Pivotal Reports Record First Quarter Revenue

Revenues increase 90 percent


North Vancouver, BC, October 15, 1999 — Pivotal Corporation (NASDAQ: PVTL) ('Pivotal'), a leading provider of eBusiness relationship management solutions, today announced financial results for its first quarter ended September 30, 1999.

Net revenue for the first quarter of fiscal 2000 increased 90 percent to $8.7 million compared to $4.6 million in the first quarter of fiscal 1999. Revenues from licenses increased 86 percent to $6.1 million in the first quarter of fiscal 2000 compared to sales of $3.3 million in the first quarter of fiscal 1999. Revenues from services and maintenance increased 100 percent to $2.6 million in the first quarter of fiscal 2000, compared to $1.3 million in the first quarter of fiscal 1999.

Net loss for the first quarter of fiscal 2000 was $686,000, or $0.04 per share, compared with a net loss of $859,000 or $0.06 per share in the first quarter of fiscal 1999. All per share amounts are computed on a pro forma basic basis which assumes conversion of the convertible preferred stock from the original date of issuance.

Pivotal's customer base expanded to 621 this quarter with the signing of 74 new customers spanning diverse industries and geographic markets. New customers include Corner Drugstore.com, Siemens - France, Heller Financial, Cypost, Novartis - UK, NEC - Argentina, RS Components, Edinburgh Petroleum and Mercer Management. In addition, many of Pivotal's existing customers made additional purchases during the quarter including, Seagate Software, Intel Corporation, E.piphany, Kimberly Clark, Serena Software and Marriott International.

"We've started our new fiscal year as a public company with a solid quarter," said Norm Francis, president and chief executive officer for Pivotal. "We are pleased with the number of successes we have achieved. In addition to generating record revenues and completing a successful initial public offering we launched a number of new products, including Pivotal eRelationship 2, and established the B2B Syndicate which offers customers a variety of Internet-based products and services. We are positioned at the intersection of two important markets-customer relationship management and eCommerce."

"We are pleased with our results for the first quarter of fiscal 2000 as we saw strong performance from all of our revenue channels," said Vince Mifsud, chief financial officer and vice president operations for Pivotal. "This quarter has been a solid start to our history as a public company and we have made significant progress in our strategy to fuse customer relationship management and eCommerce technologies."




First Quarter Highlights

PIVOTAL COMPLETES INITIAL PUBLIC OFFERING
On August 5, 1999, Pivotal completed an initial public offering of 3,500,000 common shares at a price of U.S.$12 per share. All 3,500,000 common shares were offered by the company and were listed on the Nasdaq National Market under the symbol 'PVTL'. The common shares were offered by an underwriting group lead managed by Merrill Lynch & Co. and co-managed by Bear, Stearns & Co. Inc. and Dain Rauscher Wessels. On August 19, 1999, the underwriters exercised their right to purchase an additional 475,000 common shares of Pivotal's common shares pursuant to their 15 percent over-allotment option.

PIVOTAL ANNOUNCES B2B WEB SOLUTIONS THAT FUSE ECOMMERCE , CRM AND BUSINESS PORTALS
Pivotal announced Pivotal eRelationship 2, a comprehensive, fully-integrated, all-Web product family consisting of three primary Internet application components: Pivotal eRelationship IntraHub, Pivotal eRelationship PartnerHub and Pivotal eRelationship CustomerHub. The Pivotal eRelationship™ 2 solution fuses an advanced eCommerce server application and an intelligent business portal, with Pivotal's customer relationship management applications to establish an all-Web platform for eBusiness relationship management (eBRM).

PIVOTAL ESTABLISHES INTERNET SYNDICATE FOR B2B EBUSINESS RELATIONSHIP MANAGEMENT
Pivotal announced the Pivotal B2B Syndicate™ which consists of a select group of companies that will provide real-time content, applications and services to users of the Pivotal eRelationship 2 Web application suite. Members of the Pivotal B2B Syndicate produce a rich diversity of online products and services that, when delivered through the Pivotal eRelationship 2 SmartPortal interface, enable sales, marketing and customer service employees to better serve customers and channel partners.

PIVOTAL SHIPS GREAT PLAINS INTEGRATION SOLUTION
Pivotal began shipping PivotalLink™ for Great Plains, enabling companies to seamlessly integrate Pivotal eRelationship and Great Plains Dynamics C/S+, bringing together two best-of-breed solutions to facilitate a complete 360° view of customer and financial data.

PIVOTAL ERELATIONSHIP RECEIVES PRESTIGIOUS AWARD
On September 29, 1999, Pivotal eRelationship was awarded the Editors' Choice Award by Call Center Magazine. The award credits Pivotal's comprehensive customer relationship management solution with improving a company's ability to easily share information obtained by its call center with other corporate departments.

MORE THAN 600 USERS ATTEND SECOND ANNUAL CUSTOMER AND PARTNER CONFERENCE
Industry leaders from more than 20 countries gathered at Whistler, Canada from September 12-15, 1999 to showcase their eBusiness and customer relationship management successes using Pivotal's solutions. The conference celebrated the numerous companies, who by using Pivotal products, have achieved significant, measurable financial results and have made the commitment to redefine their businesses as customer-focused enterprises.

NEW BUSINESS ALLIANCES
Pivotal continued to expand technology and channel partner relationships during the first quarter. New business alliances signed during the quarter include Incentive Systems, Interactive Intelligence, ServiceWare, fourthchannel, Endurant Business Solutions, Lighthouse Group, M1 Software, Vital Solutions and DC Systems.


PIVOTAL CORPORATION
Consolidated Statements of Operations
(Expressed in United States dollars; all amounts in thousands except per share data)
(Unaudited)

Three Months Ended

Sept 30, 1998
Sept 30, 1999


Revenues:
Licences $ 3,276
$ 6,097

Services and maintenance 1,292
2,578


Total revenues 4,568
8,675


Cost of revenues:
Licenses 73
284

Services and maintenance 562
1,368


Total cost of revenues 635
1,652


Gross profit 3,933
7,023


Operating expenses
Sales & Marketing 3,488
5,715

Research and development 808
1,569

General and administrative 543
707


Total operating expenses 4,839
7,991


Loss from operations (906)
(968)

Interest and other income 107
357


Loss before income taxes (799)
(611)


Income taxes (60)
(75)


Net loss $ (859)
$ (686)


Loss Per Share :
Basic and fully diluted $ (0.22)
$ (0.05)

Pro-forma basic and fully diluted $ (0.06)
$ (0.04)


Weighted average number of shares used to calculate loss per share:

Basic and fully diluted 3,854
13,693

Pro-forma basic and fully diluted 14,618
18,380





PIVOTAL CORPORATION
Condensed Consolidated Balance Sheets
(Expressed in United States dollars; all amounts in thousands except per share data)

June 30, 1999
Sept 30, 1999

ASSETS (unaudited)


Current Assets
Cash and cash equivalents $ 9,338
$ 51,710

Accounts receivable 8,304
9,208

Prepaid expenses 1,029
1,493


Total current assets 18,671
62,411


Property and Equipment, net 3,051
3,588


Total assets $ 21,722
$ 65,999


LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY

Current Liabilities
Accounts payable and accrued liabilities $ 6,329
$ 7,584

Deferred revenue 5,085
5,574


Total current liabilities 11,414
13,158


Redeemable convertible preferred shares 17,500
-



Shareholders' (Deficit) Equity (7,192)
52,841


Total liabilities and shareholders' (deficit) equity $ 21,722
$ 65,999
Pivotal Corporation enables large and medium-sized businesses worldwide to make, serve, and manage customers with superior speed and efficiency by providing XML-based demand chain networks that deliver personalized customer experiences across every touch point in real-time. These networks unify Internet commerce, CRM, eSelling, and wireless technologies to manage collaborative relationships between customers, business partners, and employees; guide intelligent commerce transactions across multiple channels; seamlessly integrate the demand chain with the supply chain; and fully exploit Microsoft platform standards.


Pivotal solutions are sold in 35 countries and are available in English, French, German, Spanish, Portuguese, Swedish, Japanese and Chinese. Pivotal's worldwide customer base includes more than 1,000 organizations in traditional, commercial and public market sectors and the new digital economy, including KPMG, Intrawest Corporation, Emerson Electric, US Filter, Ericsson, Nissan Motor Corp., HarperCollins Publishers, Qiagen Inc., Deutsche Bank, Trader.com, Southern Company, Lucent Technologies, Inc., NEC, Deloitte & Touche, Principal Financial Group and Red Cross Australia.


Pivotal is a public company traded on the NASDAQ under the symbol “PVTL” and the Toronto Stock Exchange under the symbol “PVT.” More information can be found on the corporate Web site at http://www.pivotal.com.

This press release contains forward-looking statements which can be identified by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," " predicts", "potential" or "continue" or the negative of such terms or comparable terms. In particular, this release contains forward-looking statements about the anticipated growth of certain markets; Pivotal's future investment plans and its ability to maintain leadership in the eBusiness marketplace. These statements are based on management's current projections, beliefs and opinions. Actual results could differ materially from those anticipated in these statements based upon a number of factors including: lack of growth in the CRM and eCommerce markets; and the performance of Pivotal's competitors. Pivotal undertakes no responsibility to update forward-looking statements if circumstances or management's projections, beliefs or opinions change. Investor Contact:
Vince Mifsud
Tel: 604/904-5303
Email: investor-relations@pivotal.com

Jacqueline Voci
Tel: 425.897.6992
Fax: 425.897.8401
Email: jvoci@pivotal.com