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On November 11, 2003, Critical Path, Inc. (the “Company”) issued a press release announcing the Company’s financial results for its third fiscal quarter ended September 30, 2003. The full text of the Company’s press release is furnished herewith as Exhibit 99.1.

The information in this Current Report, including but not limited to Exhibit 99.1, is being furnished and shall not be deemed “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that Section. The information in this Current Report, including but not limited to Exhibit 99.1, shall not be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, except as shall be expressly set forth by specific reference in such a filing.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SAN FRANCISCO (November 11, 2003) – Critical Path, Inc. (Nasdaq: CPTH), a global leader in digital communications software and services, today announced financial results for the third quarter ended September 30, 2003.

Revenues for the third quarter of 2003 were $16.2 million, compared to $18.1 million in the second quarter of 2003. Cash operating expenses, which exclude amortization, depreciation and restructuring charges, improved to $21.8 million, compared with $23.6 million in the second quarter of 2003.

Based on Generally Accepted Accounting Principles (GAAP) in the United States, net loss attributable to common shares for the third quarter of 2003 was $18.6 million, or $0.92 per share, compared to $11.0 million, or $0.55 per share in the second quarter of 2003.

Earnings before interest, taxes, depreciation and amortization, adjusted to exclude special charges (Adjusted EBITDA), amounted to a loss of $5.6 million in the third quarter of 2003, compared to an Adjusted EBITDA loss of $5.4 million in the second quarter of 2003.

“Although we are obviously disappointed with our revenue for the quarter, the results do not reflect a number of significant new customer commitments for our hosted and licensed solutions that we expect will result in revenue in future quarters,” said William McGlashan, Jr., chairman and chief executive officer of Critical Path. “Our latest deals with such customers as T-Mobile, Virgin.net, SK Communications, AFLAC, Z-Tel, Telecom Italia Media, Wind and one of the largest financial services companies in Europe demonstrate our continued traction and market opportunity. In addition, we continued to reduce expenses while also investing significantly in our new hosted business, which we believe will ultimately create substantial value for the Company.”

As of September 30, 2003, the Company’s cash and cash equivalents totaled $18.2 million as compared with its June 30, 2003 balance of $24.5 million. During the quarter the Company used cash of approximately $3.2 million to fund operating losses, approximately $1.1

million in restructuring payments, and approximately $3.1 million in capital expenditures for an aggregate cash usage of $7.4 million. These uses were offset by net cash proceeds from financing activities of approximately $900,000 and approximately $200,000 related to the effects of foreign exchange. In the current quarter it will be essential to the Company’s continued viability for it to complete a financing or other strategic transaction. The Company is currently in negotiations in an attempt to raise additional capital.

Regulation G
The Company uses both GAAP and non-GAAP metrics to measure its financial results. It utilizes two primary non-GAAP metrics: cash operating expenses and Adjusted EBITDA. Management believes that, in addition to GAAP metrics, these non-GAAP metrics assist the Company in measuring its cash based performance. In addition, management believes these non-GAAP metrics are useful to investors because they remove unusual and nonrecurring charges that occur in the affected period and provide a basis for measuring the Company’s financial condition against other quarters. Since the Company has historically reported non-GAAP results to the investment community, management also believes the inclusion of non-GAAP measures provides consistency in its financial reporting. However, non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The calculations for cash operating expenses and Adjusted EBITDA are in the Alternative Measurement Reconciliation table below.

Conference Call
Critical Path will host a conference call tomorrow, Wednesday, November 12, 2003, to discuss the financial results for the third quarter of 2003. Those who would like to participate in the conference call should dial 877-231-3543 (in USA) or +1 706-634-1329 (international) prior to 7:50 AM EST. The conference call and its replay will also be available via Web cast from the Company’s Web site, www.criticalpath.net. A telephone replay of the conference call will be available for seven days following the call. To access the replay, please dial 800-642-1687 (in USA) or +1 706-645-9291 (international), passcode 3467213. The Web cast and this earnings release will be available on our Web site for twelve months following the conference call.

About Critical Path, Inc.
Critical Path, Inc. (Nasdaq: CPTH) is a global leader in digital communications software and services. The company provides messaging solutions – from wireless, secure and unified messaging to basic email and personal information management – as well as identity management solutions that simplify user profile management and strengthen information security. The

standards-based Critical Path Communications Platform, built to perform reliably at the scale of public networks, delivers the industry’s lowest total cost of ownership for messaging solutions and lays a solid foundation for next-generation communications services. Solutions are available on a hosted or licensed basis. Critical Path’s customers include more than 700 enterprises, 200 carriers and service providers, eight national postal authorities and 35 government agencies. Critical Path is headquartered in San Francisco. More information can be found at www.criticalpath.net.

This press release contains forward-looking statements by the Company and its executives regarding the market for products and services like ours, the demand for our products, and the performance of our senior management in achieving our goals. The words and expressions “look forward to,” “will,” “expect,” “plan,” “believe,” “seek,” “strive for,” “anticipate,” hope,” “estimate” and similar expressions are intended to identify the Company’s forward-looking statements. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These risks include, but are not limited to, our success in raising sufficient capital to continue operations, our evolving business strategy and the emerging and changing nature of the market for our products and services, our ability to deliver on our sales objectives, the ability of our technology and our competitors’ technologies to address customer demands, changes in economic and market conditions, unplanned system interruptions and capacity constraints, software and service design defects. These and other risks and uncertainties are described in more detail in the Company’s filings with the U.S Securities and Exchange Commission (www.sec.gov) made from time to time, including Critical Path’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002,and Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31 and June 30, 2003, as may be amended from time to time, and all subsequent filings with the Securities and Exchange Commission (www.sec.gov). The company makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date any such statement is made.

Note to Editors: Critical Path and the Critical Path logo are the trademarks of Critical Path, Inc. All other trademarks are the property of their holders


			December 31,			September 30,
			2002			2003

						(Unaudited)
ASSETS
Current assets
	Cash and cash equivalents		$	33,498		$	18,247
	Short-term marketable securities			5,583			—
	Accounts receivable, net			22,818			16,382
	Other current assets			4,030			5,744

		Total current assets		65,929			40,373
Long-term marketable securities				3,990			—
Equity investments				357			—
Property and equipment, net				18,142			16,080
Goodwill				6,613			6,613
Restricted cash				2,729			—
Other assets				6,246			5,450

		Total assets	$	104,006		$	68,516

LIABILITIES, MANDATORILY REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS’ DEFICIT
Current liabilities
	Accounts payable		$	28,093		$	23,955
	Accrued liabilities			3,764			3,174
	Deferred revenue			10,788			8,147
	Line of credit facility			—			4,900
	Capital lease and other obligations, current			3,323			2,823

		Total current liabilities		45,968			42,999
Convertible subordinated notes payable				38,360			38,360
Capital lease and other obligations, long-term				1,332			433

		Total liabilities		85,660			81,792

Mandatorily redeemable preferred stock				26,900			47,909

Shareholders’ deficit				(8,554	)		(61,185	)

		Total liabilities, mandatorily redeemable preferred stock and shareholders’ deficit	$	104,006		$	68,516

CRITICAL PATH, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)


			Three Months Ended									Nine Months Ended

			September 30,			June 30,			September 30,			September 30,			September 30,
			2002			2003			2003			2002			2003

Net revenues
	Software license		$	5,929		$	5,592		$	4,264		$	27,740		$	14,903
	Hosted messaging			6,461			4,856			4,583			19,007			14,825
	Professional services			3,053			3,155			2,574			7,635			8,949
	Maintenance and support			3,725			4,533			4,744			10,917			13,658

		Total net revenues		19,168			18,136			16,165			65,299			52,335

Cost of net revenues
	Software license			563			722			541			1,436			3,060
	Hosted messaging			7,448			7,103			6,196			22,835			19,562
	Professional services			2,393			2,910			2,734			7,002			9,094
	Maintenance and support			2,222			1,387			1,263			6,549			4,579
	Amortization of purchased technology			4,631			—			—			13,892			—
	Stock-based expense — Hosted messaging			113			—			—			530			8
	Stock-based expense — Professional services			50			—			—			196			3
	Stock-based expense — Maintenance and support			92			—			—			364			6

		Total cost of net revenues		17,512			12,122			10,734			52,804			36,312

Gross profit				1,656			6,014			5,431			12,495			16,023

Operating expenses
	Sales and marketing			10,945			7,931			7,150			33,262			24,390
	Research and development			5,154			4,813			4,608			15,329			14,044
	General and administrative			5,362			3,320			3,228			18,336			9,774
	Amortization of intangible assets			6,209			—			—			18,578			—
	Stock-based expense — Sales and marketing			452			—			—			3,637			18
	Stock-based expense — Research and development			287			—			—			1,062			15
	Stock-based expense — General and administrative			212			—			—			3,620			9
	Restructuring and other expense			—			892			953			1,539			5,034

		Total operating expenses		28,621			16,956			15,939			95,363			53,284

Loss from operations				(26,965	)		(10,942	)		(10,508	)		(82,868	)		(37,261	)
Non-operating expenses
	Interest and other income (expense), net			1,927			3,526			(3,944	)		(803	)		(6,845	)
	Interest expense			(740	)		(783	)		(852	)		(2,256	)		(2,404	)
	Gain on investments, net			—			349			—			—			349
	Equity in net loss of joint venture			—			—			—			(1,408	)		—

		Total non-operating expenses		1,187			3,092			(4,796	)		(4,467	)		(8,900	)

Loss before provision for income taxes				(25,778	)		(7,850	)		(15,304	)		(87,335	)		(46,161	)
Provision for income taxes				(234	)		(287	)		(273	)		(255	)		(754	)

Net loss				(26,012	)		(8,137	)		(15,577	)		(87,590	)		(46,915	)
Accretion on mandatorily redeemable preferred stock				(3,600	)		(2,839	)		(3,025	)		(10,067	)		(9,529	)

Net loss attributable to common shares			$	(29,612	)	$	(10,976	)	$	(18,602	)	$	(97,657	)	$	(56,444	)

Net loss per share attributable to common shares — basic and diluted			$	(1.51	)	$	(0.55	)	$	(0.92	)	$	(5.04	)	$	(2.84	)

	Weighted average common shares outstanding			19,566			19,873			20,126			19,381			19,889

CRITICAL PATH, INC.
Alternative Measurement Reconciliations
(Unaudited)
(In thousands)


				Three Months Ended

				September 30,			June 30,			September 30,
				2002			2003			2003

Adjusted EBITDA (1)
Net loss attributable to common shares				$	(29,612	)	$	(10,976	)	$	(18,602	)
Adjustments
	Cost of net revenues
		Depreciation			5,729			3,822			3,107
		Amortization of purchased technology			4,631			—			—
		Stock-based expense — Hosted messaging			113			—			—
		Stock-based expense — Professional services			50			—			—
		Stock-based expense — Maintenance and support			92			—			—
	Operating expenses
		Depreciation			992			783			810
		Amortization of intangible assets			6,209			—			—
		Stock-based expense — Sales and marketing			452			—			—
		Stock-based expense — Research and development			287			—			—
		Stock-based expense — General and administrative			212			—			—
		Restructuring and other expense			—			892			953
	Non-operating expenses
		Interest and other income and expense, net			(3,520	)		360			4,920
		Change in fair-value of preferred stock instrument			(3,520	)		360			4,920
			Other income and expense, net		1,593			(3,886	)		(976	)
		Interest expense			740			783			852
		Gain on investments, net			—			(349	)		—
		Provision for income taxes			234			287			273
		Accretion on mandatorily redeemable preferred stock			3,600			2,839			3,025

	Total non-cash and non-operating adjustments (2)				21,414			5,531			12,964

Adjusted EBITDA (1)				$	(8,198	)	$	(5,445	)	$	(5,638	)

Cash Operating Costs
Net loss attributable to common shares				$	(29,612	)	$	(10,976	)	$	(18,602	)
Adjustments
	Total net revenues				(19,168	)		(18,136	)		(16,165	)
	Total non-cash, restructuring and non-operating adjustments (2)				21,414			5,531			12,964

Cash Operating Costs				$	(27,366	)	$	(23,581	)	$	(21,803	)

(1) Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, adjusted to exclude non-cash stock-based charges, extraordinary restucturing expenses, accretion on redeemable convertible preferred stock and other non-operating expenses.

(2) Total non-cash, restructuring and non-operating adjustments is defined in the Adjusted EBITDA table presented above.


California	000-25331	91-1788300

(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)


350 The Embarcadero, San Francisco, CA		94105

(Address of principal executive offices)		(Zip Code)


	Item 7. Financial Statements and Exhibits.
	Item 12. Results of Operations and Financial Condition.
SIGNATURE
EXHIBIT INDEX
Exhibit 99.1


Exhibit No.		Description

99.1		Press Release dated November 11, 2003


For Reporters and Editors:		For Investors:
Critical Path, Inc.		Critical Path, Inc.
Jim Fulton		Investor Relations
415.541.2524		415.541.2619
jim.fulton@criticalpath.net		ir@criticalpath.net
www.criticalpath.net		www.criticalpath.net

Table of Contents

Table of Contents

Table of Contents

Table of Contents


Dated: November 12, 2003

		CRITICAL PATH, INC.

		By: /s/ Paul H. Bartlett Paul H. Bartlett Chief Operating Officer and Chief Financial Officer