Chordiant Software Announces Financial Results for the Second Quarter of Fiscal 2007 Ended March 31

Second Quarter Fiscal 2007 Financial Highlights

• Bookings of $41.6 million;
• Record revenue of $32.8 million, up 25% year over year;
• Record deferred revenue of $64.8 million, up 152% year over year;
• Record backlog of $78.6 million;
• Record GAAP EPS of $0.15;
• Cash flow positive from operations in fiscal Q2; and
• Cash, cash equivalents and restricted cash of $71.7 million.

Business Highlights

• Signed four transactions greater than $1 million with new and existing customers;
• Received two patents. The first was from the US Patent and Trademark Office which awarded Chordiant Patent Number 7,178,109 for innovative user interface design, first introduced in its family of browser-based applications in 2003. The second US Patent Number 7,194,380 covers the Decision Management Suite and how it generates accurate models for use in Chordiant's applications;
• Announced the availability of Chordiant Foundation 6.2, the Customer Experience platform. The platform continues Chordiant's lead in advanced enterprise applications through the introduction of new technology and support for the latest Java platforms.
• Combined with the Decisioning 6.0 release, Chordiant now has a single unified "Cx" platform that is unmatched in capability and performance in the industry;
• Announced a major release of the Chordiant Decision Management suite version 6.0. At the heart of the Chordiant Cx platform, the suite brings business managed decisions and rules to the system and incorporates predictive and adaptive decision models in an industry unique manner;
• Released the Fraud Investigations module, which represents major new functionality for the credit card industry in the space of fraud case management and streamlines the debt recovery of fraudulent transactions; and
• Achieved growth in the Chordiant Mesh collaboration program, with over 700 participants from 16 organizations around the world collaborating on Chordiant solutions.

Customer Wins

Chordiant entered into $1 million plus transactions with new and existing customers including De Lage Landen, a Netherlands based international provider of asset-based financing and vendor finance programs; Sky Broadcasting, the operator of the UK's largest digital pay television platform; and Lloyds TSB, a leading UK financial services group.

Bookings

For the second quarter of FY 2007, Chordiant reported bookings of $41.6 million, compared to the $23.7 million reported for the second quarter of fiscal 2006.

Second Quarter Fiscal Year 2007 Financial Results

Total revenues for the second quarter of fiscal 2007 were a record $32.8 million, an increase of 25% from the $26.3 million reported for the three months ended March 31, 2006. For the six month period ended March 31, 2007, total revenues were $55.7 million, an increase of 14% from the $48.8 million report for the six month period of fiscal 2006. License revenues for the

Chordiant posted a record GAAP net income of $5.0 million, or a net income of $0.15 per share for the second quarter of fiscal 2007 ended March 31, compared to a GAAP net loss of $2.2 million, or $0.07 per share loss for the three months ended March 31, 2006. All share and per share amounts now reflect the 1 for 2.5 reverse stock split completed in February 2007.

Chordiant reported a record second quarter fiscal 2007 non-GAAP net income of $6.4 million, or a fully diluted non-GAAP net income of $0.19 per share, compared to a non-GAAP net income of $0.2 million, or a non-GAAP breakeven net income of $0.00 per share for the three months ended March 31, 2006. Non-GAAP net income excludes stock-based compensation, amortization of purchased intangible assets, restructuring expense and infrequent charges.

Deferred Revenue

Backlog of Business

At March 31, 2007, Chordiant's record backlog, which includes deferred revenue, increased 116% to $78.6 million, as compared to $36.4 million at the end of September 30, 2006. The quarterly change in backlog is primarily related to strong bookings in Europe in the second quarter of FY 2007.

Cash Position

Chordiant increased its cash, cash equivalents and restricted cash position by $25.9 million to $71.7 million at March 31, 2006 as compared to $45.8 million at the end of September 30, 2006.

Non-GAAP Financial Measurements

This press release and the accompanying tables include non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles, please see the section of the accompanying tables titled "NON-GAAP Financial Measures" as well as the related Table C which follows it.

Raises Fiscal Year 2007 Financial Guidance

Today, Chordiant is raising its financial guidance for fiscal year 2007 as follows:

• Chordiant is increasing its total bookings guidance for fiscal year 2007. Total bookings are now expected to range between $160 million and $170 million in FY2007 representing an estimated increase of approximately 59% to 69% from total bookings achieved in fiscal 2006;
• Chordiant is increasing its total revenue guidance for fiscal year 2007. Chordiant now expects total revenue to range between $123 million and $128 million representing an expected increase of between 26% and 31% from total revenue reported in fiscal 2006;
• Chordiant's increased deferred revenue balance of $64.8 million is expected to remain relatively flat for the second half of fiscal 2007;
• Chordiant's total fiscal 2007 GAAP income from operations as a percentage of revenues is now expected to range between 0% and 3% for fiscal 2007 and non-GAAP income from operations as a percentage of revenues is expected to range between 10.5% and 12.5% for fiscal 2007;
• Chordiant now expects to report GAAP fully diluted EPS between $0.03 and $0.12 and non-GAAP EPS between $0.40 and $0.50 for fiscal 2007 based on a fully diluted estimate of 33.8 million shares of common stock;
• Chordiant expects GAAP income from operations as a percentage of revenues for the second half of fiscal 2007 to range between 9% and 13% and expects non-GAAP income from operations to range between 14% and 17% for the same timeframe; and
• Chordiant now expects to exit fiscal 2007 with ending cash and restricted cash balances in the range of $75 million and $85 million, representing a revised positive cash flow estimate of between $30 million to $40 million in fiscal 2007.

These 2007 financial projections and a reconciliation of non-GAAP projections to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles can be found in the accompanying tables titled "Financial Projections" as well as the related Table D which follows it.

Announces Fiscal Year 2008 Financial Guidance

Today, Chordiant is announcing its financial guidance for fiscal year 2008 as follows:

• Chordiant's total bookings for fiscal year 2008 are expected to range between $150 million and $160 million;
• Chordiant's total revenue for fiscal year 2008 is expected to range between $140 million and $150 million;
• Chordiant expects to maintain or slightly increase its deferred revenue balances during fiscal 2008;
• Chordiant's total fiscal 2008 GAAP income from operations as a percentage of revenues is expected to range between 11% and 14% and non-GAAP income from operations as a percentage of revenues is expected to range between 15% and 18%;
• Chordiant expects to report GAAP fully diluted EPS between $0.46 and $0.61 and non-GAAP EPS between $0.60 and $0.76 for fiscal 2008 based on a fully diluted estimate of 36.5 million shares of common stock;
• Chordiant expects to generate positive cash flows in excess of $20 million in fiscal 2008; and
• Chordiant announced it has revised its previous non-GAAP Targeted Operating Model which is posted on Chordiant's website at http://chrd.client.shareholder.com/.

These 2008 financial projections and a reconciliation of non-GAAP projections to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles can be found in the accompanying tables titled "Financial Projections" as well as the related Table E which follows it.

Conference Call and Webcast Scheduled for April 30, 2007

Chordiant Software will host a conference call and webcast to discuss its final financial results for the second quarter of fiscal 2007 ended March 31, and also its fiscal 2007 and fiscal 2008 financial guidance on April 30, 2007 at 2:00 p.m. (PT), 5:00 p.m. (ET) and 22:00 (GMT). The live audio webcast will be available to investors and the general public from the following website:

Alternatively, you may access Chordiant's website at http://www.chordiant.com, where you will see the event listed on the homepage. Access is also possible from Chordiant's Investor Relations website.

The webcast will be archived on the Chordiant website; in addition, a telephone replay will be available on Monday, April 30, 2007, beginning at approximately 5:00 p.m. (PT), 8:00 p.m. (ET), 06:00 (GMT) for seven days after the live call. The replay can be accessed by dialing 303-590-3000, access code 11087854#.

Financial Results Table

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