Sonus Networks Reports 2012 First Quarter Results

Sonus Networks, Inc., a global leader in SIP communications, today announced results for the first quarter ending March 30, 2012 and provided its outlook for the second quarter ending Friday, June 29, 2012 and full year ending December 31, 2012.

The first quarter of fiscal 2012

Revenue for the first quarter of fiscal 2012 was $64.3 million, compared to $74.3 million in the fourth quarter of fiscal 2011 and $67.3 million in the first quarter of fiscal 2011. The GAAP net loss for the first quarter of fiscal 2012 was $6.4 million, or $0.02 per share, compared to GAAP net income of $3.7 million, or $0.01 per diluted share, in the fourth quarter of 2011 and a GAAP net loss of $12.4 million, or $0.04 per share, in the first quarter of fiscal 2011. The non-GAAP net loss for the first quarter of fiscal 2012 was $4.2 million, or $0.02 per share, compared to non-GAAP net income of $5.4 million, or $0.02 per diluted share, in the fourth quarter of fiscal 2011 and a non-GAAP net loss of $10.3 million, or $0.04 per share, in the first quarter of fiscal 2011.

The Company's outlook is based on current indications for its business, which may change while the current quarter. A reconciliation of the GAAP to non-GAAP outlook and a statement on the use of non-GAAP financial measures are included at the end of this press release.

A telephone playback of the call will be available following the conference call until May 10, 2012 and can be accessed by calling 800 633 8284 or +1 402 977 9140 for international callers. The reservation number for the replay is 21585089.

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Sonus Networks, Inc. is a leader in IP networking with proven expertise in delivering secure, reliable and scalable then-generation infrastructure and subscriber solutions. With clients in over 50 countries across the globe and over a decade of experience in transforming networks to IP, Sonus has enabled service providers and enterprises to capture and retain users and generate significant ROI. Sonus products include session border controllers, policy/routing servers, subscriber feature servers and media and signaling gateways. Sonus products are supported by a global services team with experience in design, deployment and maintenance of some of the world's largest and most complex IP networks. For more information, visit www.sonus.net.

Although the Company believes that its expectations are based on reasonable assumptions, readers are cautioned that these forward-looking statements are only predictions and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. Such forward-looking statements may relate to, among others, expected growth rates, future business prospects and market conditions. Such forward-looking statements do not constitute guarantees of future performance and are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those anticipated. These include, nevertheless are not limited to: the timing of the Company's recognition of earnings; the ability to recruit and retain key personnel; difficulties supporting our new strategic focus on channel sales; difficulties expanding the Company's customer base; difficulties leveraging market opportunities; difficulties providing solutions that meet the needs of clients; market acceptance of the Company's products and services; rapid technological and market change; the ability to protect intellectual property rights; the ability to maintain partner, reseller, distribution and vendor support and supply relationships; higher risks in international operations and markets; the ability to hire and retain employees; the impact of increased competition; currency fluctuations; litigation; changes in the market prices of the Company's common stock; actions taken by significant stockholders; failure or circumvention of the Company's controls and procedures and other risks and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission by the Company, including partly I, Item 1A "Risk Factors", Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Part II, Item 7A "Quantitative and Qualitative Disclosure about Market Risk" in the Company's most recent Annual Report on Form 10-K, and in some cases I, Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations", Part I, Item 3 "Quantitative and Qualitative Disclosures About Market Risk" and Part II, Item 1A "Risk Factors" in the Company's quarterly reports filed thereafter.

Registered trademark of Sonus Networks

Sonus is a registered trademark of Sonus Networks, Inc. All other company and product names may be trademarks of the respective companies with which they are associated.

SONUS NETWORKS, INC.Statement on the Use of Non-GAAP Financial Measures andReconciliation of Non-GAAP to GAAP Financial Measures(unaudited)

Number of different financial measures

We use a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business, making operating decisions, planning and forecasting future periods, and determining payments pursuant to this agreement compensation programs. We consider the use of these non-GAAP financial measures helpful in assessing the core performance of our continuing operations and liquidity, and when planning and forecasting future periods. We define continuing operations as the ongoing earnings and expenses of the business, excluding certain items. These excluded items for the periods presented are stock-based compensation expense and amortization of intangible assets. We do not include any income tax effect of non-GAAP adjustments as we were unable to recognize a tax benefit on domestic losses incurred in any of the periods presented; consequently, no adjustment to income taxes for non-GAAP items is required.

On January 15, 2010, we entered into an intellectual property asset purchase and license agreement with Winphoria, Inc. and Motorola, Inc. to purchase certain of Winphoria's software code and related patents and to license certain other intellectual property from Winphoria and Motorola. The purchase price included an initial payment of $2.0 million and future potential royalty payments dependent upon future sales of certain of our products that include the Winphoria research that was purchased or licensed. In connection with this transaction we recorded identifiable intangible assets which we have classified as developed innovation and that are being amortized on a straight-line basis over five years, the expected useful life of the innovation. The amortization expense for these identifiable intangible assets is charged to Research and development expense. We believe that excluding the non-cash amortization of intangible assets facilitates the comparison of our financial results to our historical operating results and to other companies in our industry, and provides meaningful information regarding our liquidity.