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Third quarter in a row, Company reports revenue and profit growth

April 16, 2003 — Concord Communications, Inc. (NASDAQ: CCRD), an industry leader in optimising application performance and availability across networks and systems, today announced its financial results for the first fiscal quarter ended March 31, 2003. Revenue increased to $24.1 million, over $23.6 million in the fourth quarter of 2002. Pro forma earnings per share was $0.04, exceeding analyst earnings expectations of $0.03, as reported by Multex. GAAP earnings per share was $0.05.

“The results demonstrate our ability to execute successfully in a challenging environment," explained Mike Betz, Concord’s managing director, EMEA. “Customer recognition of the eHealth Suite as the standard for large-scale performance deployments and our continuing investment in training and developing a market-leading sales force have increased our average deal size. We saw a significant increase in sales to global service providers this quarter that allowed us to achieve the growth in revenue and earnings.”

Deal Size Increased as Customers Chose the eHealth Suite for Scalability

•Average deal size for new customers more than doubled as a growing number of customers chose the eHealth Suite to manage large IT infrastructures.

•Number of deals over $100,000 increased to 36, representing a 20% increase over the previous quarter.

Sales to New Customers Increased and Existing Customers Expanded Use of the eHealth Suite

•22% of quarterly revenues came from 43 new customers, up sequentially from 15% of quarterly revenue in the prior quarter. New customers included Telefonica Spain, The Bank of England and the National Belgium Railway.

•78% of quarterly revenues were generated from installed base from customers like Fraport AG and the County of Sacramento. Of the revenue from existing customers, 49% was from existing customers expanding deployment of their existing Concord products across a larger portion of their IT infrastructure and 51% was from customers expanding toward an end-to-end solution by purchasing new applications in the eHealth® Suite.

Sales to the Global Service Provider Markets Grew

•45% of product revenue came from managed service provider customers, an increase of 17 points over the fourth quarter. These customers include Unisys Worldwide and BT Ignite.

•21% of product revenue came from carrier infrastructure customers, an increase of 6 points over the fourth quarter. These customers include Cable & Wireless and Vodafone.

•34% of product revenue came from enterprise customers like General Dynamics and VeriSign. This resulting decrease in enterprise mix from the previous quarter was primarily due to the increased percentage of global service provider revenue. The overall mix of enterprise, service provider and carrier infrastructure revenue is expected to fluctuate in response to quarterly market demand.

•International revenue was $12.1 million or 50% of total revenue, a sequential increase of 11 points from 39% in the previous quarter. Customers include Cable and Wireless, Audi and Bank International Indonesia.

Cash and Deferred Revenue Increased

•Cash grew over $3 million to $76.8 million

•Deferred revenue increased to $25.7 million, up from $23.3 million in the prior quarter.

•Revenue contribution percentages from the product portfolio were consistent with prior quarters.

•Gross margin was 81%, net margin was 3%.

•DSO was 70 days, up slightly from DSO of 66 days in Q4, primarily due to the increased international

Guidance Established

Concord is establishing guidance for Q2 between $24.5-25.5 million in revenue, and pro forma earnings per share between $0.05 and $0.06.

Conference Call

Concord will hold a conference call today, April 16th 2003, to discuss results, product direction and future expectations at 8:00 a.m. ET. The phone number for the call is 800-473-6123 (domestic) and 973-582-2710 (international). The call will be available for approximately two weeks. The number for the replay is 877-519-4471 for U.S./Canada and 973-341-3080 for international callers. The access code is 3846047.

About Concord Communications

Concord Communications, Inc. (NASDAQ: CCRD) is an industry leader in optimising application performance and availability across networks and systems. Concord’s 3000 customers worldwide -- including nearly 20% of the Fortune 500 -- use the eHealth® Suite as the software solution to manage their IT infrastructure to drive profitable business operations, reduce costs, and increase competitive positioning. Concord is headquartered in Marlboro, MA. For more information on Concord, call 1-800-851-8725 or visit Concord on the Web at Concord Communications, the Concord logo and eHealth are trademarks of Concord Communications, Inc.

Safe Harbor

Forward-looking statements made in this press release, including forward-looking statements regarding revenue and profit expectations, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that all forward-looking statements involve risks and uncertainties, and actual results could differ materially from the forward-looking statements contained herein. Risks and uncertainties include, without limitation, the magnitude and duration of the current domestic financial crisis and economic slowdown and specifically their impact on the software, networking and telecommunications industries; our customers' ability to obtain funding, specifically in light of the aforementioned financial and economic climate, and the resulting potential delay of customer purchasing decisions; risks of continued operating losses; the ability to attract and retain quality professional employees; uncertainties involving intellectual property rights and litigation; litigation in general; risks in technology development and commercialisation; risks in product development and market acceptance of and demand for the Company's products; risks associated with competition and competitive pricing pressures; risks associated with international sales, including foreign currency risks; and other risks detailed in the Company's filings with the Securities and Exchange Commission, including but not limited to, the Company's annual report on Form 10-K and quarterly reports on Form 10-Q. Any forward-looking statements should be considered in light of all these factors. The information contained in this press release is applicable only today and should thereafter be considered historical and will no longer constitute the Company's current expectations. The Company undertakes no obligation to update information contained in this press release.

The information in this press release, call replay, and reconciliation of non-GAAP financials is posted at

Media contacts:
Suzy Christopher
Brodeur Worldwide
+44 207 298 7111

Casey Balkham
Brodeur Worldwide
+44 207 298 7043

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