Mentor Graphics Reports Fiscal Second Quarter Results

WILSONVILLE, Ore., August 19, 2010—Mentor Graphics Corporation (NASDAQ: MENT) today announced results for the fiscal second quarter ending July 31, 2010. For the fiscal second quarter, the company reported revenues of $187.9 million, non-GAAP earnings per share of $.01, and a GAAP loss per share of $.13.

“Semiconductor markets continue to improve, with revenues at an all-time high, and industry analysts forecasting continued growth,” said Walden C. Rhines, CEO and chairman of Mentor Graphics. “Our solid results across all core EDA product lines reflected that. Annualized revenue from renewal contracts in our top ten accounts this quarter grew 45% compared to prior contract values. Leading indicators of the business, like consulting and training, were strong, with revenues up 30% and 70% respectively, year over year. Our strategy of investing in markets adjacent to semiconductor EDA, such as transportation, continues to pay off, with revenue from transportation products nearly doubling year on year, and bookings nearly tripling.”

The company also announced this quarter that the Mentor Graphics track in the TSMC Reference Flow has expanded to a complete front-to-back solution with new support for the Vista™ platform and the Catapult® C synthesis tool, expanded low power and 28nm routing features in the Olympus-SoC™ place and route system, and the Calibre® InRoute solution. Also released during the quarter were new versions of Mentor’s 0-In® Formal and 0-In Clock Domain Crossing products, both enabling greater speed and ease of use in verifying complex IC designs. The company’s recently acquired Valor division released version 9.0 of its vSure™ product, with enhancements enabling designers to more easily perform extensive design-for-manufacturing analysis during the printed circuit board design process.

“This was our sixth consecutive quarter of meeting or exceeding guidance,” said Gregory K. Hinckley, president of Mentor Graphics. “Our Flomerics and LogicVision acquisitions are performing well, and our new Valor division is on track to contribute to a strong second half. As a result, we are increasing guidance for the full year.”

Outlook

For the fiscal third quarter ending October 31, 2010, the company expects revenues of about $220 million, non-GAAP earnings per share of approximately $.15, and GAAP earnings per share of approximately $.08. For the full fiscal year 2011, the company now expects revenues of approximately $880 million, non-GAAP earnings per share of about $.65, and GAAP earnings per share of approximately $.20.

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 and semiconductor companies. Established in 1981, the company reported revenues over the last 12 months of about $800 million. Corporate headquarters are located at 8005 S.W. Boeckman Road, Wilsonville, Oregon 97070-7777. World Wide Web site: http://www.mentor.com/.