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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

For the fiscal year ended January 31, 2005

or

For the transition period from             to             

Commission file number 0-21342

WIND RIVER SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

500 Wind River Way, Alameda, California 94501

(Address of principal executive offices, including zip code)

(510) 748-4100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $.001 per share

(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).    Yes  x    No  ¨

The aggregate market value of the Registrant’s common stock held by non-affiliates of the Registrant, computed by reference to the closing price on the NASDAQ National Market on July 31, 2004, the last business day of the Registrant’s most recently completed second fiscal quarter, was approximately $709,933,246. For purposes of this disclosure, shares of common stock held by persons who hold more than 5% of the outstanding shares of common stock and shares held by officers and directors of the registrant have been excluded because such persons may be deemed to be affiliates. The determination of affiliate status is not necessarily a conclusive determination for other purposes.

As of April 11, 2005, there were 83,921,239 shares of the Registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information called for by Part III of this Form 10-K is incorporated by reference to the definitive proxy statement for the Registrant’s 2005 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission not later than 120 days after January 31, 2005.

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WIND RIVER SYSTEMS, INC.

ANNUAL REPORT ON FORM 10-K

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Unless stated otherwise, references in this report to “Wind River,” “we,” “our,” “us” or “the Company” refer to Wind River Systems, Inc., a Delaware corporation, and its consolidated subsidiaries.

Wind River, VxWorks, Tornado and Wind are registered trademarks of Wind River Systems, Inc., and Wind River Systems is the trademark of Wind River Systems, Inc. All other names mentioned are trademarks, registered trademarks or service marks of their respective companies or organizations.

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this Annual Report on Form 10-K, the words “could,” “may,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan” and similar expressions as they relate to our management or to Wind River are intended to identify these forward-looking statements. These forward-looking statements address our expected business, results of operations, future financial position, business strategy, including our adoption of Linux, and our shift to an enterprise licensing model, our ability to increase our revenues, our financing plans and capital requirements, forecasted trends relating to our services or the markets in which we operate and similar matters and include statements based on current expectations, estimates, forecasts and projections about the economies and markets in which we operate and our beliefs and assumptions regarding these economies and markets. This information and such statements are subject to important risks, uncertainties and assumptions, which are difficult to predict. The results or events predicted in these statements may differ materially from actual results or events. Factors that could cause or contribute to such differences include, but are not limited to, a decline in the rate of adoption of our enterprise license model, the impact of timing of our reported revenues based on our enterprise license model, adoption of our open source strategy, accounting changes regarding option expensing, demand for our customers’ products, competitive products and pricing, potential slow downs in customer sales, intellectual property disputes, litigation and other factors discussed under the caption “Factors That May Affect Future Results” under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

These forward-looking statements speak only as of the date this Annual Report on Form 10-K was filed and of information currently and actually known. We do not intend to update these forward-looking statements to reflect events or circumstances that occur after the filing of this Annual Report on Form 10-K or to reflect the occurrence or effect of anticipated events, except as required by law.

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PART I

Background

Technology is transforming the way people live. Intelligent connected devices are becoming pervasive in our daily lives, and the functionality of these devices is expanding rapidly. This new functionality is forcing a significant increase in the complexity of software and development tools necessary to develop and run these devices. Device manufacturers today are faced with the challenge of managing this increasing software complexity while controlling costs and delivering relevant products to market on time. The need to optimize the way device software is developed and run increasingly is driving manufacturers to choose between buying and building the software that runs their products.

Device Software Optimization

Wind River is a global leader in Device Software Optimization (DSO). Our software is used to develop and run devices better, faster, at lower cost and more reliably. Our software and development tools are used to optimize the functionality of devices as diverse as digital imaging products, automobile braking systems, Internet routers, avionics control panels and factory automation equipment. Wind River offers customers DSO solutions to enhance product performance, standardize designs across projects and throughout the enterprise, reduce research and development costs, and shorten product development cycles.

We simplify our customers’ process of programming for these devices by providing integrated software development and runtime platforms targeted to specific markets, as well as off-the-shelf device software, programming tools and hardware. To date, Wind River Platforms integrate our proprietary operating systems software with tools and middleware to meet the requirements of specific industries. Our off-the-shelf software includes operating systems and middleware applications, such as networking and security protocols that offer additional capabilities beyond those in the operating systems. Our software programming tools help customers design, develop, integrate and test their own applications for these devices. We also offer a range of hardware reference designs that customers can incorporate into their products or use as a development environment.

To complement our broad range of software products and hardware reference designs, our professional services team provides comprehensive design engineering services and technical support. We also provide training and worldwide maintenance and support for our products.

Wind River was incorporated in California in February 1983 and reincorporated in Delaware in April 1993. Our principal executive offices are located at 500 Wind River Way, Alameda, California 94501, and the telephone number at that location is (510) 748-4100. Our Internet website is http://www.windriver.com.

Device Software Systems

Device software systems are incorporated into a larger device and are used to control, monitor or assist the operation of that device. As a result, device software systems are designed to provide an immediate, predictable response to an unpredictable sequence of external events. To succeed in today’s increasingly competitive environment, manufacturers using device software systems must bring complex applications for new products to market rapidly and economically. Developing device software applications has evolved from a relatively modest programming task to a complex engineering effort. As more powerful microprocessors have become available and have decreased in price, these device software systems are being used in a wider range of applications and digital appliances and are facilitating the development of entirely new classes of products. Consequently, software with a higher degree of sophistication is required to develop these more complex applications, often including an integrated platform that provides developers many more features, higher performance and greater productivity than were necessary or feasible for programming prior generations of microprocessors.

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Products and Services

Our products and services help customers create complex device software applications more quickly, more economically, and with less risk than creating such applications using internally developed or less well-integrated software, systems and tools. Our product family is comprised of development platforms for device software, development suites and individual tools, device software components, hardware and professional services.

Our value proposition is to offer integrated, end-to-end, enterprise-wide device software development solutions, based on open standards and supported worldwide by a trusted vendor—that is, to offer customers a viable “buy” option.

Wind River Platforms

The cornerstone of our product offering is our Wind River Platforms, which we typically license using an enterprise license model. Wind River Platforms bundle an integrated development suite, one or more operating systems and industry-specific middleware consisting of various protocols and interfaces into market specific platforms. With the enterprise license model, we license these market specific platforms under subscription-based development licenses. In the majority of cases, these subscription licenses also include downstream production rights under which customers pay an aggregated per unit fee for the right to produce their products incorporating our intellectual property. (See “—Licensing Models” below for more information about the enterprise license model.)

Our Wind River Platforms are comprised of:

Our Wind River Platforms are:

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Integrated Development Suite

Wind River Workbench is our end-to-end integrated development suite. It combines a common look and feel with development tools across environments, operating systems, cores, hosts and programming languages. Based on the Eclipse 3.0 framework, Workbench enables ease of integration with hundreds of third-party plug-ins. It allows companies to standardize development tools and processes across projects and teams, optimizing device software development, enhancing test capabilities and significantly shortening the time-to-market.

Off-the-Shelf Software, Development Tools and Hardware

Our Workbench development suite products may be licensed individually, without purchase of a Wind River Platform. We also provide a line of stand-alone development tools that customers can use with their own proprietary systems or with other third-party operating systems.

We offer optional extensions and middleware for our operating systems, which provide additional capabilities to developers, such as networking, connectivity, security protocols and device management. Our middleware products act as an interface between the operating system software and application-specific software. Customers may license and incorporate these extensions and middleware into the underlying operating system to provide features required for their specific applications. As applications become more complex, especially for Web-enabled products, prepackaged middleware solutions such as those we offer have become more widely used to simplify development.

Our product family also includes a range of hardware reference designs and hardware bring-up tools that help our customers design and implement software solutions. Through the use of these hardware products, customers can incorporate portions of the reference design into their products or use the entire design as a development platform before custom boards are available. This allows software programming to be tested for operability and functionality, and to be corrected for errors early in the design cycle, thereby advancing overall product development, improving product quality and accelerating time-to-market.

Open Source Strategy

An important part of our strategy is to add open source products and support to our device software optimization offerings. This strategy has two elements. First, our integrated development suite, Wind River

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Workbench, incorporates Eclipse technology, an open source technology tools framework. Allowing developers access to hundreds of open source, proprietary and third-party tools within a single, robust development environment, Workbench lets us offer our customers the best tools available and frees us to invest our resources in developing new technologies, not developing and maintaining proprietary alternatives to existing products.

The second part of our strategy is to offer a new suite of products and services that support the Linux operating system. We intend to offer additional development tools that can be used with the Linux operating system, as well as with our proprietary system, VxWorks. We also intend to expand our professional services to provide support to customers building devices based on Linux, introducing new platform products which include Linux reference file systems and entering into partnerships with other commercial Linux providers. Pursuant to this strategy, we joined the Open Source Development Labs (OSDL), a Linux consortium, the Consumer Electronics Linux Forum (CELF), an industry group focused on the advancement of Linux as a platform for consumer electronic devices, as well as the Eclipse Consortium. (See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors That May Affect Our Future Results or the Market Price of Our Stock—We have adopted an open source strategy that may not be successful or may expose us to additional risks” for a distribution of some of the risks related to this strategy.)

Wind River is a Strategic Developer Member of Eclipse, an open source consortium supporting the Eclipse technology. Additionally, we released an implementation of TIPC, a protocol that facilitates communication between devices running different operating systems. Finally, we are committed to working closely with industry partners including IBM and Intel to encourage broad adoption of industry standards in the DSO space.

Professional Services

To complement our broad range of software and hardware products, we provide comprehensive design services and technical support. These services help customers complete a product specification, design critical drivers, ports or interfaces, and/or provide a complete design for the customer’s product or application. These design services are offered on either a time-and-materials or fixed-price basis and can encompass a broad range of services, including fully project-managed custom hardware development, software development and product integration. We offer training through partners who provide a series of formal technical courses designed to teach developers the basics of device software development and how to use our tools, operating systems and middleware effectively. We also provide worldwide maintenance and support for our products.

Licensing Models

We license our software using two primary licensing models, subscription-based enterprise licensing and project-based perpetual licensing. Our Wind River Platforms and Workbench Integrated Development Suite are primarily licensed under enterprise licensing.

Our subscription-based enterprise license model was first introduced in November 2002. This model includes subscription-based development licenses that are typically one year in duration, although some licenses extend to periods greater than one year. Subscription enterprise licenses eliminate the more traditional “project” and “site” restrictions on the use of our products. At the end of the subscription period, the customer’s right to develop using Wind River Platforms or tools expires unless renewed. Most enterprise licenses (i) have an initial duration of one year, with annual renewals, (ii) include payment terms for the full cost of the annual subscription within 30-60 days after entering into the enterprise license agreement, (iii) include production license reporting once a customer makes a commercial release of a device that incorporates our products, and (iv) may include a number of service credits for field engineering support. During fiscal 2005, certain customers have entered into multi-year strategic agreements with us. These agreements have generally included payment terms for the full cost of the multi-year subscription within 30-90 days after entering into the enterprise licensing agreement.

In February 2004, we introduced a variation on this model that includes a higher priced per-seat subscription without a separate per-unit production license fee, allowing our customers to choose between the “shared

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success” model that includes production license fees or a pure “per-seat” subscription model without a separate production license fee. To date, the majority of subscription licenses continue to include per-unit production licenses fees, which aggregate volumes across the enterprise to create incentives for broader adoption. However, we believe that offering certain variations of our enterprise licensing models allow our customers to have greater flexibility in meeting their business needs.

We also license our software under project-based perpetual licenses. Under this model, our customers pay an up-front, development license fee together with an annual maintenance fee that is based on a fixed percentage of the total licensing fees. For device software products, the customer typically also pays a per-unit, per-project production-license fee based on the number of copies of our operating system software that is included in each final manufactured device. The terms of the perpetual license for our software restrict the customer’s use to a specific project, such as a line of printers or digital camera and, as a result, any software licenses or prepaid production license fees can generally only be used on that specific project.

We anticipate that we will continue using both our enterprise licensing and perpetual licensing models. However, the proportion of our business sold under the enterprise license model which is subscription-based is increasing and we expect that this trend will continue. We believe that the enterprise licensing model allows us to:

Under our perpetual license model, we sell our products at the specific project level and are dealing primarily with the engineers leading and making decisions for individual projects. The strategy for our Wind River Platform products is to seek enterprise wide adoption. As a result, the customer’s decision to adopt our products under the enterprise licensing model is now more strategic; leading to longer sales lead times and ultimately more complex and time consuming negotiations. Our success is therefore dependent upon our ability to first educate our current and potential customers of the value associated with our Wind River Platform products and services and, secondly, our ability to negotiate and close such transactions with these customers on terms which are mutually agreeable.

Due to the fact that a significant portion of our business is sold under the enterprise licensing model, our reported revenue in a quarter does not necessarily reflect the entire level of our business activity. Under the enterprise license model, revenue is recognized ratably over the subscription period. By contrast, under applicable accounting rules, a perpetual license requires the majority of license revenue to be recognized in the quarter in which the products are delivered and a much smaller amount relating to the fair value of maintenance being deferred and recognized subsequently over the maintenance period. Therefore, an order for an enterprise license will result in lower current quarter revenue than an equal-sized order for a perpetual license, but will result in a faster growth in deferred revenue. We expect customers to continue to transition from perpetual licensing to the enterprise licensing in the coming fiscal year. Depending on the rate at which customers transition from our perpetual model to our enterprise license model, our reported revenue may continue to be impacted in the short-term.

Strategic Alliances

We believe that having many strategic relationships with semiconductor manufacturers, circuit board manufacturers, system manufacturers, other software companies and our customers is important to our future success in the DSO marketplace. These relationships help us penetrate our market segments, drive innovation and

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standards across the industry and better serve our customers’ overall needs. In addition, we offer certain corporate programs, including the Wind River Partner Program, which are designed to support the development of global alliances and foster a community of third-party partners by making it easy for these companies to access our technology, integrate value-added products and jointly market these solutions with us.

We have strategic relationships with many of the major semiconductor and system manufacturers, including ARM Holdings plc, Broadcom Corporation, Freescale Semiconductor, Inc., Hitachi, Inc., IBM Corporation, Intel Corporation, MIPS Technologies, Inc., NEC Corporation, Philips Electronics N.V., Texas Instruments Incorporated, Toshiba Corporation, Radisys Corporation and Xilinx, Inc. We have ported our technologies to their semiconductors and circuit board level products, allowing us to leverage their sales channels to give our products broader market exposure. Our gross research and development expenses were offset by $1.2 million, $2.8 million and $3.6 million in fiscal years 2005, 2004 and 2003, respectively, in funding from programs with these customers. In addition to our strategic relationships with semiconductor companies, we have entered into joint engineering programs with other key customers. Our gross research and development expenses in fiscal years 2005, 2004 and 2003 were offset by $2.6 million, $669,000 and $911,000, respectively, in funding from these programs.

We also have developed an ecosystem of smaller software companies that integrate with our platform products to provide additional value-added capabilities. This includes companies who provide additional development tools which integrate and plug-in to our Tornado and Workbench development suites, along with companies that provide complementary protocols, middleware and other technology that integrate with our VxWorks and Linux operating systems. From time to time we may elect to re-sell or recommend products from these companies through our worldwide sales channel. Occasionally, this may lead us to acquire these products or the company itself. A recent example is our acquisition of certain assets of Real-Time Innovations. For many years Wind River sold development tools from Real-Time Innovations through the Wind River worldwide sales channel. In the fourth quarter of fiscal year 2005, we acquired the ScopeTools division of Real-Time Innovations, a move that, among other items, enables us to optimize the integration of these tools with our Workbench development suite.

In February 2004 we announced a strategic relationship with Red Hat, Inc., a leading provider of open source Linux platforms. Today, as a result of this alliance, we now support Red Hat Enterprise Linux (RHEL) as our preferred Linux development host with our Wind River Workbench and development tools. We continue to work with Red Hat to promote standardization and interoperability across the DSO and Enterprise marketplaces.

Customers

Our products have been deployed by a broad range of organizations, including companies in the following industries: networking (both data and voice), consumer electronics, aerospace and defense, industrial and automotive. Our customers include end-users, distributors, original equipment manufacturers, system integrators and value-added resellers.

Our top ten customers by revenue for fiscal year 2005 were: Alcatel, Lockheed Martin Corporation, Motorola, Inc., Nortel Networks Corporation, Northrop Grumman Corporation, Philips Electronics N.V., Raytheon Company, Roper Industries, Inc., Siemens AG, and The Walt Disney Company. No single customer accounted for more than 10% of our revenue in any of the fiscal years ended January 31, 2005, 2004 or 2003.

Marketing, Sales and Distribution

We market our products and services in North America, Europe (including the Middle East and Africa, “EMEA”), Japan and the Asia Pacific region, primarily through our own direct sales organization, which consists of salespersons, field application engineers and support staff. Our direct sales force presents Wind River and our products for licensing to prospective customers, while application engineers provide technical pre-sale and post-

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sale support. As of January 31, 2005, we had 150 sales employees located throughout North America, 100 sales employees throughout EMEA, 48 sales employees in Japan and 32 sales employees in the Asia Pacific region. As of January 31, 2005, we had 62 employees in marketing, 89 employees in professional services and 87 employees in customer support.

Revenues from sales to customers outside of North America represented $106.8 million, $89.6 million and $103.6 million, or approximately 45%, 44% and 42% of total revenue, in fiscal years 2005, 2004 and 2003, respectively. (See Note 15, “Segment and Geographic Information” in the Notes to Consolidated Financial Statements for further information about our international sales. See also Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors That May Affect Future Results—Our significant international business activities subject us to increased costs and economic risks” for further discussion of the risks associated with our international operations generally.)

Prices for international customers for our Wind River Platforms are generally quoted in United States Dollars, Euros, United Kingdom Sterling or Japanese Yen and are set globally. Prices for international customers for our perpetual licenses are generally quoted in local currencies or United States Dollars and are based on the United States price list adjusted to reflect the higher cost of doing business outside the United States. International customers are normally invoiced in the currency in which they are quoted. (See Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” for a discussion of the foreign currency fluctuation risks we face.)

We have experienced, and expect to continue to experience, seasonality resulting primarily from customer buying patterns and product development cycles. We have generally experienced the strongest demand for our products in the fourth quarter of each fiscal year and the weakest demand in the first quarter of each fiscal year. The continued transition to our enterprise license model may also impact the manner in which seasonality affects quarterly trends in our revenue. (See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for more information about the impact of our transition to an enterprise license model. See also, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors That May Affect Our Future Results or the Market Price of Our Stock—Numerous factors may cause our total revenues and operating results to fluctuate significantly from period to period. These fluctuations increase the difficulty of financial planning and forecasting and may result in decreases in our available cash and declines in the market price of our stock.”)

Competition

The DSO industry is highly competitive and fragmented. Wind River’s primary competition comes from internal research and development departments of companies that develop device systems in-house. In many cases, companies that develop device systems in-house have already made significant investments of time and effort in developing their own internal systems. Historically, the process of shifting to a commercial standard has been viewed as difficult, and was a decision typically made at the project level. More recently, a number of in-house departments have begun to use open-source software, such as the Linux operating system, as the first strategic step toward standardization. Today, the increasing software complexity associated with devices is forcing a strategic shift as many companies are making build versus buy decisions to optimize their own device software development. The buy option, we believe, becomes increasingly attractive.

We also compete with commercial Linux distributors such as MontaVista Software, Inc., LynuxWorks.com, TimeSys Corporation, Metrowerks (a subsidiary of Freescale Seminconductor, Inc.), and others, and Enterprise Linux vendors such as SuSe Linux, Red Hat and others. As there continues to be increased adoption of Linux in markets such as telecommunications and data communications, we believe there will be more standardization of the development cycle based on open source technologies, an initiative that is being driven by the OSDL Corporation specification and standardization for Carrier Grade Linux. This offers equipment manufacturers high availability of open system architecture for core and edge applications. However, our competitive position could

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be affected as other embedded software solution vendors move to the middle ground and find new ways to be more open, leveling the playing field with Linux, availability of source code, ability to create and maintain IP ownership, and the ability to compete on price with reduced upfront and production licensing options.

We also compete with independent software vendors, including Microsoft Corporation, Mentor Graphics, ENEA OSE Systems AB, LynxWorks, Green Hills Software, Inc., and QNX Software Systems, Ltd. (recently acquired by Harman International), as well as a number of other vendors that address one or more segments of the device system design process. Some of the companies that develop device systems in-house and some of these independent software vendors, such as Microsoft Corporation, may have significantly greater financial, technical, marketing, sales and other resources and significantly greater name recognition than we do.

We also believe that critical competitive factors in the industry are based on the way customers and potential customers manage their process of software development. Key drivers to software development include managing limited internal resources, controlling costs, minimizing development time and limiting risks. Therefore, reliability, performance, price, product availability, architecture support and customer support may also represent competitive forces affecting our industry. We compete favorably with respect to each of these factors. (See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors That May Affect Our Future Results or the Market Price of Our Stock—We face intense competition in the DSO industry, which could decrease demand for our products or cause us to reduce our prices,” for a further description of factors that may impact our competitive position.)

Product Development and Engineering

We believe that our success will continue to depend primarily on our ability to maintain and enhance our current product line, develop new products, maintain technological competitiveness and meet an ever-expanding range of customer and market requirements. As of January 31, 2005, our product development and engineering group included 382 full-time employees.

During fiscal 2005, 2004 and 2003, product development and engineering expenses were $59.2 million, $56.7 million and $74.0 million, respectively, excluding capitalized software development costs. During the fiscal years ended January 31, 2005, 2004 and 2003, we incurred product and development and engineering expenses that qualified for capitalization of $1.5 million, none and $969,000, respectively. (See “—Strategic Alliances” above for information on research and development funded by third parties.)

Proprietary Rights

Our success is heavily dependent upon our proprietary technology. To protect our proprietary rights, we rely on a combination of patent, copyright, trade secret and trademark laws. As a part of our regular business processes, we generally enter into nondisclosure agreements with employees, consultants, distributors, customers and corporate partners, as appropriate, and thereby limit access to and distribution of our software, documentation and other proprietary information. Furthermore, our licensing agreements provide for protection of our intellectual property both in terms of source code handling and underlying intellectual property ownership of modifications to the Wind River code. (See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors That May Affect Our Future Results or the Market Price of Our Stock—The rights we rely upon to protect the intellectual property underlying our products may not be adequate, which could enable third parties to use our technology and reduce our ability to compete.”)

As we progress with our open source strategy, we may increasingly rely on third party open source products that have been developed and made available for licensing under open source license terms. Certain open source licenses, such as the GNU General Public License that applies to Linux, generally permit anyone to copy, modify and distribute the software, subject only to the restriction that any resulting or derivative work that is made available to the public be licensed under those same terms instead of under our standard license terms. Therefore,

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as we incorporate our open source strategy into our product development, although we will retain the copyrights to the code that we develop ourselves, our most valuable intellectual property with respect to derivative works from these licenses will be our collection of trademarks. (See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Factors That May Affect Our Future Results or the Market Price of Our Stock—We have adopted an open source strategy that may not be successful or may expose us to additional risks.”)

Wind River is a registered trademark in the United States and other countries worldwide. We have used, registered, and/or applied to register specific trademarks and service marks to distinguish many of our products, technologies and services from those of our competitors in the U.S. and in foreign countries and jurisdictions. We enforce our trademark, service mark and trade name rights in the U.S. and abroad.

We have filed and obtained a number of patents and patent applications in the United States and abroad that relate to various aspects of our products and technology. As of January 31, 2005, we held 23 issued patents in the United States, none of which have expired. The expiration dates of these patents range from 2015 to 2021. While we believe that patent protection of our products is important, any patents obtained may not provide substantial protection or be of commercial benefit to us. It is also possible that their validity will be challenged.

Manufacturing

Our manufacturing operations consist of assembling, packaging and shipping the software products and documentation needed to fulfill each order. Outside vendors provide tape and CD duplication, printing of documentation and manufacturing of packaging materials. We also manufacture and assemble our hardware development tools at our facility in Canton, Massachusetts and at certain subcontractor facilities.

Employees

As of January 31, 2005, we had 1,112 employees, including 392 in sales and marketing, 184 in professional services and support activities, 382 in product development and engineering and 154 in management, operations, finance and administration. Of these employees, 801 were located in North America and 311 were located outside of North America. None of our employees in North America is represented by a labor union or is subject to a collective bargaining agreement. We have never experienced a work stoppage.

Our employees are vital to our success, and our key management, engineering, sales and other employees are difficult to replace. We generally do not have employment contracts with our key employees or maintain key person life insurance on any of our employees. If we are unable to attract, assimilate, retain or motivate highly qualified technical and sales employees in the future through competitive compensation and employment policies, our ability to develop and introduce competitive new products in a timely manner may suffer.

Executive Officers of the Registrant

The names of our executive officers, their ages as of April 11, 2005 and their positions are shown below:

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Mr. Klein has been a director of Wind River since July 2003 and in January 2004 became the Chairman of the Board, President and Chief Executive Officer of Wind River. Prior to joining Wind River, Mr. Klein was with Mercury Interactive Corporation, a software company focused on business technology optimization, where he served as Chief Operating Officer from January 2000 until December 2003. He also served at Mercury Interactive as a director from July 2000 until December 2003 and held management positions there from 1992 through 1999 including President of North American Operations and Vice President of North American Sales. Mr. Klein serves on the Board of Directors of Tumbleweed Communications Corp., a provider of messaging solutions and is a director on the board of a privately-held company. Mr. Klein holds a B.S. degree in electrical engineering and biomedical engineering from the University of Southern California.

Mr. Zellner joined Wind River in September 2000 as Vice President of Finance, Chief Financial Officer and Secretary and currently serves as Senior Vice President of Finance and Administration, Chief Financial Officer and Secretary. From 1991 to 2000, Mr. Zellner was at Applied Materials, Inc., a semiconductor equipment manufacturer, where he last served as a Senior Director of Finance. Prior to joining Applied Materials, from 1979 to 1991, he served in various financial roles at Unisys Corporation, a computer systems and information management company. Mr. Zellner has completed the Stanford Executive Program at Stanford University Graduate School of Business and holds an M.B.A and a B.B.A. in accounting from Florida Atlantic University.

Mr. Bruggeman joined Wind River in February 2004 and currently serves as Vice President of Worldwide Marketing and Chief Marketing Officer. Prior to joining Wind River, Mr. Bruggeman was Vice President of Marketing at Mercury Interactive, a software company focused on business technology optimization, from May 2002 until January 2004. Prior to joining Mercury Interactive, Mr. Bruggeman was Executive Vice President at Alventive, Inc., a provider of web-based collaboration software, from February 1999 to May 2001 and Vice President of Marketing and Business Development at America On-Line, Inc., an internet service provider, from February 1997 to January 1999. Mr. Bruggeman earned a B.S. degree in Statistics and Computer Science from San Jose State University and a M.S. degree in Mathematics from the University of Connecticut.

Mr. Galvin joined Wind River in January 2004 as Vice President, Strategy and Corporate Development. Prior to joining Wind River, Mr. Galvin was Managing Director and Global Sector Coordinator for software and services research at JP Morgan Chase, an investment banking firm, from January 2001 to April 2003. Mr. Galvin began his career at Hambrecht & Quist in 1993, became a Managing Director in 1999, and remained at the firm through its merger with Chase Manhattan and then JP Morgan. Mr. Galvin earned a B.A. degree with honors in Comparative and Regional Studies (Latin America) from the University of California, Berkeley.

Mr. Morrison is Vice President of Engineering at Wind River and has previously held other management positions at Wind River including Vice President and General Manager of several different business units. Mr. Morrison joined Wind River as part of its acquisition of Integrated Systems, Inc. (ISI) in February 2000. Mr. Morrison spent fourteen years with ISI, in various positions where he last served as a Vice President and General Manager of the design automation solutions business unit from March 1999 through February 2000. Mr. Morrison earned his Bachelor of Applied Science degree in Engineering from the University of Toronto, as well as his masters degree at the Massachusetts Institute of Technology, specializing in control systems.

Mr. Wheaton joined Wind River in July 2003 as Vice President of Worldwide Sales and is currently Vice President of Worldwide Field Operations. Mr. Wheaton had previously served as Senior Vice President of Sales for Wind River from March 1992 to September 1998. From September 1998 until June 2003, Mr. Wheaton was a private investor. Before joining Wind River in 1992, Mr. Wheaton was employed at ShareBase Corporation, a relational database hardware and software company, first as Vice President of Domestic Sales and then as Vice President of Worldwide Marketing. From 1988 to 1989, he served as the western regional manager of Powersoft Corporation, a computer software company. Mr. Wheaton holds a B.S. degree in automotive engineering from Western Michigan University.

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Financial Information About Segments and Geographic Areas

For financial information about segments and geographic areas, see Note 15, “Segment and Geographic Information,” in Notes to Consolidated Financial Statements filed as part of this Annual Report.

Available Information

We file our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 with the SEC electronically. The public may read or copy any materials we file with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of that site is http://www.sec.gov.

You may obtain a free copy of our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and amendments to those reports on the day of filing with the SEC on or through our website at http://www.windriver.com or by contacting the Investor Relations Department at our corporate offices by calling (866) 296-5361. We are not incorporating by reference in this Annual Report on Form 10-K any information from our website.

We own our corporate headquarters in Alameda, California. The campus provides approximately 273,000 square feet of office space. We also lease a number of sales, services, customer training, manufacturing, and research and development offices in North America, EMEA, Japan and the Asia Pacific region. We recently sold our Sunnyvale, California facility. (See Note 4 “Certain Balance Sheet Components” in Notes to Consolidated Financial Statements for further information.)

From time to time, we are subject to legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of patents and other intellectual property rights. Management believes the outcome of our outstanding legal proceedings, claims and litigation will not have a material adverse effect on our business, results of operations, cash flows or financial condition. However, such matters involve complex questions of fact and law and could involve significant costs and the diversion of resources to defend. Additionally, the results of litigation are inherently uncertain, and an adverse outcome is at least reasonably possible.

On June 7, 2004, we filed a complaint against Green Hills Software, Inc. (Green Hills), a direct competitor, in the Superior Court of California, County of Alameda. The subsequently amended complaint requested in excess of $25,000 in damages due to breach by Green Hills of a cooperative marketing and technology agreement entered into between the parties in October 1992. On January 18, 2005, Green Hills filed a complaint against us in the United States District Court for the Central District of California alleging, among other things, that we violated antitrust and unfair competition laws by allegedly refusing to license our VxWorks product to Green Hills and refusing to market VxWorks separately from the integrated development environment (IDE) for VxWorks. Green Hills requested an award for damages and injunctive relief on these matters. No opinion has yet been issued following a hearing held on April 11, 2005 in response to Wind River’s motion to dismiss and Green Hills’ motion for preliminary injunction regarding trademark issues. These related lawsuits are still in the preliminary stages, and it is not possible for us to quantify the extent of potential liability to Green Hills, if any, resulting from the Green Hills lawsuit. We do not believe that the lawsuit brought by Green Hills against us has any merit and intend to defend the action vigorously.

Not applicable.

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PART II

Our common stock is traded on The NASDAQ National Market under the symbol WIND. As of April 11, 2005, there were approximately 708 stockholders of record of our common stock. The following table sets forth the low and high sales prices on the NASDAQ National Market for the quarters indicated:

We have not paid cash dividends on our common stock to date. Our loan facility with Wells Fargo Bank prohibits us from declaring or paying any dividend or distribution either in cash, stock or any other property on our common stock without the prior written consent of the lender. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Commitments” for more information on our loan facility. We presently intend to retain all of our earnings for use in our business and, therefore, do not anticipate paying dividends on our common stock within the foreseeable future.

Equity Compensation Plan Information

The following table sets forth information about our common stock that may be issued upon the exercise of options, warrants and rights under our existing equity compensation plans as of January 31, 2005. The table does not include information with respect to shares subject to outstanding options granted under equity compensation plans assumed by Wind River in connection with acquisitions of the companies that originally granted those options. Footnote (1) to the table sets forth the total number of shares of our common stock issuable upon the exercise of those assumed options as of January 31, 2005, and the weighted average exercise price of those options. No additional options may be granted under those assumed plans.

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The equity compensation plans not approved by security holders generally have the same features as those approved by security holders. For further details regarding Wind River’s equity compensation plans, see Note 12, “Stock-Based Compensation Plans” in Notes to Consolidated Financial Statements filed as part of this Annual Report.

The selected consolidated financial data presented below should be read in conjunction with the more detailed Consolidated Financial Statements presented in Item 8 of this Annual Report on Form 10-K.