Voltaire: Fiscal 4Q07 Financial Results

Voltaire Ltd. announced financial results for the three and twelve
month periods ended December 31, 2007.

Fourth Quarter Highlights (compared to fourth quarter 2006)

• Achieved non-GAAP net income of $1.4 million; GAAP net income of $1.2
  million
• Gross margin increased to 48.4%, up from 38.6%
• Revenues grew by 26% to $17.4 million
• Strong operating cash flow as a result of efficient inventory
  management and customer collection
• Steady increase in orders generated from main commercial vertical
  markets during fourth quarter

• Revenue for the fourth quarter of 2007 totaled $17.4 million, an
  increase of 26% compared to $13.8 million in the fourth quarter 2006. GAAP gross profit for the fourth quarter of 2007 totaled $8.4 million,
  or 48.4% of revenues, a 57% increase compared to $5.3 million gross
  profit in the fourth quarter 2006, or 38.6% of revenues. GAAP operating
  profit for the fourth quarter of 2007 totaled $0.5 million, compared to
  an operating loss of $0.2 million in the fourth quarter of 2006. Net
  income for the fourth quarter of 2007 was $1.2 million, or $0.05 per
  diluted share, compared to a net loss, before non-cash accretion of
  redeemable preferred shares, of $0.7 million, or $0.05 loss per diluted
  share, in the fourth quarter of 2006. Net income in the fourth quarter
  included the recognition of a tax benefit of approximately $0.6 million
  which we recorded at year end for our U.S. subsidiary, Voltaire,
  Inc.,  due to the release of a prior recorded tax valuation
  allowance resulting from the entity’s financial results and future
  prospects.

Non-GAAP operating profit for the fourth quarter of 2007 totaled $0.7
million, compared to a non-GAAP operating loss of $0.1 million in the
fourth quarter of 2006. Non-GAAP net income for the fourth quarter of
2007 totaled $1.4 million, or $0.06 per diluted share, compared to a
non-GAAP net loss of $0.2 million, or $0.02 loss per diluted share, in
the fourth quarter 2006. Non-GAAP net income in the fourth quarter also
included the release of the tax valuation allowance noted above.

Full Year 2007
Revenue for the full year 2007 totaled $53.1 million, an increase of 75%
compared to $30.4 million in 2006.

GAAP gross profit for 2007 totaled $23.0 million, or 43.2% of revenues,
a 105% increase compared to $11.2 million gross profit in 2006, or 36.8%
of revenues. GAAP operating loss for 2007 totaled $3.3 million, compared
to an operating loss of $8.3 million in 2006. Net loss for 2007, before
non-cash accretion of redeemable preferred shares, was $3.2 million, or
$0.19 per diluted share, compared to a net loss of $8.8 million, or
$0.69 per diluted share, before non-cash accretion of redeemable
preferred shares, in 2006.

Non-GAAP operating loss for full year 2007 totaled $2.2 million,
compared to a non-GAAP operating loss of $8.0 million in 2006. Non-GAAP
net loss for 2007 totaled $1.5 million, or $0.09 per diluted share,
compared to a non-GAAP net loss of $8.2 million, or $0.62 per diluted
share, in 2006.

“2007 was a major year for Voltaire in terms
of growth and execution, laying strong foundations for future growth and
performance in 2008 and beyond. This year we delivered on all of our
financial and operational targets, reaching major new milestones. We
introduced our Grid Director 20 Gigabits/second switches, became a
public company, surpassed the $50 million annual revenue mark and
achieved two consecutive quarters of profitability, while steadily
increasing our profit margins,” commented
Ronnie Kenneth, Chairman and CEO of Voltaire.

“Throughout the year we also continued to
execute successfully our vertical market strategy and are seeing rapid
adoption of Voltaire products in sectors outside of our traditional
markets of government, research and education,”
added Mr. Kenneth. “Looking ahead to 2008, we
intend to continue to build on these strong foundations, executing on
our three core growth drivers – our vertical solutions approach,
go-to-market strategy through our premier server OEM partners, and
leading differentiated products, driving continued growth and execution
in line with our long term business and financial model.”

Outlook
Revenues for the first quarter of 2008 are expected to be in the range
of $16 – $17 million, given seasonality, while earnings per share, on a
non-GAAP basis, are expected to be around breakeven.

Voltaire Ltd.