July 22, 2004 | Palo Alto, CA — Metreo, Inc., a leading provider of pricing management software, today reported that the market’s accelerating demand for price-management solutions fueled the company’s record-setting performance including six new deals, the sharpest quarterly sales growth and the highest quarterly operating sales in the company’s history. While Metreo has been growing at a rate of 300 percent year-over-year for the past two years, the upswing in deals allowed Metreo to attain second-quarter sales equal to the company’s total sales in fiscal 2003. All six new customers are global Fortune 500 companies, and two of the deals represent incremental business from current customers.

“While Metreo’s second-quarter results speak for themselves, it’s important to note that market demand for price-management solutions is accelerating rapidly, and that existing Metreo customers are expanding our Smart Pricing Suite™ across multiple operating divisions after realizing the 100 to 400 basis-point improvements that we initially projected,” said Daphne Carmeli, Metreo president and CEO. “I’m seeing an unprecedented number of executive level discussions with prospective customers. They are expending efforts to evaluate the best solution for their business and to ensure they achieve the highest potential returns on their investments. In addition to Metreo’s observations, I am very encouraged by bullish support from industry experts.”

“Price management is the most effective lever to impact profit and revenue, though less than 3% of companies use it to manage price effectively today.” Laura Preslan, The AMR Research Alert, “AMR Research’s Price Management Model,” May 12, 2004. Furthermore, in her June 7, 2004 report “Price Management: How the Leaders Succeed”, she states: “Big benefits await those who apply the price lever effectively; however, companies must be ready before they pull it. Companies that tackle price management from a business process perspective win, and they win big.”

Metreo Second-Quarter Highlights

During the second quarter, Metreo:

• Recorded the highest total sales of any quarter in the company's history
• Achieved a 300 percent increase in year-over-year revenue growth
• Achieved a 100 percent increase in sales from fiscal year 2003
• Signed six new deals, with entry points spanning Metreo's entire Price Execution, Price Planning, and Price Analytics solution suite
• Based on successful operational results, won incremental business into new operating divisions and to existing divisions for additional solution modules

About Metreo
Metreo is a leading provider of price optimization software. Through Metreo's Integrated Pricing Solution, global corporations are achieving significant profit improvement through better pricing decisions and disciplined price execution. Metreo's solutions provide optimal prices that maximize business objectives in every segment, create an evaluation and decision framework for guided negotiation, and then adapt company pricing to changing business opportunities and customer buying behavior. Its customers include industry leaders such as Eaton Corp., Essex Electric, Hewlett Packard, Honeywell, Owens Corning, and Oncology Therapy Network (a Bristol-Myers Squibb division), and DHL. For more information, please visit www.metreo.com.