[January 23, 2013]

Polycom Announces Revenues of $353 Million for Fourth 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 fourth quarter ended December 31, 2012.

Fourth quarter 2012 consolidated net revenues were $353 million, up 5 percent sequentially, growing in all product categories, compared to $335 million for the third quarter of 2012 and down 9 percent year-over-year compared to $386 million for the fourth quarter of 2011. Non-GAAP net income for the fourth quarter of 2012 was $31 million, or 17 cents per diluted share, compared to non-GAAP net income of $17 million or 10 cents per diluted share for the third quarter of 2012, and non-GAAP net income of $68 million, or 38 cents per diluted share for the fourth quarter of 2011. GAAP net income for the fourth quarter of 2012 was $2 million, or 1 cent per diluted share, compared to GAAP net income of $50 million, or 28 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 and non-GAAP net income is provided in the tables at the end of this release.

"Polycom has executed very well, demonstrating clear product leadership during the UC&C market transition in 2012," stated Andrew M. Miller, Polycom President and Chief Executive Officer. "We are excited to begin 2013 with what we believe is the most comprehensive product portfolio in the industry and improved sales and go-to-market capabilities that enable new business models for collaboration, including software, cloud-delivered video, and virtualization."

"We are pleased to report sequential revenue growth in all product categories, including UC Platform, which is above a quarter billion dollar per year run rate," continued Eric Brown, Polycom Chief Operating Officer and Chief Financial Officer. "Services revenue also increased both sequentially and year-over-year in line with our increased focus on this area of the business."

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

• 50 percent Americas, or $175.2 million, an increase of 2 percent sequentially and a decrease of 3 percent year-over-year;
• 26 percent Europe, Middle East, and Africa (EMEA), or $93.4 million, an increase of 19 percent sequentially and a decrease of 10 percent year-over-year; and
• 24 percent Asia Pacific, or $84.4 million, a decrease of 2 percent sequentially and a decrease of 18 percent year-over-year.

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

• UC Group Systems of $238.2 million, an increase of 5 percent sequentially, and a decrease of 8 percent year-over-year;
• UC Personal Devices of $46.8 million, an increase of 2 percent both sequentially and year-over-year; and
• UC Platform of $68.0 million, an increase of 6 percent sequentially and a decrease of 15 percent year-over-year.

In Q4 2012, Polycom generated a total of $66 million in operating cash flow and completed share repurchases of $5 million. Operating cash flow on a trailing 12 month basis was $187 million. Deferred revenue balances increased 2 percent sequentially to $250 million.

Q4 2012 Business Highlights

• Announced a royalty-free license offering for an interoperable implementation of H.264 Scalable Video Coding (SVC) software technology.
• Unveiled a comprehensive set of breakthrough products at our Strategy Day in October, including:
  • Polycom® RealPresence® CloudAXIS™ Suite, a software extension of the Polycom® RealPresence® Platform for private and public cloud deployments - available in both an enterprise and partner/service provider edition - that enables universal access to enterprise-grade video collaboration to any business (B2B) or consumer (B2C) at the highest quality, reliability, and security
  • Powerful Polycom RealPresence Platform enhancements, including the industry's first open standards-based SVC (Scalable Video Coding), with 3X HD multipoint video call capacity for greater scalability, dramatically lower TCO, superior performance, and backwards- and forwards-compatibility to protect customer investments-all available through a software update
  • Polycom® RealPresence® Collaboration Server 800s, Virtual Edition, the industry's first multi-protocol, integrated software MCU that runs on industry-standard servers
  • Next-generation video endpoints, including new Polycom® RealPresence® Group Series products, the new ultra-slim Polycom® RealPresence® VisualEdge™ Executive Desktop offering, and Polycom RealPresence software for PCs and mobile devices.
  • Launched Polycom® VVX® 600 solutions, offering workers a flexible and intuitive phone that integrates seamlessly with popular UC&C productivity applications and Bluetooth headsets for hands-free privacy. Users can also join video conferences via the optional Polycom VVX Camera, which Polycom also unveiled for both Polycom VVX 600 and Polycom® VVX® 500 business media phones.
  • Introduced a series of new customer financing options that help free customers from the limitations of quarterly capital expense budgets and allow more organizations to implement UC&C solutions that fully meet their needs.
  • Announced enhancements to the Company's video content management solutions, including a new cloud-delivered version of the Polycom® RealPresence® Media Manager and Polycom® RSS™ 4000 v8.5, which help organizations record, stream, manage and view live and on-demand video content quickly, easily and cost-effectively.
  • Announced the worldwide availability of the Polycom® HDX® Series 3.1, a software update for the Company's popular HDX video collaboration solution for executive desktops and rooms.

Earnings Call Details

Polycom will hold a conference call today, January 23, 2013, at 5:00 p.m. EST/2:00 p.m. PST to discuss its fourth 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 800.707.8704 and for callers outside of the U.S. and Canada, by calling 303.223.4360. 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 21643789. 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 the comprehensiveness of our product portfolio and improved sales and go-to-market capabilities that enable new business models for collaboration, and future expectations for continued growth of our UC Platform revenues. 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; 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; 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 September 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 communications and collaboration (UC&C) solutions for voice and video collaboration, trusted by more than 415,000 customers around the world. Polycom solutions are powered by the Polycom® RealPresence® Platform, comprehensive software infrastructure and rich APIs that interoperate with the broadest set of communication, business, mobile and cloud applications and devices to deliver secure face-to-face video collaboration in any environment. Polycom and its ecosystem of over 7,000 partners provide truly unified communications solutions that deliver the best user experience, highest multi-vendor interoperability, and lowest TCO Visit www.polycom.com or connect with us on Twitter, Facebook, and LinkedIn to learn how we're pushing the greatness of human collaboration forward.

© 2013 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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