MIPS Technologies Reports First Quarter Fiscal 2005 Financial Results; Revenue Up 40%

MIPS32(R) 24K Core Family Drives 6th Consecutive Quarter of Growth

MOUNTAIN VIEW, Calif., Oct. 20 /PRNewswire-FirstCall/ -- MIPS Technologies, Inc. (NASDAQ: MIPS), today reported financial results for its first fiscal quarter ended September 30, 2004. Revenue for the first quarter of fiscal 2005 grew 40 percent compared to the same period a year ago, primarily as the result of significant licensing activity in MIPS32(R) 24K(TM) cores.

Total revenue for the first quarter of fiscal 2005 was $14.6 million compared to $10.4 million for the same quarter a year ago. Contract revenue was $7.9 million, an increase of 48 percent compared to $5.3 million in the comparable period in fiscal 2004. Royalties were $6.7 million, an increase of 32 percent compared to $5.1 million in the same quarter a year ago. Net income for the first quarter of fiscal 2005 was $3.1 million compared to a net loss of $5.8 million for the same quarter a year ago. Net income per share on a diluted basis for the first quarter of fiscal 2005 was $0.07 compared to a net loss per share of $0.14 for the same quarter a year ago.

"Although the overall environment has slowed in the second half of 2004, we are seeing strong demand and revenue growth," said Casey Eichler, chief financial officer of MIPS Technologies. "The demand for all product families is strong, but the 24K core family is driving the top line as the 'right product at the right time' as it is very competitive in many markets. This is complemented by a continued growth in royalties as we continue to receive the benefits of our customers' introduction of MIPS-Based(TM) products in numerous embedded markets."

"The dramatic cost and performance advantage of our 24K core family is now well established," said John Bourgoin, president and CEO of MIPS Technologies. "Customers around the world, including companies with long alliances to competitor products, are recognizing that this core family will bring significant advantages to their new products. With eleven licenses completed in only six months following introduction, the 24K core family is by far the fastest growing MIPS' product in our history. This sets the stage for continued proliferation of the MIPS architecture into consumer and communications markets."

MIPS Technologies invites you to listen to management's discussion of Q1 fiscal 2005 results and guidance for Q2 fiscal 2005 in a live conference call today beginning at 1:45 p.m. Pacific. Conference call number is 1-719-457-2693. Replay number is 1-719-457-0820 and will be available for 5 days, beginning shortly after the end of the conference call. The access code is 984766. An audio replay of the conference call will be posted on the Company's website ( http://www.mips.com/content/Corporate/InvestorRelations/ir) soon thereafter.

Q1 FY2005 Highlights: Following are selected press release headlines from MIPS Technologies, and the company's licensees, systems vendors and third party providers.

  -- Adimos Utilizes MIPS32(R) 4KEp(TM) Core from MIPS Technologies in
     Wireless Video Module(TM)
  -- Atheros Communications Introduces First MIPS-Based(TM) Video Chipset
     for Affordable HDTV- Quality Wireless
  -- Broadcom(R) MIPS-Based(TM) Dual-Band WLAN Access Point and Client
     Solutions Wi-Fi CERTIFIED(TM) for Wi-Fi Multimedia(TM) (WMM(TM))
  -- Cavium Networks Acquires Brecis Communications' MIPS-Based(TM) Secure
     Communication Processor Product Line
  -- Cavium Networks Introduces OCTEON(TM) Family of Integrated Network
     Services Processors With up to 16 MIPS64(R)-Based Cores for Internet
     Services, Content and Security Processing
  -- Cavium Networks OCTEON(TM) Network Services Processor for Internet
     Services and Security Processing to Gain MontaVista Linux Support
  -- Cavium Networks Standardizes Upon the MIPS(R) Architecture and
     Announces cnMIPS(TM) Core for Secure Network Services
  -- Cavium Forms Partnership With Wind River Systems
  -- Centillium's MIPS-Based(TM) StreetFighter Product Line Selected as One
     of EE Times' "Ultimate Products"
  -- Cirrus Logic MIPS-Based(TM) DVD Processor Enables Playback of More
     Digital Multimedia Content with DivX Technology, MPEG-4-Based Codecs
  -- CoWare ConvergenSC Helps MIPS Customers Beat Price/Performance Targets
     for Highly Competitive Designs Incorporating MIPS32 24K Cores
  -- EPI Supports Cavium Networks MIPS64-based OCTEON(TM) Network Services
  -- Fujitsu Access and Metalink Announce Commercial Availability of
     MIPS-Based(TM) 100 Mbps VDSL Plus(TM) Platform - Trials Underway in
  -- Highest Java(TM) Performance Achieved by the MIPS32(R) 24Kc(TM) Core
  -- Industry-Standard MIPS(R) Architecture Adopted by NEC Electronics for
     Enhanced Single-Chip DVD Recorder Solution
  -- Intoto to Deliver iGateway Security Software Platforms for Cavium
     Networks' OCTEON Network Services Processors
  -- i3 micro's IP Set-Top Box Integrates AMD Alchemy MIPS-Based(TM) Au1550
     Processor for Embedded Network Security
  -- MIPS(R) Architecture Enabling Growing List of Mobile Application
  -- MIPS-Based(TM) Cell Phones and Digital Cameras Examples of Battery-
     Powered Devices Targeted by MegaChips
  -- MIPS Technologies and Agilent Technologies Announce Agreement on
     32- and 64-Bit MIPS-Based(TM) Embedded Processor Cores
  -- MIPS Technologies and Magma Announce Reference Methodology for
     High-Performance 24K(TM) Core Family
  -- MIPS Technologies Announces Availability of Hard Intellectual Property
  -- MIPS Technologies Introduces New System Controller for 24K(TM) Core
  -- MIPS Technologies Licenses Pro Series(TM) Processor Core to SiNett
  -- MIPS Technologies' 24K(TM) Core Family Supported by Microsoft Windows
     CE Operating System
  -- Pixelworks Selects MIPS(R) Architecture for Upcoming ICs
  -- PMC-Sierra Broadens MIPS-Based(TM) CPU Offering with Newest 32-Bit
     Synthesizeable Core Families from MIPS Technologies
  -- QuickLogic Announces Windows CE Support for the QuickMIPS Family of
     Programmable SoCs
  -- SonicWALL selects Cavium Networks OCTEON(TM) Network Services
     Processors for Next Generation Content and Security Platforms
  -- Toshiba Launches New 64-Bit RISC Microprocessor, its First Standard
     Processor Based on High-Performance TX99/H4 Core and Industry-Leading
     90nm Process Technology
  -- Wintegra's WinPath Processors Integrated into Texas Instruments' Newest
     DSL Central Office Solution
  -- Zarlink Semiconductor Selects Processor from MIPS Technologies for
     Advanced Digital Television Applications
  -- Zoran Announces New MIPS-Based(TM) Generation9 Elite HDTV Processor
     Sampling to Leading Worldwide Digital TV Makers
  -- Zoran's MIPS-Based(TM) SupraTV CPU Powers DVN's Set Top Box Products
     for China Cable Television Market

  MIPS Technologies, Inc.

MIPS Technologies, Inc. is a leading provider of industry standard processor architectures and cores for digital consumer and business applications. The company drives the broadest architectural alliance that is delivering 32- and 64-bit embedded RISC solutions. The company licenses its intellectual property to semiconductor companies, ASIC developers, and system OEMs. MIPS Technologies, Inc. and its licensees offer the widest range of robust, scalable processors in standard, custom, semi-custom and application- specific products. MIPS Technologies, Inc. is based in Mountain View, California, and can be reached at 650-567-5000 or http://www.mips.com/.

This press release contains forward-looking statements, including those regarding MIPS Technologies' market growth. Actual events or results may differ materially from those anticipated in these forward looking statements as a result of a number of different risk and uncertainties, including but not limited to: our products may fail to achieve market acceptance, changes in our research and development expenses, the anticipated benefits of our partnering relationships may be more difficult to achieve than expected, the timing of or delays in customer orders, delays in the design process, the length of MIPS Technologies' sales cycle, MIPS Technologies' ability to develop, introduce and market new products and product enhancements, and the level of demand for semiconductors and end-user products that incorporate semiconductors. For a further discussion of risk factor affecting our business, we refer you to the documents we file from time to time with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended June 30, 2004 and subsequent Forms 10-Q and 8-K.

NOTE: MIPS, MIPS32, 24K and MIPS-Based are either registered trademarks or trademarks of MIPS Technologies, Inc. in the United States and/or other countries. All other trademarks referred to herein are the property of their respective owners.

                                     MIPS  TECHNOLOGIES,  INC.
                                    (In  thousands,  except  per  share  data)

                                                                                                          Three  Months  Ended
                                                                                                                September  30,
                                                                                                        2004                        2003


        Royalties                                                                            $6,721                  $5,088
        Contract  revenue                                                                7,885                    5,325
            Total  revenue                                                                14,606                  10,413

    Costs  and  expenses:

        Research  and  development                                                5,207                    8,144
        Sales  and  marketing                                                          3,045                    2,796
        General  and  administrative                                            2,321                    1,644
        Restructuring                                                                          277                    3,233
            Total  costs  and  expenses                                          10,850                  15,817

    Operating  income  (loss)                                                      3,756                  (5,404)
    Other  income  (expense),  net                                                  245                        208
    Income  (loss)  before  income  taxes                                  4,001                  (5,196)
    Provision  for  income  taxes                                                    880                        567
    Net  income  (loss)                                                                $3,121                $(5,763)
    Net  income  (loss)  per  basic  share                                  $0.08                  $(0.14)
    Net  income  (loss)  per  diluted  share                              $0.07                  $(0.14)
    Common  shares  outstanding-basic                                    40,695                  40,172
    Common  shares  outstanding-diluted                                42,384                  40,172

                                                  MIPS  TECHNOLOGIES,  INC.
                                    CONDENSED  CONSOLIDATED  BALANCE  SHEETS
                                                            (In  thousands)

                                                                                              September  30,            June  30,
                                                                                                      2004                          2004

    Current  assets:
        Cash  and  cash  equivalents                                          $74,106                  $78,335
        Short-term  investments                                                  19,990                    15,041
        Accounts  receivable,  net                                                3,250                      2,488
        Prepaid  expenses  and  other
          current  assets                                                                  2,008                      3,159
            Total  current  assets                                                  99,354                    99,023
    Equipment  and  furniture,  net                                            3,177                      3,578
    Other  assets                                                                            5,828                      6,102
                                                                                                  $108,359                $108,703

                  Liabilities  and  Stockholders'  Equity

    Current  liabilities:
        Accounts  payable                                                              $1,025                    $1,255
        Accrued  liabilities                                                          8,701                    12,344
        Deferred  revenue                                                                3,056                      3,407
              Total  current  liabilities                                      12,782                    17,006
    Long-term  liabilities                                                          2,515                      2,038
    Stockholders'  equity                                                          93,062                    89,659
                                                                                                  $108,359                $108,703

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