Press Release

Revenue Increased 6% and Non-GAAP Net Income Increased 41%

Company Announces a New Stock Repurchase Program

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Oct. 29, 2009-- Art Technology Group, Inc. (NASDAQ: ARTG), the premier provider of commerce solutions, today reported financial results for the third quarter ended September 30, 2009.

Revenue for the third quarter of 2009 grew to $43.4 million, a 6% increase over third quarter 2008 revenue of $40.8 million.

“Revenue, bookings and net income growth exceeded our expectations in the third quarter,” stated Bob Burke, ATG’s president and CEO. “Looking ahead to the fourth quarter, we are very excited about the level of sales activity and demand we’re seeing in the market for our commerce solutions and expect a strong finish to the year.”

Product license bookings, a non-GAAP measure which the company defines as the sale of perpetual software licenses, grew 9% to $10.4 million for the third quarter from $9.5 million in the year ago quarter. Approximately 41% of product license bookings in the third quarter were deferred and will be recognized ratably.

Net income in accordance with GAAP for the third quarter of 2009 increased to $4.0 million, or $0.03 per diluted share compared with net income of $786 thousand, or $0.01 per diluted share, in the third quarter of 2008.

Non-GAAP net income increased to $5.5 million for the third quarter of 2009, or $0.04 per diluted share compared with non-GAAP net income of $3.9 million, or $0.03 per diluted share for the third quarter of 2008.

Cash flow from operations for the third quarter of 2009 was $9.9 million. At September 30, 2009, ATG had $78.1 million in cash, cash equivalents, and marketable securities.

The company’s Board of Directors has approved a new stock repurchase program that authorizes the repurchase of up to $25 million of ATG’s common stock. This new authorization is in addition to the remaining $3.9 million under the Company’s existing $20 million repurchase program authorized in April of 2007. The stock repurchase program authorizes the company to repurchase shares, in the open market or privately negotiated transactions, at times and prices considered appropriate by the company depending upon prevailing market conditions and other corporate considerations. As of October 27, 2009, ATG had approximately 127.0 million shares outstanding.

“We have executed extremely well in 2009 - consistently increasing year over year revenue while containing our costs,” stated Julie Bradley, ATG’s senior vice president and CFO. “We expect strong demand for our solutions to continue driving bookings, revenue and profit growth for the second half of 2009 as compared to the second half of 2008.”

Quarterly Conference Call

ATG management will discuss the company’s third quarter 2009 financial results, recent highlights, and business outlook on its quarterly conference call for investors at 10:00 a.m. ET today. The conference call will be broadcast live over the Internet. Investors interested in listening to the webcast should log on to the “Investors” section of the ATG website, www.atg.com. The live conference call also can be accessed by dialing (866) 723-3575 (or (706) 634-8872 for international calls) and using conference ID No. 33150677. A replay of the call will be available on the company’s website later in the day.

About ATG

A trusted, global specialist in e-commerce, ATG (Art Technology Group, Inc., NASDAQ: ARTG) has spent the last decade focused on helping the world's premier brands maximize the success of their online businesses. ATG Commerce is the commerce platform and business user application solution top-rated by industry analysts for powering highly personalized, efficient and effective e-commerce sites. ATG's platform-neutral optimization services can be easily added to any Web site to increase conversions and reduce abandonment. These services include ATG Recommendations and ATG’s eStara Click to Call and Click to Chat services. The company is headquartered in Cambridge, Massachusetts, with additional locations throughout North America and Europe. For more information, please visit http://www.atg.com.

© 2009 Art Technology Group, Inc. ATG and Art Technology Group are registered trademarks. All other product names, service marks, and trademarks mentioned herein are trademarks of their respective owners.

Use of Non-GAAP Financial Measures

ATG is providing the non-GAAP historical and forward-looking financial measures presented above as the company believes that these figures are helpful in allowing individuals to better assess the ongoing nature of ATG's core operations. A "non-GAAP financial measure" is a numerical measure of a company's historical or future financial performance that excludes amounts that are included in the most directly comparable measure calculated and presented in the GAAP statement of operations.

Net income (non-GAAP) and net income per share (non-GAAP), as we present them in the financial data included in this press release, have been normalized to exclude the net effects of amortization of acquired intangible assets, equity-related compensation, and related tax adjustments. Management believes that these normalized non-GAAP financial measures excluding these items better reflect the company’s operating performance as these non-GAAP figures exclude the effects of non-recurring or non-cash expenses. Management believes that these charges are not necessarily representative of underlying trends in the company's performance and their exclusion provides investors with additional information to compare the company's results over multiple periods.

ATG considers “product license bookings,” a non-GAAP financial measure which the company defines as product license revenue recognized plus net change in deferred license revenue during any given period, to be an important indicator of growth in its software license business, as its business increasingly evolves toward a recurring, ratable revenue model.

The company uses these non-GAAP financial measures internally to focus management on period-to-period changes in the company's core business. Therefore, the company believes that this information is meaningful in addition to the information contained in the GAAP presentation of financial information. The presentation of this additional non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

In accordance with the requirements of Regulation G issued by the Securities and Exchange Commission, the tables above present the most directly comparable GAAP financial measure and reconcile non-GAAP net income and product license bookings to the comparable GAAP measures.

ATG Statement Under Private Securities Litigation Reform Act

This press release contains forward-looking statements about the company’s estimated revenue and earnings. These statements involve known and unknown risks and uncertainties that may cause ATG’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. These risks include the effect of weakened or weakening economic conditions or perceived conditions on the level of spending by customers and prospective customers for ATG’s software and services; financial and other effects of cost control measures; quarterly fluctuations in ATG’s revenues or other operating results; customization and deployment delays or errors associated with ATG’s products; the risk of longer sales cycles for ATG’s products and ATG’s ability to conclude sales based on purchasing decisions that are delayed; satisfaction levels of customers regarding the implementation and performance of ATG’s products; ATG’s need to maintain, enhance, and leverage business relationships with resellers and other parties who may be affected by changes in the economic climate; ATG’s ability to attract and maintain qualified executives and other personnel and to motivate employees; activities by ATG and others related to the protection of intellectual property; potential adverse financial and other effects of litigation (including intellectual property infringement claims) and the release of competitive products and other activities by competitors. Further details on these risks are set forth in ATG’s filings with the Securities and Exchange Commission (SEC), including the company’s annual report on Form 10-K for the period ended December 31, 2008 and its quarterly report on Form 10-Q for the period ended June 30, 2009, as filed with the SEC. These filings are available free of charge on a website maintained by the SEC at http://www.sec.gov.

Source: Art Technology Group, Inc.

Art Technology Group, Inc.
Kim Maxwell, 617-386-1006
Director, Investor Relations
kmaxwell@atg.com