CHORDIANT ANNOUNCES RESULTS

FOR THE FIRST QUARTER FISCAL YEAR ENDED DECEMBER 31, 2004

CUPERTINO, California - April 29, 2005 -- Chordiant Software, Inc. (Nasdaq: CHRDE) today announced financial results for the first quarter of fiscal year (FY) 2005 ended December 31, 2004, and filed its Quarterly Report on Form 10-Q with the Securities and Exchange Commission (SEC).

First Quarter FY 2005 Results
Total revenues for the first quarter of FY 2005 were $21.7 million, which compares to revenues of $19.6 million reported for the three months ended December 31, 2003. License revenues for the first quarter of FY 2005 were $8.8 million, compared to $9.2 million reported for the three months ended December 31, 2003. Service revenues for the first quarter of FY 2005 were $12.8 million, compared to $10.4 million reported for the three months ended December 31, 2003. In a press release dated February 15, 2005, Chordiant commented that it expected its revenue for the first quarter to be within its previously announced guidance range of $22 million to $24 million. In April 2005, a customer increased the scope of an implementation project. As a result, the percentage-of-completion method for recognizing revenue required a deferral of certain revenues that the Company had previously anticipated. The deferral became necessary as the Company had not yet filed its Form 10-Q for the first quarter of fiscal year 2005. Deferred revenue totaled $20.2 million as of December 31, 2004. Chordiant had $53.1 million in cash and cash equivalents, short-term restricted cash, and short-term investments at December 31, 2004.

Chordiant posted a U.S. GAAP (Generally Accepted Accounting Principles) net loss of $4.1 million, or $0.06 per share loss for the first quarter of FY 2005 ended December 31, 2004, compared to a GAAP net loss of $3.9 million, or $0.06 per share loss for the three months ended December 31, 2003. Chordiant reported a first quarter FY 2005 non-GAAP financial measure loss of $2.3 million (which excludes stock-based compensation, amortization of intangible assets, purchased in-process research and development and restructuring expense), or a non-GAAP loss of $0.03 per share, compared to a non-GAAP net income (which excludes, stock-based compensation and amortization of intangible assets) of $1.3 million, or $0.02 non-GAAP net income per share for the three months ended December 31, 2003.

Non-GAAP Financial Measurements
Chordiant believes that its non-GAAP financial measure results provide useful information to investors because they reveal results excluding non-recurring 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.

Customer Success
The Company indicated that during the first quarter of FY 2005 ended December 31, 2004, it had completed significant transactions with Barclays Group; Capital One Services, Inc.; a leading retail organization in the United Kingdom; and one of Germany's largest insurance companies.

KiQ Limited Acquisition
In late December, 2004, Chordiant completed its strategic acquisition of KiQ Limited, a privately held United Kingdom company. KiQ provided Chordiant with a decision management system that advances the state of analytics by exploiting the power of predictive data mining, analytical modeling, strategy formulation into real-time decision management and execution. The acquisition resulted in a "purchased in-process research and development" charge of approximately $1.9 million in the first quarter of FY 2005 ended December 31, 2004.

About Chordiant Software, Inc.
Chordiant solutions automate and manage operational business processes for leading service-driven global organizations with a focus on retail finance and telecommunications.

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.

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 Contact:

Steve Polcyn

Chordiant Software, Inc.

(408) 517-6282

steve.polcyn@chordiant.com

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

			Three Months Ended
			December 31, 2004			December 31, 2003
Revenues:
	License	$	8,842		$	9,248
	Service		12,835			10,352
	Total revenues		21,677			19,600
Cost of revenues:
	License		166			574
	Service		7,503			6,237
	Stock-based compensation		(56	)		676
	Amortization of intangible assets		131			794
	Total cost of revenues		7,744			8,281
Gross profit			13,933			11,319
Operating expenses:
	Sales and marketing		7,215			5,695
	Research and development		4,865			4,176
	General and administrative		3,912			1,291
	Stock-based compensation		(105	)		2,671
	Amortization of intangible assets		24			96
	Purchased in-process research and development		1,940			--
	Restructuring expense		(123	)		1,028
	Total operating expenses		17,728			14,957
Loss from operations			(3,982	)		(3,638	)
Interest income, net			210			17
Other income (expense), net			(397	)		141
Net loss before income taxes			(3,795	)		(3,480	)
Provision for income taxes			80			457
Net loss		$	(4,062	)	$	(3,937	)
Other comprehensive income:
	Foreign currency translation gain		638			1,135
Comprehensive loss		$	(3,424	)	$	(2,802	)
Net loss per share:
	Basic and diluted	$	(0.06	)	$	(0.06	)
	Shares used in per share calculation:		72,223			61,560
Supplemental information [1]:
Non-GAAP financial measures and reconciliation:
	Net loss	$	(4,062	)	$	(3,937	)
	Less: Stock-based compensation		(161	)		3,347
	Less: Amortization of intangible assets		155			890
	Less: Purchased in-process research and development		1,940			--
	Less: Restructuring expense		(123	)		1,028
Pro forma net income (loss):		$	(2,251	)	$	1,328
Basic and diluted pro forma net income (loss) per share:		$	(0.03	)	$	0.02
	Shares used in per share calculation [2]:	Basic	72,223			61,560
		Diluted	72,223			69,442

[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 measures 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 a non-GAAP financial measure of net income or net loss, excluding purchased in-process research and development, amortization of deferred 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 of net income or net loss per share calculated in accordance with GAAP and gives investors and analysts insight into profitability of the Company's operating business. Management also believes that the presentation of the 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 share for the three months ended December 31, 2004, is computed excluding total potential outstanding common shares of 14,199 as their effect is anti-dilutive.

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

			December 31, 2004			September 30, 2004
ASSETS
Current assets:
	Cash and cash equivalents		$	47,287		$	55,748
	Marketable securities			4,000			4,000
	Restricted cash			1,780			279
	Accounts receivable, net			17,928			20,161
	Prepaid expenses and other current assets			3,841			3,097
		Total current assets		74,836			83,285
Restricted cash				558			2,057
Property and equipment, net				3,172			3,237
Goodwill				32,028			24,874
Intangible assets, net				6,178			244
Other assets				2,419			1,643
		Total assets	$	119,191		$	115,340
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable		$	6,656		$	6,394
	Accrued expenses			13,981			11,681
	Deferred revenue			18,582			18,459
	Current portion of capital lease obligations			201			191
		Total current liabilities		39,420			36,725
Deferred revenue, long-term				1,622			2,122
Long-term portion of capital lease obligations				257			317
		Total liabilities		41,299			39,164
	Common stock			77			72
	Additional paid-in capital			271,890			262,703
	Deferred stock-based compensation			(4,391	)		(339	)
	Accumulated deficit			(193,411	)		(189,349	)
	Accumulated other comprehensive income			3,727			3,089
		Total stockholders' equity		77,892			76,176
		Total liabilities and stockholders' equity	$	119,191		$	115,340