Signed Major IDM Technology License During the Quarter; Maintains
Full Year Outlook

SUNNYVALE, Calif.–(BUSINESS WIRE)–May 1, 2007–MoSys, Inc.
(MoSys), (Nasdaq:MOSY), the industry’s leading provider of
high-density system-on-chip (SoC) embedded memory intellectual
property (IP) today reported financial results for its first quarter
ended March 31, 2007.

First Quarter Highlights

Total revenue for the first quarter of 2007 was $3.1 million,
compared to $5.0 million in the fourth quarter of 2006 and $3.5
million in the first quarter of 2006. Total revenue was lower than the
previously stated guidance of $4 to $5 million primarily due to the
deferral of the majority of the revenue associated with a major IDM
technology license secured during the first quarter of 2007.

“During the first quarter, we signed another major IDM technology
license agreement as anticipated,” stated Chet Silvestri, CEO of
MoSys, Inc. “However, the revenue associated with this closed contract
is being recognized on a percent of completion basis over the next
several quarters, due to the bundling of engineering services within
the agreement. While royalty revenue met expectations, deferral of
revenue from this signed technology agreement caused our licensing
revenue to fall short of expectations.”

Mr. Silvestri further stated, “We have good licensing visibility
for the second quarter and the remainder of the year and anticipate
continued growth in our quarterly royalties. We have already signed
another major technology license agreement in the beginning of the
second quarter and have a strong pipeline of deals. We therefore are
maintaining our previously stated full year 2007 revenue guidance in
the range of $23 to $27 million and expect Q2 revenue guidance in the
range of $5 to $6 million.”

First quarter total revenue included $1.1 million of licensing
revenue as compared to $1.8 million in the fourth quarter of 2006 and
$2.3 million in the first quarter of 2006. Royalty revenue was $2.0
million as expected. This compared to $3.2 million in the previous
quarter and $1.2 million in the same period a year ago. The Company
recorded licensing revenue from 12 different chip development projects
and royalty revenue from 16 different licensees, which was comparable
to the previous quarter.

During the quarter, MoSys announced an agreement with Taiwan
Semiconductor Manufacturing Company Ltd. (TSMC), whereby TSMC will
develop and market eDRAM technology incorporating MoSys’ patented
1T-SRAM(R) embedded memory intellectual property (IP) at 90nm, 65nm
and future advanced process geometries. Additionally, MoSys announced
an agreement with China’s leading foundry, Semiconductor Manufacturing
International Corporation (SMIC), to jointly productize MoSys’ new
high-density, embedded flash memory IP.

The Company also announced the availability of new memory macros
specifically configured for mobile handset and other consumer liquid
crystal displays. The 1T-SRAM dual-port display macros are the first
application-optimized memory built on the Company’s technology
platform. MoSys also reported that initial customers in the
high-volume consumer handset market were entering the production

“We are very pleased with the strong customer interest that we are
receiving for our first application-specific memory solution. Our dual
port display macros offer a unique value in their ability to meet the
critical form factor requirement of these LCD chips while at the same
time offering the low power and low cost features of our 1T-SRAM
technology,” stated Chet Silvestri.

The first quarter gross margin percentage determined in accordance
with U.S. generally accepted accounting principles, or GAAP, was 82
percent, compared to 88 percent in the fourth quarter of 2006 and 90
percent in the first quarter of 2006. The sequential decrease in total
gross margin for the first quarter of 2007 was due to higher costs
associated with product deliverables accounted for under the
percentage of completion method.

Total operating expenses were $4.7 million as compared to $4.6
million in the fourth quarter of 2006.

GAAP net loss for the quarter was $969,000, or ($0.03) per share,
including stock-based compensation charges of $886,000. This compares
to net income of $567,000, or $0.02 fully diluted per share, in the
fourth quarter of 2006 and a net loss of $974,000, or ($0.03) per
share, in the first quarter of 2006. Earnings per share for the
quarter on a GAAP basis were computed using 31,689,000 shares.

The non-GAAP net loss for the first quarter of 2007, which
excludes the total stock-based compensation charges of $886,000, was
$83,000, or ($0.00) per share. Loss per share for the quarter on a
non-GAAP basis also was computed using 31,689,000 shares. A
reconciliation of GAAP results to non-GAAP results is provided in the
financial statement tables following the text of this press release.

Cash, cash equivalents and both long and short-term investments
totaled approximately $86.2 million as of March 31, 2007, up from
approximately $84.3 million as of December 31, 2006 primarily due to
the collection of receivables.

Business Outlook for Fiscal 2007

The Company’s Chief Executive Officer and Chief Financial Officer
will provide additional financial details on its business outlook
during their conference call at 1:30 p.m. (PT) on Tuesday, May 1,

First Quarter 2007 Financial Results Webcast/Conference Call

MoSys management will host a conference call and webcast with
investors today, May 1, 2007, at 1:30 p.m. Pacific time (4:30 p.m.
Eastern time) to discuss the first quarter 2007 financial results and
the business outlook. Investors and other interested parties may
access the call by dialing 1-800-299-7098 in the U.S. (1-617-801-9715)
outside of the U.S.), and entering the passcode 27921763 at least 10
minutes prior to the start of the call. In addition, an audio webcast
will be available through the MoSys Web site at
A telephonic replay will be available for 48 hours following the call
at 888-286-8010 in the U.S. (617-801-6888 outside of the U.S.),
passcode of 10379466.

Use of Non-GAAP Financial Measures

To supplement MoSys’ consolidated financial statements presented
in accordance with GAAP, MoSys uses non-GAAP financial measures that
exclude from the statement of operations the effects of stock-based
compensation and the effects of our adoption of Statement of Financial
Accounting Standard No. 123R (SFAS 123R) upon the number of shares
used in calculating non-GAAP loss per share. MoSys management uses the
above non-GAAP financial measures internally to understand, manage and
evaluate our business. MoSys believes it is useful for itself and
investors to review, as applicable, both GAAP information and the
non-GAAP measures, which exclude the effects of stock-based
compensation and the effects of our adoption of Statement of SFAS
123R, in order to assess the performance of our continuing operations
and for planning and forecasting in future periods. The presentation
of these non-GAAP measures is intended to provide investors with an
understanding of our operational results and trends that enables them
to analyze our base financial and operating performance and facilitate
period-to-period comparisons and analysis of operational trends. MoSys
believes the presentation of these non-GAAP financial measures is
useful to investors in allowing for greater transparency with respect
to supplemental information used by management in its financial and
operational decision making.

Investors are encouraged to review the reconciliation of these
non-GAAP financial measures to the comparable GAAP results, which is
provided in a table immediately below the Condensed Consolidated
Statements of Operations. For additional information regarding these
non-GAAP financial measures, and management’s explanation of why it
considers such measures to be useful, refer to the Form 8-K dated May
1, 2007 that we have submitted to the Securities and Exchange

Forward-Looking Statements

This press release may contain forward-looking statements about
the Company including, without limitation, benefits and performance
expected from use of the Company’s 1T-SRAM technology.

Forward-looking statements are based on certain assumptions and
expectations of future events that are subject to risks and
uncertainties. Actual results and trends may differ materially from
historical results or those projected in any such forward-looking
statements depending on a variety of factors. These factors include
but are not limited to, customer acceptance of our 1T-SRAM
technologies and embedded memory designs, the timing and nature of the
license agreements being signed with our customers and their requests
for our services under existing license agreements, the timing of
customer acceptance of our work under such agreements, the level of
commercial success of licensees’ products such as cell phone hand
sets, ease of manufacturing and yields of devices incorporating our
1T-SRAM, our ability to enhance the 1T-SRAM technology or develop new
technologies, the level of intellectual property protection provided
by our patents, the expenses and other consequences of litigation,
including intellectual property infringement litigation, to which we
may be or may become a party from time to time, the vigor and growth
of markets served by our licensees and customers and operations of the
Company and other risks identified in the Company’s most recent annual
report on Form 10-K filed with the Securities and Exchange Commission,
as well as other reports that MoSys files from time to time with the
Securities and Exchange Commission. MoSys undertakes no obligation to
update publicly any forward-looking statement for any reason, except
as required by law, even as new information becomes available or other
events occur in the future.


Founded in 1991, MoSys (Nasdaq:MOSY), develops, licenses and
markets innovative memory technologies for semiconductors. MoSys’
patented 1T-SRAM technologies offer a combination of high density, low
power consumption, high speed and low cost unmatched by other
available memory technologies. The single transistor bit cell used in
1T-SRAM memory results in the technology achieving much higher density
than traditional four or six transistor SRAMs while using the same
standard logic manufacturing processes. 1T-SRAM technologies also
offer the familiar, refresh-free interface and high performance for
random address access cycles associated with traditional SRAMs. In
addition, these technologies can reduce operating power consumption by
a factor of four compared with traditional SRAM technology,
contributing to making them ideal for embedding large memories in
System on Chip (SoC) designs. MoSys’ licensees have shipped more than
100 million chips incorporating 1T-SRAM embedded memory technologies,
demonstrating excellent manufacturability in a wide range of silicon
processes and applications. MoSys is headquartered at 755 N. Mathilda
Avenue, Sunnyvale, California 94085. More information is available on
MoSys’ website at

                             MOSYS, INC.
               (In thousands, except per share amounts)

                                                Three Months Ended
                                                     March 31,
                                                2007         2006
                                             ------------ ------------
                                             (unaudited)  (unaudited)
Net Revenue:
  Licensing                                        1,158        2,268
  Royalty                                          1,979        1,254
                                             ------------ ------------
    Total net revenue                              3,137        3,522

Cost of Net Revenue:
  Licensing                                          564          353
                                             ------------ ------------
    Total cost of net revenue                        564          353

Gross Profit                                       2,573        3,169

Operating Expenses:
  Research and development                         2,078        1,952
  Selling, general and administrative              2,580        2,629
                                             ------------ ------------
    Total operating expenses                       4,658        4,581

  Loss from operations                            (2,085)      (1,412)

  Other income/expenses                            1,064          452

    Loss before income taxes                      (1,021)        (960)

  Income tax benefit (provision)                      52          (14)
                                             ------------ ------------

Net Loss                                           $(969)       $(974)
                                             ============ ============

Net Loss per Share
  Basic                                           ($0.03)      ($0.03)
  Diluted                                         ($0.03)      ($0.03)

Shares Used in Computing Net Loss per Share
  Basic                                           31,689       31,022
  Diluted                                         31,689       31,022

                             MOSYS, INC.
  Reconciliation of GAAP to Non-GAAP Net Loss and Net Loss Per Share
               (In thousands, except per share amounts)

                                                Three Months Ended
                                                     March 31,
                                                2007         2006
                                             ------------ ------------

  GAAP Net Loss                                    $(969)       $(974)

  Non-GAAP Adjustments:
    Stock compensation expense
    - Cost of revenue                                100           52
    - Research and development                       305          227
    - Selling, general and administrative            481          324
                                             ------------ ------------
      Total stock compensation expense               886          603

  Non-GAAP Net Loss                                 $(83)       $(371)
                                             ============ ============

  GAAP Net Loss per Share: Basic and Diluted      $(0.03)      $(0.03)
    Reconciling item:
    - Stock compensation expense                   $0.03        $0.02

                                             ------------ ------------
  Non-GAAP Net Loss per Share: Basic and
   Diluted                                        $(0.00)      $(0.01)
                                             ============ ============

  Shares Used in Computing Non-GAAP Net Loss
   per Share
    Basic                                         31,689       31,022
    Diluted                                       31,689       31,022

                             MOSYS, INC.
                            (in thousands)

                                              March 31,   December 31,
                                                2007         2006
                                             ------------ ------------
                                             (unaudited)   (audited)
  Current assets:
    Cash, cash equivalents and short-term
     investments                                 $77,782      $81,807
    Accounts receivable - net                      1,072        2,491
    Unbilled contract receivable                     386          360
    Prepaid expenses and other assets              2,596        2,831
                                             ------------ ------------
      Total current assets                        81,836       87,489

  Long-term investments                            8,462        2,492
  Property and equipment - net                       830          855
  Goodwill                                        12,326       12,326
  Other assets                                       404          598
                                             ------------ ------------
      Total assets                              $103,858     $103,760
                                             ============ ============

Liabilities and Stockholders' Equity:
  Current liabilities:
    Accounts payable                                $231         $307
    Accrued expenses and other liabilities         1,621        1,865
    Deferred revenue                                 924          619
                                             ------------ ------------
      Total current liabilities                    2,776        2,791

   Long-term portion of restructuring
    liability                                         29           54

  Stockholders' equity:
    Common stock, additional paid-in capital
     and others                                  108,194      107,087
    Accumulated deficit                           (7,141)      (6,172)
                                             ------------ ------------
      Total stockholders' equity                 101,053      100,915

      Total liabilities and stockholders'
       equity                                   $103,858     $103,760
                                             ============ ============

CONTACT: MoSys, Inc.
Jim Pekarsky, CFO, 408-731-1846
Shelton Investor Relations
Beverly Twing, 972-239-5119 x126
Senior Account Manager

SOURCE: MoSys, Inc.