MOUNTAIN VIEW, Calif. (October 25, 2005)—Silicon Graphics (NYSE: SGI) today announced results for its first fiscal quarter which ended September 30, 2005.

Revenue for the first quarter fiscal year 2006 was $170 million, gross margin was 37.8% and the operating loss was $26 million. For comparison, in the first quarter FY05, revenue was $175 million, gross margin was 35.9% and the operating loss was $26 million. The first quarter fiscal year 2006 net loss was $32 million or $0.12 per share, compared with a net loss of $28 million or $0.11 per share one year ago.

GAAP operating expenses for the first fiscal quarter were $90 million compared with $89 million in the same quarter last year. Non-GAAP operating expenses were $83 million in the first quarter compared with $86 million the same quarter last year excluding restructuring charges of $7 million and $3 million, respectively.

"We achieved several important goals in the first quarter," said Bob Bishop, chairman and chief executive officer. "We grew revenue from core products year over year, exceeded our margin targets, secured new financing and are on-track with our restructuring plans. We still have work to do, but we are making progress."

Unrestricted cash, cash equivalents and marketable investments on September 30, 2005 were $77 million as compared with $64 million at the end of fiscal 2005.

Separately, SGI today announced that it has completed a new asset based credit facility with Wells Fargo Foothill, Inc. and Ableco Finance LLC that will provide availability of up to $100 million. This agreement replaces the previous facility which provided availability of up to $50 million. For more details, see today's related release "SGI Completes Increased $100 Million Credit Facility."

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 (800) 289-0533 or (913) 981-5525 for participants outside of North America. An audio replay of this call will be available after 5 p.m. PT today at 1-(888) 203-1112 (passcode: 9181714) or (719) 457-0820 (passcode: 9181714) 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 release contains non-GAAP financial measures. 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. The Investor Relations section on our web site at www.sgi.com provides comparable GAAP financial measures and the related reconciliation.

Forward-Looking Statements
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; failure to maintain compliance with debt covenants; 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 annual report on Form 10-K for the year ended June 24, 2005. Silicon Graphics is under 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.

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