<ARTICLE> 5 <LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. </LEGEND> <CIK> 0001002531 <NAME> TOLLGRADE COMMUNICATIONS, INC. <PERIOD-TYPE> YEAR <FISCAL-YEAR-END> DEC-31-1998 <PERIOD-START> JAN-01-1998 <PERIOD-END> DEC-31-1998 <CASH> 8,311,353 <SECURITIES> 14,249,164 <RECEIVABLES> 8,288,740 <ALLOWANCES> 100,000 <INVENTORY> 13,201,771 <CURRENT-ASSETS> 44,658,332 <PP&E> 7,146,114 <DEPRECIATION> 3,831,592 <TOTAL-ASSETS> 49,864,575 <CURRENT-LIABILITIES> 4,118,858 <BONDS> 0 <PREFERRED-MANDATORY> 0 <PREFERRED> 0 <COMMON> 1,184,093 <OTHER-SE> 44,511,674 <TOTAL-LIABILITY-AND-EQUITY> 49,864,575 <SALES> 45,767,409 <TOTAL-REVENUES> 510,000 <CGS> 19,620,226 <TOTAL-COSTS> 19,620,226 <OTHER-EXPENSES> 0 <LOSS-PROVISION> 50,000 <INTEREST-EXPENSE> 0 <INCOME-PRETAX> 11,007,102 <INCOME-TAX> 4,039,800 <INCOME-CONTINUING> 0 <DISCONTINUED> 0 <EXTRAORDINARY> 0 <CHANGES> 0 <NET-INCOME> 6,967,302 <EPS-PRIMARY> 1.19 <EPS-DILUTED> 1.17