Virage Logic Reports First-Quarter Fiscal 2006 Results; Revenue of $13.7 Million Increases by 7% over Q4 Fiscal 2005

FREMONT, Calif.--Jan. 25, 2006--Virage Logic Corporation (Nasdaq:VIRL) today reported its financial results for the first fiscal quarter ended December 31, 2005.

Revenues for the first quarter of fiscal 2006 were $13.7 million, compared with $15.9 million for the first quarter of fiscal 2005 and $12.8 million for the fourth quarter of fiscal 2005. License revenue for the first quarter of fiscal 2006 was $10.4 million, compared with $13.1 million for the same period a year ago and $10.0 million for the prior quarter. Royalties for the first quarter of fiscal 2006 were $3.3 million, compared with $2.8 million for the first quarter of fiscal 2005 and $2.8 million for the fourth quarter of fiscal 2005.

As reported under U.S. generally accepted accounting principles (GAAP), net loss for the first quarter of fiscal 2006 was $242,000, or $0.01 per share, compared with net income of $1.7 million, or $0.08 per share for the first quarter of fiscal 2005 and net income of $232,000 or $0.01 per share for the fourth quarter of fiscal 2005.

Net loss for the first quarter of fiscal 2006 included $1.9 million of stock-based compensation expense. Without the adoption of FAS123R, the company would have reported a net loss of $95,000 or $0.00 per share.

"We believe that our strategy of capturing both 90- and 65-nanometer designs during this current upturn in the semiconductor industry is beginning to pay off as royalty revenues begin to ramp," said Adam Kablanian, Virage Logic's president and chief executive officer. "At these advanced process nodes, our products hold a commanding technological lead over our competitors and offer customers key yield improvements and time-to-market advantages in implementing designs that utilize Virage Logic's semiconductor intellectual property."

Virage Logic also announced today its business outlook for the second quarter of fiscal 2006. The company currently anticipates total revenues of approximately $14.5 million to $15.0 million. Expected total revenues for the quarter are anticipated to include royalties of approximately $4.0 million to $4.5 million. The company expects to report a GAAP net loss of approximately $0.00 to $0.01 per share for the three months ending March 31, 2006. The company expects $1.8 million of stock-based compensation expense for the second quarter ending March 31, 2006. Without the adoption of FAS123R, the company would expect earnings per diluted share of $0.02 to $0.04. Although this news release will be available on the company's website, the company disclaims any duty or intention to update these or any other forward-looking statements.

Virage Logic's management plans to hold a teleconference on first-quarter 2006 results at 1:30 p.m. PT / 4:30 p.m. ET today. A live webcast of management's teleconference regarding first-quarter results will be available to all investors, and an archived webcast will be available from January 25, 2006 until January 25, 2007 on the Investor Relations page of Virage Logic's website at http://www.viragelogic.com. In addition, a telephonic replay will be available through February 1, 2006 at (719) 457-0820, access code 5866433.

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About Virage Logic

Founded in 1996, Virage Logic Corporation rapidly established itself as a technology and market leader in providing advanced embedded memory intellectual property (IP) for the design of complex integrated circuits. Today the company is a global leader in semiconductor IP platforms comprising embedded memories, logic, and I/Os and is pioneering the development of a new class of IP called Silicon Aware IP. Silicon Aware IP tightly integrates Physical IP (memory, logic and I/Os) with the embedded test, diagnostic, and repair capabilities of Infrastructure IP to help ensure manufacturability and optimized yield at the advanced process nodes. Virage Logic's highly differentiated product portfolio provides higher performance, lower power, higher density and optimal yield to foundries, integrated device manufacturers (IDMs) and fabless customers who develop products for the consumer, communications and networking, hand-held and portable, and computer and graphics markets. The company uses its FirstPass-Silicon(TM) Characterization Lab for certain products to help ensure high quality, reliable IP across a wide range of foundries and process technologies. Headquartered in Fremont, California, Virage Logic has R&D, sales and support offices worldwide. For more information, visit www.viragelogic.com.