Meru Networks Reports Record Second Quarter 2010 Financial Results

Meru demonstrated an industry-first and unique "WLAN 500(TM)" solution, designed to optimize application delivery with the highest quality of service and end user experience in highly dense mobile and/or stationary wireless environments. In a 500 square foot enterprise space, Meru leveraged its single channel differentiation, channel layering, and Virtual Port(TM) capabilities and delivered a predictable, Wireless-Like-Wire experience for the simultaneous delivery of HD video, streaming multicast video, VoIP and data to 500 client devices, including iPads, iPhones, iPod Touches, RIM Blackberry, Nokia, laptops, netbooks, WiFi VoIP phones such as Cisco's 792x, Polycom/Spectralink, and Ascom handsets.

The leader in virtualized 802

Meru is the leader in virtualized 802.11n wireless solutions for the enterprise, delivering the growing need for predictability in demanding business critical production environments. Example second quarter wins and production deployments include:

Faxton St. Luke's Healthcare (Faxton) Utica, New York, replaced their legacy microcell WLAN with Meru Networks' virtualized WLAN solutions to manage the complexity of operating a rich suite of converged applications to improve patient care and reduce operating costs. Faxton powered a suite of key applications from McKesson, Eclipsys, Rauland, TeleTracking Technologies and Ascom simultaneously and interactively across their 1.3 million sq. ft. facility to optimize the performance of business-critical applications like bedside registration, RFID for hospital asset tracking, transport service response teletracking, surgery scheduling, nurse voice call and automated temperature medication monitoring.

Internationally-recognized technological

An internationally-recognized technological, graduate and undergraduate research university in Chicago, IL, replaced their legacy microcell wireless vendor with Meru's virtualized WLAN after a head-to-head bakeoff with several legacy microcell wireless providers. The school found their wired network inflexible and difficult to operate and began migrating to an All-Wireless environment two years ago. However, the legacy microcell architecture previously selected failed to support the density and performance demands of their tech-savvy students, who expected their smartphones, laptops and iPads to work seamlessly in their dorms, at the student union and as they roam across campus. The school received complaints of dropped calls and poor video stream performance. The majority of the student body is international students, typically congregating at the student union to stream IPTV TV news and shows from their home country on their laptops. With Meru, the university is now able to deliver pervasive and reliable wireless service to support a variety of mobile devices in highly dense areas.

Founded in 2002, Meru Networks, Inc., provides a virtualized wireless LAN solution that cost-effectively optimizes the enterprise network to deliver the performance, reliability, predictability and operational simplicity of a wired network, with the advantages of mobility. Meru's solution represents an innovative approach to wireless networking that utilizes virtualization technology to create an intelligent and self-monitoring wireless network, and enables enterprises to migrate their business-critical applications from wired networks to wireless networks, and become all-wireless enterprises. Meru is headquartered in Sunnyvale, CA, and has operations in the Americas, Europe, the Middle East and Asia Pacific. For more information, visit www.merunetworks.com.

This press release contains forward-looking statements and information. All statements other than statements of historical facts on this website, including statements regarding our future financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "believe," "may," "might," "objective," "estimate," "continue," "anticipate," "project," "intend," "will," "should," "could," "plan," "future," "expect," "predict," "potential," or the negative of these terms or other similar expressions. These forward-looking statements include but are not limited to our expectations regarding market demand for our products and services, our expectations regarding our business strategy, position, and future business and financial performance, and the growing need for predictability in demanding business environments. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial conditions, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, but not limited to, whether the market for our products and solutions continue to develop and grow, our limited operating history, our ability to compete effectively, our ability to increase market awareness of our brand and solutions and our ability to continue to utilize our technology and protect our intellectual property rights, and a number of other factors out of our control, that may cause our business, industry, strategy or actual results to differ materially from the forward-looking statements. The risks and uncertainties include those described in Meru Networks' documents filed with or furnished to the Securities and Exchange Commission.

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Meru reports non-GAAP net income (loss), which excludes stock-based compensation expense and adjustments to the fair value of the warrant liability. Meru believes that its non-GAAP net income (loss) provides useful information to management and investors regarding financial and business trends relating to its financial condition and results of operations. Meru also believes the non-GAAP measures provide useful supplemental information for investors to evaluate its operating results in the same manner as the research analysts that follow Meru, all of whom will present non-GAAP projections in their published reports. As such, the non-GAAP measures provided by Meru facilitate a more direct comparison of its performance with the financial projections published by the analysts as well as its competitors, many of whom report financial results on a non-GAAP basis. The economic substance behind its decision to use such non-GAAP measures is that such measures approximate its controllable operating performance more closely than the most directly comparable GAAP financial measures. For example, Meru's management has no control over certain variables that have a major influence in the determination of stock-based compensation such as the volatility of its stock price and changing interest rates. Meru believes that all of these excluded expenses and income do not accurately reflect the underlying performance of its continuing operations for the period in which they are incurred, even though these excluded items may be incurred and reflected in Meru's GAAP financial results.