MetaSolv, Inc. (Nasdaq:MSLV), a leader in comprehensive operations support systems solutions for next-generation communications service providers, has announced their financial results for the second quarter ended June 30, 2006.

Revenues for the quarter increased 8% to $25.4 million, compared to second quarter 2005 revenues of $23.4 million. MetaSolv reported net income for the second quarter of $649,000, or $0.01 per diluted share, compared to a net loss of $663,000, or $0.02 per diluted share, in the second quarter of 2005. Earnings before interest, taxes, depreciation and amortization and stock compensation expense (”adjusted EBITDA”) for the quarter was $2.4 million, an increase of 108% compared to $1.1 million in the prior year. Non-GAAP net income for the quarter was $1.7 million, or $0.03 per diluted share, compared to a net loss of $113,000, or $0.00 per diluted share for the second quarter of 2005.

Highlights of MetaSolv’s second quarter operating and financial results include:

- A multi-year, multi-million dollar license and services contract with Telstra, Australia’s leading media-communications company, to deploy MetaSolv’s Activation 5 solution as part of a comprehensive network and OSS transformation for both fixed-line and mobile services;

- A multi-year, multi-million dollar contract with a tier 1 operator in India for enterprise-wide use of MetaSolv’s inventory management and service activation solutions;

- A major contract win with one of the largest cable providers in the U.S. to leverage MetaSolv’s inventory management system to support the growth of its nationwide IP network and digital voice services;

- A new win for the Company’s provisioning order management product, Provisioning 5, with a large, U.S. based incumbent carrier to support a new service rollout;

- The market launch of two new products expected to serve as a platform for future revenue growth - MetaSolv Configuration Management and MetaSolv Subscriber & Service Management - both currently being deployed by global Tier 1 operators;

- A 53% increase in license revenues, which increased gross profit to 59% of total revenues;

- Net income of $649,000 or $0.01 per diluted share; adjusted EBITDA of $2.4 million, a 108% improvement over the prior year; and

- A continued solid financial position at quarter end, with $58.0 million in cash equivalents and marketable securities and no debt.

For the six months ended June 30, 2006, revenues were $48.0 million, a 7% increase from $44.8 million for the same period in 2005. MetaSolv reported net income for the six months of $261,000, or $0.01 per diluted share, compared to a net loss of $2.7 million, or $0.07 per diluted share, for the same period in 2005. Adjusted EBITDA for the six months ended June 30, 2006 was $3.8 million, an increase of 475% compared to $653,000 for the same period in 2005. Non-GAAP net income for the six months ended June 30, 2006 was $2.3 million, or $0.04 per diluted share, compared to a Non-GAAP net loss of $1.9 million, or $0.05 per diluted share for the same period in 2005.

The Company’s net income for the second quarter and six months ended June 30, 2006 includes stock-based compensation expense related to the implementation of Statement of Financial Accounting Standard (SFAS) 123R which was adopted effective January 1, 2006. The Company’s net loss for the second quarter and six months ended June 30, 2005 includes stock-based compensation expense computed under APB 25. The Company’s non-GAAP results exclude stock based compensation expense in both periods. Please see table below for a complete reconciliation of non-GAAP net income (loss) and adjusted EBITDA to net income (loss) reported under accounting principles generally accepted in the United States.

“We are pleased to report MetaSolv’s continued revenue growth and increased profitability for the second quarter,” said T. Curtis Holmes, MetaSolv’s President and Chief Executive Officer. “This marks eight consecutive quarters of year-over-year revenue growth. More importantly, we had our strongest quarterly performance for license revenues in nearly five years. Communications providers worldwide are consolidating and converging their networks in the drive to enable next-generation mobile and IP services. We believe that MetaSolv, with a strong customer base and proven products, is well positioned to help service providers worldwide accelerate time-to-market, reduce operations costs and improve customer satisfaction.”

“The multi-million dollar OSS transformation projects we secured in recent months are a direct reflection of our compelling value proposition in automating the fulfillment cycle for next-generation service providers. We see continued opportunity for MetaSolv as global operators invest in transformation of their network and OSS systems,” concluded Holmes.

Financial Guidance
Based on the Company’s results for the second quarter, the pipeline of potential contracts, and expectations concerning the business environment, MetaSolv today established its guidance for revenues for the third quarter of 2006 in a range of $23.5 million to $26.5 million, compared with $23.3 million for the third quarter of 2005. The Company also established guidance for its net income for the period of between $0.00 and $0.03 per diluted share. Net income guidance for the third quarter of 2006 includes approximately $1.1 million in stock-based compensation expense computed under SFAS 123R. Excluding stock-based compensation expense, the Company expects to report non-GAAP net income of between $0.02 and $0.05 per diluted share for the third quarter of 2006.

About MetaSolv
MetaSolv, Inc. (Nasdaq:MSLV) is a global leader in comprehensive operations support system solutions for communications service providers. MetaSolv’s multi-service order management, inventory management, and service activation capabilities automate the order-to-activate provisioning process for traditional and next-generation IP-based wireline and mobile service providers. Many of the world’s largest global service providers - including Brasil Telecom, BT, Cable & Wireless, O2, T-Mobile, Vodafone, and others - use MetaSolv’s solutions to achieve increased revenues, reduced costs, and enhanced customer service. MetaSolv is a global company, headquartered in Plano, Texas.

MetaSolv is a registered trademark. The MetaSolv logo is a trademark of MetaSolv Software, Inc. All other trademarks are property of their respective owners.