InfoVista (Euronext: IFV, ISIN: FR0004031649, NASDAQ: IVTA), a leading performance management software company, today announced financial results for the quarter and full year ended June 30, 2006.

Reflecting on InfoVista’s fourth quarter performance, Gad Tobaly, Chief Executive Officer, commented: “The fourth quarter was the best quarter ever in our company’s history. Fiscal year 2006 is another year of profitability and double-digit revenue growth. In an environment where IT functionalities are increasingly delivered as services, performance assurance is becoming more and more critical. This transformation is a key success factor for us. We are growing faster than our markets, confirming InfoVista’s leading position in its segment.”

Total revenues for the quarter increased to EUR11.3 million, up 18% over the comparable period last year. InfoVista achieved positive net income in the quarter, totaling EUR0.8 million, an improvement from EUR0.4 million in the comparable quarter last year. For the year ended June 30, 2006, total revenues amounted to EUR40.6 million, an 18% increase over the previous year. Net income improved to EUR0.5 million for fiscal year 2006 from EUR0.1 million in fiscal year 2005.

For the fourth quarter, the gross margin was 81.5% of revenues as compared to 79.2% the same quarter the previous year. Gross margin for the fiscal year improved to 80.6%. Operating expenses for the fourth quarter totaled EUR8.5 million (including EUR0.2 million of stock-based compensation charges), compared to EUR7.4 million in the comparable period last year. Fiscal year 2006 operating expenses stood at EUR32.6 million (including EUR1.1 million of stock-based compensation charges), as compared to EUR27.8 million in the comparable period last year

Net income for the fourth quarter was EUR0.8 million, including EUR0.2 million of stock-based compensation. Fiscal year 2006 net income was EUR0.5 million, including EUR1.1 million of stock-based compensation charges, as compared to EUR0.1 million in fiscal year 2005.According to the balance sheet, Days Sales Outstanding (DSO) stood at 87 days for the fourth quarter, a significant improvement compared to 97 days for fiscal year 2006’s third quarter and 106 days for the previous fiscal year’s fourth quarter. Deferred revenue was EUR7.9 million up from EUR7.2 million one year ago. InfoVista’s balance sheet remains strong, with no debt and with cash, cash equivalents and marketable securities at EUR38.2 million, which is an increase of EUR4.5 million from June 30, 2005.

As at June 30, 2006, there were a total of 19,527,564 and 18,343,443 InfoVista shares issued and outstanding, respectively. InfoVista’s European operations rebound in the fourth quarter, with total revenues of EUR5.6 million that represent a 38% year-on-year increase. This quarters’ strong contribution from the European operations, which accounted for 50% to the fourth quarter’s total revenues, is set to continue in the coming quarters. InfoVista witnessed a remarkable turnaround in Asia, paving the path for stronger growth in the near future. Asian operations contributed 17% to the fourth quarter’s total revenues, rising 167% to EUR1.9 million

Following cumulative growth of 31% in the first nine months of the 2006 fiscal year, revenues from InfoVista’s American operations dropped by 22% in the fourth quarter to EUR3.7 million. Service Revenues Pulled Ahead in the Fourth Quarter, and revenues from services increased by 31% year-on year to EUR5.2 million. There was a high maintenance renewal rate generated a 31% year-on-year growth in maintenance revenues. Several large project implementations boosted consulting and training revenues by 33%. The company’s revenues from licenses also grew soundly, amounting to EUR6.0 million, in the quarter, up from a high base in the comparable quarter last year.

InfoVista had major contact wins in the Quarter, and has demonstrated its leading position within the Service Provider arena, with the fourth quarter’s revenues increasing 57% year-on-year. This included one single transaction over EUR1 million and four over EUR0.5 million. During the quarter, InfoVista secured a deal over EUR1 million with Telstra, Australia’s telecommunications incumbent. In the framework of its strategic OSS Transformation initiative, launched in January 2006 to consolidate its operational support systems and accompany the deployment of its Next Generation Network, Telstra selected InfoVista’s VistaInsight for Network as its new Performance Management solution In the fourth quarter, four leading telecommunications service providers, including BT, T-Mobile, Telmex, and Telefonica returned to InfoVista’s for additional solutions. Each of these deals was more than
EUR0.5 million.

InfoVista Continues to Innovate in High Growth Market Opportunities. InfoVista also announced that its IP telephony solution garnered a second industry award for product excellence. InfoVista received Communication Solutions Magazine’s 2005 Product of the Year award for VistaInsight for IP Telephony 2.0, a management solution for assuring delivery of Internet Protocol (IP) telephony services across the enterprise. The Company’s VistaInsight for IP Telephony 2.0 was upgraded with an add-on that enables advanced call quality management for enterprises and managed service providers. This add-on utilizes sophisticated algorithms to give an accurate assessment of voice quality, providing the base for complete proactive management of voice applications.

A Solid Year, InfoVista had Double Digit Growth in All Regions
According to Infovista, the American operations had a good performance in fiscal year 2006, with total revenues increasing 14% to EUR17.4 million. The Company secured nine separate deals in excess of US$0.5 million, including BellSouth, Bell Canada and MCI. Total Service Provider revenues in the Americas increased 21% over the comparable period last year. The American operations also continued with their penetration of the Enterprise segment, with marked wins in both the Financial and the Government sectors. After a slow start to the fiscal year, the Company’s European operations ended well, with total revenues up 11% to EUR18.4 million. InfoVista witnessed great traction from the European Service Providers including most of Europe’s leading telecommunication incumbents. European Enterprise revenues rose 30% year-on-year with breakthroughs made in new territories such as Russia, Africa and the Czech Republic. Riding upon this success, InfoVista’s Enterprise revenues increased 15% over the fiscal year to EUR11.1 million. The Company’s Asian operations saw a strong comeback, with an outstanding 86% revenue growth over the previous fiscal year. Repeat business with incumbents such as SingTel, Optus and Malaysia Telecom coupled with new large deals such as Telstra, Reliance and Bharti brought Asia’s revenues to EUR4.8 million or 12% of InfoVista’s total revenues over the fiscal year.

Double Digit Growth in License and Service Revenues
License revenues increased 19% over fiscal year 2005 to EUR22.7 million. Service revenues increased 17% with strong contributions from maintenance renewals.

Flow of Innovative Solutions Praised by Market and Customers Alike
During the fiscal year, InfoVista launched new upgrades to its three core solutions:
- VistaInsight for Networks for Service Providers, version 2.0 released in March 2006, is a next-generation performance management solution that enables service providers to effectively meet performance and service requirements for today’s advanced communications technologies including Metro Ethernet.
- VistaInsight(TM) for Servers 2.0 is the latest version of InfoVista’s performance management solution for maximizing server and system infrastructure investments in enterprise data centers. The upgrades were developed to support IT departments and Managed Service Providers (MSPs) in their efforts to increase server utilization rates, lower the cost of infrastructure resources while leveraging current investments in native host and external agent software.
- VistaInsight for IP Telephony 2.0 is the latest version of InfoVista’s performance management solution for assuring delivery of Internet Protocol (IP) telephony services across the enterprise. The solution has been recognized by the market and customers as the leading solution for IP Telephony as it received two industry awards as well as numerous industry analyst favourable reviews.

Outlook
Looking ahead, Mr. Tobaly noted: “The current positive trends seen in our European and Asian operations give us the confidence to forecast double-digit growth for fiscal year 2007 and continued improvement in our net profitability. However, in the first quarter, due to traditional unfavorable seasonality, we expect revenues to increase by 5% to approximately EUR9.5 million, and we do not expect to be profitable.” The Company will hold an analyst conference to present its fiscal year 2007 business and product strategy, along with disclosing full year guidance. The conference will be held in Paris on 19th September, 2006. Details will be available shortly.

Conference call
InfoVista will host an investor conference call today at 9:00 a.m. (EST) / 2:00 p.m. (UK) / 3:00 p.m. (Continental Europe). The call will be available by dialing +33(0)1-71-23-04-15 in France, +44(0)20-7806-1968 in the UK, or +1-718-354-1391 in North America. A replay will be available shortly after the end of the call at the following numbers: France: +33(0)-1-71-23-02-48, UK: +44(0)20-7806-1970, North America: +1-718-354-1112, Passcode: 3427179#.

About InfoVista
InfoVista is the Service-Centric Performance Management Software Company that assures the optimal delivery of business-critical IT services. Driven by a uniquely adaptive and real-time technology foundation, InfoVista solutions improve business effectiveness, reduce operating risk, lower cost of operations, increase agility and create competitive advantage. Eighty percent of the world’s largest service providers as ranked by Fortune(R), as well as leading Global 2000 enterprises, rely on InfoVista to enhance the business value of their technology assets. Representative customers include ABN AMRO, Allstream, Banques Populaires, AXA, Banque de France, Bell Canada, British Telecom, Broadwing Communications, Cable & Wireless, Com Hem, Defense Information Systems Agency (DISA), Deloitte, Deutsche Telekom, France Telecom, Savvis Corporation, SingTel, Telefonica, and US Cellular. A Software Magazine 500 company, InfoVista stock is traded on the NASDAQ (IVTA) and on Eurolist by Euronext (FR0004031649). For more information about the company, visit http://www.infovista.com.