STEC Expects $61 Million to $63 Million Revenue for 3Q08

STEC, Inc. announced that, based on the Company’s preliminary review of its anticipated financial performance for the third quarter of 2008, which showed strong performance in the Enterprise-Storage and Ultra-Mobile Personal Computing markets, it now expects to report third quarter 2008 revenue and diluted non-GAAP earnings per share to be at the high end of its previous guidance range of $61 million to $63 million and $0.10 to $0.11, respectively, initially announced on August 4, 2008. The Company believes it is important to provide this updated guidance in light of recent uncertainty in the general economy.

The Company is also providing the following outlook:

Sales of ZeusIOPS (Solid-State Drive) SSDs into the Enterprise-Storage market grew to more than $14 million, an increase of more than 17% in the third quarter of 2008 from the second quarter of 2008;
The Company continues to gain momentum with additional design wins in the Enterprise-Storage Market;
The Company’s Mach8/IOPS SSD is achieving major design wins with various Enterprise-Server OEM customers resulting in significant expected traction for 2009.

Despite the current financial crisis in the capital markets, the Company believes interest and demand for the ZeusIOPS are robust. As a result of STEC’s OEM customers introducing their storage systems — which contain the ZeusIOPS SSD — to their customers, the Company believes there is end-user interest for new industry applications including: transportation — information tracking; oil and gas exploration — data interpretation and modeling; E-Commerce — Online Transaction Processing; and Retail and Distribution — data-mining and business-intelligence information processing.

The Company plans to formally announce its actual results of operations for the third quarter of 2008 on November 10, 2008. On that date, the Company will host a webcasted open conference call. Detailed information on how to access the conference call will be included in a separate news advisory to be issued prior to October 15, 2008.