CyberSource Announces Second Quarter 2002 Financial Results

Guide to E-Commerce Technology

Gross Margins are Record 54% for Quarter

MOUNTAIN VIEW, Calif., July 17 -- CyberSource Corporation (NASDAQ: CYBS) , a leading provider of risk management and electronic payment solutions for enterprise businesses, today reported financial results for its second quarter ended June 30, 2002.

Revenue for the second quarter of 2002 was $6.9 million, consistent with the Company`s guidance for the quarter. Gross margins were a record 54% up from the Company`s guidance of 52% and up from a pro forma gross margin of 43% for the same period last year. Net loss per share was ($0.09), $0.03 better than the Company`s prior guidance of ($0.12) for the quarter and a significant improvement from the ($.63) net loss recorded in the same period last year. This net loss of ($.09) compares to a pro forma net loss, which excludes goodwill and other intangible asset amortization and deferred compensation, for the three months ended June 30, 2001 of ($.26).

"In a difficult market environment, I am very pleased with our results this quarter. Our sales team has worked hard to win customers as has our entire company to produce new products and maintain high levels of customer satisfaction," said Bill McKiernan, chairman and CEO of CyberSource. "The payment market wants a solution provider that will deliver world-class products, services, and support such as those offered by CyberSource."

CyberSource processed approximately 50.3 million transactions in the quarter ended June 30, 2002. Excluding PayPal, a former significant customer, transaction volume increased 37% in Q2 2002 compared to Q2 2001. During the course of the quarter, CyberSource added several notable new customers, including Fujitsu PC Corporation, Orchard Supply Hardware, Seiko Instruments USA and the Worldwide Retail Exchange.

Net loss for the second quarter of 2002 was $3.0 million, or ($0.09) per share, as compared to a net loss of $22.3 million, or ($0.63) per share, in the second quarter of 2001. The net loss of $22.3 million for the second quarter of 2001, includes amortization of goodwill and other intangible assets of $12.3 million and deferred compensation amortization of $0.7 million. There were no pro forma items excluded from the net loss for the second quarter of 2002.

"Transaction volumes continue to be strong. B2C online sales are still forecasted to more than double during the period from 2002 to 2005 according to Forrester Research and Gartner Group. New markets, such as international, point of sale, and small business offerings are good opportunities for CyberSource. With our cash balance, increased margins, decreased operating expenses and solid infrastructure, and several new channel alliances, we are well positioned to take advantage of projected online transaction growth.

"CyberSource will host a public conference call to discuss the second quarter results and current business developments today at 4:30 p.m. Eastern time (1:30 p.m. Pacific), which can be accessed by either of the following ways:
Live web cast http://www.cybersource.com/cgi-bin/ir.pl A replay of this web cast will remain available at this location through July 31, 2002.
Live conference call 888-542-8515 (U.S. and Canada) 706-634-2163 (International) A taped replay of this call will be available for 48 hours. The dial-in numbers are 800-642-1687 (U.S.) 706-645-9291 (International). The call`s ID number is: 4733578.

About CyberSourceCyberSource
Corporation is a leading provider of risk management and electronic payment solutions for enterprise businesses selling via multiple sales channels. CyberSource solutions manage transaction risk and enable electronic payment processing for Web, call center/IVR, and POS environments. CyberSource professional services designs, integrates and optimizes enterprise-wide commerce transaction systems. Approximately 3,000 businesses use CyberSource solutions, including over half of the Dow Jones Industrial companies. The company is headquartered in Mountain View, California, and has sales and service facilities in Japan, the United Kingdom, and other locations in the United States. For more information, please visit CyberSource`s web site at http://www.cybersource.com/ or email info@cybersource.com.

Statements in this release that are not purely historical are forward-looking statements, including any statements regarding beliefs, plans, estimates, projections, expectations, goals or intentions regarding the future. Forward-looking statements in this release include statements (1) regarding transaction volumes continuing to be strong; (2) regarding our quality, customer support, world class solutions, and reliability; (3) that with our cash balance, increased margins, decreased operating expenses and solid infrastructure, including several new alliances, we are well positioned to take advantage of this projected online transaction growth; and, (4) regarding new markets, such as international, point of sale, and small business offerings being good opportunities. Factors that could cause actual results to differ materially include risks and uncertainties such as any unforeseen event or any unforeseen technical difficulties related to the Internet as a whole or to the CyberSource services in particular, the rate of spending by CyberSource`s customers, the rate of internal spending, the pace of growth of eCommerce, the development by CyberSource and its competitors of new products and services, and general economic conditions. It is important to note that actual outcomes could differ materially from those in such forward-looking statements. Readers should also refer to the documents filed by CyberSource with the Securities and Exchange Commission, specifically the annual report filed on Form 10-K for the year ended December 31, 2001, filed with the Securities and Exchange Commission on March 27, 2002, and our quarterly reports filed on Form 10-Q from time to time, all of which identify important risk factors.

CONTACT:
Steven Pellizzer
Vice President of Finance of CyberSource Corporation
+1-650-965-6006
stevep@cybersource.com