Press Release

Digital River Beats First Quarter Revenue and Per Share Expectations
Company Operations are Cash Flow Positive in Q1

MINNEAPOLIS, MN, April 25, 2001--Digital River, Inc. (NASDAQ: DRIV), the leading global Commerce Service Provider (CSP), today reported revenues of $13.0 million for the quarter ended March 31, 2001. This represents a sequential increase of 30-percent from revenue of $10.1 million in the fourth quarter, and a year-over-year increase of 90-percent from revenue of $6.9 million in the first quarter of 2000. At March 31, 2001, cash and investments totaled $32.7 million, an increase of $800,000 from year-end levels.

The net loss prior to goodwill amortization and acquisition-related costs was $1.6 million, or $0.07 per share, in the first quarter, a 32-percent improvement from the fourth quarter net loss of $2.4 million, or $0.11 per share, and significantly better than consensus analyst estimates of a loss of $0.10 per share. The net loss for the quarter, including goodwill amortization and acquisition-related costs, was $6.2 million, or $0.28 per share, compared with a net loss of $5.4 million, or $0.24 per share, in the fourth quarter.

"Digital River continues to set the pace as the leading Commerce Service Provider," said Joel Ronning, Digital River's chief executive officer. "Despite what has been a very challenging period for our industry, we continue to achieve solid performance in terms of revenue growth, expense control and our cash position. We have prudently managed our business and are well positioned to achieve our profitability objectives for 2001."

Ronning continued, "Because of our confidence in our company and future, we also announced a share repurchase program of up to $5 million of our outstanding shares."

Industry-Leading Software and Digital Commerce Services

The Software Services Division generated $10.5 million in revenue for the Company in the quarter, versus revenues of $7.7 million in the fourth quarter. The division had earnings before income taxes, depreciation and amortization expenses (EBITDA) of $1.6 million for the quarter, a more than seven-fold increase from $229,000 in Q4. The strong first quarter performance of the Software Services Division was the result of seasonal product sales as well as the January launch of global sites for Symantec, a leading software publisher.

"Digital River is the number one provider of e-commerce services for the software publishing market," said Jay Kerutis, Digital River's president of its Software and Digital Commerce Services Division. "Thousands of companies depend on us to help grow and sustain their businesses. We have grown our business by adding new top-tier clients and by generating incremental sales through e-marketing campaigns for current clients."

Execution of E-Business Services Strategy

The E-Business Services Division generated $2.5 million in revenue for the Company in the quarter, a sequential increase of nearly 10-percent, from $2.2 million in the fourth quarter. The division's EBITDA loss was $2.5 million for the quarter.

Digital River's E-Business Services Division added eight new client contracts in the first quarter, resulting in a total of 53 client contracts, at March 31, 2001. New contracts announced since the end of the fourth quarter include Brunswick Bowling and Billiards, GemPlus and strategic partnerships with Lightning Source and Ingram Micro-Logistics.

"During the quarter, we took significant steps to solidify our product offering and expand our markets," said Ronning. "We continue to set the standard for those in our industry. Our focus on return-on-investment for our clients makes us an invaluable partner and forms the basis of our ongoing relationships."

Future Expectations

Digital River expects to achieve overall Company profitability in the fourth quarter of 2001, when it expects to generate $0.01 of earnings per share, prior to the amortization of goodwill. For 2001, Digital River anticipates revenues to increase approximately 83-percent from the prior year, to $57 million. The Company anticipates a seasonal pattern consistent with prior years, including a slower second quarter, and strong growth during the remainder of the year. The Company expects a loss per share, prior to goodwill amortization, of $0.22 for 2001.

In the second quarter, the Company expects to generate revenue of $12.4 million. The E-Business Services Division revenue is projected to be approximately 27-percent of total revenue in the second quarter. Digital River anticipates that the second quarter loss per share, prior to goodwill amortization and acquisition-related expenses, will be $0.10.

The Company expects cash balances to decrease by $7 million in the second quarter. In addition to the EBITDA loss, the decline is comprised primarily of $3 million related to a decrease in payables from the anticipated seasonal decline in software product gross sales and approximately $2 million in capital expenditures. Cash balances are anticipated to total in excess of $20 million at December 31, 2001.

About Digital River

Founded in 1994, Digital River (NASDAQ: DRIV) is a leading global Commerce Service Provider (CSP), offering thousands of companies complete e-commerce systems and services. The company's world-class infrastructure and professional services are proven to grow businesses quickly and profitably while reducing risk. Digital River's commerce services include e-commerce strategy, site development and hosting, order and transaction management, system integration, product fulfillment and returns, e-marketing and customer service. Digital River's clients include Symantec, Fujitsu, 3M, Siemens, Hewlett-Packard, Polaris, Novell, Autodesk, SONICblue, Adaptec and Staples. For more details about Digital River, visit the corporate Web site at www.digitalriver.com or call 952-253-1234.


Digital River will hold a first quarter conference call today at 4:45 p.m. Eastern Standard
Time. To access the call, please dial 877-422-0170, or listen to the web cast at
http://drhome.digitalriver.com/livehtml/newsite/dr_invest_000.html. Please go to the investor page to access the call and install any necessary audio software.

Digital River, Inc. First Quarter Results (unaudited, in thousands, except per share amounts) Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Operations

Give us a call at 1.952.253.1234. Or e-mail us at investorrelations@digitalriver.com.