CHORDIANT EXCEEDS ITS REVENUE GUIDANCE

 FOR THE FOURTH QUARTER ENDED DECEMBER 31, 2003

Fourth Quarter 2003 Revenue Up 15% Year Over Year

Generates $4 Million Cash From Operations In Fourth Quarter

CUPERTINO, California - January 29, 2004 -- Chordiant Software, Inc. (Nasdaq: CHRD) today announced the financial results for the fourth quarter and full-year ended December 31, 2003. 

Total revenues for the fourth quarter of 2003 were $19.6 million, which exceeded the upper end of Chordiant's guidance of $17 to $19 million, and compared to the $17.8 million in the third quarter of 2003 and $17.1 million reported for the fourth quarter of 2002. License revenues for the fourth quarter of 2003 were $9.2 million, compared to $6.6 million in the third quarter of 2003 and $6.8 million reported for the fourth quarter of 2002. Service revenues for the fourth quarter were $10.4 million, compared to $11.1 million in the third quarter of 2003 and $10.2 million reported for the fourth quarter of 2002. Chordiant had $36.8 million in cash and cash equivalents, short-term restricted cash, and short-term investments at December 31, 2003, an increase of $4.1 million from the third quarter of 2003. On January 26, 2004, Chordiant completed a private placement with Acqua Wellington Opportunity I Limited, resulting in net proceeds to the company of $25 million.   

On a U.S. GAAP (Generally Accepted Accounting Principles) basis, Chordiant's fourth quarter 2003 net loss was $3.9 million, or $0.06 per share, compared to a net loss of $8.6 million, or $0.15 per share for the fourth quarter of 2002. Chordiant reported a fourth quarter 2003 non-GAAP financial measure profit of $1.3 million, which excludes stock-based compensation, amortization of intangible assets and restructuring expenses, or a non-GAAP profit of $0.02 per share, compared to a non-GAAP financial measure loss, which excludes, stock-based compensation, amortization of acquired intangible assets and restructuring expenses, of $3.6 million, or $0.06 per share for the fourth quarter of 2002. Chordiant recorded a restructuring expense of approximately $1.0 million in the fourth quarter that principally includes severance expense associated with restructuring the company's support operations as part of the launch of our Global Resourcing program in Bangalore, India.

For the year ended December 31, 2003, total revenues were $68.3 million, compared to $73.9 million for the full year 2002. On a U.S. GAAP basis, Chordiant continued to reduce its net loss; for the full year of 2003, the company reported a net loss of $16.4 million, or $0.28 per share, compared to net loss of $32.3 million, or $0.59 per share, for the full year 2002. For the full year 2003, Chordiant reported a non-GAAP financial measure loss of $2.3 million, which excludes stock-based compensation, amortization of intangible assets and restructuring expenses, or a non-GAAP financial measure loss of $0.04 per share, compared to a non-GAAP loss, which excludes purchased in-process research and development, stock-based compensation, amortization of intangible assets and restructuring expenses of $17.5 million, or $0.32 per share for the full year 2002.

Chordiant believes that its non-GAAP financial measure results provide useful information to investors because they reveal results excluding non-cash and cash expenses that Chordiant believes are not indicative of its on-going operations. The non-GAAP financial measure information is provided as a complement to results provided in accordance with GAAP, and should not be considered superior to or as a substitute for GAAP measures.

"We are very pleased with posting three sequential quarters of improving non-GAAP financial measured profit, achieving sequential revenue growth, and generating approximately $4 million of cash from operations for the fourth quarter," said Stephen Kelly, Chief Executive Officer. "We are demonstrating consistent performance, delivering three quarters of revenue growth, non-GAAP profitability, and service margins consistent with our direction. We made excellent progress in North America, which contributed approximately 36 percent of our license revenue in the fourth quarter. Therefore, we believe we are well positioned to benefit from a potential IT spending upturn in 2004."

"We continued to expand our enterprise software footprint in both North America and Europe with world-class financial services organizations, and signed enterprise software agreements with CIBC, Canadian Tire Financial Services, the Northern Ireland Social Security Agency, Signal Iduna, and Music Alliance," Kelly said.

2004 Financial Outlook
For the first quarter of 2004, management estimates revenues will be in a range of $19 million to $20 million, with a non-GAAP financial measure operating expenses of between $11 million to $12 million, which excludes stock based compensation costs and amortization of intangible assets. For the full year 2004, management expects revenues in a range of $80 million to $84 million, with non-GAAP operating expenses ranging between $46 million to $48 million, which excludes stock based compensation and amortization of intangible assets. Revenue estimates are based on the assumption that overall technology spending will not deteriorate from current levels.

Teleconference Webcast Today - January 29, 2004 at 2:00 P.M. (Pacific)

Chordiant management has scheduled a teleconference for 2:00 p.m. (Pacific), 5:00 p.m. (Eastern) and 22:00 (London) today to discuss financial results and business events for the fourth quarter and full year 2003, as well as the current outlook for 2004. This teleconference will be webcast live for the public from Chordiant's website at http://www.chordiant.com. Industry analysts and media are invited to attend the conference on a listen-only basis. For more information, including this press release and Chordiant's Current Report on Form 8-K, and non-GAAP financial measures that may be discussed on the webcast as well as the most directly comparable GAAP financial measures and a reconciliation of the difference between the GAAP and non-GAAP financial measures contained in the Form 8-K, and any other material financial and other statistical information contained in the webcast, please visit the Investor Relations section of Chordiant's web site at http://www.chordiant.com. From this site, you can listen to the teleconference, assuming that your computer system is configured properly. A phone replay will also be available for seven days after the live call at (303) 590-3000, code 564373.

About Chordiant Software, Inc.
Chordiant solutions automate and manage operational business processes for leading service-driven global organizations in retail finance, telecommunications and consumer direct industries.
Chordiant orchestrates the unique processes of an organization from the point of customer interaction, through the front and back offices to multiple transactional systems, corporate applications and data stores. Our solutions integrate existing infrastructure to orchestrate the assembly, enhancement and delivery of optimal role based business processes to the appropriate channels. Business value is realized through improved employee productivity, savings in operational costs, and increased business adaptability.
Headquartered in Cupertino, California, Chordiant maintains offices in Boston; Chicago; Mahwah, N.J.; Manchester, N.H.; New York City; London; Paris; Amsterdam; and Munich

Safe Harbor
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. Forward-looking statements in this release are generally identified by words, such as "believes," "anticipates," "plans," "expects," "will," "would," "guidance," "projects" and similar expressions which are intended to identify forward-looking statements. There are a number of important factors that could cause the results of Chordiant to differ materially from those indicated by these forward-looking statements, including, among others, potential difficulties in the assimilation of operations, strategies, technologies, personnel and products of acquired companies and technologies, the impact of perceived or actual weakening of economic conditions on customers' and prospective customers' spending on Chordiant software and services; quarterly fluctuations in Chordiant's revenues or other operating results; failure by Chordiant to meet financial expectations of analysts and investors, including failure resulting from significant reductions in demand from earlier anticipated levels; risks related to market acceptance of Chordiant's products; customization and deployment delays or errors associated with Chordiant products; impact of long sales and implementation cycles for certain Chordiant products; reliance by Chordiant on a limited number of customers for a majority of its revenues; Chordiant's need to retain and enhance business relationships with systems integrators and other parties; Chordiant's use in its products of third-party software; activities by Chordiant and others regarding protection of intellectual property; and competitors' release of competitive products and other actions. Further information on potential factors that could affect the financial results of Chordiant are included in risks detailed from time to time in Chordiant's Securities and Exchange Commission filings, including without limitation Chordiant's Annual Report on Form 10-K and Quarterly Reports filed on Form 10-Q. These filings are available on a Web site maintained by the Securities and Exchange Commission at http://www.sec.gov. Chordiant does not undertake an obligation to update forward-looking or other statements in this release.

Chordiant and the Chordiant logo are registered trademarks of Chordiant Software, Inc. All other trademarks and registered trademarks are the properties of their respective owners.

Chordiant Investor Relations Contacts:
Steve Polcyn	Mike Shannahan
Chordiant Software, Inc.	Chordiant Software, Inc.
(408) 517-6282	(408) 517-6223
steve.polcyn@chordiant.com	mike.shannahan@chordiant.com
Chordiant Media Contact:
Paul Burrin
Chordiant Software, Inc.
(408) 517-6168
paul.burrin@chordiant.com

CHORDIANT SOFTWARE,  INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
 

			Three Months Ended						Twelve Months Ended
			December 31, 2003			December 31, 2002			December 31, 2003			December 31, 2002
Revenues:
	License	$	9,247		$	6,836		$	26,514		$	32,583
	Service		10,352			10,230			41,752			41,268
	Total revenues		19,599			17,066			68,266			73,851
Cost of revenues:
	License		574			362			1,421			1,580
	Service		6,237			6,492			24,593			29,669
	Total cost of revenues		6,811			6,854			26,014			31,249
Gross profit			12,788			10,212			42,252			42,602
Operating expenses:
	Sales and marketing		5,692			7,503			21,423			32,541
	Research and development		4,170			4,692			16,251			20,074
	Purchased in-process research and development		-			-			-			997
	General and administrative		1,785			1,214			6,233			7,662
	Stock-based compensation		3,347			2,131			8,395			3,501
	Amortization of intangible assets		890			932			3,561			3,664
	Restructuring expenses		1,027			1,916			2,189			6,639
	Total operating expenses		16,911			18,388			58,052			75,078
Loss from operations			(4,123	)		(8,176	)		(15,800	)		(32,476)
Interest income / (expense)			17			(55	)		(114	)		(216)
Other income / (expense), net			235			(215	)		61			521
Net loss before income taxes			(3,871	)		(8,446	)		(15,853	)		(32,171)
Provision for income taxes			65			150			550			150
Net loss		$	(3,936	)	$	(8,596	)	$	(16,403	)	$	(32,321)
Net loss per share:
	Basic and diluted	$	(0.06	)	$	(0.15	)	$	(0.28	)	$	(0.59)
	Shares used in per share calculation:		61,560			56,048			59,353			55,055
Supplemental information [1]:
Non-GAAP financial measures and reconciliation
	Net loss		(3,936	)		(8,596	)		(16,403	)		(32,321)
	Less: Purchased in-process research and development		-			-			-			997
	Less: Stock-based compensation		3,347			2,131			8,395			3,501
	Less: Amortization of intangible assets		890			932			3,561			3,664
	Less: Restructuring expenses		1,027			1,916			2,189			6,639
Pro forma net income / (loss):		$	1,328		$	(3,617	)	$	(2,258	)	$	(17,520)
Diluted pro forma net income / (loss) per share:		$	0.02		$	(0.06	)	$	(0.04	)	$	(0.32)
	Shares used in per share calculation [2]:		69,442			56,048			59,353			55,055

[1] The accompanying supplemental pro forma financial information represents a non-GAAP financial measure. A "non-GAAP financial measure" is defined as a numerical measure of a company's financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the company's financial statements. Non-GAAP financial measure of  net income or net loss is used by investors and analysts of Chordiant Software, Inc. (the "Company") as an alternative to GAAP measures when evaluating the Company's performance in comparison to other companies. The Company's management believes that the presentation of non-GAAP financial measures of  net income or net loss, excluding purchased in-process research and development, stock-based compensation, amortization of intangible assets and restructuring expenses, provide useful information regarding the Company's financial performance and earnings potential by calculating and quantifying the effect of certain charges on net income or net loss per share calculated in accordance with GAAP and gives investors and analysts insight into the profitability of the Company's operating business. Management also believes that the presentation of non-GAAP financial measures is consistent with its past practice, as well as industry practice in general, and will enable investors and analysts to compare current non-GAAP measures with non-GAAP measures presented in prior periods. The above non-GAAP financial information may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

[2] Diluted net loss per shares for the three months ended December 31, 2002 and the years ended December 31, 2002 and 2003 are computed excluding potential common shares of 3,004, 7,406 and 5,843, respectively, an their effect is anti-dilutive.

 CHORDIANT SOFTWARE,  INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 

			December 31, 2003		Conformed December 31, 2002
ASSETS
Current assets:
	Cash and cash equivalents		$	36,218	$	30,731
	Short-term investments and restricted cash			581		9,245
	Accounts receivable, net			11,974		9,415
	Other current assets			2,675		3,162
		Total current assets		51,448		52,553
Restricted cash				1,500		1,500
Property and equipment, net				3,071		5,069
Goodwill, net				24,874		24,874
Intangible assets, net				1,414		4,975
Other assets				1,504		1,788
		Total assets	$	83,811	$	90,759
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Borrowings		$	-	$	1,114
	Accounts payable			3,931		5,936
	Accrued expenses			13,038		14,007
	Deferred revenue			14,548		10,927
		Total current liabilities		31,517		31,984
Deferred revenue, long-term				3,848		7,667
Borrowings, long-term				-		136
Other liabilities				-		161
				35,365		39,948
		Total stockholders' equity		48,446		50,811
		Total liabilities and stockholders' equity	$	83,811	$	90,759