ATG Reports First Quarter 2008 Results.

Year-Over-Year, Revenue Increased 25%, Product License Bookings Increased 28%, and Non-GAAP Net Income Increased 156%

CAMBRIDGE, Mass. -- Art Technology Group, Inc. (NASDAQ: ARTG), the leading e-commerce solutions provider, today reported financial results for the first quarter ended March 31, 2008.

Revenue for the first quarter of 2008 grew to $36.5 million, a 25% increase over first quarter 2007 revenue of $29.2 million.

"ATG is off to a great start in 2008 with revenue growth of 25% and product license bookings growth of 28%," stated Bob Burke, ATG's president and CEO. "As evidenced by our first quarter results, the market for our solutions continues to be robust. Companies are increasing their investments in online channels as accelerating growth in e-commerce sales continues to outpace offline channels."

Product license revenue recognized in accordance with United States Generally Accepted Accounting Principles (GAAP) during the first quarter of 2008 was $9.3 million, compared to $6.6 million in the year ago quarter. Product license bookings, a non-GAAP measure which the Company defines as product license revenue recognized plus net change in deferred product license revenue, grew 28% year-over-year to $11.4 million for the first quarter from $8.9 million in the year ago quarter. Approximately 50% of product license bookings in the first quarter were deferred and will be recognized ratably.

Short and long term deferred revenue grew to $48.3 million at March 31, 2008, a 59% increase over March 31, 2007.

New and repeat business was generated from customers including American Eagle Outfitters, Hyatt, Kingfisher, Philips, Quebecor, SAP and Sony.

Net loss in accordance with GAAP for the first quarter of 2008 was $842 thousand, or $(0.01) per share. This compares with a net loss of $1.5 million, or $(0.01) per share, in the first quarter of 2007.

Non-GAAP net income increased 156% to $2.0 million for the first quarter of 2008, or $0.02 per diluted share compared with non-GAAP net income of $781 thousand, or $0.01 per diluted share for the first quarter of 2007.

During the quarter, ATG completed its acquisition of CleverSet, a technology leader in automated personalization, in an all cash transaction valued at $9.1 million.

At March 31, 2008, ATG had $46.9 million in cash, cash equivalents, and short-term and long-term marketable securities. Cash flow from operations for the first quarter of 2008 was $7.1 million.

"We are very pleased with our results," Julie Bradley, ATG's senior vice president and CFO stated. "Last year at this time, we embarked on a business model transition, migrating from primarily a license business to a solution provider with increasing amounts of recurring and ratable revenue streams. As a result of this change, our customers are leveraging more ATG solutions. Based on accelerating growth in e-commerce, our current pipeline, and our successful implementation of the business model transition, our guidance and outlook for the full-year remains very positive."

Financial Guidance and Business Outlook

Revenue for 2008 is expected to be in the range of $159.0 million to $165.0 million. GAAP net income (loss) for the year ending December 31, 2008 is expected to be in the range of $(4.0) million to $1.0 million. GAAP net income (loss) guidance includes an estimated $8.5 - $9.0 million of non-cash equity-related compensation expense and amortization of acquired intangibles of $4.5 - $5.0 million. Non-GAAP net income for the year ending December 31, 2008 is expected to be in the range of $9.0 million to $15.0 million. Cash flow from operations for 2008 is expected to be in the range of $28.0 million to $32.0 million.

Quarterly Conference Call

ATG management will discuss the company's first quarter 2008 financial results, recent highlights, and business outlook for the remainder of 2008 on its quarterly conference call for investors at 10:00 a.m. ET today. The conference call will be broadcast live over the Internet. Investors interested in listening to the webcast should log on to the "For Investors" section of the ATG website, www.atg.com. The live conference call also can be accessed by dialing [phone] (or [phone] for international calls) and using conference ID No. 42241246. A replay of the call will be available on the company's website later in the day.

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About ATG

ATG (Art Technology Group, Inc., NASDAQ: ARTG) makes the software and delivers the on demand solutions that the world's most customer-conscious companies use to power their e-commerce web sites, attract prospects, convert them to buyers and ensure their satisfaction so they become loyal, repeat, profitable customers. Our e-commerce suite is ranked the #1 current offering and #1 in strategy by the industry's most influential analyst firms, and powers more of the top 300 internet retailers than any other vendor. Our eStara brand provides customer interaction solutions to enhance conversions and customer support, and delivers the world's most widely used click-to-call service. ATG's solutions are used by over 900 major brands, including Amazon, American Eagle Outfitters, AOL, AT&T, Best Buy, B&Q, Cabela's, Carrefour, Cingular, Coca Cola, Continental Airlines, CVS, Dell, DirecTV, El Corte Ingles, Expedia, France Telecom, Harvard Business School Publishing, Hewlett-Packard, Hilton, HSBC, Intuit, Macy's, Meredith, Microsoft, Neiman Marcus, New York & Company, Nokia, OfficeMax, PayPal, Philips, Procter & Gamble, Sears, Sony, Symantec, Target, T-Mobile, Urban Outfitters, Verizon, Viacom, Vodafone and Walgreens. The company is headquartered in Cambridge, Massachusetts, with additional locations throughout North America and Europe. For more information about ATG, please visit www.atg.com.

(c) 2008 Art Technology Group, Inc. ATG and Art Technology Group are registered trademarks of Art Technology Group, Inc. All other product names, service marks, and trademarks mentioned herein are trademarks of their respective owners.

*Use of Non-GAAP Financial Measures

ATG is providing the non-GAAP historical and forward-looking financial measures presented above as the company believes that these figures are helpful in allowing individuals to better assess the ongoing nature of ATG's core operations. A "non-GAAP financial measure" is a numerical measure of a company's historical or future financial performance that excludes amounts that are included in the most directly comparable measure calculated and presented in the GAAP statement of operations.

Net income (non-GAAP) and net income per share (non-GAAP), as we present them in the financial data included in this press release, have been normalized to exclude the net effects of restructuring actions, the amortization of intangible assets, acquisition-related compensation charges, and equity-related compensation. Management believes that these normalized non-GAAP financial measures excluding these items better reflect its operating performance as these non-GAAP figures exclude the effects of non-recurring or non-cash expenses. Management believes that these charges are not necessarily representative of underlying trends in the company's performance and their exclusion provides individuals with additional information to compare the company's results over multiple periods.

ATG considers "product license bookings," a non-GAAP financial measure which the company defines as product license revenue recognized plus net change in deferred license revenue during any given period, to be an important indicator of growth in its software license business, as its business increasingly evolves toward a recurring, ratable revenue model.

The company uses these non-GAAP financial measures internally to focus management on period-to-period changes in the company's core business. Therefore, the company believes that this information is meaningful in addition to the information contained in the GAAP presentation of financial information. The presentation of this additional non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

In accordance with the requirements of Regulation G issued by the Securities and Exchange Commission, the tables above present the most directly comparable GAAP financial measure and reconcile non-GAAP net income and product license bookings to the comparable GAAP measures.

ATG Statement Under Private Securities Litigation Reform Act

This press release contains forward-looking statements about the company's estimated revenue and earnings. These statements involve known and unknown risks and uncertainties that may cause ATG's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. These risks include the effect of weakened or weakening economic conditions or perceived conditions on the level of spending by customers and prospective customers for ATG's software and services; financial and other effects of cost control measures; quarterly fluctuations in ATG's revenues or other operating results; customization and deployment delays or errors associated with ATG's products; the risk of longer sales cycles for ATG's products and ATG's ability to conclude sales based on purchasing decisions that are delayed; satisfaction levels of customers regarding the implementation and performance of ATG's products; ATG's need to maintain, enhance, and leverage business relationships with resellers and other parties who may be affected by changes in the economic climate; ATG's ability to attract and maintain qualified executives and other personnel and to motivate employees; activities by ATG and others related to the protection of intellectual property; potential adverse financial and other effects of litigation (including intellectual property infringement claims) and the release of competitive products and other activities by competitors. Further details on these risks are set forth in ATG's filings with the Securities and Exchange Commission (SEC), including the company's annual report on Form 10-K for the period ended December 31, 2007, as filed with the SEC. These filings are available free of charge on a website maintained by the SEC at http://www.sec.gov.