BackWeb Reports Q2 Financial Results

Company Adds Five ProactivePortal Server Customers New CFO Appointed

SAN JOSE, Calif., – July 22, 2002 – BackWeb Technologies (Nasdaq: BWEB), the leading provider of ProactivePortal™ technologies for the enterprise, today announced results for its second quarter ended June 30, 2002.

Revenues for the second quarter of 2002 were $1.8 million compared with $2.3 million reported in the first quarter of 2002. In accordance with generally accepted accounting principles (GAAP), net loss for the second quarter of 2002 was $5.5 million, or a loss of $0.14 per share. This compares with a net loss of $5.7 million, or a loss of $0.15 per share in the first quarter.

Pro Forma net loss for the second quarter of 2002 was $4.6 million, or a loss of $0.12 per share compared with a net loss of $4.8 million, or a loss of $0.12 per share reported in the first quarter.

"We are pleased with the ongoing progress in our new Portal strategy, especially with the new customer momentum we saw during the quarter," said Eli Barkat, chairman and CEO of BackWeb Technologies. "While we are disappointed with our Q2 revenue results and the overall economic conditions, our pipeline of new portal customer opportunities has increased considerably in the past six months, and we believe our customer adoption rate will continue to increase over the remainder of this year. In addition, our strategic partnerships with IBM, SAP Portals, Pricewaterhouse Coopers and Plumtree Software, will continue to drive expansion of our customer pipeline going forward."

In the second quarter, the company added five new ProactivePortal Server customers. Some of these new customers included GE Industrial Systems, Lam Research Corporation, and BT Ignite, a unit of British Telecom. By implementing the BackWeb® ProactivePortal solution, these companies intend to extend the reach of their corporate portals to mobile or disconnected users, and users who need to be notified of critical new content. They also recognize that by implementing the BackWeb ProactivePortal solutions for offline Portal access, they will realize tangible returns on investment such as increased portal usage, improved field productivity, increased customer satisfaction, and accelerated business velocity.

"For many companies, offline access for disconnected users is an obvious need, especially where sales forces, field services, consultants or executives are involved," said Barkat. "Customers see the immediate value in offline access, and there is a real opportunity for expansion of our business in the second half of the year."

REDUCED EXPENSES
BackWeb continued to reduce its cost structure in the second quarter as it worked to more closely align its operating costs with expected revenues. The company reduced overall operating expenses by approximately $300,000 compared with the first quarter, marking the fifth straight quarter that operating expenses have decreased.

MANAGEMENT
BackWeb is pleased to announce that it has appointed Michael A. Morgan, 40, as its new Chief Financial Officer. Morgan will assume his role effective August 20, 2002.

Morgan has over 10 years of CFO and financial management experience with public companies in the software industry. Prior to joining BackWeb, Morgan was the CFO and vice president of finance and administration for Talarian Corporation, a provider of infrastructure software. Morgan was responsible for developing the company's financial strategy and direction, including taking the company public in 2000. In addition, Morgan successfully managed the $115 million sale of Talarian to TIBCO Software earlier this year.

Before Talarian, Morgan was the CFO and vice president of finance and administration for Enlighten Software Solutions, a provider of integrated system management software. During his tenure, Morgan revamped all financial systems and prepared the company for its successful IPO in 1994. Morgan also has 6 years of public accounting experience, including four years at KPMG, LLP, where he advised emerging growth and technology clients.

Morgan holds a Bachelor of Science degree in business administration and accounting from San Jose State University and is a certified public accountant in California.

"We are pleased to have a person of Michael's caliber join BackWeb's management team," said Barkat. "We believe Michael's expertise and business acumen will help drive the next phase of our growth strategy to become a leader in the portal software market."

BackWeb also announced that effective today, Gwen Spertell has resigned from her position as the Company's chief operating officer to pursue other career opportunities.

"Gwen has provided solid leadership and strategic guidance during the transition phase of our portal strategy," said Barkat. "She has been with BackWeb since our pre-IPO days, and we wish her well as she looks to the next level in her career development."

Conference Call
Management will hold a conference call to discuss these results today, July 22, at 2:00 p.m. Pacific Time. Those wishing to join should dial (415) 228-5009, 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 July 29, 2002. To access the replay, please dial (402) 998-0628.