BEDFORD, MA--(Marketwire - May 2, 2012) - Acme Packet, Inc. (NASDAQ: APKT), the leader in session delivery network solutions, today announced results for the first quarter of 2012. All earnings per share results are on a fully diluted basis.

Results for the First Quarter of 2012
Total revenue for the first quarter of 2012 was $70.8 million, compared to $74.0 million in the first quarter of 2011 and $83.0 million in the fourth quarter of 2011. Net income for the first quarter of 2012 was $2.4 million, or $0.03 per share, compared to $13.7 million, or $0.19 per share, in the first quarter of 2011 and $8.7 million, or $0.12 per share, in the fourth quarter of 2011. Net income on a non-GAAP¹ basis for the first quarter of 2012 was $12.2 million, or $0.17 per share, compared to $18.9 million, or $0.27 per share, in the first quarter of 2011, and $18.3 million, or $0.26 per share, in the fourth quarter of 2011. 

Company to Host Live Conference Call and Webcast

The Company's management team plans to host a live conference call and webcast at 4:30 p.m. eastern time today to discuss the financial results as well as management's outlook for the business. The conference call may be accessed in the United States by dialing 1.877.777.1972 and using access code "APKT". The conference call may be accessed outside of the United States by dialing +1.612.332.0932 and using access code "APKT". The conference call will be simultaneously webcast on the Company's investor relations website, which can be accessed at www.ir.acmepacket.com. A replay of the conference call will be available approximately two hours after the call by dialing 1.800.475.6701 or +1.320.365.3844 and using access code 243684 or by accessing the webcast replay on the Company's investor relations website.

¹ A reconciliation of GAAP to non-GAAP results, and a statement on the use of non-GAAP financial measures, is included at the end of this press release.

About Acme Packet
Acme Packet (NASDAQ: APKT), the leader in session delivery network solutions, enables the trusted, first-class delivery of next-generation voice, video, data and unified communications services and applications across IP networks. Our Net-Net product family fulfills demanding security, service assurance and regulatory requirements in service provider, enterprise and contact center networks. Based in Bedford, Massachusetts, Acme Packet designs and manufactures its products in the USA, selling them through over 230 reseller partners worldwide. More than 1,675 customers in 108 countries have deployed over 18,000 Acme Packet systems, including 88 of the top 100 service providers and 41 of the Fortune 100. For more information visit www.acmepacket.com.

Acme Packet, Inc. Safe Harbor Statement
Statements contained herein that are not historical fact may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may relate to, among other things, expected financial and operating results, expected growth rates, future stock-based compensation and amortization expenses, 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, but are not limited to: the amount of stock-based compensation awarded; the applicable Company stock price used to determine stock-based compensation; the exercise pattern of employee stock options; difficulties expanding the Company's customer base; difficulties leveraging market opportunities; difficulties providing solutions that meet the needs of customers; poor product sales; long sales cycles; difficulties developing new products; difficulties in relationships with vendors and partners; higher risks in international operations; difficulties managing rapid growth; difficulties managing the Company's financial performance; the ability to hire and retain employees and appropriately staff operations; the Company's cash needs; the impact of new accounting pronouncements and increased competition. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in the Company's recent filings with the Securities and Exchange Commission, including those factors discussed under the caption "Risk Factors" in such filings.

Acme Packet, Inc.
Condensed Consolidated Statements of Income
(in thousands, except share and per share data)
(unaudited)
				Three Months Ended
				March 31,
				2012			2011
Revenue:
	Product			$	53,464		$	59,742
	Maintenance, support and service				17,366			14,225
		Total revenue			70,830			73,967
Cost of revenue:
	Product				9,978			9,945
	Maintenance, support and service				3,958			3,006
		Total cost of revenue			13,936			12,951
Gross profit					56,894			61,016
Operating expenses:
	Sales and marketing				31,002			23,703
	Research and development				15,097			11,294
	General and administrative				6,438			4,577
	Merger and integration-related costs				37			180
		Total operating expenses			52,574			39,754
Income from operations					4,320			21,262
Other income, net					94			102
Income before provision for income taxes					4,414			21,364
Provision for income taxes					1,985			7,655
Net income				$	2,429		$	13,709
Net income per share:
	Basic			$	0.04		$	0.21
	Diluted			$	0.03		$	0.19
Weighted average number of common shares used in the calculation of net income per share:
	Basic				67,953,550			65,076,303
	Diluted				70,858,871			70,476,973

Acme Packet, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
				March 31, 2012				December 31, 2011
Assets
Current assets:
	Cash and cash equivalents			$	128,151			$	160,403
	Short-term investments				247,713				191,672
	Accounts receivable, net				60,568				59,739
	Inventory				11,003				10,246
	Deferred product costs				864				1,515
	Deferred tax asset, net				4,809				4,809
	Income taxes receivable				4,634				4,341
	Other current assets				5,183				4,385
		Total current assets			462,925				437,110
Long-term investments					25,451				20,096
Property and equipment, net					27,530				26,252
Intangible assets, net					8,078				8,569
Goodwill					3,778				3,778
Deferred tax asset, net					18,371				18,371
Other assets					239				230
	Total assets			$	546,372			$	514,406
Liabilities and Stockholders' Equity
Current liabilities:
	Accounts payable			$	7,125			$	10,318
	Accrued expenses and other current liabilities				13,238				12,715
	Deferred revenue				34,822				22,261
		Total current liabilities			55,185				45,294
Deferred revenue, net of current portion					2,304				2,049
Deferred rent					4,495				4,533
Stockholders' equity:
	Common stock				75				74
	Additional paid-in capital				383,191				363,769
	Treasury stock, at cost				(37,522	)			(37,522	)
	Accumulated other comprehensive income				7				1
	Retained earnings				138,637				136,208
		Total stockholders' equity			484,388				462,530
	Total liabilities and stockholders' equity			$	546,372			$	514,406

Condensed Consolidated Statements of Cash Flow
(in thousands)
(unaudited)
		Three Months Ended
		March 31,
		2012				2011
Cash provided by operating activities		$	26,695			$	11,541
Cash used in investing activities			(65,472	)			(4,273	)
Cash provided by financing activities			6,525				19,987

Acme Packet, Inc.

Statement on Use of Non-GAAP Financial Measures and

Reconciliation of Non-GAAP Net Income and Non-GAAP Net Income Per Share

(in thousands, except share and per share data)

(unaudited)

Statement on Use of Non-GAAP Financial Measures:
To supplement its condensed consolidated statements of income presented in accordance with accounting principles generally accepted in the United States ("GAAP"), the Company discloses certain non-GAAP financial measures, including "non-GAAP net income", "net income on a non-GAAP basis", "non-GAAP EPS", and "net income per share on a non-GAAP basis". These non-GAAP financial measures are not presented in accordance with GAAP and are not meant to be a substitute for the most directly comparable GAAP measures of "net income", "EPS" or "net income per share". Rather, these non-GAAP financial measures should be evaluated in conjunction with its most directly comparable GAAP financial measure and the Company's financial statements as a whole. 

Management uses these supplemental non-GAAP financial measures to evaluate performance period over period, to analyze the underlying trends in the Company's business, to assess its performance relative to its competitors, and to establish operational goals and forecasts that are used in allocating resources. Management uses these non-GAAP financial measures because they exclude stock-based compensation expense which is a non-cash charge and related payroll taxes, amortization of acquired intangible assets and merger and integration-related costs associated with the Company's acquisition activities all of which are non-operational costs and expenses. By excluding stock-based compensation expense and related payroll taxes, amortization of acquired intangible assets, and merger and integration-related costs, management can compare the Company's operations to prior periods and to the operations of other companies in its industry who may have materially different unusual, non-operational charges. Management does not consider any of stock-based compensation expense and related payroll taxes, amortization of acquired intangible assets, and merger and integration-related costs to be part of the Company's operating activities or meaningful in evaluating the Company's past financial performance or future prospects. Management believes that excluding these items is useful to investors because it is more representative of ongoing costs and therefore more comparable to historical operations. 

Because management uses them, management believes that the disclosure of these non-GAAP financial measures to investors provides greater transparency and useful information to help the investor better understand the Company's operating performance and to evaluate the methodology used by management to evaluate and measure such performance. Notwithstanding their utility to investors in understanding operational trends, these non-GAAP measures should not be considered measures of the Company's liquidity. In addition, the Company cautions that its definition of "non-GAAP net income", "net income on a non-GAAP basis", "non-GAAP EPS" and net income per share on a non-GAAP basis" may differ from similar measures used by other companies and may differ from period to period. Also, in future periods, management may make other adjustments for expenses and gains that it does not consider reflective of core operating performance in a particular period thereby modifying its definition of "non-GAAP net income", "non-GAAP EPS" and "non-GAAP net income per share" by excluding these other or additional expenses and gains. 

Reconciliation of GAAP to Non-GAAP Financial Measures for the Three Months Ended March 31, 2012, March 31, 2011 and December 31, 2011:

Acme Packet, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended March 31, 2012
(in thousands, except per share data)
(unaudited)
			GAAP			Stock-based compensation expense and related payroll taxes				Amortization of acquired intangible assets				Merger and integration-related costs				Non-GAAP1
Cost of revenue:
	Product		$	9,978		$	(428	)		$	(434	)		$	-			$	9,116
	Maintenance, support and service			3,958			(702	)			-				-				3,256
Operating expenses:
	Sales and marketing			31,002			(6,414	)			(57	)			-				24,531
	Research and development			15,097			(4,295	)			-				-				10,802
	General and administrative			6,438			(2,077	)			-				-				4,361
	Merger and integration-related costs			37			-				-				(37	)			-
Provision for income taxes				1,985			4,473				188				-				6,646
Net income			$	2,429		$	9,443			$	303			$	37			$	12,212
Net income per share:
	Basic		$	0.04		$	0.14			$	0.00			$	0.00			$	0.18
	Diluted		$	0.03		$	0.13			$	0.00			$	0.00			$	0.17

Acme Packet, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended March 31, 2011
(in thousands, except per share data)
(unaudited)
			GAAP			Stock-based compensation expense and related payroll taxes				Amortization of acquired intangible assets				Merger and integration-related costs				Non-GAAP1
Cost of revenue:
	Product		$	9,945		$	(262	)		$	(371	)		$	-			$	9,312
	Maintenance, support and service			3,006			(451	)			-				-				2,555
Operating expenses:
	Sales and marketing			23,703			(3,579	)			(46	)			-				20,078
	Research and development			11,294			(2,242	)			(12	)			-				9,040
	General and administrative			4,577			(980	)			-				-				3,597
	Merger and integration-related costs			180			-				-				(180	)			-
Provision for income taxes				7,655			2,737				156				-				10,548
Net income			$	13,709		$	4,777			$	273			$	180			$	18,939
Net income per share:
	Basic		$	0.21		$	0.07			$	0.00			$	0.00			$	0.29
	Diluted		$	0.19		$	0.07			$	0.00			$	0.00			$	0.27

Acme Packet, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended December 31, 2011
(in thousands, except per share data)
(unaudited)
			GAAP			Stock-based compensation expense and related payroll taxes				Amortization of acquired intangible assets				Non-GAAP1
Cost of revenue:
	Product		$	12,155		$	(314	)		$	(385	)		$	11,456
	Maintenance, support and service			3,118			(577	)			-				2,541
Operating expenses:
	Sales and marketing			29,940			(4,857	)			(100	)			24,983
	Research and development			14,221			(3,063	)			(11	)			11,147
	General and administrative			6,073			(1,574	)			-				4,499
Provision for income taxes				8,681			1,148				174				10,003
Net income			$	8,717		$	9,237			$	322			$	18,276
Net income per share:
	Basic		$	0.13		$	0.14			$	0.00			$	0.27
	Diluted		$	0.12		$	0.13			$	0.00			$	0.26

Acme Packet, Inc.
Other Operational Data
(unaudited)
		Three Months Ended
		March 31, 2012			December 31, 2011			March 31, 2011
Other operational data:
Depreciation and amortization (in thousands)		$	2,958		$	2,944		$	2,358
Capital expenditures (in thousands)		$	3,745		$	4,186		$	4,644
Days sales outstanding			77			65			53
Total headcount			764			752			641
Quarterly inventory turnover - annualized			3.76			4.41			5.79

Investor Relations Contact:
Brian Norris
Acme Packet
+1.781.328.4790
Email Contact

Media and Analyst Contact:
Mike O'Malley
Acme Packet
+1.781.869.2975
Email Contact