[October 23, 2012]

Polycom Announces Revenues of $335 Million for Third Quarter 2012

Polycom, Inc. (Nasdaq:PLCM), the global leader in open standards-based unified communication and collaboration (UC&C), today reported financial results for the third quarter ended September 30, 2012.

Third quarter 2012 consolidated net revenues from continuing operations were $335 million, down 6 percent year-over-year as expected compared to $355 million for the third quarter of 2011. Non-GAAP net income for the third quarter of 2012 was $17 million, or 10 cents per diluted share, compared to non-GAAP net income of $42 million, or 23 cents per diluted share, for the third quarter of 2011. GAAP earnings from continuing operations for the third quarter of 2012 was a net loss of $15 million, or 8 cents per diluted share, compared to net income of $20 million, or 11 cents per diluted share, for the same period last year. All periods presented in this release have been adjusted to reflect the classification of Polycom's Enterprise Wireless Solutions business as discontinued operations. The reconciliation between GAAP net income from continuing operations and non-GAAP net income is provided in the tables at the end of this release.

"Demand for our best in class UC&C solutions was solid in Q3, which allowed us to come in at the high end of our revenue expectations and exceed our earnings expectations," stated Andrew M. Miller, Polycom President and Chief Executive Officer. "We have been taking market share in 2012 as a result of our open standards-based Polycom® RealPresence® Platform and compelling cost of ownership advantage. Earlier this month on October 8, we unveiled a comprehensive set of breakthrough products launching in Q4 2012 and early 2013, that we believe will further distance us from the competition, expand our total addressable market, and drive mass adoption of video collaboration."

"Our overall Q3 performance was at the high end of our expectations, with North America showing strength. We reported a sequential increase in deferred revenue and operating cash flow," continued Eric Brown, Polycom Chief Operating Officer and Chief Financial Officer. "Q4 is an important quarter for Polycom, as we release a comprehensive set of new products, starting with the Polycom® RealPresence® Group Series solutions in November 2012."

On a geographic basis, consolidated net revenues from continuing operations for the third quarter of 2012 were comprised of:

• 51 percent Americas, or $171.0 million, a decrease of 5 percent year-over-year;
• 23 percent Europe, Middle East, and Africa (EMEA), or $78.6 million, a decrease of 8 percent year-over-year; and
• 26 percent Asia Pacific, or $85.8 million, a decrease of 4 percent year-over-year.

By product line, inclusive of its service component, consolidated net revenues from continuing operations for the third quarter of 2012 were comprised of:

• UC Group Systems of $225.8 million, a decrease of 8 percent year-over-year;
• UC Personal Devices of $45.7 million, a decrease of 3 percent year-over-year; and
• UC Platform of $63.9 million, an increase of 4 percent year-over-year.

In Q3 2012, Polycom generated a total of $48 million in operating cash flow and completed share repurchases of $30 million. Operating cash flow on a trailing 12 month basis was $243 million. Deferred revenue balances increased 2 percent sequentially to $244 million.

Q3 2012 Business Highlights

• Forrester Research Inc. named Polycom a leader in video conferencing and top-ranked Company in both 'current offerings' and 'strategy' in its report "The Forrester Wave™: Room-Based Videoconferencing, Q3 2012." In addition, Polycom received a "strong positive rating" in the Gartner MarketScope for Telepresence and Group Video Systems and was named a "Leader" in the IDC MarketScape for worldwide enterprise videoconferencing equipment.
• Launched the new Polycom® RealPresence® Resource Manager offering that further differentiates the Polycom RealPresence Platform with support for large scale video deployments of up to 10,000 endpoints, including mobile devices, and multi-tenancy for service providers to deliver Video-Collaboration-as-a-Service (VCaaS) cost-effectively.
• Launched a new suite of rich, open APIs that extends the value and ecosystem around the RealPresence Platform enabling advanced customization by partners and end users in Collaboration Enabled Business Processes (CEBP).
• Announced an initiative with IBM Research to co-develop next-generation innovations that are designed to further accelerate cloud-delivered video collaboration applications to support key vertical and social uses. Under the initiative, Polycom will work with IBM Research to explore and develop technologies that leverage the Polycom RealPresence Platform and real-time video capabilities in the cloud, as businesses are increasingly evaluating Video-as-a-Service (VaaS) and Video Collaboration-as-a-Service (VCaaS) offerings through private, public and hybrid cloud models.
• Unveiled Polycom Adoption Services, four new services designed to help enterprises rapidly accelerate user adoption and the returns on their investments of Polycom® RealPresence® video solutions, whether on the go or in a home office, work office, conference room, or immersive telepresence theater.

Earnings Call Details

Polycom will hold a conference call today, October 23, 2012, at 5:00 p.m. ET/2:00 p.m. PT to discuss its third quarter financial results. Andrew M. Miller, President and CEO, and Eric Brown, Chief Operating Officer and Chief Financial Officer, will host the call. You may participate by viewing the webcast at www.polycom.com/investors or, for callers in the U.S. and Canada, you may participate by calling 800.622.2443 and for callers outside of the U.S. and Canada, by calling 303.223.2686. The pass code for the call is "Polycom." A replay of the call will also be available at www.polycom.com or, for callers in the U.S. and Canada, at 800.633.8284 and, for callers outside of the U.S. and Canada, at 402.977.9140. The access number for the replay is 21606466. A replay of the call will be available on www.polycom.com for at least three months.

Forward Looking Statements and Risk Factors

This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 regarding future events, future demand for our products, and the future performance of the Company, including statements regarding product availability, the expected competitive gains, expansion of our total addressable market and mass adoption of video collaboration to result from our new product launches and Polycom Adoption Services as designed to rapidly accelerate user adoption and return on investment for enterprises. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the impact of competition on our product sales and for our customers and partners; the impact of increased competition due to consolidation in our industry or competition from companies that are larger or that have greater resources than we do; potential fluctuations in results and future growth rates; risks associated with global economic conditions and external market factors; the market acceptance of our products and changing market demands, including demands for differing technologies or product and services offerings; our ability to successfully integrate our acquisitions into our business and divest our EWS business; possible delays in the development, availability and shipment of new products due to engineering, manufacturing or other delays; increasing costs and differing uses of capital; changes in key personnel that may cause disruption to the business; continuing disruption to the business due to the realignment of the North America sales organization; our inability to achieve the expected results from adjustments being made to our expense profile; the impact of restructuring actions; and the impact of global conflicts that may adversely impact our business. Many of these risks and uncertainties are discussed in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, and in other reports filed by Polycom with the SEC. Polycom disclaims any intent or obligations to update these forward-looking statements.

Polycom reserves the right to modify future product plans at any time. Products and/or related specifications referenced in this press release are not guaranteed and will be delivered on a when and if available basis.

GAAP to non-GAAP Reconciliation

To supplement our consolidated financial statements presented on a GAAP basis, Polycom uses non-GAAP measures of operating results, net income and income per share, which are adjusted to exclude certain costs, expenses, gains, and losses we believe appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our current period GAAP results are made with the intent of providing both management and investors a more complete understanding of Polycom's underlying operational results and trends and our marketplace performance. For example, the non-GAAP results are an indication of our baseline performance before gains, losses, or other charges that are considered by management to be outside of our core operating results. In addition, these adjusted non-GAAP results are among the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or diluted net income per share prepared in accordance with generally accepted accounting principles in the United States.

About Polycom

Polycom is the global leader in open standards-based unified communication and collaboration (UC&C) solutions for telepresence, video, and voice, powered by the Polycom® RealPresence® Platform. The RealPresence® Platform interoperates with the broadest range of business, mobile and social applications and devices. More than 400,000 organizations trust Polycom solutions to collaborate and meet face to face from any location for more productive and effective engagement with colleagues, partners, customers, specialists, and prospects. Polycom, together with its broad partner ecosystem, provides customers with the best total cost of ownership, interoperability, scalability, and security for video collaboration, whether on-premises, hosted or cloud delivered. Visit www.polycom.com or connect with Polycom on Twitter, Facebook, and LinkedIn.

© 2012 Polycom, Inc. All rights reserved. POLYCOM®, the Polycom logo, and the names and marks associated with Polycom's products are trademarks and/or service marks of Polycom, Inc. and are registered and/or common law marks in the United States and various other countries. All other trademarks are property of their respective owners.

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