Sandvine Reports Q2 2008 Revenue Of $11.1 Million And Diluted Loss Per Share Of $0.034

Waterloo, Canada; July 8, 2008 – Sandvine Corporation, (TSX:SVC; AIM:SAND) a leading provider of intelligent broadband network solutions for DSL, cable, FTTx, fixed wireless and mobile operators, today reported second quarter revenue of $11.1 million. Net loss was $4.6 million, or $0.034 per diluted share, which includes $1.2 million attributable to non-cash, acquisition-related expenses and stock-based compensation.

Sandvine won 12 new customers in the second quarter – matching a record for the Company.

Dave Caputo, Sandvine’s President and Chief Executive Officer, said, “This was a positive quarter for Sandvine in many respects. It was our best quarter in terms of revenue from the DSL market, and for the first time one of Sandvine’s major global reseller partners contributed over 10 percent of total revenue. Also, the EMEA region had its strongest revenue quarter ever.”

However, delays in certain opportunities impacted the results for the quarter and the Company’s ability to rely upon the material assumptions underlying its 2008 annual revenue guidance of $80 to $85 million, introduced March 6th. Most notably, given the time remaining in the current fiscal year, Sandvine no longer believes that it can rely upon the assumptions that it would earn at least $40 million in revenue from existing customers and $40 million in revenue from new customers. Consequently, the Company has withdrawn its annual revenue guidance.

The timing of customer decisions has become increasingly difficult to forecast due to a variety of factors, including the effect of the network neutrality debate on Sandvine’s North American installed base, the reduced predictability associated with expansion into new markets, such as Sandvine’s entrance into the Tier-one DSL and wireless markets, and the increasing number of opportunities being pursued through the indirect sales channel.

Caputo added, “While we haven’t lost any meaningful business and we believe that the delayed opportunities are still available to be won, the decision dates have proven to be unpredictable and may not fall within our fiscal year. As a result, we think it is prudent to withdraw guidance at this time.”

To download the complete results in PDF format (~57kb) please click the link below:
[download release]