SUNNYVALE, Calif. – November 2, 2004 – Interwoven, Inc. (Nasdaq: IWOV), provider of Enterprise Content Management (ECM) solutions for business, today announced effectiveness of an amendment to its headquarters lease that relieves it of future lease payment obligationsand improves its previously reported third quarter of 2004 net loss calculated in accordance with generally accepted accounting principles by $1.1 million, or $0.02 per share.

Interwoven will have no further obligations on 89,000 square feet of currently unoccupied space following the payment of approximately $12.3 million to Ariba. Under the terms of the amendment, Interwoven will be relieved of its obligation to pay rent and operating expenses on the space for the remaining lease term, which ends July 31, 2007, improving its future cash flows. As a result of the effectiveness of this amendment, Interwoven will adjust its previously reported financial results calculated in accordance with generally accepted accounting principles for the three months ended September 30, 2004 by reducing its reported net loss from $2.6 million, or $0.06 per share, to $1.5 million, or $0.04 per share, and from a net loss of $25.2 million, or $0.62 cents per share, to $24.1 million, or $0.60 per share, for the nine months ended September 30, 2004. The adjusted results for the three and nine months ended September 30, 2004 are included with this release.

For the third quarter of 2004, Interwoven reported total revenues of $40.3 million, an increase from the $39.5 million posted in the quarter ended June 30, 2004, and an increase of 54 percent from total revenues of $26.1 million for the same period last year. The adjusted net loss for the third quarter of 2004, calculated in accordance with generally accepted accounting principles, was $1.5 million, or $0.04 per share, compared to a net loss of $18.8 million, or $0.71 per share, for the same period last year. On a pro forma basis, Interwoven reported net income of $1.5 million for the third quarter of 2004, or $0.04 per share compared to a pro forma net loss of $4.4 million, or $0.17 per share, in the third quarter last year. Pro forma net income (loss) excludes amortization of stock-based compensation and intangible assets, restructuring adjustments and the related tax impact of these items.

For the nine months ended September 30, 2004, Interwoven reported total revenues of $117.2 million, an increase of 50 percent from the $77.9 million for the same period last year. The adjusted net loss for the nine months ended September 30, 2004, calculated in accordance with generally accepted accounting principles, was $24.1 million, or $0.60 per share, compared to a net loss of $35.1 million, or $1.36 per share, for the same period last year. On a pro forma basis, Interwoven reported net income of $1.6 million for the nine months ended September 30, 2004, or $0.04 on a per share basis, compared to a pro forma net loss of $15.8 million, or $0.61 per share, last year. Pro forma net income (loss) excludes restructuring adjustments, amortization of stock-based compensation and intangible assets, a charge for in-process research and development in 2003 and the related tax impact of these items.

A reconciliation of net loss calculated in accordance with generally accepted accounting principles and pro forma net income (loss), is provided in the tables immediately following the consolidated statements of operations below. These pro forma measures are not in accordance with, or an alternative for, similar measures calculated in accordance with generally accepted accounting principles and may be different from pro forma measures used by other companies. Interwoven believes that the presentation of pro forma results provides useful information to management and investors regarding underlying trends in its consolidated financial condition and results of operations. Readers of Interwoven's consolidated financial statements are advised to review and carefully consider the financial information prepared in accordance with generally accepted accounting principles contained in this press release and Interwoven's periodic filings with the Securities and Exchange Commission.

Consolidated Statement of Operations, As Adjusted
Impact of Pro Forma Adjustments on Reported New Loss, As Adjusted
Consolidated Balance Sheets, As Adjusted

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking" statements, including statements about historical results that may suggest trends for our business. These statements are based on estimates and information available to us at the time of this press release and are not guarantees of future performance. All statements other than statements of historical fact are statements that could be deemed as forward-looking statements. Actual results could differ materially from our current expectations as a result of many factors, including: customer acceptance of our enterprise content management solutions and new product releases may be slower than we anticipate; customer spending on enterprise content management initiatives may decline; our ability to cross-sell additional products into our installed base of customers; intense competition in our market which makes our results difficult to predict; development of certain Interwoven products and services may not proceed as planned; and the introduction of new products or services by competitors and the ongoing consolidation in our market place could delay or reduce sales. These and other risks and uncertainties associated with our business are described in our most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and Current Reports on Forms 8-K, which are on file with the Securities and Exchange Commission and available through www.sec.gov.