MOUNTAIN VIEW, Calif. (April 19, 2005)—Silicon Graphics (NYSE: SGI) today announced results for its third fiscal quarter which ended March 25, 2005. Revenue for the third quarter was $159 million, in line with the preliminary results announced April 7, 2005. Gross margin was 34.5% compared with 37.5% in the second quarter. SGI's third-quarter operating loss was $45 million, compared with an operating loss of $9 million in the second quarter. The third-quarter net loss was $45 million or $0.17 per share, compared with a net loss of $11 million or $0.04 per share in the second quarter.

GAAP operating expenses for the third fiscal quarter were $99.7 million compared with $92.9 million last quarter. Non-GAAP operating expenses were $85.4 million in the third quarter compared with $87.7 million last quarter excluding restructuring charges of $14.3 million and $5.2 million, respectively. Management believes that a non-GAAP presentation of operating expenses is useful to investors to facilitate period to period comparisons of SGI's operating results.

"As we previously announced, our Q3 results were far short of our initial expectations," said Bob Bishop, chairman and CEO of Silicon Graphics. "Several major server and storage orders failed to close at the end of the quarter and we continue to see significant competitive pressure in the marketplace, which affects our margins as well as our revenue. Nevertheless, continued recognition of our Altix server line and the early adoption of our Linux-based Silicon Graphics Prism visualization system give us confidence that we are on the right track with the new product lines."

Unrestricted cash, cash equivalents and marketable investments on March 25, 2005 were $84 million as compared with $106 million at the end of the second quarter of fiscal 2005. As previously announced, after the close of the quarter, SGI also renewed its asset-based line of credit with Wells Fargo Foothill, Inc. and completed the sale of a portion of its interest in SGI Japan for $29 million.

SGI will conduct a conference call today at 2 p.m. PT to provide additional details. The webcast is available at http://www.sgi.com/. The dial-in number is (888) 208-1824 or (913) 981-4901 for participants outside of North America. An audio replay of this call will be available after 5 p.m. PT today at (888) 203-1112 (passcode: 4007592) or (719) 457-0820 (passcode: 4007592) and will be available for seven days. All links to the archived Webcast and audio replay are available through SGI's Web site at http://www.sgi.com/.

This news release contains forward-looking statements relating to future events or expected financial performance that involve risks and uncertainties. The company's future results could differ materially from the expectations discussed herein. Factors that might cause such a difference include risks associated with the timely development, production and acceptance of new products and services; increased competition; dependence on third party partners and suppliers; the failure to achieve expected product mix and revenue levels; failure to manage costs and generate improved operating results and cash flows; and failure to maintain adequate cash resources for the operation of the business. These and other risks are detailed from time to time in SGI's periodic reports that are filed with the Securities and Exchange Commission, including SGI's quarterly report on Form 10-Q for the quarter ended December 24, 2004. We undertake no obligation to publicly update or revise any forward-looking statements, whether changes occur as a result of new information, future events or otherwise.

SILICON GRAPHICS | The Source of Innovation and Discovery™™
SGI, also known as Silicon Graphics, Inc. (NYSE: SGI), is a leader in high-performance computing, visualization and storage. SGI's vision is to provide technology that enables the most significant scientific and creative breakthroughs of the 21st century. Whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate, providing technologies for homeland security and defense, or enabling the transition from analog to digital broadcasting, SGI is dedicated to addressing the next class of challenges for scientific, engineering and creative users. With offices worldwide, the company is headquartered in Mountain View, Calif., and can be found on the Web at www.sgi.com.

Silicon Graphics, SGI, the SGI logo and Altix are registered trademarks and The Source of Innovation and Discovery and Silicon Graphics Prism are trademarks of Silicon Graphics, Inc., in the United States and/or other countries worldwide. All other trademarks mentioned herein are the property of their respective owners.