Exhibit 99.1

News Release

CONTACTS:
Magma Design Automation Inc.:
Gregory C. Walker	Milan G. Lazich
Chief Financial Officer	Vice President, Corporate Marketing
(408) 565-7500	(408) 565-7706
gwalker@magma-da.com	milan.lazich@magma-da.com

MAGMA REPORTS RECORD REVENUE FOR THIRD QUARTER

Increases 66 percent over Year-Ago Period

SANTA CLARA, Calif., January 29, 2004 — Magma Design Automation Inc. (Nasdaq: LAVA), a provider of chip design solutions, today announced financial results that included record revenue and profitability for the quarter ended December 31, 2003, the third quarter of Magma’s 2004 fiscal year.

Magma reported record revenue of $31.1 million for the quarter, compared to $18.7 million for the quarter ended December 31, 2002, an increase of 66 percent. In accordance with generally accepted accounting principles (GAAP), Magma reported net income attributed to common shareholders of $3.8 million, or $0.09 per share (diluted), for the quarter, compared to a net loss attributed to common shareholders of ($0.3) million, or ($0.01) per share (diluted), for the quarter ended December 31, 2002.

Magma reported pro forma net income for the third quarter of fiscal 2004 of $6.9 million, or $0.16 per share (diluted), compared to pro forma net income of $2.0 million, or $0.06 per share (diluted), for the third quarter of fiscal 2003. Pro forma net income for the third quarter of fiscal 2004 is adjusted to exclude the effects of amortization of developed technology, amortization of intangibles, in-process research and development, consolidation of an equity investment, amortization of deferred stock compensation and charges associated with an impairment of equity investments. Pro forma net income for the third quarter of fiscal 2003 is adjusted to exclude the effects of amortization of developed technology, restructuring charges and amortization of deferred stock-based compensation. A reconciliation of the pro forma to GAAP results is included in this press release.

For the nine-month period ended December 31, 2003, Magma reported revenue of $79.7 million, compared to $54.6 million for the nine-month period ended December 31, 2002, an increase of 46 percent.

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Magma Reports Record Revenue for Third Quarter Page 2

In accordance with GAAP, Magma reported net income attributed to common shareholders of $7.2 million, or $0.18 per share (diluted), for the recently completed nine-month period, compared to net income attributed to common shareholders of $0.4 million, or $0.01 per share (diluted), for the nine-month period ended December 31, 2002. Magma reported pro forma net income of $18.1 million, or $0.44 per share (diluted), for the nine-month period ended December 31, 2003. This compares to pro forma net income of $5.4 million, or $0.17 per share (diluted), for the nine-month period ended December 31, 2002. Magma provides pro forma data as a useful means for understanding the company’s operating results and ongoing business trends. Pro forma data is not in accordance with, or an alternative for, GAAP and may be materially different from pro forma measures used by other companies. Pro forma net income for the nine-month period of fiscal 2004 is adjusted to exclude the effects of amortization of developed technology, amortization of intangibles, in-process research and development, consolidation of an equity investment, amortization of deferred stock compensation and charges associated with an impairment of equity investments. Pro forma net income for the nine-month period of fiscal 2003 is adjusted to exclude the effects of amortization of developed technology, restructuring charges and amortization of stock-based compensation. A reconciliation of the pro forma to GAAP results is included in this press release.

“We had another strong quarter of financial results, reflecting the advances we’re making in the market,” said Rajeev Madhavan, chairman and CEO of Magma. “Blast Create was used with great success by more of our customers who experienced real economic benefit by using our integrated design flow. We added 21 new customers, the fifth consecutive quarter we’ve added 10 or more. And with the December quarter’s results we passed $100 million in revenue for the calendar year, an achievement only a few EDA companies have ever reached. All in all, we continue to execute our plans and reach our targets.”

Guidance & Business Outlook

Magma’s financial performance in the third quarter was within or exceeded all target ranges established in the guidance provided during Magma’s October conference call. For Magma’s fiscal 2004 fourth quarter, ending March 31, 2004, the company expects total revenue in the range of $32.0 million to $34.0 million, and pro forma EPS in the range of $0.15 to $0.19. Pro forma EPS for the fourth quarter of fiscal 2004 excludes the effects of amortization of intangibles, amortization of capitalized developed technology, amortization of deferred stock compensation, and impairment (write-down) of equity investments. A schedule showing a reconciliation of the business outlook for pro forma to GAAP EPS is included in this announcement.

Consistent with company practice of providing financial guidance at the time of each quarterly earnings announcement, Chief Financial Officer Greg Walker will provide and discuss Magma’s guidance during a live conference call at 2 p.m. Pacific Standard Time today. More detailed information on the company’s guidance is available in the Investor Relations section of Magma’s website at http://investor.magma-da.com/home.cfm.

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Magma Reports Record Revenue for Third Quarter Page 3

The financial guidance targets set forth in this press release represent the company’s expectations only as of the date of this release and should not be viewed as a statement about Magma’s expectations after this date. Although this information will remain available on Magma’s website for reference purposes, its continued availability does not indicate that the company is reaffirming or confirming its continued validity. By publishing this guidance, Magma has not assumed any obligation to update this information on any date after its publication today.

Conference Call

Magma will discuss the financial results for the recently completed quarter, including guidance going forward, during a live webcast and earnings call today at 2 p.m. Pacific Standard Time (5 p.m. Eastern Standard Time). The call will be available live by both webcast and conference call. To listen live via webcast, visit the Investor Relations section of Magma’s website at http://investor.magma-da.com/home.cfm. To listen live via telephone call either of the numbers below:

U.S. & Canada:	(800) 374-0247, conference ID #4775529
Elsewhere:	(706) 634-2358, conference ID #4775529

Following completion of the call, a webcast replay of the call will be available at http://investor.magma-da.com/home.cfm through February 5, 2004. Those without Internet access may listen to a telephone replay of the call by telephone through February 5, 2004 by calling:

U.S. & Canada:	(800) 642-1687, conference ID #4775529
Elsewhere:	(706) 645-9291, conference ID #4775529

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which include statements in the “Business Outlook” section and quotations from Magma management, are subject to risks and uncertainties that could cause actual results to differ materially from Magma’s current expectations. Factors that could cause or contribute to such differences include, but are not limited to: potential difficulties integrating recently acquired businesses; increasing competition in the EDA market; the continuing impact of the economic recession; the effects terrorist activities or events in the Middle East may have on Magma, its customers and industry; any delay of customer orders or failure of customers to renew licenses; weaker-than-anticipated sales of the company’s products and services; weakness in the semiconductor or electronic systems industries; the ability to successfully manage the company’s expanding operations; the ability to attract and retain the key management and technical personnel needed to operate Magma successfully; the ability to continue to deliver competitive products to customers to help them get their products to market; and changes in accounting rules. Further discussion of these and other potential risk factors may be found in Magma’s Form 10-K for the fiscal year ended March 31, 2003, its quarterly reports on Form 10-Q, and in reports subsequently filed with the Securities and Exchange Commission (“SEC”). Magma undertakes no obligation to update these forward-looking statements.

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Magma Reports Record Revenue for Third Quarter Page 4

About Magma

Magma provides leading software for designing highly complex integrated circuits while maximizing Quality of Results with respect to area, timing and power, and at the same time reducing overall design cycles and costs. Magma provides a complete RTL-to-GDSII design flow that includes prototyping, synthesis, place & route, and signal and power integrity chip design capabilities in a single executable, offering “The Fastest Path from RTL to Silicon”^™. Magma’s software also includes products for advanced physical synthesis and architecture development tools for programmable logic devices (PLDs); capacitance extraction; and characterization and modeling. The company’s stock trades on Nasdaq under the ticker symbol LAVA. Visit Magma Design Automation on the Web at www.magma-da.com.

Magma is a registered trademark and Blast Create and “The Fastest Path from RTL to Silicon” are trademarks of Magma Design Automation Inc. All other product and company names are trademarks and registered trademarks of their respective companies.

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Magma Reports Record Revenue for Third Quarter Page 5

MAGMA DESIGN AUTOMATION, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

	December 31, 2003			March 31, 2003
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	68,563		$	64,756
Short-term investments		—			3,059
Accounts receivable, net		25,399			19,223
Prepaid expenses and other current assets		8,091			3,627
Total current assets		102,053			90,665
Property and equipment, net		13,853			5,808
Intangibles, net		29,471			—
Goodwill		32,663			—
Long-term investments and restricted cash		112,694			27,882
Other assets		5,666			3,123
Total assets	$	296,400		$	127,478
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,312		$	1,384
Accrued expenses		15,387			7,711
Deferred revenue, current		18,113			12,539
Total current liabilities		35,812			21,634
Convertible subordinated notes		150,000			—
Deferred tax		4,640			—
Other long-term liabilities		461			72
Total non-current liabilities		155,101			72
Total liabilities		190,913			21,706
Stockholders’ equity:
Common stock		3			3
Additional paid-in capital		218,885			228,400
Deferred stock-based compensation		(1,031	)		(1,638	)
Notes receivable from stockholders		—			(2,037	)
Accumulated deficit		(111,289	)		(118,538	)
Treasury stock at cost		—			(408	)
Accumulated other comprehensive loss		(1,081	)		(10	)
Total stockholders’ equity		105,487			105,772
Total liabilities and stockholders’ equity	$	296,400		$	127,478

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Magma Reports Record Revenue for Third Quarter Page 6

MAGMA DESIGN AUTOMATION, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

IMPACT OF PRO FORMA ADJUSTMENTS ON REPORTED NET INCOME (LOSS)

(in thousands, except per share data)

(Unaudited)

	For the Three Months Ended December 31, 2003									For the Three Months Ended December 31, 2002
	As Reported			Adjust- ments			As Adjusted			As Reported			Adjust- ments			As Adjusted
Revenue:
Licenses	$	27,472		$	—		$	27,472		$	17,243		$	—		$	17,243
Services		3,580			—			3,580			1,426			—			1,426
Total revenue		31,052			—			31,052			18,669			—			18,669
Cost of revenue		4,741			(1,029	)  A,E F		3,712			2,754			(97	)  A,F		2,657
Gross profit		26,311			1,029			27,340			15,915			97			16,012
Operating expenses:
Research and development		7,510			(157	)  B		7,353			4,299			—			4,299
Sales and marketing		10,038			—			10,038			6,113			—			6,113
General and administrative		2,961			—			2,961			3,938			—			3,938
Restructuring costs		—			—			—			727			(727	)  C		—
In-process research and development		200			(200	)  D		—			—			—			—
Amortization of intangible assets		584			(584	)  E		—			—			—			—
Amortization of stock-based compensation		923			(923	)  F		—			1,467			(1,467	)  F		—
Total operating expenses		22,216			(1,864	)		20,352			16,544			(2,194	)		14,350
Operating income (loss)		4,095			2,893			6,988			(629	)		2,291			1,662
Interest income (expense):
Interest income		691			—			691			419			—			419
Interest expense		(404	)		—			(404	)		(42	)		—			(42	)
Other income (expense)		379			278	G		657			—			—			—
Interest income (expense), net		666			278			944			377			—			377
Net income (loss) before income taxes		4,761			3,171			7,932			(252	)		2,291			2,039
Income taxes		(1,000	)		—			(1,000	)		(80	)		—			(80	)
Net income (loss)	$	3,761		$	3,171		$	6,932		$	(332	)	$	2,291		$	1,959
Net income (loss) per common share – basic	$	0.12					$	0.22		$	(0.01	)				$	0.06
Net income (loss) per common share – diluted*	$	0.09					$	0.16		$	(0.01	)				$	0.06
Pro forma shares outstanding:
Basic		32,184						32,184			30,587						30,587
Diluted*		42,035						42,035			30,587						31,623

A Amortization of developed technology

B Consolidation of equity investments

C Restructuring charges

D In-process research and development

E Amortization of intangibles

F Amortization of deferred stock-based compensation

G Impairment (write-down) of equity investment

* Gives effect to the potential issuance of common stock upon conversion of convertible subordinated notes and to the effect of all dilutive potential common shares outstanding during the period, including stock options and warrants, using the treasury stock method.

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Magma Reports Record Revenue for Third Quarter Page 7

MAGMA DESIGN AUTOMATION, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

IMPACT OF PRO FORMA ADJUSTMENTS ON REPORTED NET INCOME (LOSS)

(in thousands, except per share data)

(Unaudited)

	For the Nine Months Ended December 31, 2003									For the Nine Months Ended December 31, 2002
	As Reported			Adjust- ments			As Adjusted			As Reported			Adjust- ments			As Adjusted
Revenue:
Licenses	$	70,826		$	—		$	70,826		$	45,310		$	—		$	45,310
Services		8,856			—			8,856			9,253			—			9,253
Total revenue		79,682			—			79,682			54,563			—			54,563
Cost of revenue		11,879			(1,917	)  A,E,F		9,962			8,968			(139	)  A,F		8,829
Gross profit		67,803			1,917			69,720			45,595			139			45,734
Operating expenses:
Research and development		18,537			(358	)  B		18,179			14,077			—			14,077
Sales and marketing		25,441			—			25,441			19,027			—			19,027
General and administrative		7,798			—			7,798			8,269			—			8,269
Restructuring costs		—			—	C		—			727			(727	)  C		—
In-process research and development		200			(200	)  D		—			—			—			—
Amortization of intangible assets		584			(584	)  E		—			—			—			—
Amortization of stock-based compensation		6,656			(6,656	)  F		—			4,060			(4,060	)  F		—
Total operating expenses		59,216			(7,798	)		51,418			46,160			(4,787	)		41,373
Operating income (loss)		8,587			9,715			18,302			(565	)		4,926			4,361
Interest income (expense):
Interest income		1,934			—			1,934			1,447			—			1,447
Interest expense		(727	)		—			(727	)		(45	)		—			(45	)
Other income (expense)		45			1,100	G		1,145			—			—			—
Interest income (expense), net		1,252			1,100			2,352			1,402			—			1,402
Net income before income taxes		9,839			10,815			20,654			837			4,926			5,763
Income taxes		(2,590	)		—			(2,590	)		(411	)		—			(411	)
Net income	$	7,249		$	10,815		$	18,064		$	426		$	4,926		$	5,352
Net income per common share – basic	$	0.23					$	0.57		$	0.01					$	0.18
Net income per common share – diluted*	$	0.18					$	0.44		$	0.01					$	0.17
Pro forma shares outstanding:
Basic		31,438						31,438			30,427						30,427
Diluted*		41,075						41,075			32,134						32,134

A Amortization of developed technology

B Consolidation of equity investments

C Restructuring charges

D In-process research and development

E Amortization of intangibles

F Amortization of deferred stock-based compensation

G Impairment (write-down) of equity investment

* Gives effect to the potential issuance of common stock upon conversion of convertible subordinated notes and to the effect of all dilutive potential common shares outstanding during the period, including stock options and warrants, using the treasury stock method.

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Magma Reports Record Revenue for Third Quarter Page 8

MAGMA DESIGN AUTOMATION, INC.

AS OF DECEMBER 31, 2003

IMPACT OF PRO FORMA ADJUSTMENTS ON FORWARD-LOOKING DILUTED NET INCOME PER SHARE

(Unaudited)

	Quarter Ending March 31, 2004
GAAP diluted net income per share	$0.09 to $0.13
Amortization of intangibles	$0.01
Amortization of capitalized developed technology	$0.02
Amortization of deferred stock compensation	$0.02
Impairment (write-down) of equity investment.	$0.01
Pro forma diluted net income per share	$0.15 to $0.19

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