SANTA CLARA, Calif. — (BUSINESS WIRE) — February 3, 2011 — MoSys, Inc., (NASDAQ: MOSY), a leading architect of serial chip-to-chip communications solutions that deliver unparalleled bandwidth performance for next generation networking systems and advanced system-on-chip (SoC) designs, today reported financial results for the fourth quarter and fiscal year ended December 31, 2010.

Fourth Quarter and Year 2010 Highlights

• Full year 2010 revenue increased 36 percent to $15.6 million from $11.5 million in 2009;
• Fourth quarter 2010 revenue increased 12 percent over the prior year period to $4.0 million;
• Raised $20.0 million in equity capital, ending the year with total cash and investments of $37.5 million;
• Launched Bandwidth Engine^® family of integrated circuits (ICs) in February 2010 and shipped first samples in December 2010;
• Introduced the GigaChip™ Interface, an open, CEI-11 compatible interface that enables highly efficient serial chip-to-chip communications in high-speed networking systems; and
• Established the GigaChip Alliance, an ecosystem of companies supporting the GigaChip Interface, with initial members including Altera, NetLogic Microsystems and Xilinx.

Management Commentary

“MoSys made significant progress towards expanding our business and future growth opportunities in 2010. Further, total revenues increased 36 percent, driven by growth in both license and royalty. These increased revenues were more than offset as we invested heavily in the development of our new Bandwidth Engine family of ICs,” commented Len Perham, President and CEO of MoSys. “At the end of the year we strengthened our balance sheet by completing a direct equity financing of approximately $20 million, which will be used for general corporate purposes, including working capital and the further development of our Bandwidth Engine family of ICs.

“We announced our Bandwidth Engine family of ICs in February and shipped the first samples in December. This remarkable accomplishment was made possible by the extreme dedication and extraordinary efforts of our excellent team coupled with great support from our partners. The high level of interest being generated by potential customers is particularly gratifying.”

Mr. Perham concluded, “Looking out over 2011, we anticipate increasing demand for Bandwidth Engine IC samples, both in the form of reference board pairs and stand alone components as we compete to win design-in runoffs at several potential customers. We also anticipate completing the definition and initiating the design of our second generation IC family aimed squarely at the bandwidth and access requirements of next generation networking equipment. Additionally, there will be an intensified level of activity around our IP business. In 2011, IP will be our primary source of sales, and we intend to support that business with the resources required to achieve maximum revenue contribution. Overall, our efforts will be focused on driving MoSys to become an IP-rich, fabless semiconductor company.”

Fourth Quarter Results

Total net revenue for the fourth quarter of 2010 was $4.0 million, compared with $3.8 million reported in the third quarter of 2010 and $3.5 million in the fourth quarter of 2009. Fourth quarter revenue was driven by increased royalties from licensees in the gaming and networking markets.

Fourth quarter 2010 total revenue included licensing revenue of $1.4 million, compared with $1.5 million for the previous quarter and $1.3 million for the fourth quarter of 2009. Fourth quarter royalty revenue was $2.6 million, compared with $2.3 million in the previous quarter and $2.2 million for the fourth quarter of 2009.

Gross margin for the fourth quarter of 2010 was 81 percent, compared with 81 percent for the third quarter of 2010 and 80 percent for the fourth quarter of 2009.

Total operating expenses on a GAAP basis for the fourth quarter of 2010 were $8.9 million, compared with $9.2 million in the previous quarter and $8.2 million for the fourth quarter of 2009. Fourth quarter 2010 operating expenses included $0.7 million of amortization of intangible assets and $1.0 million of stock-based compensation expense.

GAAP net loss for the fourth quarter of 2010 was $5.7 million, or ($0.17) per share, compared with a net loss of $6.2 million, or ($0.19) per share, for the previous quarter and a net loss of $4.9 million, or ($0.16) per share, for the fourth quarter of 2009. The non-GAAP net loss for the fourth quarter of 2010 was $4.0 million, or ($0.12) per share, which excludes amortization of intangible assets and stock-based compensation expense. Earnings per share for the fourth quarter 2010 were computed using approximately 33.1 million shares on a GAAP and non-GAAP basis. A reconciliation of GAAP results to non-GAAP results is provided in the financial statement tables following the text of this press release.