Pivotal Announces Record Quarter with 116 Percent Year-Over-Year Revenue Growth

Pivotal Corporation (NASDAQ: PVTL), The eBusiness Relationship Company™, today announced financial results for its third quarter ended March 31, 2000

Vancouver, Canada, April 11, 2000 — Pivotal Corporation (NASDAQ: PVTL), The eBusiness Relationship Company™, today announced financial results for its third quarter ended March 31, 2000.

Net revenues for the third quarter of fiscal 2000 increased 116 percent to $14.5 million compared to $6.7 million in the third quarter of fiscal 1999. Revenue from licenses increased 102 percent to $10.1 million in the third quarter of fiscal 2000 compared to $5.0 million in the third quarter of fiscal 1999. Revenues from services and maintenance increased 157 percent to $4.4 million in the third quarter of fiscal 2000, compared to $1.7 million in the same quarter last fiscal year.

Net income for the third quarter of fiscal 2000 was $224,000 or $0.01 per share, compared with a net loss of $647,000 or $0.04 per share in the third quarter of fiscal 1999. All per share amounts are presented on a pro forma diluted basis, which assumes conversion of the convertible preferred stock from the original date of issuance.

Net revenues for the nine-month period ended March 31, 2000 were $34.8 million compared with $17.0 million for the same period last year, an increase of 104 percent. The net loss for the nine-month period ended March 31, 2000 was $626,000 or $0.03 per share, compared with net loss of $2,149,000 or $0.14 per share for the first nine months of fiscal 1999. Software license revenue for the first nine months of fiscal 2000 grew 92 percent over the same period last year, while service revenue grew 139 percent.

Pivotal's enterprise customer base totaled more than 810 this quarter with the signing of 101 new customers spanning diverse industries and geographic markets. New customers include Nissan Motor (Denmark), Software Spectrum, Heller Financial, Telco Online, Fairmont Hotels and Resorts, Royal Mail US, Uniglobe Travel, Pharmasmarket.com, Little Tikes Company, iSalvex.com, HotData, InterCon Security Limited, USFilter, Global Marine Systems, CJ Dream Soft and INMAR Technology Solutions.

According to Norm Francis, president and CEO, Pivotal, "In this quarter, we accomplished several critical advancements in Pivotal's strategy for global expansion and eBusiness leadership. The company unveiled Pivotal eRelationship 2000, which is the most significant advancement of our technology since the company's inception. In addition to a dramatic improvement in scalability, the solution features a three-tiered Internet architecture and industry-leading eBusiness capabilities such as intelligent, real-time analysis and interaction management. The new Pivotal solution has already received industry acclaim - it was demonstrated during Bill Gates' keynote address at the launch of Microsoft Windows 2000 and it currently holds the world record for eBRM scalability on the Microsoft platform. The product launch was well received by the market as demonstrated by the expansion of our customer base to include notable names in industry sectors including financial services, manufacturing, healthcare and technology. Pivotal eRelationship 2000 has reinforced our position as a leading Internet application infrastructure provider."

According to Vince Mifsud, CFO and vice president of operations, Pivotal, "We are very pleased with our performance this quarter in which our revenue growth has increased over the previous quarter. With the launch of Pivotal eRelationship 2000, we are increasing our penetration of the large-enterprise market and as a result we are increasing our deal size. We have continued to invest in all areas of our business by expanding our global operations with office openings in Northern Ireland, Washington, DC, Australia and Japan, expanding our organization to more than 400 employees and increasing our sales team."

Quarterly Highlights

Pivotal eRelationship 2000 Launched
Pivotal announced Pivotal eRelationship™ 2000 featuring the new Pivotal ePower™ 2000 platform with embedded eBusiness Engines for real-time intelligence and interaction management. Pivotal eRelationship 2000 is the first eBusiness Relationship Management (eBRM) solution to exploit new features of the Microsoft Windows 2000 operating system to deliver unprecedented scalability, reliability and performance.

First eBusiness Solution Certified for Microsoft Windows 2000
Pivotal announced that Pivotal eRelationship 2000 is the first eBRM solution to be Microsoft Certified for Windows 2000. To achieve certification, Pivotal underwent a rigorous set of compliance and performance tests administered by a third-party auditor. The Pivotal eRelationship 2000 solution was specifically engineered to optimize for Microsoft Windows DNA technologies - including Windows 2000, XML, XSL, Microsoft Message Queue Server (MSMQ), COM+ and SQL Server 7.0.

Set World Record for eBusiness Scalability
According to Microsoft benchmark testing, Pivotal set a world-record in scalability for the new Pivotal eRelationship 2000 solution on the Microsoft Windows 2000 platform. The benchmark testing was performed under rigorous laboratory conditions in the Microsoft Advanced Performance Facility. It confirmed that Pivotal eBusiness solutions achieve average sub-second user response times with 20,000 concurrent users.

Featured at Bill Gates' Windows 2000 Keynote Address
Pivotal eRelationship 2000 was demonstrated during Bill Gates' keynote address at the worldwide premiere of Microsoft Windows 2000. The solution was showcased as a leading sell-side eBusiness solution at the launch event in San Francisco, CA on February 17, 2000.

Established eBusiness Center of Excellence in Northern Ireland
Pivotal continued its European expansion by establishing an eBusiness Center of Excellence in Belfast with support from the Industrial Development Board (IDB). The center will draw from the talent pool and development resources in Northern Ireland and will employ people in areas such as research and development, technical support, training, and professional services.

Expanded Presence in Latin America
Pivotal, Microsoft and KPMG Consulting announced an eBusiness solution to enable Latin American companies to make a fast, cost-effective transition to eBusiness. The alliance includes the development of localized eBRM products and services for Latin America as well as a joint sales and marketing program.

Opened Offices in Australia, Japan and Washington, DC
Pivotal opened offices in Australia, Japan and Washington, DC as part of its strategy for global expansion.

Received Honors from Industry Experts
Pivotal received top honors from both Upside Magazine and ISM, a leading industry analyst firm. In February, Upside Magazine rated Pivotal as an "E-Business Winner" in its analysis of the most promising eBusiness companies. ISM named Pivotal to its "Top 15 Software Selections for 2000" based on an extensive product review process.

eField Service Solution Announced
Pivotal and ServicePlus Corporation announced an agreement that will provide integrated Web, wireless and Windows field service and support capabilities for Pivotal customers. The solution enables a new generation of field service capabilities and offers companies the ability to manage the entire customer relationship lifecycle from the initial point of contact with sales and support through the complete field and depot service process.

Consolidated Statements of Operations
(Expressed in United States dollars; all amounts in thousands except per share data)
Three months ended Nine months ended
March 31, March 31,
2000 1999 2000 1999
Licences $ 10,125 $ 5,006 $ 24,248 $ 12,605
Services and maintenance 4,412 1,717 10,506 4,399
Total revenues 14,537 6,723 34,754 17,004
Cost of revenues:
Licenses 635 268 1,329 438
Services and maintenance 2,295 822 5,476 1,973
Total cost of revenues 2,930 1,090 6,805 2,411
Gross profit 11,607 5,633 27,949 14,593
Operating expenses :
Sales and marketing 8,214 4,404 20,846 11,825
Research and development 2,409 1,184 6,103 3,158
General and administrative 1,197 566 2,872 1,621
Amortization of goodwill 97 - 129 -
Total operating expenses 11,917 6,154 29,950 16,604
Loss from operations (310) (521) (2,001) (2,011)
Interest and other income (loss) 673 (63) 1,715 45
Income (loss) before income taxes 363 (584) (286) (1,966)
Income taxes 139 63 340 183
Net income (loss) $ 224 $ (647) $ (626) $ (2,149)
Earnings (loss) per share :
Basic $ 0.01 $ (0.17) $ (0.03) $ (0.55)
Diluted $ 0.01 $ (0.17) $ (0.03) $ (0.55)
Pro-forma basic $ 0.01 $ (0.04) $ (0.03) $ (0.14)
Pro-forma diluted $ 0.01 $ (0.04) $ (0.03) $ (0.14)
Weighted average number of shares used
to calculate earnings (loss) per share :
Basic 20,134 3,888 17,951 3,875
Diluted 21,470 3,888 17,951 3,875
Pro-forma basic 20,134 15,725 19,153 14,996
Pro-forma diluted 21,470 15,725 19,153 14,996

About Pivotal Corporation

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.

Cautionary Note about Forward-Looking Statements

This release contains certain forward-looking statements that involve a number of known and unknown risks, uncertainties and other factors that may cause actual results of events to differ materially from those anticipated in our forward-looking statements. Factors that could cause actual results to differ materially include: rapid technological changes in the industry; volatility in the market price of the company's common stock; the company's ability to successfully manage its growth; the ability to maintain and grow successful third party relationships, to improve current products and develop new products, to adequately protect the company's proprietary rights, and other factors as described in the company's SEC filings. Although we believe that the expectations reflected in our forward-looking statements are reasonable, individual results may vary, and we cannot guarantee future results, levels of activity, performance or achievements or other future events. Moreover, neither we nor anyone else assumes responsibility for the accuracy or completeness of forward-looking statements.

For More Information

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