Chordiant Announces Record First-Quarter 2001 Financial Results.

Business Editors/High-Tech Writers

CUPERTINO, Calif.--(BUSINESS WIRE)--April 24, 2001

Records 160% Revenue Growth Year-over-Year; Begins Enterprise

Implementations at Barclaycard and Royal Bank of Scotland

Chordiant Software, Inc. (Nasdaq:CHRD), a leading developer of unified customer relationship management (CRM) solutions for companies with extreme customer demands, today announced its financial results for the first quarter ended March 31, 2001.

Total net revenues for the first quarter of 2001 were $13.0 million, up 160% from the $5.0 million reported for the first quarter of 2000. First-quarter license revenues were $6.8 million, up 218% from $2.1 million year over year. Service revenues were $6.3 million, up 118% from $2.9 million a year earlier. First-quarter gross margin was 59 percent, compared with 32 percent year-over-year.

First-quarter net loss on operations was $6.4 million, or a loss of $0.13 per share on a pro forma basis, compared with a net loss of $7.2 million, or a loss of $0.20 per share pro forma, for the same quarter of 2000. Net loss on operations excludes the effect of non-cash charges for the amortization of deferred stock-based compensation and purchased in-process research and development, the amortization of acquired intangible assets and integration-related costs associated with the acquisition of Prime Response, Inc., and currency translation gains and losses related to foreign subsidiaries.

"In the first quarter, our acquisition of PrimeResponse made Chordiant a significantly larger and more competitive player in the global CRM market," said Sam Spadafora, chairman and chief executive officer of Chordiant. "We're pleased with the aggressive pace of the integration and the response of customers in the financial services, communications and consumer segments to our enhanced enterprise CRM platform and services. Also during the first quarter, we began six customer engagements, including enterprise implementations at Barclaycard and The Royal Bank of Scotland Group."

Spadafora continued, "Through the past four quarters, we consistently exceeded our objectives for organic revenue growth, expense control, cash management, and progress toward profitability. Now, having broadened the base of the business through acquisition, we look forward to capitalizing on our momentum as a leading provider of enterprise customer life cycle management solutions."

"We are pleased with the continued strength of our balance sheet," added Steve Vogel, senior vice president and chief financial officer. "Cash, cash equivalents and short-term investments totaled $78.7 million at March 31. Total deferred revenue was $31.0 million, up from $10.8 million a year earlier and $30.0 million at December 31, 2000. Our balance sheet provides a measure of security in the current economic environment and supports our long-term growth prospects."

Chordiant completed the acquisition of PrimeResponse, Inc. (Nasdaq:PRME) on March 27, 2001. In accordance with the purchase method of accounting, the two companies' first-quarter results of operations are consolidated for March 28-31, 2001.

Recent Business Highlights

Recently, Chordiant:

-- Completed the acquisition of PrimeResponse and combined the two companies'
worldwide operations and customer bases into a single entity with more than 430
employees and 100 Global 1000 accounts;

-- Began the integration of PrimeResponse marketing automation solutions with
Chordiant's Intelligent Customer Interaction Management (ICIM) platform and
Intelligent Business Services

-- including e-marketing, e-service, e-selling, and e-fulfillment--for
enterprise-wide management of the entire customer life cycle;

-- Began a multi-million-dollar enterprise implementation at Barclaycard, the
leading credit card issuer in Europe, for the execution of its new CRM
strategy;

-- Also began an enterprise implementation at The Royal Bank of Scotland Group,
one of the largest banks in Europe and the first PrimeResponse customer to
adopt the Chordiant Unified CRM solution;

-- Commenced six engagements with customers, including General American Life
Insurance, MetLife and Tesco Personal Finance;

-- Released Chordiant Unified CRM Solution v3.0 with Chordiant Unified Rules
for consistent business policy management and real-time decision support across
multiple channels and business units;

-- Signed a co-marketing agreement with Verbind, Inc. for the joint marketing
of its real-time behavioral targeting system with the Chordiant Unified CRM
Solution;

-- Strengthened its senior management team with the appointments of Steve Vogel
as senior vice president and chief financial officer, Gary Daniels as senior
vice president of worldwide engineering and Allen Swann as president of
Chordiant International.

About Chordiant Software, Inc.

Chordiant Software (www.chordiant.com) delivers a Unified CRM Solution that provides an Intelligent Customer Interaction Management (ICIM) platform for enterprise-wide integration with existing systems and Intelligent Business Services including e-marketing, e-service, e-selling, and e-fulfillment, which embrace the customer's existing applications. Chordiant's solution is designed to meet the extreme customer demands of complex businesses serving millions of individuals in real time and across multiple lines of business, with the objectives of customer satisfaction, retention, growth, and lifetime value.

Whether communicating via branch locations, Web, e-mail, telephone, or wireless access, the Chordiant Unified CRM Solution provides a real-time, single view of each customer and a consistent, personalized message for every interaction. It includes a comprehensive business process engine, which allows companies to implement best business practices across multiple touchpoints. Marketers and sales professionals can maximize their marketing investment through the creation, execution and refinement of sophisticated direct marketing initiatives that span both traditional and online channels. Chordiant empowers intelligent, high-value contacts designed to retain customers, grow revenues and drive profits during every customer interaction.

Headquartered in Cupertino, California, Chordiant maintains regional offices in Boston; Chicago; Dallas; Denver; Manchester, New Hampshire; New York; Amsterdam; London; Frankfurt; Munich; Paris; and Melbourne.

This news release includes "forward-looking statements" that are subject to risks, uncertainties and other factors that could cause actual results or outcomes to differ materially from those contemplated by the forward-looking statements. For this purpose, any statements contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Words such as "believes," "anticipates," "plans," "expects," "will," "would," and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause the results of Chordiant, PrimeResponse or the combined company to differ materially from those indicated by these forward-looking statements, including, among others, potential difficulties in the assimilation of operations, strategies, technologies, methodologies, and products of the acquired company; the risk of loss of key personnel of the acquired company; diversion of management attention from other business concerns; and business risks including the risk of variations in quarterly operating results, significant current and expected additional competition, and the need to continue to expand product distribution and service offerings. Further information on potential factors that could affect the financial results of Chordiant, PrimeResponse or the combined company are included in risks detailed from time to time in Chordiant's and PrimeResponse's Securities and Exchange Commission filings, including Chordiant's Annual Report on Form 10-K filed on March 27, 2001; the joint proxy statement/prospectus filed by both Chordiant and PrimeResponse on February 28, 2001; Amendment No. 1 to the Form S-4 filed by Chordiant on February 26, 2001; PrimeResponse's final prospectus for its initial public offering filed on March 3, 2000; and Chordiant's final prospectus for its initial public offering filed on February 15, 2000. Also, statements in this news release related to the expected benefits of the transaction are subject to risks related to the timing and successful completion of technology and product development efforts; integration of the technologies and businesses of Chordiant and PrimeResponse; unanticipated expenditures; changing relationships with customers, suppliers and strategic partners; and other factors described in both the Securities and Exchange Commission filings listed above and other periodic reports filed by Chordiant with the Securities and Exchange Commission.

Note to Editors: Chordiant and the Chordiant logo are registered trademarks of Chordiant Software, Inc. and Chordiant Unified CRM for Extreme Demands is a trademark of Chordiant Software, Inc. All other trademarks and registered trademarks are the properties of their respective owners.

                       Chordiant Software, Inc.
            Condensed Consolidated Statements of Operations
          (in thousands, except share and per-share amounts)
                              (unaudited)

                                Three months ended March 31,
                                     2001        2000


Net revenues:
 License                           $  6,786    $  2,137
 Service                              6,261       2,877
    Total net revenues               13,047       5,014

Cost of net revenues:
 License                                437         159
 Service                              4,949       3,257
    Total cost of net revenues        5,386       3,416

Gross profit                        $ 7,661     $ 1,598

Operating expenses:
 Sales and marketing                  8,352       4,772
 Research and development             4,445       3,309
 Purchased in-process
  research and development            1,486       3,500
 General and administrative           1,904       1,053
 Amortization of deferred
  stock-based compensation              960       2,451
 Amortization of acquired
  intangible assets                     540          --
 Integration-related costs              941          --
    Total operating expenses         18,628      15,085

Loss from operations                (10,967)    (13,487)
Interest expense                        (15)       (189)
Effect of currency
 translation gains
 and losses on foreign
 subsidiaries                           653          --
Other income, net                       636         481

Net loss                           $ (9,693)   $(13,195)

Net loss per share:
    Basic and diluted              $  (0.25)   $  (0.60)

    Weighted average shares          38,860      21,972

Supplemental information(1)

Pro forma net loss per
 share net of purchased
 in-process research
 and development,
 stock-based compensation,
 amortization of
 acquired intangible
 assets, effect of
 currency translation
 gains and losses on
 foreign subsidiaries, and
 integration-related costs
 (unaudited):

    Basic and diluted              $  (0.13)   $  (0.20)

    Shares outstanding(2)            50,433      36,386


(1) The accompanying supplemental financial information is presented
    for informational purposes only and should not be considered as a
    substitute for the historical financial information presented in
    accordance with generally accepted accounting principles in the
    United States.

(2) Pro forma net loss per share is computed using the shares
    outstanding of Chordiant's common stock as if such conversion
    occurred on the first day of the period presented or at the date
    of original issuance, if later. The calculation of pro forma net
    loss per share excludes other potential common shares as the
    effect is anti-dilutive. Pro forma potential common shares are
    comprised of common stock subject to repurchase and incremental
    common stock issuable upon exercise of stock options.



                       Chordiant Software, Inc.
                 Condensed Consolidated Balance Sheets
                            (in thousands)

                                    March 31,   December 31,
                                      2001         2000
                                   (unaudited)

ASSETS

Current assets:
 Cash and cash equivalents         $ 30,663    $ 41,465
 Short-term investments              47,991      26,203
 Accounts receivable, net            23,651      20,480
  (Includes deferred revenue
   of $11,691 and $11,734,
   respectively)
 Other current assets                 8,541      7,149
    Total current assets            110,846     95,297

Property and equipment, net           8,860      5,050
Intangible assets, net               27,504      4,585
Other assets                          3,294      2,516
                                   ---------  ---------
                                   $150,504   $107,448


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Borrowings                        $    485   $    595
 Accounts payable                     6,948      5,081
 Accrued expenses                    16,447      8,163
 Deferred revenue                    24,260     20,929
    Total current liabilities        48,140     34,768

Deferred revenue, long-term           6,708      9,116
Other liabilities                       809        244
                                   ---------  ---------
                                     55,657     44,128

Stockholders' equity:                94,847     63,320
                                   ---------  ---------
                                   $150,504   $107,448