Novatel Wireless Announces Fourth Quarter Results

SAN DIEGO, CA. - Novatel Wireless, Inc. (Nasdaq: NVTL), a leading provider of wireless data communications access solutions, today reported financial results for the fourth quarter ended December 31, 2003.

Net revenues for the fourth quarter were higher than prior guidance at approximately $10.6 million, a 32% increase from $8.1 million in the preceding third quarter and a 33% increase from $8.0 million in the same period last year. In the fourth quarter ended December 31, 2003, the Company reported non-GAAP net income break-even results. Pro forma non-GAAP net income excludes non-cash charges of $1.7 million for the accretion of dividends and interest expense, $414,000 related to restructuring, and $75,000 for stock-based compensation. Net loss applicable to common shareholders for the fourth quarter of 2003 was $2.1 million or $0.23 per basic and diluted share, a $13.8 million improvement from the $15.9 million net loss reported in the same period last year.

"We are encouraged by the strong increase in fourth quarter sales, driven by growing demand for 3G UMTS products in Europe," commented Peter Leparulo, Chief Executive Officer of Novatel Wireless. "We are in an important leadership position with our first UMTS data terminals to roll out of mass production in partnership with multiple leading carriers in Europe and Asia. In addition, we are very excited to announce today an agreement with Verizon Wireless to be a key long-term volume supplier of 3G EV-DO PC cards and believe our product introductions will be closely synchronized with volume deployments of that technology in North America later this year. We believe these efforts, bolstered by our partnership with Sprint in CDMA 1X, deployments of our GPRS products in China and the recent introduction of Freedom Box with AT&T Wireless, will give us the broadest and most advanced line of wireless data access products on the market today."

"At the same time, we continue to closely focus on improving our business," added Mr. Leparulo. "Our market continues to strengthen and, based on current volumes under contracts, we are now focused on executing our growth strategy throughout 2004. Looking forward, in the first quarter of 2004, we expect to see a sequential increase in revenues to approximately $12 million to $13 million in a normally seasonally soft first quarter and expect to report positive non-GAAP bottom line results, despite our investment in EV-DO development."

Recent highlights include:

- Today, Novatel Wireless also announced in a separate press release that it has signed an agreement positioning the Company to be a key long-term volume supplier of EV-DO PC cards to Verizon Wireless.

- On January 6th, Novatel Wireless announced the receipt of $14 million in new orders for the Merlin U530(TM) scheduled for delivery in the first half of 2004. To date, Novatel Wireless has received orders for its 3G UMTS Wireless PC Card Modem totaling over $22 million.

- In January of 2004, the Company announced an agreement with AirLink Communications to offer the Freedom Box 200G(TM) on AT&T Wireless' GSM/GPRS network. The Freedom Box 200G will be offered to telemetry, field service and public safety integrators looking to migrate to the higher speed and reliability of GSM/GPRS networks.

- In the fourth quarter, Novatel Wireless announced a new operator relationship in Europe and initial purchase orders with Wind Telecomunicazioni S.p.a in Italy. In Asia, Novatel Wireless signed a distribution agreement with Jade Bird for the China Mobile GPRS network. As part of the agreement, Jade Bird placed a bulk purchase order for the Merlin G301(TM) Wireless PC Card Modem and will offer the card to operators, manufacturers, VARs, retailers, and other distributors throughout China.

- On January 16, 2004, Novatel Wireless announced the completion of an $8.0 million private placement to certain institutional investors of 1,142,855 shares of common stock, together with warrants to acquire shares of common stock.

Dan Halvorson, Acting Chief Financial Officer of Novatel Wireless, explained, "Gross margins of 26.6% were impacted by the ramp of UMTS products and the increase in lower margin joint development service revenues. Gross margins on products shipments were 28.0%. Notably, we booked a $4.0 million increase in Q4 to deferred revenues, which now stands at $6.2 million, which we will recognize over the next twelve to sixteen months. Additionally, we improved our balance sheet, as cash increased for the third quarter in a row. After the quarter close, we further bolstered our financial position, raising an additional $8.0 million increasing our ability to ramp our business to meet higher demand."

Net revenues for the year ended December 31, 2003 were $33.8 million, an increase from $28.9 million reported for the prior year. Net loss applicable to common shareholders for 2003 was $16.1 million or $2.06 per basic and diluted share which compares to a net loss of $53.5 million or $10.47 per basic and diluted share for 2002.

Novatel Wireless will host a conference call for analysts and investors today to discuss its quarterly results at 5:00 p.m. ET on February 10, 2004. Open to the public, a live Web cast of the conference call will be accessible from the "Investor Relations" section of the Novatel Wireless Web site (www.novatelwireless.com). Following the live Web cast, an archived version will be available on the Novatel Wireless Web site.

ABOUT NOVATEL WIRELESS, INC.

Novatel Wireless, Inc. is a global leader in the design and development of wireless modems, software and custom engineering for use in mobile computing devices. Novatel Wireless Merlin(TM) PC Cards, Expedite(TM) Embedded Modems, and Freedom Box(TM) Ruggedized Modems enable high-speed wireless access to personal, corporate and public information via portable computers, handheld devices and vertical market applications. The company delivers innovative 2.5G and 3G solutions to operators, distributors and vertical markets worldwide. Headquartered in San Diego, California, Novatel Wireless is listed on Nasdaq: NVTL.

Note to Editors: The Novatel Wireless logo, Merlin, Expedite and Freedom Box are trademarks of Novatel Wireless, Inc.. All other brands, products and company names mentioned herein are trademarks of their respective holders. This release may contain forward-looking statements, which are made pursuant to the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. These factors include risks relating to technological changes, continued acceptance of Novatel Wireless' products and dependence on intellectual property rights. These factors, as well as other factors that could cause actual results to differ materially, are discussed in more detail in Novatel Wireless' filings with the United States Securities and Exchange Commission and other regulatory agencies.

*Please see the attached document for financial tables.
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Novatel Wireless
Dan Halvorson
Acting Chief Financial Officer
(858) 320-8821
www.novatelwireless.com

the blueshirt group, Investor Relations
Chris Danne, Rakesh Mehta
(415) 217-7722
chris@blueshirtgroup.com
rakesh@blueshirtgroup.com


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For more information, contact:
Novatel Wireless
Dan Halvorson
Acting Chief Financial Officer
(858) 320-8821
www.novatelwireless.com

the blueshirt group, Investor Relations
Chris Danne, Rakesh Mehta
(415) 217-7722
chris@blueshirtgroup.com
rakesh@blueshirtgroup.com