Ixia Announces Financial Results For 2016 Third Quarter

Ixia (Nasdaq: XXIA) today reported its financial results for the third quarter ended September 30, 2016.

Total revenue for the 2016 third quarter was $123.9 million, compared with $125.9 million reported for the 2015 third quarter and $120.1 million reported for the 2016 second quarter.

"We are pleased with our results in the third quarter, with revenue and EPS exceeding our guidance. Our revenue performance was driven by growing momentum for our network visibility solutions and record revenue from the enterprise market, which offset softness in our NEM markets," said Bethany Mayer, Ixia's president and chief executive officer. "We are continuing to execute and invest in our strategy and are pleased with the early results we have generated from the changes we made to our sales leadership and organization."

On a GAAP basis, the company recorded net income for the 2016 third quarter of $4.8 million, or $0.06 per diluted share, compared with net income of $4.0 million, or $0.05 per diluted share, for the 2015 third quarter, and net income of $1.5 million, or $0.02 per diluted share, for the 2016 second quarter.

Non-GAAP net income for the 2016 third quarter was $15.2 million, or $0.18 per diluted share, compared with non-GAAP net income of $12.3 million, or $0.15 per diluted share, for the 2015 third quarter, and non-GAAP net income of $14.9 million, or $0.18 per diluted share, for the 2016 second quarter.

Additional non-GAAP information and GAAP to Non-GAAP reconciliation information may be found in the attached financial tables.

Ixia ended the 2016 third quarter with $121.5 million in cash, cash equivalents, and investments, compared with $100.8 million at June 30, 2016.

Conference Call and Webcast Information

Ixia will host a conference call today at 1:30 p.m. Pacific time (4:30 p.m. Eastern time) to discuss with analysts and investors the company's 2016 third quarter and its business outlook and guidance for the 2016 fourth quarter. The call will be open to the public, and interested parties may listen to the call by dialing (804) 681-3728. A live audio webcast of the conference call will be accessible from the "Investors" section of the company's website ( http://investor.ixiacom.com/). Following the live webcast, an archived version will be available in the "Investors" section of the Ixia website for at least 90 days. Certain supplemental financial information will be posted promptly to the website following the issuance of this press release, and additional supplemental financial information will be posted just prior to the start of the conference call.

Non-GAAP Financial Measures

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. Specifically, we have provided non-GAAP net income and non-GAAP diluted earnings per share measures that, among other adjustments identified in the attached financial tables, exclude from the most directly comparable GAAP measures certain items such as expenses relating to internal investigations and any related remediation efforts, the securities class action and shareholder derivative action that have been settled recently, as well as an ongoing SEC investigation, the amortization of acquisition-related intangible assets, stock-based compensation expenses, acquisition and other related costs, restructuring expenses, and the related income tax effects of these items, as well as certain other non-cash income tax impacts such as changes in the valuation allowance recorded against certain deferred tax assets. The aforementioned items represent expense items that may be difficult to estimate from period to period and/or that we believe are not directly attributable to and/or reflective of the underlying performance of our business operations. We believe that, by excluding these items, our non-GAAP measures provide supplemental information to both management and investors that is useful in assessing the operating performance of our core business, identifying and assessing financial and business trends affecting our business that might otherwise be obscured or distorted, and comparing our results of operations on a consistent basis from period to period by eliminating certain items that may vary independent of business performance. These non-GAAP financial measures are provided to enhance the user's overall understanding of our financial performance and to provide to our investors greater transparency with respect to key metrics used by management to operate our business. These non-GAAP financial measures are used by management, in conjunction with and in addition to our results prepared in accordance with GAAP, to plan, budget, and forecast for future periods and in making operating and strategic decisions. The company also uses these measures in evaluating the performance of management and making determinations regarding executive compensation. The presentation of this additional information is not prepared in accordance with GAAP. The information may not necessarily be comparable to that of other companies that may calculate their non-GAAP financial measures differently and should be considered as a supplement to, and not as a substitute for or superior to, the corresponding measures calculated in accordance with GAAP. Investors are encouraged to review the reconciliations of our non-GAAP financial measures to the most directly comparable GAAP measures, which are included below in the attached financial tables and also posted on our website.

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