Audible Announces Third Quarter 2005 Financial Results; Company Reports Record Q3-05 Revenue of $16.8 Million; Reports Q3-05 Diluted EPS of ($0.01); Reaffirms 2005 Guidance

Audible reported record consolidated net revenue for the thirdquarter 2005 of $16.8 million, up 81% year over year; an operatingloss of $793,000; and a net loss after taxes of $189,000, or a $0.01loss per diluted share.

Total customers acquired during the quarter were 79,800,representing growth of 75% year over year. AudibleListener(R) membersacquired during the quarter were 61,900, representing growth of 102%year over year.

"The third quarter saw continued momentum in our acquisition ofnew AudibleListener members," stated Donald Katz, chairman and CEO ofAudible. "But perhaps more importantly, execution on our AudibleAir,Audible UK, education, and podcasting initiatives has allowed us toplant flags in new markets that will become increasingly importantcontributors to our growth and profitability in 2006 and beyond."

Key Financial and Operating Metrics:

Consolidated Net Revenue: consolidated net revenue totaled $16.8million in Q3-05, an 81% increase over the $9.3 million reported inQ3-04.

Total New Customers: total new customers, a combination of newAudibleListener(R) members and new a la carte customers, totaled79,800 in Q3-05, a 75% increase over 45,500 in Q3-04.

New AudibleListener(R) Members: new AudibleListener(R) memberstotaled 61,900, representing 102% year-over-year growth.

Loss from Operations: loss from operations totaled $793,000 inQ3-05, as compared to income from operations of $528,000 in Q3-04.

Loss before Income Taxes: loss before income taxes totaled$239,000 in Q3-05, as compared to income before income taxes of$542,000 in Q3-04.

Net Loss: net loss totaled $189,000, or $0.01 loss per dilutedshare.

Cash, Cash Equivalents and Short-Term Investments: Audible's cash,cash equivalents and short-term investments totaled $69.7 million atthe end of Q3-05.

Business Outlook:

The company today reaffirmed 2005 full-year guidance forconsolidated net revenue of $62 million to $65 million, whichrepresents 80% to 89% year-over-year revenue growth.

The company also reaffirmed 2005 full-year guidance for incomebefore income taxes and before charges related to stock-basedcompensation of $1.6 million to $2.0 million.

Key Third Quarter Announcements:

-- September 27, 2005 - Audible announces the launch of AudibleAir(TM), an innovative new service that allows the automated wireless download of secure digital audio files to smartphones.

-- September 8, 2005 - Audible and Bookspan announce online commerce partnership aimed at providing Audible's audiobook download service to the millions of members of Bookspan's book clubs, including Book-Of-The-Month Club, Doubleday Book Club, Literary Guild, QPB, and others.

-- August 16, 2005 - XM Satellite Radio and Audible announce the launch of the XM Audible Store (http://www.audible.com/xmradio), featuring exclusive XM programming available for individual purchase or download subscription, including "The Bob Edwards Show" and "Opie and Anthony."

Conference Call

Senior management will host an investor teleconference at 5:00p.m. EDT today, to discuss third quarter results as well as relatedfinancial and operational developments. A live webcast of theconference call is available at www.audible.com/ir for audio streamingaccess to the call. To participate in the call, the dial-in number is(877) 236-1078 or +1(213) 408-0663.

* Use of Non-GAAP Measures

Management believes that free cash flow is a useful measure ofliquidity because it includes cash provided by operating activities aswell as the impact of cash used for investment in property andequipment. However, this non-GAAP measure should be considered inaddition to, not as a substitute for, or superior to, net cashprovided by operating activities, or other financial measures preparedin accordance with U.S. GAAP. A reconciliation to the U.S. GAAPequivalents of this non-GAAP measure is contained in tabular form onthe attached unaudited condensed consolidated financial statements.

About Audible Inc.:

Audible (www.audible.com) is the leader in spoken audioinformation and entertainment on the Internet. Content from Audible isdownloaded and played back on personal computers, CDs, orAudibleReady(R) computer-based mobile devices. Audible has 80,000hours of audio programs from 270 content partners that include leadingaudiobook publishers, broadcasters, entertainers, magazine andnewspaper publishers, and business information providers. Audible.comis the Apple iTunes Music Store's preeminent provider of spoken-wordproducts for downloading or streaming via the Web. Additionally, theCompany is strategically aligned with Random House, Inc. in thefirst-ever imprint to produce spoken-word content specifically suitedfor digital distribution, Random House Audible. Among the Company'skey business relationships are Amazon.com, Apple Corp.,Hewlett-Packard Company, Microsoft Corporation, palmOne, Inc., XMSatellite Radio, PhatNoise Inc., Rio Audio, Creative Labs, TexasInstruments Inc., and VoiceAge Corporation.

Audible, audible.com, AudibleListener, and AudibleReady areregistered trademarks of Audible, Inc. and all are part of the familyof Audible, Inc. trademarks.

Other product or service names mentioned herein are the trademarksof their respective owners.

This press release contains information about Audible, Inc. thatis not historical fact and may be deemed to contain forward-lookingstatements about the company. Actual results may differ materiallyfrom those anticipated in any forward-looking statements as a resultof certain risks and uncertainties, including, without limitation,Audible's limited operating history, history of losses, uncertainmarket for its services, and its inability to license or producecompelling audio content and other risks and uncertainties detailed inthe company's Securities and Exchange Commission filings.
AUDIBLE INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three months ended Nine Months ended
September 30, September 30,
------------------------ -------------------------
2005 2004 2005 2004
------------ ----------- ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue, net:
Content and
services:
Consumer
content $16,471,719 $9,110,575 $44,468,360 $23,724,075
Point of sale
rebates (208,320) (101,640) (795,130) (285,645)
Services 41,472 17,791 81,806 47,794
------------ ----------- ------------ ------------
Total content
and services 16,304,871 9,026,726 43,755,036 23,486,224
Hardware 141,790 186,408 331,686 530,874
Related party
revenue 263,358 65,762 796,889 65,762
Other 60,275 - 89,009 32,257
------------ ----------- ------------ ------------
Total revenue,
net $16,770,294 $9,278,896 $44,972,620 $24,115,117
------------ ----------- ------------ ------------

Operating expenses:
Cost of content
and services
revenue:
Royalties and
other content
charges 5,919,011 2,838,098 15,553,805 7,492,866
Discount
certificate
rebates 297,860 434,170 1,261,591 778,505
------------ ----------- ------------ ------------
Total cost of
content and
services
revenue $6,216,871 $3,272,268 $16,815,396 $8,271,371

Cost of hardware
revenue 840,463 747,734 1,460,169 1,879,337
Operations 2,461,166 1,318,442 6,587,547 3,658,374
Technology and
development 2,324,678 1,271,737 5,771,436 3,807,839
Marketing 3,344,560 1,180,929 8,539,016 3,332,926
General and
administrative 2,375,895 959,518 5,600,114 2,367,233
------------ ----------- ------------ ------------

Total
operating
expenses $17,563,633 $8,750,628 $44,773,678 $23,317,080
------------ ----------- ------------ ------------

(Loss) income from
operations $(793,339) $528,268 $198,942 $798,037

Other income
(expense):
Interest income $553,994 $23,467 $1,424,318 $83,122
Interest expense - (10,069) (1,495) (26,347)
------------ ----------- ------------ ------------
Other income,
net $553,994 $13,398 $1,422,823 $56,775

------------ ----------- ------------ ------------
(Loss) income before
income taxes $(239,345) $541,666 $1,621,765 $854,812

Income tax
benefit
(expense) 50,315 (57,782) (97,535) (76,571)

------------ ----------- ------------ ------------
Net (loss) income $(189,030) $483,884 $1,524,230 $778,241

Dividends on
preferred stock - - - (614,116)
Charges related to
conversion of
convertible
preferred stock - - - (9,873,394)
------------ ----------- ------------ ------------
Total
preferred
stock expense - - - (10,487,510)

------------ ----------- ------------ ------------
Net (loss) income
applicable to
common shareholders $(189,030) $483,884 $1,524,230 $(9,709,269)
============ =========== ============ ============


Basic net (loss)
income applicable
to common
shareholders per
common share $(0.01) $0.02 $0.06 $(0.48)
------------ ----------- ------------ ------------

Basic weighted
average common
shares outstanding 24,291,008 21,270,416 24,157,233 20,394,380
------------ ----------- ------------ ------------

Diluted net (loss)
income applicable
to common
shareholders per
common share $(0.01) $0.02 $0.06 $(0.48)
------------ ----------- ------------ ------------

Diluted weighted
average common
shares outstanding 24,291,008 23,678,669 25,458,621 20,394,380
------------ ----------- ------------ ------------

AUDIBLE INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, December 31,
Assets 2005 2004
------------- -------------
(unaudited)

Current Assets:
Cash and cash equivalents $13,570,880 $13,296,006
Short-term investments 56,136,629 48,386,399
Interest receivable on short-term
investments 242,335 76,151
Accounts receivable, net of allowance 1,424,408 786,987
Accounts receivable, related party 176,334 87,625
Royalty advances 541,421 140,634
Prepaid expenses and other current assets 733,507 665,984
Inventory 98,705 394,109
------------- -------------
Total current assets 72,924,219 63,833,895

Property and equipment, net 3,116,455 919,090
Other assets 131,803 20,805

------------- -------------
Total Assets $76,172,477 $64,773,790
============= =============

Liabilities and Stockholders' Equity

Current Liabilities:
Accounts payable $1,734,116 $850,906
Accrued expenses 9,470,509 3,628,556
Royalty obligations, current 331,652 150,800
Accrued compensation 958,977 448,156
Capital lease obligations - 120,795
Deferred revenue, current 3,218,599 2,445,868
------------- -------------
Total current liabilities 15,713,853 7,645,081

Royalty obligations, non current 250,578 38,000
Deferred revenue, non current 24,995 -

Commitments and contingencies

Stockholders' Equity:

Common stock 243,023 241,697
Additional paid-in capital 192,317,575 187,248,675
Deferred compensation (3,858,676) (154,173)
Accumulated other comprehensive income 17,649 -
Treasury stock at cost - (184,740)
Accumulated deficit (128,536,520) (130,060,750)
------------- -------------
Total Stockholders' Equity 60,183,051 57,090,709

------------- -------------
Total Liabilities and Stockholders' Equity $76,172,477 $64,773,790
------------- -------------

AUDIBLE INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended Nine months ended
September 30, September 30,
------------------------- --------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
Cash flows from
operating
activities:
Net (loss)
income $(189,030) $483,884 $1,524,230 $778,241
Adjustments to
reconcile net
(loss) income to
net cash provided
by operating
activities:
Depreciation and
amortization 299,564 121,857 676,755 377,284
Services
rendered for
common stock
and warrants - - - 432,327
Non-cash
compensation
charge 363,027 14,913 535,460 70,339
Deferred cash
compensation - - - (58,750)
Accretion of
discounts on
short-term
investments (305,634) - (932,053) -
Income tax
effect from
exercise of
stock options (50,316) - 96,985 -
Changes in
assets and
liabilities:
Interest
receivable on
short-term
investments (89,949) - (166,184) -
Accounts
receivable,
net 52,365 (87,246) (637,690) (284,589)

Accounts
receivable,
from related
parties (130,405) (65,762) (88,709) (65,762)
Royalty
advances (145,137) (14,700) (400,787) 43,838

Prepaid
expenses and
other current
assets 196,483 295,916 (67,739) (41,704)
Inventory 50,918 52,094 294,303 (50,902)
Other assets (103,243) - (113,846) 397,719
Accounts
payable 258,994 224,055 885,706 187,630
Accrued
expenses 3,083,133 88,894 5,845,733 704,429
Royalty
obligations 163,600 (19,000) 393,430 (146,500)
Accrued
compensation 238,233 28,714 513,334 60,674
Deferred
revenue 285,528 114,411 798,351 312,729

------------ ------------ ------------ ------------

Net cash
provided by
operating
activities 3,978,131 1,238,030 9,157,279 2,717,003
------------ ------------ ------------ ------------


Cash flows from
investing
activities:
Purchases of
property and
equipment (389,485) (87,269) (2,106,440) (325,080)
Capitalized
software
development
costs (768,352) - (768,352) -
Purchases of
short-term
investments (29,069,562) - (61,718,177) -
Proceeds from
maturity of
short-term
investments 28,900,000 - 54,900,000 -
------------ ------------ ------------ ------------
Net cash used
in investing
activities (1,327,399) (87,269) (9,692,969) (325,080)
------------ ------------ ------------ ------------


Cash flows from
financing
activities:
Proceeds from
exercise of
common stock
options 33,451 34,529 623,518 362,962
Proceeds from
exercise of
common stock
warrants - - 294,500 27,500
Principal
payments made
on capital
lease
obligations - (149,874) (120,795) (468,439)
Payments
received on
notes due from
stockholders
for common
stock - - - 58,750
------------ ------------ ------------ ------------
Net cash
provided by
(used in)
financing
activities 33,451 (115,345) 797,223 (19,227)
------------ ------------ ------------ ------------

Effect of exchange
rate changes on
cash and cash
equivalents (773) - 13,341 -
------------ ------------ ------------ ------------


Increase in
cash and cash
equivalents 2,683,410 1,035,416 274,874 2,372,696

Cash and cash
equivalents at
beginning of
period 10,887,470 10,412,267 13,296,006 9,074,987
------------ ------------ ------------ ------------
Cash and cash
equivalents at
end of period $13,570,880 $11,447,683 $13,570,880 $11,447,683
============ ============ ============ ============


Non-GAAP Free Cash
Flow
reconciliation:
Net cash
provided by
operating
activities $3,978,131 $1,238,030 $9,157,279 $2,717,003
Purchases of
property and
equipment and
capital lease
payments (389,485) (237,143) (2,227,235) (556,376)
Capitalized
software
development
costs (768,352) - (768,352) -

------------ ------------ ------------ ------------
Non-GAAP Free Cash
Flow $2,820,294 $1,000,887 $6,161,692 $2,160,627
------------ ------------ ------------ ------------