@Home Network Reports Subscriber Base Grows to 50,000 Upgraded Homes Passed Increases to 4.5 Million

@Home Network Reports Subscriber Base Grows to 50,000

Upgraded Homes Passed Increases to 4.5 Million

REDWOOD CITY, Calif., January 20, 1998 -- @Home Network (Nasdaq:ATHM) today reported revenues totaling $3.7 million for the fourth quarter ended December 31, 1997, a 95% increase over revenues of $1.9 million reported in the third quarter ended September 30, 1997. The net loss for the fourth quarter, before a non-cash charge of $172.6 million related to the Cablevision distribution agreement, was approximately $11.8 million, or $0.10 per share. Including the charge, the net loss for the fourth quarter was $184.4 million, or $1.55 per share compared to a net loss of $11.9 million, or $0.10 per share, in the previous quarter of 1997. Revenue and net loss for the fourth quarter of 1996 was $0.5 million and $9.0 million, respectively.

Revenue for the year ended December 31, 1997 was $7.4 million, nearly a ten-times increase over revenues of $0.7 million for the year ended December 31, 1996. The net loss for the year, before the aforementioned charge, was $46.5 million, or $0.41 per share. The Company completed its initial public offering of 10.3 million shares on July 11, 1997; as a result, shares outstanding were 118.6 million for the quarter ended December 31, 1997, excluding shares reserved for outstanding warrants and employee stock options.

At year-end, @Home served 50,000 cable modem subscribers across North America on a base of 4.5 million homes that have two-way upgraded plant. In addition, during the fourth quarter of 1997, the @Home service was launched in 5 new markets, raising the total number of active U.S. and Canadian markets to 21.

Commenting on the Company's results, Tom Jermoluk, chairman, president and CEO of @Home Network, said, "In 1997, we met or exceeded expectations in key performance areas. With new affiliate agreements reached earlier in the year with Rogers Cablesystems and Shaw Communications, and during the fourth quarter with Cablevision Systems Corp., @Home's cable partners now serve nearly fifty percent of all homes passed by cable in North America. With major initiatives successfully launched in all three divisions in 1997, we are well positioned to expand our business in 1998."

An increasingly significant contributor to @Home's growth, @Work ended 1997 with more than 300 installed accounts and now enters 1998 with an expanded platform of applications that is opening-up new markets for the service. Through @Work Remote, @Work will use its cable partners' advanced broadband technology to provide business customers with virtual private networking at speeds substantially higher than remote access alternatives. In addition, @Work extended its distribution to the hotel industry through an agreement with The Fourth Communications Network, Inc.

The growth and success of the @Media division made it a meaningful contributor to the company's overall growth in the fourth quarter. The launch of the new @Home user interface aided in attracting new content and service providers such as the Associated Press, CNN Interactive and Bloomberg. In addition, the division signed a number of substantial advertising agreements with The Clorox Company, DLJ Direct, Metro Goldwin Mayer, Shopping.com, and On Sale Corporation.

@Home Network began a number of key technology initiatives during the quarter. @Work signed an agreement with Netscape to offer business-to-business electronic commerce services, based on Netscape CommerceXpert. @Work and Microsoft also agreed to work jointly to support Windows NT and other Microsoft products designed for small businesses. This is in addition to @Home's development initiative with Microsoft to create an @Home branded version of Microsoft Internet Explorer 4.0 for the @Home service.

Cash and short-term investments as of December 31, 1997 totaled $120.4 million, and includes $101 million raised in @Home Network's initial public offering on July 11, 1997. Capital expenditures in the fourth quarter of $6.0 million and for the year of $26.5 million supported the growth in the infrastructure necessary to roll out @Home and @Work services. Depreciation and amortization was $2.5 million and $7.8 million for the fourth quarter and 1997 periods, respectively.

@Home Network distributes high-speed Internet services to consumers and businesses using its own network architecture and a variety of transport options centered on the cable industry's hybrid-fiber coaxial infrastructure. The cable connection provides users significant increases in speed over conventional Internet services and easy-to-use navigation. Leveraging the "always on" attributes of cable, @Home allows for unique multimedia applications that go beyond current Web experiences. Since its founding in 1995, @Home Network has reached affiliate agreements with eight leading cable companies passing approximately 50 million homes in North America, including Tele-Communications, Inc., Comcast Corporation, Cox Communications, Cablevision Systems Corp., InterMedia Partners, Marcus Cable, Rogers Cablesystems Limited, and Shaw Communications.

Traded on Nasdaq under the symbol ATHM, @Home Network is based in Redwood City, California. Additional information about @Home Network is available on the Internet at http://www.home.net.

@Home Network, @Home, @Work, @Work Remote and the @ logo are trademarks of @Home Network and may be registered in certain jurisdictions. All other brands and products are trademarks of their respective companies.

This press release contains forward-looking information within the meaning of Section 27A of the Securities Exchange Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbors created by those sections. These forward-looking statements include statements concerning the Company's ability to expand its business in 1998 and the future scope and success of the Company's services. Actual results may differ materially. The matters discussed in this press release also involve risks and uncertainties described from time to time in the Company's filings with the Securities and Exchange Commission (SEC). In particular, see "Factors That May Affect Future Results" in the Company's Form 10-Q for the quarter ended September 30, 1997 and "Risk Factors" in the Final Prospectus for the Company's initial public offering filed with the SEC on July 11, 1997. The Company assumes no obligation to update the information contained in this press release.