KANA Software Announces Preliminary Results for the Fourth Quarter of

    Business Editors/High-Tech Editors

    MENLO PARK, Calif.--(BUSINESS WIRE)--Jan. 19, 2005--KANA Software, Inc. (NASDAQ: KANA), the leading provider of Service Resolution Management (SRM) solutions, announced today preliminary results for the fourth quarter of 2004.
    KANA expects that its revenues for the fourth quarter of 2004 will be approximately $13.5 million, at the high-end of management's estimates discussed on the November 9, 2004 conference call regarding Q3 2004 results. Approximately $4.6 million is expected to be recognized as fourth quarter license revenue.
    KANA expects to report its cash position as of December 31, 2004 to be approximately $20.1 million, compared to $24.2 million as of September 30, 2004, in-line with cash flow expectations discussed in the company's 10Q's filed for the second and third quarters of 2004.
    KANA plans to release final results for quarter and year ended December 31, 2004 in February, and will announce the specific date and conference call information in the coming weeks.

    About KANA

    KANA is the leading provider of Service Resolution Management (SRM) solutions that improve customer satisfaction, reduce service costs, and increase revenues. KANA's award-winning suite of customer service solutions for assisted, self, and proactive service enables companies to resolve customer requests quickly and accurately across multiple channels. Built on the industry's most advanced Web architecture, KANA's solutions are in use at more than half of the world's largest 100 companies. For more information visit www.kana.com.

    Cautionary Note Regarding Forward-looking Statements Under the Private Securities Litigation Reform Act of 1995:

    Information in this release regarding KANA's forecasts, projections, expectations, beliefs, and intentions are forward-looking statements that involve risks and uncertainties. All forward-looking statements included in this release are based upon information available to KANA as of the date of this release, which may likely change, and we assume no obligation to update any such forward-looking statement. These statements include statements about KANA's customers' expected benefits and results from KANA applications. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to such differences include, but are not limited to: competition in our marketplace, including introductions of new products or services, or reductions in prices, by competitors; risks associated with lack of market acceptance of KANA's products or services; inability to enhance and develop our products and services within budget and on schedule; inability to attract and retain qualified employees, to manage cash and expenditures or to expand sales; inability to manage our business in light of recent personnel reductions; KANA's history of losses; the effect of potential military action and terrorist activities; and slow economic conditions, particularly as they affect spending by our prospective customers on SRM and similar enterprise software products. These and other factors are risks associated with our business that may affect our operating results and are discussed in KANA's filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and our quarterly reports on Form 10-Q.

    NOTE: KANA and KANA iCARE are registered trademarks of KANA Software, Inc. All other company and product names may be trademarks of their respective owners.

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CONTACT: KANA Software Jessica Hohn, 603-665-1306 jhohn@kana.com or Media: PAN Communications Elise Sherman, 978-474-1900 kana@pancomm.com or Investors: Carolyn Bass, 415-445-3232 Market Street Partners Carolyn@marketstreetpartners.com

KEYWORD: MASSACHUSETTS INDUSTRY KEYWORD: SOFTWARE INTERNET E-COMMERCE EARNINGS SOURCE: KANA Software

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