BackWeb Reports Reduced Q1 Net Loss on 7% Revenue Increase; Cash and Investments Total $13.4 Million

SAN JOSE, CA – April 22, 2004 – BackWeb Technologies Ltd. (Nasdaq: BWEB), a leading provider of offline Web software, today reported financial results for its first quarter ended March 31, 2004. In addition, BackWeb announced that as a result of preliminary discussions it is entering into with its auditing firm, Ernst & Young LLP, with respect to a potential licensing transaction, the Company's Board and its audit committee have accepted the auditors' resignation as BackWeb's auditing firm (effective following the filing of its Form 10-Q for the quarter ended March 31, 2004). This decision is related to the high standards of independence governing independent auditors potential conflicts of interest and was not the result of any disputes or disagreements with Ernst & Young on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

BackWeb achieved Q1 2004 net revenue of $1.64 million compared to $1.53 million in the first quarter of 2003, an increase of 7% driven by higher maintenance and consulting revenue which more than offset a decline in license revenue resulting from the transition of BackWeb's sales execution strategy and related realignments within its worldwide sales team.

As a result of BackWeb's company-wide cost management initiatives and higher revenue, the Company reported a reduced net loss of $1.37 million, or $0.03 per share, for Q1 2004, compared to a net loss of $3.64 million, or $0.09 per share, in Q1 2003. The year-ago first quarter results included a $1.0 million charge for the write-down of an equity investment. BackWeb's 2004 first quarter net loss also represented a sequential improvement over its Q4 2003 net loss of $1.99 million, or $0.05 per share. As of March 31, 2004, BackWeb had cash and investments totaling $13.4 million and no long-term debt.

Erez Lorber, CEO of BackWeb, commented, "While investments in new or upgraded IT infrastructure remain in a tentative rebound, our rigorous cost management disciplines contributed to bottom-line improvement in the quarter. We also initiated a realignment of our sales strategy and sales team to emphasize business value selling as a complement to our traditional technology selling to IT professionals. To implement this new initiative, we recruited Pat Williams as Vice President of Worldwide Sales. We specifically selected Pat for this role because he brings substantial experience in successfully implementing value-based selling strategies.

"Importantly, during the quarter we continued to expand our base of deployed customers. We focused on enabling our customers to obtain greater efficiencies and business value from their customer facing organizations through the use of our solution. Our growing base of customers in full production provides important commercial and technological validation for our offering, which we plan to leverage in a variety of ways within our sales and marketing programs."