NEWPORT BEACH, Calif. – October 23, 2001 – The TriZetto(R) Group, Inc. (Nasdaq: TZIX) reported financial results today for the third quarter ended September 30, 2001. The company's performance exceeded analysts' estimates for pro forma earnings per share.

Third Quarter Highlights

• Total revenue grew to $57.2 million in the third quarter of 2001, an increase of 195% over the $19.4 million reported in the third quarter of 2000. The increase was the result of acquisitions plus organic growth of 31%.
• Fully diluted pro forma earnings per share were $0.10 in the third quarter of 2001, compared with a pro forma loss per share of $0.28 per share in the third quarter of 2000. (Pro forma numbers exclude amortization of acquisition-related intangibles and deferred stock compensation, write-off of in-process research and development costs, one-time charges and related taxes.)
• Reported net loss for the third quarter 2001 was $11.6 million or $0.27 per share compared with a net loss of $7.7 million or $0.37 per share in the third quarter of 2000.
• TriZetto achieved positive third quarter EBITDA (earnings before interest, taxes, depreciation and amortization) of $6.6 million, compared with negative EBITDA of $4.4 million in the third quarter of 2000.
• Total recurring and software license revenue backlog at September 30, 2001 was approximately $524 million. Total recurring revenue backlog at September 30, 2001 was approximately $501 million.
• The 12-month recurring and software license revenue backlog at September 30, 2001 was approximately $165 million. The 12-month recurring revenue backlog at September 30, 2001 was approximately $142 million.
• 119 recurring revenue and software contracts were signed in the third quarter, with a total contract value of $32.1 million. 65 of these were Application Service Provider (ASP) contracts and 54 were software license contracts.
• Days billings outstanding were 61 for the third quarter 2001, and days sales outstanding were 62.

"Our third quarter revenue growth was driven not only by acquisitions, but strong organic growth as well," Margolis said. "From the second to the third quarter, revenue grew by 7%, within the estimated range provided to the investment community. Although our new contract bookings and consulting revenue were lower than anticipated due to contract delays, our diverse sources of revenue allowed us to reach our growth target."

TriZetto signed software license contracts with a total value of $6.8 million in the third quarter, including new and amended contracts for Erisco Facets(R), Erisco Facts(R), RIMS QicLink(TM) and HealthWeb(R). In October, TriZetto signed a $3 million QicLink agreement with Associated Third Party Administrators (ATPA), one of the country's largest third party benefits administrators. QicLink software automates the processing of approximately 130 million claims annually. ATPA is using QicLink to upgrade its automated claims payment systems to comply with the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

TriZetto signed ASP contracts in the quarter with a total value of $25.4 million. Of the total, over $14 million was generated by contracts with physician groups. Several of these groups purchased a suite of hosted applications in combination with outsourced business services, such as accounts receivable.

"We are looking to the future with confidence," Margolis said. "We believe we have the financial strength, product and services portfolio, market position and name recognition required for success. Further, we believe the healthcare industry will continue to demand information systems and services -- like those offered by TriZetto -- that will reduce costs, improve customer service and help achieve compliance with HIPAA."

Financial Review/Outlook

Revenue -- Third quarter revenue totaled $57.2 million, up from $19.4 million in the third quarter of 2000. Recurring revenue totaled $39.4 million in the third quarter of 2001 and non-recurring revenue was $17.8 million. Comparing the third quarter of 2001 with the same period in 2000, revenue increased primarily as a result of the Erisco, RIMS and INFOTRUST acquisitions, as well as an increase in ASP and HealthWeb businesses. Organic revenue growth (excluding acquisitions) was 31% in the third quarter of 2001 compared with the same period last year.

Recurring revenue in the third quarter was 69% of total revenue, compared with 73% in the third quarter of 2000 and 63% in the second quarter of 2001. The year-over-year change in third quarter revenue mix is primarily the result of higher non-recurring software license sales. Given the anticipated growth rates of its business lines, TriZetto expects recurring revenue as a percent of total revenue to increase over time.

In the fourth quarter of 2001, TriZetto anticipates that total revenue will be approximately $60 - $64 million, within the range of previous guidance. In 2002, total revenue is expected to range from $260 - $275 million.

EBITDA -- TriZetto attained positive EBITDA of $6.6 million in the third quarter of 2001, compared with an EBITDA loss of $4.4 million in the third quarter of 2000 and positive EBITDA of $2.1 million in the second quarter of 2001. The EBITDA improvement was the result of higher revenue and flat expenses.

In the fourth quarter of 2001, TriZetto expects EBITDA to range between $9.0 million and $10.0 million, within the range of previous guidance. In 2002, TriZetto expects to generate $26 - $31 million in EBITDA.

Net Loss/Per Share Data -- TriZetto reported a net loss of $11.6 million in the third quarter of 2001, or a loss per share of $0.27, compared with a loss of $7.7 million or $0.37 per share in the third quarter of 2000.

TriZetto's pro forma net income in the third quarter of 2001 was $4.7 million, or $0.10 per fully diluted share, compared to a pro forma net loss of $5.8 million or a $0.28 loss per share in the third quarter of 2000. (Pro forma numbers exclude amortization of acquisition-related intangibles and deferred stock compensation, write-off of in-process research and development costs, one-time charges and related taxes.)

In the fourth quarter of 2001, TriZetto expects pro forma net income to range from $5.8 - $6.8 million, and fully diluted pro forma earnings per share to range from $0.13 - $0.15, within the range of previous guidance. The company estimates that weighted average fully diluted shares outstanding in the fourth quarter will be approximately 46 million. In 2002, TriZetto anticipates pro forma net income to range from approximately $11 - $16 million and fully diluted pro forma earnings per share to range from $0.24 - $0.34.

Cash Resources -- Cash, cash equivalents, restricted cash and short-term investments totaled $80 million at September 30, 2001. TriZetto used approximately $1.5 million in cash from operations during the third quarter of 2001. TriZetto believes that its cash resources are sufficient to operate the business for at least the next 12 months.

Conference Call

TriZetto will be hosting a conference call to discuss its third quarter results today at 7:30 a.m. Pacific Time. To listen to the conference call via the Internet, go to TriZetto's Web site at www.trizetto.com, click on "investor relations," and follow the instructions provided.

About TriZetto

The TriZetto(R) Group, Inc. offers a broad portfolio of healthcare information technology products and services that can be delivered individually or combined to create a comprehensive solution. The company provides proprietary and third-party software on a licensed or hosted basis, e-business applications, consulting services and business services, such as claims, billing and enrollment processing. Focused exclusively on healthcare, TriZetto serves more than 500 payers, providers and benefits administrators. Its payer customers serve more than 90 million health plan members, or approximately 40 percent of the insured population of the United States. Headquartered in Newport Beach, Calif., TriZetto can be reached at (800) 569-1222, www.trizetto.com.

CONTACTS:

TriZetto Investor Relations
Anna Marie Dunlap
949-719-2236
am.dunlap@trizetto.com

TriZetto Media Relations
David Scott
303-495-7197
david.scott@trizetto.com

Information

For more detailed information, please call 1-800-569-1222 or click on the link below. Request more information     Contact a sales rep