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A Leading Provider of Telecom Software and IT Security Solutions


              Corporate Presentation for Investors
                           July 2007
Safe Harbor
The information contained in this presentation is as of July 31, 2007. AsiaInfo assumes
no obligation to update any forward-looking statements contained in this presentation
as a result of new information or future events or developments.
This presentation contains forward-looking information about AsiaInfo’s operating
results and business prospects that involve substantial risks and uncertainties. You can
identify these statements by the fact that they use words such as “anticipate,”
“estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of
similar meaning in connection with any discussion of future operating or financial
performance. Among the factors that could cause actual results to differ materially are
the following: government telecommunications infrastructure and budgetary policy in
China; our ability to maintain our concentrated customer base; the long and variable
billing cycles for our products and services that can cause our revenues and operating
results to vary significantly from period to period; our ability to meet our working
capital requirements; our ability to retain our executive officers; our ability to attract
and retain skilled personnel; potential liabilities we are exposed to because we extend
warranties to our customers; risks associated with cost overruns and delays; our ability
to develop or acquire new products or enhancements to our software products that are
marketable on a timely and cost-effective basis; our ability to adequately protect our
proprietary rights; the competitive nature of the markets we operate in; political and
economic policies of the Chinese government. A further list and description of these
risks, uncertainties, and other matters can be found in our Annual Report on Form 10-K
for the fiscal year ended December 31, 2006, and in our periodic reports on Forms 10-
Q and 8-K (if any) filed with the United States Securities and Exchange Commission
and available at www.sec.gov.

                                                                                             2
Table of Contents



Company Overview
Product and Service Offering
Market Outlook and Position
Financial Highlights
Conclusion
Appendix


                                               3
Company Overview




                   4
Who We Are




          A leading provider of
high quality telecom software solutions
                    and
   IT security products and services
                 in China

                                           5
Company Profile


President & CEO         Steve Zhang

Headquarters            Beijing, China

China Branch Offices    Shanghai, Guangzhou, Hangzhou, Nanjing, Fuzhou,
                        Shenyang, Chengdu, Xi’an

Principal U.S. Office   Santa Clara, CA, USA

R&D Centers             Hangzhou, Beijing, Guangzhou, Nanjing

Employees               Approximately 2,300

Capital Structure       Listed on Nasdaq (ticker: ASIA)

Background              Founded in 1993 in the US, introduced the Internet
                        to China in 1995, listed on Nasdaq in 2000. The first
                        Chinese technology company to list on Nasdaq



                                                                                6
Our Key Strengths

Well-positioned in the rapidly growing Chinese
telecom software market
–   Technology leadership
–   Strong market-wide brand awareness
–   Wide installation base and strong product stickiness
–   In-depth understanding of China market and customer needs
China leverage
– Capitalize on the rapid growth of the Chinese economy and
  telecom/ IT industry
– Leverage relatively low cost of R&D and operations


            We are focused on high growth technologies in
                        high growth markets

                                                                7
Product and Service Offering




                               8
Two Business Units in
                                                                              High-Growth Markets




                                                                                        IT Security
              Telecom Software Solutions                                       Products & Services
                      • Core growth driver                                           • Acquired in 2004
                      • Comprehensive product portfolio                              • High growth market
                      • Leading solution in China market
                      • High industry entry barrier and strong
                      product stickiness
                                                                                             10%*

                                    90%*

*Approximate percentage of 2006 net revenue. Net Revenue represents total revenues net of third party hardware costs. Please refer to Appendix
A for full details of net revenue.
                                                                                                                                                 9
Telecom Coverage

Telecom software solutions continues to be the focus




                                      Network
                                                re
                                    Infrastructu




                                                       10
IT Security Products and Services


Different types of firewall products
and services to suit customers’          Super V series Firewall products
needs
Leading solutions & brand name
                                        Power V series Firewall products
– industry wide brand recognition
– high quality product offering
New Network Gap products gain            Smart V series Firewall products


market acceptance quickly
                                       3000-FE/GE/GF Network Gap products




                                                                        11
Market Outlook and Position




                              12
Market Environment Overview
                  China’s GDP growth (2001-2010)                                               China’s telecom subscriber growth (2001-2010)
US$ Billion                                                                             Million Subscribers
    3500                                                                                     800


    3000                                                                                     700

                                                                                             600
    2500
                                                                                             500
    2000
                                                                                             400
    1500
                                                                                             300
    1000
                                                                                             200

     500
                                                                                             100

      0                                                                                       0
           2001    2002     2003   2004   2005   2006   2007E   2008E   2009E   2010E              2001   2002   2003      2004    2005    2006      2007E   2008E       2009E   2010E



                          Data Source: National Bureau of Statistics of china                                       PSTN          Mobile      Internet       Broadband

                                                                                                                                                             Data Source: BDA

       Strong economy growth prospect for China: if sustains the 7.5% growth
       objective outlined in the government’s 11th 5-year plan, China will become
       the world’s dominant economy in 2020
       Population of 1.3 billion and rapidly growing economy creates massive
       demand for telecom services
       Increasing competition among operators creates growing demand for
       advanced software systems to help differentiate service offerings
                                                                                                                                                                                         13
Software Solutions Revenue
                                       Continues to Outpace Carrier CAPEX

     China’s Telecom CAPEX Spending                          AsiaInfo’s Software Solutions Revenue(1)
 US$ Billion                                                US$ Million
60
                                                            80                                                             72
                                                                                      6
50                                                          70                   – 200 %
                                                                             2000 = 27                            56
40                                                          60                   R
                34                                                            CAG
                                                            50                                           41
       27                26     27     26            28
30                                            25            40                         32       31
                                                                             28
20                                                          30
                                                                    17
                                                            20
10
                                                            10
 0                                                           0
      2000     2001      2002   2003   2004   2005   2006          2000     2001     2002     2003      2004     2005     2006

     Source: China MII                                           (1) Results of Lenovo-AsiaInfo have been consolidated since Q4’ 2004



     As the telecom industry evolves, the capital investment focus is
     moving from hardware to software and services

                                                                                                                                        14
Market Leadership in Telecom
                                                Software Solutions
Market leader in China’s BOSS market with
approximately 30% market share and
deployment in 9 China Mobile subsidiaries
Market leader in China’s BI market with
approximately 50% market share and
installation in 15 China Mobile subsidiaries and
headquarters
Deployed China’s largest BOSS system in
Zhejiang province, which services over 30
million subscribers
AsiaInfo’s BI systems support more than 150
million users and over 500 terabytes of data
Over 60 million email users in China supported
by AsiaInfo’s AIMC software




                                                                 15
China IT Security Market Outlook

         China IT Security Market Size and Growth Rate
 US$ Million

1800                                                          1657       30%
1600                        27%
                                     25%            1384                 25%
1400                                          24%
                       11                  1140         21%
                   – 20
1200           2007 =24%                                         20% 20%
                   R               921
1000            CAG
                      734                                                15%
 800      576
 600                                                                     10%
 400
                                                                         5%
 200
   0                                                                     0%
         2006A       2007E        2008E    2009E    2010E     2011E

                China IT Security Market Size       Growth Rate (%)
                                                                      Source: IDC, 2007
                                                                                          16
Emerging Market Opportunities

 China 3G
- Spark industry wide BOSS system upgrades and development to support new
  services and growing user base
- Operators will increasingly rely on sophisticated software solutions in face of
 increasing competition
 Next Generation Business Intelligence Systems
 - BI is the fastest growing segment in China’s telecom market. To grow at 18%
 CAGR from 2005 to 2010(1)
 - International BI market expected to grow from $4.4 billion to $5.7 billion from
  2006 to 2007(2)
 Wireless Value Added Services (VAS)
 - Mobile push-mail, mobile music, mobile newspaper etc.
 Rapid Growth of Broadband Subscribers
-59 million by the end of June 2006; 32% CAGR over the past 5 years (3)
                                      (1) Source: IDC.   (2) Source: Yankee Group.   (3) China MII
                                                                                                     17
Financial Highlights




                       18
Successfully Focusing on Core
                                                           Software Business

                                      Key 2Q 2007 Numbers

      Net Revenue                                            Up 40% year-over-year


      Software Products                                      Up 39% year-over-year
      and Solutions Revenue

      Gross Margin of Net Revenue(1)                         54%


      Net Income                                             Up 85% year-over-year


      Total Cash Position(2)                                 164.5 million

(1)   Gross profit divided by net revenue
(2)   Including cash and cash equivalents, restricted cash, and short-term investments


                                                                                         19
Consistent Growth in Core
                                           Software Business

                                    ware
                           2006 soft %
US$ Million          2003 – CAGR=32
                           e
                     revenu
100                                                   87
                                       75
 80                                                   17%
                                                               34% growth of software
                         63
              57                       25%                     revenue from 1H06
 60                                                                 50
                         34%
              45%                                                   16%
 40                                                   83%
                                       76%
                         66%
 20           55%
                                                                    84%


  0
              2003       2004         2005           2006          071H

      Software Revenue
      Services & Third Party Hardware Revenues Net of Third Party Hardware Costs


                                                                                   20
Leading R&D Drives Software
                                             Development

              Annual R&D Expenditure – On the Rise


                             006
                      2003–2 %
US$ Million                 =16
                       CAGR

16.0                                      14.2
14.0                               12.8
12.0
10.0          9.1
                       8.2                           8.2
 8.0
 6.0
 4.0
 2.0
 0.0
          2003         2004        2005   2006       071H



                                                            21
Total Cash Position
                                                                                   and Cash Flow
                  Strong Total Cash Position, Operating Cash flow,
                          and Non-organic Growth Activities
US$ Million

200

150

100

  50


   0
                2002                     2003                     2004                     2005                      2006
 -50

        Total cash position including cash, cash equivalent, restricted cash and short-term investment
        Net operating cashflow
        Non-organic growth (1)

(1) This includes cash outflows for both investing activities in M&A and financing activities in stock repurchase.




                                                                                                                            22
Quarterly Results-Net Revenue

                                     Net Revenue (2006 Q1-2007 Q2)

                          US$ Million
                                                                                              Up 40% YoY
                             30.0
                                                                                                  26.6
                                                                           25.4
                             25.0                               23.5                   23.5

                                        18.8        19.0
                             20.0

                             15.0

                             10.0

                              5.0

                                 -
                                        06Q1       06Q2        06Q3       06Q4        07Q1       07Q2



(1) Net Revenue represents total revenues net of third party hardware costs. Please refer to Appendix A for full details of net revenue.

                                                                                                                                    23
Quarterly Results-EPS

                                         Basic and Adjusted EPS(1)
                                                  (2006Q1-2007Q2)
              US$

               0.16
               0.14
               0.12
               0.10
               0.08
               0.06
               0.04
               0.02
                  -
                            06Q1           06Q2            06Q3     06Q4       07Q1   07Q2

                                                       Basic EPS    Adjusted EPS


(1) Please refer to Appendix B for full details of adjusted EPS



                                                                                             24
Conclusion

    •   Ideally positioned. . .                   •   To capitalize on the huge opportunities in
                                                      China’s telecom market and software industry

•       World-class total software solutions to   •   Ability to tailor cutting-edge solutions to client
        meet the evolving needs of China’s            specific requirements
        telecom carriers. . .                     •   Ability to leverage current telecom market
                                                      penetration to sell other offerings including
                                                      advanced OSS, service applications and
                                                      enterprise management solutions


•       Lead over the competition                 •   Well positioned vis-à-vis local and global
                                                      competitors
        continues to widen . . .
                                                  •   Expanding market share in key telecom
                                                      software solutions market



•       Consistent growth …                       •   Both organically and through strategic
                                                      acquisitions
                                                  •   Existing solutions for new markets
                                                  •   Innovation and product development to capitalize
                                                      on emerging market opportunities

                                                                                                           25
Thank you!
Investor relations contact:
       Charles Zhang
      ir@AsiaInfo.com
   Tel: +8610 8216 6039




                              26
Appendix A: Explanation
                                                                of Net Revenue
               Net Revenue Referred to in Slide Entitled “Quarterly Results-Net Revenue”

   Net revenue represents total revenue net of hardware costs that are passed through to our customers.
   We believe total revenues net of hardware costs more accurately reflects our core business, which is
   the provision of software solutions and services, and provides transparency to our investors. It is also
   the same measure used by our management to evaluate the competitiveness and development of our
   business.


                             Reconciliation of Net Revenue to GAAP Revenue


                                    06Q1         06Q2           06Q3          06Q4      07Q1       07Q2
                                                   (In US dollar thousands)
Net Revenue                           18,785       19,042          23,496      25,410    23,513      26,575
Third Party Hardware Costs             7,779        4,092           4,278       6,701     6,542       2,995
Total Revenues                        26,564       23,134          27,774      32,111    30,055      29,570




                                                                                                              27
Appendix B: Explanation
                                                                  of Adjusted EPS
             Adjusted EPS Referred to in Slide Entitled “Quarterly Results-EPS”

Adjusted EPS excludes certain non-cash expenses and income, including share-based compensation
expenses, amortization of acquired intangible assets, other operating income, and gain or loss from
discontinued operations. We believe that these non-GAAP financial measures provide meaningful
supplemental information regarding our performance and liquidity by excluding certain non-cash
expenses and income that may not be indicative of our operating performance from a cash
perspective. We believe that both management and investors benefits from referring to this additional
information in assessing our performance and when planning and forecasting future periods.

                            Reconciliation of Adjusted EPS to GAAP Basic EPS

                                             06Q1           06Q2           06Q3          06Q4          07Q1        07Q2
                                        (in US dollar thousands, except for share and per share amounts)
 Net income                                   360          1,348          2,004         2,119         6,396       2,498
 Adjustments:
 Stock based compensation expenses           135           137           138            393           939            912
 Amortization of intangible assets           153           217           561            575           552            523
 Other operating income                         -             -             -              -       (2,734)             0
 Gain on discontinued operations            (223)         (246)         (183)          (183)       (1,445)             0
 Adjusted net income                         425         1,456         2,520          2,904         3,708          3,933
 Shares used in computation for EPS   45,453,267    43,941,763    42,331,045     42,838,394    43,150,828     43,231,164
 Basic EPS                                  0.01          0.03          0.05           0.05          0.15           0.06
 Adjusted EPS                               0.01          0.03          0.06           0.07          0.09           0.09




                                                                                                                           28

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Ai Investor Presentation July 2007

  • 1. A Leading Provider of Telecom Software and IT Security Solutions Corporate Presentation for Investors July 2007
  • 2. Safe Harbor The information contained in this presentation is as of July 31, 2007. AsiaInfo assumes no obligation to update any forward-looking statements contained in this presentation as a result of new information or future events or developments. This presentation contains forward-looking information about AsiaInfo’s operating results and business prospects that involve substantial risks and uncertainties. You can identify these statements by the fact that they use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Among the factors that could cause actual results to differ materially are the following: government telecommunications infrastructure and budgetary policy in China; our ability to maintain our concentrated customer base; the long and variable billing cycles for our products and services that can cause our revenues and operating results to vary significantly from period to period; our ability to meet our working capital requirements; our ability to retain our executive officers; our ability to attract and retain skilled personnel; potential liabilities we are exposed to because we extend warranties to our customers; risks associated with cost overruns and delays; our ability to develop or acquire new products or enhancements to our software products that are marketable on a timely and cost-effective basis; our ability to adequately protect our proprietary rights; the competitive nature of the markets we operate in; political and economic policies of the Chinese government. A further list and description of these risks, uncertainties, and other matters can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, and in our periodic reports on Forms 10- Q and 8-K (if any) filed with the United States Securities and Exchange Commission and available at www.sec.gov. 2
  • 3. Table of Contents Company Overview Product and Service Offering Market Outlook and Position Financial Highlights Conclusion Appendix 3
  • 5. Who We Are A leading provider of high quality telecom software solutions and IT security products and services in China 5
  • 6. Company Profile President & CEO Steve Zhang Headquarters Beijing, China China Branch Offices Shanghai, Guangzhou, Hangzhou, Nanjing, Fuzhou, Shenyang, Chengdu, Xi’an Principal U.S. Office Santa Clara, CA, USA R&D Centers Hangzhou, Beijing, Guangzhou, Nanjing Employees Approximately 2,300 Capital Structure Listed on Nasdaq (ticker: ASIA) Background Founded in 1993 in the US, introduced the Internet to China in 1995, listed on Nasdaq in 2000. The first Chinese technology company to list on Nasdaq 6
  • 7. Our Key Strengths Well-positioned in the rapidly growing Chinese telecom software market – Technology leadership – Strong market-wide brand awareness – Wide installation base and strong product stickiness – In-depth understanding of China market and customer needs China leverage – Capitalize on the rapid growth of the Chinese economy and telecom/ IT industry – Leverage relatively low cost of R&D and operations We are focused on high growth technologies in high growth markets 7
  • 8. Product and Service Offering 8
  • 9. Two Business Units in High-Growth Markets IT Security Telecom Software Solutions Products & Services • Core growth driver • Acquired in 2004 • Comprehensive product portfolio • High growth market • Leading solution in China market • High industry entry barrier and strong product stickiness 10%* 90%* *Approximate percentage of 2006 net revenue. Net Revenue represents total revenues net of third party hardware costs. Please refer to Appendix A for full details of net revenue. 9
  • 10. Telecom Coverage Telecom software solutions continues to be the focus Network re Infrastructu 10
  • 11. IT Security Products and Services Different types of firewall products and services to suit customers’ Super V series Firewall products needs Leading solutions & brand name Power V series Firewall products – industry wide brand recognition – high quality product offering New Network Gap products gain Smart V series Firewall products market acceptance quickly 3000-FE/GE/GF Network Gap products 11
  • 12. Market Outlook and Position 12
  • 13. Market Environment Overview China’s GDP growth (2001-2010) China’s telecom subscriber growth (2001-2010) US$ Billion Million Subscribers 3500 800 3000 700 600 2500 500 2000 400 1500 300 1000 200 500 100 0 0 2001 2002 2003 2004 2005 2006 2007E 2008E 2009E 2010E 2001 2002 2003 2004 2005 2006 2007E 2008E 2009E 2010E Data Source: National Bureau of Statistics of china PSTN Mobile Internet Broadband Data Source: BDA Strong economy growth prospect for China: if sustains the 7.5% growth objective outlined in the government’s 11th 5-year plan, China will become the world’s dominant economy in 2020 Population of 1.3 billion and rapidly growing economy creates massive demand for telecom services Increasing competition among operators creates growing demand for advanced software systems to help differentiate service offerings 13
  • 14. Software Solutions Revenue Continues to Outpace Carrier CAPEX China’s Telecom CAPEX Spending AsiaInfo’s Software Solutions Revenue(1) US$ Billion US$ Million 60 80 72 6 50 70 – 200 % 2000 = 27 56 40 60 R 34 CAG 50 41 27 26 27 26 28 30 25 40 32 31 28 20 30 17 20 10 10 0 0 2000 2001 2002 2003 2004 2005 2006 2000 2001 2002 2003 2004 2005 2006 Source: China MII (1) Results of Lenovo-AsiaInfo have been consolidated since Q4’ 2004 As the telecom industry evolves, the capital investment focus is moving from hardware to software and services 14
  • 15. Market Leadership in Telecom Software Solutions Market leader in China’s BOSS market with approximately 30% market share and deployment in 9 China Mobile subsidiaries Market leader in China’s BI market with approximately 50% market share and installation in 15 China Mobile subsidiaries and headquarters Deployed China’s largest BOSS system in Zhejiang province, which services over 30 million subscribers AsiaInfo’s BI systems support more than 150 million users and over 500 terabytes of data Over 60 million email users in China supported by AsiaInfo’s AIMC software 15
  • 16. China IT Security Market Outlook China IT Security Market Size and Growth Rate US$ Million 1800 1657 30% 1600 27% 25% 1384 25% 1400 24% 11 1140 21% – 20 1200 2007 =24% 20% 20% R 921 1000 CAG 734 15% 800 576 600 10% 400 5% 200 0 0% 2006A 2007E 2008E 2009E 2010E 2011E China IT Security Market Size Growth Rate (%) Source: IDC, 2007 16
  • 17. Emerging Market Opportunities China 3G - Spark industry wide BOSS system upgrades and development to support new services and growing user base - Operators will increasingly rely on sophisticated software solutions in face of increasing competition Next Generation Business Intelligence Systems - BI is the fastest growing segment in China’s telecom market. To grow at 18% CAGR from 2005 to 2010(1) - International BI market expected to grow from $4.4 billion to $5.7 billion from 2006 to 2007(2) Wireless Value Added Services (VAS) - Mobile push-mail, mobile music, mobile newspaper etc. Rapid Growth of Broadband Subscribers -59 million by the end of June 2006; 32% CAGR over the past 5 years (3) (1) Source: IDC. (2) Source: Yankee Group. (3) China MII 17
  • 19. Successfully Focusing on Core Software Business Key 2Q 2007 Numbers Net Revenue Up 40% year-over-year Software Products Up 39% year-over-year and Solutions Revenue Gross Margin of Net Revenue(1) 54% Net Income Up 85% year-over-year Total Cash Position(2) 164.5 million (1) Gross profit divided by net revenue (2) Including cash and cash equivalents, restricted cash, and short-term investments 19
  • 20. Consistent Growth in Core Software Business ware 2006 soft % US$ Million 2003 – CAGR=32 e revenu 100 87 75 80 17% 34% growth of software 63 57 25% revenue from 1H06 60 50 34% 45% 16% 40 83% 76% 66% 20 55% 84% 0 2003 2004 2005 2006 071H Software Revenue Services & Third Party Hardware Revenues Net of Third Party Hardware Costs 20
  • 21. Leading R&D Drives Software Development Annual R&D Expenditure – On the Rise 006 2003–2 % US$ Million =16 CAGR 16.0 14.2 14.0 12.8 12.0 10.0 9.1 8.2 8.2 8.0 6.0 4.0 2.0 0.0 2003 2004 2005 2006 071H 21
  • 22. Total Cash Position and Cash Flow Strong Total Cash Position, Operating Cash flow, and Non-organic Growth Activities US$ Million 200 150 100 50 0 2002 2003 2004 2005 2006 -50 Total cash position including cash, cash equivalent, restricted cash and short-term investment Net operating cashflow Non-organic growth (1) (1) This includes cash outflows for both investing activities in M&A and financing activities in stock repurchase. 22
  • 23. Quarterly Results-Net Revenue Net Revenue (2006 Q1-2007 Q2) US$ Million Up 40% YoY 30.0 26.6 25.4 25.0 23.5 23.5 18.8 19.0 20.0 15.0 10.0 5.0 - 06Q1 06Q2 06Q3 06Q4 07Q1 07Q2 (1) Net Revenue represents total revenues net of third party hardware costs. Please refer to Appendix A for full details of net revenue. 23
  • 24. Quarterly Results-EPS Basic and Adjusted EPS(1) (2006Q1-2007Q2) US$ 0.16 0.14 0.12 0.10 0.08 0.06 0.04 0.02 - 06Q1 06Q2 06Q3 06Q4 07Q1 07Q2 Basic EPS Adjusted EPS (1) Please refer to Appendix B for full details of adjusted EPS 24
  • 25. Conclusion • Ideally positioned. . . • To capitalize on the huge opportunities in China’s telecom market and software industry • World-class total software solutions to • Ability to tailor cutting-edge solutions to client meet the evolving needs of China’s specific requirements telecom carriers. . . • Ability to leverage current telecom market penetration to sell other offerings including advanced OSS, service applications and enterprise management solutions • Lead over the competition • Well positioned vis-à-vis local and global competitors continues to widen . . . • Expanding market share in key telecom software solutions market • Consistent growth … • Both organically and through strategic acquisitions • Existing solutions for new markets • Innovation and product development to capitalize on emerging market opportunities 25
  • 26. Thank you! Investor relations contact: Charles Zhang ir@AsiaInfo.com Tel: +8610 8216 6039 26
  • 27. Appendix A: Explanation of Net Revenue Net Revenue Referred to in Slide Entitled “Quarterly Results-Net Revenue” Net revenue represents total revenue net of hardware costs that are passed through to our customers. We believe total revenues net of hardware costs more accurately reflects our core business, which is the provision of software solutions and services, and provides transparency to our investors. It is also the same measure used by our management to evaluate the competitiveness and development of our business. Reconciliation of Net Revenue to GAAP Revenue 06Q1 06Q2 06Q3 06Q4 07Q1 07Q2 (In US dollar thousands) Net Revenue 18,785 19,042 23,496 25,410 23,513 26,575 Third Party Hardware Costs 7,779 4,092 4,278 6,701 6,542 2,995 Total Revenues 26,564 23,134 27,774 32,111 30,055 29,570 27
  • 28. Appendix B: Explanation of Adjusted EPS Adjusted EPS Referred to in Slide Entitled “Quarterly Results-EPS” Adjusted EPS excludes certain non-cash expenses and income, including share-based compensation expenses, amortization of acquired intangible assets, other operating income, and gain or loss from discontinued operations. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain non-cash expenses and income that may not be indicative of our operating performance from a cash perspective. We believe that both management and investors benefits from referring to this additional information in assessing our performance and when planning and forecasting future periods. Reconciliation of Adjusted EPS to GAAP Basic EPS 06Q1 06Q2 06Q3 06Q4 07Q1 07Q2 (in US dollar thousands, except for share and per share amounts) Net income 360 1,348 2,004 2,119 6,396 2,498 Adjustments: Stock based compensation expenses 135 137 138 393 939 912 Amortization of intangible assets 153 217 561 575 552 523 Other operating income - - - - (2,734) 0 Gain on discontinued operations (223) (246) (183) (183) (1,445) 0 Adjusted net income 425 1,456 2,520 2,904 3,708 3,933 Shares used in computation for EPS 45,453,267 43,941,763 42,331,045 42,838,394 43,150,828 43,231,164 Basic EPS 0.01 0.03 0.05 0.05 0.15 0.06 Adjusted EPS 0.01 0.03 0.06 0.07 0.09 0.09 28