Acme Packet Reports Results for Third Quarter of Fiscal Year 2008

Acme Packet, Inc. (NASDAQ: APKT), the leader in session border control solutions, today announced results for the three and nine months ended September 30, 2008 and updated its business outlook for the balance of fiscal year 2008.

Results for the Third Quarter of Fiscal Year 2008

Total revenues for the third quarter of fiscal year 2008 were $28.4 million compared to $29.6 million in the same period last year. Net income for the third quarter of fiscal year 2008 was $2.0 million, or $0.03 per share on a diluted basis, compared to $5.5 million, or $0.08 per share on a diluted basis, in the same period last year. Net income on a non-GAAP¹ basis for the third quarter of 2008 was $3.4 million, or $0.05 per share on a diluted basis, compared to $6.7 million, or $0.10 per share on a diluted basis, in the same period last year. Non-GAAP net income¹ differs from GAAP net income as it excludes stock-based compensation expense, net of tax, of approximately $1.3 million, or $0.02 per share in the third quarter of fiscal year 2008 and approximately $1.2 million, or $0.02 per share in the third quarter of fiscal year 2007. A reconciliation of GAAP to non-GAAP results is included at the end of this press release.

Results for the First Nine Months of Fiscal Year 2008

Total revenues for the first nine months of fiscal year 2008 grew to $85.8 million, an increase of 5% compared to $81.7 million in the same period last year. Net income for the first nine months of fiscal year 2008 was $7.9 million, or $0.12 per share on a diluted basis, compared to $14.4 million, or $0.22 per share on a diluted basis, in the same period last year. Net income on a non-GAAP¹ basis for the first nine months of fiscal year 2008 was $11.5 million, or $0.18 per share on a diluted basis, compared to $17.4 million, or $0.26 per share on a diluted basis, in the same period last year. Non-GAAP net income¹ differs from GAAP net income as it excludes stock-based compensation expense, net of tax, of approximately $3.6 million, or $0.06 per share in the first nine months of fiscal year 2008 and approximately $3.0 million, or $0.04 per share for the first nine months of fiscal year 2007. A reconciliation of GAAP to non-GAAP results is included at the end of this press release.

Company Updates Business Outlook for Fiscal Year 2008

The Company today provided its current outlook for the three month period ended December 31, 2008 and updated its full year business outlook for fiscal year 2008. The Company’s outlook is based on the current indications for its business, which may change at any time.

Company Announces Update on Common Stock Repurchase Program

The Company previously announced that its Board of Directors has authorized a $55.0 million common stock repurchase program (the "Program”). During the three month period ended September 30, 2008, the Company repurchased approximately 4.0 million shares of its common stock for an aggregate purchase price of $22.6 million. Since announcing the Program in February 2008 and through September 30, 2008, the Company repurchased approximately 4.9 million shares of its common stock for an aggregate purchase price of $29.3 million. Subsequent to September 30, 2008 and through November 5, 2008, the Company repurchased an additional 1.4 million shares for an aggregate purchase price of $6.5 million. In the aggregate, the Company has purchased approximately 6.3 million shares of its common stock for an aggregate purchase price of $35.8 million, with $19.2 million available for repurchase activity under the plan. Under terms of the Program, purchases will continue to be executed periodically as market and business conditions warrant on the open market, in negotiated or block trades, or under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The Program does not obligate the Company to repurchase any Dollar amount or number of shares of common stock, and the program may be suspended or discontinued at any time. The common stock repurchase program will remain effective through February 28, 2009 unless terminated earlier by the Board of Directors.

Company to Host Live Conference Call and Webcast

The Company’s management team will host a live conference call and webcast at 5:00 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 (800) 553-5260 and using access code "APKT”. The conference call may be accessed outside of the United States by dialing (612) 332-0820 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 (800) 475-6701 and using access code 963780 or by accessing the webcast replay on the Company’s investor relations website.

About Acme Packet, Inc.

Acme Packet, Inc. (NASDAQ: APKT), the leader in session border control solutions, enables the delivery of trusted, first class interactive communications—voice, video and multimedia sessions—and data services across IP network borders. Our Net-Net family of session border controllers, multiservice security gateways and session routing proxies supports multiple applications in service provider, large enterprise and contact center networks—from VoIP trunking to hosted enterprise and residential services to fixed-mobile convergence. They satisfy critical security, service assurance and regulatory requirements in wireline, cable and wireless networks; and support multiple protocols—SIP, H.323, MGCP/NCS and H.248—and multiple border points—interconnect, access and data center. Our products have been selected by more than 580 customers in 85 countries, including 29 of the top 30, and 84 of the top 100 service providers in the world. For more information, contact us at +1 781.328.4400, or visit www.acmepacket.com.

Acme Packet, Inc. Safe Harbor Statement

Statements contained herein that are not historical fact (including those in the section "Company Updates Business Outlook for Fiscal Year 2008”) 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, among other things, to the Company’s position in the session border controller market, including its market leadership; the Company’s expected financial and operating results, including expected revenue and net income per share (on both a GAAP and non-GAAP basis) for future periods, including fiscal year 2008; the amount and impact of stock-based compensation expense; the Company’s definition of "non-GAAP net income” and/or "non-GAAP net income per share”; its ability to build and grow; the benefits or advantages of its programs, partnerships, services, or products; its traction in both new and existing customers; its ability to achieve its goals, plans and objectives; its ability to attract and retain customers; and its development activities. 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: difficulties growing its customer base; difficulties leveraging market opportunities; difficulties providing solutions that meet the needs of customers; poor product sales; long sales cycles; difficulty developing new products; difficulty in relationships with vendors and partners; higher risk in international operations; difficulty managing rapid growth, financial performance; its ability to hire and retain necessary employees and appropriately staff its operations; the spending of the proceeds of its capital raising activities; its cash needs; and 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.

¹ The Company uses the financial measures "non-GAAP net income” and "non-GAAP net income per share” to supplement its consolidated financial statements, which are presented in accordance with accounting principles generally accepted in the United States ("GAAP”). The presentation of non-GAAP net income and non-GAAP net income per share is not meant to be a substitute for "net income” or "net income per share”, presented in accordance with GAAP but rather should be evaluated in conjunction with net income and net income per share. The Company’s management believes that the presentation of non-GAAP net income and non-GAAP net income per share provides useful information to investors because this financial measure excludes stock-based compensation expense which is a non-cash charge. Management does not consider this item to be part of the Company’s on-going operating activities or meaningful in evaluating the Company’s past financial performance or future prospects. Management believes that excluding stock-based compensation expense is useful to investors because it is more representative of ongoing costs and therefore more comparable to historical operations. Non-GAAP net income and non-GAAP net income per share are primary financial indicators that the Company’s management uses to evaluate the Company’s financial results and forecast anticipated financial results for future periods. Management also uses these non-GAAP figures to make financial and operational decisions as these numbers exclude non-operational activities. These non-GAAP measures should not be considered measures of the Company’s liquidity. The Company’s definition of "non-GAAP net income” and/or "non-GAAP net income per share” may differ from similar measures used by other companies and may differ from period to period. Subject to the review and approval of the audit committee of the Board of Directors, management may make other adjustments for expenses and gains that it does not consider reflective of core operating performance in a particular period and may modify "non-GAAP net income” and/or "non-GAAP net income per share” by excluding these expenses and gains.