Polycom (PLCM) 8-K Polycom Announces Revenues of $335 Million for Third Quarter 2012

Exhibit 99.1

Investor Contact:	Laura Graves
	Polycom, Inc.
	408.586.4271
	laura.graves@polycom.com
Press Contact:	Shawn Dainas
	Polycom, Inc.
	408.586.3768
	shawn.dainas@polycom.com

Polycom Announces Revenues of $335 Million for Third Quarter 2012

•Q3 Non-GAAP EPS Results Above Expectations

•UC Platform Revenues Reach 19 Percent of Q3 Revenues

•Breakthrough New Products Announced at October 8, 2012 Strategy Day

San Jose, California – October 23, 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 atwww.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 atwww.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 onwww.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 fortelepresence,video, andvoice, 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. Visitwww.polycom.com or connect with Polycom onTwitter,Facebook, andLinkedIn.

^© 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.

POLYCOM, INC.

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30, 2012			September 30, 2011			September 30, 2012			September 30, 2011
Revenues:
Product revenues	$	247,058		$	284,872		$	780,611		$	834,589
Service revenues		88,334			70,394			258,991			181,370
Total revenues		335,392			355,266			1,039,602			1,015,959
Cost of revenues:
Cost of product revenues		102,235			112,594			316,863			319,089
Cost of service revenues		36,799			28,131			106,123			72,566
Total cost of revenues		139,034			140,725			422,986			391,655
Gross profit		196,358			214,541			616,616			624,304
Operating expenses:
Sales and marketing		117,853			111,326			348,041			315,428
Research and development		53,997			51,000			153,425			138,896
General and administrative		27,376			22,039			72,375			61,031
Amortization of purchased intangibles		2,512			1,933			7,318			2,869
Restructuring costs		6,171			1,264			21,829			4,739
Acquisition-related expenses		6,334			3,578			11,793			7,924
Total operating expenses		214,243			191,140			614,781			530,887
Operating income (loss)		(17,885	)		23,401			1,835			93,417
Other expense, net		(230	)		(1,443	)		(3,010	)		(3,449	)
Income (loss) from continuing operations before provision for income taxes		(18,115	)		21,958			(1,175	)		89,968
Provision (benefit) for income taxes		(3,384	)		2,382			(1,025	)		9,790
Income (loss) from continuing operations		(14,731	)		19,576			(150	)		80,178
Income from discontinued operations, net of taxes		645			4,144			7,710			6,063
Net income (loss)	$	(14,086	)	$	23,720		$	7,560		$	86,241
Basic net income (loss) per share:
Income (loss) per share from continuing operations	$	(0.08	)	$	0.11		$	(0.00	)	$	0.45
Income per share from discontinued operations, net of taxes	$	0.00		$	0.02		$	0.04		$	0.03
Basic net income (loss) per share	$	(0.08	)	$	0.13		$	0.04		$	0.49
Diluted net income (loss) per share:
Income (loss) per share from continuing operations	$	(0.08	)	$	0.11		$	(0.00	)	$	0.44
Income per share from discontinued operations, net of taxes	$	0.00		$	0.02		$	0.04		$	0.03
Diluted net income (loss) per share:	$	(0.08	)	$	0.13		$	0.04		$	0.47
Number of shares used in computation of net income (loss) per share:
Basic		176,847			177,249			177,331			176,325
Fully diluted		176,847			182,519			177,331			181,816

Note: Earnings per share amounts for continuing operations, discontinued operations and net income, as presented above, are calculated individuallyand may not sum due to rounding differences.

As a result of the net loss from continuing operations for the three and nine month periods ended September 30, 2012, all potentially issuable commonshares have been excluded from the fully diluted shares used in the computation of earnings per share for those periods as their effect is anti-dilutive.

POLYCOM, INC.

Reconciliation of GAAP to Non-GAAP Net Income

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30, 2012			September 30, 2011			September 30, 2012			September 30, 2011
GAAP net income (loss) from continuing operations	$	(14,731	)	$	19,576		$	(150	)	$	80,178
Amortization of purchased intangibles		4,421			3,494			13,044			6,672
Restructuring costs		6,171			1,264			21,829			4,739
Acquisition-related expenses		6,334			3,578			11,793			7,924
Stock-based compensation expense		24,823			19,956			65,071			45,577
Effect of stock-based compensation on warranty rates		169			137			541			365
Severance costs associated with CFO retirement		—			—			929			—
Legal costs associated with the indemnification of a former officer		121			347			236			1,639
Impairment of an investment in a private company		—			—			—			500
Benefit related to the resolution of a multi-year tax audit		—			—			—			(7,486	)
Income tax effect of non-GAAP exclusions		(10,071	)		(5,994	)		(22,168	)		(13,383	)
Non-GAAP net income	$	17,237		$	42,358		$	91,125		$	126,725
GAAP earnings per share from continuing operations:
Basic	$	(0.08	)	$	0.11		$	(0.00	)	$	0.45
Fully diluted	$	(0.08	)	$	0.11		$	(0.00	)	$	0.44
Non-GAAP earnings per share:
Basic	$	0.10		$	0.24		$	0.51		$	0.72
Fully diluted	$	0.10		$	0.23		$	0.51		$	0.70
Number of shares used in computation of GAAP earnings per share:
Basic		176,847			177,249			177,331			176,325
Fully diluted		176,847			182,519			177,331			181,816
Number of shares used in computation of non-GAAP earnings per share:
Basic		176,847			177,249			177,331			176,325
Fully diluted		178,292			182,519			179,276			181,816

Note: As a result of the GAAP net loss from continuing operations for the three and nine month periods ended September 30, 2012, all potentiallyissuable common shares have been excluded from the fully diluted shares used in the computation of GAAP earnings per share for those periodsas their effect was anti-dilutive.

POLYCOM, INC.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

	September 30, 2012		December 31, 2011
ASSETS
Current assets
Cash and cash equivalents	$	415,558	$	375,241
Short-term investments		167,639		159,426
Trade receivables, net		189,778		210,804
Inventories		102,842		93,284
Deferred taxes		46,820		37,282
Prepaid expenses and other current assets		42,990		51,241
Assets held for sale, current		64,048		67,130
Total current assets		1,029,675		994,408
Property and equipment, net		138,156		126,884
Long-term investments		45,204		56,772
Goodwill and purchased intangibles		612,932		623,121
Deferred taxes		25,981		23,356
Other assets		21,852		20,264
Total assets	$	1,873,800	$	1,844,805
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	84,637	$	110,719
Accrued payroll and related liabilities		34,723		38,546
Deferred revenue		154,531		138,486
Other accrued liabilities		56,575		59,288
Liabilities held for sale, current		13,252		14,119
Total current liabilities		343,718		361,158
Non-current liabilities
Deferred revenue		89,028		82,898
Taxes payable		12,142		16,813
Deferred taxes		376		558
Other non-current liabilities		19,661		13,262
Total liabilities		464,925		474,689
Stockholders’ equity		1,408,875		1,370,116
Total liabilities and stockholders’ equity	$	1,873,800	$	1,844,805

POLYCOM, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine Months Ended
	September 30, 2012			September 30, 2011
Cash flows from operating activities:
Net income	$	7,560		$	86,241
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		45,592			38,732
Amortization of purchased intangibles		15,878			14,943
Provision for excess and obsolete inventories		5,297			6,189
Provision for doubtful accounts		800			—
Stock-based compensation expense		66,256			46,583
Impairment of private company investments		—			500
Excess tax benefits from stock-based compensation		(9,587	)		(13,330	)
Loss on disposals of property and equipment		3,502			738
Changes in assets and liabilities, net of the effect of acquisitions:
Trade receivables		20,435			(49,553	)
Inventories		(13,858	)		1,261
Deferred taxes		(12,947	)		(1,383	)
Prepaid expenses and other assets		3,058			(4,705	)
Accounts payable		(31,552	)		9,466
Taxes payable		1,032			11,553
Other accrued liabilities		19,958			30,395
Net cash provided by operating activities		121,424			177,630
Cash flows from investing activities:
Purchases of property and equipment		(51,979	)		(45,404	)
Purchases of investments		(212,377	)		(306,199	)
Proceeds from sale of investments		37,794			31,687
Proceeds from maturities of investments		178,162			235,412
Net cash paid in purchase acquisitions		(4,583	)		(139,041	)
Net cash used in investing activities		(52,983	)		(223,545	)
Cash flows from financing activities:
Proceeds from issuance of common stock under employee option and stock purchase plans		24,362			40,495
Repurchase of common stock		(62,073	)		(43,082	)
Excess tax benefits from stock-based compensation		9,587			13,330
Net cash (used in) provided by financing activities		(28,124	)		10,743
Net increase (decrease) in cash and cash equivalents		40,317			(35,172	)
Cash and cash equivalents, beginning of period		375,441			324,188
Cash and cash equivalents, end of period	$	415,758		$	289,016

These Condensed Consolidated Statements of Cash Flows include combined cash flows of continuing and discontinued operations.

POLYCOM, INC.

Reconciliations of GAAP Measures to Non-GAAP Measures

(In thousands)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30, 2012			September 30, 2011			September 30, 2012			September 30, 2011
GAAP cost of revenues used in inventory turns	$	139,034		$	140,725		$	422,986		$	391,655
Stock-based compensation expense		(2,889	)		(2,008	)		(7,672	)		(4,676	)
Effect of stock-based compensation on warranty rates		(169	)		(137	)		(541	)		(365	)
Amortization of purchased intangibles		(1,909	)		(1,561	)		(5,726	)		(3,803	)
Non-GAAP cost of revenues used in inventory turns	$	134,067		$	137,019		$	409,047		$	382,811
GAAP gross profit	$	196,358		$	214,541		$	616,616		$	624,304
Stock-based compensation expense		2,889			2,008			7,672			4,676
Effect of stock-based compensation on warranty rates		169			137			541			365
Amortization of purchased intangibles		1,909			1,561			5,726			3,803
Non-GAAP gross profit	$	201,325		$	218,247		$	630,555		$	633,148
Non-GAAP gross margin		60.0	%		61.4	%		60.7	%		62.3	%
GAAP sales and marketing expense	$	117,853		$	111,326		$	348,041		$	315,428
Stock-based compensation expense		(9,765	)		(7,778	)		(27,069	)		(18,891	)
Non-GAAP sales and marketing expense	$	108,088		$	103,548		$	320,972		$	296,537
Non-GAAP sales and marketing expense as percent of revenues		32.2	%		29.1	%		30.9	%		29.2	%
GAAP research and development expense	$	53,997		$	51,000		$	153,425		$	138,896
Stock-based compensation expense		(5,409	)		(4,694	)		(14,808	)		(10,622	)
Non-GAAP research and development expense	$	48,588		$	46,306		$	138,617		$	128,274
Non-GAAP research and development expense as percent of revenues		14.5	%		13.0	%		13.3	%		12.6	%
GAAP general and administrative expense	$	27,376		$	22,039		$	72,375		$	61,031
Stock-based compensation expense		(6,760	)		(5,476	)		(15,522	)		(11,388	)
Severance costs associated with CFO retirement		—			—			(929	)		—
Legal costs associated with the indemnification of a former officer		(121	)		(347	)		(236	)		(1,639	)
Non-GAAP general and administrative expense	$	20,495		$	16,216		$	55,688		$	48,004
Non-GAAP general and administrative expense as percent of revenues		6.1	%		4.6	%		5.4	%		4.7	%
GAAP total operating expenses	$	214,243		$	191,140		$	614,781		$	530,887
Stock-based compensation expense		(21,934	)		(17,948	)		(57,399	)		(40,901	)
Amortization of purchased intangibles		(2,512	)		(1,933	)		(7,318	)		(2,869	)
Restructuring costs		(6,171	)		(1,264	)		(21,829	)		(4,739	)
Acquisition-related expenses		(6,334	)		(3,578	)		(11,793	)		(7,924	)
Severance costs associated with CFO retirement		—			—			(929	)		—
Legal costs associated with the indemnification of a former officer		(121	)		(347	)		(236	)		(1,639	)
Non-GAAP total operating expenses	$	177,171		$	166,070		$	515,277		$	472,815
Non-GAAP total operating expenses as percent of revenues		52.8	%		46.7	%		49.6	%		46.5	%
GAAP operating income (loss)	$	(17,885	)	$	23,401		$	1,835		$	93,417
Stock-based compensation expense		24,823			19,956			65,071			45,577
Effect of stock-based compensation on warranty rates		169			137			541			365
Amortization of purchased intangibles		4,421			3,494			13,044			6,672
Restructuring costs		6,171			1,264			21,829			4,739
Acquisition-related expenses		6,334			3,578			11,793			7,924
Severance costs associated with CFO retirement		—			—			929			—
Legal costs associated with the indemnification of a former officer		121			347			236			1,639
Non-GAAP operating income	$	24,154		$	52,177		$	115,278		$	160,333
Non-GAAP operating margin		7.2	%		14.7	%		11.1	%		15.8	%

POLYCOM, INC.

Summary of Stock-Based Compensation Expense

(In thousands)

(Unaudited)

	Three Months Ended				Nine Months Ended
	September 30, 2012		September 30, 2011		September 30, 2012		September 30, 2011
Cost of sales - product	$	969	$	670	$	2,720	$	1,794
Cost of sales - service		1,920		1,338		4,952		2,882
Stock-based compensation expense in cost of sales		2,889		2,008		7,672		4,676
Sales and marketing		9,765		7,778		27,069		18,891
Research and development		5,409		4,694		14,808		10,622
General and administrative		6,760		5,476		15,522		11,388
Stock-based compensation expense in operating expenses		21,934		17,948		57,399		40,901
Total stock-based compensation expense	$	24,823	$	19,956	$	65,071	$	45,577