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CALABASAS, CA -- (Marketwire) -- 04/19/12 -- Ixia (NASDAQ: XXIA) today reported its financial results for the first quarter ended March 31, 2012.

Total revenue for the 2012 first quarter was $85.6 million, compared with $78.5 million reported for the 2011 first quarter and $83.7 million reported for the 2011 fourth quarter.

On a GAAP basis, the company recorded net income for the 2012 first quarter of $4.4 million, or $0.06 per diluted share, compared with net income of $7.1 million, or $0.10 per diluted share, for the 2011 first quarter.

Non-GAAP net income for the 2012 first quarter was $11.4 million, or $0.15 per diluted share, compared with non-GAAP net income of $12.2 million, or $0.16 per diluted share, for the 2011 first quarter.

Additional non-GAAP information and a reconciliation of our non-GAAP measures to the most directly comparable GAAP measures for the 2012 and 2011 first quarters may be found in the attached financial tables.

"In the first quarter, we achieved record revenue primarily driven by a robust quarter in Japan as well as the strong sales of our LTE solutions worldwide," commented Victor Alston, Ixia's chief operating officer. "We are encouraged by the strong start to the year and the opportunities for growth we see in 2012. While we have seen increases in the levels of our operating expenses over the last few quarters, we believe that these investments position us well in the more rapidly growing and promising segments of our market, including virtualization, cloud, mobility and security test solutions for the converged networks of the future. These investments pave the way for Ixia to be a leader in emerging markets for the years to come."

Ixia ended the first quarter with approximately $422 million in cash and investments, compared with $385 million at December 31, 2011.

Conference Call and Webcast Information

Ixia will host a conference call today, at 5:00 p.m., Eastern time, for analysts and investors to discuss its 2012 first quarter results and its business outlook for the 2012 second quarter. Open to the public, investors may access the call by dialing (678) 825-8347. A live webcast of the conference call, along with supplemental financial information, will be accessible from the "Investors" section of Ixia's web site (www.ixiacom.com). Following the live webcast, an archived version will be available in the "Investors" section on the Ixia web site for 90 days.

Non-GAAP Information

To supplement our consolidated financial results prepared in accordance with Generally Accepted Accounting Principles ("GAAP"), we have included certain non-GAAP financial measures in this press release and in the attachments hereto. Specifically, we have provided non-GAAP financial measures (e.g., non-GAAP cost of revenues, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP income tax expense, non-GAAP net income, and non-GAAP diluted earnings per share) that exclude certain non-cash and/or non-recurring income and expense items such as proceeds and expenses from certain legal and contractual settlements, stock-based compensation expenses, acquisition and other related costs, the amortization of acquisition-related intangible assets, and the related income tax effects of these items, as well as the income tax impacts of the valuation allowance recorded against certain deferred tax assets. The aforementioned items represent income and expense items that may be difficult to estimate from period to period and/or that we believe are not directly attributable to the underlying performance of our business operations. These non-GAAP financial measures are provided to enhance the user's overall understanding of our financial performance. We believe that by excluding these items, our non-GAAP measures provide supplemental information to both management and investors that is useful in assessing our core operating performance, in evaluating our ongoing business operations and in comparing our results of operations on a consistent basis from period to period. These non-GAAP financial measures are also used by management to plan and forecast future periods and to assist in making operating and strategic decisions. The presentation of this additional information is not prepared in accordance with GAAP. The information therefore may not necessarily be comparable to that of other companies and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Investors are encouraged to review the reconciliations of GAAP to non-GAAP financial measures which are included below in the attached financial tables.

About Ixia

Ixia provides the industry's most comprehensive converged IP services testing solution - from the wireless edge to the Internet core. Network equipment manufacturers, service providers, enterprises and government agencies use Ixia's industry-leading test and simulation platforms to design and validate a broad range of wired, Wi-Fi and 3G/LTE networking equipment and networks. Ixia's solutions create real-world conditions by emulating a full range of high-scaling networking protocols and generating media-rich application traffic to validate performance, conformance and security of cloud, core, data center, wireless and multiplay networks. For more information, visit www.ixiacom.com.

Safe Harbor Under the Private Securities Litigation Reform Act of 1995:
Certain statements made in this press release are forward-looking statements, including, without limitation, statements regarding growth, profitability, financial performance and future business. In some cases, such forward-looking statements can be identified by terms such as may, will, should, expect, plan, believe, estimate, predict or the like. Such statements reflect our current intent, belief and expectations and are subject to risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in the forward-looking statements. Factors that may cause future results to differ materially from our current expectations include changes in the global economy, competition, consistency of orders from significant customers, our success in developing and producing new products, market acceptance of our products and war, terrorism, political unrest, natural disasters and other circumstances that could, among other consequences, reduce the demand for our products, disrupt our supply chain or impact the delivery of our products. Such factors also include those identified in our Annual Report on Form 10-K for the year ended December 31, 2011, and in our other filings with the U.S. Securities and Exchange Commission. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

                    Condensed Consolidated Balance Sheets
                               (in thousands)
                                 (unaudited)

                                                  March 31,    December 31,
                                                    2012           2011
                                               -------------- --------------

Assets
Current assets:
  Cash and cash equivalents                    $       49,414 $       42,729
  Short-term investments in marketable
   securities                                         169,751        156,684
  Accounts receivable, net                             63,357         65,357
  Inventories                                          26,796         27,239
  Prepaid expenses and other current assets            13,330         12,700
                                               -------------- --------------
    Total current assets                              322,648        304,709

Investments in marketable securities                  202,381        185,608
Property and equipment, net                            25,817         25,060
Intangible assets, net                                 42,189         46,028
Goodwill                                               66,429         66,429
Other assets                                            6,750          6,633
                                               -------------- --------------
    Total assets                               $      666,214 $      634,467
                                               ============== ==============


Liabilities and Shareholders' Equity
Current liabilities:
  Accounts payable                             $        9,948 $        5,005
  Accrued expenses                                     31,685         27,301
  Deferred revenues                                    46,731         40,963
  Income taxes payable                                    900            895
                                               -------------- --------------
    Total current liabilities                          89,264         74,164

Deferred revenues                                      10,220         10,092
  Other liabilities                                     6,494          5,849
  Convertible senior notes                            200,000        200,000
                                               -------------- --------------
    Total liabilities                                 305,978        290,105
                                               -------------- --------------


Shareholders' equity:
  Common stock, without par value; 200,000
   shares authorized at March 31, 2012 and
   December 31, 2011; 71,179 and 70,240 shares
   issued and outstanding as of March 31, 2012
   and December 31, 2011, respectively                138,277        132,330
  Additional paid-in capital                          150,598        145,840
  Retained earnings                                    68,344         63,962
  Accumulated other comprehensive income                3,017          2,230
                                               -------------- --------------
    Total shareholders' equity                        360,236        344,362
                                               -------------- --------------

    Total liabilities and shareholders' equity $      666,214 $      634,467
                                               ============== ==============


                                    IXIA
              Condensed Consolidated Statements of Operations
                   (in thousands, except per share data)
                                (unaudited)

                                                    Three months ended
                                                         March 31,
                                               ----------------------------
                                                    2012           2011
                                               -------------  -------------
Revenues:
  Products                                     $      69,043  $      64,927
  Services                                            16,600         13,534
                                               -------------  -------------
    Total revenues                                    85,643         78,461
                                               -------------  -------------

Costs and operating expenses:(1)
  Cost of revenues - products                         14,782         14,021
  Cost of revenues - services                          2,130          1,478
  Research and development                            20,851         18,519
  Sales and marketing                                 24,607         22,918
  General and administrative                          11,516          8,398
  Amortization of intangible assets                    4,045          3,690
  Acquisition and other related                          425             --
                                               -------------  -------------
    Total costs and operating expenses                78,356         69,024
                                               -------------  -------------

    Income from operations                             7,287          9,437
Interest income and other, net                           110            538
Interest expense                                      (1,800)        (1,800)
                                               -------------  -------------
    Income before income taxes                         5,597          8,175
Income tax expense                                     1,215          1,066
                                               -------------  -------------
    Net income                                 $       4,382  $       7,109
                                               =============  =============

Earnings per share:
  Basic                                        $        0.06  $        0.10
  Diluted                                      $        0.06  $        0.10

Weighted average number of common and common
 equivalent shares outstanding:
  Basic                                               70,580         68,121
  Diluted                                             72,954         71,433



(1) Stock-based compensation included in:
      Cost of revenues - products              $          96  $         136
      Cost of revenues - services                         37             51
      Research and development                         1,279          1,374
      Sales and marketing                              1,023          1,041
      General and administrative                       1,666          1,259


                                    IXIA
    Non-GAAP Information and Reconciliation to Comparable GAAP Financial
                                  Measures
           (in thousands, except percentages and per share data)
                                (unaudited)

                                     Three months ended March 31,
                           ------------------------------------------------
                                     2012                     2011
                           -----------------------  -----------------------
                                          % Total                  % Total
                            Amount ($)   Revenues    Amount ($)   Revenues
                           -----------  ----------  -----------  ----------
Total revenues             $    85,643         100% $    78,461         100%

Total cost of revenues -
 GAAP                      $    16,912        19.7% $    15,499        19.8%
  Stock-based
   compensation(a)                (133)       -0.1%        (187)       -0.3%
                           -----------  ----------  -----------  ----------
Total cost of revenues -
 Non-GAAP                  $    16,779        19.6% $    15,312        19.5%
                           ===========  ==========  ===========  ==========

Operating expenses - GAAP  $    61,444        71.7% $    53,525        68.2%
  Amortization of
   intangible assets(b)         (4,045)       -4.7%      (3,690)       -4.7%
  Acquisition and other
   related(c)                     (425)       -0.5%          --          --%
  Stock-based
   compensation(a)              (3,968)       -4.6%      (3,674)       -4.7%
  Legal, contract
   settlements and
   other(d)                     (1,682)       -2.0%        (900)       -1.1%
                           -----------  ----------  -----------  ----------
Operating expenses - Non-
 GAAP                      $    51,324        59.9% $    45,261        57.7%
                           ===========  ==========  ===========  ==========

Operating margin - GAAP    $     7,287         8.5% $     9,437        12.0%
  Amortization of
   intangible assets(b)          4,045         4.7%       3,690         4.7%
  Acquisition and other
   related(c)                      425         0.5%          --          --%
  Stock-based
   compensation(a)               4,101         4.8%       3,861         5.0%
  Legal, contract
   settlements and other
   (d)                           1,682         2.0%         900         1.1%
                           -----------  ----------  -----------  ----------
Operating margin - Non-
 GAAP                      $    17,540        20.5% $    17,888        22.8%
                           ===========  ==========  ===========  ==========

Income tax expense - GAAP  $     1,215         1.4% $     1,066         1.4%
  Effect of reconciling
   items(e)                      3,211         3.8%       3,391         4.3%
                           -----------  ----------  -----------  ----------
Income tax expense - Non-
 GAAP                      $     4,426         5.2% $     4,457         5.7%
                           ===========  ==========  ===========  ==========

Net income - GAAP          $     4,382         5.1% $     7,109         9.1%
  Effect of reconciling
   items(f)                      7,042         8.2%       5,060         6.4%
                           -----------  ----------  -----------  ----------
Net income - Non-GAAP      $    11,424        13.3% $    12,169        15.5%
                           ===========  ==========  ===========  ==========

Diluted earnings per share
 - GAAP                    $      0.06              $      0.10
  Effect of reconciling
   items(g)(h)                    0.09                     0.06
                           -----------              -----------
Diluted earnings per share
 - Non-GAAP                $      0.15              $      0.16
                           ===========              ===========

(a)  This reconciling item represents stock-based compensation expenses. As
     stock-based compensation represents a non-cash charge that is not
     directly attributable to the underlying performance of our business
     operations, we believe that by excluding stock-based compensation, we
     provide our investors with supplemental information that is useful in
     comparing our operating results from period to period and in evaluating
     our core operations and performance. While we expect to continue to
     recognize stock-based compensation expense in the future, management
     also excludes this expense when evaluating current performance,
     forecasting future results, measuring core operating results, and
     making operating and strategic decisions.

(b)  This reconciling item represents the amortization of intangible assets
     related to the acquisitions of various businesses and technologies such
     as the acquisitions of Catapult Communications Corporation, Agilent
     Technologies' N2X Data Network Testing Product line and VeriWave, Inc.
     As the amortization expense represents a non-cash charge that is not
     directly attributable to the underlying performance of our business
     operations, we believe that by excluding the amortization of
     acquisition-related intangible assets, we provide investors with
     supplemental information that is useful in evaluating our ongoing
     operations and performance. While the amortization of acquisition-
     related intangible assets is expected to continue in the future,
     management also excludes this expense when evaluating current
     performance, forecasting future results, measuring core operating
     results, and making operating and strategic decisions.

(c)  This reconciling item represents costs associated with acquisition-
     related activities. These acquisition and other related costs consist
     primarily of professional fees for legal, accounting and tax services,
     and other related costs. We believe that by excluding acquisition and
     other related costs, we provide investors with supplemental information
     that is useful in comparing our ongoing operating results from period
     to period and in evaluating our core operations and performance.

(d)  This reconciling item represents a one-time charge of $900,000 incurred
     in the first quarter of 2011 to terminate and settle a development
     contract and a one-time transition charge of $1.7 million incurred in
     the first quarter of 2012 in connection with the previously announced
     departure of our CEO. We believe that by excluding these charges, we
     provide our investors with supplemental information that is useful in
     comparing our operating results from period to period and in evaluating
     our core operations and performance.

(e)  This adjustment represents the income tax effects of the reconciling
     items noted in footnotes (a), (b), (c) and (d) as well as changes in
     the valuation allowance relating to the company's deferred tax assets.

(f)  This adjustment represents the effects of the reconciling items noted
     in footnotes (a), (b), (c), (d) and (e).

(g)  This adjustment represents the effects of the reconciling items noted
     in footnotes (a), (b), (c), (d) and (e), on a diluted per share basis.

(h)  This reconciling item for the non-GAAP diluted earnings per share
     calculation includes the impact of our convertible senior notes as
     these were anti-dilutive for the equivalent GAAP earnings per share
     calculations.