Chordiant sees some light on the path to profitability

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Chordiant Software revenues for the second quarter ended June 30, 2001 were $18.5 million, up 151% from the $7.4 million for the same quarter of 2000 and up 42% sequentially.

License revenues were $9.6 million, up 191% from $3.3 million year over year. Service revenues were $9.0 million, up 118% from $4.1 million a year earlier. Second-quarter gross margin was 55%, up from 44% a year ago.

The loss on operations was $7.5 million, or a loss of $0.14 per share, compared with a loss of $6.0 million ($0.16) for the same quarter of 2000. Second-quarter net loss was $12.7 million ($0.25), compared with a loss of $7.9 million ($0.21), for the year-ago quarter.

Weighted average shares outstanding for the second quarter increased 40% to 51.5 million from 36.8 million a year earlier, due to the issuance of new shares of common stock for acquisitions.

"The second quarter of 2001 was our sixth consecutive quarter of solid revenue growth as a public company," said Sam Spadafora, chairman and chief executive officer of Chordiant.

"We were hitting on all cylinders and grew 151% in spite of economic and market challenges. We exceeded both top and bottom line targets, while completing two new acquisitions and integrating the operations of Prime Response. At the same time, we maintained prudent controls in managing our business conservatively on the path to profitability.

"During the quarter, we signed million-dollar license agreements in the U.S. and internationally, adding top-tier customers such as VoiceStream Wireless and Bank of Ireland, and began a total of 12 new customer engagements. We now have approximately 135 customers and partners worldwide, most of which are in the Global 1000."

Spadafora continued: "We anticipate total net revenues ranging from $70 million to $75 million for full-year 2001 and expect operating and cash break-even in the first half of 2002. Furthermore, we are comfortable with the higher end of the revenue range, based on the continued strength of our pipeline in Europe and the growth of our pipeline in the U.S. Our second-quarter momentum reinforces our expectations of achieving these estimates."

At June 30, 2001, Chordiant's cash, cash equivalents and short-term investments were $62.5 million, and total deferred revenue was $29.8 million.

For the six months ended June 30, 2001, total net revenues were $31.6 million, up 155% from $12.4 million for the same period of the prior year. First-half net loss on operations was $13.9 million, or a loss of $0.26 per share on a pro forma basis, excluding non-cash charges for the amortisation of deferred stock-based compensation, the write-off of purchased in-process research and development, the amortisation of acquired intangible assets, and integration-related costs associated with the acquisition of Prime Response, and currency translation adjustments related to foreign subsidiaries. The six-month 2001 net loss as reported was $22.4 million, or a loss of $0.49 per share.

About Chordiant Software, Inc.
Headquartered in Cupertino, California, the company has U.S. offices in Boston, Chicago, Dallas, Manchester, N.H., and New York; European offices in Amsterdam, Paris, Munich, London and Brentford, U.K.; and Australian offices in Sydney and Melbourne.

Chordiant Software

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