Net Perceptions Reports Q2 Revenues Up 341% Year-Over-Year Key Customer Wins Include Best Buy.com, Palm Inc., Warner Music Group, Samsung Corp., Williams-Sonoma, and Cabelas.com

Business Wire, July 24, 2000

Business Editors

MINNEAPOLIS--(BUSINESS WIRE)--July 24, 2000

NETP ends quarter with $115 million in cash;

Operating margin continues to improve

Net Perceptions, Inc. (Nasdaq: NETP) today announced record revenues of $12.4 million for the second quarter ended June 30, 2000, the 12th consecutive quarter of strong revenue growth. Second quarter revenues were up 341% over the $2.8 million reported in the same period last year and up 31% from the $9.5 million reported in the first quarter of 2000. The company reported a pro forma net loss for the quarter of $4.1 million, or ($0.16) per share, before the amortization of goodwill and other intangibles, compared with a loss of $3.1 million, or ($0.20) per share, in the same period in 1999. The company's loss including the amortization of intangibles was $11.7 million, or ($0.46) per share. For the six-month period ending June 30, 2000, the company reported $21.9 million in revenue and a pro forma loss of $7.9 million, or ($0.33) per share, compared with $4.7 million in revenue, and a loss of $6.0 million, or ($0.60) per share, in the first six months of 1999.

"During the quarter we signed significant deals with enterprise class multi-channel retailers and successfully launched our ASP business with five customers demonstrating the solid demand for the Company's product offerings," said Steve Snyder, President and CEO of Net Perceptions "We continued to diversify our license revenue mix, expanded distribution through channel partners, and broadened our market opportunity through ASP delivery capabilities."

Key highlights of the quarter include:

-- Net Perceptions continued to diversify its license revenue

mix. Revenues were recognized from all software products

during the quarter, with 24% of reported license revenues were

attributable to pure "dot.com" companies. New software

customers included BestBuy.com, Palm Inc., Warner Music Group,

Samsung Corp., and Williams-Sonoma.

-- Net Perceptions launched its Application Service Provider

(ASP) platform for e-marketing, in which certain capabilities

are delivered over the web from our Dallas data center. Five

customers were added to the platform during the quarter -

Cabelas.com, Williams-Sonoma, Dean & Deluca, Firstsource and

Express.com. Currently, Net Perceptions has four service

offerings designed to help e-merchants attract, retain and

enhance relationships with their most profitable customers.

-- Net Perceptions and i2 Technologies, Inc. (Nasdaq: ITWO)

announced plans to license Net Perceptions' Knowledge Refinery

product for integration into i2's TradeMatrix(TM)

business-to-business (B2B) and business-to-consumer (B2C)

marketing, commerce, fulfillment, and customer care solutions.

-- Net Perceptions and Hewlett-Packard Company (NYSE: HWP)

announced a reseller agreement that will allow HP to offer Net

Perceptions' products with HP's worldwide e-services

offerings.

-- Net Perceptions and Xchange, Inc., (Nasdaq: EXAP) announced an

agreement to co-market each other's products. The relationship

will provide customers with the first ASP-delivered email

marketing solution that combines Net Perceptions' individually

personalized recommendations and Xchange's targeted email

delivery system.

-- Net Perceptions and Interelate, the leading customer

intelligence application service provider (ASP), announced an

agreement under which Interelate will host and deploy Net

Perceptions' software offerings. The companies also will

cooperate on marketing and sales efforts.

-- Net Perceptions and Documentum (Nasdaq: DCTM), the leading

provider of Internet-scale content management solutions for

powering e-business applications announced an agreement to

integrate Documentum 4i eBusiness Edition with Net Perceptions

for Knowledge Management. Through this integration, the

companies will provide a dynamic and personalized end-user

experience through e-business Web sites.

-- Net Perceptions released new product return on investment data

with The Children's Place (Nasdaq: PLCE). The Net Perceptions

one-to-one email-marketing product delivered more than 10

times the industry purchase rate and more than two times the

industry click-through rate.

"This quarter's results continue to reinforce strong execution," Mr. Snyder said. "We now have over 210 customers, over 360 employees and are well positioned for continued growth and profitability."

About Net Perceptions

Net Perceptions is a leading provider of one-to-one realtime personalization and merchandising software solutions. Net Perceptions' software is designed to drive the earnings and revenues of its customers through a better understanding of its customers, employees and products, enabling businesses to optimize information and product assortments, prices and inventories and to offer the right product to the right customer at the right price. Net Perceptions' customers include many of the world's best-known brands including: J.C. Penney, Williams-Sonoma, Bertelsmann, The Children's Place, Egghead.com, Procter & Gamble, eToys.com, Fingerhut, CDNOW, Hudson's Bay Company, Tower Records and Walgreens. Headquartered in Minneapolis, the company has offices in San Francisco; New York; Austin, Texas; Richardson, Texas; Berkshire, U.K.; Hong Kong; Singapore; Frankfurt, Germany and a joint venture operation in Japan. For more information about Net Perceptions products visit http://www.netperceptions.com or call 800-466-0711.