BACKWEB REPORTS Q3 RESULTS

Balance Sheet Remains Strong With $10.1 million in Cash and No Debt

SAN JOSE, Calif., November 1, 2004 – BackWeb Technologies Ltd. (Nasdaq: BWEB), a leading provider of offline Web software, today reported financial results for the third quarter and nine months ended September 30, 2004.

BackWeb reported Q3 2004 net revenue of $1.18 million compared to $1.75 million in the third quarter of 2003. BackWeb reported a net loss of $1.6 million, or $0.04 per share, for Q3 2004, compared to a net loss of $2.5 million, or $0.06 per share, in Q3 2003.

As of September 30, 2004, BackWeb had cash and investments totaling approximately $10.1 million and no long-term debt.

BackWeb’s newly-appointed CEO, Bill Heye, commented, “Despite a disappointing third quarter sales performance, BackWeb made progress expanding our base of customer deployments as two global healthcare customers went live with our mobile web solution to large numbers of mobile employees. We were also pleased to add a new partner, Blue Pumpkin Software, Inc., a leading provider of contact center workforce optimization solutions.

“Additionally, we expanded our sales and marketing reach through a sales referral agreement with our partner BEA Systems, Inc.. In addition to acknowledging the clear benefit of our solution, the referral agreement establishes incentives to BEA’s sales team to provide referrals and support the sale of BackWeb products to their customers.

“With the recent reductions in our company-wide workforce and overhead restructuring, we have improved our operating expense position and have focused our resources on a core set of revenue opportunities. Costs associated with the staffing reductions of approximately $400,000 will be reflected in our Q4 results. We expect annualized savings of approximately $4.0 million from these actions, which will begin to benefit our Q1 2005 results.

“On the development front, our engineering team reached the ‘code freeze’ stage in the development of the next version of our Offline Access Server product, which is slated for release next year. From a sales standpoint, we are very focused on completing contracts with prospective customers, especially in markets where we have achieved some key customer wins. We are working on improving our financial results in coming quarters by leveraging our product, customer value proposition and existing customer base.”

About BackWeb Technologies:
BackWeb Technologies is a leading offline Web software company. BackWeb extends the value of technology investments by offering mobile and remote employees offline access to portals, intranets, and other Web-based applications and content. The Company's products reduce network costs and improve the productivity of an increasingly mobile workforce. At the core of BackWeb's products is its patented Polite® synchronization technology that can distribute large amounts of data even over narrow bandwidth connections.

BackWeb® Offline Access Server™, the Company's flagship product, integrates with portal frameworks, intranets, and web applications to extend access to users who are frequently disconnected from the network or offline. Its two-way synchronization capability enables field personnel to both access and publish to portals and web applications while disconnected, creating greater efficiency and improved data accuracy and value.

BackWeb customers include market leaders such as Boehringer Ingelheim, Centocor, Eastman Kodak, GE Medical Systems, Guidant, Hewlett-Packard, KLA Tencor, Lam Research, Pfizer, and more than one hundred other companies. BackWeb also has a strategic partnership with BEA and reseller alliances with software industry leaders: Plumtree, SAP, and IBM.

BackWeb is headquartered in San Jose, California, and Rosh Ha 'ayin, Israel. For more information, visit www.backweb.com or call (877) 222-5932.

© 2004 BackWeb Technologies Ltd. All rights reserved. BackWeb and Polite are registered trademarks and Offline Access Server is a trademark of BackWeb Technologies Ltd. All other trademarks are property of their respective owners.

Statements in this news release, which are not purely historical, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements of beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include statements regarding: anticipated savings from our recently announced restructuring and the timing of when we expect to begin realizing such savings, the expected timing of the release of the next version of our Offline Access Server product and anticipated improvements in our financial results in future quarters. Actual results could differ materially from those in such forward-looking statements. Factors that could cause actual results to differ materially from expectations include, but are not limited to, that the Company may encounter difficulties meeting the goals of the restructuring given the reduction in its worldwide workforce, Mr. Heye and the restructured management team must integrate into the Company’s operations effectively and in a timely manner for the company to successfully execute its business strategy, the effects of a continued prolonged downturn in general economic conditions or IT industry spending; the ability of the Company’s new and existing sales personnel to effectively transition to the new sales execution model; the uncertainty of market acceptance of offline access products or our ability to license those products to customers; the ability of the Company to develop innovative technology and deliver solutions that meet customer needs; and potential emergence of competitive technologies or competitor companies. In addition, please refer to our periodic filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, which contain more detailed descriptions of the risk factors facing our business. BackWeb assumes no obligation to update any of the forward-looking statements in this release.

Contacts:
Investor Relations
BackWeb Technologies Ltd.
(408) 933-1722
investors@jcir.com

Bill Heye
Chief Executive Officer
(408) 933-1700
investors@backweb.com

BackWeb Technologies Ltd. Condensed Consolidated Balance Sheets (in thousands)

	September 30, 2004	December 31, 2003
	Unaudited	Unaudited
ASSETS
Current assets:
Cash and investments	$10,109	$14,457
Trade accounts receivable, net	1,370	2,403
Other current assets	645	782
Total current assets	12,124	17,642

Long-term investments and other assets	24	572
Property and equipment, net	155	301
Total assets	$12,303	$18,515

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$2,557	$ 4,216
Deferred revenue	849	1,125
Total current liabilities	3,406	5,341

Long-term liabilities	68	213
Total shareholders' equity	8,829	12,961
Total liabilities and shareholders' equity	$12,303	$18,515

BackWeb Technologies Ltd. Condensed Consolidated Statements of Operations (in thousands, except per share data)

	Three months ended		Nine months ended
	September 30, 2004	September 30, 2003	September 30, 2004	September 30, 2003
	Unaudited	Unaudited	Unaudited	Unaudited
Revenue:
License	$124	$911	$1,043	$2,379
Service	1,057	843	2,923	2,367
Total revenue	1,181	1,754	3,966	4,746

Cost of revenue:
License	12	29	53	102
Service	347	239	960	724
Total cost of revenue	360	268	1,013	826

Gross profit	821	1,486	2,953	3,920

Operating expenses:
Research and development	768	1,181	2,527	3,509
Sales and marketing	1,236	1,454	3,273	4,851
General and administrative	423	1,297	1,533	3,323
Total operating expenses	2,427	3,932	7,333	11,683

Loss from operations	(1,606)	(2,446)	(4,380)	(7,763)

Finance and other income, net	68	(44)	149	27
Write-down of an equity investment	--	--	--	(1,000)
Net loss	$(1,538)	$(2,490)	$(4,231)	$(8,736)

Net loss per share	$(0.04)	$(0.06)	$(0.10)	$(0.22)

Shares used in computing net loss per share	40,717	40,311	40,669	40,019