<ARTICLE> 5 <LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997. </LEGEND> <CIK> 0001002531 <NAME> TOLLGRADE COMMUNICATIONS, INC. <PERIOD-TYPE> YEAR <FISCAL-YEAR-END> DEC-31-1997 <PERIOD-START> JAN-01-1997 <PERIOD-END> DEC-31-1997 <CASH> 3,183,944 <SECURITIES> 15,666,626 <RECEIVABLES> 8,451,773 <ALLOWANCES> 50,000 <INVENTORY> 12,101,114 <CURRENT-ASSETS> 39,975,925 <PP&E> 5,473,704 <DEPRECIATION> 2,471,880 <TOTAL-ASSETS> 43,713,212 <CURRENT-LIABILITIES> 5,405,713 <BONDS> 0 <PREFERRED-MANDATORY> 0 <PREFERRED> 0 <COMMON> 1,145,470 <OTHER-SE> 36,955,913 <TOTAL-LIABILITY-AND-EQUITY> 43,713,212 <SALES> 44,546,135 <TOTAL-REVENUES> 45,421,135 <CGS> 20,104,202 <TOTAL-COSTS> 20,104,202 <OTHER-EXPENSES> 0 <LOSS-PROVISION> 50,000 <INTEREST-EXPENSE> 0 <INCOME-PRETAX> 11,056,797 <INCOME-TAX> 4,173,649 <INCOME-CONTINUING> 0 <DISCONTINUED> 0 <EXTRAORDINARY> 0 <CHANGES> 0 <NET-INCOME> 6,883,148 <EPS-PRIMARY> 1.21 <EPS-DILUTED> 1.15