VA Software Reports First Quarter FY06 Results

VA Software Corporation (NASDAQ: LNUX), a leading provider of software, information and community support for IT and development professionals, today announced financial results for its first quarter fiscal year 2006, ended October 31, 2005.

Total first quarter fiscal 2006 revenue grew to $8.2 million, compared to first quarter fiscal 2005 total revenue of $7.0 million. In particular, online media revenue increased 40% to $2.6 million in first quarter fiscal 2006 from $1.8 million in first quarter fiscal 2005.

On a GAAP basis, the first quarter fiscal 2006 net loss was $1.2 million, or $0.02 per share, compared to first quarter fiscal 2005 GAAP net loss of $1.6 million, or $0.03 per share.

As specified in the attached reconciliation of net loss as reported to pro forma net loss, the first quarter fiscal 2006 net loss was $1.0 million, or $0.02 per share, compared to the first quarter fiscal 2005 net loss of $1.6 million, or $0.03 per share. Cash and investments remain strong at $35.9 million as of October 31, 2005.

"We are pleased with our performance this quarter. Our online media revenue grew by 40% year-over-year, due in part to our media sales team operating at a fully-staffed level," said Ali Jenab, president and CEO. "We are encouraged by the strong start that our online media and ecommerce businesses had during the first quarter. We are also encouraged by an over $1 million sale of SourceForge® Enterprise Edition to a single enterprise customer, that slipped from the first quarter and closed in November. We released a new look and feel for SourceForge.net® and intend to continue to invest in this important asset throughout fiscal year 2006."

A conference call to review results will be held at 5:00 pm (Eastern) today. The call may be accessed via webcast at http://www.vasoftware.com or by dialing (800) 862-9098 or (785) 424-1051. A replay of the call will be available for 30 days by dialing (800) 839-4014 or (402) 220-2983.

Recent Highlights

--  Customers. Through first quarter fiscal 2006, VA Software sold the
    SourceForge solution to a total of 136 customers.  During the quarter,
    Naval Research Laboratory, ThoughtWorks, Inc., a large transportation
    services company and a number of entities in Japan were added to the
    installed base.  In addition, existing customers, including Agilent,
    Sapient, Eli Lilly and Acxiom, purchased additional SourceForge licenses or
    services.

--  ThoughtWorks alliance. VA Software and ThoughtWorks, Inc. announced an
    alliance to develop agile development solutions for enterprise customers.
    The two companies will offer a turn-key solution that integrates VA
    Software's SourceForge Enterprise Edition, the leading collaborative
    development platform; CruiseControl, the popular continuous integration
    build tool open sourced by ThoughtWorks; and ThoughtWorks' best practices
    for agile and distributed agile development.

--  SourceForge.net. We have begun the implementation of strategic
    upgrades to make SourceForge.net more powerful and functional to our
    worldwide technology audience. The first release streamlines the site's
    navigation, as well as optimizes and increases the usability of the most
    frequently visited areas of our site, to give our users a more robust
    environment to create projects, participate actively with the community,
    and evaluate open source applications for their organization's IT
    infrastructure. The enhanced site design is the first step in
    SourceForge.net's strategic usability refinements. Over the next few
    months, we will continue to make numerous enhancements to the site's
    usability.

--  OSTG. OSTG has had continued success in custom publishing by
    developing microsites for clients such as HP, IBM Power Architecture, the
    IBM Migration Factory and IBM Solaris to Linux. OSTG also launched a large-
    scale program for IBM to promote downloads of Apache Geronimo server, as a
    first phase approach to their larger scale branding initiatives around
    Gluecode.

    OSTG continues to rank highly against other online technology networks with
    the third-party research firm Nielsen//NetRatings @Plan.  According to
    Nielsen//NetRatings @Plan Fall 2005 results, The OSTG network maintains the
    number one rank against competitors in key technology categories such as:
    visitors who look for technology news online, visitors who download
    software online, visitors who purchase networking equipment and multi-media
    software, and visitors who have purchased computer hardware and software
    online in the last 6 months.

    On the technical and operational side, OSTG has recently outsourced its ad
    serving to Falk eSolutions and its site measurement and metrics services to
    Google Analytics. Both systems allow OSTG to reference third party sources
    for traffic measurement and ad impression delivery. Google Analytics
    measures site traffic by IAB industry standards and provides advertisers
    with additional comfort that comes from a trusted third-party source.