Nassda Announces Revenue of $11.3 Million for the Quarter Ended December 31, 2004

Net Income of $1.3 Million, or $0.05 Per Diluted Share

SANTA CLARA, Calif., Jan. 12 /PRNewswire-FirstCall/ -- Nassda Corporation (NASDAQ: NSDA), a leading provider of full-chip circuit simulation and analysis software for the design and verification of complex semiconductors, today announced financial results for the quarter ended December 31, 2004, the first quarter of Nassda's fiscal 2005. Revenue for the quarter ended December 31, 2004 was $11.3 million, an increase of 16% from $9.7 million for the quarter ended December 31, 2003 and an increase of 2% from $11.0 million for the quarter ended September 30, 2004.

Net income for the quarter ended December 31, 2004 was $1.3 million, or $0.05 per diluted share, an increase of 135% from $572,000, or $0.02 per diluted share, for the quarter ended December 31, 2003 and an increase of $68.6 million from a net loss of $(67.3) million, or $(2.50) per diluted share, for the quarter ended September 30, 2004. Operating expenses for the first quarter of fiscal 2005 were lower than expected, primarily due to lower litigation costs. As a result, Nassda was able to achieve an operating margin of 14% for the quarter ended December 31, 2004.

"First fiscal quarters are always seasonally challenging. We are pleased to have achieved satisfactory financial results, exceeding both the revenue and earnings expectations for the first quarter of our fiscal 2005 and maintaining our total cash, cash equivalents and short-term investments balances at $101.0 million," said Sang Wang, Chief Executive Officer. "Even though the semiconductor industry completed 2004 with good growth, we expect that the customers will continue to be very cautious with their spending. Nevertheless, as design starts steadily move to smaller and smaller geometries, we expect the need for nanometer verification software will become even more prominent."

Business Outlook

Although we continue to see signs of some recovery in the global economy and the semiconductor industry, we believe our customers will spend conservatively in the first half of calendar 2005. Therefore, we do not expect our customers' R&D budgets to increase materially during the first half of 2005. As a result, for the quarter ending March 31, 2005, Nassda expects to have total revenue of $11.0 million to $11.3 million. Because the uncertainties surrounding the pending merger between Nassda and a subsidiary of Synopsys, Inc. (the "Pending Merger") may impact customers' purchasing behavior, Nassda is not providing any forward-looking guidance on future licensing trends.

Nassda intends to continue its efforts to control operating costs and expects its litigation related costs to be substantially lower in the second quarter of fiscal 2005 versus recent quarters. However, we are not able to estimate the costs and timing related to the closing of the Pending Merger at this time. Therefore, Nassda is not providing any forward-looking guidance on its net income for the quarter ending March 31, 2005 or the remaining quarters of fiscal 2005.

Nassda will hold a conference call that includes business outlook with financial analysts and investors at 2:00 p.m. PST today. A live webcast of the call will be available on Nassda's Web site at http://www.nassda.com/ or http://www.fulldisclosure.com/ . Following completion of the call, a rebroadcast of the webcast will be available at http://www.nassda.com/ or http://www.fulldisclosure.com/ through January 19, 2005.

Those without internet access may listen to a replay of the call by dialing 719-457-0820, access code 143551. The replay will be available from 5:00 p.m. PST on January 12, 2005 through January 19, 2005.

About Nassda

Nassda Corporation is a leading provider of full-chip circuit verification software for complex nanometer semiconductors. Headquartered in Santa Clara, California, the company develops and markets simulation and analysis solutions for advanced ICs, especially for analog, memory, high-performance digital, and mixed-signal SoC designs. Nassda's products enable first silicon success and improve IC quality and yield for its consumer, communication, computer and memory customers. The company has sales and distribution offices throughout the world. For more information about Nassda, please visit the company's website at http://www.nassda.com/ .

Forward-Looking Statements

This press release contains forward-looking statements regarding anticipated revenue, operating expenses that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty, including without limitation the availability of customer budgets for Nassda's products, Nassda's cost control measures, the timing, receipt of regulatory approval s and stockholder vote related to the Pending Merger, the time and extent of legal and other expenses related to Nassda's litigation and the Pending Merger, Nassda's product development schedules, the design performance of Nassda's existing and new electronic design automation software and other tools, customers' adoption of Nassda's products, whether customers purchase time-based or perpetual licenses and those customers' design and manufacturing schedules. In addition, continued reduced capital spending or delayed implementation of programs due to adverse general economic conditions and reduced demand for products containing complex nanometer-scale semiconductors may impact Nassda's future performance. These risks, uncertainties and other factors may cause Nassda's actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. In addition, historical information should not be considered a predictor of future performance. Neither Nassda nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. Nassda disclaims any obligation to update information contained in any forward- looking statement.

For additional information and considerations regarding the risks faced by Nassda, see Nassda's Annual Report on Form 10-K for the fiscal year ended September 30, 2004 as filed with the Securities and Exchange Commission. Additional Information About the Pending Merger and Where to Find It Nassda will file a proxy statement with the SEC in connection with the Pending Merger. Nassda urges investors and security holders to read the proxy statement when it becomes available and any other relevant documents filed with the SEC because they will contain important information. Investors and security holders will be able to obtain these documents free of charge at the website maintained by the SEC at http://www.sec.gov/. Additionally, documents filed with the SEC by Nassda are available free of charge by contacting Investor Relations, Nassda, 2650 San Tomas Expressway, Santa Clara, California 95051 (Telephone: 408-988-9988) and on Nassda's website at http://www.nassda.com/. Documents on Nassda's website will not be a part of the filing. Nassda's directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Nassda in connection with the Pending Merger. A description of certain of the interests of directors and executive officers of Nassda is set forth in the proxy statement for Nassda's 2004 annual meeting of stockholders, which was filed with the SEC on January 14, 2004. Sang S. Wang, Nassda's Chief Executive Officer and Chairman, An-Chang Deng, Nassda's President and Chief Operating Officer, and the other individual defendants have entered into certain settlement and release agreements with Synopsys, which will be effective upon the closing of the Pending Merger, which will be described in the proxy statement. The remaining directors and officers of Nassda are expected to enter into a release agreement with Synopsys, effective upon closing of the Pending Merger, which will be described in the proxy statement. Investors and security holders will be able to obtain additional information regarding the direct and indirect interests of Nassda's directors and executive officers in the transaction by reading the definitive proxy statement when it becomes available.

  NOTE:  Nassda is a registered trademark of Nassda Corporation.


                            Nassda Corporation
            Unaudited Condensed Consolidated Income Statements
                  (in thousands, except per share data)


                                                     Three Months Ended
                                                                                                December  31,
                                                                                                        2004                      2003

    Revenue
      Product                                                                                    $2,207                  $3,003
      Subscription                                                                            6,414                    4,242
      Maintenance                                                                              2,642                    2,482
        Total  revenue                                                                      11,263                    9,727

    Cost  of  revenue
      Cost  of  product  revenue                                                            33                          91
      Cost  of  subscription  revenue                                                168                        105
      Cost  of  maintenance  revenue                                                  377                        226
        Total  cost  of  revenue                                                            578                        422

    Gross  profit                                                                            10,685                    9,305

    Operating  expenses:
      Research  and  development                                                    2,151                    2,032
      Sales  and  marketing                                                              2,814                    2,678
      General  and  administrative                                                4,059                    3,774
      Stock-based  compensation                                                          99                        224
                                                                                                          9,123                    8,708

    Income  from  operations                                                          1,562                        597
    Other  income,  net                                                                        377                        220
    Income  before  income  taxes                                                  1,939                        817
    Income  tax  provision                                                              (593)                    (245)
    Net  income                                                                                $1,346                      $572

    Earnings  per  share:
      Basic                                                                                          $0.05                    $0.02
      Diluted                                                                                      $0.05                    $0.02

    Shares  used  in  computing  earnings  per  share:
      Basic                                                                                        27,319                  25,957
      Diluted                                                                                    29,213                  29,149



                                                        Nassda  Corporation
                          Unaudited  Condensed  Consolidated  Balance  Sheets
                                                            (in  thousands)


                                                                                                  December  31,  September  30,
                                                                                                          2004                    2004

    ASSETS
      Current  assets:
      Cash,  cash  equivalents  and  short-term
        investments                                                                      $101,020              $101,440
      Accounts  receivable,  net  of  allowance                          1,689                    1,302
      Prepaid  expenses  and  other  current  assets                  1,006                    1,093
      Deferred  income  taxes                                                          3,269                    3,768
        Total  current  assets                                                      106,984                107,603
    Property  and  equipment,  net                                                    444                        483
    Other  assets                                                                                  920                        921
    Total  assets                                                                        $108,348              $109,007

    LIABILITIES  AND  STOCKHOLDERS'  EQUITY
    Current  liabilities:
      Accounts  payable                                                                  $1,993                  $2,168
      Other  accrued  liabilities                                                  5,309                    8,342
      Accrued  litigation  settlement                                        67,463                  67,463
      Deferred  revenue                                                                  10,243                  10,143
        Total  current  liabilities                                              85,008                  88,116
    Deferred  revenue                                                                          453                        482
    Other  long-term  liabilities                                                      53                          57
        Total  liabilities                                                              85,514                  88,655

    Stockholders'  equity:
      Common  stock                                                                                  27                          27
      Additional  paid-in  capital                                              74,140                  73,117
      Deferred  stock-based  compensation                                  (110)                    (235)
      Accumulated  other  comprehensive  loss                              (88)                      (76)
      Retained  earnings  (accumulated  deficit)                (51,135)              (52,481)
        Total  stockholders'  equity                                            22,834                  20,352
    Total  liabilities  and  stockholders'  equity            $108,348              $109,007
 


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