Mentor Graphics Reports Fiscal Third Quarter Results

WILSONVILLE, Ore., November 19, 2010—Mentor Graphics Corporation (NASDAQ: MENT) today announced results for the fiscal third quarter ending October 31, 2010. For the fiscal third quarter, the company reported revenues of $238.9 million, non-GAAP earnings per share of $.22, and GAAP earnings per share of $.14.

“The strength of our third quarter was broad-based with bookings up 60% over the year ago quarter,” said Walden C. Rhines, CEO and chairman of Mentor Graphics. “Our strategy of focusing on areas of differentiation rewarded us this quarter with strong growth in emulation, printed circuit board design software, design for test, physical verification and a number of our newer system-oriented products like automotive networking. Our diversification also helped drive the business with over 30% of new customers coming from non-traditional segments. We remain confident that our strategy will continue to drive earnings growth for the company.”

During the quarter, the company launched new analysis capability in the FloTHERM® thermal analysis tool, which allows designers to easily find and correct bottlenecks in heat flow in a design. The company’s embedded software division released Mentor Embedded ReadyStart™ Platform, a new easy-to-use platform for rapid development of embedded systems, and a version of the Inflexion Platform™ graphical user interface for the Android™ platform. Additionally, the embedded market analyst firm VisionMobile reported that Mentor’s Nucleus® real-time operating system is the market leader in handsets with over 2.3 billion copies shipped.

“The third quarter was a record on revenue, bookings and product book-to-bill,” said Gregory K. Hinckley, president of Mentor Graphics. “Despite some headwinds from currency and product mix, we are confident that this momentum will continue into the fourth quarter. As a result, we are raising guidance.”

Outlook

For the fiscal fourth quarter, the company expects revenue of about $293 million, non- GAAP earnings per share of approximately $.46 and GAAP earnings per share of about $.40. For the full fiscal year 2011 ending January 31, 2011 the company sees revenue in the range of $900 million, non-GAAP earnings per share of about $.67 and GAAP earnings per share of approximately $.19.

Financial Tables

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About Mentor Graphics

Mentor Graphics Corporation (NASDAQ: MENT) is a world leader in electronic hardware and software design solutions, providing products, consulting services and award-winning support for the world’s most successful electronics, semiconductor and systems companies. Established in 1981, the company reported revenues over the last 12 months of about $850 million. Corporate headquarters are located at 8005 S.W. Boeckman Road, Wilsonville, Oregon 97070-7777. World Wide Web site: http://www.mentor.com/.