Press Releases

FREMONT, CA — November 20, 2002 — VA Software Corporation (Nasdaq: LNUX), provider of SourceForge[tm], the leading Development Intelligence application, today announced financial results for its first quarter of fiscal year 2003, ended October 26, 2002.

The first quarter fiscal 2003 pro forma net loss, excluding restructuring and other special charges, amortization of intangible assets and deferred stock compensation, improved to $3.7 million, or $0.07 per share, as compared to last year’s first quarter fiscal 2002 pro forma net loss of $9.8 million, or $0.19 per share. Cash and investments remain strong at $48.7 million.

On a total reported basis, the first quarter fiscal 2003 loss was $4.1 million, or $0.08 per share, showing significant improvement compared to last year’s first fiscal quarter total reported loss of $54.9 million, or $1.04 per share. The first quarter fiscal year 2003 total reported loss includes a credit of $0.2 million associated with charges for restructuring, net of adjustments to previously recorded restructuring reserves, and a $0.7 million charge for amortization of intangible assets and deferred stock compensation.

First quarter fiscal 2003 revenue totaled $5.1 million, compared to first quarter fiscal 2002 total revenue of $5.6 million. Revenue from the software and online businesses increased 30% to $4.9 million in the first quarter fiscal 2003 from $3.8 million in the first quarter fiscal 2002. Revenue from the exited hardware business was $0.2 million in the first quarter of fiscal 2003 and $1.8 million in the first quarter of fiscal 2002.

“I am very pleased with our progress during the first quarter. Software revenue grew by 31% over fourth quarter fiscal 2002, online business revenue grew 14% over last year’s first quarter, and pro forma financial results were in line with analyst expectations,” said Ali Jenab, President and CEO. “We continue to execute according to plan. We are meeting or exceeding our revenue, operating results and cash flow expectations, we have a strong pipeline of prospects, and we are continually improving SourceForge’s capabilities. In SourceForge Enterprise Edition 3.2, which will be released later this month, we’ve enhanced its real–time project management capabilities to deliver visibility and reduce the risk in software development projects.”

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) 450-0785 or (651) 224-7472. A replay of the call will be available for 30 days by dialing (800) 475-6701 or (320) 365-3844; passcode 658071.

Recent Highlights

• Products.SourceForge Enterprise Edition 3.2, the latest release of VA’s flagship Development Intelligence application, features the new SourceForge Project Management Console. The Project Management Console provides real–time visibility into the entire application development lifecycle through an intuitive dashboard, enabling new levels of effectiveness in software development management.
• Customers.During the first quarter, VA Software added new accounts, including LEGATO Systems and a subsidiary of Thomson, Singingfish, to its installed base. In addition, existing customers including Sandia National Laboratories, General Atomics, Cornell University, Open SystemC Initiative and Panhandle–Plains Student Loan Center purchased additional SourceForge licenses or services.
• OSDN.OSDN continues to grow and delivers more than 150 million page views, reaching 7.2 million unique visitors, per month. According to Nielsen//NetRatings’ Fall 2002 @plan data, OSDN is the No. 1 network for delivering people who look for technology news online and the No. 1 network for delivering people who purchase software online, based on composition. Advertisers and sponsors of the network include Intel, IBM, Microsoft, Xerox, Oracle, Hewlett–Packard, EMC, Dice, Interland and Sprint.
• SourceForge.netSourceForge.net, the world’s largest collaborative software development web site, surpassed a major milestone of more than half a million registered users, as well as a site record of more than 50,000 registered projects. With an average of 16,000–19,000 separate code changes and 800,000–1,000,000 developer–to–developer emails exchanged on a daily basis, more Open Source developers collaborate on more projects at SourceForge.net than anywhere on the web.

About VA Software

VA Software (Nasdaq: LNUX), provider of SourceForge Enterprise Edition, is the leader in Development Intelligence. SourceForge is an integrated web–based application that combines software development tools with the ability to track, measure and report on software project activity in real–time. IT and software engineering organizations use SourceForge to manage application development more effectively, improve operational efficiency and build better quality software. Development Intelligence with SourceForge provides the information and infrastructure required to make software development a key driver of competitive advantage. VA Software customers currently using SourceForge include major organizations in financial services, defense and aerospace, manufacturing, communications and government. Information on how SourceForge aligns IT and business is available at www.vasoftware.com.

OSDN, the Open Source Development Network, Inc., a subsidiary of VA Software, is the most dynamic community–driven IT media network on the web. The cornerstone of the Open Source community, OSDN attracts every level of IT decision maker and buyer, from CTOs to project managers. Technologists, developers and system administrators turn to OSDN sites to create, debate, and make or break IT news, tools, technologies and techniques. OSDN is the home of several popular web sites, including the award winning news discussion site, Slashdot.org, and the world’s largest collaborative software development site, SourceForge.net.

Note Regarding Forward–Looking Statements: This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding: VA’s sales pipeline of customer prospects and the anticipated customer benefits from SourceForge Enterprise Edition 3.2. Actual results may differ materially from those expressed or implied in such forward–looking statements due to various factors, including: VA’s success in expanding its SourceForge enterprise software business; VA’s ability to successfully attract, retain and motivate employees; the possibility of further deterioration in the general economy; VA’s ability to achieve and sustain higher levels of revenue; VA’s reliance upon strategic relationships with other companies; rapid technological and market change; future guidelines and interpretations regarding software revenue recognition; unforeseen expenses that VA may incur in future quarters; competition with, and pricing pressures from, more established competitors; and VA’s ability to protect and defend its intellectual property rights. Investors should consult VA’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10–K for the fiscal year ended July 27, 2002, for further information regarding these and the other risks of the Company’s business. These documents are available at the SEC Web site: www.sec.gov. VA assumes no obligation to update the forward–looking information contained in this news release.

Note to editors: VA Software, SourceForge and OSDN are trademarks or registered trademarks of VA Software Corporation in the United States and other countries. All other trademarks are property of their respective owners.

Contact:

Investor Relations
VA Software Corporation
(510) 687-8731
[email protected]

Eureka Endo, Media Relations
VA Software Corporation
(510) 687-6754
[email protected]

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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Reconciliation of Net loss as reported to pro forma net loss

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