Sonus Networks Reports Third Quarter 2008 Financial Results

Sonus Investor Relations:
Karin Cellupica
978-614-8615
kcellupica@sonusnet.com
Media Relations:
Lucy Millington
978-614-8240
lmillington@sonusnet.com

Revenue: $62.2 million, down 18% from Q3 2007
Net loss: $19.6 million (GAAP); $1.9 million (non-GAAP)
Cash and investments: $404.7 million at the end of Q3 2008

WESTFORD, Mass., November 6, 2008 - Sonus Networks, Inc. (Nasdaq: SONS), a market leader in IP communications infrastructure, today reported financial results for the third quarter ended September 30, 2008.

Revenue from continuing operations for the third quarter of fiscal 2008 was $62.2 million, compared to $87.8 million in the second quarter of fiscal 2008 and $75.8 million for the third quarter of fiscal 2007, a decrease of 18% year over year. The Company's loss from continuing operations on a GAAP basis was $19.0 million, or $0.07 per share, for the third quarter of 2008, compared to GAAP income from continuing operations of $3.5 million, or $0.01 per diluted share, for the second quarter of 2008, and a GAAP loss from continuing operations of $26.6 million, or $0.10 per share, for the third quarter of 2007.

Revenue from continuing operations for the first nine months of fiscal 2008 was $223.6 million, compared to $222.3 million in the first nine months of fiscal 2007, an increase of $1.3 million year over year. The Company's loss from continuing operations on a GAAP basis was $14.6 million, or $0.05 per share, compared to a GAAP loss from continuing operations of $37.3 million, or $0.14 per share, for the first nine months of fiscal 2007.

"We had a challenging quarter, and are disappointed with our results," said Richard Nottenburg, president and CEO of Sonus Networks. "We experienced a downturn during September that impacted our revenue and earnings performance. We have maintained a strong cash position and a stable financial platform which allow us to focus on managing the business through the current economic climate."

Business Update

Zynetix: In the third quarter of 2008, the Company committed to a plan to sell its Zynetix subsidiary and is currently in negotiations regarding the sale of the subsidiary. The Company will continue to own and sell the Sonus mobilEdgeTM wireless solution. In reporting the Company's third quarter results, the Zynetix business has been reclassified and reported as discontinued operations in the statements of operations for all periods presented.

Third Quarter Customer Highlights

Telenet: Telenet, a leading provider of media and telecommunications services and the largest cable operator in Belgium, will use Sonus technology to offer businesses across the country secure and reliable access to next generation IP voice services. Telenet will extend the services of its broadband network to provide Belgian enterprises with a new and cost- effective option to receive their office telephone services.

Interoute: Interoute is working with Sonus to increase the capacity of Interoute's Virtual Voice Network in Western Europe, Eastern Europe, the Middle East and the United States. Interoute has implemented Sonus' IMS-compliant technology in over eight European countries and has recently deployed the technology in New York, with further expansion plans underway for 2009.

Conference Call Details

Sonus Networks will host a conference call for analysts and investors to discuss its third quarter 2008 results today at 8.00 a.m. ET.

To listen via telephone:
Dial-in number: 800-763-5654
International Callers: +1 212-231-2901

To listen via the Internet:
Sonus will host a live webcast of the conference call. To access the webcast, visit www.sonusnet.com, Corporate, Investor Relations.

Sonus believes that the presentation of non-GAAP financial information, when shown in conjunction with the corresponding GAAP measures, provides important supplemental information to management and investors regarding financial and business trends relating to the Company's financial condition and results of operations. The Company's results include stock-based compensation and related expenses, amortization of intangible assets, the reduction of a loss contingency related to an employment tax audit, 409A excise tax adjustments, the earnout settlement related to the acquisition of Zynetix, stock option review costs, litigation settlements and the results of discontinued operations. The amount of each item included in our financial statements and not separately reported is available in the "Supplemental Information" schedule attached. On a pre-tax basis, with the exception of discontinued operations which is presented net of tax, these amounts totaled $26.1 million of expense in the third quarter of 2008, $8.6 million in the second quarter of 2008 and $51.2 million in the third quarter of 2007. Excluding these items, the non-GAAP net loss for the third quarter of 2008 was $1.9 million, or $0.01 per share, compared to non-GAAP net income of $6.1 million, or $0.02 per diluted share for the second quarter of 2008 and non-GAAP net income of $5.3 million, or $0.02 per diluted share, for the third quarter of 2007.

About Sonus Networks

Sonus Networks, Inc. is a market leader in IP communications infrastructure for wireline and wireless service providers. With its comprehensive IP Multimedia Subsystem (IMS) solution, Sonus addresses the full range of carrier applications, including residential and business voice services, wireless voice and multimedia, trunking and tandem switching, carrier interconnection and enhanced services. Sonus' voice infrastructure solutions are deployed in service provider networks worldwide. Founded in 1997, Sonus is headquartered in Westford, Massachusetts. Additional information on Sonus is available at http://www.sonusnet.com.

Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results. For a discussion of the risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007, and all subsequent Quarterly Reports on Form 10-Q. Risk factors include among others: the impact of material weaknesses in our disclosure controls and procedures and our internal control over financial reporting on our ability to report our financial results timely and accurately; the unpredictability of our quarterly financial results; risks and uncertainties associated with the Company's restatement of its historical stock option granting practices and accounting including regulatory actions; actions that may be taken by significant shareholders; risks associated with our international expansion; and the impact the current global financial market conditions may have on the telecommunications industry. Any forward-looking statements represent Sonus' views only as of today and should not be relied upon as representing Sonus' views as of any subsequent date. While Sonus may elect to update forward-looking statements at some point, Sonus specifically disclaims any obligation to do so, except as required by law.