UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                              ---------------------

                                    Form 10-Q

     [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

                              EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 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 000-29239

                                  INFORTE CORP.
             (Exact name of registrant as specified in its charter)

                Delaware                             36-3909334
        (State of incorporation)        (IRS Employer Identification No.)


         150 North Michigan Avenue, Suite 3400, Chicago, Illinois 60601
          (Address of principal executive offices, including ZIP code)

                                 (312) 540-0900
              (Registrant's telephone number, including area code)

                                     None
              (Former name, former address and former fiscal year,
                         if changed since last report)

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 such reports) Yes X No ___, and (2) has been subject to such
filing requirements for the past 90 days. Yes X No _

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).  Yes      No X
                                                ---      --
The number of shares outstanding of the Registrant's Common Stock as of
September 30, 2002 was 10,761,499.






                                  INFORTE CORP.

                                      INDEX





                                                                        Page No.
                                                                        --------

PART I.  Financial Information

Item 1.      Financial Statements (Unaudited)

              Consolidated Balance Sheets - September 30, 2001,
              December 31, 2001, March 31, 2002, June 30, 2002
              and September 30, 2002                                          1

              Consolidated Statements of Operations - Three months and
              nine months ended September 30, 2001 and 2002                   2

              Consolidated Statements of Cash Flows - Three months and
              nine months ended September 30, 2001 and 2002                   3

              Notes to Consolidated Financial Statements                    4-5

Item 2.       Management's Discussion and Analysis of Financial
              Condition and Results of Operations                          6-20

Item 3.       Qualitative and Quantitative Disclosure About Market Risk      20

Item 4.       Controls and Procedures                                        20

PART II. Other Information

Item 1        Legal Proceedings                                              21

Item 2.       Changes in Securities and Use of Proceeds                      21

Item 3        Defaults of Senior Securities                                  21

Item 4.       Submission of Matters to a Vote of Security Holders            21

Item 5        Other Information                                              21

Item 6.       Exhibits and Reports on Form 8-K                               21

Signature                                                                    22

Certifications                                                            23-24

Exhibit 99.1  Section 906 certification of the Chief Executive Officer       25

Exhibit 99.2  Section 906 certification of the Chief Financial Officer       26







PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

                                  INFORTE CORP.
                           CONSOLIDATED BALANCE SHEETS
                                     (000's)




                                                     SEPT 30,      DEC 31,     MAR 31,     JUN 30,    SEPT 30,
                                                      2001          2001        2002        2002       2002
                                                     --------     --------    --------    --------    --------
                                                    (Unaudited)              (Unaudited) (Unaudited) (Unaudited)

                                                                                       
                           ASSETS
Current assets:
  Cash and cash equivalents                          $ 27,202     $ 20,208    $ 26,404    $ 15,295    $ 14,992
  Short-term marketable securities                     22,417       32,669      27,195      37,311      32,044
  Accounts receivable                                   8,191        6,539       7,251       5,576       5,388
  Allowance for doubtful accounts                      (1,150)      (1,150)     (1,000)       (850)       (700)
                                                     --------     --------    --------    --------    --------
  Accounts receivable, net                              7,041        5,389       6,251       4,726       4,688
  Prepaid expenses and other current assets             1,736        2,008       1,949       2,045       1,923
  Deferred income taxes                                   940        1,621       1,550       1,493       1,435
                                                     --------     --------    --------    --------    --------
          Total current assets                         59,336       61,895      63,349      60,870      55,082

Computers, purchased software and property              4,177        3,777       3,662       3,232       3,074
Less accumulated depreciation and amortization          2,022        1,916       2,040       1,798       1,853
                                                     --------     --------    --------    --------    --------
Computers, purchased software and property, net         2,155        1,861       1,622       1,434       1,221

Long-term marketable securities                        27,091       22,241      21,677      20,146      18,947
Deferred income taxes                                     690          462         482         707         629
                                                     --------     --------    --------    --------    --------
          Total assets                               $ 89,272     $ 86,459    $ 87,130    $ 83,157    $ 75,879
                                                     ========     ========    ========    ========    ========

            LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                   $    753     $    400    $    970    $    317    $    155
  Income taxes payable                                    547          167         179         677         800
  Accrued expenses                                      5,674        5,524       5,169       6,584       6,336
  Deferred revenue                                      9,801        8,165       8,564       5,460       5,028
                                                     --------     --------    --------    --------    --------
          Total current liabilities                    16,775       14,256      14,882      13,038      12,319
Stockholders' equity:
  Common stock, $0.001 par value
  authorized- 50,000,000 shares;
  issued and outstanding (net of treasury stock)-
  10,761,499 as of Sept 30, 2002                           12           12          12          12          11
  Additional paid-in capital                           75,424       77,916      78,305      78,680      78,742
  Cost of common stock in treasury (2,720,823
  shares as of Sept 30, 2002)                         (13,170)     (14,502)    (14,771)    (17,810)    (24,997)
  Retained earnings                                     9,914        8,561       8,697       9,053       9,577
  Accumulated other comprehensive income                  317          216           5         184         227
                                                     --------     --------    --------    --------    --------
          Total stockholders' equity                   72,497       72,203      72,248      70,119      63,560
                                                     --------     --------    --------    --------    --------
         Total liabilities and stockholders' equity  $ 89,272     $ 86,459    $ 87,130    $ 83,157    $ 75,879
                                                     ========     ========    ========    ========    ========



                 See notes to consolidated financial statements



1


                      CONSOLIDATED STATEMENTS OF OPERATIONS
                         (000's, except per share data)




                                               THREE MONTHS ENDED         NINE MONTHS ENDED
                                                    SEPT 30,                   SEPT 30,
                                           ------------------------    ------------------------
                                               2001          2002         2001          2002
                                           ----------    ----------    ----------    ----------
                                           (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)

                                                                         
Revenues:

  Revenue before reimbursements
     (net revenue)                          $ 10,600     $   9,607     $  37,189     $  30,413
  Reimbursements                               1,527         1,342         4,759         4,244
                                            ---------    ----------    ----------    ----------
Total Revenues                                12,127        10,949        41,948        34,657

Operating expenses:
  Project personnel and related expenses       5,877         4,546        20,653        14,877
  Reimbursed expenses                          1,527         1,342         4,759         4,244
  Sales and marketing                          1,805         1,621         5,793         4,951
  Recruiting, retention and training             597           294         2,231         1,025
  Management and administrative                3,083         2,911         9,629         9,883
                                            ---------    ----------    ----------    ----------
          Total operating expenses            12,889        10,714        43,065        34,980

Operating income (loss)                         (762)          235        (1,117)         (323)

Interest income, net and other                   870           535         2,781         1,667
                                            ---------    ----------    ----------    ----------
Income before income tax                         108           770         1,664         1,344
Income tax expense                                 -           246           503           328
                                            ---------    ----------    ----------    ----------
          Net income                        $    108     $     524     $   1,161     $   1,016
                                            =========    ==========    ==========    ==========

Earnings per share:
-Basic                                      $   0.01     $    0.05     $    0.09     $    0.09
-Diluted                                    $   0.01     $    0.05     $    0.09     $    0.09

Weighted average common shares
  outstanding:
-Basic                                        12,778        11,092        12,764        11,495
-Diluted                                      13,521        11,298        13,620        11,888



                     See notes to consolidated financial statements



2


                                  INFORTE CORP.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     (000's)




                                                THREE MONTHS ENDED             NINE MONTHS ENDED
                                                      SEPT 30,                      SEPT 30,
                                               ------------------------    -------------------------
                                                   2001          2002          2001           2002
                                               ----------    ----------    ----------     ----------
                                               (Unaudited)   (Unaudited)   (Unaudited)    (Unaudited)

                                                                              
Cash flows from operating activities
Net income                                      $     108    $    524      $   1,161      $   1,016

Adjustments to reconcile net income to
net cash provided by operating activities:
  Depreciation and amortization                       408         333          1,245          1,125
  Non-cash compensation                                75           -            150              -
  Deferred income taxes                              (140)        136           (388)            19
Changes in operating assets and liabilities
  Accounts receivable                                 231          38          2,195            701
  Prepaid expenses and other current assets           555         122            169             87
  Accounts payable                                    125        (162)           170           (245)
  Income taxes                                        128         123          2,092            633
  Accrued expenses and other                         (230)       (171)        (2,915)           812
  Deferred revenue                                  1,682        (432)         1,227         (3,137)
                                                ---------    --------      ---------      ---------
Net cash provided by operating activities           2,942         511          5,106          1,011

Cash flows from investing activities
(Increase)/Decrease in marketable
  securities                                      (26,103)      6,374         (8,781)         3,508
Purchases of property and equipment                   (64)        (16)          (351)          (178)
                                                ---------    --------      ---------      ---------
Net cash provided by(used in) investing
  activities                                      (26,167)      6,358         (9,132)         3,330

Cash flows from financing activities
Proceeds from stock option and purchase
  plans                                               349          61          1,082            825
Purchase of treasury stock                        (11,792)     (7,265)       (12,264)       (10,496)
                                                ---------    --------      ---------      ---------
Net cash used in financing activities             (11,443)     (7,204)       (11,182)        (9,671)
                                                ---------    --------      ---------      ---------
Effect of changes in exchange rates on cash            21          32             18            114
Decrease in cash and cash
  equivalents                                     (34,647)       (303)       (15,190)        (5,216)
Cash and cash equivalents, beg. of period          61,849      15,295         42,392         20,208
                                                ---------    --------      ---------      ---------
Cash and cash equivalents, end of period        $  27,202    $ 14,992      $  27,202      $  14,992
                                                =========    ========      =========      =========



                 See notes to consolidated financial statements



3


                   Notes to consolidated financial statements
                                   (Unaudited)
                               September 30, 2002

(1) BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
by Inforte Corp. ("Inforte") pursuant to the rules and regulations of the
Securities and Exchange Commission regarding interim financial reporting.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete consolidated financial
statements and should be read in conjunction with the consolidated financial
statements and notes thereto for the year ended December 31, 2001 included in
Inforte's annual report Form 10-K (File No. 000-29239). The balance sheet at
December 31, 2001 has been derived from the audited consolidated financial
statements at that date but does not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The accompanying consolidated financial statements reflect
all adjustments (consisting solely of normal, recurring adjustments) which are,
in the opinion of management, necessary for a fair presentation of results for
the interim periods presented. The results of operations for the nine-month
period ended September 30, 2002 are not necessarily indicative of the results to
be expected for the full fiscal year. Certain previously reported amounts have
been reclassified to conform with current presentation format.


(2) COST OF COMMON STOCK IN TEASURY
During the quarter ended September 30, 2002, Inforte repurchased 890,021 shares
of common stock for $7.2 million at an average price of $8.08. All shares
repurchased were settled in the third quarter. In addition, $0.1 million was
used in the September 2002 quarter to settle purchases made in the June 2002
quarter. On January 24, 2001, the board of directors approved a $25.0 million
stock repurchase program that was complete as of September 30, 2002. On August
22, 2002 the board of directors approved a new $5 million repurchase
authorization, although we stated in a press release at that time that we had no
present plans to make additional repurchases of stock. As of September 30, 2002
no shares had been purchased under the new repurchase authorization.


(3) NET INCOME PER COMMON SHARE
Inforte computes basic earnings per share by dividing net income by the weighted
average number of common shares outstanding. Diluted earnings per common share
is computed by dividing net income by the weighted average number of common
shares and dilutive common share equivalents outstanding.




                                          Three Months Ended          Nine Months Ended
                                             September 30,               September 30,
                                      --------------------------  --------------------------
                                         2001            2002         2001           2002
                                      --------------------------  --------------------------
                                              (unaudited)                 (unaudited)


                                                                      
   Basic weighted average shares      12,778,087      11,091,832   12,764,405     11,495,235
   Effect of dilutive stock options      743,314         206,153      856,051        393,026
                                      --------------------------  --------------------------

   Diluted common and common
     equivalent shares                13,521,401      11,297,985   13,620,456     11,888,261
                                      ==========================   =========================



(4) COMPREHENSIVE INCOME
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" (SFAS 130), establishes standards for reporting comprehensive income.
Comprehensive income includes net income as currently reported under generally
accepted accounting principles, and also considers the effect of additional
economic events that are not required to be recorded in determining net income,
but rather are reported as a separate component of stockholders' equity. Inforte
reports foreign currency translation gains and losses, and unrealized gains and
losses on investments, as components of comprehensive income. Total
comprehensive income was



4


$565,561 and $1,025,302 for the three and nine months ended September 30, 2002
and $179,572 and $1,393,988 for the three months and nine months ended
September 30, 2001.


(5) CONTINGINCIES
Inforte and Philip S. Bligh, Stephen C.P. Mack and Nick Padgett, officers of
Inforte, have been named as defendants in Mary C. Best v. Inforte Corp.;
Goldman, Sachs & Co.; Salomon Smith Barney, Inc.; Philip S. Bligh; Stephen C.P.
Mack and Nick Padgett, Case No. 01 CV 10836, filed on November 30, 2001 in
Federal Court in the Southern District of New York. The case is also known as In
re Inforte Initial Public Offering Securities Litigation. An amended class
action complaint was filed on April 19, 2002. The amended complaint alleges
violations of federal securities laws in connection with our initial public
offering occurring in February 2000 and seeks certification of a class of
purchasers of Inforte Corp. stock, unspecified damages, interest, attorneys' and
expert witness fees and other costs. The amended complaint does not allege any
claims relating to any alleged misrepresentations or omissions with respect to
our business. The individual defendants (Messrs. Bligh, Mack and Padgett) have
been dismissed from the case without prejudice pursuant a stipulated dismissal
and a tolling agreement. We have moved to dismiss the plaintiff's case. The
court has heard oral argument on these fully briefed motions, but not yet ruled
on the motions. We believe that we have defenses to the claims and we intend to
vigorously defend the lawsuit.


(6) SEGMENT REPORTING
Inforte engages in business activities in one operating segment, which provides
consulting services either on a fixed-price, fixed-timeframe basis or on a
time-and-materials basis. Inforte's services are delivered to clients in North
America and Europe, and Inforte's long-lived assets are located in North America
and Europe. Domestic and foreign operating revenues are based on the location of
customers. Long-lived assets consist of property, plant and equipment, software,
furniture and fixtures and leasehold improvements (net of accumulated
depreciation). Inforte's European operations had $6,473,199 and $3,269,959 of
revenues for the nine months ending September 30, 2002 and 2001, respectively,
and $1,858,996 and $1,124,425 of revenues for the three months ending September
30, 2002 and 2001, respectively. Long-lived assets were $107,634 and $118,697 as
of September 30, 2002 and 2001, respectively.


(7) COST TO EXIT LEASED OFFICE SPACE
In the third quarter 2001, we consolidated office space at our Chicago location
where we had multiple contractual rental commitments. Estimated costs for the
consolidation of facilities comprise contractual rental commitments for office
space being vacated and related costs in addition to future depreciation of the
related leasehold improvements, offset by estimated sub-lease income. The total
reduction of office space resulting from these office consolidations was
approximately 17,770 square feet, all of which were vacated as of September 30,
2001. The total charge related to this reduction of office space was $256,550 in
the third quarter of 2001. This charge is reported as management and
administrative expense on the Statement of Operations, and as accrued expenses
on the Balance Sheet. In the December 2001 quarter, the March 2002 quarter and
the June 2002 quarter, we lowered our estimate of expected sub-lease income,
bringing the cumulative charges for office consolidation to $1.8 million. If
future sub-lease income is less than estimated, additional charges in future
periods will be necessary. Further, if we are unable to sub-lease our vacated
office space, additional charges in future periods will be necessary.



5


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

You should read the following discussion in conjunction with our consolidated
financial statements, together with the notes to those statements, included
elsewhere in this Form 10-Q. The following discussion contains forward-looking
statements that involve risks, uncertainties, and assumptions such as statements
of our plans, objectives, expectations and intentions. Our actual results may
differ materially from those discussed in these forward-looking statements
because of the risks and uncertainties inherent in future events that include,
but are not limited to, those identified under the caption "Risk Factors"
appearing in this 10-Q as well as factors discussed elsewhere in this Form 10-Q.
Actual results may differ from forward-looking results for a number of reasons,
including but not limited to, Inforte's ability to: (i) effectively forecast
demand and profitably match resources with the demand during a period where
information technology spending is depressed and when economic and geopolitical
uncertainty is heightened throughout the world; (ii) attract and retain clients
and satisfy our clients' expectations; (iii) recruit and retain qualified
professionals; (iv) accurately estimate the time and resources necessary for the
delivery of our services; (v) build and maintain marketing relationships with
leading software vendors while occasionally competing with their professional
services organizations; and (vi) compete with emerging alternative economic
models for delivery, such as outsourcing system development work to business
units outside of the United States, as well as other factors discussed from time
to time in our other Securities and Exchange Commission filings. Should one or
more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
anticipated, estimated or projected. All forward-looking statements included in
this document are made as of the date hereof, based on information available to
Inforte on the date thereof, and Inforte assumes no obligation to update any
forward-looking statements.

Overview

Customer and demand management consultancy Inforte helps clients improve
customer interactions, revenue forecasting, management and profitability.
Inforte creates strategies and implements technology solutions that enhance
visibility, optimize customer and channel profitability, and integrate demand
information with supply and resource planning processes. Inforte has applied a
client advocacy approach and rigorous delivery methodologies to help garner
references from 100 percent of its Global 2000 client base. Founded in 1993,
Inforte is headquartered in Chicago and has offices in Atlanta, Dallas, London,
Los Angeles, New York and San Francisco.

The majority of our revenue historically is from professional services performed
on a fixed-price basis; however, we also perform services on a
time-and-materials basis. Typically, the first portion of an engagement involves
a strategy project or a discovery phase lasting 30 to 60 days, which we perform
on a fixed-price basis. This work enables us to determine with our clients the
scope of successive phases for design and implementation, which in total
generally last three to nine months, and to decide whether we will perform these
additional phases for a fixed price or on a time-and-materials basis. Whether we
use fixed pricing or time-and-material pricing depends upon our assessment of
the project's risk, how precisely our clients are able to define the scope of
activities they wish us to perform and client preference. Fixed prices are based
on estimates from senior personnel in our consulting organization who project
the length of the engagement, the number of people required to complete the
engagement and the skill level and billing rates of those people. We then adjust
the fixed price based on various qualitative risk factors such as the
aggressiveness of the delivery deadline, the technical complexity of the
solution and the value of the solution delivered to the client.

We typically ask clients to pay 25%-50% of our fixed-price projects in advance
to enable us to secure a project team in a timeframe that is responsive to the
client's needs. We typically bill the remainder in advance of the work


6


performed over the course of the engagement based upon a predetermined billing
schedule. We typically bill time-and-materials projects twice per month on the
15th and last day of the month.

We recognize revenue from fixed-price contracts on the percentage-of-completion
method, based on the ratio of costs incurred to total estimated costs. The
cumulative impact of any revision in estimates of the percentage of complete is
reflected in the period in which the changes become known. Provisions for
estimated losses are made on a contract-by-contract basis and are recognized in
the period in which such losses are determined. We recognize time-and-materials
revenue as we perform the services. For some clients, we have a requirement that
cash collection must occur prior to revenue recognition. This requirement is in
addition to the regular requirement that revenue be recognizable under either
the percentage-of-completion method for fixed-price contracts or as services are
performed under time-and-materials contracts. We typically use cash-based
revenue recognition for clients with one of the following characteristics:
deteriorating or poor financial condition, limited financial resources, poor or
no payment history, large relative accounts receivable balance or a non-US
location. Amounts billed before we perform the services or before we recognize
revenue are classified as deferred revenue.

Through 2001, we did not include in our revenues the reimbursable expenses we
charge to our clients, on either fixed-price or time-and-material projects, as
we believe this is the most meaningful presentation of our income statement. In
November 2001, the Financial Accounting Standards Board's Emerging Issues Task
Force issued Topic D-103, "Income Statement Characterization of Reimbursements
Received for `Out-of-Pocket' Expenses Incurred" stating these costs should be
characterized as revenue in the income statement if billed to customers. For
each quarter beginning with the March 31, 2002 quarter, we included reimbursable
expenses in revenue and expense and we have reclassified prior periods in the
comparative consolidated financial statements as required by the Financial
Accounting Standards Board. This reclassification had no effect on current or
previously reported net income or earnings per share. For presentation purposes,
we show two components of total revenue: 1) revenue before reimbursements, which
we call net revenue, consisting of revenue for performing consulting services;
and 2) reimbursements, consisting of reimbursements we receive from clients for
out-of-pocket expenses incurred. We believe net revenue is a more meaningful
representation of our economic activity than total revenue since it excludes
pass-through, zero-margin expense reimbursements.

Our revenues and earnings may fluctuate from quarter to quarter based on factors
within and outside of our control. These include:

     *  The variability in market demand for strategic technology
        professional services and our ability to win business;

     *  The degree of competitive pricing;

     *  The length of the sales cycle associated with our service offerings;

     *  The number, size and scope of our projects;

     *  The efficiency with which we deliver projects and use our people;

     *  The compensation that we pay our people; and

     *  Our ability to keep expenses within budget.

If revenue does not increase at a rate at least equal to increases in expenses,
our results of operations could be materially and adversely affected.




7


RESULTS OF OPERATIONS
---------------------

The following table sets forth the percentage of net revenues of certain items
included in Inforte's statement of income:



                                                % of Net Revenue     % of Net Revenue
                                               Three months ended    Nine months ended
                                                 September 30,         September 30,
                                                2001      2002       2001      2002

                                                                  
Revenues
  Revenue before reimbursements
     (net revenue)                             100.0%    100.0%     100.0%    100.0%
  Reimbursements                                14.4      14.0       12.8      14.0
                                               -----     -----      -----     -----

Total Revenue                                  114.4     114.0      112.8     114.0
                                               -----     -----      -----     -----

Operating expenses:
Project personnel and
 related expenses                               55.4      47.3       55.5      48.9

Reimbursements                                  14.4      14.0       12.8      14.0
Sales and marketing                             17.0      16.9       15.6      16.3
Recruiting, retention
 and training                                    5.6       3.1        6.0       3.4
Management and administrative                   29.1      30.3       25.9      32.5
                                                ----      ----       ----      ----

Total operating expenses *                     121.6     111.5      115.8     115.0
                                               -----     ------     -----     -----

Operating income (loss)                         (7.2)     (2.4)      (3.0)     (1.1)
Interest income, net and other                   8.2       5.6        7.5       5.5
                                                ----      ----       ----      ----
Pretax income                                    1.0       8.0        4.5       4.4

Income tax expense (benefit)                     0.0       2.6        1.4       1.1
                                                 ---       ---        ---       ---

Net income                                       1.0%      5.5%       3.1%      3.3%
                                                 ====      ====       ====      ====


*Total operating expenses,
  excluding reimbursements                     107.2%     97.6      103.0%    101.1%



Nine months and three months ended September 30, 2001 and 2002
--------------------------------------------------------------

Net revenue. Net revenue excludes reimbursable expenses that are billed to our
clients. Net revenue decreased 9% to $9.6 million for the quarter ended
September 30, 2002 from $10.6 million for the quarter ended September 30, 2001.
For the nine months ended September 30, 2002, net revenue decreased 18% to $30.4
million from $37.2 million for the nine months ended September 30, 2001. We
attribute this decline in revenues to the slow growth rate of the U.S. economy
and the negative impact that economic uncertainty has had on information
technology (IT) spending. These factors have depressed the market for strategic
technology services over the last 21 months. For the quarter ended September 30,
2002, we had 30 significant clients with each of these clients contributing $1.2
million to revenue on average on an annualized basis. We had 41 significant
clients during the quarter ended September 30, 2001, each contributing $1.0
million to revenue on average on an annualized basis.

Sequentially, net revenue decreased 16% to $9.6 million in the September 2002
quarter from $11.4 million in the June 2002 quarter. Historically our business
has experienced stronger sequential growth in the first half of the year,
compared to the sequential growth in the second half of the year. We believe
this seasonal pattern stems from the calendar year budget cycle of most clients,
and their access to new budget money in the first half of the year. We believe
our third quarter revenue performance was consistent with the seasonal effects
of our business. Positive seasonality contributed to our sequential growth in
the second quarter, while negative seasonality combined with a continuing
depressed IT spending environment has hampered and will continue to hamper
growth in the second half of



8


2002. In our third quarter 2002 earnings release on October 11, 2002, we set net
revenue guidance for the fourth quarter and future quarters as follows: $8.0
million for the fourth quarter 2002, and $8.5 million for the first quarter 2003
and each quarter beyond. We believe that revenue-driven corporate profit growth
must occur before broad-based growth in IT spending resumes.

Project personnel and related expenses. Project personnel and related expenses
consist primarily of compensation and benefits for our professional employees
who deliver consulting services and non-reimbursable costs. All labor costs for
project personnel are included in project personnel and related expenses. These
expenses decreased 23% to $4.5 million for the quarter ended September 30, 2002
from $5.9 million for the quarter ended September 30, 2001. Year-to-date, these
costs decreased 28% to $14.9 million for the nine months ended September 30,
2002 from $20.7 million for the nine months ended September 30, 2001. These
decreases resulted from reductions in consulting headcount. We employed 188
consultants on September 30, 2002, down from 216 one year earlier. Project and
personnel related expenses represented 47.3% of net revenue for the quarter
ended September 30, 2002, compared to 55.4% for the quarter ended September 30,
2001. Year-to-date, these expenses were 48.9% for the first three quarters of
2002 down from 55.5% for the nine months ended September 30, 2001. These
expenses declined as a percent of net revenue both for the quarter and
year-to-date as we reduced expenses by a greater magnitude than the rate of
revenue decline. On our third quarter 2002 earnings conference call on October
11, 2002, we stated that we were targeting project personnel and related
expenses to be around 53% of net revenue in fourth quarter 2002. This statement
was based on net revenue guidance of $8.0 million.


In June 2001 Inforte offered a six-to-nine-month voluntary leave of absence
program and a voluntary resignation program to employees in underutilized areas.
There were 90 people who participated in the programs. Individuals who selected
the leave of absence program received compensation at 20%-25% of regular pay if
they remain available to return to full-time service. Individuals who chose the
voluntary resignation package received pay through the end of August 2001. All
costs related to resigning employees were included either in our June 2001
quarter results or our September 2001 quarter results. Salary costs for
employees on leave of absence were expensed as incurred and included in the
quarters through June 2002. No further costs related to these initial programs
remain as of September 30, 2002. In October 2001 and in January 2002, Inforte
again offered voluntary programs similar to the June 2001 programs, however
these latter programs were smaller in scope, involving approximately 20 and 30
people, respectively.


Sales and marketing. Sales and marketing expenses consist primarily of
compensation, benefits, bonus and travel costs for employees in the market
development and practice development groups and costs to execute marketing
programs. Sales and marketing expenses decreased 10% to $1.6 million for the
quarter ended September 2002 from $1.8 million in quarter ended September 2001.
As a percent of revenue, these expenses were roughly unchanged at 16.9% for the
quarter ended September 30, 2002 compared to 17.0% for the quarter ended
September 30, 2001, as we reduced sales and marketing expenses at the same rate
as the reduction in revenue. Year-to-date, these expenses decreased 15% to $5.0
million for the nine months ended September 30, 2002 from $5.8 million in the
prior year period. Sales and marketing headcount was 25 at the end of both the
September 2001 quarter and the September 2002 quarter. However, sales and
marketing headcount was higher in the first and second quarters of 2001 than in
the first and second quarters of the 2002, resulting in greater compensation
expense for the nine months ended September 30, 2001 versus the nine months
ended September 30, 2002. As a percent of net revenue, these expenses increased
on a year-to-date basis to 16.3% for the nine months ended September 30, 2002
from 15.6% for the nine months ended September 30, 2001, as we reduced expenses
at a lesser rate than the rate of revenue. On our third quarter 2002 earnings
conference call on October 11, 2002, we stated that we were targeting sales and
marketing expense to be around 17% of net revenue in fourth quarter 2002. This
statement was based on net revenue guidance of $8.0 million.


Recruiting, retention and training. Recruiting, retention and training expenses
consist of compensation, benefits and travel costs for personnel engaged in
human



9


resources; costs to recruit new employees; costs of human resource programs; and
training costs. These expenses decreased 51% to $294,000 for the quarter ended
September 30, 2002 from $597,000 for the quarter ended September 30, 2001. As a
percent of net revenue, these costs decreased to 3.1% in the quarter ended
September 30, 2002 from 5.6% in the quarter ended September 30, 2001, as we
reduced expenses by a greater magnitude than the rate of revenue decline. Year-
to-date, recruiting, retention and training decreased 54% to $1.0 million for
the nine months ended September 30, 2002 from $2.2 million for the nine months
ended September 30, 2001. As a percent of net revenue, these costs decreased to
3.4% for the nine months ended September 30, 2002 from 6.0% for the same period
last year. These costs decreased due to lower human resources headcount and less
spending on retention and training activities due to lower overall headcount.
Recruiting, retention and training headcount was 5 as of September 30, 2002,
down from 13 as of September 30, 2001. Total headcount was 248 as September 30,
2002, down from 298 as of September 30, 2001. On our third quarter 2002 earnings
conference call on October 11, 2002, we stated that we were targeting
recruiting, retention and training expense to be around 4% of net revenue in
fourth quarter 2002. This statement was based on net revenue guidance of $8.0
million.


Management and administrative. Management and administrative expenses consist
primarily of compensation, benefits and travel costs for management, finance,
information technology and facilities personnel, together with rent,
telecommunications, audit, legal, business insurance and depreciation and
amortization of capitalized computers, purchased software and property. These
expenses decreased 6% to $2.9 million for the quarter ended September 30, 2002,
from $3.1 million for the quarter ended September 30, 2001. As a percent of net
revenue, management and administrative expenses were 30.3% for the quarter ended
September 30, 2002, up from 29.1% for the quarter ended September 30, 2001, as
net revenue declined at a greater rate than did management and administrative
expense. Management and administrative expenses increased 3% to $9.9 million for
the nine months ended September 30, 2002 from $9.6 million for the same time
period one year earlier. As a percent of net revenue, management and
administrative expenses increased to 32.5% for the nine months ended September
30, 2002, up from 25.9% for the nine months ended September 30, 2001. These
increases in management and administrative expense on a year-to-date basis
primarily resulted from an increase in charges related to our cost to exit
leased office space. In addition, costs have risen in the following areas:
business insurance, variable executive compensation resulting from improved
operating income and start-up costs for new practice areas. On our third quarter
2002 earnings conference call on October 11, 2002, we stated that we were
targeting management and administrative expense to be around 33% of net revenue
in fourth quarter 2002. This statement was based on net revenue guidance of $8.0
million.


Interest income, net and other. During the quarter ended September 30, 2002,
interest income, net and other was $535,000, down from $870,000 for the quarter
ended September 30, 2001. For the nine months ended September 30, 2002, interest
income, net, and other was $1.7 million compared to $2.8 million in the prior
year period. The decrease during both periods in 2002 was due to the
reinvestment of matured securities into similar type securities at lower market
interest yields and also due to the lower average cash balances as a result of
Inforte's stock buyback program. Since inception of this stock buy-back program
in the March 2001 quarter we have repurchased $25 million of common stock.


Income tax expense. Inforte's effective tax rate for the September 2002 quarter
was 32.0% compared to a rate of 0.0% for the September 2001 quarter. The
increase in the effective tax rate is a result of a higher operating income in
the September 2002 quarter. The year-to-date 2002 income tax expense through
September 30, 2002 was the sum of a) the year-to-date operating loss times a 38%
combined federal and state tax rate and b) year-to-date interest income, net and
other times a reduced tax rate of 27%. Our present expectation, which could
change, is that the income tax expense (benefit) at the end of 2002 will be
calculated similarly with a 38% tax rate on operating income (loss) and a 27%
tax rate on interest income, net and other. The tax rate on interest income, net
and other will vary from the 27% level if the



10


proportion of tax-advantaged marketable securities in our investment portfolio
changes.

Liquidity and capital resources. Cash and cash equivalents decreased from $20.2
million as of December 31, 2001 to $15.0 million as of September 30, 2002.
Short-term marketable securities decreased from $32.7 million as of December 31,
2001 to $32.0 million as of September 30, 2002. Long-term marketable securities
decreased from $22.2 million as of December 31, 2001 to $20.1 million as of
September 30, 2002. Short-term and long-term marketable securities are
available-for-sale securities consisting of commercial paper, U.S. government or
municipal notes and bonds, corporate bonds and corporate auction preferreds. In
total, cash and cash equivalents, short-term and long-term marketable securities
decreased from $75.1 million to $66.0 million during the quarter ended September
30, 2002.

During the September 2002 quarter, Inforte's cash flow from operations was
positive $0.5 million and capital expenditures were immaterial, resulting in a
positive $0.5 million free cash flow (cash flow from operation minus capital
expenditures). Financing activities resulted in a cash outflow of $7.2 million,
consisting of expenditures of $7.3 million used to settle purchases of Inforte
common stock through our stock buyback program and inflows of $0.1 million from
employees participating in stock purchase and stock option plans.

During the September 2002 quarter, Inforte repurchased 890,021 shares of stock
for $7.2 million at an average price of $8.08. All shares repurchased were
settled in the third quarter. In addition, $0.1 million was used in the
September 2002 quarter to settle purchases made in the June 2002 quarter. Our
board of directors approved a $25.0 million stock repurchase program on January
24, 2001 and as of September 30, 2002, the entire amount authorized had been
repurchased. The board of directors approved an additional $5.0 million stock
repurchase program on August 22, 2002, although we stated at that time that we
had no present plans to make additional repurchases of stock. The entire $5.0
million remains authorized for repurchase as of September 30, 2002. At quarter
end, Inforte had 10,761,499 shares outstanding and $66.0 million in cash and
marketable securities, resulting in $6.13 of cash and marketable securities per
basic share. As of September 30, 2002, the public float (shares not held by
executive officers and directors) totaled 5.6 million shares or 52% of total
outstanding shares.

Inforte believes that its current cash, cash equivalents and marketable
securities will be sufficient to meet working capital and capital expenditure
requirements for the foreseeable future.

All highly liquid investments with maturities of three months or less when
purchased are considered cash equivalents. Cash and cash equivalent balances
consist of obligations of U.S. banks, high-grade commercial paper and other high
quality, short-term obligations of U.S. companies. Short-term and long-term
marketable securities are available-for-sale securities that are recorded at
fair market value. The difference between amortized cost and fair market value,
net of tax effect, is shown as a separate component of stockholders' equity. The
cost of securities available-for-sale is adjusted for amortization of premiums
and discounts to maturity. Interest and amortization of premiums and discounts
for all securities are included in interest income.

Inforte has several operating leases that have contractual cash obligations for
future payments. There are no other contractual obligations that require future
cash obligations or other commitments. The table below identifies all future
commitments.



11




Contractual                                                Payments Due by Period
Obligations
-----------
                                            Total          Q4 2002        2003-2004      2005 and
                                                                                          beyond
---------------------------------------------------------------------------------------------------
                                                                              
Long-term debt                                  0                0              0             0
Capital lease obligations                       0                0              0             0
Operating leases                            8,498              592          4,863         3,044
Unconditional purchase obligations              0                0              0             0
Other long-term obligations                     0                0              0             0
Total contractual cash obligations          8,498              592          4,863         3,044



Inforte Corp. has a wholly owned subsidiary, Inforte Investments Inc., a
Delaware corporation, which functions as a holding company for Inforte Corp.'s
investments.  Inforte Investments Inc. has no operations other than holding
investments of Inforte Corp. and no contractual commitments requiring future
cash obligations.  The financial position and results of operations for Inforte
Investments Inc. are consolidated, in accordance with generally accepted
accounting principles, in the consolidated financial statements reported in this
document.

Critical accounting policies. We recognize net revenue from fixed-price
contracts on the percentage-of-completion method, based on the ratio of costs
incurred to total estimated costs. The cumulative impact of any revision in
estimates of the percentage complete is reflected in the period in which the
changes become known. Provisions for estimated losses are made on a
contract-by-contract basis and are recognized in the period in which such losses
are determined. We recognize time-and-materials net revenue as we perform the
services. For some clients, we have a requirement that cash collection must
occur prior to net revenue recognition. This requirement is in addition to the
regular requirement that net revenue be recognizable under either the percentage
-of-completion method for fixed-price contracts or as services are performed
under time-and-materials contracts. We typically use cash-based revenue
recognition for clients with one of the following characteristics: deteriorating
or poor financial condition, limited financial resources, poor or no payment
history, large relative accounts receivable balance or a non-US location.
Amounts billed before we recognize revenue are classified as deferred revenue.

In November 2001, the Financial Accounting Standards Board's Emerging Issues
Task Force issued Topic D-103, "Income Statement Characterization of
Reimbursements Received for `Out-of-Pocket' Expenses Incurred" stating these
costs should be characterized as revenue in the income statement if billed to
customers. For each quarter beginning with the March 31, 2002 quarter, we
included reimbursable expenses in revenue and expense and we have reclassified
prior periods in the comparative consolidated financial statements as required
by the Financial Accounting Standards Board. This reclassification had no effect
on current or previously reported net income or earnings per share. For
presentation purposes, we show two components of total revenue: 1) revenue
before reimbursements, which we call net revenue, consisting of revenue for
performing consulting services; and 2) reimbursements, consisting of
reimbursements we receive from clients for out-of-pocket expenses incurred. We
believe net revenue is a more meaningful representation of our economic activity
than total revenue since it excludes pass-through, zero-margin expense
reimbursements.

An allowance for doubtful accounts is maintained for potential credit losses.
The amount of the reserve is established analyzing all client accounts to
determine



12


credit risk. In establishing a clients credit worthiness we consider
deteriorating or poor financial condition, limited financial resources, poor or
no payment history, large relative accounts receivable balance and a non-US
location.

Recently issued Accounting Pronouncements. In 2002 the Financial Accounting
Standards Board ("FASB") issued Statement of Financial Accounting Standards
("SFAS") No. 146, "Accounting for Costs Associated With Exit or Disposal
Activities". This statement addresses financial accounting and reporting for
costs associated with exit or disposal activities and nullifies Emerging Issues
Task Force (EITF) Issue No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring)." The principal difference between this
Statement and Issue 94-3 relates to its requirements for recognition of a
liability for a cost associated with an exit or disposal activity. This
Statement requires that a liability for a cost associated with an exit or
disposal activity be recognized when the liability is incurred. Under Issue
94-3, a liability for an exit cost as defined in Issue 94-3 was recognized at
the date of an entity's commitment to an exit plan. Adoption of this statement
is required for exit or disposal activity initiated after December 31, 2002. Any
exit or disposal activity which has been completed or has already been committed
to as of December 31, 2002 is accounted for under EITF 94-3. Currently, Inforte
does not have any new exit or disposal activity that will occur after December
31, 2002, beyond the exit of a portion of our office space at our Chicago
location, which will continue to be accounted under issue 94-3. Thus we do not
believe that the adoption of this statement will have an effect on Inforte's
results of operations or financial position.

In July 2000, the Financial Accounting Standards Board's Emerging Issues Task
Force issued abstract 00-21, "Accounting for Revenue Arrangements with Multiple
Deliverables." This abstract addresses certain aspects of the accounting by a
vendor for arrangements under which it will perform multiple revenue-generating
activities. Under this abstract, companies which have multiple revenue
generating activities are required to segment their activities into separate
units of accounting for revenue recognition purposes. For example, a company
that engages a client to integrate an enterprise-wide software application and
manage the ongoing maintenance of that application in a production environment,
would have to separate the project into phases and recognize revenue for those
distinct phases under the separate accounting pronouncements that are
appropriate for each phase. This abstract has not been finalized the EITF, and
any further changes may affect Inforte's reporting of revenue. However, under
the current abstract, it is our view that Inforte's revenue generating
activities are all similar in nature, and thus would not require separate
accounting treatment.


Risk Factors

In addition to other information in this Form 10-Q, the following risk factors
should be carefully considered in evaluating Inforte and its business because
such factors currently may have a significant impact on Inforte's business,
operating results and financial condition. As a result of the risk factors set
forth below and elsewhere in this Form 10-Q, and the risk factors discussed in
Inforte's other Securities and Exchange Commission filings, actual results could
differ materially from those projected in any forward-looking statements.

RISKS RELATED TO INFORTE

If we are unable to accurately forecast our quarterly revenue, our profitability
may be reduced or eliminated.

The level of IT spending by current and potential clients in the United States
has slowed and become less certain. We believe the uncertainty stems from the
slowing of growth in Gross Domestic Product in the United States that began in
the second half of calendar 2000. In some cases the uncertainty has reduced the
overall number and size of projects available for bid. In other cases the
uncertainty has resulted in project deferrals, project scope reductions, longer
decision making cycles or limited follow-on projects at existing clients. With
fewer opportunities available in the market, competition on some opportunities
has become more intense. While our



13


revenue forecast methods are sophisticated and have proven accurate
historically, we believe the current environment adds greater risk and
uncertainty to our forecasts. If we fail to accurately forecast revenue, our
actual results may differ materially from the amounts planned, and our
profitability may be reduced or eliminated.



If we fail to identify and successfully transition to the latest and most
demanded solutions or keep up with an evolving industry, we will not compete
successfully for clients and our profits may decrease.

If we fail to identify the latest solutions, or if we identify but fail to
successfully transition our business to solutions with growing demand, our
reputation and our ability to compete for clients and the best employees could
suffer. If we cannot compete successfully for clients, our revenues may
decrease. Also, if our projects do not involve the latest and most demanded
solutions, they would generate lower fees.

Because our market changes constantly, some of the most important challenges
facing us are the need to:

*       develop new services that meet changing customer needs;

*       identify and effectively market solutions with growing demand during a
        period of slower technological advancement and adoption;

*       enhance our current services;

*       continue to develop our strategic and technical expertise;

*       effectively use the latest technologies; and

*       influence and respond to emerging industry standards and other
        technological changes.



All of these challenges must be met in a timely and cost-effective manner. We
cannot assure you that we will succeed in effectively meeting these challenges,
especially during a substantial economic slowdown or a recession when right
sizing the business for lower demand diverts resources and senior management's
attention.

If we fail to satisfy our clients' expectations, our existing and continuing
business could be adversely affected.

If we fail to satisfy the expectations of our clients, we could damage our
reputation and our ability to retain existing clients and attract new clients.
In addition, if we fail to perform adequately on our engagements, we could be
liable to our clients for breach of contract. Although most of our contracts
limit the amount of any damages based upon the fees we received, we could still
incur substantial cost, negative publicity, and diversion of management
resources to defend a claim, and as a result, our business results could suffer.

We may be unable to hire and retain employees who are highly skilled, which
would impair our ability to perform client services, generate revenue and
achieve profitability.

If we are unable to hire and retain highly-skilled individuals, our ability to
retain existing business and compete for new business will be harmed.
Individuals who have sucessfully sold and delivered services similar to those we
provide to our clients are limited and competition for these individuals is
intense. Further, in the current depressed spending environment, individuals who
were previously successful may no longer be successful. Identifying individuals
who will succeed in this environment is extraordinarily difficult. To attract
and retain these individuals, we invest a significant amount of time and money.
In addition, we


14


expect that both bonus payments and equity ownership will be an important
component of overall employee compensation. In the current economic and market
environment, overall bonus payments have been reduced significantly, increasing
the risk that key employees will leave Inforte. Also, if our stock price does
not increase over time, it may be more difficult to retain employees who have
been compensated with stock options. Options granted to employees from the IPO
date, February 17, 2000, through September 30, 2002 have exercise prices
of $5.12 to $71.81. The average exercise price of all options outstanding at
September 30, 2002 is $14.22. Since the current market price for Inforte stock
has recently been below this average strike price, it may be more difficult to
retain employees. If key employee turnover rates grow to unacceptable levels
because compensation is not at competitive rates, Inforte may increase the level
of stock option grants or cash compensation. These actions would reduce earnings
per share and may cause Inforte to become unprofitable.

If we fail to adequately manage rapid changes in demand, our profitability and
cash flow may be reduced or eliminated.

If we cannot keep pace with the rapid changes in demand, we will be unable to
effectively match resources with demand, and maintain high client satisfaction,
which may eliminate our profitability and our ability to achieve positive cash
flow from operations. Our business grew dramatically from 1993 through 2000. For
example, our net revenue increased by 100% or more for seven consecutive years,
reaching $63.8 million in 2000. As a result of the current depressed IT spending
environment and overcapacity in our industry however, net revenue in 2001 was
$47.7 million, a 25% decline compared to 2000. Currently, we expect net revenue
to be $8.0 million in the fourth quarter of 2002 to total $38.4 million for
2002, a further 21% decline. If the level of spending declines further, we may
not be profitable or achieve positive cash flow from operations. If, on the
other hand, our growth exceeds our expectations, our current resources and
infrastructure may be inadequate to handle the growth.

If our marketing relationships with software vendors deteriorate, we would lose
their client referrals. If these vendors continue to increase their professional
services revenue, our revenue could be adversely affected.


We currently have marketing relationships with software vendors, including
Ariba, i2, Siebel and Vignette. Although we have historically received a large
number of business leads from these software vendors to implement their
products, they are not required to refer business to us and they may terminate
these relationships at any time. If our relationships with these software
vendors deteriorate, we may lose their client leads and our ability to develop
new clients could be negatively impacted. Any decrease in our ability to obtain
clients may cause a reduction in our net revenues.

Historically our software partners have primarily relied on licensing fees and
maintenance contracts to generate revenue. However, more recently as software
licensed sales have declined, software vendors have sought to supplement their
revenue through increased implementation services for their software. This
business strategy puts us in competition with our software partners on some
deals, reducing client leads and our ability to develop new clients and revenue.

If we are unable to rapidly integrate third-party software, we may not be able
to deliver solutions to our clients on a timely basis, resulting in lost
revenues and potential liability.

In providing client services, we recommend that our clients use software
applications from a variety of third-party vendors. If we are unable to
implement and integrate this software in a fully functional manner for our
clients, we may experience difficulties that could delay or prevent the
successful development, introduction or marketing of services. Software often
contains errors or defects, particularly when first introduced or when new
versions or enhancements are released. Despite internal testing and testing by
current and potential clients, our current and future solutions may contain
serious defects due to third-party software



15


or software we develop or customize for clients. Serious defects or errors could
result in liability for damages, lost revenues or a delay in implementation of
our solutions.

Our revenues could be negatively affected by the loss of a large client or our
failure to collect a large account receivable.

At times, we derive a significant portion of our revenue from large projects for
a limited number of varying clients. In the September 2002 quarter our five
largest clients accounted for 41% of net revenue and our ten largest clients
accounted for 63% of net revenue. Frequently we have one or more clients in a
quarter accounting for over 10% of net revenue. Although these large clients
vary from time to time and our long-term revenues do not rely on any one client,
our revenues could be negatively affected if we were to lose one of our top
clients or if we were to fail to collect a large account receivable.

In addition, many of our contracts are short-term and our clients may be able to
reduce or cancel our services without incurring any penalty. If our clients
reduce or terminate our services, we would lose revenue and would have to
reallocate our employees and our resources to other projects to attempt to
minimize the effects of that reduction or termination. Accordingly,
terminations, including any termination by a major client, could adversely
impact our revenues. We believe the uncertain economic environment increases the
probability that services may be reduced or canceled.

If we estimate incorrectly the time required to complete our projects, we will
lose money on fixed-price contracts.

Historically, a majority of our contracts are fixed-price contracts, rather than
contracts in which the client pays us on a time-and-materials basis. We must
estimate the number of hours and the materials required before entering into a
fixed-price contract. Our future success will depend on our ability to continue
to set rates and fees accurately and to maintain targeted rates of employee
utilization and project quality. If we fail to accurately estimate the time and
the resources required for a project, any required increase in the time and
resources to complete the project could cause our profits to decline.

Fluctuations in our quarterly revenues and operating results due to cyclical
client demand may lead to reduced prices for our stock.

Our quarterly revenues and operating results have fluctuated significantly in
the past and we expect them to continue to fluctuate significantly in the
future. Historically, we have experienced our greatest sequential growth during
the first and second quarters. We typically experience significantly lower
sequential growth in the third and fourth quarters. We attribute this to the
budgeting cycles of our customers, most of whom have calendar-based fiscal years
and as a result are more likely to initiate projects during the first half of
the year. In 2001, this traditional seasonal pattern was overwhelmed by a
cyclical decline in information technology spending, causing our net revenue to
decline sequentially in each quarter of 2001. More recently, in February and
March 2002, we did experience an increase in demand which did allow our net
revenue in the second quarter 2002 to exceed the first quarter 2002 level. We
believe that increase in demand was due to positive seasonal effects, while the
subsequent lower revenue in the third quarter 2002 was due to negative seasonal
effects. This existence of both seasonal and cyclical effects does make it more
difficult to predict demand, and if we are unable to predict client demand
accurately in a slower growth or distressed economic environment, our expenses
may be disproportionate to our revenue on a quarterly basis and our stock price
may be adversely affected.

Others could claim that we infringe on their intellectual property rights, which
may result in substantial costs, diversion of resources and management
attention, and harm to our reputation.

A portion of our business involves the development of software applications for
specific client engagements. Although we believe that our services do not
infringe



16


on the intellectual property rights of others, we may be the subject of
claims for infringement, which even if successfully defended could be costly and
time-consuming. An infringement claim against us could materially and adversely
affect us in that we may:

*      experience a diversion of our financial resources and management
       attention;

*      incur damages and litigation costs, including attorneys' fees;

*      be enjoined from further use of the intellectual property;

*      be required to obtain a license to use the intellectual property,
       incurring licensing fees;

*      need to develop a non-infringing alternative, which could be costly and
       delay projects; and

*      have to indemnify clients with respect to losses incurred as a
       result of our infringement of the intellectual property.


Because we are newer and smaller than many of our competitors, we may not have
the resources to effectively compete, causing our revenues to decline.

Many of our competitors have longer operating histories, larger client bases,
longer relationships with clients, greater brand or name recognition, and
significantly greater financial, technical, marketing, and public relations
resources than we do. We may be unable to compete with full-service consulting
companies, including the past and current consulting divisions of the largest
global accounting firms, who are able to offer their clients a wider range of
services. If our clients decide to take their IT strategy and technology
projects to these companies, our revenues may decline. It is possible that in
uncertain economic times our clients may prefer to work with larger firms to a
greater extent than normal. In addition, new professional services companies may
provide services similar to ours at a lower price, which could cause our
revenues to decline.

Our expansion and growth internationally could negatively affect our business.

For the nine months ended September 2002, international net revenue exceeded 20%
of net revenue. We face additional risks internationally that we do not face
domestically. Such risks include longer customer payment cycles, adverse taxes
and compliance with local laws and regulations. Further, the effects of
fluctuations in currency exchange rates may adversely affect the results of
operations. Finally, as the U.S. economic slowdown has spread to the rest of the
world, our ability to obtain international net revenue going forward will likely
be reduced. These risk factors, as well as others not cited here, may negatively
impact our business.

If clients view offshore development as a viable alternative to our service
offerings, our pricing and revenue may be negatively affected.

Gradually, over the past two decades, numerous IT service firms have been
founded in countries such as India, which have well-educated and technically
trained English-speaking workforces available at wage rates that are only a
fraction of US and European wages rates. Additionally, some larger clients have
established internal IT operations at offshore locations. While traditionally we
have not competed with offshore development, presently this form of development
is seeing increasing acceptance in the market, especially for routine and
repetitive types of development. While offshore development has greater risk due
to distance, geopolitical and cultural issues, its lower cost advantage could
overwhelm these risks. Inforte does not currently intend to establish offshore
development capabilities as some of our competitors have done. Instead, we
intend to continue our ongoing evolution toward more valued and more
differentiated service offerings -- including more strategy and process
consulting -- which are difficult for offshore



17


developers to replicate. If we are unable to evolve our service offerings, or if
the rate of acceptance of offshore development advances faster than we
anticipate, then our pricing and our revenue may be negatively affected.

RISKS RELATED TO OUR INDUSTRY


If the rate of adoption of advanced information technology slows substantially,
our revenues may decrease.

We market our services primarily to firms that want to adopt information
technology that provides an attractive return on investment or helps provides a
sustainable competitive advantage. Our revenues could decrease if companies
decide not to integrate the latest technologies into their businesses due to
economic factors, governmental regulations, financial constraints or other
reasons.

Inforte's market research suggests that the level information technology
spending in the United States is closely linked with the growth rate of the
Gross Domestic Product (GDP). The slowdown in the US GDP growth rate that began
in the second half of 2000 has caused a slower rate of adoption of advanced
information technology by our target clients. We expect information technology
spending and Inforte revenue to be highly dependent on the health of the US
economy. We believe that corporate revenue-driven profit growth must resume for
IT spending to improve.


If the supply of information technology companies and personnel continues to
exceed demand, this may adversely impact the pricing of our projects and our
ability to win business.

Beginning in the second half of 2000, many firms in our industry announced
significant employee layoffs and lower rates of utilization of billable
personnel. An oversupply of technology professionals may reduce the price
clients are willing to pay for our services. An oversupply may also increase the
talent pool for potential clients who may choose to complete projects in-house
rather than use an outside consulting firm such as Inforte. Lower utilization
rates increase the likelihood that a competitor will reduce their price to
secure business in order to improve their utilization rate. The extent to which
pricing and our ability to win business may be impacted is a function of both
the magnitude and duration of the supply and demand imbalance in our industry.

Geopolitical instability may cause our revenues to decrease.

Our clients often avoid large IT spending commitments during periods of
geopolitical instability and economic uncertainty. If the United States attacks
Iraq, or if terrorists attack United States' interests, clients may freeze their
decision making processes. This would slow demand for our services and would
negatively impact our revenue.



18


               RISKS RELATED TO THE OWNERSHIP OF OUR COMMON STOCK

Our stock price could be extremely volatile, like many technology stocks.

The market prices of securities of technology companies, particularly
information technology services companies, have been highly volatile. We expect
continued high volatility in our stock price, with prices at times bearing no
relationship to Inforte's operating performance.

Inforte's average trading volume during the September 2002 quarter averaged
approximately 57,000 shares per day. On any particular day, Inforte's trading
volume can be less than 1,000 shares which increases the potential for volatile
stock prices.

Volatility of our stock price could result in expensive class action litigation.

If our common stock suffers from volatility like the securities of other
technology companies, we have a greater risk of further securities class action
litigation claims. One such claim is pending presently. Litigation could result
in substantial costs and could divert our resources and senior management's
attention. This could harm our productivity and profitability.


Officers and directors own a significant percentage of outstanding shares and,
as a group, may control a vote of stockholders.

As of September 30, 2002 our executive officers and directors own over 48% of
the outstanding shares of our common stock. The largest owners and their
percentage ownership are set forth below:

                  *       Philip S. Bligh                22.8%


                  *       Stephen C.P. Mack              18.3%


                  *       Nick Padgett                    6.6%

If the stockholders listed above act or vote together with other employees who
own significant shares of our common stock they will have the ability to control
the election of our directors and the approval of any other action requiring the
approval of our stockholders, including any amendments to the certificate of
incorporation and mergers or sales of all or substantially all assets, even if
the other stockholders perceive that these actions are not in their best
interests.

Our stock repurchase program has had the effect of increasing the concentration
of insider ownership. If we make further repurchases, insider ownership could
increase further.

Over time, the influence or control executive officers have on a stockholder
vote may decrease as officers supplement below-market salaries and diversify
overall equity wealth with sales of Inforte stock. As permitted by SEC Rule
10b5-1, Inforte executive officers have or may set up a predefined, structured
stock trading program. The trading program allows brokers acting on behalf of
company insiders to trade company stock during company blackout periods or while
the insiders may be aware of material, non-public information, if the
transaction is performed according to a pre-existing contract, instruction or
plan that was established with the broker during a non-blackout period and when
the insider was not aware of any material, non-public information. Inforte
executive officers may also trade company stock outside of plans set up under
SEC rule 10b5-1, however such trades would be subject to company blackout
periods and insider trading rules.



19


The authorization of preferred stock, a staggered board of directors and
supermajority voting requirements will make a takeover attempt more difficult,
even if the takeover would be favorable for stockholders.

Inforte's certificate of incorporation and bylaws may have the effect of
deterring, delaying or preventing a change in control of Inforte. For example,
our charter documents provide for:

*        the ability of the board of directors to issue preferred stock and to
         determine the price and other terms, including preferences and voting
         rights, of those shares without stockholder approval;

*        the inability of our stockholders to act by written consent or to call
         a special meeting;

*        advance notice provisions for stockholder proposals and nominations to
         the board of directors;

*        a staggered board of directors, with three-year terms, which will
         lengthen the time needed to gain control of the board of directors; and

*        supermajority voting requirements for stockholders to amend provisions
         of the charter documents described above.

We are also subject to Delaware law. Section 203 of the Delaware General
Corporation Law prohibits us from engaging in a business combination with any
significant stockholder for a period of three years from the date the person
became a significant stockholder unless, for example, our board of directors
approved the transaction that resulted in the stockholder becoming an interested
stockholder. Any of the above could have the effect of delaying or preventing
changes in control that a stockholder may consider favorable.


Item 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

In all categories of cash, cash equivalents and short-term and long-term
marketable securities, Inforte invests only in highly liquid securities of high
credit quality. All short-term investments bear a minimum Standard & Poor's
rating of A1 or Moody's investor service rating of P1. All long-term investments
bear a minimum Standard & Poor's rating of A or Moody's investor service rating
of A2.

Inforte has a large cash and marketable securities balance that generates
substantial interest income relative to its size. During 2001 and year-to-date
in 2002, over 100% of Inforte's pretax income was from interest income. A drop
in short-term market interest rates will have a significant impact on Inforte's
ability to be profitable as interest income drops. Thus, a drop in short-term
market interest rates will increase the revenue level required to be profitable,
and increases the risk that Inforte will lose money.

Item 4. CONTROLS AND PROCEEDURES

Within the 90-day period prior to the filing of this report, an evaluation was
carried out under the supervision and with the participation of the
Corporation's management, including the Corporation's Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the Corporation's
disclosure controls and procedures (as defined in Rule 13a-14(c) under the
Securities Exchange Act of 1934). Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that these disclosure
controls and procedures were effective. No significant changes were made in the
Corporation's internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation.



20


PART II. OTHER INFORMATION

Item 1. Legal Proceedings
Inforte and Philip S. Bligh, Stephen C.P. Mack and Nick Padgett, officers of
Inforte, have been named as defendants in Mary C. Best v. Inforte Corp.;
Goldman, Sachs & Co.; Salomon Smith Barney, Inc.; Philip S. Bligh; Stephen C.P.
Mack and Nick Padgett, Case No. 01 CV 10836, filed on November 30, 2001 in
Federal Court in the Southern District of New York. The case is also known as In
re Inforte Corp. Initial Public Offering Securities Litigation. An amended class
action complaint was filed on April 19, 2002. The amended complaint alleges
violations of federal securities laws in connection with our initial public
offering occurring in February 2000 and seeks certification of a class of
purchasers of Inforte stock, unspecified damages, interest, attorneys' and
expert witness fees and other costs. The amended complaint does not allege any
claims relating to any alleged misrepresentations or omissions with respect to
our business. The individual defendants (Messrs. Bligh, Mack and Padgett) have
been dismissed from the case without prejudice pursuant a stipulated dismissal
and a tolling agreement. We have moved to dismiss the plaintiff's case. The
court has heard oral argument on these fully briefed motions, but not yet ruled
on the motions. We believe that we have defenses to the claims and we intend to
vigorously defend the lawsuit.

Item 2. Changes in Securities and Use of Proceeds
              None

Item 3. Defaults upon Senior Securities
                  None

Item 4. Submission of Matter to a Vote of Security Holders
                  None

Item 5. Other Information
                  None

Item 6. Exhibits and Reports on Form 8-K


(a)     Exhibits

            Exhibit Number          Exhibit
            --------------          -------

            99.1                    Certification by Philip Bligh pursuant to 18
                                    U.S.C Section 1350, as adopted pursuant to
                                    Section 906 of the Sarbanes-Oxley Act of
                                    2002

            99.2                    Certification by Nick Padgett pursuant to 18
                                    U.S.C Section 1350, as adopted pursuant to
                                    Section 906 of the Sarbanes-Oxley Act of
                                    2002

(b)     Reports on Form 8-K

In a Report on Form 8-K filed on November 5, 2002, Inforte reported, under Item
9, "Regulation FD Disclosure," the election of Harvey H. Bundy, III as a
director of Inforte, effective November 1, 2002, to fill a vacancy created by
the resignation of Edgar D. Jannotta.




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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.




                                       Inforte Corp.

                                 By:   /s/ Nick Padgett
November 14, 2002                   --------------------------------------------
                                         Nick Padgett,
                                      Chief Financial Officer




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CERTIFICATIONS

I, Philip Bligh, certify that:
   1.         I have reviewed this quarterly report on Form 10-Q of Inforte
              Corp.;
   2.         Based on my knowledge, this quarterly report does not contain any
              untrue statement of a material fact or omit to state a material
              fact necessary to make the statements made, in light of the
              circumstances under which such statements were made, not
              misleading with respect to the period covered by this quarterly
              report;
   3.         Based on my knowledge, the financial statements, and other
              financial information included in this quarterly report, fairly
              present in all material respects the financial condition, results
              of operations and cash flows of the registrant as of, and for, the
              periods presented in this quarterly report;
   4.         The registrant's other certifying officers and I are responsible
              for establishing and maintaining disclosure controls and
              procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
              for the registrant and we have:
              (a)  designed such disclosure controls and procedures to ensure
                   that material information relating to the registrant,
                   including its consolidated subsidiaries, is made known to us
                   by others within those entities, particularly during the
                   period in which this quarterly report is being prepared;
              (b)  evaluated the effectiveness of the registrant's disclosure
                   controls and procedures as of a date within 90 days prior to
                   the filing date of this quarterly report (the "Evaluation
                   Date"); and
              (c)  presented in this quarterly report our conclusions about the
                   effectiveness of the disclosure controls and procedures based
                   on our evaluation as of the Evaluation Date;
   5.         The registrant's other certifying officers and I have disclosed,
              based on our most recent evaluation, to the registrant's auditors
              and the audit committee of registrant's board of directors (or
              persons performing the equivalent functions):
              (a)  all significant deficiencies in the design or operation of
                   internal controls which could adversely affect the
                   registrant's ability to record, process, summarize and report
                   financial data and have identified for the registrant's
                   auditors any material weaknesses in internal controls; and
              (b)  any fraud, whether or not material, that involves management
                   or other employees who have a significant role in the
                   registrant's internal controls; and
   6.         The registrant's other certifying officers and I have indicated in
              this quarterly report whether or not there were significant
              changes in internal controls or in other factors that could
              significantly affect internal controls subsequent to the date of
              our most recent evaluation, including any corrective actions with
              regard to significant deficiencies and material weaknesses.

                                            By:    /s/ Philip S. Bligh
November 14, 2002                              ---------------------------------
                                                      Philip S. Bligh,
                                                  Chief Executive Officer



23


I, Nick Padgett, certify that:
   1.         I have reviewed this quarterly report on Form 10-Q of Inforte
              Corp.;
   2.         Based on my knowledge, this quarterly report does not contain any
              untrue statement of a material fact or omit to state a material
              fact necessary to make the statements made, in light of the
              circumstances under which such statements were made, not
              misleading with respect to the period covered by this quarterly
              report;
   3.         Based on my knowledge, the financial statements, and other
              financial information included in this quarterly report, fairly
              present in all material respects the financial condition, results
              of operations and cash flows of the registrant as of, and for, the
              periods presented in this quarterly report;
   4.         The registrant's other certifying officers and I are responsible
              for establishing and maintaining disclosure controls and
              procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
              for the registrant and we have:
              (a)  designed such disclosure controls and procedures to ensure
                   that material information relating to the registrant,
                   including its consolidated subsidiaries, is made known to us
                   by others within those entities, particularly during the
                   period in which this quarterly report is being prepared;
              (b)  evaluated the effectiveness of the registrant's disclosure
                   controls and procedures as of a date within 90 days prior to
                   the filing date of this quarterly report (the "Evaluation
                   Date"); and
              (c)  presented in this quarterly report our conclusions about the
                   effectiveness of the disclosure controls and procedures based
                   on our evaluation as of the Evaluation Date;
   5.         The registrant's other certifying officers and I have disclosed,
              based on our most recent evaluation, to the registrant's auditors
              and the audit committee of registrant's board of directors (or
              persons performing the equivalent functions):
              (a)  all significant deficiencies in the design or operation of
                   internal controls which could adversely affect the
                   registrant's ability to record, process, summarize and report
                   financial data and have identified for the registrant's
                   auditors any material weaknesses in internal controls; and
              (b)  any fraud, whether or not material, that involves management
                   or other employees who have a significant role in the
                   registrant's internal controls; and
   6.         The registrant's other certifying officers and I have indicated in
              this quarterly report whether or not there were significant
              changes in internal controls or in other factors that could
              significantly affect internal controls subsequent to the date of
              our most recent evaluation, including any corrective actions with
              regard to significant deficiencies and material weaknesses.

                                            By: /s/ Nick Padgett
November 14, 2002                              ---------------------------------
                                                    Nick Padgett,
                                                Chief Financial Officer




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