Docent Reports Financial Results for the Second Quarter Ended June 30, 2003; Announces Global Fortune 500 Customer Wins at BMW North America, NCR and BMO Financial Group

Business Wire, July 23, 2003

Business Editors/High-Tech Writers

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--July 23, 2003

Docent(R), Inc. (Nasdaq:DCNT), a leading provider of integrated software solutions proven to directly drive business performance through learning, today announced the financial results of its second quarter ended June 30, 2003.

Docent's second quarter 2003 revenue was $7.3 million, an increase from $6.6 million reported in the second quarter of 2002.

On a GAAP basis, the second quarter 2003 net loss was $2.7 million, or 21 cents per share, compared to a net loss of $6.8 million, or 49 cents per share, in the second quarter of 2002.

"We are pleased with our performance in the second quarter, especially our 10 percent revenue growth over the second quarter of 2002, and our continued progress in reducing our losses and cash usage," said R. Andrew Eckert, president and chief executive officer. "We have progressively reduced Docent's net loss in each of the seven most recent quarters and our cash usage has been reduced from $14.9 million in the fourth quarter 2001 to $1.9 million in the most recent quarter," he stated.

"Our solution suite and in particular, Docent Analytics(TM) continued to gain acceptance in the market place during the second quarter. We have been gratified to see the industry and other players follow our product introductions and solution messaging," Eckert said. "In head to head competition at major accounts, Docent continues to dominate the vendor of choice decisions. As contracts take longer to be signed in today's business climate, I believe that winning these all-important selections is the best indicator of future success," he added.

At the end of the second quarter of 2003, Docent had $35.8 million in cash and short-term investments, or approximately $2.50 per share. Deferred revenue was $7.3 million as of June 30, 2003, compared to $6.3 million as of June 30, 2002. Accounts receivable days sales outstanding (DSO) was 53 days at the end of the second quarter of 2003, compared to 82 days at the end of the second quarter of 2002 quarter.

For the six months ended June 30, 2003, revenue was $14.7 million; flat with the $14.7 million reported for the first half of 2002. On a GAAP basis, Docent's net loss was reduced to $5.6 million, or 43 cents per share, from $16.6 million, or $1.18 per share in the first half of 2002.

Second Quarter Highlights

-- New customer wins at BMW North America, NCR and, in

partnership with Exult, the BMO Financial Group (parent of

Bank of Montreal).

-- A record quarter in Japan as a result of Docent's sustained

investment in this market over the past two years. Docent

signed a license agreement with Works Applications, a leading

Enterprise Resource Planning (ERP) vendor in Japan and added

Pfizer Japan as a new customer. Docent's installed base in

Japan also includes NEC, Sony and NTT Comware.

-- Continued progress in Europe. Docent added the Swedish

National Labor Board as a new customer and also went live at

Carrefour in France, the second largest retail chain in the

world, as well as the Football Association and the University

of Sheffield in the United Kingdom.

-- Expansion of Docent's relationship with Exult, a leader in the

fast growing business process outsourcing solutions market, by

adding new modules of the Docent Enterprise(TM) suite to the

license agreement. Docent Enterprise is the embedded learning

component of Exult's comprehensive human resources solutions

that serve premier corporations worldwide, including

International Paper, British Petroleum and BMO Financial

Group. Docent is the de-facto standard in the Human Resources

Outsourcing area with nearly all identified major deals

running on the Docent solution.

Financial Outlook

The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements do not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed after July 23, 2003.

For the third quarter of 2003, Docent expects revenue to be between $7.0 million and $8.0 million compared to $7.3 million in the second quarter of 2003. On a GAAP basis, the net loss is expected to be between 19 cents and 22 cents per share compared to 21 cents per share in the second quarter of 2003.

TELECONFERENCE WEB CAST

Docent management has scheduled a teleconference for 2:00 p.m. (PDT), 5:00 p.m. (EDT) today to discuss financial results and business events for the second quarter of 2003, as well as the current outlook for the third quarter of 2003. A live Web-cast of the conference call can be accessed through the Investor Relations section of Docent's Web site at http://www.docent.com. From this site, you can listen to the teleconference, assuming that your computer system is configured properly. A telephone replay of the teleconference will be available on Wednesday, July 23, beginning at approximately 4:00 p.m. (PDT) through the close of business on July 30, 2003. The replay can be accessed by dialing: 402-344-6811, no access code is required.