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eGain announces financial results for the Sept 2002 quarter

Company also announces transfer of common stock to NASDAQ SmallCap market

SUNNYVALE, Calif. (October 31, 2002) – eGain Communications Corporation (Nasdaq: EGAN), a leading provider of knowledge-powered customer service software and services for the Global 2000, today announced financial results for the first quarter of fiscal year 2003.

Revenue for the quarter was $5.7 million, compared to $6.3 million in the prior quarter. On a pro-forma (non-GAAP) EBDA basis, which reflects earnings before depreciation, amortization, and other non-cash and restructuring charges, net loss for the quarter narrowed to $2.9 million, or $0.08 per share, compared to a net loss of $5.6 million, or $0.15 per share, in the prior quarter. Other non-cash charges include accreted dividends.

On a GAAP basis, including non-cash and restructuring charges, net loss for the quarter was $8.1 million, or $0.22 per share, compared to a net loss of $57.5 million, or $1.57 per share, in the prior quarter.

“We are pleased to have performed in line with our previously announced targets in a traditionally slow summer quarter,” said Ashutosh Roy, eGain’s chairman and CEO. “We’ve been able to reduce costs and expenses on an EBDA basis by $3.3 million over the prior quarter. Our well-established global operating model allows us to sustain product innovation and customer satisfaction in a tough market. We remain committed to achieving our EBDA breakeven target in the December 2002 quarter,” continued Mr. Roy.

In addition to announcing quarterly results, eGain also announced today that the Nasdaq Stock Market has approved the transfer of the listing of eGain’s common stock from the Nasdaq National Market to the Nasdaq SmallCap Market. The transfer to the SmallCap Market will take effect with the open of business on Tuesday, November 5, 2002.

During the quarter eGain expanded its relationships with existing customers such as Virgin Mobile, Vodafone and Verizon and added 8 new customers including Replacements, Ltd. and OnStar Corporation. eGain also signed new relationships or expanded existing relationships with distribution and systems integrator partners around the world, most notably Hitachi, NS Solutions, Cap Gemini, Deloitte Consulting, eLoyalty and Siemens.

On the product side, the company announced the availability of eGain Call Center BridgeTM 5.0, a unique solution for out-of-the-box integration of eGain’s solutions with leading call center telephony providers. The product provides unprecedented flexibility to call center managers in optimizing the use of blended agents for assisted service across the phone and “live” web channels. This is key to maximizing contact center productivity, as end-customers continue to demand unified, multi-channel customer service from enterprises.

Financial Guidance

Management provides the following financial guidance.

DOLLARS IN MILLIONS, EXCEPT PER SHARE            DATA  Q2: FY03 
 December 2002
Net revenue  $5.5 – $6.0
Total costs & expenses (a)  $5.5 – $6.0
Proforma EBDA per share(earnings before depreciation, amortization   and restructuring charges) (a) (b) $0.02 – $0.00

(a) Excludes depreciation, amortization, other non-cash charges, one-time restructuring charges.
Other non-cash charges include accreted dividends.

(b) Depreciation and amortization are non-cash charges.

About eGain Communications Corporation

eGain (Nasdaq: EGAN – News) is a leading provider of software and services that enable knowledge-powered multi-channel customer service. Selected by 24 of the 50 largest global companies to transform their traditional call centers into knowledge-powered multi-channel contact centers, eGain solutions measurably improve operational efficiency and customer retention, delivering a significant ROI. eGain eService Enterprise, the company’s software suite, also available as a hosted service, includes applications for knowledge management, web self-service, email management, and web collaboration, as well as certified integrations with existing call center infrastructure and business systems. Additionally, eGain offers a comprehensive set of professional services including business consulting, implementation services, 24×7 support, education, and training.

Headquartered in Sunnyvale, California, eGain has an operating presence in 18 countries and serves over 800 enterprise customers worldwide, including ABN AMRO, DaimlerChrysler, and Vodafone. To find out how eGain can help you leverage customer service for competitive advantage, please visit http://www.eGain.com or call the company’s offices – United States: (888) 603-4246; London: +44 (0) 1753 464646; or Sydney: +612 9492 5400.

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Trademarks: eGain, the eGain logo and all other eGain product names and slogans are trademarks or registered trademarks of eGain Communications Corp. in the United States and/or other countries. All other company names and products mentioned in this release may be trademarks or registered trademarks of their respective companies.

Cautionary Note Regarding Forward-looking Statements: All statements in this release that involve eGain’s plans, forecasts, beliefs, projections, expectations, strategies and intentions are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are based on information available to eGain at the time of this release, are not guarantees of future results; rather, they are subject to risks and uncertainties that may cause actual results to differ materially from those set forth in this release. These risks include, but are not limited to, the challenging economic environment; the uncertainty of demand for eGain products; the anticipated customer benefits from eGain products; increased competition and technological changes in the markets in which eGain competes; eGain’s ability to manage its expenditures; and other risks detailed from time to time in the company’s filings with the Securities and Exchange Commission, including the company’s annual report on Form 10-K filed on September 28, 2001, and the company’s quarterly reports on Form 10-Q. eGain assumes no obligation to update these forward-looking statements.

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September Quarter Financial Data

eGain Media Contact

Anand Subramaniam
eGain Communications
Tel: 408 212 3506
Email: pr@egain.com

Investor Contact:

Tel: 408-212-3448
ir@egain.com