BackWeb Q4 Revenue Rises 31% to $1.76 Million; Cash and Equivalents Total $14.5 Million at year end

SAN JOSE, CA – January 28, 2004 – BackWeb Technologies Ltd. (Nasdaq: BWEB), a leading provider of offline Web software, today announced financial results for its fourth quarter and year ended December 31, 2003, as well as recent business developments.

BackWeb achieved Q4 2003 net revenue of $1.76 million compared to $1.34 million in the fourth quarter of 2002, an increase of 31%, and roughly flat with Q3 2003 net revenue of $1.75 million. License revenue was approximately $0.9 million in the quarter, compared to $0.5 million in the fourth quarter of 2002, an increase of 56%, and roughly equal to Q3 2003 license revenue. BackWeb® Offline Access ServerTM (OAS) customers in the period included GE Medical Systems, Ortho-McNeil Pharmaceutical, UTi (US), Compass Group, and VNU Data and Network Services (AC Nielsen).

BackWeb reported a net loss of $2.0 million, or $0.05 per share, for Q4 2003, compared to a net loss of $2.4 million, or $0.06 per share, in Q4 2002 and a net loss of $2.5 million, or $0.06 per share in Q3 2003. At the close of the fourth quarter of 2003, BackWeb had cash and cash equivalents totaling $14.5 million and no long-term debt.

Net revenue for 2003 increased to $6.5 million compared with $6.3 million in 2002. BackWeb's 2003 net loss was $10.7 million, or $0.27 per share, compared with a net loss of $24.9 million, or $0.63 per share, a year ago. The decrease in net loss, year-over-year, principally reflects a full year's benefit of the Company's Fall 2002 restructuring as well as its ongoing cost containment disciplines.

Recent BackWeb Developments:

• Plumtree and BackWeb Form Alliance: In November 2003 Enterprise Web leader Plumtree Software and BackWeb announced that Plumtree will resell BackWeb's Offline Access Server, which provides field sales and service users access to the Enterprise Web applications and content when those users are disconnected from the network. The combination of BackWeb's technology with Plumtree products is designed to preserve all personalization and security features so that content, collaboration, and Web forms that are accessible online, are also accessible offline.
   
• BackWeb® Offline Access Server™ Version 4: Also in November 2003, BackWeb released version 4.0 of its flagship product, the BackWeb Offline Access Server, (previously called ProactivePortal® Server). The new product name reflects the product's growing use in offline enabling different web applications, including portals, intranets, extranets, or any ASP, ASP.Net or J2EE application. A key innovation in Version 4 was the new BackWeb Developer Studio, a visual integrated development environment (IDE) that greatly reduces the effort required to extend web applications for offline use.
   
• Boehringer Ingelheim: In December 2003, Boehringer Ingelheim, one of the world's 20 largest pharmaceutical companies deployed BackWeb's offline solution with its Plumtree-powered employee portal to give its UK sales and field employees offline access to enterprise applications and critical sales, marketing, regulation, and product development information in the portal.
   
• Telecommunications Leader British Telecom Deploys BackWeb Offline Access Solution: In January 2004, BT Exact, BT's research, technology and IT operations business, deployed BackWeb's technology to provide offline access to critical support information to BT's field service engineers. The deployment will continue to rollout to reach more than 10,000 field service engineers.

Erez Lorber, CEO of BackWeb, commented, "Our fourth quarter results reflect our continued focus on containing costs while at the same time working to position our company and products for an eventual rebound in IT spending. During the quarter and full year, we believe we made further progress on our goal of establishing BackWeb as the technology and solution leader for offline access to web content. We also believe that we have played a role in helping prospective customers appreciate both the problems of not having offline access - - as well as the clear ROI to be gained from empowering mobile employees with our offline solution. We have continued our penetration into industries such as pharmaceuticals and medical equipment which have relatively healthier budgets to consider new IT solutions. These companies also have significant mobile sales and service teams which can benefit from our products.

"Our focus going forward into 2004 is simply placed on our existing and potential customers - properly supporting these relationships and helping to ensure their success in deploying and utilizing our products' benefits to their fullest. As we are confident in the value and strength of our solution, there's really no more important agenda than customer satisfaction. At the same time, we will continue to actively manage costs and direct our resources to the areas we believe will provide the highest long-term returns. While there are positive signs for our industry, visibility of its evolution remains low. We are still waiting to see more clear and sustainable improvements in IT spending across all industries before we will be in a position to provide forward-looking guidance on operating results."