– Revenues Reach Second Quarter Record of $24.7 Million – – GAAP Diluted EPS Is $0.16; Non-GAAP Diluted EPS Is $0.22 before FAS123R Effect –

TEL AVIV (July 24, 2007) –

RADVISION® (Nasdaq: RVSN) today announced that revenues for the second quarter of 2007 reached a record for the quarter of $24.7 million, a 12% increase from $22.0 million reported in the second quarter of 2006.
Operating income for the second quarter of 2007 was $1.7 million compared with $2.1 million in the second quarter of 2006. Excluding the effects of stock-based compensation expense related to the adoption of FAS123R in both periods, the Company had non-GAAP operating income of $3.1 million compared with $3.3 million in the same period of 2006.
Net income for the second quarter of 2007 was $3.6 million, or $0.16 per diluted share compared with $3.2 million or $0.14 per diluted share in the 2006 second quarter. Excluding the effect of stock-based compensation expense which amounted to $1.3 million or $0.06 per diluted in the 2007 second quarter and $1.2 million or $0.06 per diluted share in 2006 second quarter, non-GAAP net income for the second quarter of 2007 was $5.0 million or $0.22 per diluted share compared with $4.4 million or $0.20 per diluted share reported in the second quarter of 2006.
The Company had forecast that 2007 second quarter revenues would approximate $25.0 million and that net income would approximate $3.7 million or $0.16 per diluted share including stock-based compensation expense. Excluding the effect of stock-based compensation expense, the Company expected second quarter 2007 non-GAAP net income to be $5.1 million or $0.22 per diluted share.
Business unit revenues for the second quarter of 2007 consisted of $18.8 million in Networking Business Unit (NBU) sales, representing an increase of 17% from the second quarter of 2006, and $5.9 million in Technology Business Unit (TBU) sales, which were 1% below the second quarter of 2006. NBU and TBU revenues approximated the Company’s forecast of $19.0 million and $6.0 million, respectively.
For the first six months of 2007, revenues were $49.0 million, operating income was $3.6 million and net income was $7.2 million or $0.31 per diluted share. This compares with revenues of $42.1 million, operating income of $4.0 million and net income was $6.1 million or $0.27 per diluted share in the first six months of 2006. Excluding the effect of stock-based compensation expense (which amounted to $2.7 million or $0.12 per diluted in the first six months of 2007 and $2.2 million or $0.10 per diluted share for the first six months of 2006), non-GAAP operating income for the first six months of 2007 was $6.2 million and net income was $9.8 million or $0.43 per diluted share compared with non-GAAP operating income of $6.3 million and net income of $8.4 million or $0.37 per diluted share for the first six months of 2006.
The Company ended the second quarter of 2007 with approximately $131.9 million in cash and liquid investments, equivalent to $5.93 per basic share, a decrease of $23.9 million from March 31, 2007. The decrease reflects the use of $16.7 million for the repurchase of 814,511 Company shares, $2.4 million of capital expenditures and $7.0 million of cash flow used for operations (including a $4.0 million payment for the purchase of a patent portfolio) offset by proceeds of $2.2 million from the exercise of options.
Boaz Raviv, Chief Executive Officer, commented: “Our progress in the room conferencing market continues to drive our growth. Our revenues from room conferencing increased 19% from the second quarter of 2006, which included $2.7 of revenues from the DVSII project. Excluding the 2006 DVSII revenues, our room conferencing revenues grew 51% in the second quarter of 2007 over the comparable period in 2006. Our channel partner relationships led by Cisco are essential to our success. We also continue to focus on developing new solutions for the unified communications marketplace.
“We reached a significant milestone in that effort in the second quarter with the release and general availability of our SCOPIATM Desktop videoconferencing solution. SCOPIA Desktop, which is bundled with our SCOPIATM MCU, extends room conferencing-based systems to remote users who can fully participate in audio, video and data collaboration from their PCs without complex software installations, licensing fees or firewall transversal problems. Although SCOPIA Desktop was released late in the quarter, it has enjoyed early success – several universities purchased multiple SCOPIA platforms because of the SCOPIA Desktop functionality.
“Revenues from our Mobility and Service Provider business unit grew 24% in the second quarter. Approximately half of those revenues came from sales of 3G gateways. We released the latest generation our SCOPIATM 3G Gateway last month. The balance was derived from our SCOPIATM Interactive Video Platform, which is used by mobile operators and application service providers to rapidly develop and deploy new video services. We have developed iContactTM based on our IVP to provide a total video solution for contact centers.
“Our Technology Business Unit remains at the forefront of developing next generation technology. Sales and deal volume of our IMS (IP Multimedia Subsystem) products were at record levels in the second quarter. We offer the most comprehensive suite of IMS-compliant developer tools available.”
Mr. Raviv concluded: “We continued to make strong progress in the second quarter. Looking forward, we have important new product introductions scheduled for later in the year and in 2008. We believe our future prospects are very exciting.”
Guidance
The following statements are forward-looking, and actual results may differ materially.
The Company expects revenues for the third quarter of 2007 to be approximately $25.0 million and net income to approximate $3.7 million or $0.16 per diluted share. This includes stock-based compensation expense related to the adoption of FAS123R of $1.4 million or $0.06 per diluted share. Excluding this item, third quarter 2007 non-GAAP net income is expected to be $5.1 million or $0.23 per diluted share. That compares to third quarter 2006 revenues of $23.6 million and net income of $2.0 million or $0.09 per diluted share, which included a $1.9 million patent settlement reserve, equivalent to $0.09 per diluted share. It also included stock-based compensation expense related to the adoption of FAS123R of $1.2 million or $0.05 per diluted share. Excluding these items, net income for the third quarter of 2006 was $5.1 million or $0.23 per diluted share. (Full details are available on the Company’s web site at www.radvision.com.)
GAAP versus NON-GAAP Presentation
To supplement the consolidated financial statements presented in accordance with generally accepted accounting principles (“GAAP”), the Company uses non-GAAP measures of operating results, net income and earnings per share, which are adjusted from results based on GAAP to exclude the expenses recorded for stock compensation in accordance with SFAS 123(R). These non-GAAP financial measures are provided to enhance overall understanding of the current financial performance and prospects for the future. Specifically, the Company believes the non-GAAP results provide useful information to both management, and investors as these non-GAAP results exclude the expenses recorded for stock compensation in accordance with SFAS 123(R) that the Company believes are not indicative of the core operating results. Further, these non-GAAP results are one of the primary indicators management uses for assessing the Company’s performance, allocating resources and planning and forecasting future periods. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. These non-GAAP measures may be different than the non-GAAP measures used by other companies.
Second Quarter 2007 Earnings Conference Call/Webcast
RADVISION will hold a conference call to discuss its second quarter 2007 results and third quarter 2007 outlook, today, Tuesday, July 24, 2007 at 9:00 a.m. (Eastern). To access the conference call, please dial 1-800-857-6028 (International dialers may call +1-210-234-0004) by 8:45 a.m. (Eastern). The passcode “RADVISION” will be required to access the live conference call. A live webcast of the conference call also will be available on the Company’s website and archived on the site until the next quarter. Simply click on the following link or copy it onto your browser: www.radvision.com/Corporate/Investors/FinancialReports/. A replay of the call will be available beginning approximately one hour after the conclusion of the call through 5:00 p.m. (Eastern) on July 31st. To access the replay, please dial 1-800-925-0240 (International dialers may call +1-402-998-0856).
The PowerPoint presentation highlighting key financial metrics as well as the third quarter 2007 estimate also will be available in the Investor Relations section of the company’s website. The presentation will be available beginning at 8:00 a.m. (Eastern) on July 24th and will be archived on the website until the end of the third quarter.
About RADVISION
RADVISION (Nasdaq: RVSN) is the industry’s leading provider of market-proven products and technologies for unified visual communications over IP and 3G networks. With its complete set of standards-based video networking infrastructure and developer toolkits for voice, video, data and wireless communications, RADVISION is driving the unified communications evolution by combining the power of video, voice, data and wireless – for high definition videoconferencing systems, innovative converged mobile services, and highly scalable video-enabled desktop platforms on IP, 3G and emerging next-generation networks. For more information about RADVISION, visit www.radvision.com.
This press release contains forward-looking statements that are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, general business conditions in the industry, changes in demand for products, the timing and amount or cancellation of orders and other risks detailed from time to time in RADVISION’s filings with the Securities Exchange Commission, including its Annual Report on Form 20-F. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statement.

Source: RADVISION