BackWeb Technologies Announces Preliminary Q3 Revenues and Earnings Results

Plans to Reduce Workforce by 44%

SAN JOSE, Calif., – September 30, 2002 – BackWeb Technologies (Nasdaq: BWEB), the leading provider of ProactivePortal™ technologies for the enterprise, today announced that it expects revenue for the third quarter, ending September 30, 2002 to be between $700,000 and $900,000. Loss per diluted share for the third quarter is expected to be between $0.12 and $0.14 (excluding special charges related to the reduction in force, amortization charges related to intellectual property, other intangibles and deferred stock compensation).

The company also announced that it is reducing its workforce by approximately 60 positions worldwide, or 44 percent of its total workforce. The reduction is across all functions of the company. Excluding restructuring charges, the company anticipates annualized savings of $8.2 to $8.5 million from this reduction in force, including savings from the closing or consolidation of several facilities worldwide, the write-off of related assets and the reduction of other expenses. The cost-savings are expected to begin to have an impact in the December 2002 quarter. The company will take a special charge of $4.0 to $4.4 million in the September 2002 quarter to cover reduction costs.

"The prolonged economic downturn continues to affect IT spending budgets, and therefore our ability to close deals," said Eli Barkat, chairman and CEO of BackWeb Technologies. "While we are certainly disappointed with these results, we continue to be focused on building our leadership position in the enterprise portal market and will continue to leverage the relationships with our strategic portal partners going forward.

"Today's layoffs are difficult but appropriate to better align our operating expenses with current and expected revenues. We will continue to aggressively pursue the core components of our business strategy – strengthen existing partnerships and customer relationships, forge new relationships, position our technology as "must-have" within the portal space and protect our cash position – and we do not anticipate this reduction in workforce will materially affect our install base or partnership relationships."

October 22 Conference Call Information
BackWeb will be releasing its full results for the third quarter 2002 on Tuesday, October 22 after the market close. A conference call will be held at 2:00 p.m. Pacific Time that day. Those wishing to join should dial (630) 395-0018, 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 October 29, 2002. To access the replay, please dial (402) 220-4159.