February 4, 2003

MontaVista Doubles Revenues; Completes Record Year

SUNNYVALE, Calif., TOKYO, PARIS, Feb. 4, 2003 â MontaVista Software, Inc., the company powering the embedded revolution, today announced it has ended its 2002 fiscal year with revenues doubling over 2001, despite the general economic downturn. In 2002, MontaVista captured more than 450 customer design wins, almost half of which were with Fortune 100 and Global 500 corporations, including Agilent Technologies UK Ltd., Alcatel, Lucent Technologies, NEC, Nokia, Matsushita (Panasonic), Philips, Sony and Toshiba Electronics Europe GmbH. The company reported a record fourth quarter and a record year.

âLast year, we predicted that Linux would become the platform of choice for carrier grade applications in telecommunications. We also anticipated the burgeoning use of embedded Linux in name-brand digital consumer electronics goods. Today, both of these trends are being realized,â said Jim Ready, embedded industry pioneer and CEO, MontaVista Software. âMore and more companies are reaching the conclusion that purchasing MontaVista Linux is much easier and more cost effective than buying a proprietary RTOS, creating their own, or trying to use untested Linux off the Web.â

âOur revenue base is grounded in product sales, with product subscriptions accounting for more than 75 percent of our revenues last year,â added Dave Warner, CFO, MontaVista Software. âWe are experiencing strong growth and our investors are thrilled with the companyâs financial progress and future prospects. In addition, most of our third round funding money is still in the bank.â

In 2002, MontaVista secured more than $28 million in a third round of funding from venture capital firms such as US Venture Partners, Alloy Ventures, RRE Ventures, and WR Hambrecht & Co., and leading technology companies including IBM, Intel, Panasonic (Matsushita), Sony, Toshiba America and Yamaha Corporation.

âMontaVista Software is an exceptional company. As the market for commercial embedded Linux products has surged, MontaVista has continued to ride the crest of the wave, establishing itself as a leading provider of Linux-based systems software for several markets,â said Stuart Phillips, general partner, US Venture Partners. âIn each of these markets, MontaVista has secured the leading vendors in that market as customers.â

MontaVista Product Line

The company delivered a wealth of new products in 2002, including the innovative MontaVista⢠Linux® Carrier Grade Edition 2.1 for the telecommunications market, and MontaVista Linux Professional Editions 2.1 and 3.0. The companyâs graphics product updates included MontaVista Graphics 2.1 and Qt/Embedded for MontaVista Linux 2.3.3. Rounding out its product portfolio, MontaVista also updated its Java development tools - VisualAge Micro Edition (VAME 1.4) for MontaVista Linux was released last year.

It also laid the groundwork for the successful launch of its first product for the consumer electronics market â MontaVista Linux Consumer Electronics Edition 3.0 â in January of 2003. Consumer electronics products based on MontaVista Linux are already shipping from Sony, NEC and Panasonic.

Industry Recognition

In 2002, MontaVista Software was chosen as one of the âCommunication Systems Designâ magazineâs 20 up-and-coming communications companies and was honored with the magazineâs âCOMETâ award. MontaVista was also named as one of âUpsideâ magazineâs âHot 100â companies and âElectronic Businessâ magazine picked MontaVista as one of its âThirty Best Small Electronics Companies for 2002.â

The companyâs flagship product, MontaVista Linux Professional Edition, was named âBest Embedded Linux Solutionâ at the Linux World and Expo in New York; it was also recognized as âBest Embedded Tool and Development Solution for 2002â by the prestigious French publication âElectronique;â and received the âReadersâ Choice Awardâ for âFavorite Embedded Solution 2002â from the American magazine âLinux Journal.â

Growing Global Presence

The company continued to expand its worldwide sales and distribution network with the appointment of a new vice president of European operations and new distribution channels in China, India, Korea, Japan and Taiwan.

Vibrant Partner Ecosystem

MontaVista Softwareâs strong partner ecosystem topped 200 members; welcoming new alliances and solidifying strategic relationships with semiconductor vendors including IBM, Intel, Broadcom, Toshiba America, Altera, Xilinx, Texas Instruments, Agere, IDT, and Interphase, and with software suppliers such as InterVideo, Access, Omron Software, Tao Group, IP Infusion, LVL7, Hughes Software Systems, Parasoft and Zentek Technology.

About MontaVista Software

MontaVista Software is a leading global supplier of systems software for intelligent connected devices and associated infrastructure. MontaVista powers the embedded revolution by providing GNU/Linux-based open-source software solutions. Founded in 1999 by real-time operating system (RTOS) pioneer James Ready, MontaVista offers a family of products under the MontaVista Linux umbrella that address broad-based software developer needs encompassing applications ranging from communications infrastructure to consumer electronics. Multiple Editions of MontaVista Linux are available including Professional, Consumer Electronics and Carrier Grade, along with complementary technology products providing powerful Java and graphics development capabilities.

Headquartered in the heart of Silicon Valley, in Sunnyvale, Calif., MontaVista Software is a privately held company funded by leading investors such as Alloy Ventures, US Venture Partners, RRE Ventures, WR Hambrecht + Co., IBM, Intel Capital, Sony, Panasonic (Matsushita), Toshiba America and Yamaha Corporation. For more information about MontaVista Software, please visit http://www.mvista.com.

Linux is a registered trademark of Linus Torvalds. MontaVista is a trademarkof MontaVista Software Inc. Java and all Java-based marks are trademarks or registered trademarks of Sun Microsystems, Inc. All other names mentioned are trademarks, registered trademarks or service marks of their respective companies.

Contacts:

MontaVista Software,
Joe Samagond,
Director of Marketing and Corporate Communications,
MontaVista Software Inc.,
Phone (408) 328-9234,
E-mail: jsamagond@mvista.com

Patricia Colby,
PR Strategy and Business Development,
Pacifico Inc.,
Phone (408) 293-8600 ext. 340,
E-mail: pcolby@pacifico.com"

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