Acme Packet, Inc. (NASDAQ: APKT), the leader in session border control solutions, today announced record results for the second quarter ended June 30, 2010 and raised its business outlook for 2010.

Results for the Second Quarter of 2010

Total revenue for the second quarter of 2010 was $53.3 million, compared to $32.9 million in the second quarter of 2009 and $51.1 million in the first quarter of 2010. Net income for the second quarter of 2010 was $9.7 million, or $0.14 per share on a diluted basis, compared to $1.7 million, or $0.03 per share on a diluted basis in the second quarter of 2009 and $8.3 million, or $0.13 per share on a diluted basis, in the first quarter of 2010. Net income on a non-GAAP¹ basis for the second quarter of 2010 was $12.4 million, or $0.18 per share on a diluted basis, compared to $4.5 million, or $0.07 per share on a diluted basis, in the second quarter of last year, and $10.7 million, or $0.16 per share on a diluted basis, in the first quarter of 2010. A reconciliation of GAAP to non-GAAP¹ results, and a statement as to the use of non-GAAP¹ financial measures, is included at the end of this press release.

Results for the First Six Months of 2010

Total revenue for the first six months of 2010 was $104.4 million compared to $63.8 million in the same period last year. Net income for the first six months of 2010 was $18.1 million, or $0.27 per share on a diluted basis, compared to $4.5 million, or $0.07 per share on a diluted basis, in the same period last year. Net income on a non-GAAP¹ basis for the first six months of 2010 was $23.0 million, or $0.35 per share on a diluted basis, compared to $8.8 million, or $0.15 per share on a diluted basis, in the same period last year. A reconciliation of GAAP to non-GAAP¹ results, and a statement as to the use of non-GAAP¹ financial measures, is included at the end of this press release.

Company Raises Business Outlook for 2010

The Company today raised its full year business outlook for 2010. The Company’s outlook is based on the current indications for its business, which may change at any time. The Company will not comment on its business outlook during the quarter unless it is done through an explicit public disclosure.

The Company expects net income on a non-GAAP¹ basis to differ from net income on a GAAP basis in 2010 as it is expected to exclude estimated stock-based compensation expense of approximately $10.2 million, or $0.15 per share on a diluted basis, and amortization of acquired intangible assets of approximately $1.2 million, or $0.02 per share on a diluted basis. A reconciliation of the Company’s expected GAAP to non-GAAP¹ business outlook, and a statement as to the use of non-GAAP¹ financial measures, is included at the end of this press release.

Company to Host Live Conference Call and Webcast

The Company’s management team plans to host a live conference call and webcast at 5:00 p.m. eastern daylight savings 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) 230-1074 and using access code “APKT”. The conference call may be accessed outside of the United States by dialing +1 612.234.9960 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 163908 or by accessing the webcast replay on the Company’s investor relations website.

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¹A 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, 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, 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, H.248 and RTSP—and multiple border points—service provider access and interconnect, and enterprise access and trunking. Over 10,000 Acme Packet systems have been deployed by more than 1,105 customers in 105 countries. They include 91 of the top 100 service providers in the world and 11 of the Fortune 25. 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 Raises Business Outlook for 2010”) 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, and to 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; 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; difficulty developing new products; difficulty in relationships with vendors and partners; higher risk in international operations; difficulty managing rapid growth; difficulty managing the Company’s financial performance; the ability to hire and retain employees and appropriately staff operations; the Company’s 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.

A/73442304.2

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 per share data)
(unaudited)

Statement on Use of Non-GAAP Financial Measures:

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 these financial measures exclude stock-based compensation expense which is a non-cash charge, as well as amortization of acquired intangible assets and merger and integration-related costs associated with the Company’s acquisition of Covergence Inc. in April 2009. By excluding stock-based compensation expense, 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 charges. Management does not consider any of stock-based compensation expense, 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. 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 measures 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. 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.