BackWeb Reports Fourth Quarter and Fiscal Year 2000 Results

SAN JOSE, Calif., Jan. 25, 2001 – BackWeb® Technologies (Nasdaq: BWEB), a leading provider of push communications infrastructure for e-business, today announced results for its fourth quarter and year ended Dec. 31, 2000.

Revenues for the fourth quarter of 2000 were $7.1 million compared with $7.9 million reported in the fourth quarter of 1999. Excluding a one-time write-off and amortization charges relating mainly to the acquisition of wireless technology, net loss for the fourth quarter of 2000 was $4.7 million, or a loss of $0.12 per diluted share. This compares with a net loss of $1.4 million, or a loss of $0.04 per diluted share, in the fourth quarter of 1999 (excluding amortization charges related to a previous acquisition and deferred stock compensation). Including these special charges, net loss for the fourth quarter of 2000 was 5.8 million, or a loss of $0.15 per diluted share, compared with a net loss of $2.1 million, or a loss of $0.06 per share in the fourth quarter of 1999.

Revenues for the year ended Dec. 31, 2000 were $38.3 million, up 64 percent from $23.3 million reported a year ago. Net loss for the fiscal year was $8.0 million, or a loss of $0.21 per share, compared with a loss of $7.8 million, or a loss of $0.27 per share for 1999 (excluding write-off and amortization charges in 2000 and amortization charges in 1999). Including the special charges, net loss for fiscal 2000 was $19.2 million, or a loss of $0.52 per share, compare with a net loss of $11.5 million or a loss of $0.39 per share a year ago.

The company continued to make progress in its business initiatives throughout the quarter. BackWeb strengthened key partnerships, as evidenced by a December contract – the largest deal in the company's history -- with an existing strategic partner. BackWeb also recently signed a strategic OEM and reseller partnership with a major Internet Infrastructure industry leader. Initial revenues from this new relationship are expected to occur towards the end of fiscal year 2001. The company also made significant strides toward gaining new customers -- over 100 in the fourth quarter -- from direct and indirect channels. On the product front, the company announced and shipped strategic product enhancements that enable companies to deliver content through a variety of different devices.

"While the slowdown in IT spending clearly has had an impact on the sales cycle of our enterprise deals, we have the utmost confidence in our technology and competitive positioning, " said Eli Barkat, chairman and CEO of BackWeb Technologies. "The new customer additions this quarter, along with our strategic partnership momentum, provides strong evidence of the continued demand for BackWeb's industry-leading push infrastructure."

Fourth Quarter 2000 Highlights

Strategic Alliances:

• During the quarter BackWeb renewed and expanded an OEM agreement with a major partner to cover the existing CRM as well as a new product line. The deal, for $9.2 million, is the largest in BackWeb's history. Revenue will be recognized throughout 2001.
• During the quarter BackWeb created a presence within the corporate training market by forging alliances with Mentergy and Docent. This new relationship allows Mentergy to deliver its e-learning content on the Docent platform.

New Customer Wins:

• Guidant will use BackWeb to streamline the distribution of sales and training materials -- previously distributed via courier in printed and CD format -- to its national network of over 1,000 medical device sales representatives.
• Cambridge Technology Partners has licensed BackWeb to deliver critical executive communication videos and other information to 4,000 employees worldwide.
• Jackson National Life Insurance Company licensed BackWeb to communicate with its 100,000 plus independent insurance agents and brokers. The company will utilize BackWeb to deliver software updates and regulatory form changes for its own distributed applications that reside on user desktops.
• Additional new customers in the quarter include Banesto, Bombardier, CD & Video Rental, MemberDrive, Philips Lighting B.V., Quaker Oats, and Vattenfall.

Upsells to Existing Customers:

• IBM Canada will use BackWeb to deliver critical daily updates to price lists, inventory information, weekly announcements about IBM products and programs, and other important business communications to its partners' networks.
• F-Secure will use BackWeb's technology to automatically deliver updates designed to keep F-Secure Anti-Virus customers current with the latest virus protection. F-Secure also intends to incorporate BackWeb to protect F-Secure customers against software viruses on next-generation wireless devices.
• Fidelity Investments will use BackWeb as the solution for its "Emergency Broadcasting System" to deliver critical time-sensitive alerts to over 7,000 call center representatives.
• Additional sales to existing customers included Charles Schwab & Company, AC Nielsen, ISI Mars and Enron among others.

Products:

• BackWeb strategically advanced its product offering by adding SMS (Short Message Service) wireless delivery to its BackWeb Push Application Server. This technology provides e-businesses with a single communications infrastructure to deliver targeted content to users via digital cellular phones and pagers, in addition to desktop and laptop computers and email.
• BackWeb's e-Accelerator was recently named Product of the Year by Customer Inter@ction Solutions Magazine in the desktop messaging software category.
• BackWeb introduced Foundation 6.0, a powerful new version of the company's efficient, scalable and reliable infrastructure. Other new enhancements include server clustering, enhanced reporting and notification enhancements.
• To address the growing needs of its multi-national Global 2000 customer base, BackWeb's e-Accelerator v2.1 was released to support fast localization and is now available in French and German language versions.

"We are encouraged by the momentum we've seen in customer additions, product demand and partnerships," said Mr. Barkat. "BackWeb continues to deliver a real business value; this concept has not changed. In fact, as people's lives become more "online-centric", we believe our technology becomes even more critical. Our technology fulfills a strategic need and as companies continue to question the passive model, BackWeb is in the perfect position to answer them," he said.

Conference Call
BackWeb Technologies has scheduled a conference call for 2:00 p.m. Pacific Time today to discuss the fourth quarter and year-end results. To access the conference call, please dial (415) 228-4572 by 1:40 p.m. Pacific Time on Jan. 25. You will need to reference the passcode "BackWeb." A live webcast of the conference call will also be available via the company's website at www.backweb.com. A replay of the call will be available starting one hour after the completion of the call until Feb. 1, 2001. To access the replay, please dial (402) 220-0346.