MontaVista 2003 Results

FYI.

For Immediate Release

MontaVista Software Reports Impressive Revenue Surge in 2003

Company Secures Hundreds of Design Wins, Expands Global Operations and
Becomes Cash Flow Positive in 2003

SUNNYVALE, Calif., TOKYO, PARIS, Feb. 10, 2004 ‹ MontaVista Software, Inc.,
the company powering the embedded revolution, today announced it has ended
its 2003 fiscal year with revenue growth of 77 percent over the previous
year. In 2003, MontaVista captured 500 new customer design wins, many with
Fortune 100 and Global 500 corporations. The company became cash flow
positive in the fourth quarter of 2003, ahead of plan. By the end of 2003,
MontaVista Software had experienced 15 consecutive quarters of growth,
despite a challenging global economy.

³For the last four years, MontaVista Software has been on a steady growth
path, with the company¹s revenue multiplying 12-fold since 2000,² said Jim
Ready, embedded industry pioneer and CEO, MontaVista Software. ³Our strong
brand, global presence and solid products meet the needs of customers in
markets ranging from consumer electronics to communications infrastructure.
MontaVista Software is perfectly positioned to continue increasing market
share in a rapidly growing global embedded software market.²

In August 2003, Gartner Inc. reported that the Embedded Software Tools Total
Available Market was close to $1 billion. In this survey (2002 Worldwide
Embedded Software Tools Market Share, August 14, 2003, Nancy Wu and Daya
Nadamuni), MontaVista Software was listed among the top embedded OS
companies. Last year, Venture Development Corporation placed MontaVista
Software as the #1 commercial embedded Linux company worldwide, based on
market share. In Japan, the Fuji-Keizai Group, a leading provider of market
and industry information, reported last year that MontaVista Linux garnered
almost half (46.3%) of embedded Linux projects in Japan while MontaVista
Software represented almost two-thirds (63.4%) of the embedded Linux market
revenues in Japan.

MontaVista Software is unique in that it is a pure-play Linux company.
MontaVista has enjoyed its spectacular growth by productizing and marketing
a Linux-based embedded platform. MontaVista Linux leverages Open Source and
gives customers a huge head start in OEM product development. By providing a
foundation with rich high performance networking, a robust and reliable
runtime environment, and an unparalleled collection of development tools,
utilities and deployment components, MontaVista Linux has easily displaced a
broad range of legacy, proprietary embedded OS-es, accelerating migration to
embedded Linux and shortened time-to-market for intelligent devices.

³Driven by the company¹s rapid growth as the preferred provider of embedded
Linux systems software platforms, we achieved positive cash flow in the
fourth calendar quarter of last year, a milestone for us and the embedded
Linux market,² commented Dave Warner, CFO, MontaVista Software. ³For the
year, our staffing increased to about 200 people worldwide, productivity
improved, gross margins improved and operating expenses stayed flat. Our
results reflect the market telling us that we are the safe bet when it comes
to using Linux for embedded devices.²
MontaVista Software now has secured more than 1200 customers worldwide since
it was established in 1999. New customers or product deployments include
Samsung Electronics, Siemens, Alcatel, Nortel Networks, Volvo Mobility
Systems, Toshiba Personal Computer, Mitsubishi Electric Company, Toyota
Communication Systems, Lucent Technologies, Motorola PCS, Motorola Broadband
Communications Sector, Caspian Networks, MEN Micro Elektronik, UTStarcom,
Iskratel, Datang Mobile, and Thales.

Market focus and growing International presence
MontaVista Linux has been particularly well received in market segments like
Telecommunications, Data Communications, Consumer Electronics, Automotive
Telematics, Instrumentation & Control, and Medical. Device developers in
these markets have been very eager to migrate from legacy platforms to open
standards-based operating environments.

MontaVista Software has become a key embedded OS player in Japan and Asia
Pacific in particular. Several factors have contributed to its success in
the Asian technology market: the robustness and maturity of the embedded
Linux platform, enhanced control over technology road maps, the opportunity
for customers to consolidate diverse technology investments, and a growing
desire to migrate from legacy and proprietary platforms. Impressed by the
ease and low cost of developing consumer, networking, communications and
other products, leading companies there are now standardizing on MontaVista
Linux as a ³strategic platform² for current and future product development.

In Japan, it was significant that the T-Engine Forum selected MontaVista
Linux as the preferred Linux platform defined in the T-Engine software
architecture. Working together with the T-Engine Forum, MontaVista Software
will propose a joint solution, combining the long-dominant Japanese embedded
OS, TRON, and embedded Linux, benefiting the Japanese electronics industry
at large.
 
In 2003, the company continued to expand its international sales and
distribution network with the opening of a new office in Korea and a new
distribution channel in Italy. The company has also established software
development centers in India, Russia and China. MontaVista now has a strong
global presence with eight subsidiaries and numerous offices in North
America, Japan, Europe and Asia Pacific.

MontaVista Customer Product Deployments
MontaVista Linux is remarkably scalable and device OEMs deploy it in
next-generation highly available communications infrastructure servers
running high-end databases like Oracle 9i, and equally in the latest mobile
phones like the Motorola A760.

In 2003, numerous MontaVista Linux customers brought their products to
market. These intelligent devices include the first Linux-based mobile phone
from Motorola; a home server from Sharp; a telematics application from
Volvo; an AdvancedTCA telco platform from NEC; a universal remote control
for the home from Philips; and a broadband terminal and a broadband TV tuner
from Panasonic, to name only a few. There are also several brand name High
Definition Televisions running MontaVista Linux available to consumers.

MontaVista Product Line
In 2003, MontaVista successfully launched its first product for the consumer
electronics market ‹ MontaVista Linux Consumer Electronics Edition 3.0
(CEE). CEE was quickly embraced by customers worldwide and has become the
strategic development platform at leading global consumer electronics
companies for exciting new products expected to hit the market soon. The
company also delivered MontaVista Linux Carrier Grade Edition 3.0 and 3.1
for the telecommunications market, and MontaVista Linux Professional Edition
3.0 enabling many hardware platforms. Moreover, MontaVista Software
introduced a new Integrated Development Environment (IDE), MontaVista
DevRocket, based on Eclipse technology and offering developers a
comprehensive tool suite. DevRocket is already a key element of MontaVista
Linux Professional Edition and will be incorporated into the Consumer
Electronics Edition and Carrier Grade Edition very soon.

Industry Recognition and Participation
In 2003, the ³Silicon Valley and San Jose Business Journal² recognized
MontaVista Software as #5 on its list of ³Fastest Growing Private Companies²
in Silicon Valley. The company made the ³AlwaysOn 100² list of top
technologies companies and was a finalist in the ³Best of Show² awards at
the Embedded Systems Conference in San Francisco. A MontaVista Linux-based
product was also selected as the "Best Embedded Linux System" at the
inaugural Linux User & Developer Awards in the UK.

MontaVista was also active in a variety of industry organizations including
the Open Systems Development Lab, the Service Availability Forum, the
Eclipse organization and the Embedded Linux Consortium. In 2003, the company
joined the Open Mobile Alliance and the Consumer Electronics Linux Forum, a
group, founded by Sony and Matsushita, to promote the use of Linux for
digital consumer electronics devices. The company was also invited to join
SH-Mobile Consortium, a development community established by Renesas
Technology (formed last year by Hitachi and Mitsubishi).

Vibrant Partner Ecosystem
A major factor in the MontaVista Software success story has been the
company¹s laser-like focus on building an extensive ecosystem of partners
from a broad array of semiconductor, software application, middleware and
systems integration companies, to provide solutions for manufacturers in key
markets including telecommunications, mobile, home entertainment and
automotive telematics.

Last year, MontaVista Software¹s strong partner ecosystem topped 270
members. The company welcomed new alliances and solidified strategic
relationships with semiconductor vendors including IBM, Texas Instruments,
Intel, Motorola, Renesas Technology, Broadcom and Force Computers.
MontaVista is also the Linux vendor of choice for MIPS Technologies, Inc.
New software partners included Aplix, Atheros Communications, Beatnik,
Cavium Networks, Elematics, Emuzed, Fathammer, Interpeak, Objective
Interface, OpenWave, Packetvideo, RealNetworks and Superscape.

Moving Forward
MontaVista Software fully expects that Linux will become the #1 platform of
choice for new embedded design starts in 2004 and that MontaVista Software
will play a significant role in this development.

About MontaVista Software, Inc.
MontaVista Software is a leading global supplier of systems software and
development tools for intelligent connected devices and associated
infrastructure. MontaVista powers the embedded revolution by providing Open
Source GNU/Linux-based software solutions. Founded in 1999 by real-time
operating system pioneer James Ready, MontaVista offers a family of products
that address software developer needs encompassing applications ranging from
communications infrastructure to consumer electronics. MontaVista products
include MontaVista Linux Professional, Consumer Electronics and Carrier
Grade Editions. MontaVista DevRocket, a powerful integrated development
environment, delivers state-of-the-art development tools across all the
product Editions. MontaVista Graphics offers a rich GUI development tools
platform.

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 registered
trademark of MontaVista Software Inc.  All other names mentioned are
trademarks, registered trademarks or service marks of their respective
owners.

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