Phone.com Reports Fourth Quarter and Fiscal Year End

Results / Quarterly Revenues Grow to $6.7 Million; Pro Forma NetLoss per Share of $0.22 Redwood City, Calif. (PROTEXT) - Phone.com (Nasdaq: PHCM), aleading provider of software that enables the delivery ofInternet-based services to mass-market wireless telephones, todayannounced fourth quarter and fiscal year end results for theperiod ending June 30, 1999. Fourth quarter revenues increased 425 percent to $6.7 million,from $1.3 million in the same period a year earlier and up 90percent from $3.5 million in the third quarter of fiscal 1999.Deferred revenues increased 96 percent during the fourth quarterto $36.8 million, up from $18.7 million at the previous quarterend. The company incurred a net loss in the fiscal fourth quarteras it continued to aggressively execute its strategy throughsignificant investments in research and development and sales andmarketing activities. The net loss for the fourth fiscal quarterof 1999 was $6.8 million, or $0.62 per diluted share loss basedon 11.0 million weighted average shares outstanding, compared toa net loss of $ $2.9 million or $0.53 per diluted share loss forthe same period a year earlier, and a net loss of $5.7 million,or $0.99 per diluted share loss for the third quarter of fiscal1999. Pro forma net loss per share using the 31.2 million sharesoutstanding as of June 30, 1999 was $0.22, compared to a proforma net loss per share of $0.12 for the same period a yearearlier and $0.22 per share for the third quarter of fiscal 1999. For the fiscal year-end 1999, Phone.com reported revenues of$13.4 million, an increase of 510 percent from the $2.2 millionof revenues reported for the prior year. The net loss for theyear was $20.8 million, or $2.98 per diluted share loss, comparedwith a net loss of $10.6 million, or $2.03 per diluted share lossfor fiscal year 1998. Pro forma net loss per share for fiscal1999 was $0.67, compared to a pro forma net loss per share of$0.44 for fiscal 1998. "The fourth quarter marked a defining period for Phone.com,"said Alain Rossmann, chairman and chief executive officer. "Aboveand beyond the successful completion of our initial publicoffering, we also made significant strides in executing ourstrategy to make the convergence of the Internet and mobiletelephony a reality of everyday life. In particular, we announcedcommercial licenses of our UP.Link(TM) Server Suite during thequarter to major wireless network operators around the world,including Sprint PCS and US West in the United States, BellMobility in Canada, Cegetel/SFR in France, Omnitel in Italy, DDICorporation and IDO Corporation in Japan, and LG TeleCom inKorea. We now have commercial relationships with 31 networkoperators worldwide that collectively provide voice telephonyservices to approximately 33 percent of the world's voicesubscribers. We also saw continued acceptance of Phone.com'sUP.Browser(TM) microbrowser. A total of 25 wireless devicemanufacturers have licensed UP.Browser as of the end of thefourth quarter, an increase of one from the date we completed ourinitial public offering." In June 1999, Phone.com completed an initial public offeringof 4.6 million shares, including 600,000 additional over-allotment shares. Net proceeds to Phone.com from the offeringtotaled approximately $67 million. As of June 30, 1999, thecompany had cash and short-term investments of $113.1 million,total assets of $138.9 million and stockholders' equity of $92.3million. About Phone.com Phone.com, Inc. is a leading provider of software that enablesthe delivery of Internet-based services to mass-market wirelesstelephones. Using its software, wireless subscribers have accessto Internet- and corporate intranet-based services, includingemail, news, stocks, weather, travel and sports. In addition,subscribers have access via their wireless telephones to networkoperators' intranet-based telephony services, which may includeover-the-air activation, call management, billing historyinformation, pricing plan subscription and voice messagemanagement. Phone.com, Inc. is headquartered in Silicon Valley,California and has regional offices in London and Tokyo. Except for the historical information contained herein, thematters discussed in this news release are forward-lookingstatements involving risks and uncertainties that could causeactual results to differ materially from those in such forward-looking statements. Potential risks and uncertainties include,but are not limited to, Phone.com's limited operating history,potential fluctuations in the company's operating results,uncertainties related to the company's long sales cycle andreliance on a small number of customers, the company's dependenceon the acceptance of its products by network operators andwireless subscribers, the company's ability to adequately addressthe rapidly-evolving market for delivery of Internet-basedservices through wireless telephones, the need to achievewidespread integration of Phone.com's browser in wirelesstelephones, competition from companies with substantially greaterfinancial, technical, marketing and distribution resources andthe ability of Phone.com to manage a complex set of engineering,marketing and distribution relationships. Further informationregarding these and other risks is included in Phone.com'sprospectus dated June 10, 1999 and in its other filings with theSecurities and Exchange Commission.

PHONE.COM, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

Three months ended

Yearended

June 30,

June 30,

1998

1999

1998 1999 Revenues: License

$233

$3,699

$522 $5,229 Maintenance and support services 1,048 2,135

1,683 5,921 Consulting services

--

891

-- 2,292

Total revenues

1,281

6,725

2,205 13,442 Cost of revenues: License

36

199

95 371 Maintenance and support services 348

1,146

1,063 3,022 Consulting services

--

500

-- 1,146

Total cost of revenues

384

1,845

1,158 4,539

Gross profit

897

4,880

1,047 8,903 Operating expenses: Research and development

1,861

4,676

5,73213,082 Sales and marketing

1,704

4,336

5,01110,840 General and administrative

616

1,701

1,801 4,432 Stock-based compensation

63

227

108 1,011

Total operating expenses

4,244

10,940 12,65229,365

Operating loss

(3,347)

(6,060) (11,605)(20,462) Interest income, net

454

664

982 1,803

Loss before income taxes (2,893) (5,396) (10,623)(18,659) Income taxes

--

1,394

-- 2,104

Net loss

$(2,893) $(6,790) $(10,623)$(20,763) Basic and diluted net loss per share

$(0.53)

$(0.62) $(2.03) $(2.98) Shares used in computing basic and diluted net loss per share

5,459

11,023 5,221 6,966

PHONE.COM, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands) Assets

June 30,

1998

1999 Current assets

Cash, cash equivalents and

short-term investments

$33,464 $113,086

Accounts receivable

2,724 20,474

Prepaid expenses and other current assets

352 865

Total current assets

36,540 134,425 Property and equipment, net

1,336 3,014 Deposits and other assets

1,268 1,494

$39,144 $138,933 Liabilities and Stockholders' Equity Current liabilities:

Current portion of equipment loan

and capital lease obligations

$424 $424

Accounts payable

532 1,749

Accrued liabilities

1,877 7,173

Deferred revenue

7,003 36,797

Total current liabilities

9,836 46,143 Equipment loan and capital lease obligations, less current portion

915 498

Total liabilities

10,751 46,641 Stockholders' equity

28,393 92,292

$39,144 $138,933ots Original Text Service: Phone.com Internet:http://www.newsaktuell.de Contact: Alan Black, Chief FinancialOfficer of Phone.com, (in the USA) 650-562-0200, orinvestor@corp.phone.com; or Bonnie McBride, Managing Director ofThe Carson Group, (in the USA) 415-989-0399, for Phone.com Website: http://www.phone.com

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