Ixia (XXIA) 8-K Ixia Announces Second Quarter Results and Record Bookings

Exhibit 99.1

For more information, contact:

Tom Miller
Chief Financial Officer
(818) 444-2325
tmiller@ixiacom.com

Ixia Announces Second Quarter Results and Record Bookings

CALABASAS, CA— July 24, 2008— Ixia (Nasdaq: XXIA) today reported its financial results for the second quarter ended June 30, 2008.

Total revenues for the second quarter of 2008 were $45.9 million, which compares to $41.7 million in the immediately preceding first quarter of 2008 and $43.0 million in the second quarter of 2007. The Company earned net income on a GAAP basis for the second quarter of 2008 of $1.8 million, or $0.03 per diluted share, compared to net income of $1.4 million, or $0.02 per diluted share, for the second quarter of 2007.

Ixia’s 2008 second quarter GAAP results include non-cash charges of $2.4 million related to stock-based compensation, $1.4 million for the amortization of acquired intangible assets, and a net tax benefit of $1.3 million related to these items. Excluding the effects of these items, non-GAAP net income for the second quarter of 2008 was $4.3 million, or $0.07 per diluted share, compared to $5.4 million, or $0.08 per diluted share, for the second quarter of 2007. Second quarter 2007 non-GAAP results exclude non-cash charges of $3.3 million related to the impairment of certain intangible assets, $2.1 million related to stock-based compensation, $2.0 million related to the amortization of acquired intangible assets, and a net tax benefit of $3.4 million related to these items.

“We are very pleased with our second quarter results, especially given the ongoing uncertainty with the economy,” commented Atul Bhatnagar, Ixia’s President and Chief Executive Officer. “We achieved record bookings this quarter, driven by our worldwide accounts as we continued to diversify and grow our customer base. We increased bookings over the first quarter in all of our major geographic regions and customer segments due in part to the recent investments we have made in our sales and marketing teams. During the quarter, we also launched our new, high density and high performance IxYukon^TM load modules which helped us attain record bookings for our 10 gigabit Ethernet products. And, we were able to accomplish all of this while holding our operating expenses relatively flat compared to the first quarter.”

During the second quarter of 2008, Ixia completed its $50 million share repurchase program that was announced in August of 2007. In the second quarter of 2008, Ixia repurchased approximately 4.3 million shares of its common stock at an average purchase price of $7.64 per share, or a total repurchase price of approximately $32.6 million. Overall, the $50 million share repurchase program resulted in the repurchase of approximately 6.3 million shares of its common stock at an average purchase price of $7.99 per share.

As of June 30, 2008, Ixia had cash, cash equivalents and investments of $221.0 million and no debt.

Ixia will host a conference call today for analysts and investors to discuss its 2008 second quarter results and business outlook for the 2008 third quarter at 5:00 p.m. Eastern Time. Open to the public, a live webcast of the conference call will be accessible from the “Investors” section of Ixia’s Web Site (www.ixiacom.com). Following the live webcast, an archived version will be available in the “Investors” section on the Ixia Web Site for 90 days.

Non-GAAP Information

To supplement our consolidated financial results prepared in accordance with Generally Accepted Accounting Principles (“GAAP”), we have included certain non-GAAP financial measures in this press release and in the attachments hereto. Specifically, we have provided non-GAAP financial measures (e.g., non-GAAP cost of revenues, non-GAAP operating expenses, non-GAAP operating income, non-GAAP income tax expense, non-GAAP net income, and non-GAAP diluted earnings per share) that exclude certain non-cash expenses such as the amortization or impairment of acquisition-related intangible assets and stock-based compensation, as well as the related income tax effects of such items. The amortization or impairment of acquisition-related intangible assets and stock-based compensation represent non-cash charges that may be difficult to estimate from period to period and that are not directly attributable to the underlying performance of our business operations. These non-GAAP financial measures are provided to enhance the user’s overall understanding of our financial performance. We believe that by excluding certain non-cash charges, as well as the related income tax effects, our non-GAAP measures provide supplemental information to both management and investors that is useful in assessing our core operating performance, in evaluating our ongoing business operations and in comparing our results of operations on a consistent basis from period to period. These non-GAAP financial measures are also used by management to plan and forecast future periods and to assist in making operating and strategic decisions. The presentation of this additional information is not prepared in accordance with GAAP. The information therefore may not necessarily be comparable to that of other companies and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Investors are encouraged to review the reconciliations of GAAP to non-GAAP financial measures which are included below in this press release.

About Ixia

Ixia is a leading provider of IP performance test systems and service verification platforms for IP-based infrastructure and services. Ixia’s test systems are used by network and telephony equipment manufacturers, semiconductor manufacturers, service providers, governments and enterprises to validate the performance and reliability of complex IP networks, devices, and applications. Ixia’s multiplay test systems address the growing need to test voice, video, and data services and network capability under real-world conditions.

For more information, contact Ixia at 26601 W. Agoura Road, Calabasas, CA 91302; (818) 871-1800, Fax: (818) 871-1805; Email: info@ixiacom.com or visit our Web Site at http://www.ixiacom.com.

Ixia, the Ixia four petal logo and IxYukon are trademarks and/or registered trademarks of Ixia. Other trademarks are the property of their respective owners.

Safe Harbor Under the Private Securities Litigation Reform Act of 1995:

Certain statements made in this press release are forward-looking statements, including, without limitation, statements regarding possible future revenues, growth and profitability and future business and market share. In some cases, such forward-looking statements can be identified by terms such as “may,” “will,” “expect,” “plan,” “believe,” “estimate,” “predict” or the like. Such statements reflect our current intent, belief and expectations and are subject to risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in the forward-looking statements. Factors that may cause future results to differ materially from our current expectations include those identified in our Annual Report on Form 10-K for the year ended December 31, 2007 and in our other filings with the Securities and Exchange Commission. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

IXIA
Condensed Consolidated Balance Sheets
(in thousands)

	June 30,			December 31,
	2008			2007
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	168,457		$	188,892
Short-term investments in marketable securities		4,996			4,999
Accounts receivable, net		35,888			32,405
Inventories		9,658			12,731
Deferred income taxes		5,593			5,613
Prepaid expenses and other current assets		4,139			3,385
Total current assets		228,731			248,025
Investments in marketable securities		47,508			54,609
Property and equipment, net		20,392			21,433
Deferred income taxes		13,244			13,543
Intangible assets, net		11,357			14,147
Goodwill		16,728			16,728
Other assets		2,200			955
Total assets	$	340,160		$	369,440
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	3,410		$	2,474
Accrued expenses		19,533			19,440
Deferred revenues		20,514			18,748
Income taxes payable		750			1,304
Total current liabilities		44,207			41,966
Deferred revenues		6,716			7,167
Other liabilities		5,711			3,807
Total liabilities		56,634			52,940
Shareholders’ equity:
Common stock, without par value; 200,000 shares authorized at June 30, 2008 and December 31, 2007; 63,362 and 68,171 shares issued and outstanding as of June 30, 2008 and December 31, 2007, respectively		93,281			132,092
Additional paid-in capital		102,704			98,157
Retained earnings		90,964			89,077
Accumulated other comprehensive loss		(3,423	)		(2,826	)
Total shareholders’ equity		283,526			316,500
Total liabilities and shareholders’ equity	$	340,160		$	369,440

IXIA
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)

	Three months ended					Six months ended
	June 30,					June 30,
	2008		2007			2008			2007
Revenues:
Products	$	38,783	$	36,864		$	73,717		$	71,579
Services		7,137		6,135			13,854			12,123
Total revenues		45,920		42,999			87,571			83,702
Costs and operating expenses:(1)
Cost of revenues — products		8,658		8,379			16,840			16,234
Cost of revenues — amortization of purchased technology		1,220		1,427			2,440			2,756
Cost of revenues — services		1,134		916			2,188			2,060
Research and development		12,530		10,942			24,516			22,610
Sales and marketing		15,027		13,466			29,729			28,309
General and administrative		6,138		5,847			13,142			12,331
Amortization of intangible assets		207		614			468			1,145
Impairment of purchased technology and intangible assets		—		3,263			—			3,263
Total costs and operating expenses		44,914		44,854			89,323			88,708
Income (loss) from operations		1,006		(1,855	)		(1,752	)		(5,006	)
Interest and other income, net		1,756		2,912			4,533			5,611
Income before income taxes		2,762		1,057			2,781			605
Income tax expense (benefit)		981		(343	)		894			(36	)
Net income	$	1,781	$	1,400		$	1,887		$	641
Earnings per share:
Basic	$	0.03	$	0.02		$	0.03		$	0.01
Diluted	$	0.03	$	0.02		$	0.03		$	0.01
Weighted average number of common and common equivalent shares outstanding:
Basic		65,343		67,834			66,646			67,625
Diluted		66,265		69,232			67,594			69,161
(1) Stock-based compensation included in:
Cost of revenues — products	$	91	$	84		$	248		$	226
Cost of revenues — services		35		32			95			86
Research and development		774		839			1,883			2,260
Sales and marketing		860		656			1,774			2,366
General and administrative		672		445			1,368			960

IXIA
Non-GAAP Information and Reconciliation to Comparable GAAP Financial Measures
(in thousands, except percentages and per share data)
(unaudited)

	Three months ended June 30,
	2008						2007
				% Total						% Total
	Amount ($)			Revenues			Amount ($)			Revenues
Total cost of revenues — GAAP	$	11,012			24.0	%	$	12,225			28.4	%
Amortization of purchased technology(a)		(1,220	)		-2.7	%		(1,427	)		-3.3	%
Impairment of purchased technology(b)		—			0.0	%		(1,503	)		-3.5	%
Stock-based compensation(c)		(126	)		-0.3	%		(116	)		-0.3	%
Total cost of revenues — Non-GAAP	$	9,666			21.0	%	$	9,179			21.3	%
Operating expenses — GAAP	$	33,902			73.8	%	$	32,629			75.9	%
Amortization of intangible assets(a)		(207	)		-0.5	%		(614	)		-1.4	%
Impairment of intangible assets(b)		—			0.0	%		(1,760	)		-4.1	%
Stock-based compensation(c)		(2,306	)		-4.9	%		(1,940	)		-4.5	%
Operating expenses — Non-GAAP	$	31,389			68.4	%	$	28,315			65.9	%
Income (loss) from operations — GAAP	$	1,006			2.2	%	$	(1,855	)		-4.3	%
Effect of reconciling items(d)		3,859			8.4	%		7,360			17.1	%
Income from operations — Non-GAAP	$	4,865			10.6	%	$	5,505			12.8	%
Income tax expense (benefit) — GAAP	$	981			2.1	%	$	(343	)		-0.8	%
Effect of reconciling items(e)		1,294			2.9	%		3,370			7.8	%
Income tax expense — Non-GAAP	$	2,275			5.0	%	$	3,027			7.0	%
Net income — GAAP	$	1,781			3.9	%	$	1,400			3.3	%
Effect of reconciling items(f)		2,565			5.6	%		3,990			9.2	%
Net income — Non-GAAP	$	4,346			9.5	%	$	5,390			12.5	%
Diluted earnings per share — GAAP	$	0.03					$	0.02
Effect of reconciling items(g)		0.04						0.06
Diluted earnings per share — Non-GAAP	$	0.07					$	0.08

(a)	This reconciling item represents the amortization of intangible assets related to the acquisitions of various businesses and technologies such as the acquisition of the ANVLTM product line from Empirix, Inc., the acquisition of certain rights associated with the Chariot® product line from NetIQ Corporation and the acquisition of G3 Nova Technologies, Inc. As the amortization expense represents a non-cash charge that is not directly attributable to the underlying performance of our business operations, we believe that by excluding the amortization of acquisition-related intangible assets, investors are provided with supplemental information that is useful in evaluating our ongoing operations and performance. While the amortization of acquired intangible assets is expected to continue in the future, management also excludes this expense when evaluating current performance, forecasting future results, measuring core operating results, and making operating and strategic decisions.
(b)	This reconciling item represents the impairment of purchased technology of $1.5 million and the impairment of certain intangible assets of $1.8 million related to the acquisition of Communication Machinery Corporation in July 2005 and to the acquisition of the mobile video test product line from Dilithium Networks in January 2006.
(c)	This reconciling item represents stock-based compensation expense recognized under Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“FAS 123R”). As stock-based compensation represents a non-cash charge that is not directly attributable to the underlying performance of our business operations, we believe that by excluding stock-based compensation, investors are provided with supplemental information that is useful in comparing our operating results from period to period and in evaluating our core operations and performance. While we expect to continue to recognize stock-based compensation expense in the future, management also excludes this expense when evaluating current performance, forecasting future results, measuring core operating results, and making operating and strategic decisions.
(d)	This adjustment represents the effects of the reconciling items noted in footnotes (a), (b) and (c).
(e)	This adjustment represents the income tax effects of the reconciling items noted in footnotes (a), (b) and (c).
(f)	This adjustment represents the effects of the reconciling items noted in footnotes (a), (b) and (c), net of tax.
(g)	This adjustment represents the effects of the reconciling items noted in footnotes (a), (b) and (c), net of tax, on a diluted per share basis.

IXIA
Non-GAAP Information and Reconciliation to Comparable GAAP Financial Measures
(in thousands, except percentages and per share data)
(unaudited)

	Six months ended June 30,
	2008						2007
				% Total						% Total
	Amount ($)			Revenues			Amount ($)			Revenues
Total cost of revenues — GAAP	$	21,468			24.5	%	$	22,553			26.9	%
Amortization of purchased technology(a)		(2,440	)		-2.8	%		(2,756	)		-3.3	%
Impairment of purchased technology(b)		—			0.0	%		(1,503	)		-1.8	%
Stock-based compensation(c)		(343	)		-0.4	%		(312	)		-0.3	%
Total cost of revenues — Non-GAAP	$	18,685			21.3	%	$	17,982			21.5	%
Operating expenses — GAAP	$	67,855			77.5	%	$	66,155			79.0	%
Amortization of intangible assets(a)		(468	)		-0.5	%		(1,145	)		-1.4	%
Impairment of intangible assets(b)		—			0.0	%		(1,760	)		-2.1	%
Stock-based compensation(c)		(5,025	)		-5.8	%		(5,586	)		-6.6	%
Operating expenses — Non-GAAP	$	62,362			71.2	%	$	57,664			68.9	%
Loss from operations — GAAP	$	(1,752	)		-2.0	%	$	(5,006	)		-6.0	%
Effect of reconciling items(d)		8,276			9.5	%		13,062			15.6	%
Income from operations — Non-GAAP	$	6,524			7.5	%	$	8,056			9.6	%
Income tax expense (benefit) — GAAP	$	894			1.0	%	$	(36	)		0.0	%
Effect of reconciling items(e)		2,987			3.4	%		4,975			5.9	%
Income tax expense — Non-GAAP	$	3,881			4.4	%	$	4,939			5.9	%
Net income — GAAP	$	1,887			2.2	%	$	641			0.8	%
Effect of reconciling items(f)		5,289			6.0	%		8,087			9.6	%
Net income — Non-GAAP	$	7,176			8.2	%	$	8,728			10.4	%
Diluted earnings per share — GAAP	$	0.03					$	0.01
Effect of reconciling items(g)		0.08						0.12
Diluted earnings per share — Non-GAAP	$	0.11					$	0.13

(a)	This reconciling item represents the amortization of intangible assets related to the acquisitions of various businesses and technologies such as the acquisition of the ANVLTM product line from Empirix, Inc., the acquisition of certain rights associated with the Chariot® product line from NetIQ Corporation and the acquisition of G3 Nova Technologies, Inc. As the amortization expense represents a non-cash charge that is not directly attributable to the underlying performance of our business operations, we believe that by excluding the amortization of acquisition-related intangible assets, investors are provided with supplemental information that is useful in evaluating our ongoing operations and performance. While the amortization of acquired intangible assets is expected to continue in the future, management also excludes this expense when evaluating current performance, forecasting future results, measuring core operating results, and making operating and strategic decisions.
(b)	This reconciling item represents the impairment of purchased technology of $1.5 million and the impairment of certain intangible assets of $1.8 million related to the acquisition of Communication Machinery Corporation in July 2005 and to the acquisition of the mobile video test product line from Dilithium Networks in January 2006.
(c)	This reconciling item represents stock-based compensation expense recognized under Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“FAS 123R”). As stock-based compensation represents a non-cash charge that is not directly attributable to the underlying performance of our business operations, we believe that by excluding stock-based compensation, investors are provided with supplemental information that is useful in comparing our operating results from period to period and in evaluating our core operations and performance. While we expect to continue to recognize stock-based compensation expense in the future, management also excludes this expense when evaluating current performance, forecasting future results, measuring core operating results, and making operating and strategic decisions.
(d)	This adjustment represents the effects of the reconciling items noted in footnotes (a), (b) and (c).
(e)	This adjustment represents the income tax effects of the reconciling items noted in footnotes (a), (b) and (c).
(f)	This adjustment represents the effects of the reconciling items noted in footnotes (a), (b) and (c), net of tax.
(g)	This adjustment represents the effects of the reconciling items noted in footnotes (a), (b) and (c), net of tax, on a diluted per share basis.