##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 x
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2008
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
   THE ULTIMATE SOFTWARE GROUP, INC.
 
  Delaware
    
    65-0694077(State or other jurisdiction of 
incorporation) or organization
    
    (I.R.S. Employer Identification No.)
 2000 Ultimate Way, Weston, FL
    
    33326(Address of principal executive offices)
    
    (Zip Code)
 (954) 331-7000
 None
 þ o
   Large accelerated filer o
    
    Accelerated
filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




---



##### 



THE ULTIMATE SOFTWARE GROUP, INC. AND SUBSIDIARIES
 TABLE OF CONTENTS
 Page(s)Part I 
    
    Financial Information:Item 1 
    
    Financial Statements:Unaudited Condensed Consolidated Balance Sheets as of March 31, 2008 and December 31, 2007
    
    
    3Unaudited Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2008 and 2007
    
    
    4Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2008 and 2007
    
    
    5Unaudited Condensed Consolidated Statement of Stockholders Equity and Comprehensive Income for the Three Months Ended March 31, 2008
    
    
    6Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    7-15Item 2 
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15-23Item 3 
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    23-24Item 4 
    
    Controls and Procedures
    
    
    24Part II 
    
    Other Information:Item 2 
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    25Item 6 
    
    Exhibits
    
    
    26Signatures
    
    
    27Certifications
  
 2




---



##### 



PART 1  FINANCIAL INFORMATION
 
 Item 1  Financial Statements
 
 THE ULTIMATE SOFTWARE GROUP, INC. AND SUBSIDIARIES
 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands, except share and per share data)
 As of
    
    
    As ofMarch 31,
    
    
    December 31,2008
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    22,594
    
    
    $
    17,462Short-term investments in marketable securities
    
    
    10,929
    
    
    
    17,120Accounts receivable, net of allowance for doubtful accounts of
$700 for 2008 and 2007, respectively
    
    
    29,897
    
    
    
    34,658Prepaid expenses and other current assets
    
    
    11,741
    
    
    
    9,801Deferred tax assets, net
    
    
    3,516
    
    
    
    3,516Total current assets
    
    
    78,677
    
    
    
    82,557Property and equipment, net
    
    
    20,095
    
    
    
    18,238Capitalized software, net
    
    
    3,608
    
    
    
    3,631Goodwill
    
    
    4,063
    
    
    
    4,063Long-term investments in marketable securities
    
    
    
    
    
    
    1,298Other assets, net
    
    
    10,493
    
    
    
    9,365Long-term deferred tax assets, net
    
    
    15,803
    
    
    
    16,004Total assets
    
    $
    132,739
    
    
    $
    135,156LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    7,161
    
    
    $
    3,528Accrued expenses
    
    
    8,801
    
    
    
    11,405Current portion of deferred revenue
    
    
    43,896
    
    
    
    43,262Current portion of capital lease obligations
    
    
    1,891
    
    
    
    2,002Current portion of long-term debt
    
    
    488
    
    
    
    572Total current liabilities
    
    
    62,237
    
    
    
    60,769Deferred revenue, net of current portion
    
    
    8,384
    
    
    
    8,446Deferred rent
    
    
    2,726
    
    
    
    2,652Capital lease obligations, net of current portion
    
    
    1,621
    
    
    
    1,991Long-term debt, net of current portion
    
    
    320
    
    
    
    320Total liabilities
    
    
    75,288
    
    
    
    74,178Stockholders equity:Preferred Stock, $.01 par value, 2,000,000 shares authorized,
no shares issued or outstanding
    
    
    
    
    
    
    Series A Junior Participating Preferred Stock, $.01 par value,
500,000 shares authorized, no shares issued or outstanding
    
    
    
    
    
    
    Common Stock, $.01 par value, 50,000,000 shares authorized,
26,353,024 and 26,219,789 shares issued in 2008 and 2007, respectively
    
    
    264
    
    
    
    262Additional paid-in capital
    
    
    149,537
    
    
    
    143,913Accumulated other comprehensive income/(loss)
    
    
    13
    
    
    
    (18
    )Accumulated deficit
    
    
    (50,081
    )
    
    
    (50,371
    )99,733
    
    
    
    93,786Treasury stock, 1,786,875 and 1,452,375 shares, at cost, for 2008
and 2007, respectively
    
    
    (42,282
    )
    
    
    (32,808
    )Total stockholders equity
    
    
    57,451
    
    
    
    60,978Total liabilities and stockholders equity
    
    $
    132,739
    
    
    $
    135,156
  3




---



##### 



THE ULTIMATE SOFTWARE GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 For the Three MonthsEnded March 31,2008
    
    
    2007Revenues:Recurring
    
    $
    25,696
    
    
    $
    19,471Services
    
    
    14,120
    
    
    
    12,187License
    
    
    3,653
    
    
    
    4,884Total revenues
    
    
    43,469
    
    
    
    36,542Cost of revenues:Recurring
    
    
    6,525
    
    
    
    5,499Services
    
    
    11,299
    
    
    
    10,292License
    
    
    428
    
    
    
    409Total cost of revenues
    
    
    18,252
    
    
    
    16,200Gross profit
    
    
    25,217
    
    
    
    20,342Operating expenses:Sales and marketing
    
    
    11,829
    
    
    
    8,783Research and development
    
    
    8,879
    
    
    
    7,171General and administrative
    
    
    4,296
    
    
    
    3,447Total operating expenses
    
    
    25,004
    
    
    
    19,401Operating income
    
    
    213
    
    
    
    941Other income (expense):Interest expense and other
    
    
    (79
    )
    
    
    (47
    )Other income, net
    
    
    357
    
    
    
    395Total other income, net
    
    
    278
    
    
    
    348Income before provision for income taxes
    
    
    491
    
    
    
    1,289Provision for income taxes
    
    
    201
    
    
    
    30Net income
    
    $
    290
    
    
    $
    1,259Net income per share:Basic
    
    $
    0.01
    
    
    $
    0.05Diluted
    
    $
    0.01
    
    
    $
    0.05Weighted average shares outstanding:Basic
    
    
    24,682
    
    
    
    24,527Diluted
    
    
    26,460
    
    
    
    27,383
  4




---



##### 



THE ULTIMATE SOFTWARE GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Three MonthsEnded March 31,2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    290
    
    
    $
    1,259Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    2,139
    
    
    
    1,660Provision for doubtful accounts
    
    
    522
    
    
    
    324Non-cash stock-based compensation expense
    
    
    4,575
    
    
    
    2,819Deferred income taxes
    
    
    201
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    4,239
    
    
    
    321Prepaid expenses and other current assets
    
    
    (1,940
    )
    
    
    (1,612
    )Other assets
    
    
    (1,174
    )
    
    
    (530
    )Accounts payable
    
    
    3,633
    
    
    
    966Accrued expenses and deferred rent
    
    
    (2,530
    )
    
    
    (2,347
    )Deferred revenue
    
    
    572
    
    
    
    719Net cash provided by operating activities
    
    
    10,527
    
    
    
    3,579Cash flows from investing activities:Purchases of marketable securities
    
    
    (642
    )
    
    
    (6,245
    )Maturities of marketable securities
    
    
    8,174
    
    
    
    4,068Capitalized software
    
    
    (167
    )
    
    
    (395
    )Payments for acquisition
    
    
    
    
    
    
    (21
    )Purchases of property and equipment
    
    
    (3,657
    )
    
    
    (2,267
    )Net cash provided by/(used in) investing activities
    
    
    3,708
    
    
    
    (4,860
    )Cash flows from financing activities:Repurchases of Common Stock
    
    
    (9,474
    )
    
    
    (4,405
    )Principal payments on capital lease obligations
    
    
    (583
    )
    
    
    (455
    )Repayments of borrowings of long-term debt
    
    
    (84
    )
    
    
    (126
    )Net proceeds from issuances of Common Stock
    
    
    1,051
    
    
    
    2,257Net cash used in financing activities
    
    
    (9,090
    )
    
    
    (2,729
    )Effect of exchange rate changes on cash
    
    
    (13
    )
    
    
    (2
    )Net increase/(decrease) in cash and cash equivalents
    
    
    5,132
    
    
    
    (4,012
    )Cash and cash equivalents, beginning of period
    
    
    17,462
    
    
    
    16,734Cash and cash equivalents, end of period
    
    $
    22,594
    
    
    $
    12,722Supplemental disclosure of cash flow information:Cash paid for interest
    
    $
    22
    
    
    $
    25Cash paid for income taxes
    
    $
    29
    
    
    $
    
  -
    
    The Company entered into capital lease obligations to acquire new equipment totaling $103 and $648
during the three months ended March 31, 2008 and 2007, respectively.  5




---



##### 



THE ULTIMATE SOFTWARE GROUP, INC. AND SUBSIDIARIES
 UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME
 (In thousands)
 AccumulatedAdditional
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    TotalCommon Stock
    
    
    Paid-in
    
    
    Comprehensive
    
    
    Accumulated
    
    
    Treasury Stock
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Income (Loss)
    
    
    Deficit
    
    
    Shares
    
    
    Amount
    
    
    EquityBalance, December 31, 2007
    
    
    26,220
    
    
    $
    262
    
    
    $
    143,913
    
    
    $
    (18
    )
    
    $
    (50,371
    )
    
    
    1,452
    
    
    $
    (32,808
    )
    
    $
    60,978Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    290
    
    
    
    
    
    
    
    
    
    
    
    290Unrealized gain on investments in marketable
securities available for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44Unrealized loss on foreign currency
translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    321Repurchases of Common Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    335
    
    
    
    (9,474
    )
    
    
    (9,474
    )Issuances of Common Stock from exercises
of stock options
    
    
    133
    
    
    
    2
    
    
    
    1,049
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,051Non-cash stock-based compensation
    
    
    
    
    
    
    
    
    
    
    4,575
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,575Balance, March 31, 2008
    
    
    26,353
    
    
    $
    264
    
    
    $
    149,537
    
    
    $
    13
    
    
    $
    (50,081
    )
    
    
    1,787
    
    
    $
    (42,282
    )
    
    $
    57,451
  6




---



##### 



THE ULTIMATE SOFTWARE GROUP, INC. AND SUBSIDIARIES
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1. Nature of Operations
  2. Basis of Presentation, Consolidation and the Use of Estimates
    3. Summary of Significant Accounting Policies and Recent Accounting Pronouncements
 Summary of Significant Accounting Policies
  Recently Adopted Accounting Pronouncements
 
 7




---



##### 



Recently Issued Accounting Pronouncements
  4. Investments in Marketable Securities and Fair Value of Financial Instruments
  8




---



##### 



Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gain
    
    
    Loss
    
    
    ValueInvestments in marketable securities:Corporate debentures  bonds
    
    $
    7,011
    
    
    $
    25
    
    
    $
    
    
    
    $
    7,036Commercial paper
    
    
    1,941
    
    
    
    
    
    
    
    
    
    
    
    1,941Certificates of deposit
    
    
    649
    
    
    
    
    
    
    
    
    
    
    
    649Asset-backed securities
    
    
    1,295
    
    
    
    8
    
    
    
    
    
    
    
    1,303Total investments available-for-sale
    
    $
    10,896
    
    
    $
    33
    
    
    $
    
    
    
    $
    10,929
  Amortized
    
    
    MarketCost
    
    
    ValueDue in one year or less
    
    $
    10,896
    
    
    $
    10,929$
    10,896
    
    
    $
    10,929
  Level 1:
    
    Unadjusted quoted prices in active markets that are accessible at
the measurement date for identical, unrestricted assets and
liabilities.Level 2:
    
    Quoted prices in markets that are not active or financial
instruments for which all significant inputs are observable,
either directly or indirectly.Level 3:
    
    Prices or valuations that require inputs that are both
significant to the fair value measurement and unobservable.
    9




---



##### 



QuotedPrices in
    
    
    Other
    
    
    Un-Active
    
    
    Observable
    
    
    observableMarkets
    
    
    Inputs
    
    
    InputsTotal
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Corporate debentures  bonds
    
    $
    7,036
    
    
    $
    
    
    
    $
    7,036
    
    
    $
    Commercial paper
    
    
    1,941
    
    
    
    
    
    
    
    1,941
    
    
    
    Certificates of deposit
    
    
    649
    
    
    
    649
    
    
    
    
    
    
    
    Asset-backed securities
    
    
    1,303
    
    
    
    
    
    
    
    1,303
    
    
    
    Total investments, available for sale
    
    $
    10,929
    
    
    $
    649
    
    
    $
    10,280
    
    
    $
    
  5. Property and Equipment
  10




---



##### 



As of
    
    
    As ofMarch 31, 2008
    
    
    December 31, 2007Property and equipment
    
    $
    56,361
    
    
    $
    52,611Less: accumulated depreciation and
amortization
    
    
    36,266
    
    
    
    34,373$
    20,095
    
    
    $
    18,238
 6. Goodwill and Other Intangible Assets
  7. Earnings Per Share
   For the three monthsended March 31,2008
    
    
    2007Basic weighted average shares outstanding
    
    
    24,682
    
    
    
    24,527Effect of dilutive equity instruments
    
    
    1,778
    
    
    
    2,856Dilutive weighted average shares outstanding
    
    
    26,460
    
    
    
    27,383Other common stock equivalents (i.e., stock
options, and restricted stock awards)
outstanding which are not included in the
calculation of diluted income per share because
their impact is anti-dilutive
    
    
    998
    
    
    
    815
 8. Comprehensive Income
  11




---



##### 



For the three monthsended March 31,2008
    
    
    2007Net income
    
    $
    290
    
    
    $
    1,259Other comprehensive incomeUnrealized gain on investments in
marketable securities available-for-sale
    
    
    44
    
    
    
    3Unrealized loss on foreign currency
translation adjustments
    
    
    (13
    )
    
    
    (2
    )Comprehensive income
    
    $
    321
    
    
    $
    1,260
 9. Foreign Currency
  10. Stock-Based Compensation
 Summary of Plans
   12




---



##### 



Stock-Based Compensation
  For the three monthsended March 31,2008
    
    
    2007Non-cash stock-based compensation:Cost of recurring revenues
    
    $
    329
    
    
    $
    214Cost of service revenues
    
    
    679
    
    
    
    600Cost of license revenues
    
    
    4
    
    
    
    2Sales and marketing
    
    
    2,053
    
    
    
    1,201Research and development
    
    
    589
    
    
    
    365General and administrative
    
    
    921
    
    
    
    437Total non-cash stock-based compensation expense
    
    $
    4,575
    
    
    $
    2,819
    For the three monthsended March 31,2008
    
    
    2007Expected term (in years)
    
    
    5.0
    
    
    
    4.9Volatility
    
    
    39
    %
    
    
    39
    %Interest rate
    
    
    2.88
    %
    
    
    4.80
    %Dividend yield
    
    
    
    
    
    
    Weighted average fair value at grant date
    
    $
    10.93
    
    
    $
    10.07
 Restricted Stock Awards
  13




---



##### 



Stock Unit Awards
   Stock Option and Restricted Stock Activity
  WeightedAverageWeighted
    
    
    Remaining
    
    
    AggregateAverage
    
    
    Contractual
    
    
    IntrinsicStock Options
    
    Shares
    
    
    Exercise Price
    
    
    Term (in Years)
    
    
    ValueOutstanding at December 31, 2007
    
    
    4,547
    
    
    $
    13.31
    
    
    
    
    
    
    
    Granted
    
    
    587
    
    
    
    28.41
    
    
    
    
    
    
    
    Exercised
    
    
    (133
    )
    
    
    7.89
    
    
    
    
    
    
    
    Forfeited or expired
    
    
    (9
    )
    
    
    24.35
    
    
    
    
    
    
    
    Outstanding at March 31, 2008
    
    
    4,992
    
    
    $
    15.21
    
    
    
    6.17
    
    
    $
    74,452Exercisable at March 31, 2008
    
    
    3,872
    
    
    $
    12.21
    
    
    
    5.36
    
    
    $
    69,267
  14




---



##### 



WeightedAverageGrant DateRestricted Stock
    
    Shares
    
    
    Fair ValueOutstanding at December 31, 2007
    
    
    911
    
    
    $
    27.11Granted
    
    
    2
    
    
    
    28.41Vested
    
    
    
    
    
    
    Forfeited or expired
    
    
    
    
    
    
    Outstanding at March 31, 2008
    
    
    913
    
    
    $
    27.11
  
 ITEM 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
   Executive Summary
   15




---



##### 



16




---



##### 



Original Ceridian Agreement
   Critical Accounting Estimates
  17




---



##### 



Results of Operations
  For the three monthsended March 31,2008
    
    
    2007Revenues:Recurring
    
    
    59.1
    %
    
    
    53.3
    %Services
    
    
    32.5
    
    
    
    33.4License
    
    
    8.4
    
    
    
    13.3Total revenues
    
    
    100.0
    
    
    
    100.0Cost of revenues:Recurring
    
    
    15.0
    
    
    
    15.0Services
    
    
    26.0
    
    
    
    28.2License
    
    
    1.0
    
    
    
    1.1Total cost of revenues
    
    
    42.0
    
    
    
    44.3Operating expenses:Sales and marketing
    
    
    27.2
    
    
    
    24.0Research and development
    
    
    20.4
    
    
    
    19.6General and administrative
    
    
    9.9
    
    
    
    9.5Total operating expenses
    
    
    57.5
    
    
    
    53.1Operating income
    
    
    0.5
    
    
    
    2.6Other income (expense)Interest expense and other
    
    
    (0.2
    )
    
    
    (0.1
    )Other income, net
    
    
    0.8
    
    
    
    1.0Total other income, net
    
    
    0.6
    
    
    
    0.9Income before income taxes
    
    
    1.1
    
    
    
    3.5Provision for income taxes
    
    
    0.4
    
    
    
    0.1Net income
    
    
    0.7
    %
    
    
    3.4
    %
 Revenues
      18




---



##### 



a)
    
    Intersourcing revenues increased primarily due to the continued growth of the
Intersourcing offering, which comprises the majority of unit sales. The increase is
based on the revenue impact of incremental units that have gone Live since March 31,
2007, including both UltiPro and, to a lesser extent, add-on products such as UltiPro
Time and Attendance (UTA) and Recruitment. Recognition of recurring revenues for
Intersourcing unit sales commences upon Live date.b)
    
    Maintenance revenues increased due to additional maintenance fees resulting
from cumulative increases in the customer base subsequent to March 31, 2007 due to
incremental license sales since such date. Maintenance revenues are recognized over
the initial term of the related license contract, which is typically 12 months, and
then on a monthly recurring basis thereafter as the maintenance contracts renew
annually.c)
    
    The impact on recurring revenues of units sold under the Intersourcing Offering
(as compared to the typical immediate impact on license revenues of licensed units
sold) is expected to be a gradual increase from one period to the next, based on the
incremental effect of revenue recognition of the Intersourcing fees over the terms of
the related contracts.d)
    
    Recurring subscription revenues decreased slightly due to the termination of
the Original Ceridian Agreement on March 9, 2008, at which time the related revenue
recognition ended.
   Cost of Revenues
   19




---



##### 



ales and Marketing
  Research and Development
  20




---



##### 



General and Administrative
  Interest Expense and Other
  Other Income, Net
  Income Taxes
  Liquidity and Capital Resources
   21




---



##### 



Off-Balance Sheet Arrangements
  Quarterly Fluctuations
  22




---



##### 



Forward-Looking Statements
  
 ITEM 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  Market risks.
 
    
    Maximum safety of principal;
    
    Maintenance of appropriate liquidity for regular cash needs;
    
    Maximum yields in relationship to guidelines and market conditions;
    
    Diversification of risks; and
    
    Fiduciary control of all investments.
  Interest rates
 23




---



##### 



Interest rate risk.
  
 ITEM 4.
    
    Controls and Procedures
 Evaluation of disclosure controls and procedures
 Changes in internal control over financial reporting.
 24




---



##### 



PART II  OTHER INFORMATION
 
 ITEM 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
 Purchases of Equity Securities by the Issuer.
    Total Number of Shares
    
    
    Maximum Number ofPurchased as Part
    
    
    Shares That May YetTotal Number of
    
    
    Average Price
    
    
    Of Publicly Announced
    
    
    Be Purchased Under thePeriod
    
    Shares Purchased (1)
    
    
    Paid per Share
    
    
    Plans or Programs
    
    
    Plans or ProgramsJanuary 1  31, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    547,625February 1  28, 2008
    
    
    334,500
    
    
    
    28.22
    
    
    
    1,786,875
    
    
    
    1,213,125
    (2)March 1  31, 2008
    
    
    
    
    
    
    
    
    
    
    1,786,875
    
    
    
    1,213,125Total
    
    
    334,500
    
    
    $
    28.22
    
    
    
    1,786,875
    
    
    
    1,213,125
 
 (1)
    
    All shares were purchased through the publicly announced Stock Repurchase Plan in open-market transactions.(2)
    
    On February 5, 2008, the Company announced that its Board of Directors authorized the repurchase of up to 1,000,000 additional shares of
the Companys Common Stock pursuant to the Stock Repurchase Plan. 25




---



##### 



ITEM 6. Exhibits
 Number
    
    Description31.1
    
    Certification Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the
Securities Exchange Act of 1934, as amended *31.2
    
    Certification Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the
Securities Exchange Act of 1934, as amended *32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as AdoptedPursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as
amended *32.2
    
    Certification Pursuant to 18 U.S.C. Section 1350, as AdoptedPursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as
amended *
 
 *
    
    Filed herewith. 26




---



##### 



Signatures
  The Ultimate Software Group, Inc.Date: May 8, 2008
    By:
    /s/ Mitchell K. DauermanMitchell K. DauermanExecutive Vice President, Chief
Financial Officer and Treasurer
(Authorized Signatory and Principal
Financial and Accounting Officer) 27