MOUNTAIN VIEW, Calif. (January 25, 2005)—Silicon Graphics (NYSE: SGI) today announced results for its second fiscal quarter, which ended December 24, 2004. Revenue for the quarter was $223 million, compared with $175 million for the first quarter ended September 24, 2004. Gross margin was 37.5% in the second quarter, up from 35.9% in the first quarter. SGI's second-quarter operating loss from continuing operations was $9 million, compared with an operating loss of $26 million in the first quarter. The second-quarter net loss from continuing operations was $11 million or $0.04 per share, compared with a net loss of $28 million or $0.11 per share last quarter.

GAAP operating expenses for the second quarter were $93 million, compared with $89 million for the first quarter. Non-GAAP operating expenses for the second quarter were $88 million, excluding $5 million recorded as other operating expense. This compares with prior quarter non-GAAP operating expenses of $86 million excluding $3 million in other operating expense. These other operating expenses consisted of primarily charges associated with facilities consolidation. 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.

"Altix revenues continue to build during the second quarter as we successfully installed the world's fastest production computer at NASA's Ames Research Center and the world's largest shared memory computer in Japan," said Bob Bishop, chairman and CEO of SGI. "Furthermore, Silicon Graphics Prism has been successfully launched into the visualization market. Nevertheless, we continue to fall short of our profitability objectives and will take steps to lower expenses accordingly."

Unrestricted cash, cash equivalents and marketable investments on December 24, 2004 were $106 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) 981-5591 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: 901189) or (719) 457-0820 (passcode: 901189) 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 the ability to improve the financial condition and performance of the company. 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 September 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, Altix, and the SGI logo 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.