure
    to comply with laws or regulations applicable to our business
    could cause us to lose U.S. government customers or our ability
    to contract with the U.S. government.
    Our
    government contracts may limit our ability to move development
    activities overseas and to source components from some
    countries, which may impair our ability to optimize our product
    development costs and compete for non-government
    contracts.
    Real
    or perceived errors, failures or bugs in our products could
    adversely affect our operating results and growth
    prospects.
      day-to-day
   22




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Incorrect
    or improper use of our complex products, our failure to properly
    train customers on how to utilize our products or our failure to
    properly provide consulting and implementation services could
    result in customer dissatisfaction and negatively affect our
    results of operations and growth prospects.
  sub-optimal
    If we
    are unable to maintain effective relationships with our
    technology partners, we may not be able to support the
    interoperability of our software with a wide variety of security
    and other products and our business may be harmed.
  out-of-the-box
 23




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Our
    international sales and operations subject us to additional
    risks that can adversely affect our operating
    results.
    
    increased management, travel, infrastructure and legal
    compliance costs associated with having multiple international
    operations;
    longer payment cycles and difficulties in collecting accounts
    receivable, especially in emerging markets, and the likelihood
    that revenues from international resellers and customers may
    need to be recognized when cash is received, at least until
    satisfactory payment history has been established;
    the need to localize our products and licensing programs for
    international customers;
    differing regulatory and legal requirements and possible
    enactment of additional regulations or restrictions on the use,
    import or export of encryption technologies and our
    appliance-based products, which could delay or prevent the sale
    or use of our products in some jurisdictions;
    weaker protection of intellectual property rights in some
    countries; and
    overlapping of different tax regimes.    Our
    business in countries with a history of corruption and
    transactions with foreign governments increase the risks
    associated with our international activities.
    Failure
    to protect our intellectual property rights could adversely
    affect our business.
   24




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Confidentiality
    agreements with employees and others may not adequately prevent
    disclosure of trade secrets and other proprietary
    information.
    We may
    in the future be subject to intellectual property rights claims,
    which are extremely costly to defend, could require us to pay
    significant damages and could limit our ability to use certain
    technologies.
   25




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We
    rely on software licensed from other parties, the loss of which
    could increase our costs and delay software
    shipments.
    If we
    are unable to attract and retain personnel, our business would
    be harmed.
       26




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If we
    fail to manage future growth effectively, our business would be
    harmed.
    Some
    of our products contain open source software, and
    any failure to comply with the terms of one or more of these
    open source licenses could negatively affect our
    business.
    Indemnity
    provisions in various agreements potentially expose us to
    substantial liability for intellectual property infringement and
    other losses.
    Changes
    or reforms in the law or regulatory landscape could diminish the
    demand for our solutions, and could have a negative impact on
    our business.
   27




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Future
    acquisitions could disrupt our business and harm our financial
    condition and results of operations.
    
    an acquisition may negatively impact our results of operations
    because it may require us to incur charges and substantial debt
    or liabilities, may cause adverse tax consequences, substantial
    depreciation or deferred compensation charges, may result in
    acquired in-process research and development expenses or in the
    future may require the amortization, write-down or impairment of
    amounts related to deferred compensation, goodwill and other
    intangible assets, or may not generate sufficient financial
    return to offset acquisition costs;
    we may encounter difficulties or unforeseen expenditures in
    integrating the business, technologies, products, personnel or
    operations of any company that we acquire, particularly if key
    personnel of the acquired company decide not to work for us;
    an acquisition may disrupt our ongoing business, divert
    resources, increase our expenses and distract our management;
    an acquisition may result in a delay or reduction of customer
    purchases for both us and the company acquired due to customer
    uncertainty about continuity and effectiveness of service from
    either company;
    we may encounter difficulties in, or may be unable to,
    successfully sell any acquired products; and
    an acquisition may involve the entry into geographic or business
    markets in which we have little or no prior experience.  If we
    fail to maintain an effective system of internal controls, our
    ability to produce accurate financial statements or comply with
    applicable regulations could be impaired.
       28




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We may
    not be able to utilize a significant portion of our net
    operating loss carry-forwards, which could adversely affect our
    operating results.
    Governmental
    export or import controls could subject us to liability or limit
    our ability to compete in foreign markets.
    We may
    become a party to litigation that may negatively affect our
    business results of operations or financial
    condition.
   29




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Risks
    Related to Ownership of Our Common Stock
  Our
    stock price may be volatile or may decline regardless of our
    operating performance.
    
    actual or anticipated fluctuations in our operating results;
    the financial projections we may provide to the public, any
    changes in these projections or our failure to meet these
    projections;
    failure of securities analysts to maintain coverage of us,
    changes in financial estimates by any securities analysts who
    follow our company, or our failure to meet these estimates or
    the expectations of investors;
    ratings or other changes by any securities analysts who follow
    our company or our industry;
    announcements by us or our competitors of significant technical
    innovations, acquisitions, strategic partnerships, joint
    ventures or capital commitments;
    changes in operating performance and stock market valuations of
    other technology companies generally, or those in our industry
    in particular;
    price and volume fluctuations in the overall stock market,
    including as a result of trends in the economy as a whole, such
    as the continuing volatility in the financial markets;
    lawsuits threatened or filed against us; and
    other events or factors, including those resulting from war,
    incidents of terrorism or responses to these events.    If
    securities or industry analysts cease publishing research or
    publish inaccurate or unfavorable research about our business,
    our stock price and trading volume could decline.
    Delaware
    law, provisions in our restated certificate of incorporation and
    amended and restated bylaws and the concentration of our
    ownership could make a merger, tender offer or proxy contest
    difficult, thereby depressing the trading price of our common
    stock.
   30




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
    our board of directors is classified into three classes of
    directors with staggered three-year terms;
    currently only our president and chief executive officer, our
    lead independent director or a majority of our board of
    directors is authorized to call a special meeting of
    stockholders;
    our stockholders are only able to take action at a meeting of
    stockholders and not by written consent;
    vacancies on our board of directors are able to be filled only
    by our board of directors and not by stockholders;
    directors may be removed from office only for cause;
    our restated certificate of incorporation authorizes
    undesignated preferred stock, the terms of which may be
    established, and shares of which may be issued, without
    stockholder approval; and
    advance notice procedures will apply for stockholders to
    nominate candidates for election as directors or to bring
    matters before an annual meeting of stockholders.    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Item 3.
    Legal
    Proceedings    Item 4.
    (Removed
    and Reserved)  PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities 31




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Market
    Information for Common Stock
  intra-day
  Fiscal 2009

High

LowFirst Quarter

$
11.74


$
7.19Second Quarter


13.00



5.25Third Quarter


10.00



4.17Fourth Quarter


16.10



7.70   Fiscal 2010

High

LowFirst Quarter

$
20.80


$
13.52Second Quarter


25.99



16.90Third Quarter


29.24



22.15Fourth Quarter


29.33



22.58   Fiscal 2011

High

LowFirst Quarter (through July 6, 2010)

$
25.77


$
17.51   Stockholders
    Stock
    Price Performance Graph
    COMPARISON
    OF 26 MONTH CUMULATIVE TOTAL RETURN* Among
    ArcSight, Inc., the NASDAQ Composite Index
    and the NASDAQ Computer & Data Processing Index
  
    *
    
    $100 invested on 2/14/08 in stock or 1/31/08 in index, including
    reinvestment of dividents. Fiscal year ending April 30. 32




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Form 10-K,
  Dividend
    Policy
    Equity
    Compensation Plan Information
    (a) Number of



(c) Number of SecuritiesSecurities to be



Remaining Available forIssued Upon



Future Issuance UnderExercise of

(b) Weighted-Average

Equity CompensationOutstanding

Exercise Price of

Plans (ExcludingOptions, Warrants

Outstanding Options,

Securities Reflected inPlan Category

and Rights(1)

Warrants and Rights

Column (a))Equity compensation plans approved by security holders


6,734,350


$
10.41



4,222,243Equity compensation plans not approved by security holders










Total


6,734,350


$
10.41



4,222,243     (1)
    
    Prior to our IPO, we issued securities under our 2002 Stock
    Plan, as amended, and our 2000 Stock Incentive Plan. Following
    our IPO, we issued securities under our 2007 Equity Incentive
    Plan (2007 Plan) and our 2007 Employee Stock
    Purchase Plan (ESPP).      Recent
    Sales of Unregistered Securities
   33




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Use of
    Proceeds from Public Offering of Common Stock
  Form S-1 No. 333-145974)
      Purchases
    of Equity Securities by the Issuer and Affiliated
    Purchasers
   34




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##### Table of Contents



Item 6.
    Selected
    Financial Data  Form 10-K. Form 10-K.
  Fiscal Year Ended April 30,Consolidated Statements of Operations Data:

2010


2009


2008


2007


2006(In thousands, except per share data)Revenues:Products

$
106,568


$
80,616


$
63,765


$
43,989


$
22,859Maintenance


54,736



38,521



27,607



18,762



11,473Services


20,080



17,031



10,173



7,082



5,103Total revenues


181,384



136,168



101,545



69,833



39,435Cost of revenues:Products


12,969



8,595



4,767



2,569



1,769Maintenance(1)


9,503



6,861



5,691



3,498



2,085Services(1)


13,340



9,875



5,800



3,521



2,942Total cost of revenues


35,812



25,331



16,258



9,588



6,796Gross profit


145,572



110,837



85,287



60,245



32,639Operating expenses(1):Research and development


26,266



22,537



19,762



14,535



12,154Sales and marketing


73,658



56,279



53,453



36,587



24,309General and administrative


26,269



20,278



13,422



9,453



12,978Total operating expenses


126,193



99,094



86,637



60,575



49,441Income (loss) from operations


19,379



11,743



(1,350
)


(330
)


(16,802
)Other income (expense), net


(399
)


734



472



462



219Income (loss) before provision for income taxes


18,980



12,477



(878
)


132



(16,583
)Provision (benefit) for income taxes


(9,407
)


2,564



1,131



389



163Net income (loss)

$
28,387


$
9,913


$
(2,009
)

$
(257
)

$
(16,746
)Net income (loss) per common share, basic

$
0.85


$
0.32


$
(0.08
)

$
(0.03
)

$
(2.24
)Net income (loss) per common share, diluted

$
0.78


$
0.30


$
(0.08
)

$
(0.03
)

$
(2.24
)Shares used in computing basic net income (loss) per common share


33,434



31,233



25,936



10,042



7,469Shares used in computing diluted net income (loss) per common
    share


36,197



33,550



25,936



10,042



7,469     (1)
    
    Stock-based compensation expense is included above as follows:  Cost of maintenance revenues

$
445


$
216


$
106


$
3


$
5Cost of services revenues


225



142



115



14



5Research and development


2,177



1,342



1,356



501



1,950Sales and marketing


3,418



2,451



2,685



661



210General and administrative


3,941



1,994



664



350



5,948Total stock-based compensation expense

$
10,206


$
6,145


$
4,926


$
1,529


$
8,118    35




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##### Table of Contents



As of April 30,2010

2009

2008

2007

2006(In thousands)Consolidated Balance Sheet Data:Cash, cash equivalents, and marketable securities

$
149,371


$
90,467


$
71,946


$
16,917


$
16,443Working capital (deficit)


123,773



74,549



46,711



(3,811
)


5,377Total assets


226,203



141,161



118,579



48,990



32,926Current and long-term debt


















Convertible preferred stock














26,758



26,758Common stock and additional paid-in capital


144,273



113,781



101,574



23,479



19,383Total stockholders equity


135,576



76,673



54,769



5,130



1,433   Item 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  The following discussion and analysis of our financial
    condition and results of operations should be read in
    conjunction with the audited consolidated financial statements
    and notes thereto and managements discussion and analysis
    of financial condition and results of operations for the fiscal
    year ended April 30, 2010 included herein. This Annual
    Report on
    Form 10-K
    contains forward-looking statements within the
    meaning of Section 27A of the Securities Act of 1933, as
    amended, and Section 21E of the Securities Exchange Act of
    1934, as amended. These statements are often identified by the
    use of words such as may, will,
    expect, believe, anticipate,
    intend, could, estimate, or
    continue, and similar expressions or variations.
    Such forward-looking statements are subject to risks,
    uncertainties and other factors that could cause actual results
    and the timing of certain events to differ materially from
    future results expressed or implied by such forward-looking
    statements. Factors that could cause or contribute to such
    differences include, but are not limited to, those identified
    herein, and those discussed in the section titled Risk
    Factors, set forth in Part I, Item 1A of this
    Form 10-K
    and in our other SEC filings. We disclaim any obligation to
    update any forward-looking statements to reflect events or
    circumstances after the date of such statements.
  Overview
     36




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##### Table of Contents



Important
    Factors Affecting Our Operating Results and Financial
    Condition
    Development and Introduction of New
    Products.
  Sales of Products to New Customers and Continued Sales to Our
    Installed Base.
  Further Development of Our Channel Network and Our
    Relationships with System
    Integrators.
 37




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##### Table of Contents



Sources
    of Revenues, Cost of Revenues and Operating Expenses
      985-605, Software Revenue Recognition 985-605. 985-605
    make-up
  Product
    Revenues
   38




---



##### Table of Contents




    the timing of our annual sales club for top
    performers and annual training for our entire sales force in our
    first fiscal quarter;
    the fiscal year end procurement cycle of our government
    customers;
    the budgeting, procurement and work cycles of our customers,
    including customers in the public sector;
    seasonal reductions in business activity during the summer
    months in the United States, Europe and certain other
    regions; and
    the structure of our direct sales incentive and compensation
    program, which may reinforce the tendency of our direct sales
    team to book the largest volume of deals toward the end of our
    fiscal year.       39




---



##### Table of Contents



Maintenance
    Revenues
  24-hour
    Services
    Revenues
  time-and-materials
   40




---



##### Table of Contents



Cost
    of Revenues
          Operating
    and Non-Operating Expenses
  Research and Development Expenses.
  Sales and Marketing Expenses.
  General and Administrative Expenses.
  Other Income (Expense), Net.
 41




---



##### Table of Contents



Accounting for Income Taxes. Accounting for Income Taxes
    Critical
    Accounting Policies, Significant Judgments and
    Estimates
    Revenue
    Recognition
  985-605.
    
    persuasive evidence of an arrangement exists;
    the fee is fixed or determinable;
    product delivery has occurred or services have been
    rendered; and
    collection is considered probable. 42




---



##### Table of Contents



and/or
     43




---



##### Table of Contents



Stock-Based
    Compensation
  Compensation-Stock Compensation
     44




---



##### Table of Contents



Business
    Combinations
  Business Combinations
    Goodwill
    and Intangible Assets
  Goodwill and Other
    Intangible Assets
  Allowance
    for Doubtful Accounts
   45




---



##### Table of Contents



Accounting
    for Income Taxes
        740-10-50, Accounting for Uncertainty in Income Taxes, 740-10-50
  740-10-50
       46




---



##### Table of Contents



Results
    of Operations
    Fiscal Year Ended April 30,2010

2009

2008Revenues:Products


58.7
%


59.2
%


62.8
%Maintenance


30.2



28.3



27.2Services


11.1



12.5



10.0Total revenues


100.0



100.0



100.0Cost of revenues:Products


7.1



6.3



4.7Maintenance


5.2



5.0



5.6Services


7.4



7.3



5.7Total cost of revenues


19.7



18.6



16.0Gross margin


80.3



81.4



84.0Operating expenses:Research and development


14.5



16.6



19.5Sales and marketing


40.6



41.3



52.6General and administrative


14.5



14.9



13.2Total operating expenses


69.6



72.8



85.3Income (loss) from operations


10.7
%


8.6
%


(1.3
)%   Comparison
    of Fiscal 2010 and Fiscal 2009
  Revenues
    Fiscal Year EndedApril 30,


Change in


Change in2010


2009


Dollars


PercentProducts

$
106,568


$
80,616


$
25,952



32.2
%Percentage of total revenues


58.7
%


59.2
%Maintenance


54,736



38,521



16,215



42.1
%Percentage of total revenues


30.2
%


28.3
%Services


20,080



17,031



3,049



17.9
%Percentage of total revenues


11.1
%


12.5
%Total revenues

$
181,384


$
136,168


$
45,216



33.2
%   Product Revenues.
 47




---



##### Table of Contents



Maintenance Revenues.
  Services Revenues.
  Geographic Regions.
  Fiscal Year EndedApril 30,


Change in


Change in2010


2009


Dollars


PercentAmericas

$
139,938


$
109,812


$
30,126



27.4
%Percentage of total revenues


77.2
%


80.6
%EMEA


33,750



19,409



14,341



73.9
%Percentage of total revenues


18.6
%


14.3
%APAC


7,696



6,947



749



10.8
%Percentage of total revenues


4.2
%


5.1
%Total revenues

$
181,384


$
136,168


$
45,216



33.2
%     Cost
    of Revenues and Gross Margin
    Fiscal Year EndedApril 30,


Change in


Change in2010


2009


Dollars


PercentProducts

$
12,969


$
8,595


$
4,374



50.9
%Maintenance


9,503



6,861



2,642



38.5
%Services


13,340



9,875



3,465



35.1
%Total cost of revenues

$
35,812


$
25,331


$
10,481



41.4
%  48




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##### Table of Contents



Fiscal Year EndedApril 30,2010


2009Gross marginProducts

$
93,599


$
72,021Percentage of product revenues


87.8
%


89.3
%Maintenance

$
45,233


$
31,660Percentage of maintenance revenues


82.6
%


82.2
%Services

$
6,740


$
7,156Percentage of services revenues


33.6
%


42.0
%Total gross margin

$
145,572


$
110,837Percentage of total revenues


80.3
%


81.4
%   Cost of Product Revenues and Gross
    Margin.
  Cost of Maintenance Revenues and Gross
    Margin.
  Cost of Services Revenues and Gross
    Margin.
 49




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##### Table of Contents



Operating
    Expenses
    Fiscal Year EndedApril 30,


Change in


Change in2010


2009


Dollars


PercentResearch and development

$
26,266


$
22,537


$
3,729



16.5
%Percentage of total revenues


14.5
%


16.6
%Sales and marketing


73,658



56,279



17,379



30.9
%Percentage of total revenues


40.6
%


41.3
%General and administrative


26,269



20,278



5,991



29.5
%Percentage of total revenues


14.5
%


14.9
%Total operating expenses

$
126,193


$
99,094


$
27,099



27.3
%Percentage of total revenues


69.6
%


72.8
%   Research and Development Expenses.
  Sales and Marketing Expenses.
  General and Administrative Expenses.
 50




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##### Table of Contents



Non-Operating
    Expenses
    Fiscal Year EndedApril 30,


Change in


Change in2010


2009


Dollars


PercentInterest income

$
124


$
991


$
(867
)


(87.5
)%Percentage of total revenues


0.1
%


0.7
%Other expense, net


(523
)


(257
)


(266
)


(103.5
)%Percentage of total revenues


(0.3
)%


(0.2
)%Provision (benefit) for income taxes


(9,407
)


2,564



(11,971
)


(466.9
)%Percentage of total revenues


(5.2
)%


1.9
%Total non-operating expenses

$
9,008


$
(1,830
)

$
10,838



592.2
%Percentage of total revenues


5.0
%


(1.3
)%   Interest Income.
  Other Expense, Net.
  Provision (Benefit) for Income Taxes.
  Comparison
    of Fiscal 2009 and Fiscal 2008
  Revenues
    Fiscal Year EndedApril 30,


Change in


Change in2009


2008


Dollars


PercentProducts

$
80,616


$
63,765


$
16,851



26.4
%Percentage of total revenues


59.2
%


62.8
%Maintenance


38,521



27,607



10,914



39.5
%Percentage of total revenues


28.3
%


27.2
%Services


17,031



10,173



6,858



67.4
%Percentage of total revenues


12.5
%


10.0
%Total revenues

$
136,168


$
101,545


$
34,623



34.1
%   Product Revenues.
 51




---



##### Table of Contents



Maintenance Revenues.
  Services Revenues.
  Geographic Regions.
  Fiscal Year EndedApril 30,


Change in


Change in2009


2008


Dollars


PercentAmericas

$
109,812


$
77,621


$
32,191



41.5
%Percentage of total revenues


80.6
%


76.4
%EMEA


19,409



18,447



962



5.2
%Percentage of total revenues


14.3
%


18.2
%Asia Pacific


6,947



5,477



1,470



26.8
%Percentage of total revenues


5.1
%


5.4
%Total revenues

$
136,168


$
101,545


$
34,623



34.1
%    52




---



##### Table of Contents



Cost
    of Revenues and Gross Margin
    Fiscal Year EndedApril 30,


Change in


Change in2009


2008


Dollars


PercentProducts

$
8,595


$
4,767


$
3,828



80.3
%Maintenance


6,861



5,691



1,170



20.6
%Services


9,875



5,800



4,075



70.3
%Total cost of revenues

$
25,331


$
16,258


$
9,073



55.8
%     Fiscal Year EndedApril 30,2009


2008Gross marginProducts

$
72,021


$
58,998Percentage of product revenues


89.3
%


92.5
%Maintenance

$
31,660


$
21,916Percentage of maintenance revenues


82.2
%


79.4
%Services

$
7,156


$
4,373Percentage of services revenues


42.0
%


43.0
%Total gross margin

$
110,837


$
85,287Percentage of total revenues


81.4
%


84.0
%   Cost of Product Revenues and Gross
    Margin.
  Cost of Maintenance Revenues and Gross
    Margin.
  Cost of Services Revenues and Gross
    Margin.
 53




---



##### Table of Contents



Operating
    Expenses
    Fiscal Year EndedApril 30,


Change in


Change in2009


2008


Dollars


PercentResearch and development

$
22,537


$
19,762


$
2,775



14.0
%Percentage of total revenues


16.6
%


19.5
%Sales and marketing


56,279



53,453



2,826



5.3
%Percentage of total revenues


41.3
%


52.6
%General and administrative


20,278



13,422



6,856



51.1
%Percentage of total revenues


14.9
%


13.2
%Total operating expenses

$
99,094


$
86,637


$
12,457



14.4
%Percentage of total revenues


72.8
%


85.3
%   Research and Development Expenses.
  Sales and Marketing Expenses.
  General and Administrative Expenses.
 54




---



##### Table of Contents



Non-Operating
    Expenses
    Fiscal Year EndedApril 30,


Change in


Change in2009


2008


Dollars


PercentInterest income

$
991


$
857


$
134



15.6
%Percentage of total revenues


0.7
%


0.8
%Other expense, net


(257
)


(385
)


128



(33.2
)%Percentage of total revenues


(0.2
)%


(0.4
)%Provision for income taxes


2,564



1,131



1,433



126.7
%Percentage of total revenues


1.9
%


1.1
%Total non-operating expenses

$
(1,830
)

$
(659
)

$
(1,695
)


(257.2
)%Percentage of total revenues


(1.3
)%


(0.6
)%   Interest Income.
  Other Income (Expense), Net.
  Provision for Income Taxes.
  Liquidity
    and Capital Resources
   55




---



##### Table of Contents



Fiscal Year Ended April 30,2010

2009

2008Net cash provided by operating activities

$
45,685


$
16,841


$
13,532Net cash used in investing activities


(16,689
)


(2,007
)


(4,012
)Net cash provided by financing activities

$
17,876


$
3,948


$
45,567   Operating
    Activities
      
    the growth in our sales transactions and associated cash
    collections or growth in receivables;
    the level of our sales and marketing activities, including
    expansion into new territories;
    the timing and extent of spending to support product development
    efforts; and
    the timing of the growth in general and administrative expenses
    as we further develop our administrative infrastructure to
    support the business as a public company.     56




---



##### Table of Contents



Investing
    Activities
    Financing
    Activities
    Other
    Factors Affecting Liquidity and Capital Resources
   57




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
  Regulation S-K.
  Contractual
    Obligations and Commitments
        Payments Due by PeriodTotal


FY 2011


FY 2012


FY 2013


FY 2014


Thereafter(In thousands)Operating lease obligations

$
22,833


$
3,354


$
3,024


$
3,045


$
3,137


$
10,273Accrued contractual obligations

$
2,986



2,595



271



120







Total

$
25,819


$
5,949


$
3,295


$
3,165


$
3,137


$
10,273     Recent
    Accounting Pronouncements
  855-10, Subsequent Events
  No. 2010-09, Amending Subsequent Events (Topic 855) Certain
    Recognition and Disclosure Requirements
  105-10 The FASB Accounting Standards Codification and the Hierarchy
    of Generally Accepted Accounting Principles
 58




---



##### Table of Contents



No. 2009-13, Revenue Recognition (Topic 605) Multiple-Deliverable
    Element Arrangements  a consensus of the FASB
    Emerging Issues Task Force
  No. 2009-14, Software (Topic 985) Certain Arrangements That Contain
    Software Elements  a consensus of the FASB Emerging
    Issues Task Force
  Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk  Market Risk.
  Foreign Currency Exchange Risk.
  Interest Rate Risk.
  Credit Risk.
 59




---



##### Table of Contents



60




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  Quarterly
    Results of Operations
  Form 10-K. Form 10-K.
  Three Months EndedJuly 31,


Oct. 31,


Jan. 31,


April 30,


July 31,


Oct. 31,


Jan. 31,


April 30,2008


2008


2009


2009


2009


2009


2010


2010(Unaudited, in thousands)Revenues:Products

$
15,802


$
19,169


$
21,775


$
23,870


$
18,265


$
28,018


$
26,555


$
33,730Maintenance


8,568



9,530



10,004



10,419



11,919



12,617



14,702



15,498Services


3,293



4,136



4,613



4,989



4,371



4,868



4,853



5,988Total revenues


27,663



32,835



36,392



39,278



34,555



45,503



46,110



55,216Cost of revenues:Products


1,655



1,844



2,637



2,459



1,944



3,150



3,824



4,051Maintenance(1)


1,631



1,663



1,637



1,930



1,925



2,434



2,497



2,647Services(1)


2,043



2,387



2,587



2,858



2,630



3,204



3,283



4,223Total cost of revenues


5,329



5,894



6,861



7,247



6,499



8,788



9,604



10,921Gross profit


22,334



26,941



29,531



32,031



28,056



36,715



36,506



44,295Operating expenses(1):Research and development


5,315



5,423



5,201



6,598



5,598



6,576



6,429



7,663Sales and marketing


14,868



14,355



12,298



14,758



14,785



18,582



18,563



21,728General and administrative


4,349



4,863



4,943



6,123



6,018



6,336



6,767



7,148Total operating expenses


24,532



24,641



22,442



27,479



26,401



31,494



31,759



36,539Income (loss) from operations


(2,198
)


2,300



7,089



4,552



1,655



5,221



4,747



7,756Interest and other income (expense), net


305



340



157



(68
)


(89
)


(179
)


(81
)


(50
)Income (loss) before provision for income taxes


(1,893
)


2,640



7,246



4,484



1,566



5,042



4,666



7,706Provision (benefit) for income taxes


(563
)


795



2,183



149



551



2,544



2,438



(14,940
)Net income (loss)

$
(1,330
)

$
1,845


$
5,063


$
4,335


$
1,015


$
2,498


$
2,228


$
22,646     (1)
    
    Stock-based compensation expense as included in above:  Cost of maintenance revenues

$
46


$
54


$
56


$
60


$
80


$
102


$
123


$
140Cost of services revenues


33



39



34



36



33



43



64



85Research and development


339



334



322



347



429



518



595



635Sales and marketing


751



752



466



482



612



851



987



968General and administrative


234



346



786



628



776



971



1,071



1,123Total stock-based compensation expenses

$
1,403


$
1,525


$
1,664


$
1,553


$
1,930


$
2,485


$
2,840


$
2,951  61




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##### Table of Contents



Three Months EndedJuly 31,

Oct. 31,

Jan. 31,

April 30,

July 31,

Oct. 31,

Jan. 31,

April 30,2008

2008

2009

2009

2009

2009

2010

2010(Unaudited)Revenues:Products


57.1
%


58.4
%


59.8
%


60.8
%


52.9
%


61.6
%


57.6
%


61.1
%Maintenance


31.0



29.0



27.5



26.5



34.5



27.7



31.9



28.1Services


11.9



12.6



12.7



12.7



12.6



10.7



10.5



10.8Total revenues


100.0



100.0



100.0



100.0



100.0



100.0



100.0



100.0Cost of revenues:Products


6.0



5.6



7.3



6.3



5.6



6.9



8.3



7.3Maintenance


5.9



5.1



4.5



4.9



5.6



5.4



5.4



4.8Services


7.4



7.3



7.1



7.3



7.6



7.0



7.1



7.7Total cost of revenues


19.3



18.0



18.9



18.5



18.8



19.3



20.8



19.8Gross margin


80.7



82.0



81.1



81.5



81.2



80.7



79.2



80.2Operating expenses:Research and development


19.2



16.5



14.3



16.8



16.2



14.5



13.9



13.9Sales and marketing


53.7



43.7



33.8



37.6



42.8



40.8



40.3



39.4General and administrative


15.7



14.8



13.5



15.6



17.4



13.9



14.7



12.9Total operating expenses


88.6



75.0



61.6



70.0



76.4



69.2



68.9



66.2Income (loss) from operations


(7.9
)%


7.0
%


19.5
%


11.5
%


4.8
%


11.5
%


10.3
%


14.0
%                62




---



##### 



INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 PageReports of Independent Registered Public
    Accounting Firm


64Consolidated Balance Sheets


65Consolidated Statements of Operations


66Consolidated Statements of Stockholders
    Equity


67Consolidated Statements of Cash Flows


68Notes to Consolidated Financial Statements


69   63




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm              
    64




---



##### Table of Contents



ARCSIGHT,
    INC.
    Consolidated Balance Sheets  As of April 30,2010


2009(In thousands, except share amounts and par value)ASSETSCurrent assets:Cash and cash equivalents

$
137,358


$
90,467Marketable securities


12,013



Accounts receivable, net of allowance for doubtful accounts of
    $256 and $262, as of April 30, 2010 and 2009, respectively


33,609



34,184Deferred tax asset, current


8,807



Capitalized software, current


2,303



144Prepaid expenses and other current assets


6,557



3,717Total current assets


200,647



128,512Property and equipment, net


8,174



4,416Deferred tax asset, non-current


10,649



Goodwill


5,746



5,746Acquired intangible assets, net


430



1,319Other long-term assets


557



1,168Total assets

$
226,203


$
141,161LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
5,039


$
1,432Accrued compensation and benefits


13,633



11,671Obligations for software licenses, current


2,832



363Other accrued liabilities


5,696



4,337Deferred revenues, current


49,674



36,160Total current liabilities


76,874



53,963Deferred revenues, non-current


11,237



8,888Other long-term liabilities


2,516



1,637Total liabilities


90,627



64,488Commitments and contingencies (Note 5)Stockholders equity:Convertible preferred stock, $0.00001 par value per share,
    10,000,000 shares authorized as of April 30, 2010 and
    2009, respectively; no shares issued and outstanding as of
    April 30, 2010 and 2009, respectively






Common stock, $0.00001 par value per share;
    150,000,000 shares authorized as of April 30, 2010 and
    April 30, 2009, respectively; 34,322,543 and 32,248,116
    issued and outstanding as of April 30, 2010 and 2009,
    respectively






Additional paid-in capital


144,273



113,781Accumulated other comprehensive loss


(290
)


(314
)Accumulated deficit


(8,407
)


(36,794
)Total stockholders equity


135,576



76,673Total liabilities and stockholders equity

$
226,203


$
141,161    65




---



##### Table of Contents



ARCSIGHT,
    INC.
    Consolidated Statements of Operations  Fiscal Year Ended April 30,2010


2009


2008(In thousands, except share amounts)Revenues:Products

$
106,568


$
80,616


$
63,765Maintenance


54,736



38,521



27,607Services


20,080



17,031



10,173Total revenues


181,384



136,168



101,545Cost of revenues:Products


12,969



8,595



4,767Maintenance(1)


9,503



6,861



5,691Services(1)


13,340



9,875



5,800Total cost of revenues


35,812



25,331



16,258Gross profit


145,572



110,837



85,287Operating expenses(1):Research and development


26,266



22,537



19,762Sales and marketing


73,658



56,279



53,453General and administrative


26,269



20,278



13,422Total operating expenses


126,193



99,094



86,637Income (loss) from operations


19,379



11,743



(1,350
)Interest income


124



991



857Other income (expense), net


(523
)


(257
)


(385
)Income (loss) before provision for income taxes


18,980



12,477



(878
)Provision (benefit) for income taxes


(9,407
)


2,564



1,131Net income (loss)

$
28,387


$
9,913


$
(2,009
)Net income (loss) per common share, basic

$
0.85


$
0.32


$
(0.08
)Net income (loss) per common share, diluted

$
0.78


$
0.30


$
(0.08
)Shares used in computing basic net income (loss) per common share


33,434



31,233



25,936Shares used in computing diluted net income (loss) per common
    share


36,197



33,550



25,936     (1)
    
    Stock-based compensation expense included in above (see
    Note 8):  Cost of maintenance revenues

$
445


$
216


$
106Cost of services revenues


225



142



115Research and development


2,177



1,342



1,356Sales and marketing


3,418



2,451



2,685General and administrative


3,941



1,994



664    66




---



##### Table of Contents





ARCSIGHT,
    INC.



Consolidated
    Statements of Stockholders Equity

For
    the Fiscal Years Ended April 2008, 2009 and 2010  Deferred


AccumulatedConvertible








Additional


Stock-


Other





TotalPreferred Stock


Common Stock


Paid-in


Based


Comprehensive


Accumulated


StockholdersShares


Amount


Shares


Amount


Capital


Compensation


Income (Loss)


Deficit


Equity(In thousands, except share amounts)Balance as of April 30, 2007


13,032,497



26,758



10,620,041







23,479



(554
)


13



(44,566
)


5,130Cumulative effect adjustment due to the adoption of
    ASC 740-10






























(132
)


(132
)Issuance of common stock upon exercise of stock options










402,260







923















923Reclassification of options exercised but not vested, net


















60















60Repurchase of common stock subject to vesting










(6,845
)






(3
)














(3
)Amortization of deferred stock-based compensation, net of
    terminations


















(6
)


97











91Amortization of restricted stock-based compensation






















404











404Stock-based compensation under ASC 718


















4,431















4,431Exercise of Series B preferred stock warrants


12,909































Exercise of common stock warrants










6,293























Conversion of preferred stock into common stock


(13,045,406
)


(26,758
)


14,000,441







26,758















Proceeds from initial public offering, net of issuance costs of
    $4,288










6,000,000







45,932















45,932Comprehensive loss:Foreign currency translation adjustment


























(58
)






(58
)Net loss






























(2,009
)


(2,009
)Comprehensive loss


































(2,067
)Balance as of April 30, 2008










31,022,190







101,574



(53
)


(45
)


(46,707
)


54,769Issuance of common stock under stock option and stock purchase
    plans










1,225,926







4,800















4,800Reclassification of options exercised but not vested, net


















24















24Amortization of deferred stock-based compensation, net of
    terminations






















19











19Amortization of restricted stock-based compensation






















34











34Stock-based compensation under ASC 718


















6,092















6,092Tax benefit from stock-based awards


















1,291















1,291Comprehensive income:Foreign currency translation adjustment


























(269
)






(269
)Net income






























9,913



9,913Comprehensive income


































9,644Balance as of April 30, 2009





$




32,248,116


$



$
113,781


$



$
(314
)

$
(36,794
)

$
76,673Issuance of common stock under stock option and stock purchase
    plans










2,074,427







12,017















12,017Stock-based compensation under ASC 718


















10,206















10,206Tax benefit from stock-based awards


















8,269















8,269Comprehensive income:Foreign currency translation adjustment


























24







24Net income






























28,387



28,387Comprehensive income


































28,411Balance as of April 30, 2010





$




34,322,543


$



$
144,273


$



$
(290
)

$
(8,407
)

$
135,576    67




---



##### Table of Contents






ARCSIGHT,
    INC.



Consolidated
    Statements of Cash Flows  Fiscal Year Ended April 30,2010


2009


2008(In thousands)Cash flows from operating activities:Net income (loss)

$
28,387


$
9,913


$
(2,009
)Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Depreciation and amortization


2,452



2,471



1,945Amortization of acquired intangibles


889



842



573Loss (gain) on disposal of property and equipment


26



17



(6
)Stock-based compensation


10,206



6,145



4,926Deferred tax assets


(19,456
)






Excess tax benefit from stock-based compensation


(8,269
)


(1,291
)


Provision for allowance for doubtful accounts


134



142



33Changes in operating assets and liabilities:Accounts receivable


441



(7,668
)


(11,137
)Prepaid expenses and other assets


(624
)


2,205



1,008Accounts payable


3,607



(1,683
)


269Accrued compensation and benefits


2,386



(193
)


5,186Other accrued liabilities


9,643



2,159



1,066Deferred revenues


15,863



3,782



11,678Net cash provided by operating activities


45,685



16,841



13,532Cash flows from investing activities:Restricted cash


842







Maturities of marketable securities


12,985







Purchases of marketable securities


(24,998
)






Purchases of property and equipment


(5,518
)


(2,007
)


(4,031
)Proceeds from sales of property and equipment










19Net cash used in investing activities


(16,689
)


(2,007
)


(4,012
)Cash flows from financing activities:Initial public offering preparation costs










(3,669
)Proceeds from initial public offering










50,220Excess tax benefit from stock-based compensation


8,269



1,291



Proceeds from exercise of stock options, net of repurchases


12,017



4,800



920Payment of capital lease and software license obligations


(2,410
)


(2,143
)


(1,904
)Net cash provided by financing activities


17,876



3,948



45,567Effect of exchange rate changes on cash


19



(261
)


(58
)Net increase in cash and cash equivalents


46,891



18,521



55,029Cash and cash equivalents at beginning of period


90,467



71,946



16,917Cash and cash equivalents at end of period

$
137,358


$
90,467


$
71,946Supplemental disclosure of cash flow information:Income taxes paid

$
2,873


$
1,669


$
331Interest expense paid


103



110



227Supplemental disclosure of non-cash investing and financing
    activities:Common stock issued upon conversion of preferred stock










26,758Property and equipment acquired under capital lease


713



101



Capitalized software obligations


4,606







    68




---



##### Table of Contents



ARCSIGHT,
    INC.



Notes to
    Consolidated Financial Statements  1.
    Description
    of Business    Initial
    Public Offering
    2.
    Significant
    Accounting Policies  Basis
    of Presentation and Consolidation
    1-for-4
  Use of
    Estimates
   69




---



##### Table of Contents



Cash
    and Cash Equivalents
    Marketable
    Securities
  available-for-sale. other-than-temporary other-than-temporary, other-than-temporary
  Fair
    Value of Financial Instruments
    Foreign
    Currency Translation/Transactions
      Derivative
    Financial Instruments
   70




---



##### Table of Contents



Concentration
    of Credit Risk and Business Risk
  mark-to-market
     71




---



##### Table of Contents



lower-than-expected
  Revenue
    Recognition
  time-and-materials
  985-605 985-605),
           72




---



##### Table of Contents



and/or
  time-and-materials
     73




---



##### Table of Contents



Allowance
    for Doubtful Accounts
      AdditionBalance at

Charged to



Balance atBeginning

Costs and



EndPeriod

of Period

Expenses

Deductions(1)

of Period2008

$
123


$
33


$
(23
)

$
1332009

$
133


$
142


$
(13
)

$
2622010

$
262


$
134


$
(140
)

$
256     (1)
    
    Uncollectible amounts written off, net of recoveries.  Restricted
    Cash
    Capitalized
    Software License Obligations
     74




---



##### Table of Contents



Impairment
    of Long-Lived Assets
    Property
    and Equipment, Net
    Business
    Combinations
      Goodwill
     75




---



##### Table of Contents



Software
    Development Costs
    Cost
    of Computer Software Developed or Obtained for Internal
    Use
    Research
    and Development Expenses
    Advertising
    Expenses
    Income
    Taxes
    ASC 740-10, ASC 740-10 ASC 740-10
 76




---



##### Table of Contents



Stock-Based
    Compensation Expense
      Comprehensive
    Income (Loss)
    Fair
    Value Measurement
  820-10 820-10),
    
    Level 1  observable inputs such as
    unadjusted quoted prices in active markets for identical assets
    and liabilities;
    Level 2  observable inputs such as quoted
    prices for similar assets and liabilities in active markets that
    are observable either directly or indirectly; and
    Level 3  unobservable inputs in which
    there is little or no market data, which require the Company to
    develop its own assumptions.   77




---



##### Table of Contents



Level 1


Level 2


Level 3


TotalAs of April 30, 2010:Cash and cash equivalents

$
137,358


$



$



$
137,358Marketable securities


12,013











12,013Capitalized software license obligations






2,832







2,832Total

$
149,371


$
2,832






$
152,203   Level 1


Level 2


Level 3


TotalAs of April 30, 2009:Cash and cash equivalents

$
90,467


$



$



$
90,467Restricted cash


842











842Capitalized software license obligations






363







363Total

$
91,309


$
363


$



$
91,672     Recent
    Accounting Pronouncements
  855-10, 855-10), .
  No. 2010-09, 2010-09).
  105-10 105-10),
 78




---



##### Table of Contents



No. 2009-13, 2009-13).
  No. 2009-14, 2009-14).
  3.
    Net
    Income (Loss) Per Common Share     79




---



##### Table of Contents



Fiscal Year Ended April 30,2010


2009


2008Numerator for basic and diluted net income (loss) per share:Net income (loss)

$
28,387


$
9,913


$
(2,009
)Denominator for basic net income (loss) per share:Weighted-average common shares, net of weighted-average shares
    subject to repurchase, used in computing net income (loss) per
    common share-basic


33,434



31,233



25,936Denominator for diluted net income (loss) per share:Shares used above, basic


33,434



31,233



25,936Stock options


2,763



2,266



Shares subject to repurchase






51



Denominator for diluted net income (loss) per share:


36,197



33,550



25,936Net income (loss) per common share:Basic

$
0.85


$
0.32


$
(0.08
)Diluted

$
0.78


$
0.30


$
(0.08
)       Fiscal Year Ended April 30,2010

2009

2008Convertible preferred stock (as converted)










11,046Options to purchase common stock


291



1,354



2,484Common stock subject to repurchase










153Warrants to purchase common stock and convertible preferred
    stock (as converted)










13Total


291



1,354



13,696  80




---



##### Table of Contents



4.
    Balance
    Sheet Details  Property
    and Equipment, Net
    As of April 30,2010


2009Computers and equipment

$
7,341


$
7,064Furniture and fixtures


1,595



1,072Software


3,784



788Leasehold improvements


2,538



2,33715,258



11,261Less: accumulated depreciation and amortization


(7,084
)


(6,845
)Property and equipment, net

$
8,174


$
4,416     Goodwill
    and Intangible Assets, Net
    EstimatedWeighted-Average


Gross





NetUseful Lives


Carrying


Accumulated


CarryingAs of April 30, 2010:

in Years


Amount


Amortization


AmountCore and developed technologies


5.00


$
1,970


$
(1,611
)

$
359Customer installed-base relationships


6.00



80



(66
)


14Employee non-compete agreements


5.00



1,160



(1,103
)


57Total





$
3,210


$
(2,780
)

$
430Goodwill













$
5,746   EstimatedWeighted-Average


Gross





NetUseful Lives


Carrying


Accumulated


CarryingAs of April 30, 2009:

in Years


Amount


Amortization


AmountCore and developed technologies


5.00


$
1,970


$
(960
)

$
1,010Customer installed-base relationships


6.00



80



(53
)


27Employee non-compete agreements


5.00



1,160



(878
)


282Total





$
3,210


$
(1,891
)

$
1,319Goodwill













$
5,746    81




---



##### Table of Contents



EstimatedAmortizationAs of April 30, 2010:

ExpenseFiscal 2011


425Fiscal 2012


5Total

$
430   Accrued
    Compensation and Benefits
    As of April 30,2010


2009Accrued bonus

$
5,264


$
5,441Accrued commissions


3,985



2,807Accrued vacation


2,832



2,273Accrued payroll taxes


727



667Accrued ESPP


520



346Other compensation and benefits


731



137Total accrued compensation and benefits

$
14,059


$
11,671Less accrued compensation and benefits, current portion


(13,633
)


(11,671
)Accrued compensation and benefits, non-current

$
426


$
   Deferred
    Revenues
    As of April 30,2010


2009Deferred product revenues

$
10,757


$
9,786Deferred maintenance revenues


46,675



32,408Deferred services revenues


3,479



2,854Total deferred revenues


60,911



45,048Less deferred revenues, current portion


(49,674
)


(36,160
)Deferred revenues, non-current

$
11,237


$
8,888   5.
    Commitments
    and Contingencies   82




---



##### Table of Contents



Amount ofFiscal Year Ending April 30:

Payments2011

$
3,3542012


3,0242013


3,0452014


3,1372015 and thereafter


10,273Total future minimum lease payments

$
22,833       6.
    Indemnification
    and Warranties          ASC 450-10.
  7.
    Stockholders
    Equity  Common
    Stock
   83




---



##### Table of Contents



Preferred
    Stock
    Common
    Stock Reserved for Issuance
    As of April 30,2010Options available for future grant under the 2007 Equity
    Incentive Plan


4,222,243Options outstanding under the stock option plans


6,734,350Shares reserved for future issuance under the 2007 Employee
    Stock Purchase Plan


1,068,798Total shares reserved


12,025,391   Stock
    Plans
  2007 Equity Incentive Plan.
  2007 Employee Stock Purchase Plan.
 84




---



##### Table of Contents



Stock
    Plan Activity
    Outstanding OptionsWeighted-

Weighted-Average

AverageShares



Exercise

Remaining

AggregateAvailable

Number of

Price

Contractual

Intrinsicfor Grant

Shares

per Share

Term (Years)

Value(In thousands)Options outstanding as of April 30, 2007


1,675,840



5,772,812



3.95



8.31


$
31,003Options authorized


4,000,000







Options granted


(1,731,313
)


1,731,313



9.78Options exercised






(402,260
)


2.30Options canceled


414,820



(414,820
)


6.10Shares repurchased


6,845



Options outstanding as of April 30, 2008


4,366,192



6,687,045



5.43



7.89



15,142Options authorized


1,260,416







Options granted


(1,752,950
)


1,752,950



7.73Options exercised






(852,793
)


2.40Options canceled


646,206



(646,206
)


8.42Shares repurchased


235



Options outstanding as of April 30, 2009


4,520,099



6,940,996



6.10



7.30



62,464Options authorized


1,357,590







Options granted


(2,038,986
)


2,038,986



20.44Options exercised






(1,862,092
)


21.02Options canceled


383,540



(383,540
)


12.71Options outstanding as of April 30, 2010


4,222,243



6,734,350



10.41



7.34



83,505Vested and expected to vest as of April 30, 2010, net of
    anticipated forfeitures






5,865,619



10.41



7.34



72,733Vested and exercisable as of April 30, 2010






3,466,228



6.08



6.29



58,001    85




---



##### Table of Contents



Options OutstandingWeighted-


Options Vested and ExercisableAverage





Weighted-Remaining





AverageNumber


Contractual


Number of


ExerciseExercise Price

Outstanding


Life (Years)


Shares


Price per Share$0.12-0.80


633,177



3.72



633,177


$
0.46$4.00-5.98


688,745



6.56



486,030



4.13$6.08-6.80


1,551,285



6.54



1,359,174



6.59$7.17-8.95


1,064,397



7.95



406,407



8.24$9.00-10.00


851,613



7.47



504,588



9.81$11.08-17.65


259,917



9.05



17,742



12.14$18.00-24.47


1,097,758



8.71



59,110



21.90$24.49-28.15


587,458



9.64







Total


6,734,350



7.34



3,466,228


$
6.08     8.
    Stock-Based
    Compensation    Fiscal Year Ended April 30,2010


2009


2008Stock-based compensation under ASC 718

$
8,959


$
5,117


$
4,186Stock-based compensation under prospective transition method for
    option awards granted prior to the adoption of ASC 718






19



91Amortization of restricted stock awards in connection with the
    acquisition of Enira Technologies, LLC






34



404Stock-based compensation under Employee Stock Purchase Plan


1,247



975



245Total

$
10,206


$
6,145


$
4,926   Accounting
    for Stock-Based Compensation
       86




---



##### Table of Contents



with-and-without No. D-32, Intraperiod Tax Allocation of the tax effect of pre-tax
    income from continuing operations
  Valuation
    and Expense Information
    Fiscal Year Ended April 30,2010

2009

2008Risk-free interest rate


2.41
%


3.13
%


4.22
%Expected volatility


57
%


52
%


55
%Expected life (years)


5.64



5.74



5.25     Fiscal Year Ended April 30,2010


2009


2008Cost of maintenance revenues

$
445


$
216


$
106Cost of services revenues


225



142



115Stock based compensation expense included in cost of revenues


670



358



221Operating expenses:Research and development


2,177



1,342



1,356Sales and marketing


3,418



2,451



2,685General and administrative


3,941



1,994



664Stock based compensation expense included in operating expenses


9,536



5,787



4,705Stock based compensation expense included in net income (loss)

$
10,206


$
6,145


$
4,926  87




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##### Table of Contents



Employee
    Stock Purchase Plan
        Fiscal Year Ended April 30,2010

2009

2008Risk-free interest rate


0.32
%


1.32
%


2.11
%Expected volatility


70
%


61
%


53
%Expected life (years)


0.50



0.52



0.58    88




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##### Table of Contents



9.
    Segment
    Information          Fiscal Year Ended April 30,2010


2009


2008Total revenues by geography:United States:Products

$
73,047


$
58,189


$
40,021Maintenance


40,580



28,574



21,042Services


15,967



12,897



7,280Total


129,594



99,660



68,343EMEA:Products


23,429



11,432



12,923Maintenance


8,239



5,867



3,960Services


2,082



2,110



1,564Total


33,750



19,409



18,447Asia Pacific:Products


4,983



4,422



3,553Maintenance


2,336



1,872



1,305Services


377



653



619Total


7,696



6,947



5,477Other Americas:Products


5,109



6,573



7,267Maintenance


3,581



2,208



1,301Services


1,654



1,371



710Total


10,344



10,152



9,278Total revenues

$
181,384


$
136,168


$
101,545  89




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##### Table of Contents



10.
    Income
    Taxes    Fiscal Year Ended April 30,2010


2009


2008Current:Federal

$
18,011


$
11,804


$
(2,360
)Foreign


968



673



1,482Total

$
18,979


$
12,477


$
(878
)     Fiscal Year Ended April 30,2010


2009


2008Current:Federal

$
7,201


$
1,312


$
150State


1,608



731



185Foreign


351



371



512Total Current


9,160



2,414



847Deferred:Federal


(12,025
)


130



250State


(6,385
)


20



34Foreign


(157
)






Total Deferred


(18,567
)


150



284Total provision (benefit)

$
(9,407
)

$
2,564


$
1,131     Fiscal Year Ended April 30,2010


2009


2008U.S. federal taxes (benefit) at statutory rate

$
6,643


$
4,242


$
(298
)State tax expense, net


(3,105
)


482



122Foreign taxes






1



512Net operating losses not benefited (benefited)


(448
)


(969
)


(653
)Alternative minimum tax










149Tax credits


(347
)


(1,202
)


Stock option expense


199



746



905Meals and entertainment


181



131



101Amortization of tax deductible goodwill






150



284Change in valuation allowance


(12,344
)


(725
)


Other


(186
)


(292
)


9Total provision (benefit)

$
(9,407
)

$
2,564


$
1,131  90




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##### Table of Contents



As of April 30,2010


2009Deferred tax assets:Net operating losses

$
1,577


$
1,998Research credits


1,651



2,352Non-deductible reserves and accruals


2,030



1,403Non-deductible stock-based compensation


8,312



6,516Deferred revenues


4,950



3,097Intangibles


806



492Other


129



91Total deferred tax assets


19,455



15,949Deferred tax liabilities:Foreign earnings


(20
)


(70
)Amortization of tax deductible goodwill


(562
)


(434
)Total deferred tax liabilities


(582
)


(504
)Valuation allowance






(15,879
)Net deferred tax assets (liabilities)

$
18,873


$
(434
)            91




---



##### Table of Contents



ASC 740-10,
      Balance as of May 1, 2007





$
1,497Tax positions related to current year:Additions for current year items






615Balance as of May 1, 2008





$
2,112Tax positions related to current year:Additions for current year items






543Additions for prior year items






96Reductions for prior year items






(57
)Balance as of April 30, 2009






2,694Tax positions related to current year:Additions for current year items






671Additions for prior year items






24Reductions for prior year items






(22
)Balance as of April 30, 2010





$
3,367    92




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##### Table of Contents



11.
    Employee
    Benefit Plan   93




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rule 13a-15
    Internal
    Control over Financial Reporting
  Rules 13a-15(f) 15d-15(f). Internal Control  Integrated Framework
 94




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
                 
    95




---



##### Table of Contents



Changes
    in Internal Control over Financial Reporting
  Rule 13a-15(f) Rule 15d-15(f) Form 10-K,
  Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance      Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Regulation S-K Regulation S-K
  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accounting Fees and Services   96




---



##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  Financial Statements: Form 10-K
    Exhibits. Form 10-K.
 97




---



##### Table of Contents



SIGNATURES  Form 10-K
  ARCSIGHT,
    INC.
  By:

/s/  Thomas
    J. ReillyThomas
    J. Reilly
    President and Chief Executive Officer
    (Principal Executive Officer)

By:

/s/  Stewart
    GriersonStewart
    Grierson
    Chief Financial Officer
    (Principal Financial Officer)   POWER OF
    ATTORNEY
  Form 10-K,
    Signature

Title

Date/s/  Thomas
    J. ReillyThomas
    J. Reilly

President, Chief Executive Officer and Director
    (Principal Executive Officer)

July 9, 2010/s/  Stewart
    GriersonStewart
    Grierson

Chief Financial Officer
    (Principal Financial and Accounting Officer)

July 9, 2010/s/  Sandra
    BergeronSandra
    Bergeron

Director

July 9, 2010/s/  William
    P. CrowellWilliam
    P. Crowell

Director

July 9, 2010/s/  E.
    Stanton McKee, Jr.E.
    Stanton McKee, Jr.

Director

July 9, 2010/s/  Craig
    RamseyCraig
    Ramsey

Director

July 9, 2010/s/  Scott
    A. RylesScott
    A. Ryles

Director

July 9, 2010/s/  Ted
    SchleinTed
    Schlein

Director

July 9, 2010/s/  Roger
    SiboniRoger
    Siboni

Director

July 9, 2010/s/  Ernest
    von SimsonErnest
    von Simson

Director

July 9, 2010  98




---



##### Table of Contents



EXHIBIT INDEX
  Incorporated by ReferenceExhibit









Filing

ProvidedNumber

Exhibit Description

Form

File No.

Exhibit

Date

Herewith3
.1

Restated Certificate of Incorporation of ArcSight, Inc., as
    currently in effect.

S-1/A

333-145974


3
.2

11/23/073
.2

Amended and Restated Bylaws of ArcSight, Inc., as currently in
    effect.

S-1/A

333-145974


3
.4

11/23/074
.1

Form of ArcSight, Inc. common stock certificate.

S-1/A

333-145974


4
.1

11/23/074
.2

Amended and Restated Investors Rights Agreement, dated as
    of October 24, 2002, between ArcSight, Inc. and certain
    security holders of ArcSight, Inc.

S-1/A

333-145974


4
.2

9/11/0710
.1

Form of Indemnity Agreement entered into between ArcSight, Inc.
    and its directors and executive officers.

S-1/A

333-145974


10
.1

10/29/0710
.2

2000 Stock Incentive Plan.

S-1/A

333-145974


10
.2

9/11/0710
.3

Forms of Stock Option Agreement and Stock Option Exercise
    Agreement under the 2000 Stock Incentive Plan.

S-1/A

333-145974


10
.3

9/11/0710
.4

2002 Stock Plan, as amended.

S-1/A

333-145974


10
.4

9/11/0710
.5

Forms of Stock Option Agreement and Stock Option Exercise
    Agreement under the 2002 Stock Plan.

S-1/A

333-145974


10
.5

9/11/0710
.6

2007 Equity Incentive Plan.

S-1/A

333-145974


10
.6

11/23/0710
.7

Form of Stock Option Agreement, Stock Option Exercise Agreement,
    Restricted Stock Agreement, Restricted Stock Units Award
    Agreement, Stock Appreciation Right Award Agreement, Performance
    Shares Award Agreement and Stock Bonus Award Agreement
    under the 2007 Equity Incentive Plan.

S-1/A

333-145974


10
.7

11/23/0710
.8

2007 Employee Stock Purchase Plan.

S-1/A

333-145974


10
.8

11/23/0710
.9

Form of Subscription Agreement under the 2007 Employee Stock
    Purchase Plan.

S-1/A

333-145974


10
.9

11/23/0710
.10

Offer Letter, dated June 1, 2000, between ArcSight, Inc.
    and Hugh S. Njemanze.

S-1/A

333-145974


10
.11

9/20/0710
.11

Offer Letter, dated January 24, 2003, between ArcSight,
    Inc. and Stewart Grierson, as amended.

S-1/A

333-145974


10
.12

11/23/0710
.12

Offer Letter, dated October 5, 2006, between ArcSight, Inc.
    and Thomas Reilly, as amended.

S-1/A

333-145974


10
.14

11/23/0710
.13

Fiscal Year 2011 Management Bonus Plan











X10
.14

Sales Commission Plan  FY 2011 (Kevin P. Mosher).











X10
.15

Lease Agreement, dated April 24, 2007, between ArcSight,
    Inc. and ECI Two Results LLC.

S-1/A

333-145974


10
.17

9/11/0710
.16

First Amendment to Lease, dated November 18, 2009, between
    ArcSight, Inc. and ECI Two Results LLC.

10-Q

001-33923


10
.01

12/9/0910
.17

Oracle PartnerNetwork Embedded Software License Distribution
    Agreement, dated May 31, 2009, as amended, between
    ArcSight, Inc. and Oracle USA, Inc.

10-K

001-33923


10
.16

7/9/09 99




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##### Table of Contents



Incorporated by ReferenceExhibit









Filing

ProvidedNumber

Exhibit Description

Form

File No.

Exhibit

Date

Herewith21
.1

Subsidiaries of ArcSight, Inc.











X23
.1

Consent of Independent Registered Public Accounting Firm.











X31
.01

Certification of Principal Executive Officer Pursuant to
    Securities Exchange Act
    Rule 13a-14(a).











X31
.02

Certification of Principal Financial Officer Pursuant to
    Securities Exchange Act
    Rule 13a-14(a).











X32
.01

Certification of Principal Executive Officer Pursuant to
    18 U.S.C. Section 1350 and Securities Exchange Act
    Rule 13a-14(b).*











X32
.02

Certification of Principal Financial Officer Pursuant to
    18 U.S.C. Section 1350 and Securities Exchange Act
    Rule 13a-14(b).*











X     
    
    Certain portions of this exhibit have been omitted and have been
    filed separately with the SEC pursuant to a request for
    confidential treatment under
    Rule 24b-2
    as promulgated under the Securities Exchange Act of 1934, as
    amended.*
    
    This certification is not deemed filed for purposes
    of Section 18 of the Securities Exchange Act, or otherwise
    subject to the liability of that section. Such certification
    will not be deemed to be incorporated by reference into any
    filing under the Securities Act of 1933 or the Securities
    Exchange Act of 1934, except to the extent that ArcSight, Inc.
    specifically incorporates it by reference. 100