Insightful Announces Operating Results for First Quarter 2008

Seattle, WA - May 1, 2008 -

Insightful Corporation (NASDAQ: IFUL), a leading provider of predictive analytics and reporting solutions, today announced its operating results for the first quarter ended March 31, 2008.

Insightful reported total revenues of $4.9 million for the first quarter of 2008, a decrease of 21% compared to revenues of $6.2 million for the first quarter of 2007. For the first quarter of 2008, Insightful reported a net loss of $0.4 million, or $0.03 per share, compared to a net loss of $1.1 million, or $0.09 per share, for the first quarter of 2007.

Non-GAAP operating results, which exclude stock-based compensation expense and amortization of intangible assets, were a loss of $0.3 million, or $0.02 per share, for the first quarter of 2008, compared to a loss of $0.8 million, or $0.06 per share, for the first quarter of 2007. As described in the section below entitled “Use of Non-GAAP Financial Measures,” non-GAAP earnings or loss differs from net income or loss reported under accounting principles generally accepted in the United States (GAAP) due to the exclusion of stock-based compensation expense and the amortization of intangible assets. The reconciliation of Insightful’s GAAP net loss to its non-GAAP operating results for the quarters ended March 31, 2008 and 2007 are set forth at the end of this release.

Insightful’s cash, cash equivalents, and short and long-term investments totaled $11.2 million at March 31, 2008, up from $11.0 million at December 31, 2007.

“We are pleased with the progress on the path back to profitability that we made during the first quarter,” said Jeff Coombs, president and CEO of Insightful Corporation. “We reduced our non-GAAP operating loss to $269,000 for the quarter, and our cash balance has increased.”

“We are certainly disappointed with our overall revenue decline in the first quarter, as compared to the first quarter of last year,” Coombs continued. “However, we believe we have a strong foundation upon which to continue delivering on our mission to deploy predictive analytics across our customers’ organizations. We have a strong balance sheet and an able R&D department. Despite headcount reductions in the fourth quarter of 2007, we expect to continue delivering a series of product releases built on our S-PLUS platform over the coming quarters. We also believe that Bob Fitzgerald, who joined us on February 1 as vice president of worldwide field operations, is making progress in driving a unified worldwide sales and operations function. He is making a difference in enabling us to better sell to and support global organizations.”

Quarterly Financial Highlights

* Software license revenues were $1.7 million in the first quarter of 2008, compared to $2.0 million in the first quarter of 2007.
* Maintenance revenues were $2.1 million in the first quarter of 2008, compared to $2.0 million in the first quarter of 2007.
* Professional services and other revenues were $1.1 million in the first quarter of 2008, compared to $2.1 million in the first quarter of 2007.
* Domestic revenues were $2.3 million in the first quarter of 2008, compared to $3.1 million in the first quarter of 2007. International revenues were $2.6 million in the first quarter of 2008, compared to $3.1 million in the first quarter of 2007.
* Funded research, which is an offset to research and development expense in the company’s income statement, was $0.4 million in the first quarter of 2008, compared to $0.5 million in the first quarter of 2007.

Use of Non-GAAP Financial Measures

The non-GAAP financial measure of loss included in this press release is different from the GAAP measure of net loss, as this non-GAAP measure excludes certain expenses otherwise included in the computation of net loss. Insightful believes this non-GAAP measure is useful to enhance an overall understanding of its past financial performance and also its prospects for the future. These adjustments to the company’s GAAP results are presented with the intent of providing both management and investors a more complete understanding of Insightful’s underlying operating results and trends. This non-GAAP measure is among the primary indicators management uses as a basis for planning and forecasting of future periods.

The expenses excluded from Insightful’s GAAP results include stock-based compensation expense and amortization of intangible assets arising from the 2004 acquisition from Lucent Technologies, Inc. of the title to the software code underlying the “S” programming language. Stock-based compensation expense and amortization of intangible assets have no current effect on cash or the future uses of cash. Insightful’s stock-based compensation expense fluctuates with changes in the company’s stock price and interest rates. For this reason, changes in stock prices and interest rates could mask variation and trends in Insightful’s GAAP operating results that may otherwise be important to an understanding of the company’s results. The acquisition of intangible assets was an event outside of the course of Insightful’s normal business operations. For these reasons, management believes that exclusion of stock-based compensation expense and amortization of intangible assets may be important to an understanding of Insightful’s ongoing operating performance.

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