Direct Insite Reports 12.6% Growth in Recurring Revenues; Operating Income and Cash Flow Improve in the Third Quarter 2006

Direct Insite Corp. (OTC BB:DIRI), a global provider of eInvoicing, revenue assurance and cash flow optimization solutions reported 12.6% growth in recurring revenues for the nine months ended September 30, 2006. The Company also achieved a 455% increase in income from operations for the three months ended September 30, 2006 and a $1,070,000 increase in cash flow provided by operations for the nine months ended September 30, 2006, compared to the same periods in 2005.

Recurring revenues from eInvoicing services increased 0.7% and 12.6% to $1,707,000 and $4,823,000 for the three and nine month periods ended September 30, 2006, compared to $1,695,000 and $4,284,000 for the three and nine month periods ended September 30, 2005. Total revenue, which includes professional services, declined 13.0% and 7.4% to $2,185,000 and $6,396,000 for the three and nine month periods ended September 30, 2006 compared to total revenue of $2,512,000 and $6,910,000 for the three and nine month periods ended September 30, 2005. Professional services revenue decreased to $470,000 and $1,550,000 for the three and nine months ended September 30, 2006, compared to professional services revenues of $809,000 and $2,593,000 in the same periods in 2005, a decrease of 41.9% and 40.2%, respectively.

"Our long term strategy is to continue to increase solid recurring revenue streams while reducing the need to grow professional services. With recurring revenue growth of over 12%, we are well on our way to achieving this goal," said Direct Insite CEO James A. Cannavino. "Of course, we will always be prepared to customize a solution for our customers. But we see strong momentum in our business operation towards solid growth of recurring revenue streams with an actual decrease in professional services."

Dramatic 455% Improvement in Operating Income

The Company also reported income from operations of $416,000 for the three months ended September 30, 2006, compared to income from operations of $75,000 for the same period in 2005, a 455% improvement in performance. The Company had income from operations of $240,000 for the nine months ended September 30, 2006, compared to a loss from operations of $306,000 for the same period in 2005.

"We've created solutions with deep functionality that are rapidly available and quickly operational for global companies. We focused on efficiency in delivering and implementing these solutions, and now we are seeing the fruits of our labor in significantly improved operating income," said Mr. Cannavino.

Operating costs for the three and nine months ended September 30, 2006 were reduced $668,000 (27.4%) and $1,060,000 (14.7%) to $1,769,000 and $6,156,000, respectively, compared to operating costs of $2,437,000 and $7,216,000 for the three and nine months ended September 30, 2005, respectively.

The Company had income (loss) before the change in fair value of its warrant liability of $161,000 and ($415,000) for the three and nine months ended September 30, 2006, compared to ($84,000) and ($678,000) for the three and nine months ended September 30, 2005. The change in fair value of warrant liabilities resulted in a charge (gain) of $254,000 and ($15,000) for the three and nine months ended September 30, 2006 and ($212,000) and ($120,000) for the three and nine months ended September 30, 2005. The Company had a net loss for the three months ended September 30, 2006 of $93,000, compared to net income of $128,000 for the three months ended September 30, 2005. For the nine months ended September 30, 2006 the Company reported a net loss of $400,000 compared to a net loss of $558,000 for the same period in 2005.

Bridge Loan Financing Repaid; No New Financing Anticipated

Cash flows provided by operating activities improved to $895,000 for the nine months ended September 30, 2006 compared to cash used in operating activities of $175,000 for the same period in 2005. Subsequent to September 30, 2006 the Company repaid the $750,000 bridge financing obtained in 2005 and does not anticipate assuming additional financing.

Basic and diluted loss per share attributable to common shareholders for the three and nine months ended September 30, 2006 was $0.06 and $0.19, respectively, compared to a basic and diluted loss per share of $0.01 and $0.23 for the three and nine months ended September 30, 2005.

Company Now Provides Online Service in 62 Countries

During the third quarter of 2006, the Company also expanded its Invoices On-Line (IOL) service coverage area to include 38 additional countries. Direct Insite now provides invoices on line access to companies in 62 countries, localized to 15 unique languages and related currencies. "Worldwide coverage and multi-language support continue to be key buying criteria for global corporations. We have more than doubled the number of countries served by our eInvoicing solutions in the past year, including growing economies in Eastern Europe and the Middle East," said Mr. Cannavino.

About Direct Insite

Direct Insite Corp.'s electronic invoice management and workflow solutions for accounts payable and accounts receivable deliver increased revenue assurance, improved cash flow optimization, and profit maximization for companies around the world. Direct Insite processes over $80 billion in electronic invoice value each year through solutions implemented in 62 countries and in 15 languages. When businesses need to achieve cost reductions of 50% or more from accounts payable and accounts receivable operations, eliminate 75% of manual invoicing, and save millions of dollars in improved day's sales outstanding, they turn to Direct Insite products and solutions. Direct Insite provides eInvoices to 75% of the Fortune 1000 and 100% of Financial Times 100 corporations. Direct Insite was selected by Deloitte & Touche LLP as one of the '500 Fastest-Growing Technology Companies.' For more information, visit www.directinsite.com, or call 954-510-3750.

The financial information stated above and in the tables below has been abstracted from Direct Insite Corp.'s Form 10-QSB for the nine months ended September 30, 2006, filed with the Securities and Exchange Commission on November 17, 2006, and should be read in conjunction with the information provided therein.

Summarized Financial Information

STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2006 FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005
Revenue $ 2,185,000 $ 2,512,000 $ 6,396,000 $ 6,910,000
Operating income (loss) $ 416,000 $ 75,000 $ 240,000 $ (306,000)
Other income (expense), net $ (509,000) $ 55,000 $ (636,000) $ (242,000)
Loss from discontinued operations $ — $ (2,000) $ (4,000) $ (10,000)
Net (loss) income $ (93,000) $ 128,000 $ (400,000) $ (558,000)
Preferred Stock Dividends $ (181,000) $ (164,000) $ (529,000) $ (489,000)
Net income (loss) attributable to common shareholders $ (274,000) $ (36,000) $ (929,000) $ (1,047,000)
Basic and diluted income (loss) per share $ (0.06) $ (0.01) $ (0.19) $ (0.23)
BALANCE SHEET SEPTEMBER 30, 2006 DECEMBER 31, 2005
Total Current Assets $ 2,204,000 $ 2,417,000
Total Assets $ 2,925,000 $ 3,181,000
Total Current Liabilities $ 7,278,000 $ 6,842,000
Total Shareholders' Deficiency ($ 4,482,000) ($ 3,734,000)

FORWARD-LOOKING STATEMENTS. All statements other than statements of historical fact included in this release, including without limitation statements regarding the company's financial position, business strategy, and the plans and objectives of the company's management for future operations, are forward-looking statements. When used in this release, words such as "anticipate", "believe", "estimate", "expect", "intend" and similar expressions, as they relate to the company or its management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of the company's management, as well as assumptions made by and information currently available to the company's management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to, business and economic conditions, competitive factors and pricing pressures, capacity and supply constraints. Such statements reflect the views of the company with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the company. Readers are cautioned not to place undue reliance on these forward-looking statements. The company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect future events or circumstances or to reflect the occurrence of unanticipated events.

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