 REVOLUTIONARY ANALYTICS. BREAKTHROUGH RESULTS. TM eLoyalty Q1 2007 Earnings Webinar May 09, 2007 Exhibit 99.1 |
 Slide 2 eLoyalty Confidential and Restricted © 2007 eLoyalty Corporation REVOLUTIONARY ANALYTICS. BREAKTHROUGH RESULTS. TM Safe Harbor Language During today’s call we will be making both historical and forward-looking statements in order to help you better understand our business. These forward-looking statements include references to our plans, intentions, expectations, beliefs, strategies and objectives. Any forward-looking statements speak only as of today’s date. In addition, these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those stated or implied by the forward-looking statements. The risks and uncertainties associated with our business are highlighted in our filings with the SEC, including our Annual Report filed on Form 10-K for the year ended December 30, 2006, our quarterly reports on Form 10-Q, as well as our press release issued earlier today. eLoyalty undertakes no obligation to publicly update or revise any forward-looking statements in this call. Also, be advised that this call is being recorded and is copyrighted by eLoyalty Corporation. |
 Slide 3 eLoyalty Confidential and Restricted © 2007 eLoyalty Corporation REVOLUTIONARY ANALYTICS. BREAKTHROUGH RESULTS. TM Discussion Topics Q1 Summary and eLoyalty Overview Q1 2007 Results Q2 2007 Guidance and 2007 Outlook |
 Slide 4 eLoyalty Confidential and Restricted © 2007 eLoyalty Corporation REVOLUTIONARY ANALYTICS. BREAKTHROUGH RESULTS. TM Q1 Summary 31% year/year Services revenue growth 11% sequential Services revenue growth $1.4 million year/year improvement in Adjusted Earnings Record $64.2 million Managed Services Backlog Record CIPCC and Behavioral Analytics™ revenue Growth in traditional business |
 Slide 5 eLoyalty Confidential and Restricted © 2007 eLoyalty Corporation REVOLUTIONARY ANALYTICS. BREAKTHROUGH RESULTS. TM Key Messages Cisco/CIPCC related activities remain strong Behavioral Analytics™ is in its infancy and we believe it has significant upside potential Demand for our Traditional Consulting Services has improved |
 Slide 6 eLoyalty Confidential and Restricted © 2007 eLoyalty Corporation REVOLUTIONARY ANALYTICS. BREAKTHROUGH RESULTS. TM eLoyalty Strategy Leverage our CRM and Contact Center Consulting platform to create a rapidly growing Managed Services and Consulting Company Service Line focus Converged IP for Contact Centers (CIPCC)…delivering and supporting Cisco’s Converged IP solutions for Contact Centers Behavioral Analytics™…a unique, proprietary managed analytics service |
 Slide 7 eLoyalty Confidential and Restricted © 2007 eLoyalty Corporation REVOLUTIONARY ANALYTICS. BREAKTHROUGH RESULTS. TM First Quarter Financial Results Summary $22.2 million of Services Revenue 31% increase year/year 11% increase sequentially $27.9 million of Total Revenue 42% increase year/year 18% increase sequentially $0.5 million of Adjusted Earnings Loss $1.4m improvement year/year $0.1m improvement sequentially $1.3 million Loss Before Non-Cash Compensation Expenses $1.6m improvement year/year $0.1m improvement sequentially |
 Slide 8 eLoyalty Confidential and Restricted © 2007 eLoyalty Corporation REVOLUTIONARY ANALYTICS. BREAKTHROUGH RESULTS. TM CIPCC Highlights Revenue Performance 60% year/year increase 12% sequential increase Other Highlights Added 7 new customers, including 2 with >$1.0 million in Services revenue Signed a 3 year renewal of a large Managed services contract Significantly expanded our relationship with a large state government client Grew CIPCC Managed Services Backlog 43% sequentially, to a record $22.4 million |
 Slide 9 eLoyalty Confidential and Restricted © 2007 eLoyalty Corporation REVOLUTIONARY ANALYTICS. BREAKTHROUGH RESULTS. TM Behavioral Analytics™ Highlights Revenue Performance 685% year/year increase 9% sequential increase Other Highlights Converted an additional client into production status Closed 2 new Assessments Significantly expanded our new prospect pipeline Summary Increasing amount of prospect and client activity Initial users are beginning to realize significant tangible benefits We believe the market opportunity is large Due to the size and complexity of these deals, sales cycles remain long |
 Slide 10 eLoyalty Confidential and Restricted © 2007 eLoyalty Corporation REVOLUTIONARY ANALYTICS. BREAKTHROUGH RESULTS. TM Managed Services Backlog Trend ($000’s) $- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Behavioral Analytics™ represents ~ 56% of ending Q1 Managed Services Backlog |
 Slide 11 eLoyalty Confidential and Restricted © 2007 eLoyalty Corporation REVOLUTIONARY ANALYTICS. BREAKTHROUGH RESULTS. TM Expense Classification Changes Beginning this quarter, certain expenses previously reported within Cost of Services will be classified as SG&A expenses The change is intended to provide a clearer understanding of our economic drivers moving forward, and is a result of the ongoing evolution of our business model The three changes in classification are: Costs associated with Behavioral Analytics™ development, and certain other Managed services administrative and support costs Non-billable costs associated with our vertical industry client services teams Costs associated with delivery management and related administrative support personnel The impact of these changes in the first quarter of 2007 was to decrease Cost of Services and, correspondingly, increase Selling, General and Administrative expense by $4.7 million |
 Slide 12 eLoyalty Confidential and Restricted © 2007 eLoyalty Corporation REVOLUTIONARY ANALYTICS. BREAKTHROUGH RESULTS. TM Q1 P&L Overview and Comparison to Q4 and Selected Other Metrics $1.9 million increase in Gross Margin, primarily due to higher Q1 revenue $1.0 million increase in payroll taxes and vacation accrual, due to seasonally higher expense/accrual rates in Q1 as compared to Q4 $1.0 million increase in Behavioral Analytics™ expenses Ending headcount was 419 Up 3% from Q4 Continued hiring for CIPCC and Behavioral Analytics™ Service Lines |
 Slide 13 eLoyalty Confidential and Restricted © 2007 eLoyalty Corporation REVOLUTIONARY ANALYTICS. BREAKTHROUGH RESULTS. TM First Quarter Balance Sheet Review $30.7 million in Cash $16.3 million in Accounts Receivable 53 Day DSO |
 Slide 14 eLoyalty Confidential and Restricted © 2007 eLoyalty Corporation REVOLUTIONARY ANALYTICS. BREAKTHROUGH RESULTS. TM Second Quarter Guidance We only provide guidance for Services revenue Our Q2 Services revenue guidance is $22.0 million to $23.0 million |
 Slide 15 eLoyalty Confidential and Restricted © 2007 eLoyalty Corporation REVOLUTIONARY ANALYTICS. BREAKTHROUGH RESULTS. TM 2007 Outlook Update Traditional Consulting and CIPCC Service Lines should generate significant positive EBITDA in 2007 Investing heavily to build out Behavioral Analytics™ service and to build a defensible competitive position Our objective is to achieve around EBITDA breakeven in 2007 Key 2007 objectives include: Achieving consistent revenue growth Growing Managed Services Backlog Increasing our Business Development and Client Services team Developing additional Behavioral Analytics™ functionality |
 REVOLUTIONARY ANALYTICS. BREAKTHROUGH RESULTS. TM Q&A |
 Slide 17 eLoyalty Confidential and Restricted © 2007 eLoyalty Corporation REVOLUTIONARY ANALYTICS. BREAKTHROUGH RESULTS. TM Summary Building on a solid consulting and integration track record Our CIPCC Service Line is well positioned to benefit from the rapid adoption of Converged IP in Contact Centers Behavioral Analytics™ is a revolutionary new application We are very early in our growth cycle We continue to hit important milestones |
 Slide 18 eLoyalty Confidential and Restricted © 2007 eLoyalty Corporation REVOLUTIONARY ANALYTICS. BREAKTHROUGH RESULTS. TM Thank You Kelly Conway (847) 582-7200 Kelly_Conway@eLoyalty.com Steve Pollema (847) 582-7100 Steve_Pollema@eLoyalty.com |