Sapient Revenues Jump 74% in First Quarter; Quarterly Revenue Surpasses $100 Million For The First Time As Pro Forma Net Income Rises 83%

Business Wire, April 24, 2000

Business/Technology Editors

CAMBRIDGE, Mass.--(BUSINESS WIRE)--April 24, 2000

Sapient (NASDAQ:SAPE) today announced strong financial results for its first quarter ended March 31, 2000. For the three months, consolidated revenues were $100,334,000, a 74% increase over revenues of $57,793,000 in the first quarter of 1999. Sequential revenue growth over the prior quarter was 23%. Pro forma net income (before amortization of intangibles, acquisition costs and stock based compensation charge) was $12,652,000 or $0.19 per diluted share for the first quarter of 2000, compared to $6,901,000 or $0.11 per diluted share for the first quarter of 1999. Net income for the quarter (including the above costs) totaled $11,890,000 or $0.18 per diluted share, compared to net income of $4,279,000 or $0.07 per diluted share for the first quarter of 1999.

"Clients are continuing to reward us for our insight and analysis of the future marketplace. They value the way our people bring the skills needed to help them succeed in the New Economy," said Jerry A. Greenberg, Sapient's co-chairman and co-chief executive officer. "This combination of insight and strong people led to accelerated demand in Europe as well as new opportunities in Asia and South America."

"We have made solid progress on our key business drivers during the first quarter," said Edward G. Goldfinger, Sapient's chief financial officer. "In particular, the initiatives we have undertaken to be more effective in the areas of pricing and collection have paid off in strong top line growth, earnings and cash flow."

Highlights from the first quarter follow.

--  Sapient's efforts in the areas of wireless and broadband have been
    accelerating, with fifteen projects underway around the world.

--  Sapient continued to expand its presence outside the US:
    --  As Sapient's office in Milan gains momentum and the London
        office continues to grow, the company now has approximately
        200 people located in Europe.
    --  Sapient developed Internet Gratis, a Brazil-based ISP and
        portal, which grew to become the largest ISP in Brazil within
        four weeks of its January launch.
    --  Bolstering Sapient's ability to serve its global clients, Alan
        J. Herrick was appointed to lead European operations and
        expansion efforts.

--  Sapient received accolades from the creative community for its
    smart, user-focused approach to problem solving and design. The
    company was ranked number one on Adweek's fifth annual list of
    "Top 100 Interactive Agencies," and placed first in the
    interaction design competition at the CHI (Computer Human
    Interaction) 2000 Conference in The Hague, The Netherlands.

--  Sapient further enhanced its executive and industry-focused
    leadership teams with experienced professionals who are tasked
    with developing and implementing many of Sapient's most critical
    initiatives:
    --  Merle Sprinzen joined Sapient as chief marketing officer,
        underscoring the company's commitment to become better
        recognized for the new style of consulting it is creating and
        the benefits this approach delivers to its clients.

    --  James R. Anthony was appointed managing director of Sapient's
        Media, Entertainment and Communications (MEC) business unit.
    --  Andrew R. Easter has taken the reins as managing director of
        Sapient's Energy Services business unit.

About Sapient

Sapient is a leading e-services consultancy providing Internet strategy consulting and sophisticated Internet-based solutions to Global 1000 companies and startup businesses. As Architects for the New Economy, Sapient helps clients define their Internet strategies and design, architect, develop and implement solutions to execute those strategies. Founded in 1991, Sapient has been providing Internet solutions since 1994 and employs approximately 2,300 people in offices in Cambridge, Mass., the company's headquarters, as well as London, Sydney, Milan, New York, San Francisco, Chicago, Atlanta, Dallas, Los Angeles, Washington D.C., Denver and Houston. More information on Sapient can be found at www.sapient.com.

This press release contains forward-looking statements that involve a number of risks and uncertainties. There are a number of factors that could cause actual events to differ materially from those indicated. Such factors include, without limitation, the Company's ability to continue to attract and retain high quality employees, accurately set fees for and timely complete its current and future client projects, the continued acceptance of the Company's services, the ability of the Company to manage its growth and projects effectively, and the other factors set forth in the Company's Form 10-K with the SEC.

Sapient and Architects for the New Economy are registered servicemarks of Sapient Corporation. All other product, service and company names are trademarks or servicemarks of their respective owners.

Consolidated Statements of Income
(in thousands)                            Three months ended March 31,
(Unaudited)                                      2000          1999

Revenues                                     $ 100,334    $  57,793
Operating Expenses:
  Project personnel costs                       48,575       28,334
  Selling and marketing                          7,885        3,974
  General and administrative                    25,253       14,648
  Stock-based compensation                         110        1,699
  Amortization of intangible assets                884          569
  Acquisition costs                               --          2,340

Total operating expenses                        82,707       51,564
  Income from operations                        17,627        6,229

Interest Income                                  2,473          820
  Income before income taxes and equity in
    net loss from  unconsolidated affiliate     20,100        7,049

Income taxes                                     7,857        2,770
  Income before equity in net loss
   from unconsolidated affiliate                12,243        4,279

Equity in net loss from
 unconsolidated affiliate                          353         --
  Net income                                 $  11,890    $   4,279

Basic net income per share                   $    0.20    $    0.08
Diluted net income per share                 $    0.18    $    0.07

Weighted average common shares                  58,104       54,278
Weighted average common share-equivalents        8,416        6,870
Weighted average common shares and
 common share equivalents                       66,520       61,148

Pro forma Data:(1)
  Income before income taxes and
   equity in net loss from
   unconsolidated affiliate                     20,100        7,049
Non-cash & merger-related charges                  994        4,608
Equity in net loss from
 unconsolidated affiliate                         (353)        --
Pro forma income before taxes                   20,741       11,657
Pro forma tax expense                            8,089        4,756

              Pro forma net income           $  12,652    $   6,901

Pro forma basic net income per share         $    0.22    $    0.13
Pro forma diluted net income per share       $    0.19    $    0.11

Weighted average common shares                  58,104       54,278
Weighted average common stock equivalents        8,416        6,870
Weighted average common shares
 and stock equivalents                          66,520       61,148

(1) The pro forma data excludes merger and acquisition related
    expenses, including stock-based compensation, the amortization of
    purchased intangible assets and other non-recurring items. This
    does not purport to be prepared in accordance with Generally
    Accepted Accounting Principles.


Consolidated Balance Sheets (in thousands)
                                               March 31,  Dec. 31,
                                                 2000       1999
Assets                                        (Unaudited)
Current Assets:
Cash and short-term investments                $219,832   $196,109
Accounts receivable, net                         77,917     75,170
Unbilled revenues on contracts                   15,773     13,474
Deferred income taxes                             1,311      1,311
Prepaid expenses and other current assets        10,415      7,928
  Total current assets                          325,248    293,992

Net fixed assets and other assets                41,521     32,615
Net intangibles                                  15,698     16,582
                                               --------   --------
                                                 57,219     49,197

  Total assets                                 $382,467   $343,189

Liabilities and stockholders' equity

Current Liabilities:
Accounts payable and accrued expenses          $ 26,292   $ 20,657
Income taxes payable                              4,172        948
Deferred revenues on contracts                   17,824     15,136
  Total current liabilities                      48,288     36,741

Other long term liabilities                       1,877      1,489

Stockholders' equity                            332,302    304,959

  Total liabilities and stockholders' equity   $382,467   $343,189