HILLSBORO, OR — February 1, 2007— RadiSysÒ Corporation (Nasdaq: RSYS), a leading global provider of advanced embedded solutions, today announced revenues of $60.7 million for the quarter ended December 31, 2006 and a net loss of $5.5 million or $0.25 per share. Non-GAAP net loss for the fourth quarter was $40 thousand or $0.00 per share. The GAAP and non-GAAP fourth quarter results per share exceeded the Company’s previously issued fourth quarter guidance due to an improved gross margin rate, reduced operating expenses and a higher tax benefit relative to guidance. Non-GAAP results excluded a loss of approximately $0.25 per share, primarily attributable to the impact of acquisition-related expenses, stock-based compensation expense and restructuring charges.

The Company reported 2006 full year revenues of $292.5 million, an increase of 12% compared to 2005 revenues of $260.2 million. Net loss in 2006 was $13.0 million or $0.62 per share, compared to net income of $16.0 million or $0.68 per diluted share in 2005. Non-GAAP net income in 2006 was $12.0 million or $0.50 per diluted share, compared to non-GAAP net income of $14.7M or $0.62 per diluted share in 2005. The Company’s inventory increased in the fourth quarter by $13.9 million mainly related to transitioning out of the Company's contract manufacturing partner in North America. The Company expects the inventory increase to be temporary and the balance to decrease throughout the year.

Commenting on the financial results for the quarter, Scott Grout, President and CEO stated, “I am pleased that the fourth quarter results were better than expected. We ended the year with revenue growth of 12% over 2005 with most of the growth in our strategically targeted markets. Our wireless and medical equipment revenues both increased 21% over last year. From a global perspective, our Europe and Asia Pacific revenues increased 14% from 2005.” Scott Grout continued to say, “We made significant progress on our strategies in 2006. We were awarded record levels of future standard product business in both our communications and commercial markets in applications such as 3G wireless infrastructure, IP security, wireless billing, IPTV, XML routing servers, IP media processing, test and measurement and medical imaging. We also successfully completed the acquisition of ConvediaÒ Corporation, the leading provider of media processing platforms. We believe this acquisition will accelerate our strategy of offering higher-value, application-ready platforms.”

In the second half of 2006, the Company’s new Promentum™ SYS-6010, the industry's first ATCA 10Gigabit managed platform, began shipping to customers for their development programs. In the fourth quarter, the Company also introduced the ATCA-7200, a high performance Gigabit Ethernet Line card equipped with up to four Cavium processors and the new AMC-7211, which provides power efficient packet and security processing for customers. Both products have been well received in the market and evaluation units are expected to ship in the second quarter. Finally, the Company’s new Procelerant™ RMS420-5000XI, a 4U high performance embedded server with two dual-core processors, and the new Procelerant CE945GM dual-core COM-Express Module are both expected to begin shipping in the first quarter.

Commenting on the outlook, Scott Grout stated, “We currently expect first quarter revenues to increase sequentially to between $62 and $68 million driven by projected increases in our wireless market. We expect first quarter results to be a loss in the range of $0.33 to $0.27 per share, and our non-GAAP results to be between a loss of $0.03 per share to income of $0.03 per diluted share. Our projected non-GAAP results exclude a loss of approximately $0.30 per share primarily attributable to the impact of acquisition-related expenses, stock-based compensation expense and restructuring charges. For the year, we currently expect revenue and earnings to grow modestly over 2006. We believe that the drivers for more meaningful growth will be determined by the timing of our customers’ next generation system deployments.”

In closing, Mr. Grout stated, “I’m pleased with the Company’s progress in 2006 on furthering our strategy to be the leading provider of embedded solutions across our targeted markets. We continue to make significant investments in our Promentum, Convedia and Procelerant product lines and these investments are resulting in a strong level of design awards for future business. We believe that the market acceptance and enthusiasm around our new products is strong and that our solutions will enable our customers to bring better products to market faster and at a lower total cost.”

This press release contains forward-looking statements, including statements about the Company’s business strategy and the Company’s guidance for the first quarter of 2007, particularly with respect to anticipated revenues and loss/ earnings per share. Actual results could differ materially from the outlook, guidance and expectations in these forward-looking statements as a result of a number of risk factors, including, among others, (a) the amount of stock-based compensation expense, (b) the Company's inability to successfully integrate operations, technologies, products or personnel from the acquisition of Convedia Corporation, (c) the Company's inability to realize the benefits sought from the acquisition of Convedia Corporation, higher than anticipated cost of the acquisition and less than expected financial performance resulting therefrom, which may adversely affect the price of the Company’s stock, and (d) the factors listed in RadiSys’ reports filed with the Securities and Exchange Commission (SEC), including those listed under “Risk Factors” in RadiSys’ Annual Report on Form 10-K for the year ended December 31, 2005, and in the RadiSys Quarterly Reports on Form 10-Q filed with the SEC each fiscal quarter, and other filings with the SEC, copies of which may be obtained by contacting the Company at 503-615-1100 or from the Company’s investor relations web site at http://investor.radisys.com/. Although forward-looking statements help provide additional information about RadiSys, investors should keep in mind that forward-looking statements are inherently less reliable than historical information. All information in this press release is as of February 1, 2007. The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

In addition to disclosing financial results calculated in accordance with GAAP, the historical and forward-looking financial results in the Company’s earnings release contain non-GAAP financial measures that exclude the effects of (a) Convedia acquisition-related expenses including an in-process R&D charge, amortization of acquired intangible assets, amortization of deferred compensation, integration expenses and purchase accounting adjustments, (b) stock-based compensation expense recognized as a result of the Company’s adoption of FAS 123R, (c) restructuring charges (reversals), (d) insurance gain, and (e) a gain related to supplier settlement. The Company believes that the presentation of results excluding these items will provide meaningful supplemental information to investors that are indicative of the Company’s core operating results. A reconciliation of non-GAAP information to GAAP information is included in the tables below. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for or superior to financial measures calculated in accordance with GAAP, and reconciliations between GAAP and non-GAAP financial measures included in this earnings release should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

RadiSys (Nasdaq: RSYS) is a leading provider of advanced embedded solutions for the communications networking and commercial systems markets. Through intimate customer collaboration and combining innovative technologies and industry leading architecture, RadiSys helps OEMs, systems integrators and solution providers bring better products to market faster and more economically. RadiSys products include embedded boards, application enabling platforms and turn-key systems, which are used in today's complex computing, processing and network intensive applications. For more information, visit http://www.radisys.com, write to info@radisys.com, or call 800-950-0044 or 503-615-1100. Editors seeking more information may contact Lyn Pangares at RadiSys Corporation at 503-615-1220 or lyn.pangares@radisys.com.

	For the Three Months Ended December 31,						For the Year Ended December 31,
	2006			2005			2006			2005
Revenues	$	60,701		$	61,905		$	292,481		$	260,234
Cost of sales		43,758			44,725			213,525			183,398
Gross margin		16,943			17,180			78,956			76,836
Research and development		11,270			7,571			41,492			29,784
Selling, general, and administrative		11,227			7,509			39,330			30,084
Intangible assets amortization		4,255			513			6,224			2,052
In-process research and development charge		—			—			14,000			—
Restructuring and other charges		313			127			139			1,128
Income (loss) from operations		(10,122	)		1,460			(22,229	)		13,788
Loss on repurchase of convertible subordinated notes		—			(46	)		—			(50	)
Interest expense		(431	)		(457	)		(1,732	)		(2,053	)
Interest income		1,847			2,017			9,348			6,337
Other income (expense), net		408			(270	)		851			(879	)
Income (loss) before income tax provision		(8,298	)		2,704			(13,762	)		17,143
Income tax provision (benefit)		(2,827	)		(2,181	)		(746	)		1,185
Net income (loss)	$	(5,471	)	$	4,885		$	(13,016	)	$	15,958
Net income (loss) per share:
Basic	$	(0.25	)	$	0.24		$	(0.62	)	$	0.79
Diluted (I)	$	(0.25	)	$	0.20		$	(0.62	)	$	0.68
Weighted average shares outstanding:
Basic		21,572			20,543			21,158			20,146
Diluted (I)		21,572			25,231			21,158			24,832

(I)

For the three months and year ended December 31, 2005, the diluted weighted average shares outstanding calculation includes shares underlying our 1.375% convertible senior notes; as a result, the diluted earnings per share calculation excludes the interest expense for our 1.375% convertible senior notes, net of tax benefit. The interest expense, net of tax benefit, excluded from the diluted net income per share calculation amounted to $242 thousand and $969 thousand for the three months and year ended December 31, 2005, respectively. For the three months and year ended December 31, 2006, interest on the convertible senior notes and related shares were excluded from the calculation as the effect would be anti-dilutive.

	December 31, 2006		December 31, 2005
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	23,734	$	90,055
Short-term investments, net		102,250		135,800
Accounts receivable, net		42,549		39,055
Other receivables		3,782		3,886
Inventories, net		35,184		21,629
Other current assets		4,609		2,426
Assets held for sale		3,497		—
Deferred tax assets		5,779		7,399
Total current assets		221,384		300,250
Property and equipment, net		11,075		13,576
Goodwill		67,183		27,463
Intangible assets, net		42,935		2,159
Long-term investments, net		10,000		—
Long-term deferred tax assets		24,531		21,634
Other assets		4,546		3,629
Total assets	$	381,654	$	368,711

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	39,699	$	36,903
Accrued wages and bonuses		5,995		4,829
Accrued interest payable		222		224
Accrued restructuring		329		856
Convertible subordinated notes, net		2,410		—
Other accrued liabilities		11,154		8,279
Total current liabilities		59,809		51,091
Long-term liabilities:
Convertible senior notes, net		97,412		97,279
Convertible subordinated notes, net		—		2,498
Other long-term liabilities		978		—
Total long-term liabilities		98,390		99,777
Total liabilities		158,199		150,868
Shareholders’ equity :
Preferred stock — $.01 par value, 10,000 shares authorized; none issued or outstanding		—		—
Common stock — no par value, 100,000 shares authorized; 21,835 and 20,703 shares issued and outstanding at December 31, 2006 and December 31, 2005		212,887		193,839
Retained earnings		6,555		20,275
Accumulated other comprehensive income:
Cumulative translation adjustments		4,013		3,729
Total shareholders’ equity		223,455		217,843
Total liabilities and shareholders’ equity	$	381,654	$	368,711

	For the Three Months Ended December 31,						For the Year Ended December 31,
	2006			2005			2006			2005
GAAP net income (loss)	$	(5,471	)	$	4,885		$	(13,016	)	$	15,958
Acquisition-related expenses:
(a) In-process research and development charge		—			—			14,000			—
(b) Amortization of acquired intangible assets		4,124			—			5,499			—
(c) Amortization of deferred compensation:
Cost of sales		26			—			34			—
Research and development		160			—			213			—
Selling, general and administrative		282			—			377			—
Total amort. of deferred compensation		468			—			624			—
(d) Integration expenses:
Research and development		—			—			9			—
Selling, general and administrative		277			—			423			—
Total integration expenses		277			—			432			—
(e) Purchase accounting adjustments:
Revenue		240			—			330			—
Cost of sales		503			—			1,378			—
Selling, general and administrative		97			—			130			—
Total purchase accounting adjustments		840			—			1,838			—
Total Convedia acquisition-related exp.		5,709			—			22,393			—
(f) Stock-based compensation:
Cost of sales		236			—			876			—
Research and development		542			—			1,745			—
Selling, general and administrative		1,346			—			3,968			—
Total stock-based compensation		2,124			—			6,589			—
(g) Restructuring and other charges		313			127			139			1,128
(h) Insurance gain		—			—			(362	)		—
(i) Gain related to supplier settlement		(400	)		—			(400	)		—
(j) Tax valuation allowance		—			(2,176	)		—			(2,176	)
(j) Income tax effect of reconciling items		(2,315	)		25			(3,365	)		(251	)
Non-GAAP net income (loss)	$	(40	)	$	2,861		$	11,978		$	14,659

	For the Three Months Ended December 31,						For the Year Ended December 31,
	2006			2005			2006			2005
Revenues (e)	$	60,941		$	61,905		$	292,811		$	260,234
Cost of sales (c) (e) (f)		42,993			44,725			211,237			183,398
Non-GAAP gross margin		17,948			17,180			81,574			76,836
Research and development (c) (d) (f)		10,568			7,571			39,525			29,784
Selling, general, and administrative (c) (d) (e) (f)		9,225			7,509			34,432			30,084
Intangible assets amortization (b)		131			513			725			2,052
Non-GAAP income (loss) from operations (a) (g)		(1,976	)		1,587			6,892			14,916
Loss on repurchase of convertible subordinated notes		—			(46	)		—			(50	)
Interest expense		(431	)		(457	)		(1,732	)		(2,053	)
Interest income		1,847			2,017			9,348			6,337
Other income (expense), net (h) (i)		8			(270	)		89			(879	)
Non-GAAP income (loss) before income tax provision		(552	)		2,831			14,597			18,271
Income tax provision (benefit) (j)		(512	)		(30	)		2,619			3,612
Non-GAAP net income (loss)	$	(40	)	$	2,861		$	11,978		$	14,659
Non-GAAP net income (loss) per share:
Basic	$	0.00		$	0.14		$	0.57		$	0.73
Diluted (I)	$	0.00		$	0.12		$	0.50		$	0.62
Weighted average shares outstanding used to compute non-GAAP net income per share:
Basic		21,572			20,543			21,158			20,146
Diluted		21,572			25,231			26,076			24,832

(I)

The diluted weighted average shares outstanding calculation includes shares underlying our 1.375% convertible senior notes; as a result, the diluted earnings per share calculation excludes the interest expense for our 1.375% convertible senior notes, net of tax benefit. The interest expense, net of tax benefit excluded from the diluted net income per share calculation amounted to $242 thousand for the three months ended December 31, 2005, and $974 thousand and $969 thousand for the year ended December 31, 2006 and 2005, respectively.

	Gross Margin		Research and Development		Selling, General and Administrative		Income (loss) from Operations		Income (loss) before income tax provision		Effective Tax Rate
GAAP		27.9%		18.6%		18.5%		(16.7)%		(13.7)%		34.1%
Amortization of acquired intangible assets (b)		—		—		—		6.8		6.8		31.2
Amortization of deferred compensation (c)		—		(0.3.)		(0.5)		0.8		0.8		3.5
Integration expenses (d)		—		—		(0.5)		0.5		0.5		2.1
Purchase accounting adjustments (e)		1.2		—		(0.2)		1.4		1.4		6.4
Stock-based compensation (f)		0.4		(1.0)		(2.2)		3.5		3.5		16.1
Restructuring (g)		—		—		—		0.5		0.5		2.3
Gain related to supplier settlement (i)		—		—		—		—		(0.7)		(3.0)
Non-GAAP		29.5%		17.3%		15.1%		(3.2)%		(0.9)%		92.7%

	Tax Effected Estimates for the Quarter Ended March 31, 2007 Low End High End						Per Share Estimates for the Quarter Ended March 31, 2007 Low End High End
GAAP net loss (assumes tax rate of 16%)		($7.2	)		($5.8	)		($0.33	)		($0.27	)
Amortization of acquired intangible assets		3.5			3.5			0.15			0.15
Stock-based compensation		1.9			1.9			0.09			0.09
Restructuring charges		0.4			0.4			0.02			0.02

Amortization of deferred compensation		0.4			0.4			0.02			0.02
Purchase accounting adjustments		0.2			0.2			0.01			0.01
Integration expenses		0.1			0.1			0.01			0.01
Total adjustments		6.5			6.5			0.30			0.30
Non-GAAP net income (loss) (assumes tax rate of 24%)		($0.7	)	$	0.7			($0.03	)	$	0.03

	Estimates for the Quarter Ended March 31, 2007
		Low End	High End
GAAP gross margin % of revenue		27.4%	28.4%
Stock-based compensation		0.4	0.4
Purchase accounting adjustments		0.2	0.2
Non-GAAP gross margin % of revenue		28.0%	29.0%

	NEWS RELEASE

For more information, contact: Brian Bronson Chief Financial Officer 1-503-615-1281 brian.bronson@radisys.com

	Research and Development Expense			Selling, General and Admin. Expense
GAAP	$	11.0		$	11.4
Stock-based compensation		(0.6	)		(1.4	)
Amortization of deferred compensation		(0.2	)		(0.3	)
Integration expenses		—			(0.2	)
Purchase accounting adjustments		—			(0.1	)
Non-GAAP	$	10.2		$	9.4