Audible Reports First Quarter Results Highlighted by 68% Year-Over-Year Content and Services Revenue Growth

Business Wire, May 4, 2004

Business Editors

WAYNE, N.J.--(BUSINESS WIRE)--May 4, 2004

Company Achieves First Quarter of GAAP Net Income from Operations

Audible(R), Inc. (OTC BB: ADBL), the leading provider of digitally delivered spoken word audio, today announced financial results for the first quarter of 2004.

First quarter financial and growth highlights include:

-- Consumer content and services revenue of $6.6 million, up 68%

over the first quarter of 2003 and 17% over the fourth quarter

of 2003.

-- The addition of 33,000 new customers in the first quarter,

bringing total customer count to 344,000.

-- The company's first quarter of positive GAAP income from

operations, as compared to a $237,000 loss from operations in

the fourth quarter of 2003 and a $1.8 million loss from

operations in the first quarter of 2003.

-- Free cash flow* of $312,000. This is the second consecutive

quarter of positive free cash flow for Audible(R).

"Audible has kicked off 2004 with a very strong first quarter," noted Donald Katz, CEO and chairman, Audible, Inc. "We achieved the important milestone of positive net income from operations, and our performance in terms of financial, strategic, and operational progress exceeded our expectations. Audible is well positioned to capitalize on the increasingly positive environment for premium digital media services, and we continue to improve our audio products and open new channels to generate awareness of our brand."

The Audible board of directors will seek shareholder approval of a reverse stock split at the company's annual meeting on June 3, 2004. The company seeks to effect a reduction of common shares in order to complete the rationalization of its financial structure begun with the conversion of all preferred shares to common shares in recent months. The board believes that the reverse split will also increase the marketability and liquidity of Audible's common stock and accelerate the company's re-listing of its common shares on Nasdaq.

Other recent highlights:

-- Audible and Creative Labs(R) announced that Creative's MP3

players, NOMAD(R) Jukebox Zen(R) and NOMAD MuVo(R), will ship

as AudibleReady(R) devices later in Q2 2004.

-- Audible and Rio Audio(R) announced that Rio's Nitrus(R) and

Cali(R) MP3 players will ship as AudibleReady devices in Q3

2004.

-- Audible offered free audio downloads of testimony given before

the 9-11 Commission, also distributed by The New York Times

Online.

-- More than 5,000 new hours of spoken word audio from Audible

were integrated and offered for sale at Apple's(R)

industry-leading iTunes(R) Music Store, above and beyond the

20,000 hours supplied to iTunes in Q4 2003.

-- Device compatibility and marketing initiatives launched for

the Sony(R) Clie(R).

-- Support for Apple Macintosh(R) users with Palm OS-based

devices such as the Treo 600(R) Smartphone and Sony Clie.

-- Audible and Amazon.com(R) launched an instant rebate promotion

on AudibleReady devices from Amazon and Micro Center(R) when

purchased with AudibleListener(R) membership.

-- New content distribution partnerships with Franklin Covey,

publisher of the best selling audiobook of all time, The Seven

Habits of Highly Effective People; Oversampling's Soundwalk

audio tours; Galaxy Press; Harry Shearer's Le Show; and

exclusive audio from comedian Greg Proops.

-- Feature coverage and positive reviews of the Audible service

in The Wall Street Journal, The New York Times, International

Herald Tribune, CNN Headline News, Automobile Club of New

York's Car & Travel magazine, The Washington Post, CBS

MarketWatch.com, About.com, CNet.com, and The Guardian (UK).

Business Outlook

The Company currently expects to report 2004 total revenue in the range of $28 million to $30 million, up from $19.3 million in total revenue in 2003, reflecting a growth rate of 45% to 55% over 2003. Management also expects net income of $1 million to $1.4 million before dividend and preferred stock conversion charges, and free cash flow of $2 million to $2.4 million.

Conference Call

Senior management will host an investor teleconference at 5:00 p.m. EDT today, to discuss these results as well as related financial and operational developments. A live webcast of the conference call is available at www.audible.com/ir for online access to the call. To participate in the call the dial-in number is (800) 218-0204. The replay of the call will be available 7:00 p.m. EDT on Tuesday, May 4 at (800) 405-2236, passcode 575984#. International replay: +1 (303) 590-3000, passcode 575984#.

*Use of Non-GAAP Measures

Management believes that free cash flow is a useful measure of liquidity because it includes cash provided by operating activities as well as the impact of cash used for investment in property and equipment. However, this non-GAAP measure should be considered in addition to, not as a substitute for, or superior to, net cash provided (used) by operating activities, or other financial measures prepared in accordance with GAAP. A reconciliation to the GAAP equivalents of this non-GAAP measure is contained in tabular form on the attached unaudited financial statements.