DIGITAL RIVER REPORTS RECORD FIRST QUARTER RESULTS
Sales of $32.8 Million Up 19.5 Percent from Prior Quarter

MINNEAPOLIS, Minn., April 27, 2000 --Digital River, Inc., (Nasdaq:DRIV), the world's largest Commerce Service Provider (CSP), today reported sales of $32.8 million for the first quarter ended March 31, 2000, a 19.5 percent sequential increase from the fourth quarter of 1999 and a 180.3 percent increase from $11.7 million in the first quarter of 1999. First-quarter gross margin increased to 20.3 percent from 19.4 percent for the fourth quarter of 1999 and from 16.3 percent in the first quarter of 1999.

The company's first-quarter loss before the effect of amortization of goodwill and acquisition related costs was $6.6 million, or 32 cents per share. After amortization of goodwill and acquisition related costs, the first quarter net loss was $12.0 million, or 58 cents per share, compared with a net loss of $5.3 million or 27 cents per share, in the first quarter of 1999.

"Our first quarter results clearly demonstrate strong momentum and growth from both Digital River divisions - Software and Digital Commerce Services and E-Business Services, '' said Joel Ronning, chief executive officer. "By applying the ASP model to e-commerce, we've revealed an entirely new market category. Today, we're one of few Commerce Service Providers (CSPs) in the industry to build, host, manage and grow e-commerce for companies who want to outsource their entire operation. Our commerce system is designed not only to increase online sales revenue but also to automate business processes and reduce costs."

"We are excited to announce new long-term operating targets for our business. We are targeting gross margins of 65-70 percent and operating profits in the range of 20-25 percent for the e-Business division in the long-term. For the Software division, we continue to target long-term gross margins of 18-20 percent and operating profits in the 8-11 percent range," said Perry Steiner, Digital River President.

"We anticipate that our Software Division will reach profitability, before depreciation and amortization, by December of this year and overall company profitability, before goodwill amortization, in the fourth quarter of next year," continued Steiner. "With over $50 million in cash and investments and no debt at quarter end, we expect to have the capital to reach our profitability targets without needing to raise additional funds."

Execution of e-Business Services Strategy
Digital River's e-Business Services division ended the quarter with 29 e-Business client contracts, an increase of seven for the period. Clients announced during the quarter include Coors, Fujitsu General, TDK and Damark's ClickShipDirect. The division greatly expanded its management and employee base and increased the e-Business sales force from 7 to 18. This year, the company will continue to invest in both technology and personnel to support greater-levels of e-business complexities within vertical industries such as manufacturing, distribution and retail.

Industry-Leading Software and Digital Commerce Services
Digital River's Software and Digital Commerce Services division continued to excel, moving closer to the goal of profitability before depreciation and amortization by year end. During the quarter, the division brought its total number of clients to over 7,000. The division posted its thirteenth consecutive quarter of double digit sales growth and increased gross margins almost 300 basis points over last year's first quarter. The Company signed new software clients including Eastman Software, IMSI, TurboLinux and Agfa Monotype. New developments included a volume licensing system developed for Symantec, supporting business-to-business software purchases online directly from Symantec and online retail partners. The volume licensing system will also be rolled out to additional clients.

eMarketing Services
The Company announced the integration of E.piphany E.4 last month into its commerce system, expanding its e-marketing service offerings. By integrating E.Piphany's data mining and analysis system into Digital River's new Enterprise Campaign Management (ECM) System, Digital River clients can achieve enhanced personalization, customer segmentation, and 1:1 marketing capabilities.

Segment Results
The Software and Digital Commerce Services Division posted sales of $32.1 million with a gross margin of 19.1 percent and an operating loss of $2.5 million for the first quarter of 2000. The e-Business Services Division posted sales of $753,000 with a gross margin of 71.0 percent and an operating loss of $4.8 million for the quarter.

About Digital River
Digital River is the world's largest Commerce Service Provider (CSP). The Company provides more than 7,000 companies with a complete e-commerce solution including site design, hosting and system management. The Company develops front-to-back e-commerce solutions for software publishers, online retailers and other large corporations including Fujitsu, Autodesk, Hasbro, Staples, Adaptec, 3M, CompUSA, K-Mart, ScanSoft, eGames, Sega, Fox Interactive and Egghead.com.

Digital River's first quarter earnings conference call will be Webcast live at 3:45 p.m. CDT today April 27, 2000. Investors are invited to listen via Digital River's Web site, http://www.digitalriver.com. Please go to the Web site at least 15 minutes early to register, download, and install any necessary audio software. For those who cannot listen via the Webcast, we invite you to listen to our telephone replay of the conference call by dialing 1-800-633-8284 and entering reservation number 14956123, beginning at 5:45 p.m. CDT until 5:45 p.m. CDT on May 4.

Condensed Consolidated Statements of Operations (unaudited)