NEWPORT BEACH, Calif. – July 24, 2001 – The TriZetto(R) Group, Inc. (Nasdaq: TZIX) reported financial results today for the second quarter ended June 30, 2001. The Company's performance exceeded analysts' estimates for revenue and pro forma earnings per share.

Second Quarter Highlights

• Total revenue grew to $53.3 million in the second quarter of 2001, an increase of 200% over the $17.8 million reported in the second quarter of 2000. The increase was the result of acquisitions plus organic growth of 33%. Second quarter 2001 recurring revenue increased 169% over the same period last year.
• Pro forma loss per share was $0.00 in the second quarter of 2001, compared with a pro forma loss of $0.30 per share in the second 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 taxes.)
• Reported net loss for the second quarter 2001 was $15.0 million or $0.40 per share compared with a net loss of $8.6 million or $0.43 per share in the second quarter of 2000.
• TriZetto achieved positive second quarter EBITDA (earnings before interest, taxes, depreciation and amortization) of $2.1 million, compared with negative EBITDA of $5.6 million in the second quarter of 2000.
• Total recurring and software license revenue backlog at June 30, 2001 was approximately $521 million. Total recurring revenue backlog at June 30, 2001 was approximately $493 million.
• The 12-month recurring and software license revenue backlog at June 30, 2001 was approximately $165 million. The 12-month recurring revenue backlog at June 30, 2001 was approximately $137 million.
• 88 recurring revenue and software contracts were signed in the second quarter, with a total contract value of $149 million. 36 of these were application service provider (ASP) contracts, and 52 were software license contracts.
• Days billings outstanding were 48 as of June 30, 2001. Days sales outstanding were 54.

As previously announced, in the second quarter TriZetto completed a secondary equity offering of 6 million shares at $9.25 per share, generating approximately $48 million in net proceeds to the company. Of the 6 million shares, 5.52 million were primary shares, and 480,000 were secondary shares. TriZetto's cash balance at June 30, 2001, including the $48 million in net proceeds, was $76.6 million. Subsequent to the end of the second quarter, the underwriters exercised their option to purchase 900,000 shares to cover over-allotments, which generated approximately $7.3 million in additional net proceeds to TriZetto. Commenting on the offering, Margolis said, "The main goal of the offering was to strengthen our balance sheet, and thus, our competitive position in the industry. We believe the increase in our cash balance has helped allay any concerns that customers may have had about our financial status.

"Our revenue growth in the second quarter was driven by the continued strong performance of our software license and HealthWeb(R) units, as well as an increase in ASP sales," Margolis said. "Our sequential EBITDA improvement reflects the impact of higher software license revenue, which has higher gross margins than our ASP business. In addition, ASP margins improved, and HealthWeb reached profitability in the quarter, less than two years after signing its first health plan customer."

During the quarter, TriZetto signed 36 ASP contracts with a total value of over $139 million. Of the total, a 7-year contract with Altius represented $100 million, subject to regulatory approval. Altius is a health plan with approximately 113,000 members based in Salt Lake City, Utah. TriZetto is providing a full complement of technology solutions and services for Altius, including software hosting and management as well as enrollment, billing and claims processing. In addition, TriZetto signed ASP contracts with physician groups totaling $14 million.

HealtheWare(TM) (proprietary Erisco and RIMS software licenses) sales remained on target during the second quarter. The largest contract signed was with IHC Health Plans, which purchased Erisco's Facets(R) for its one million-member health plan division based in Salt Lake City, Utah. HealtheWare also completed a significant upgrade of Erisco's Facets, its flagship software, which will help ensure its leadership position in the industry. The upgrade increases Facets' compatibility with other systems and includes real-time Internet claim adjudication and payment for physicians via HealthWeb.

TriZetto continued to successfully cross-sell its HealthWeb Internet platform to Erisco Facets customers during the second quarter, as well as to the broader health plan market. HealthWeb signed five new customers that use three different core software, demonstrating its ability to work with virtually any legacy system on the market. HealthWeb also signed two joint marketing agreements in the second quarter: one with McKessonHBOC, covering approximately 100 AMISYS customers, and one with the national Blue Cross and Blue Shield Association, covering 45 "Blues" plans. These agreements create substantial new marketing opportunities for HealthWeb.

"Given our progress toward profitability, stronger balance sheet and diverse, market-leading portfolio of products and services, we believe we are well positioned for continued growth," Margolis concluded.

Financial Review/Outlook

Revenue -- Second quarter revenue totaled $53.3 million, up from $17.8 million in the second quarter of 2000. Recurring revenue totaled $33.3 million in the second quarter of 2001; and non-recurring revenue was $20.0 million. Comparing the second quarter of 2001 with the same period in 2000, revenue increased primarily as a result of the Erisco, RIMS and INFOTRUST(R) acquisitions, as well as an increase in ASP and HealthWeb business. Organic revenue growth (excluding acquisitions) was 33% in the second quarter of 2001 compared with the same period last year.

Recurring revenue in the second quarter was 63% of total revenue, compared with 70% in the second quarter of 2000 and 66% in the first quarter of 2001. The change in second 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.

NOTE: The following guidance has been adjusted to reflect TriZetto's actual financial results for the six months ended June 30, 2001. TriZetto anticipates that total revenue for 2001 will be approximately $216 - $222 million compared with $89.1 million in 2000, driven by increases in its ASP, HealtheWare and HealthWeb businesses. In 2002, total revenue is expected to range from $260 - $275 million.

EBITDA -- TriZetto attained positive EBITDA in the second quarter of 2001. EBITDA was $2.1 million in the quarter, compared with an EBITDA loss of $5.6 million in the second quarter of 2000 and an EBITDA loss of $2.8 million in the first quarter of 2001. The EBITDA improvement has been primarily the result of higher software license sales associated with TriZetto's HealtheWare and HealthWeb businesses, as well as improvement in ASP gross margins.

NOTE: The following guidance has been adjusted to reflect TriZetto's actual financial results for the six months ended June 30, 2001. In 2001, TriZetto expects EBITDA to range between $14.8 million and $17 million. In 2002, TriZetto expects to generate $26 - $31 million in EBITDA.

Net Loss/Earnings Per Share (EPS) -- TriZetto reported a net loss of $15.0 million in the second quarter of 2001, or a loss per share of $0.40, compared with a loss of $8.6 million or $0.43 per share in the second quarter of 2000.

TriZetto's pro forma net loss in the second quarter of 2001 was $184,000, or $0.00 per share, compared to a pro forma net loss of $6.1 million or a $0.30 loss per share in the second 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 taxes.)

NOTE: The following guidance has increased, primarily to reflect the impact of the secondary offering completed in June 2001 and to incorporate TriZetto's actual financial results for the six months ended June 30, 2001. In 2001, TriZetto expects pro forma net income to range from $4.5 - $6.5 million, and pro forma earnings per share to range from $0.11 - $0.16. In 2002, TriZetto anticipates pro forma net income to range from approximately $11 - $16 million and pro forma EPS to range from $0.24 to $0.34.

Cash Resources -- Cash, cash equivalents, restricted cash and short-term investments totaled $76.6 million at June 30, 2001. The increase in cash reflects the addition of approximately $48 million in net proceeds from the equity offering completed in June 2001. TriZetto used approximately $1.2 million in cash from operations during the second quarter of 2001. TriZetto believes that its cash resources are sufficient to operate the business for at least the next 12 months.

Guidance Update

As a result of the equity offering completed in June 2001 and other issues, the company has updated its guidance for 2001 and 2002. The revised guidance has been posted on the company's Web site at http://www.trizetto.com, investor relations section, financial reports, or it can be obtained by calling the company.

Conference Call

TriZetto will be hosting a conference call to discuss its second quarter results today at 8:00 a.m. Pacific Time. To listen to the conference call via the Internet, go to TriZetto's Web site at http://www.trizetto.com and follow the instructions provided on the investor relations section of the site.

About TriZetto

The TriZetto(R) Group, Inc., is an information technology and services company focused on the healthcare industry. TriZetto hosts and licenses software and provides Internet platforms, serving over 500 customers. TriZetto's payer customers have more than 90 million enrollees, or approximately 40% of the insured population in the U.S. TriZetto's ASP hosts third-party and proprietary applications and provides business outsourcing services. TriZetto's HealthWeb(R) technology allows health plans to exchange information and conduct business over the Internet with their providers, employers and members. HealtheWare(TM) develops and licenses premium Erisco and RIMS applications for payers and benefits administrators. Headquartered in Newport Beach, Calif., TriZetto can be reached at (949) 719-2200, www.trizetto.com.

CONTACTS:

The TriZetto Group, Inc.
Anna Marie Dunlap (Investors)
949-719-2236
am.dunlap@trizetto.com

The TriZetto Group, Inc.
Jenny Lemos (Media)
480-657-9966, ext. 11
jlemos@cpronline.com