**UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549**  **FORM 10-Q**  (Mark One) **[X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934** **for the period ended March 31, 2002** **OR** **[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934** **For the transition period from ________to _________** **Commission file number 000-25315** **Sagent Technology, Inc.** (Exact name of Registrant as specified in its Charter)  **Delaware**
**94-3225290**(State or Other Jurisdiction of Incorporation or Organization)
(I.R.S. Employer Identification Number) **800 W. El Camino Real, Suite 300Mountain View, CA 94040**

        (Address of Principal Executive Offices including Zip Code) **(650) 815-3100**


                 (Registrant's Telephone Number, Including Area Code)

   
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file reports), and (2) has been subject to such filing
requirements for the past 90 days.   YES [X]    NO [  ] As of May10, 2002, Registrant had 46,374,583
shares of common stock issued and outstanding  .


**SAGENT TECHNOLOGY, INC. QUARTERLY REPORT ON FORM 10-Q
       FOR THE PERIOD ENDED MARCH 31, 2002
                                TABLE OF CONTENTS**





|**PART I.  FINANCIAL INFORMATION**                                                                                    | **Page No.**
|--------------------------------------------------------------------------------------------------------------------- | ------------
|                                                                                                                      |             
|Item 1.  Financial Statements:                                                                                        |             
|                                                                                                                      |             
|Unaudited Condensed Consolidated Balance Sheets                                                                       | 3           
|                                                                                                                      |             
|Unaudited
Condensed Consolidated
Statements of Operations                                                             | 4           
|                                                                                                                      |             
|Unaudited
Condensed Consolidated Statements of Cash Flows                                                             | 5           
|                                                                                                                      |             
|Notes to Condensed Consolidated Financial Statements (Unaudited)                                                      | 7           
|                                                                                                                      |             
|Item 2.   Management's Discussion and Analysis of Financial
                      Condition and Results of Operations | 17          
|                                                                                                                      |             
|Item 3.   Quantitative and Qualitative Disclosures About Market Risk                                                  | 33          
|                                                                                                                      |             
|**PART II.  OTHER INFORMATION**                                                                                       |             
|                                                                                                                      |             
|Item 1.   Legal Proceedings                                                                                           | 34          
|                                                                                                                      |             
|Item 2. None                                                                                                          | 36          
|                                                                                                                      |             
|SIGNATURES                                                                                                            | 36          
|                                                                                                                      |             
|INDEX TO EXHIBITS                                                                                                     | 37          





PART I  FINANCIAL INFORMATION

Item 1. Financial Statements

SAGENT TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS 
(amounts in thousands)

|                                                                                                                                                                                                        | March 31, | December 31,
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------- | ------------
|                                                                                                                                                                                                        | 2002      | 2001        
|ASSETS                                                                                                                                                                                                  |           |             
|Current
            Assets                                                                                                                                                                              |           |             
|Cash and cash equivalents                                                                                                                                                                               | $12,543   | $15,552     
|Accounts receivable, net of allowance for doubtful accounts of $1,890
          in 2002 and $ 1,798 in 2001                                                                                             | 10,961    | 12,560      
|Other current assets                                                                                                                                                                                    | 3,048     | 3,700       
|Total current assets                                                                                                                                                                                    | 26,552    | 31,812      
|Restricted cash                                                                                                                                                                                         | 775       | 775         
|Property and equipment, net                                                                                                                                                                             | 5,440     | 6,138       
|Goodwill, net                                                                                                                                                                                           | 7,514     | 7,514       
|Notes receivable from officers                                                                                                                                                                          | 2,395     | 2,409       
|Other assets                                                                                                                                                                                            | 1,131     | 1,138       
|Total assets                                                                                                                                                                                            | $43,807   | $49,786     
|                                                                                                                                                                                                        |           |             
|LIABILITIES AND
            STOCKHOLDERS' EQUITY                                                                                                                                                        |           |             
|Current
            Liabilities                                                                                                                                                                         |           |             
|Accounts payable                                                                                                                                                                                        | $3,098    | $3,369      
|Accrued liabilities                                                                                                                                                                                     | 6,564     | 8,411       
|Deferred revenue                                                                                                                                                                                        | 9,379     | 8,701       
|Current portion of capital lease obligation                                                                                                                                                             | 1,904     | 2,240       
|Total current liabilities                                                                                                                                                                               | 20,945    | 22,721      
|Long-term portion of capital lease
          obligation                                                                                                                                                 | 1,006     | 1,384       
|Other long-term liabilities                                                                                                                                                                             | 167       | 170         
|Total liabilities                                                                                                                                                                                       | 22,118    | 24,275      
|                                                                                                                                                                                                        |           |             
|Minority
          Interest                                                                                                                                                                             | 621       | 658         
|                                                                                                                                                                                                        |           |             
|Stockholders' Equity                                                                                                                                                                                    |           |             
|Convertible preferred stock, par value $.001 per share; Authorized:
          6,011 shares in March 31, 2002 and December 31, 2001;   
          Issued and outstanding : none in 2002 and 2001         | 0         | 0           
|Common stock, par value $.001 per share; Authorized: 70,000
          shares in March 31, 2002 and December 31, 2001; Issued and outstanding
          : 46,245 at March 31, 2002 and December 31, 2001 | 46        | 46          
|Additional
            paid-in capital                                                                                                                                                                  | 133,726   | 133,726     
|Deferred stock compensation                                                                                                                                                                             | (1,021)   | (1,130)     
|Notes receivable from shareholders                                                                                                                                                                      | (610)     | (602)       
|Accumulated other comprehensive income (loss)                                                                                                                                                           | (146)     | 17          
|Accumulated deficit                                                                                                                                                                                     | (110,927) | (107,204)   
|Total stockholders' equity                                                                                                                                                                              | 21,068    | 24,853      
|Total liabilities and
          stockholders' equity                                                                                                                                                    | $43,807   | $49,786     

See accompanying notes to unaudited condensed consolidated financial statements.



SAGENT TECHNOLOGY, INC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
(amounts in thousands, except per share data)

Three Months Ended March 31,2002
          2001Revenue:License
          $6,116
          $4,747Service
          5,167
          5,544Total net revenue
          11,283
          10,291Cost of net
            revenue:License
          614
          830Service
          2,195
          3,134Total cost of net revenue
          2,809
          3,964Gross profit
          8,474
          6,327Operating
            expenses:Sales and marketing
          7,111
          8,533Research and development
          3,425
          3,853General and
            administrative
          1,336
          3,879Stock-based compensation
          189
          189Amortization of goodwill
          0
          498Restructuring credit
          (50)
          0Total operating expenses
          12,011
          16,952Loss from
            operations
          (3,537)
          (10,625)Interest income, net
          18
          94Other
            income (expense), net
          (60)
          32Net loss before income taxes
          (3,579)
          (10,499)Provision for income taxes
          144
          25Net Loss
          ($3,723)
          ($10,524)Basic and diluted net loss per share
          ($0.08)
          ($0.32)Shares used in computing basic and diluted net loss
            per share
          46,154
          33,281


``

See accompanying notes to unaudited condensed consolidated
financial statements.



**SAGENT TECHNOLOGY, INC.
      UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

      (amounts in thousands)**

|                                                                                                    | ThreeMonths Ended March 31,
|--------------------------------------------------------------------------------------------------- | ---------------------------
|                                                                                                    | 2002                       
|Cash flows from operations:                                                                         |                            
|Net loss                                                                                            | $(3,723)                   
|Adjustments to reconcile net
            loss to net cash used in operating
            activities: |                            
|Depreciation and amortization                                                                       | 809                        
|Restructuring credit                                                                                | (50)                       
|Allowance for doubtful accounts                                                                     | 92                         
|Loss on disposal of property and equipment                                                          | 80                         
|Issuance of common stock for services                                                               | 80                         
|Stock-based compensation                                                                            | 109                        
|Officer note forgiveness                                                                            | 37                         
|Accrued interest on notes receivable from officers                                                  | (31)                       
|Minority interest in losses of subsidiary                                                           | (37)                       
|Changes in operating assets and liabilities:                                                        |                            
|Accounts receivable                                                                                 | 1,507                      
|Other current assets                                                                                | 572                        
|Other assets                                                                                        | 7                          
|Accounts payable                                                                                    | (381)                      
|Accrued liabilities                                                                                 | (1,797)                    
|Deferred revenue                                                                                    | 678                        
|Other long-term liabilities                                                                         | (3)                        
|Net cash
            used in operating activities                                                   | (2,051)                    
|Cash flows from investing
            activities:                                                   |                            
|Purchase of property and equipment                                                                  | (43)                       
|Cash acquired in purchase of  Sagent Asia/Pacific Pte. Ltd                                          | 0                          
|Net cash (used in) provided by investing activities                                                 | (43)                       
|Cash flows from financing
            activities:                                                   |                            
|Payments of principal under capital lease obligations                                               | (752)                      
|Proceeds from issuance of common stock                                                              | 0                          
|Net cash (used in) provided by financing activities                                                 | (752)                      
|Effect of exchange rate changes                                                                     | (163)                      
|Net  (decrease) increase in
            cash and cash equivalents                                   | (3,009)                    
|Cash and cash equivalents, beginning of the period                                                  | 15,552                     
|Cash and cash equivalents, end of
          the period                                              | $12,543                    
|Supplemental
            disclosure of cash flow information:                                       |                            
|Cash payments for interest                                                                          | $70                        
|Cash payments for
            taxes                                                                 | $67                        
|Supplemental
            disclosure of non-cash investing and financing activity:                   |                            
|Equipment acquired under capital leases                                                             | $38                        



See accompanying notes to unaudited condensed consolidated financial statements.

---



SAGENT TECHNOLOGY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands, except where noted)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

1. Description of Business and Summary of
Significant Accounting Policies

Basis of
Presentation

The
unaudited condensed consolidated financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures, normally included in financial
statements prepared in accordance with generally accepted accounting principles,
have been condensed or omitted pursuant to such rules and regulations. Certain
prior period amounts have been reclassified to conform to the current period
presentation. In the opinion of management, the condensed consolidated financial statements reflect all
adjustments, consisting only of normal recurring adjustments necessary for a
fair presentation of the Company's financial position at March 31, 2002 and
December 31, 2001, the operating results for the three months ended March 31,
2002 and 2001 and cash flows for the three months ended March 31, 2002 and 2001.
These financial statements and notes should be read in conjunction with Sagent's
audited financial statements and notes thereto for the year ended December 31,
2001, included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission on April 1, 2002. The results of operations for the three months
ended March 31, 2002 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2002.

Business

Sagent offers a complete business intelligence software platform that allows
business users and Information Technology (IT) departments to work together to
integrate, analyze, deliver and understand information. Sagent's technology and
proven implementation methodology reduce the time and expense required to deploy
custom business intelligence solutions. Sagent technology also forms the basis
for multiple partner solutions that address the needs of specific vertical and
functional application areas.

Sagent was incorporated in California in April 1995 under the name Savant
Software, Inc. In June 1995, we changed our name to Sagent Technology, Inc. In
September 1998, we reincorporated in Delaware. References in this quarterly
report to "Sagent," "we," "our" and "us" refer to Sagent Technology, Inc. and
its subsidiaries, unless the context otherwise requires.

Principles of
Consolidation

The
consolidated financial statements include the accounts of Sagent Technology,
Inc. and its majority owned subsidiary Asia/Pacific Pte Ltd., and its
wholly-owned subsidiaries, Qualitative Marketing Software, Inc. (QMS), Sagent
U.K., Ltd., Sagent Technology GmbH, Sagent France, S.A., Sagent Technology Japan
KK, Sagent Benelux, Sagent Australia Pty Ltd, Sagent do Brazil, and Sagent de
Mexico. All significant intercompany accounts and transactions have been
eliminated in consolidation.

Use of Estimates

The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Sagent's current estimated range of liability related to some of the pending
litigation is based on claims for which we can estimate the amount and range of
loss. In addition, Sagent also analyzes current accounts receivable for a
reserve for doubtful accounts based on historical bad debts, customer
credit-worthiness, the current business environment and historical experience
with the customer. The allowance includes specific reserves for accounts where
collection is no longer probable. Actual results could differ from those
estimates.

Foreign
Currency Translation

The
functional currencies of our foreign subsidiaries are the local currencies.
Sagent translates the assets and liabilities of international subsidiaries into
dollars at the current rates of exchange in effect during each period. Revenues
and expenses are translated using rates that approximate those in effect during
the period. Gains and losses from translation adjustments are included in
stockholders' equity in the consolidated balance sheet caption "Accumulated
other comprehensive income (loss)" Currency transaction gains and losses on
inter-company accounts stated in a currency other than the functional currency,
are recognized in current operations and have not been significant to Sagent's
operating results in any period. The effect of foreign currency rate exchange on
cash and cash equivalents has not been significant in any period.

Cash and Cash
Equivalents

Cash and cash equivalent include all highly liquid investments with an original
maturity of three months or less at the time of purchase. Sagent's cash and cash
equivalents at March 31, 2002 and December 31, 2001 consisted of deposits in
banks and money market funds.

Restricted Cash

Certain of our lease agreements require us to provide standby letters of credit
to guarantee payment. As of March 31, 2002, $775 of the standby letters of
credit was issued against the line of credit agreement. As of March 31, 2002,
the Company was not in compliance with certain  financial covenants of the
line of credit agreement. As a result, the bank required us to maintain $775
of cash equivalents on deposit to support the standby letters of credit, which is
classified as restricted cash on the consolidated balance sheets.

Concentration of
Credit Risk

Financial instruments, which potentially subject the Company to concentrations
of credit risk, consist primarily of cash and cash equivalents and trade
accounts receivable. Sagent maintains its cash and cash equivalents with high
quality financial institutions. Sagent maintains allowances for potential credit
risks and for estimated future sales returns. Returns to date have not
been material. Actual credit losses to date have been within management's
expectations. As of March 31, 2002 and December 31, 2001, there were no
customers with balances due to Sagent in excess of 10% of aggregate accounts
receivable.

Property and
Equipment

Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line method based on the estimated
useful lives of the assets, generally ranging from three to five years.
Depreciation commences upon placing the asset in service. Capital leases are
recorded at the lesser of the fair value of the leased asset at the inception of
the lease or the present value of the minimum lease payments as of the beginning
of the lease term. Leased assets are amortized on a straight-line basis over the
estimated useful life of the asset or the lease term. Leasehold improvements are
amortized over the shorter of the useful life or the remaining lease term.  Sagent reviews its long-lived assets for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of net
assets acquired in business combination. In 2001, Sagent amortized goodwill on a
straight-line basis over its expected useful life ranging from one to five
years.

Sagent adopted Statement of Financial Accounting
Standards ("SFAS") No. 142, "Goodwill and other Intangible
Assets" on January 1, 2002.  Sagent has ceased amortization of goodwill and will evaluate goodwill
for impairment in accordance with Company's policy stated below.

Impairment of
Long-Lived Assets and Goodwill

Statement of Financial Accounting Standards ("SFAS")
No. 142, ""Goodwill and Other Intangible Assets" became effective in 2002. 
In lieu of amortization, we are required to perform an impairment review of our
goodwill in 2002 and annual reviews thereafter. Sagent does not expect to record
a material impairment charge as a result of  its initial review which will
be completed in the quarter ending June 30, 2002. However,
there can be no assurance that at the time the review is completed a material
impairment charge will not be recorded.

Sagent reviews long-lived assets, including goodwill for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable or that the useful lives of the assets are no longer appropriate. Factors considered important which
could trigger an impairment review include, but are not limited to, significant
underperformance relative to expected historical or projected future operating
results, significant changes in the manner of use of the acquired assets or the
strategy for the Company's overall business, significant negative industry or
economic trends, a significant decline in the Company's stock price for a
sustained period, and a decline in the Company's market capitalization relative to net book
value. When the Company determines that the carrying value of long-lived assets
may not be recoverable based upon the existence of one or more of the above
indicators of impairment, the Company measures any impairment based on a
projected discounted cash flow method using a discount rate commensurate with
the risk inherent in the Company's current business model.

Revenue Recognition

Sagent sells its software products directly to its customers and through channel
partners such as enterprise software vendors, resellers and distributors.
Enterprise software vendors generally integrate our products with their
applications and will embed them into their products or resell them with their
products. Our other channel partners, principally resellers and distributors,
sell our software products to end user customers.

Statement of Position, 97-2, "Software Revenue Recognition" (SOP 97-2) was
issued in 1997 by the American Institute of Certified Public Accountants (AICPA)
and amended by Statements of Position 98-4 and 98-9. We adopted SOP 97-2
effective January 1, 1998. Based on our reading and interpretation of SOP's
97-2, 98-4 and 98-9, we believe our current revenue recognition policies and
practices are consistent with SOP's 97-2, 98-4, and 98-9.

Sagent derives its revenue from license fees for software products and fees for
services relating to the software products, including consulting, training,
software and data updates, technical support and real-time marketing services
over the Internet.

Sagent recognizes revenue from sales of software licenses to end users upon
contract execution, provided all shipment obligations have been met, fees are
fixed and determinable, collection is probable, and vendor specific objective
evidence exists to allocate the total fee between all delivered and undelivered
elements of the arrangement. If vendor specific objective evidence does not
exist to allocate the total fee to all delivered and undelivered elements of the
arrangement, revenue is deferred until the earlier of a) such evidence does
exist for the undelivered elements, or b) all elements are delivered. Fees from
license agreements which include the right to receive unspecified future
products are recognized over the term of the arrangement or, if not specified,
the estimated economic life of the product.

Sagent's customers generally require consulting and implementation services
which include evaluating their business needs, identifying the data sources
necessary to meet these needs and installing the software solution in a manner
that fulfills their needs. Where consulting services are essential to the
functionality of the licensed software, both the license revenue and the
consulting service revenue are recognized as the services are performed. Our
arrangements related to sales of software licenses generally do not include
services that are essential to the functionality of the software.

When licenses are sold together with consulting and implementation services,
license fees are recognized upon shipment, provided that a) the above revenue
recognition criteria are met, b) payment of the license fees is not dependent
upon performance of the consulting services, and c) the services do not include
significant alterations to the features and functionality of the software. To
date, services have not been essential to the functionality of the software
products for substantially all software agreements.

Revenue for transactions with enterprise application vendors, OEMs, and
distributors is generally recognized when the licenses are resold or utilized by
the reseller and all related obligations on our part have been satisfied.
However, if the contract stipulates a non-refundable royalty payment to be paid
in advance of any resale, revenue is recognized upon execution of the contract,
provided all other revenue recognition criteria have been met.

Maintenance contracts generally call for us to provide technical support and
software updates and upgrades to customers. Maintenance revenue is recognized
ratably over the term of the maintenance contract, generally on a straight-line
basis when all revenue recognition requirements are met. Other service revenue,
primarily training and consulting, is generally recognized at the time the
service is performed and when it is determined that the Company has fulfilled
our obligations resulting from the services contract.

Deferred Revenue

Deferred revenue represents amounts received from customers under certain
license, maintenance and service agreements for which the revenue earnings
process has not been completed.

Software Development
Costs

Software development costs are included in product development and are expensed
as incurred. After technological feasibility is established, material software
development costs are capitalized in accordance with SFAS No. 86, "Accounting
for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed."
The period between achieving technological feasibility, which Sagent has defined
as the establishment of a working model, typically occurring when the beta
testing commences, and the general availability of such software has been short,
and software development costs qualifying for capitalization have been
insignificant. No software development costs have been capitalized for the
periods ended March 31, 2002 and December 31, 2001.

Stock-Based
Compensation

Sagent accounts for stock issued to employees in accordance with Accounting
Principles Board Opinion No. 25 ("APB 25") "Accounting for Stock Issued to
Employees" as interpreted by FIN 44 "Accounting for Certain Transactions
Involving Stock Compensation." and complies with the disclosure provision of FASB Statement No. 123 ("SFAS 123"). Under APB No. 25, compensation expense is
based on the difference, if any, on the date of the grant, between the fair
value of the Company's stock and the exercise price of the option. Stock
compensation is being amortized over the vesting period of the individual awards
in a manner consistent with the method described in FASB Interpretation No. 28,
"Accounting for Stock Appreciation Rights and Other Variable Stock Option Award
Plus." In addition, the Company accounts for stock issued to non-employees in
accordance with the provisions of SFAS 123. Pursuant to SFAS 123, stock-based
compensation is accounted for at the fair value of the equity instruments
issued, or at the fair value of the consideration received, whichever is more
reliably measurable.

Income Taxes

Sagent uses the asset and liability method of accounting for income taxes. Under
the asset and liability method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
financial statement carrying amounts and the tax basis of existing assets and
liabilities. Sagent records a valuation allowance to reduce tax assets to an
amount for which realization is more likely than not.

Net Income (Loss) Per
Share

Basic net income (loss) per share is computed by dividing the net income (loss)
available to common stockholders for the period by the weighted average number
of common shares outstanding, net of shares subject to repurchase during the
period. Diluted net income (loss) per share is computed by dividing the net
income (loss) for the period by the weighted average number of common and common
equivalent shares outstanding during the period. Options, warrants, restricted
stock and convertible preferred stock were not included in the computation of
diluted net loss per share for those periods in which Sagent incurred a loss
because the effect would be antidilutive.

Reclassification

Sagent has reclassified certain prior period amounts to
conform to the current period presentation.



NOTE 2. COMPREHENSIVE LOSS

Comprehensive income (loss) is the total of net income (loss) and all other
revenues, expenses, gains and losses recorded directly in equity. Sagent's
"other comprehensive loss" consists of foreign currency translation adjustments.
There was no significant tax effect on the components of other comprehensive
loss for the three months ended March 31, 2002 and 2001.

|                                        | Three
            Months Ended
|--------------------------------------- | ------------------------------
|                                        | March 31,                     
|                                        | 2002                          
|Net loss                                | ($3,723)                      
|Other comprehensive loss:               |                               
|Foreign currency translation adjustment | (163)                         
|Comprehensive loss                      | ($3,886)                      

## 

## NOTE 3. OTHER CURRENT ASSETS

Other current assets consists of:

|                 | March 31, | December 31,
|---------------- | --------- | ------------
|                 | 2002      | 2001        
|Prepaid licenses | $1,886    | $2,135      
|Other            | 1,162     | 1,565       
|Total            | $3,048    | $3,700      

Included in prepaid licenses are licensed
technologies purchased from third parties, which are integrated into our products
and services prior to deployment. These licensed technologies are being amortized
ratably over the term of the license, generally for a period of two years.

## 

## NOTE 4. GOODWILL

Goodwill is comprised of the following:

|                             | March 31, | December 31,
|---------------------------- | --------- | ------------
|                             | 2002      | 2001        
|Goodwill:                    |           |             
|Sagent UK                    | $1,746    | $1,746      
|Sagent France SA             | 645       | 645         
|Sagent GmbH                  | 1,787     | 1,787       
|Sagent do Brazil             | 728       | 728         
|Smarter Software, Inc        | 68        | 68          
|Sagent Asia/Pacific Pte. Ltd | 2,389     | 2,389       
|Sagent Benelux               | 151       | 151         
|Total                        | $7,514    | $7,514      

The following table presents net loss per share information for the period ended
March 31, 2001, adjusted to exclude the amortization related to goodwill that
will no longer be amortized under SFAS No. 142:

|                                   | March 31,
|---------------------------------- | ---------
|                                   | 2001     
|Net loss, as
          reported    | ($10,524)
|Add back: amortization of goodwill | 498      
|Pro forma net loss                 | ($10,026)
|Loss per share as reported         | ($0.32)  
|Pro forma loss per share           | ($0.30)  



NOTE 5. OTHER ASSETS

Other assets is comprised of the following:

|                                     | March 31, | December 31,
|------------------------------------ | --------- | ------------
|                                     | 2002      | 2001        
|Other assets:                        |           |             
|Investment in Responsys (Net Acumen) | $529      | $529        
|Deposit                              | 492       | 545         
|Other                                | 110       | 64          
|Total                                | $1,131    | $1,138      

The
investment in NetAcumen, prior to Responsys acquisition, was accounted for under the cost method. At January 16,
2002, Responsys, Inc. acquired 100% of NetAcumen, and NetAcumen became a wholly-owned subsidiary of Responsys. As a result of this acquisition, Sagent's
ownership interest in Responsys is 0.62% as of March 31, 2002, Sagent continues
to account for its investment in Responsys under the cost method. Sagent
recognized revenue of $65 for the three months ended March 31, 2002 from
licenses sold to Responsys. No sales was made to NetAcumen during the first quarter
of 2001.



NOTE 6. LITIGATION

From time to
time, the Company has been subject to litigation including the pending
litigation described below. Because of the uncertainties related to both the
amount and range of loss on the pending litigation, management is unable to make
a reasonable estimate of the liability that could result from an unfavorable
outcome. As additional information becomes available, the Company will assess
its potential liability and revise its estimates. Pending or future litigation
could be costly, could cause the diversion of management's attention and could
upon resolution, have a material adverse affect on our business, result of
operations, financial condition and cash flow.

In addition, the Company is engaged in certain legal and administrative
proceedings incidental to its normal business activities and believes that these matters will not have a
material adverse effect on our financial position, result of operations or cash
flow.

From October 20,
2000 to November 27, 2000, several class action lawsuits were filed in the
United States District Court on behalf of the individual investors who purchased
Sagent common stock between October 21, 1999 and April 18, 2000. The claims
allege that Sagent misrepresented its prospects for 1999 and the first quarter
of 2000. Thereafter, the court consolidated the complaints and selected a lead
plaintiff and counsel. A consolidated amended complaint was filed in April 2001.
The defendants filed a motion to dismiss the consolidated amended complaint. On
September 28, 2001, the court granted the defendants' motion, and gave the
plaintiffs leave to amend the complaint. On December 28, 2001, the class
plaintiffs filed a second amended complaint. Defendants filed a motion to
dismiss that complaint on February 15, 2002. The hearing on defendants' motion
is scheduled for June 2002.

On November 17,
2000, a derivative lawsuit was filed by a purported Sagent shareholder in the
Superior Court of California for the County of San Mateo (the "Fanucci
complaint"). On February 9, 2001, a second derivative lawsuit was filed in the
Superior Court of California for the County of Santa Clara (the "Hu complaint").
The complaints name certain of our present and former officers and directors as
defendants. The Hu complaint also names an investment bank retained by us and an
employee of that firm as defendants. We have also been named as a nominal
defendant. The principal allegation of the complaints is that the defendants
breached their fiduciary duties to Sagent. In July 2001, the two cases were
coordinated for pretrial purposes in the Superior Court of California for the
County of Santa Clara. Sagent filed a motion to dismiss the Fanucci complaint,
on the grounds that, among other things, the plaintiff had failed to make a
pre-suit demand on the board of directors as required by Delaware law. The
officer and director defendants joined in that motion, and also moved to dismiss
on the grounds that the complaint fails to allege the asserted causes of action
against the individual defendants. Similar motions were filed concerning the Hu
complaint.

The parties
agreed to stay the Hu complaint indefinitely, pending the outcome of the Fanucci
matter. The court entered an order staying the Hu complaint on January 11, 2002.
Thereafter, on January 16, 2002, the Fanucci plaintiff filed a motion to
transfer and/or remand that case back to the Superior Court for San Mateo County
where it was originally filed. The court heard oral arguments on the defendants'
motion to dismiss the Fanucci complaint, and the plaintiffs' transfer motion on
January 28, 2002. On March 1, 2002, the court issued an order sustaining
Sagent's motion to dismiss, granting the plaintiff leave to amend the complaint,
denying the plaintiff's motion to transfer and/or remand the Fanucci case to San
Mateo County, and ordering Sagent to produce a limited quantity of documents to
the plaintiff.

In October 2001,
infoUSA, Inc. filed a complaint against Sagent in the District Court of Douglas
County, Nebraska, seeking amounts infoUSA claims are owed under a license
agreement between Sagent and infoUSA. The amount of the claim is $900,000, plus
interest. A default judgment for the full amount of the claim was entered
against Sagent on December 20, 2001, for failure by Sagent to respond to the
initial complaint. Sagent filed a motion to set aside the default judgment in
January 2002. On February 22, 2002, the court granted Sagent's motion to set
aside the default judgment, and allowed Sagent to file its answer to the
complaint.

In November and
December 2001, several class action lawsuits were filed in the United States
District Court for the Northern District of California on behalf of investors
who purchased Sagent common stock between May 11, 2001 and November 28, 2001.
The complaints allege that Sagent and certain of its officers and directors
violated the Securities Exchange Act of 1934. The complaints allege that during
the class period, the defendants caused Sagent's shares to trade at artificially
inflated levels through the issuance of false and misleading financial
statements. The court has selected a lead plaintiff in that action and we expect
a consolidated amended complaint to be filed.

In February
2002, two derivative lawsuits were filed by purported Sagent shareholders in the
United States District Court for the Northern District of California. The
complaints name certain of our present and former officers and directors as
defendants. The principal allegation of the complaints is that the defendants
breached their fiduciary duties to Sagent.



NOTE 7. LINE OF CREDIT

Sagent has a $5 million line of credit agreement with a bank collateralized by
the assets of the Company. The line consists of advances against eligible
accounts receivable in an aggregate amount not to exceed the lesser of, the
committed revolving line or the borrowing base, less any outstanding letters of
credit. Advances against the revolving line bear interest at the bank's prime
rate plus 1%,  5.75% at December 31, 2001. As of March 31, 2002 there were
no advances against the line of credit.

Certain of our lease agreements require us to provide standby letters of credit
to guarantee payment. As of December 31, 2001, $775 of the standby letters of
credit was issued against the line of credit agreement. As of December 31, 2001,
the Company was not in compliance with certain  financial covenants of the
line of credit agreement. As a result, the bank required us to maintain $775
cash equivalents on deposit to support the standby letters of credit, which is
classified as restricted cash on the consolidated balance sheets. In March 2002,
the bank waived all instances of noncompliance with covenants as of December 31,
2001.



The Company is
evaluating offers for a replacement credit facility with less restrictive terms.
If the Company does not secure such a credit facility or improve its financial
performance or liquidity to comply with the financial covenants, the line of
credit and deposits supporting the stand by letters of credit will remain
unavailable. As of March 31, 2002, Sagent was not in compliance with the
financial covenants of the agreement.  As a result, Sagent cannot borrow
against the line of credit.



NOTE 8. RESTRUCTURING COSTS

In December
2001, Sagent Board of Directors approved a restructuring plan aimed at
streamlining its underlying cost structure to better position Sagent for growth
and improved operating results. As part of the restructuring plan, Sagent
consolidated the Florida facility and implemented a reduction in workforce of
approximately 14% or 51 employees and contractors. The reductions came from all
areas of the Company and, as of March 31, 2002, the terminations were completed.
The remaining reserve as of March 31, 2002 is as follows:

|                              | Reserve as of December 31, 2001 | Cash Payment | Non-Cash Credit | Remaining Reserve as of March 31, 2002
|----------------------------- | ------------------------------- | ------------ | --------------- | --------------------------------------
|Facility exit costs           | $252                            | $(73)        | $0              | $179                                  
|Severance and personnel costs | 150                             | (100)        | (50)            | 0                                     
|Total                         | $402                            | ($173)       | ($50)           | $179                                  

Sagent expects to pay the
remaining balance in the next three quarters of 2002.



NOTE 9. RELATED PARTY TRANSACTIONS

Agreements and Arrangement with Executive Officers

In August 2000, we entered into an
employment agreement with our President and Chief Executive Officer. The
employment agreement provides that he will receive, among other things, two
loans:

|1.) | an interest-free $750 loan for use towards the
          purchase of a home, which loan would be forgiven over a period of five
          years provided he continues to be employed with us, and                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.) | a $2,000 loan for use towards the purchase of a home
          bearing simple interest at a rate of 5% per year and maturing in five
          years. On January 2, 2002, the Board approved amendment to his
          employment agreement. The Company agreed to forgive $282 of the
          principal of this loan.

The difference between the market interest rates and stated interest rates have
been imputed to the loans and recognized as compensation expense over the term
of the employment agreement. For the three months ended March 31, 2002, Sagent
forgave a total of $37 from the balance due from an officer. Such amounts have been
recorded in general and administrative expense. As of March 31, 2002, $513 of
the outstanding loans will be forgiven during the remaining life of the note,
contingent upon continued employment of the officer. A total of $2,395 in unpaid principal and
interest was outstanding under the two loans as of  March 31, 2002.

In May 2000, we
entered into a letter agreement with our previous Executive Vice President,
Finance and Administration, and Chief Financial Officer. The letter agreement
provides that our previous Chief Financial Officer will receive, among other
things, a $400 loan for use towards the purchase of a home bearing interest at a
rate of 7.5% per year and maturing in five years. During year 2001, Sagent
forgave a total of $ 316 of the principal and interest. As of March 31, 2002,
$126 in unpaid principal and interest was outstanding under the loan.

Agreements and Arrangements with
Directors

Sagent
recognized revenues of $65 for the three months ended March 31, 2002 from
licenses sold to a company for which Sagent's former Chairman serves as a member
of the Board of Directors. A member of Sagent's Board of Directors is also an
officer of an entity from which Sagent recognized revenue of $800 and $41 from
licenses and services for the three months ended March 31, 2002 and 2001,
respectively.

One of our director also provided consulting services to Sagent Technology GmbH,
the amount paid for such services was $50 and $11 for the three months ended
March 31, 2002 and 2001, respectively. Sagent also sold this director product
and services totaling $20 for the three months ended March 31, 2001.



ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

The following
discussion and analysis contains "forward-looking statements" that are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are generally preceded by words
that imply a future state such as "expected" or "anticipated" or imply that a
particular future event or events will occur such as "will." Investors are
cautioned that all forward-looking statements involve risks and uncertainties,
and that actual results could be materially different from those discussed in
this report. The section below entitled "Factors That May Affect Future Results"
and similar discussions in our other SEC reports filed with the SEC discuss some
of the important risk factors that may affect our business, results of
operations and financial condition. Copies of our reports filed with the SEC are
available from us without charge and on the SEC's website at www.sec.gov. You
should carefully consider those risks, in addition to the other information in
this report and in our other filings with the SEC, before deciding to invest in
our company or to maintain or increase your investment.

OVERVIEW

We provide business intelligence solutions that enable
enterprises to win, retain, and grow new customers and improve operational
effectiveness. We develop, market, and support products and services that help
businesses collect, analyze, understand, and act on customer and operational
information both in batch and in real-time. Our products and services provide a
way for an organization's employees, customers, and partners to use the Internet
to examine the internal data they already have and to supplement that data with
external, value-added information such as demographic, geographic, or other
content and data feeds. We refer to our products as business intelligence
solutions because they enable organizations to rapidly make more informed,
intelligent decisions and to spread that ability across the enterprise.

Critical Accounting Policies

Sagent's critical accounting policies
are as follows:

- Revenue recognition
- Valuation of long-lived assets and goodwill
- Consolidation of Sagent's international operations
- Valuation allowances.

Revenue recognition

Sagent sells its
software products directly to our customers and through channel partners such as
enterprise software vendors, resellers and distributors. Enterprise software
vendors generally integrate our products with their applications and will embed
them into their products or resell them with their products. Our other channel
partners, principally resellers and distributors, sell our software products to
end user customers.

Sagent derives
its revenue from license fees for software products and fees for services
relating to the software products, including consulting, training, software and
data updates, technical support and real-time marketing services over the
Internet.

Sagent
recognizes revenue in accordance with Statement of Position 97-2 Software
Revenue Recognition (SOP 97-2), as amended by SOP 98-4 and 98-9 and generally
recognize revenue when, all of the following criteria are met as set forth in
paragraph 8 of SOP 97-2: 1) persuasive evidence of an arrangement exists, 2)
delivery has occurred, 3) the fee is fixed or determinable, and 4) collectibility is probable. We define each of the four criteria above as
follows:

Persuasive
evidence of an arrangement exists -It is our customary practice to have a
written contract, which is signed by both the customer and us and a signed
purchase order by customer.

Delivery has
occurred -Our software may be either physically or electronically delivered
to the customer. If undelivered products or services exist in an arrangement
that are essential to the functionality of the delivered product, delivery is
not considered to have occurred until these products or services are delivered.

The fee is
fixed or determinable -Arrangement fees are generally due within six months
or less. Arrangements with payment terms extending beyond these customary
payments terms are considered not to be fixed or determinable, and revenue from
such arrangements is recognized as payments become due.

Collectibility is probable -Collectibility is assessed on a
customer-by-customer basis. New customers are subjected to a credit review
process, which evaluates the customer's financial positions and ultimately their
ability to pay. Sagent assesses collectibility based on a number of factors,
including past transaction history with the customers and their credit
worthiness. Sagent obtains and reviews credit reports from the third-party
credit reporting agencies for new customers with which it is not familiar. If
Sagent determines that collection of a fee is not probable, we defer the fee
and recognize revenue at the time collection becomes probable, which is
generally upon receipt of cash.

We allocate
revenue on software arrangements involving multiple elements to the delivered
element using the residual method. Our determination of fair value of the
undelivered elements in multiple-element arrangements is based on
vendor-specific objective evidence (VSOE). We have analyzed all of the elements
included in our multiple-element arrangements and determined that we have
sufficient VSOE to allocate revenue to maintenance, professional services and
data services components of our license arrangements. We sell our data and
professional services separately, and have established VSOE on this basis. We
have also established VSOE for maintenance services for accounts less than $1
million through selling such services separately. VSOE for maintenance services
for accounts greater than $1 million is determined based upon the customer's
annual renewal rates. Accordingly, assuming all other revenue recognition
criteria are met, revenue from licenses is recognized upon delivery using the
residual method in accordance with SOP 98-9, and revenue from data, maintenance
and support services is recognized ratably over their respective terms.

Sagent usually
licenses its software products on a perpetual basis. If vendor specific
objective evidence does not exist to allocate the total fee to all delivered and
undelivered elements of the arrangement, revenue is deferred until the earlier
of a) such evidence does exist for the undelivered elements, or b) all elements
are delivered. Where software license contracts call for payment terms of six
months or more from the date of delivery, revenue is recognized as payments
become due and all other conditions for revenue recognition have been
satisfied.

Sagent's
customers generally require consulting and implementation services which include
evaluating their business needs, identifying the data sources necessary to meet
these needs and installing the software solution in a manner that fulfills their
needs. If consulting services were essential to the functionality of the licensed
software, then both the license revenue and the consulting service revenue would
be recognized as the services are performed. Our arrangements regarding sales of
software licenses generally do not include services that are essential to the
functionality of the software.

When licenses
are sold together with consulting and implementation services, license fees are
recognized upon shipment, provided that a) the above revenue recognition
criteria are met, b) payment of the license fees is not dependent upon
performance of the consulting services, and c) the services do not include
significant alterations to the features and functionality of the software. To
date, services have not been essential to the functionality of the software
products for substantially all software agreements.

Revenue for
transactions with enterprise application vendors, OEMs, and distributors is
generally recognized when the licenses are resold or utilized by the reseller
and all related obligations on our part have been satisfied. However, if the
contract stipulates a non-refundable royalty payment to be paid in advance of
any resale, revenue is recognized upon execution of the contract.

Maintenance contracts generally call for us to provide technical support and
software updates and upgrades to customers. Maintenance revenue is recognized
ratably over the term of the maintenance contract, generally on a straight-line
basis when all revenue recognition requirements are met. Other service revenue,
primarily training and consulting, is generally recognized at the time the
service is performed and when it is determined that we have fulfilled
our obligations resulting from the services contract.

Valuation of long-lived assets

Statement of
Financial Accounting Standards ("SFAS") No.
142, "Goodwill and Other Intangible Assets" became effective in 2002. Upon
adoption of SFAS No. 142, we have ceased to amortize any goodwill starting
January 1, 2002. In lieu of amortization, we are required to perform an
impairment review of our goodwill in 2002 and annual reviews thereafter. Sagent
expects to complete the initial review during the quarter ending June 30, 2002.
Sagent does not expect to record an impairment charge upon completion of its initial
review; however, there can be no assurance that at the time the review is
completed, a material impairment charge will not be recorded.

Sagent assesses the impairment of  long-lived assets and goodwill
whenever events or changes in circumstances indicate that the carrying value may
not be recoverable.

The following
factors could trigger an impairment review:

- Changes in economic and industry trends
- Changes in the strategies of the company in sales and
marketing and research and development
- Changes in projected future operating results
- Changes in the mode of operations and the exit from
facilities
- Significant decline in Sagent's stock price for a
significant period of time.

When Sagent determines that the carrying value of long-lived assets and goodwill
may not be recoverable based upon any of the above indicators of impairment,
Sagent measures any impairment based on a projected discounted cash flow using a
discount rate determined by our management to be commensurate with the risk
inherent in our business model. Cash flows are projected for each of our geographic regions, which are the lowest level of identifiable
cash flows. If the assumptions we use to
determine the valuation of these long-lived assets proved to be wrong, we may be
required to record impairment charges to the carrying value of these assets
in future periods.

Sagent has a minority investment in a privately held company. This investment
is included in other long-term assets on the balance sheet and is carried at
cost since Sagent owns less than 20% of the voting equity and does not have the
ability to exercise significant influence over this company. This investment is
inherently risky as the market for technologies marketed by the company is at a
very early stage and may never be significant. Sagent can potentially lose all
its investment in this company. As a result, Sagent continuously monitors its
investments for impairment and makes appropriate reductions in carrying values
when necessary. Our determination of impairment related to certain equity
investments in privately-held companies is based on lower financing rounds or
assumptions related to projected operating results of the privately-held company
and potential effects of declines in market trends that are determined to be
other than temporary.  If the operating results of the privately-held
company or the market in which it operates decline in the future, we may be
required to record impairment charges to reduce the carrying amount in the
future periods.

Consolidation of Sagent's international operations

We have several international subsidiaries that accounted for 35% of our total net
revenue, 17% of our total assets and 17% of our total liabilities as of March
31, 2002. The functional currency of our foreign subsidiaries is the local
currency. The functional currency is determined based on management judgment and
involves consideration of all relevant economic facts and circumstances
affecting the subsidiary. Generally, the currency in which the subsidiary
transacts a majority of its transactions, including billings, financing, payroll
and other expenditures would be considered the functional currency but any
dependency upon the parent and the nature of the subsidiary's operations must
also be considered. Sagent translates the assets and liabilities of
international subsidiaries into U.S. dollars at the current rates of exchange in
effect during each period. Revenue and expenses are translated using rates that
approximate those in effect during the period. Gains and losses from translation
adjustments are included in stockholders' equity in the consolidated balance
sheet caption "Accumulated other comprehensive loss."

Accordingly, we had a cumulative translation loss of $0.2 million as of 
March 31, 2002 and December 31, 2001. Had we determined that the functional
currency of our subsidiaries was the
U.S. dollar, these losses and gains would have increased or decreased our loss for
each of the periods presented. The magnitude of these losses is dependent upon movements in the exchange rates of the foreign
currencies in which we transact business against the United States dollar. These
currencies include the following:

- U.K.                   British Pound
- Japan                  Japanese Yen
- Germany             Euro
- France               
Euro
- Australia             Australian Dollar
- Brazil                  Brazilian Real
- Benelux               Euro
- Mexico               Mexican Peso
- Asia Pacific         Singapore Dollar

Any future
translation gains and losses could be significantly higher than those noted in
each of these periods if the international business continues to grow. In
addition, if we determine that a change in the functional currency of our
subsidiaries has occurred at any point in time, we would be required to include
any translation gains or losses from the date of change in our statement of
operations.

Valuation allowances

The preparation of financial statements requires Sagent's management to make
estimates and assumptions that affect the reported amount of assets and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the 
period.

Sagent's current estimated range of liability related to some of the pending
litigation is based on claims for which we can reasonably estimate the amount
and range of loss. Because of the uncertainties related to both the amount and
range of loss on the remaining pending litigation, Sagent is unable to make a
reasonable estimate of the liability that could result from unfavorable outcome.
As additional information becomes available, we will assess the potential
liability related to our pending litigation and revise our estimates. Such
revisions in our estimates of the potential liability could materially impact
our results of operation and financial position.

Sagent also analyzes current accounts receivable for a reserve for doubtful
accounts based on historical bad debt, customer credit-worthiness, the current
business environment and historical experience with the customer. The allowance
for doubtful accounts was $1.9 million and $1.8 million as of March 31, 2002 and
December 31, 2001, respectively. The allowance includes specific reserves for
accounts where collection is no longer considered probable. In addition, we
maintain a general reserve for invoices without specific reserves by applying a
percentage based on the age category. For the three months ended March 31, 2002.
Sagent recognized $0.1 million of bad debt expense in accounts receivable
against the allowance for doubtful accounts. If events arise that may cause our customers' ability to pay,
we evaluate the need to increase our allowance for doubtful accounts based on an
assessment of the probability of collection.  We review our allowance for
doubtful accounts against specific customer balances outstanding to determine
the adequacy of the allowance.  To the extent economic and market events
cause the financial ability of our customers with outstanding balances to
deteriorate, we may be required to record additional provisions for doubtful
accounts in the future periods.

Sagent has a 90 days warranty for any defects in the products that it sells to
customers. Sagent has not provided any allowances for returns since historically
we have not had any material returns due to defects.  If due to certain
circumstances, we receive returns from customers due to defective materials
shipped, then we may be required to record additional expenses in the future
periods and provide provisions against future returns.

RESULTS OF OPERATIONS (Amount in thousands)

The following table sets forth for the periods presented, certain data, from our
unaudited condensed consolidated statements of operations, including data as a
percentage of total revenue. The information contained in the table below should
be read in conjunction with the Unaudited Condensed Consolidated Financial
Statements and Notes thereto included elsewhere in this quarterly report on Form
10-Q.

|                                        | ThreeMonths Ended March 31,
|--------------------------------------- | ---------------------------
|                                        | 2002                       
|Revenue:                                |                            
|License                                 | $6,116                     
|Service                                 | 5,167                      
|Total net revenue                       | 11,283                     
|Cost of net
            revenue:        |                            
|License                                 | 614                        
|Service                                 | 2,195                      
|Total cost of net revenue               | 2,809                      
|Gross profit                            | 8,474                      
|Operating
            expenses:         |                            
|Sales and marketing                     | 7,111                      
|Research and development                | 3,425                      
|General and
            administrative  | 1,336                      
|Stock-based compensation                | 189                        
|Amortization of goodwill                | 0                          
|Restructuring credit                    | (50)                       
|Total operating expenses                | 12,011                     
|Loss from
            operations        | (3,537)                    
|Interest income, net                    | 18                         
|Other
            income (expense), net | (60)                       
|Net loss before income tax              | (3,579)                    
|Provision for income taxes              | 144                        
|Net Loss                                | ($3,723)                   

Revenue

Total revenue increased 10% to $11.3 million for the three months ended March
31, 2002 from $10.3 million for the corresponding period in 2001. The increase
in total revenue was mainly attributed to an increase of $1.2 million or 41% in
international revenue to $4.0 million for the three months ended March 31, 2002
from $2.8 million for the corresponding period in 2001. This increase is
attributed mainly to the expansion of our international operations with new
subsidiaries added in the Benelux region, Australia, Mexico, and the Asia
Pacific region as well as stronger overseas market demand for our products.

|                  | Three Months Ended March 31
|----------------- | ---------------------------
|                  | 2002                       
|Revenue:          |                            
|U.S.A. (Domestic) | $7,306                     
|International     | 3,978                      
|Total net revenue | $11,283                    

License revenue increased 29% to $6.1 million for the three months ended March
31, 2002 from $4.7 million for the corresponding period in 2001. The increase
was mainly attributed to the execution of OEM contracts that increased  indirect sales by $0.7 million.

Service revenue decreased 7% to $5.2 million for the three months ended March
31, 2002 from $5.5 million for the corresponding period in 2001.

|                      | Three Months Ended March 31
|--------------------- | ---------------------------
|                      | 2002                       
|Service:              |                            
|Maintenance           | $3,045                     
|Professional Services | 2,122                      
|Total service revenue | $5,167                     

Maintenance revenue
increased by 30% to $3.0 million for the three months ended March 31, 2002 from
$2.3 million for the corresponding period in 2001. The  increases in
maintenance revenue were due primarily to new licenses and an increased effort
to renew the maintenance agreements within the existing customer base. We expect
maintenance revenue to continue to rise during 2002 as a result of our effort to
continue to increase our installed base of customers and maintain consistent
maintenance renewal rates.

Professional services decreased by
34% to $2.1 million for the three month ended March 31, 2002 from $3.2 million for the corresponding
period in 2001. Decreases in professional services revenue were due to declines
in consulting and training services attributed to a slowdown in the economy and
a decline in new license revenue in prior quarters.

Sagent continued to grow internationally as our
international revenue was 35% or $4.0 million and 27% or $2.8 million for the
three months ended March 31, 2002 and 2001, respectively, representing an
increases of $1.2 million or 41%. This increase is attributed mainly to
expansion of our international operations as well as stronger overseas market
demand for our products. A significant portion of our total revenue is currently
derived from international sales and therefore subject to its related risks,
including general economic conditions in each country, the strength of
international competitors, different tax structures, difficulty of managing an
organization spread over various countries, changes in regulatory requirements,
compliance with a variety of foreign laws and regulations, longer payment
cycles, and the volatility of exchange rates in certain countries. A portion of
our business is conducted in currencies other than the U.S. dollar and the
effect of exchange rates on our total revenues was immaterial during the three months ended March
31, 2002 and 2001. Foreign exchange rates will continue to affect
our total revenue and results of operations depending on the U.S. dollar
strengthening or weakening relative to foreign currencies. Unfavorable changes
in each country's general economic and political environment or foreign exchange
rates may have a material adverse impact on our total revenue and results of
operations.

Cost of Revenue

Cost of revenue
from license sales consists primarily of royalties, product packaging, shipping,
media, and documentation. Our cost of revenue for license sales was $0.6 million
and $0.8 million for the three months ended March 31, 2002 and 2001,
respectively, representing 10% and 17% of license revenue in the three months
ended March 31, 2002 and 2001, respectively. Our cost of license revenue
decreased over the same period of the prior year as a result of discontinuation
of providing product documentation in a hard copy format and reducing the
applicable costs by $0.2 million. We are providing our customers with soft
copy online documentation effective January 1, 2002.

Cost of service consists primarily of personnel costs associated with providing
software maintenance, technical support, training and consulting services. Our
cost of service revenue declined by 30% to $2.2 million for the three months
ended March 31, 2002 from $3.1 million for the corresponding period in 2001. The
decline was mainly attributed to outsourcing of marketing services that reduced
the cost of services by $0.3 million and a reduction in headcount to 43 as of
March 31, 2002 from 63 at March 31, 2001.  The reduction in headcount
resulted in a $0.6 million decrease in salary and employee
related costs.

Gross Margin

Gross margins
increased to 75% for the three months ended March 31, 2002 from 61% for the same
period in 2001. The increase was due to the lower cost of revenue for both
license and service sales and the increase in license revenue as a percentage of
total revenue, since license revenue normally has a lower cost than service
revenue.

Sales and Marketing

Sales and marketing expenses consist primarily of
compensation, travel, marketing programs, and branch facilities. In absolute
dollars, sales and marketing expenses declined by $1.4 million to $7.1 million
for the three months ended March 31, 2002 from $8.5 million for the
corresponding period in 2001. As a percentage of total net revenues, sales and
marketing expenses represent 63% and 83% for the three months ended March 31,
2002 and 2001, respectively. The decline was attributable to a $0.4 million
reduction in marketing programs, a  $0.3 million reduction in relocation and
recruiting expenses and a $0.3 million reduction in traveling expenditures.

Research and Development

Research and development expenses consist primarily of
personnel and related costs associated with the development of new products, the
enhancement and localization of existing products, quality assurance testing,
and facilities. In absolute dollars, research and development expenses have
remained fairly consistent decreasing by $0.5 million to $3.4 million for the three
months ended March 31, 2002 from $3.9 million for the corresponding period in
2001. As a percentage of total net revenue, research and development expenses
represent 30% and 37% for the three months ended March 31, 2002 and 2001,
respectively. The decline is mainly attributable to salary and employee related
costs pertaining to salary reductions and other cost cutting measures that took
effect during the first quarter of 2002.

General and Administrative

General and administrative expenses consist primarily of
personnel costs for finance, human resources, information systems and general
management as well as legal, accounting and bad debt expenses. In absolute
dollars, general and administrative expenses declined by $2.6 million to $1.3
million for the three months ended March 31, 2002 from $3.9 million for the
corresponding period in 2001. As a percentage of total net revenue, general and
administrative expenses represent 12% and 38% for the three months ended March
31, 2002 and 2001, respectively. The decline in absolute dollars was primarily
due to a $0.8 million decline in bad debt expense, a $0.4 million third party professional fees,
a $0.2 million decline in office rent and facility expenditures, a $0.7 million
reduction in computer related services
and a $0.5 million reduction in salaries and employee related costs, as a result
of the reduction in headcount to 26 as of  March 31, 2002 from 28 at March
31, 
2001.  
 LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2002, Sagent's
principal source of liquidity consisted of $12.5 million of  cash and cash
equivalents and $0.8 million restricted cash in the form of a money market
account and certificate of deposit. Since inception, we have funded our
operations partially
through private sales of equity securities, the use of equipment leases and the
initial public offering of our common stock in April 1999.

Net cash used in operating activities was $2.1 million, due primarily to funding
of our ongoing operations.

Net cash used by investing activities was $0.04 million in the first quarter of 2002, due
primarily to payments for the purchase of certain equipment and software.

Net cash used by
financing activities was $0.8 million in the first quarter of 2002, due
primarily to payments of  capital lease obligations.

Accounts receivable decreased 13% in the first quarter of 2002 due to improvement in  days sales
outstanding (DSO). Sagent calculates its DSO on a "net" basis by dividing the
average accounts receivable at the beginning and the end of the quarter by the
revenue booked, revenue recognized net of changes in deferred revenue, for the
quarter multiplied by the number of days during that quarter. There was
improvement in collection of accounts receivables in the first quarter of 2002
compared to the same period in 2001. DSO was at 89 and 126 as of  March 31, 2002 and 2001, respectively.

The following is a summary
of our future minimum payments under contractual obligations as of March 31,
2002:

|(amount in millions) | Remaining of 2002 | 2003 | 2004 and thereafter | Total
|-------------------- | ----------------- | ---- | ------------------- | -----
|Capital Leases       | $1.6              | $1.4 | $0.1                | $3.1 
|Operating Leases     | 2.3               | 2.0  | 0.7                 | 5.0  
|Purchase obligation  | 0.5               | 0.1  | 0.0                 | 0.6  
|Total                | $4.4              | $3.5 | $0.8                | $8.7 

Sagent has entered into several
agreements to finance computer equipment leases. Sagent financed the acquisition
of property and equipment, primarily computer hardware and software, and
leasehold improvements and furniture totaling $0.04 million and $4.0 million as
of March 31, 2002 and December 31, 2001, respectively, through capital leases.
Sagent has also entered into several agreements to lease sites in California and
several other states as well as in other countries in which it has sales
operations. Sagent is also under obligation to pay certain maintenance fees to
third party vendors.

Purchase obligations relate to
Sagent's future commitments for acquired
technology and a data renewal contract.

In October 2001, Sagent entered
into a $5 million line of credit agreement with a financial institution
collateralized by certain of our assets. The line consists of advances against
eligible accounts receivable in an aggregate amount not to exceed the lesser of
the committed revolving line of the borrowing base, less any outstanding letters
of credit, foreign currency exchange contracts, or any other extension of credit
by the financial institution. Advances against the revolving line bear interest
at the bank's prime rate plus 1%. The line of credit expires on August 31, 2002.
As of March 31, 2002, Sagent has not utilized the credit line. As of March 31,
2002, the Company was not in compliance with certain of the financial covenants
of the line of credit agreement. As a result, the bank required us to maintain
$0.8 million of cash equivalents on deposit to support the standby letters of
credit, which is classified as restricted cash on the consolidated balance
sheets. The Company is evaluating offers for a replacement credit facility with
less restrictive terms. If the Company does not secure such a credit facility or
improve its financial performance or liquidity to comply with the financial
covenants, the line of credit and deposits supporting the stand by letters of
credit will remain unavailable.

Our ability to grow sales and
manage our expenses will have a direct impact on our liquidity and capital
resources. Factors which are reasonably likely to impact our ability to maintain
or grow revenues are as follows:

- general economic conditions and the information technology spending
  environment;
- the growth or contraction of the enterprise intelligence software market;
- competition from other participants in the enterprise intelligence
  software market;
- our ability to expand our direct and indirect sales channels;
- our ability to maintain and expand our marketing, technology and
  distribution relationships;
- our access to licensed technologies integrated in our products and
  services
- market acceptance of Internet solutions;
- our ability to manage our international expansion;
- our ability to protect our intellectual property rights; and
- our ability to anticipate and respond to technological change.

We believe that our existing cash
balances and any cash provided by operations will be sufficient to meet our
operating requirements for the remainder of the fiscal year ended December 31,
2002. Thereafter, we may require additional funds to support our operating
requirements and may seek, even before such time, to raise additional funds
through public or private equity financing, debt financing or other sources.
There can be no assurance that additional financing will be available at all, or
that if available, such financing will be obtained on terms favorable to us and
would not result in additional dilution to our stockholders. If we are unable to
raise additional capital, we will take actions to conserve our cash balances,
including significantly reducing our operating expenses, downsizing our staff
and closing existing branch offices, all of which could have a material adverse
effect on our  financial condition and our ability to reduce losses or
generate profits.

Net cash used in
operating activities was $2.1 million and $7.3 million in the three months ended March 31,
2002 and 2001, respectively. For such periods, net cash used in operating
activities was primarily a result of funding ongoing operations.

RECENT ACCOUNTING PRONOUNCEMENTS

In August 2001, the Financial
Accounting Standards Board (FASB) issued Statement of Financial Accounting
Standard (SFAS) No.143, "Accounting for Asset Retirement Obligations." SFAS No.
143 requires an enterprise to record the fair value of an asset retirement
obligation as a liability in the period in which it incurs a legal obligation
associated with the retirement of a tangible long-lived asset. Since the
requirement is to recognize the obligation when incurred, approaches that have
been used in the past to accrue the asset retirement obligation over the life of
the asset are no longer acceptable. Statement No. 143 also requires the
enterprise to record the contra to the initial obligation as an increase to the
carrying amount of the related long-lived asset (i.e., the associated asset
retirement costs) and to depreciate that cost over the remaining useful life of
the asset. The liability is changed at the end of each period to reflect the
passage of time (i.e., accretion expense) and changes in the estimated future
cash flows underlying the initial fair value measurement. The provision of SFAS
No. 143 is effective for fiscal years beginning after June 15, 2002. We do not
expect the adoption of SFAS No. 143 to have a material effect on our
consolidated results of operations or financial position.

In October 2001, the Financial
Accounting Standards Board (FASB) issued Statement of Financial Accounting
Standard (SFAS) No.144, "Accounting for the Impairment or Disposal of Long-Lived
Assets." SFAS No. 144 addresses the financial accounting and reporting for the
impairment or disposal of long-lived assets. This statement supersedes SFAS No.
121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of." SFAS No. 144 also supersedes the accounting and
reporting provisions of APB Opinion No.30, "Reporting the Results of
Operations-Reporting the Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions," for the disposal of
a segment of business. The provision will be effective for fiscal years
beginning after December 15, 2001 and interim periods within those fiscal
periods. The Company  adopted the provisions of SFAS No. 144 on January 1, 2002.
The adoption of SFAS No. 144 did not have a material effect on our
consolidated results of operations or financial position.

RISK FACTORS THAT MAY AFFECT FUTURE RESULTS

Any investment in our common stock
involves a high degree of risk. You should consider carefully the following
information about risks, together with the other information contained in this
report, before you decide whether to buy our common stock or maintain your
investment. Additional risks and uncertainties not known to us or that we now
believe to be unimportant could also impair our business. If any of the
following risks actually occur, our business, results of operations and
financial condition could suffer significantly. As a result, the market price of
our common stock could decline, and you may lose all of your investment.

WE HAVE RECEIVED A NOTICE FROM NASDAQ REGARDING THE
POTENTIAL DELISTING OF OUR COMMON STOCK.

On May 10, 2002,
Nasdaq notified us that the minimum closing bid price for our common stock had
fallen below the specified $1.00 per share for 30 consecutive business days and
that therefore, our common stock was subject to delisting from the Nasdaq
National Market unless the bid price for our common stock closes at or above
$1.00 per share for a 10 consecutive day period prior to August 8, 2002. If we
do not comply with the minimum bid requirement by such time, Nasdaq will send us
formal notice of delisting.  We would then have the opportunity to appeal the
delisting notice and appear before Nasdaq's Listing Qualifications Panel.  Our
common stock would continue to trade on the Nasdaq National Market until the
Panel makes its formal decision.

In the event our shares are delisted from
the Nasdaq National Market, we will attempt to have our common stock traded on
the Nasdaq over-the counter Bulletin Board.  If our common stock is delisted,
it would seriously limit the liquidity of our common stock and impair our
potential to raise future capital through the sale of our common stock, which
could have a material adverse effect on our business.  Delisting could also
reduce the ability of holders of our common stock to purchase or sell shares as
quickly and as inexpensively as they have done historically, and may have an
adverse effect on the trading price of our common stock.  Delisting could
also adversely affect relationships with vendors and customers.

WE RESTATED A PORTION OF OUR FINANCIAL RESULTS FOR
2001.

On November 28, 2001, we announced
that we were revising our reported revenues for the first nine months of 2001 as
a result of an internal investigation into the validity of sales orders to
various government agencies. Our investigation confirmed that sales orders
totaling approximately $5 million booked by one of our employees were forged. As
a result, we filed Form 10-Q/A's for the periods ended March 31, 2001 and June
30, 2001 with financial statements restated to remove the effect of the invalid
sales orders.

As a result of the restatement,
Sagent has been named in shareholder lawsuits. These lawsuits could seriously
harm our business and financial condition. In particular, the lawsuits could
harm our relationships with existing customers and our ability to obtain new
customers. The continued defense of the lawsuits also could result in the
diversion of our management's time and attention away from business operations,
which could harm our business. Negative developments with respect to the
lawsuits could cause our stock price to decline significantly. In addition,
although we are unable to determine the amount, if any, that we may be required
to pay in connection with the resolution of these lawsuits by settlement or
otherwise, the size of any such payment could seriously harm our financial
condition. The complaints generally allege that we and the other named
defendants made false or misleading statements of material facts about our
financial results during 2001. The complaints, in general, do not specify the
amount of damages that plaintiffs seek. As a result, we are unable to estimate
the possible range of damages that might be incurred as a result of the
lawsuits. We have not set aside any financial reserves relating to potential
damages associated with any of these lawsuits.

OUR WORKFORCE REDUCTION AND FINANCIAL
PERFORMANCE MAY ADVERSELY AFFECT THE MORALE AND PERFORMANCE OF OUR PERSONNEL AND
OUR ABILITY TO HIRE NEW EMPLOYEES.

In connection with our effort to
streamline operations, increase revenues, reduce costs and bring our staffing
and structure in line with our current and anticipated requirements, we recently
realigned our business organization, which included a 14% reduction in workforce.
There may be costs associated with the workforce reduction, and our realignment
plan may yield unanticipated consequences, such as attrition beyond our planned
reduction in staff. In addition, our common stock has recently declined in value
below the exercise price of many options granted to employees pursuant to our
stock option plan. Thus, the intended benefits of the stock option granted to
our employees, the creation of performance and retention incentives, may not be
realized.

In addition, workforce reductions
and management changes create anxiety and uncertainty and may adversely affect
employee morale. As a result, we may lose employees whom we would prefer to
retain. Due to above factors, our remaining personnel may seek employment with
larger, more established companies they perceive as having less volatile stock
prices.

WE MAY NEED TO RAISE
ADDITIONAL CAPITAL IN THE FUTURE TO FUND OUR OPERATIONS.

Since our
inception, we have funded our operations primarily through sales of equity
securities, and not from cash generated by our business. During the last twelve months, we have completed
two separate private offerings of our common stock. In February 2001, we sold
5.8 million shares of our common stock to a group of private investors, raising
approximately $16.1 million in net proceeds. In August 2001, we completed the
sale of 9.1 million shares of our common stock to a group of private investors,
netting approximately $16.0 million in proceeds.

Although we believe that our
current cash and cash equivalents and any net cash provided by operations will
be sufficient to meet anticipated cash needs for the remainder of this fiscal year, a
revenue shortfall could require us to reduce operations or raise additional
funds through equity or debt financings. We cannot assure you any equity or debt
financing will be available to us on favorable terms, if at all, or that if
available, such financing will not be dilutive to our stockholders. If we are
unable to raise additional capital, we will take actions to conserve our cash
balances, including significantly reducing our operating expenses, downsizing
our staff and closing existing branch offices, all of which could have a
material adverse effect on our business, financial condition and our ability to
reduce losses or generate profits.

VARIATIONS IN OUR QUARTERLY OPERATING RESULTS DUE TO
SUCH FACTORS AS CHANGES IN DEMAND FOR OUR PRODUCTS AND CHANGES IN OUR MIX OF
REVENUES MAY CAUSE OUR STOCK PRICE TO DECLINE.

We expect our quarterly operating
results to fluctuate. We therefore believe that quarter-to-quarter comparisons
of our operating results may not be a good indication of our future performance,
and you should not rely on them to predict our future performance or the future
performance of our stock price. Our short-term expense levels are relatively
fixed and are based on our expectations of future revenues. As a result, a
reduction in revenue in a quarter may harm our operating results for that
quarter. In the past, our operating results have fallen below the expectations
of market analysts and investors. If we fall short of market expectations in
future quarters, the price of our common stock may fall. Factors that may cause
our operating results to fluctuate on a quarterly basis include:

- varying size, timing and contractual terms of orders for our products;
- lengthy sales cycles associated with our products;
- changes in the mix of revenue attributable to higher-margin product
  license revenue as opposed to lower-margin service revenue;
- customers' decisions to defer orders or implementations, particularly
  large orders or implementations, from one quarter to the next;
- announcements or introductions of new products by our competitors;
- our ability to hire, train and retain sufficient engineering, consulting,
  training and sales staff; and
- subcontracting to more expensive consulting organizations to help provide
  implementation, support and training services when our own capacity is
  constrained.

A SLOWING ECONOMY AND REDUCTIONS IN INFORMATION
TECHNOLOGY SPENDING MAY NEGATIVELY AFFECT OUR REVENUES.

Our revenues may be negatively
affected by the increasingly uncertain economic conditions both in the market
generally and in our industry. If the economy continues to slow, some companies
may reduce their budgets for spending on information technology and business
software. As a consequence, our sales cycle may become longer with some
customers, and other prospective customers may postpone, reduce, or even forego
the purchase of our products and services, which could negatively affect our
revenues.

ENTERPRISE INTELLIGENCE SOFTWARE MARKETS MAY NOT GROW.

Since all of our
revenues are attributable to the sale of enterprise intelligence software and
related maintenance, consulting and training services, if the market for
enterprise intelligence software does not grow, our business will not grow. We
expect enterprise intelligence software and services to account for
substantially all of our revenue for the foreseeable future. Although demand for
enterprise intelligence software has grown in recent years, the market may not
continue to grow or, even if the market does grow, businesses may not adopt our
products.

IF WE FAIL TO EXPAND OUR DIRECT AND INDIRECT
SALES CHANNELS, WE WILL NOT BE ABLE TO INCREASE REVENUES.

Competition for highly qualified
sales personnel is intense, and we may not be able to recruit and maintain the
kind and the number of sales personnel we need. Hiring highly qualified customer
service and account management personnel is very competitive in the software
industry due to the limited number of people available with the necessary
technical skills and understanding of the space.

In order to grow our business, we
need to increase market awareness and sales of our products and services. To
achieve this goal, we need to increase both our direct and indirect sales
channels. If we fail to do so, this failure could harm our ability to increase
revenues. We currently receive a significant portion of our revenues from direct
sales, but we intend to increase sales through indirect sales channels in the
future.

We intend to derive revenues from
indirect sales channels by selling our software through value-added resellers
(VARs) and original equipment manufacturers (OEMs). These VARs and OEMs offer
our software products to their customers together with consulting and
implementation services or integrate our software solutions with other software.
Our ability to increase our revenues is dependent on entering into relationships
with these VARs and OEMs.

We expect as part of our strategy
to increase international sales principally through both direct and indirect
sales. Our ability to develop and maintain direct and indirect channels will
significantly affect our ability to penetrate international markets. 
 
 PENDING LITIGATION COULD HARM OUR BUSINESS.

During the last two years, Sagent
has been the subject of several shareholder lawsuits, which are still pending.
In addition, the members of our board of directors have been the subjects of
derivate lawsuits alleging breaches of their fiduciary duties to Sagent. More
recently, as the result of the restatement by Sagent of its financial results
for portions of 2001, Sagent has been named in additional shareholder lawsuits.
These lawsuits could seriously harm our business and financial condition. In
particular, the lawsuits could harm our relationships with existing customers
and our ability to obtain new customers. The continued defense of the lawsuits
could also result in the diversion of our management's time and attention away
from business operations, which could harm our business. The lawsuits could also
have the effect of discouraging potential acquirers from bidding for us or
reducing the consideration they would otherwise be willing to pay in connection
with an acquisition. In addition, although we are unable to determine the
amount, if any, that we may be required to pay in connection with the resolution
of these lawsuits by settlement or otherwise, the size of any such payment could
seriously harm our financial condition.

WE HAVE A RELATIVELY NEW MANAGEMENT TEAM AND THERE IS NO GUARANTEE THAT
THEY WILL BE SUCCESSFUL IN GROWING OUR BUSINESS.

Our management team has not been
with us for a significant length of time. Ben C. Barnes, our Chief Executive
Officer, joined us in August 2000, replacing founder Ken Gardner. Steven
R. Springsteel, our Chief Financial Officer, joined us in November 2001 and Richard Ghiossi,
Chief Marketing Officer joined us in October 2001. These employees serve
"at-will" and may elect to pursue other opportunities at any time. If our
management team is unable to work effectively together to accomplish our
business objectives, our ability to grow our business could be severely
impaired.

IF WE DO NOT KEEP PACE WITH TECHNOLOGICAL CHANGE, OUR PRODUCTS MAY BE
RENDERED OBSOLETE AND OUR BUSINESS MAY FAIL.

Our industry is characterized by
rapid technological change, changes in customer requirements, frequent new
product introductions and enhancements and emerging industry standards. In order
to achieve broad customer acceptance, our products must be compatible with major
software and e-commerce applications and operating systems. We must continually
modify and enhance our products to keep pace with changes in these applications
and systems. If our products were to be incompatible with popular new systems or
applications, our business would be significantly harmed. In addition, the
development of entirely new technologies replacing existing software could lead
to new competitive products that have better performance or lower prices than
our products and could render our products obsolete.

Delays or problems in the
installation or implementation of our new releases may cause customers to forego
purchases of our products to purchase those of our competitors.

OUR MARKETS ARE HIGHLY COMPETITIVE AND COMPETITION COULD HARM OUR ABILITY
TO SELL PRODUCTS AND SERVICES AND REDUCE OUR MARKET SHARE.

Competition could seriously harm
our ability to sell additional software and maintenance and support renewals on
prices and terms favorable to us. Additionally, if we cannot compete
effectively, we may lose market share. The markets for our products are
intensely competitive and subject to rapidly changing technology. We compete
against providers of decision support software, data warehousing software and
enterprise application software. We also compete with providers of e-Business
software, which allows for the electronic delivery of products and services that
enable commerce among businesses and end users. Companies in each of these areas
may expand their technologies or acquire companies to support greater enterprise
intelligence functionality and capability, particularly in the areas of query
response time and the ability to support large numbers of users. We may also
face competition from vendors of products and turnkey solutions for e-Business
applications that include Internet based information functionality.

Many of our competitors have
longer operating histories, significantly greater financial, technical,
marketing or other resources, or greater name recognition than we do. Our
competitors may be able to respond more quickly than we can to new or emerging
technologies and changes in customer requirements.

WE RELY, IN PART, ON EQUITY INCENTIVES TO ATTRACT AND RETAIN EMPLOYEES,
AND THE PERFORMANCE OF OUR STOCK PRICE MAY IMPAIR OUR ABILITY TO ATTRACT AND
RETAIN QUALIFIED PERSONNEL.

The market price of our common
stock has fluctuated substantially since our initial public offering in April
1999, and has experienced a significant decline since the first quarter of 2000.
We have relied historically on our ability to attract and retain employees using
equity incentives, and any perception by potential or existing employees that
our equity incentives are less attractive could harm our ability to attract and
retain qualified employees.

WE RELY ON MARKETING, TECHNOLOGY AND DISTRIBUTION RELATIONSHIPS THAT MAY
GENERALLY BE TERMINATED AT ANY TIME, AND IF OUR CURRENT AND FUTURE RELATIONSHIPS
ARE NOT SUCCESSFUL, OUR GROWTH MAY BE LIMITED.

We rely on marketing and
technology relationships with a variety of companies that, in part, generate
leads for the sale of our products. These marketing and technology relationships
include relationships with:

- system integrators and consulting firms;
- vendors of e-commerce and Internet software;
- vendors of software designed for customer relationship management or for
  management of organizations' operational information;
- vendors of key technology and platforms;
- demographic data providers; and
- an application service provider and an Internet hoster.

If we cannot maintain successful
marketing and technology relationships or cannot enter into additional marketing
and technology relationships, we may have difficulty expanding the sales of our
products and our growth may be limited.

IF WE LOSE KEY LICENSES WE MAY BE REQUIRED TO DEVELOP OR LICENSE
ALTERNATIVES WHICH MAY CAUSE DELAYS OR REDUCTIONS IN SALES.

We rely on third-party
technologies, and if we are unable to use or integrate these technologies, our
product and service development may be delayed.

Sagent relies on MainWin from
MainSoft to deliver the Solaris versions of the Data Load, Data Access, and
WebLink Servers. MainWin is the Windows API ported to Sun Solaris. In addition,
Visual Basic for Applications has been embedded in Design Studio and Information
Studio to allow customization. We rely on interfaces from Microsoft and Crystal
Decisions to integrate Microsoft Excel and Crystal Reports as display options in
Design Studio, Information Studio, and WebLink. The Opalis Robot from Opalis
provides the basis for the Sagent Automation tool. Automation is a dependency
scheduling tool with extensive integration with operating system level tasks.
Opalis may not provide a stable Solaris version in the timeframe expected by our
customers. The basis for the Sagent Portal is Citrix' XPS portal product. Citrix
may discontinue this product or not make it available on the needed operating
systems in a commercially viable time schedule. The DirectLink for R/3 product
we offer to connect to SAP is based on metadata browsing technology and pool
table connectivity from Server Enterprises. DirectLink for Mainframes, which
provides connectivity to mainframe data sources, is enabled by technology from
Striva and Cross Access.

FAILURE OF COMMERCIAL USERS TO ACCEPT INTERNET SOLUTIONS COULD LIMIT OUR
FUTURE GROWTH.

A key element of our strategy is
to offer users the ability to access, analyze and report information from a data
server through a Web browser. Our growth may be limited if businesses do not
accept Internet solutions or perceive them to be cost-effective. Continued
viability of the Internet depends on several factors, including:

- Third parties' abilities to develop new enabling technologies in a timely
  manner;
- The Internet's ability to handle increased activity;
- The Internet's ability to operate as a fast, reliable and secure network;
  and
- Potential changes in government regulation.

Moreover, critical issues
concerning the commercial use of the Internet, including data corruption, cost,
ease of use, accessibility and quality of service, remain unresolved and may
negatively affect commerce and communication on the Internet. These issues will
need to be addressed in order for the market for our products and services to
grow.

WE HAVE EXPANDED OUR INTERNATIONAL OPERATIONS BUT MAY ENCOUNTER A NUMBER
OF PROBLEMS IN MANAGING OVERSEAS OPERATIONS, WHICH COULD LIMIT OUR FUTURE
GROWTH.

We may not be able to successfully
market, sell, deliver and support our products and services internationally. Our
failure to manage our international operations effectively could limit the
future growth of our business. International sales represented approximately 28%
of our total revenue for the year ended December 31, 2001 and 35% for the three months
ended March 31, 2002. We conduct our international sales through local
subsidiaries in the United Kingdom, Germany, France, Japan, Brazil,
Asia/Pacific, Benelux region, and Australia and through distributor
relationships in South Africa and Italy. The expansion of our existing international
operations and entry into additional international markets will require
management attention and significant financial resources. Because of the
significant growth in international business, we benefit overall from a weaker
dollar and are adversely affected by a stronger dollar relative to major
currencies worldwide. Changes in exchange rates, and in particular a
strengthening of the U.S. dollar, may unfavorably affect our consolidated sales
and net income.

WE HAVE BEEN, AND MAY BE SUBJECT TO FUTURE, INTELLECTUAL PROPERTY
INFRINGEMENT CLAIMS.

We may be subject, from time to
time, to claims that we are infringing the intellectual property rights of
others. Any litigation regarding intellectual property rights may be costly to
defend or settle, and may divert the attention of our management and key
personnel from our business operations. The complexity of the technology
involved and the uncertainty of intellectual property litigation increase these
risks. Claims of intellectual property infringement might also require us to
enter into costly royalty or license agreements. In December 2000, we settled an
infringement claim brought by Timeline, Inc. Under the terms of the settlement,
we paid Timeline $600,000 and issued 600,000 shares of our common stock to
Timeline. We may be subject to similar or more costly claims in the future or
may become subject to an injunction against use of our products. A successful
claim of patent or other intellectual property infringement against us would
have an immediate material adverse effect on our business and financial
condition.

IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, THIS
INABILITY COULD WEAKEN OUR COMPETITIVE POSITION, REDUCE OUR REVENUE AND INCREASE
OUR COSTS.

Our success depends in large part
on our proprietary technology. We rely on a combination of copyright, trademark
and trade secrets, confidentiality procedures and licensing arrangements to
establish and protect our proprietary rights. We may be required to spend
significant resources to monitor and police our intellectual property rights. If
we fail to successfully enforce our intellectual property rights, our
competitive position may be harmed.

Other software providers could
copy or otherwise obtain and use our products or technology without
authorization. They also could develop similar technology independently which
may infringe our proprietary rights. We may not be able to detect infringement
and may lose a competitive position in the market before we do so. In addition,
competitors may design around our technology or develop competing technologies.
The laws of some foreign countries do not protect proprietary rights to the same
extent as do the laws of the United States.

IF WE DISCOVER SOFTWARE DEFECTS WE MAY HAVE PRODUCT-RELATED LIABILITIES
WHICH MAY LEAD TO LOSS OF REVENUE OR DELAY IN MARKET ACCEPTANCE FOR OUR
PRODUCTS.

Our software products are
internally complex and may contain errors, defects or failures, especially when
first introduced or when new versions are released. We test our products
extensively prior to releasing them; however, in the past we have discovered
software errors in some of our products after their introduction. Despite
extensive testing, we may not be able to detect and correct errors in products
or releases before commencing commercial shipments, which may result in loss of
revenue or delays in market acceptance.

Our license agreements with our
customers typically contain provisions designed to limit our exposure to
potential product liability claims. All domestic and international jurisdictions
may not enforce these limitations. Although we have not experienced any product
liability claims to date, we may encounter such claims in the future. Product
liability claims, whether or not successful, brought against us could divert the
attention of management and key personnel and could be expensive to defend.

WE HAVE ANTI-TAKEOVER DEFENSES THAT COULD DELAY OR PREVENT AN ACQUISITION
OF OUR COMPANY.

Provisions of our certificate of
incorporation, bylaws, other agreements and Delaware law could make it more
difficult for a third party to acquire us, even if doing so would be beneficial
to our stockholders. Our board of directors could choose not to negotiate with
an acquirer that it did not feel was in the strategic interests of our company.
If the acquirer was discouraged from offering to acquire us, or prevented from
successfully completing a hostile acquisition by the anti-takeover measures, you
could lose the opportunity to sell your shares at a favorable price.



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

The following discusses our
exposure to market risk related to changes in interest rates, foreign currency
exchange rates and equity prices. This discussion contains forward-looking
statements that are subject to risks and uncertainties. Actual results could
vary materially as a result of a number of factors including those set forth in
"Risk Factors That May Affect Results".

INTEREST RATE RISK

Our exposure to market risk
related to changes in interest rates is primarily due to our highly liquid
investments. We do not use derivative financial instruments. The primarily
objective of our investment activities is to preserve principal while maximizing
yields without significantly increasing risk. Our investments consist primarily
of highly liquid investments and certificate of deposits. Due to the nature of
our investments, we believe that there is no material risk exposure. All
investments are carried at cost, which is approximates market value. At March
31, 2002 and December 31, 2001, we had $13.3 and $16.3 million, respectively, in
cash equivalents and restricted cash.

Sagent has a $5 million
line of credit agreement with a bank collateralized by certain of our assets.
The line consists of advances against eligible accounts receivable in an
aggregate amount not to exceed the lesser of, the committed revolving line or
the borrowing base, less any outstanding letters of credit. Advances against the
revolving line bear interest at the bank's prime rate plus 1%. The prime rate
was  4.75% at March 31, 2002. The line of credit expires on August 31, 2002.
As of March 31, 2002, the Company was not in compliance with certain of the
financial covenants of the line of credit agreement. As a result, the bank
required us to maintain $0.8 million of cash equivalents on deposit with the
bank to support the
standby letters of credit, which is classified as restricted cash on the
consolidated balance sheets. The Company is evaluating offers for a replacement
credit facility with less restrictive terms. If the Company does not secure such
a credit facility or improve its financial performance or liquidity to comply
with the financial covenants, the line of credit and deposit supporting the
standby letters of credit will remain unavailable. Although we have no
outstanding balance under the line of credit, we may borrow under the line in
the future. If we do so and market interest rates rise, then our interest
payments would increase accordingly.

FOREIGN CURRENCY EXCHANGE RATE RISK

A high percentage
of operations is based in the United States, and, accordingly, the majority of
our transactions are denominated in U.S. Dollars. However, we do have foreign
based operations where transactions are denominated in foreign currencies and
are subject to exchange rate risk with respect to fluctuations in the relative value of currencies.
Currently, we have operations throughout Asia, Asia Pacific, Europe, Middle
East, South Africa and Latin America and conduct transactions in the local
currency of each location. To date, the impact of any fluctuation in the
relative value of other currencies has not been material due to relative size of
the operation. However, we will
continue to monitor our exposure to currency fluctuations, and, when
appropriate, may use financial hedging techniques in the future to minimize the
effect of these fluctuations, we cannot assure you that exchange rate
fluctuations will not harm our business in the future.

EQUITY PRICE RISK

We do not own any
significant public equity investments. Therefore, we believe we are not
currently exposed to any direct equity price risk.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time,
the Company has been subject to litigation including the pending litigation
described below. Because of the uncertainties related to both the amount and
range of loss on the pending litigation, management is unable to make a
reasonable estimate of the liability that could result from an unfavorable
outcome. As additional information becomes available, the Company will assess
its potential liability and revise its estimates. Pending or future litigation
could be costly, could cause the diversion of management's attention and could
upon resolution, have a material adverse affect on our business, result of
operations, financial condition and cash flow.

In addition, the
Company is engaged in certain legal and administrative proceedings incidental to
our normal business activities and believes that these matters will not have a
material adverse effect on our financial position, result of operations or cash
flow.

From October 20,
2000 to November 27, 2000, several class action lawsuits were filed in the
United States District Court on behalf of the individual investors who purchased
Sagent common stock between October 21, 1999 and April 18, 2000. The claims
allege that Sagent misrepresented its prospects for 1999 and the first quarter
of 2000. Thereafter, the court consolidated the complaints and selected a lead
plaintiff and counsel. A consolidated amended complaint was filed in April 2001.
The defendants filed a motion to dismiss the consolidated amended complaint. On
September 28, 2001, the court granted the defendants' motion, and gave the
plaintiffs leave to amend the complaint. On December 28, 2001, the class
plaintiffs filed a second amended complaint. Defendants filed a motion to
dismiss that complaint on February 15, 2002. The hearing on defendants' motion
is scheduled for June 2002.

On November 17, 2000,
a derivative lawsuit was filed by a purported Sagent shareholder in the Superior
Court of California for the County of San Mateo (the "Fanucci complaint"). On
February 9, 2001, a second derivative lawsuit was filed in the Superior Court of
California for the County of Santa Clara (the "Hu complaint"). The complaints
name certain of our present and former officers and directors as defendants. The
Hu complaint also names an investment bank retained by us and an employee of
that firm as defendants. We have also been named as a nominal defendant. The
principal allegation of the complaints is that the defendants breached their
fiduciary duties to Sagent. In July 2001, the two cases were coordinated for
pretrial purposes in the Superior Court of California for the County of Santa
Clara. Sagent filed a motion to dismiss the Fanucci complaint, on the ground
that, among other things, the plaintiff had failed to make a pre-suit demand on
the board of directors as required by Delaware law. The officer and director
defendants joined in that motion, and also moved to dismiss on the grounds that
the complaint fails to allege the asserted causes of action against the
individual defendants. Similar motions were filed concerning the Hu complaint.

The parties agreed to
stay the Hu complaint indefinitely, pending the outcome of the Fanucci matter.
The court entered an order staying the Hu complaint on January 11, 2002.
Thereafter, on January 16, 2002, the Fanucci plaintiff filed a motion to
transfer and/or remand that case back to the Superior Court for San Mateo County
where it was originally filed. The court heard oral argument on defendants'
motion to dismiss the Fanucci complaint, and the plaintiffs' transfer motion on
January 28, 2002. On March 1, 2002, the court issued an order sustaining
Sagent's motion to dismiss, granting the plaintiff leave to amend the complaint,
denying the plaintiff's motion to transfer and/or remand the Fanucci case to San
Mateo County, and ordering Sagent to produce a limited quantity of documents to
the plaintiff.

In October 2001,
infoUSA, Inc. filed a complaint against Sagent in the District Court of Douglas
County, Nebraska, seeking amounts infoUSA claims are owed under a license
agreement between Sagent and infoUSA. The amount of the claim is $900,000, plus
interest. A default judgment for the full amount of the claim was entered
against Sagent on December 20, 2001, for failure by Sagent to respond to the
initial complaint. Sagent filed a motion to set aside the default judgment in
January 2002. On February 22, 2002, the court granted Sagent's motion to set
aside the default judgment, and allowed Sagent to file its answer to the
complaint.

In November and
December 2001, several class action lawsuits were filed in the United States
District Court for the Northern District of California on behalf of investors
who purchased Sagent common stock between May 11, 2001 and November 28, 2001.
The complaints allege that Sagent and certain of its officers and directors
violated the Securities Exchange Act of 1934. The complaints allege that during
the class period, the defendants caused Sagent's shares to trade at artificially
inflated levels through the issuance of false and misleading financial
statements. The court has selected a lead plaintiff in that action and we expect
a consolidated amended complaint to be filed.

In February 2002, two
derivative lawsuits were filed by purported Sagent shareholders in the United
States District Court for the Northern District of California. The complaints
name certain of our present and former officers and directors as defendants. The
principal allegation of the complaints is that the defendants breached their
fiduciary duties to Sagent.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

(c) Recent Sales of Unregistered Securities.

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

ITEM 5. OTHER INFORMATION.

Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

THE EXHIBITS
LISTED IN THE ACCOMPANYING INDEX TO EXHIBITS ARE INCORPORATED BY REFERENCE AS
PART OF THIS FORM 10-Q.

(b) Reports on Form 8-K

No reports on Form
8-K were filed during the quarter ending March 31, 2002.

SIGNATURES

Pursuant to the
requirements of the Securities Exchange Act of 1934, as amended, the Registrant
has duly caused this report on Form 10-Q to be signed on its behalf by the
undersigned thereunto duly authorized.

SAGENT TECHNOLOGY, INC.



Dated: May 14, 2002                                                                                                            
/s/ Steven R. Springsteel

________________________________________
                                                                                                                                             
Steven R. Springsteel 
                                                                                                                                             
Executive Vice President, Finance and Administration 
                                                                                                                                             
and Chief Financial Officer 
                                                                                                                                             
(Principal Financial and Accounting Officer)

INDEX TO
EXHIBITS

|Number |      | Title
|------ | ---- | -----
|       |      |      
|3.1    | (1)  |      
|       |      |      
|3.2    | (1)  |      
|       |      |      
|3.3    | (1)  |      
|       |      |      
|4.1    | (1)  |      
|       |      |      
|4.2    | (2)  |      
|       |      |      
|4.3    | (4)  |      
|       |      |      
|10.1   | (1)  |      
|       |      |      
|10.2   | (1)  |      
|       |      |      
|10.3   | (1)  |      
|       |      |      
|10.4   | (1)  |      
|       |      |      
|10.5   | (1)  |      
|       |      |      
|10.6   | (1)  |      
|       |      |      
|10.7   | (1)  |      
|       |      |      
|10.8   | (1)+ |      
|       |      |      
|10.9   | (1)+ |      
|       |      |      
|10.10  | (1)+ |      
|       |      |      
|10.11  | (1)  |      
|       |      |      
|10.12  | (1)+ |      
|       |      |      
|10.13  | (1)  |      
|       |      |      
|10.14  | (1)  |      
|       |      |      
|10.15  | (1)  |      
|       |      |      
|10.16  | (1)  |      
|       |      |      
|10.17  | (1)  |      
|       |      |      
|10.18  | (1)  |      
|       |      |      
|10.19  | (1)+ |      
|       |      |      
|10.20  | (1)  |      
|       |      |      
|10.21  | (1)+ |      
|       |      |      
|10.22  | (1)  |      
|       |      |      
|10.23  | (1)  |      
|       |      |      
|10.24  | (1)  |      
|       |      |      
|10.25  | (2)  |      
|       |      |      
|10.26  | (2)  |      
|       |      |      
|10.27  | (2)  |      
|       |      |      
|10.28  | (3)  |      
|       |      |      
|10.29  | (4)  |      
|       |      |      
|10.30  | (6)  |      
|       |      |      
|10.31  | (6)  |      
|       |      |      
|10.32  | (6)  |      
|       |      |      
|16.1   | (5)  |      
|       |      |      



|1 |  | Incorporated by reference to the exhibits to the Registrant's
          Registration Statement on Form S-1 (No. 333-71369), declared effective
          by the Securities and Exchange Commission (SEC) on April 14, 1999.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |  |                                                                                                                                                                                                                            
|2 |  | Incorporated by reference
    to the exhibits to the Registrant's Annual Report on Form 10-K for the year
    ended December 31, 2000.                                                                                     
|  |  |                                                                                                                                                                                                                            
|3 |  | Incorporated by reference
    to the exhibit to the Registrant's Quarterly Report on Form 10-Q for the
    quarterly period ended March 31,2001.                                                                           
|  |  |                                                                                                                                                                                                                            
|4 |  | Incorporated by reference to the
    exhibits to the Registrant's Current Report on Form 8-K filed with the SEC
    on August 7, 2001.                                                                                     
|  |  |                                                                                                                                                                                                                            
|5 |  | Incorporated by reference
    to the exhibit to the Registrant's Current Report on Form 8-K filed with the
    SEC on October 19, 2000.                                                                                    
|  |  |                                                                                                                                                                                                                            
|6 |  | Incorporated by reference to the exhibits to the
    Registrant's Annual Report on Form 10-K for the year ended December 31, 2001
    filed with the SEC on April 1, 2002.                                                 
|  |  |                                                                                                                                                                                                                            
|+ |  | Confidential treatment has been granted with respect to
    certain portions of this exhibit. Omitted portions have been filed
    separately with the Securities and Exchange Commission.