Consolidated revenue for the year ended December 31, 2003 increased $1,259,000 or 14.9% to $9,726,000 as compared to $8,467,000 for the year ended December 31, 2002. The Company's consolidated net loss for the year ended December 31, 2003 was $(1,205,000), or $(0.14) per share, as compared to a loss of $(1,022,000) or $(0.12) per share for the year ended December 31, 2002.

Bitstream is composed of three different businesses: (1) its type and type technology business ("Type"); (2) its MyFonts.com business ("MyFonts"); and (3) its Pageflex business ("Pageflex"). The Company's highlights are presented below by business and a more detailed description of these business segments may be found in the "About Bitstream" section of this press release.

FOURTH QUARTER AND 2003 HIGHLIGHTS

Type Business

• During the fourth quarter of 2003, the Company completed three major set top box placements and licensed our font technology and fonts to over 40 OEM customers during the fourth quarter.
• The Company finalized a deal to include Font Fusion and fonts into the cell phones of a major cell phone manufacturer to allow users to scale text on the handset display.
• The Type business (exclusive of ThunderHawk sales, marketing and research & development expenses) generated an operating profit for the year ended December 31, 2003 of approximately $769,000 or 19.8% of the font technology revenue.
• Over 30% of the revenue from the Type business during 2003 was generated from new customers in a variety of markets, including consumer electronics, gaming software, desktop software, television broadcasting, cell phones and other mobile devices.
• In October, the Company achieved a milestone for ThunderHawk when it closed its first sale with an Italian wireless carrier. While this sale comprises a 150 user pilot placement, management believes it will lead to additional licenses from this customer in 2004.
• The Company received a record number of ThunderHawk downloads totaling 8,873 bringing the total number of users to more than 38,000.
• With the addition of a new Vice President of Sales for ThunderHawk in August 2003 and a ThunderHawk Business Development Manager in February 2004, the Company expanded its sales focus to enable it to reach more corporations and wireless carriers. Its efforts included establishing and furthering relationships with 12 wireless carriers and signing three new resellers to help promote and sell ThunderHawk worldwide.
• The Company also focused on building the reputation for the ThunderHawk technology while it increased efforts on the development of the Smartphone Edition to improve its time to market. With the beta release announced last week, management believes it is well positioned to get a final version of the technology into the hands of wireless carriers in the next two months.

MyFonts Business

• MyFonts revenue increased $239,000 or 61.1% to $630,000 for the fourth quarter of 2003, and for the year ended December 31, 2003 grew $1,020,000 or 74.0% as compared to 2002. This increase was the result of a large number of new users and an increase in the percentage of orders placed by existing customers.
• During the fourth quarter of 2003, MyFonts acquired over 17,000 additional users, bringing the total as of December 31, 2003 to over 153,000 registered users.
• Over 37% of the orders placed during the fourth quarter were submitted by users who had previously purchased fonts from MyFonts.com.
• MyFonts also continued to try to increase its margins on sales of fonts on the site during 2003 by negotiating with the foundries for more favorable royalty terms.

Pageflex Business

• Revenue from the Company's Pageflex business increased $171,000 or 23.8% to $890,000 for the fourth quarter of 2003 as compared to the fourth quarter of 2002.
• During 2003, Pageflex revenue increased $899,000 or 36.1% as compared to 2002.
• Over 40% of the new customers acquired during 2003 signed their first license agreements with the Company during the fourth quarter.
• Despite the significant revenue growth achieved by Pageflex this year, management believes there is the potential for greater growth through an increased sales effort combined with an easier to integrate product offering. With the increase in our sales pipeline, we are in the process of expanding the Pageflex sales team to take advantage of a growing list of potential customers.
• Additionally, the Company is improving the Pageflex products to increase the ease with which such customers can integrate the Pageflex technology.

2004 Outlook

"During 2003, we remained focused on growing revenue on a consolidated basis resulting in the first year where revenues grew by more than $1,000,000 since 1998," said Anna M. Chagnon, President and Chief Executive Officer. "For 2004, our goal is to grow consolidated revenue by more than 20%. Through new customer acquisition, and increased placements in new areas such as cell phones, we are optimistic that the Type business can increase its profitability (exclusive of ThunderHawk sales, marketing and research & development expenses). This profitability will be used to fund the development of ThunderHawk for the Smartphone in the near term, and to a broader range of cell phones later in the year. Our goal for ThunderHawk is to work with carriers to offer ThunderHawk as a service to their end users for which we receive a per month per user royalty. Our goal for both Pageflex and MyFonts is to achieve profitability on a stand-alone basis to help fund future initiatives, while continuing to grow each of these businesses. To achieve these goals and position the Company for future growth, it is critical for us to ramp up sales and marketing expenses during 2004. We believe the near-term investment in these resources, will result in greater revenue growth potential for the Company overall."

CONFERENCE CALL REMINDER

Today, March 1, 2004, at 4:30 p.m. EST, Bitstream will host a conference call with the financial community to discuss its fourth quarter results:

• Date: Monday, March 1, 2004
• Time: 1:30 Pacific (4:30 Eastern) International Dial-in number: 303-262-2190 Domestic Dial-in number: 800-218-8862
• Internet Simulcast: www.actioncast.acttel.com
• Event ID # 20653

(Windows Media Player or Real Player will be needed for simulcast)

Call into the conference number 5-10 minutes prior to the start time. An operator will check your name and organization and ask you to wait until the call begins. If you have any difficulty connecting with the conference call number, please call the Liolios Group at (949) 574-3860.

A replay of the conference call will be available until 3/8/2004

• International Replay number: 303-590-3000
• Domestic Replay number: 800-405-2236
• Internet Simulcast link above
• The playback passcode (570931) must be entered to access the playback

                            Bitstream Inc.
                 Consolidated Statements of Operations
                 (In Thousands, Except Per Share Data)


                                       Three Months     Twelve Months
                                          Ended             Ended
                                       December 31,      December 31,
                                   ----------------- -----------------
                                       2003    2002     2003     2002
                                   -----------------------------------

Revenue:
   Software license               $   2,282  $2,042 $  8,487  $ 7,415
   Services                             357     232    1,239    1,052
                                   ---------  ------ --------  -------
Total revenue                         2,639   2,274    9,726    8,467

Cost of revenue:
   Software license                     742     444    2,477    1,682
   Services                             144      74      540      372
                                   ---------  ------ --------  -------
Total cost of revenue                   886     518    3,017    2,054
                                   ---------  ------ --------  -------

Gross profit                          1,753   1,756    6,709    6,413
                                   ---------  ------ --------  -------

Operating expenses:
   Marketing and
    selling                             598     530    2,653    2,229
   Research and
    development                         858   1,001    3,826    4,028
   General and
    administrative                      530     387    1,997    1,446
                                   ---------  ------ --------  -------

Total operating
 expenses                             1,986   1,918    8,476    7,703
                                   ---------  ------ --------  -------

Loss from operations                   (233)   (162)  (1,767)  (1,290)

Other income (expense):
   Income on investment
    in DiamondSoft, Inc.                ---     102      591      149
  Other income (loss), net               27      14       48       74
                                   ---------  ------ --------  -------

Income (loss) before income taxes      (206)    (46)  (1,128)  (1,067)
Provision for (benefit
 from) income taxes                      23    (120)      77      (45)
                                   ---------  ------ --------  -------

      Net income (loss)           $    (229) $   74 $ (1,205) $(1,022)
                                   =========  ====== ========  =======


Basic and diluted  net
 loss per share                   $   (0.03) $ 0.01 $  (0.14) $ (0.12)
                                   =========  ====== ========  =======

Basic weighted average
 shares outstanding                   8,421   8,349    8,374    8,326
                                   =========  ====== ========  =======
Diluted weighted
 average shares
 outstanding                          8,421   8,563    8,374    8,326
                                   =========  ====== ========  =======

                            Bitstream Inc.
                      Consolidated Balance Sheets
                            (In Thousands)

                                                          December 31,
                                                        --------------
ASSETS                                                    2003   2002
                                                         ------ ------
Current assets:
  Cash and cash equivalents                             $4,367 $4,828
  Accounts receivable, net                               1,016    602
  Prepaid expenses and other current assets                 60    112
  Income tax receivable                                    ---    134
                                                         ------ ------

     Total current assets                                5,443  5,676
                                                         ------ ------

Property and equipment, net                                347    271
                                                         ------ ------

Other assets:
  Restricted cash                                          250    300
  Goodwill                                                 727    727
  Investment in DiamondSoft, Inc.                          ---    748
  Intangible assets                                        243    236
  Other assets                                               1      6
                                                         ------ ------
     Total other assets                                  1,221  2,017
                                                         ------ ------

Total assets                                            $7,011 $7,964
                                                         ====== ======

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                      $  513 $  245
  Accrued expenses                                         877  1,046
  Current portion of deferred revenue                      547    667
                                                         ------ ------
     Total current liabilities                           1,937  1,958
                                                         ------ ------
Long-term liabilities                                      135      6
                                                         ------ ------
                                                         ------ ------
Total liabilities                                        2,072  1,964
                                                         ------ ------
Total stockholders' equity                               4,939  6,000
                                                         ------ ------
Total liabilities and stockholders' equity              $7,011 $7,964
                                                         ====== ======

Bitstream
Bitstream Inc. (NASDAQ: BITS) is a software development company that focuses on the presentation of data. Bitstream enables customers worldwide to render high-quality text, browse the Web on wireless devices, select from the largest collection of fonts online, and customize documents over the Internet. Its core competencies include font technology, browsing technology (ThunderHawk), e-commerce technology (MyFonts.com), and publishing technology (Pageflex).

Bitstream is a leading developer of font technology, digital fonts, and custom font designs. Bitstream licenses its TrueDoc and Font Fusion technologies to Web and application developers, and to manufacturers of information appliances, wireless and handheld devices, set-top boxes, embedded systems, and printers.

ThunderHawk is a client-server technology that brings full-featured wireless Web browsing to mobile devices. It gives customers complete Internet access to real Web pages while maintaining full text legibility. Now in alpha release, ThunderHawk Smartphone Edition enables consumers to browse the Web on smart phones. ThunderHawk Pocket PC Edition allows consumers to browse the Web on Pocket PC devices. ThunderHawk Enterprise Server is a client-server technology for corporations and telecommunications companies. Providing wireless Web browsing across networks, it gives a mobile workforce complete access to Internet and corporate intranet Web pages.

MyFonts.com is a showcase of the world's fonts available from one easy-to-use Web site. It provides the largest collection of fonts ever assembled for on-line delivery, and offers easy ways to find and purchase fonts on-line. MyFonts.com also offers unique typographic resources and forums for interacting with font experts. For details, visit http://www.myfonts.com, the Web site for finding, trying, and buying fonts on line.

Pageflex technologies have pioneered a new direction in composition software: Web-top publishing. Web-top publishing software helps novice users create high-quality printed products using intelligent, flexible templates, without installing or learning any new desktop publishing software. Pageflex templates are intelligent and flexible because professional designers can set rules to define which elements can change, how much they can change, and who can change them. Pageflex products thus maintain corporate identity and design integrity while enabling sophisticated customizing of documents.

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations. Actual performance and results of operations may differ materially from those projected or suggested in the forward-looking statements due to certain risks and uncertainties, including, without limitation, market acceptance of the Company's products, competition and the timely introduction of new products. Additional information concerning certain risks and uncertainties that would cause actual results to differ materially from those projected or suggested in the forward-looking statements is contained in the Company's filings with the Securities and Exchange Commission, including Bitstream's Annual Report on Form 10-K for the year ended December 31, 2002.

Bitstream was founded in 1981 and is headquartered in Cambridge, Massachusetts. Find out more about Bitstream at http://www.bitstream.com.

Bitstream, Font Fusion, and TrueDoc are registered trademarks, and the Bitstream logo and ThunderHawk are trademarks, of Bitstream Inc. MyFonts.com is a trademark of MyFonts.com, Inc. Pageflex and Mpower are trademarks of Pageflex. Other technologies and brand names are used for information only and remain trademarks or registered trademarks of their respective companies.

Anna Chagnon
President and
Chief Executive Officer
Bitstream Inc.
617.520.8619

James P. Dore
Chief Financial Officer
Bitstream Inc.
617.520.8377