BackWeb Reports Q4 and FY01 Financial Results In-Line with Guidance

Expands Leadership Position in Portal Market Through Partnerships With SAP Portals, IBM WebSphere and Plumtree Software

SAN JOSE, Calif. – Jan. 29, 2002 – BackWeb Technologies (Nasdaq: BWEB), the leading provider of ProactivePortal™ technologies for the enterprise, today announced financial results for its fourth quarter and fiscal year 2001 ended December 31, 2001.

Revenues for the fourth quarter of 2001 were $4.4 million compared with $7.1 million for the same period last year and $4.5 million reported in the third quarter of 2001. Net loss for the fourth quarter of 2001 was $5.0 million, or a loss of $0.13 per share. This compares with a net loss of $4.6 million, or a loss of $0.12 per share in the same period last year and a loss of $5.5 million, or a loss of $0.14 per share, in the third quarter of 2001. These figures exclude amortization related to goodwill, other intangibles and deferred stock compensation, and a one-time restructuring charge in the third quarter of 2001.

Including charges, net loss for the fourth quarter of 2001 was $6.0 million, or a loss of $0.15 per share. This compares with a net loss, including charges, of $5.8 million, or a loss of $0.15 per share, in the same period last year and a loss of $9.2 million, or a loss of $0.24 per share, in the third quarter of 2001 (of which $2.8 million, or a loss of $0.07 per share, was attributable to a one-time restructuring charge).

Revenues for the year ended December 31, 2001 were $20.6 million compared with $38.3 million reported in fiscal 2000. Net loss for the fiscal year was $25.6 million, or a loss of $0.67 per share, compared with a net loss of $7.8 million, or a loss of $0.21 per share for 2000 (excluding in-process research and development write-off in 2000, amortization related to goodwill, other intangibles and deferred stock compensation in both years, and a one-time restructuring charge and a write-down of an equity investment in 2001). Including the charges, net loss for fiscal 2001 was $34.7 million, or a loss of $0.91 per share, compared with a net loss of $19.2 million, or a loss of $0.52 per share, a year ago.

"We are very pleased with our fourth quarter financial and business results," said Eli Barkat, chairman and CEO of BackWeb Technologies. "During the quarter, we continued to deliver on our financial targets while successfully managing our transition to one of the hottest and most dynamic markets in the software industry, the enterprise portal market. This is evidenced by our additional high-profile customer wins such as the United States Social Security Administration, our key strategic partnerships with IBM WebSphere, SAP Portals and Plumtree Software in the portal space, as well as the encouraging ProactivePortal Server™ pipeline we are building for the second half of 2002.

The BackWeb® ProactivePortal Server just began shipping in September and BackWeb has already been chosen as the offline vendor of choice by leading portal framework providers such as SAP Portals, IBM WebSphere and Plumtree Software, as well as leading system integrators such as PwC Consulting. Offline access and proactive notification, the cornerstone benefits of BackWeb's ProactivePortal technology, continue to be cited as leading, "must-have" capabilities for next-generation portals by key industry analysts.

"We believe that the substantial partnerships and industry endorsements we garnered this quarter position BackWeb as a visible leader in the portal space, a market that industry analysts expect will grow to more than $1.8 billion in product revenues by 2005," said Barkat. "BackWeb enters 2002 as a leader in the right market, at the right time. We believe our accomplishments in the fourth quarter clearly illustrate our ability to successfully execute on the portal opportunity. As we continue to build momentum from our partnerships, capitalize on our leadership position and execute on our 2002 milestones, we expect to grow our shareholder value as the year progresses."

Conference Call
Management will hold a conference call to discuss these results today, Jan. 29, at 2:00 p.m. Pacific Time. Those wishing to join should dial (712) 271-3826, passcode "BackWeb" at approximately 1:45 p.m. 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. 5, 2002. To access the replay, please dial (402) 220-3826.