Acme Packet Reports Record Revenues and Net Income in Fourth Quarter of Fiscal Year 2006

Acme Packet Reports Record Revenues and Net Income in Fourth Quarter of Fiscal Year 2006

– Company Affirms Business Outlook for 2007 –

Acme Packet, Inc. (NASDAQ: APKT), the leader in session border control solutions, today announced record results for its fourth quarter and fiscal year ended December 31, 2006. The Company also affirmed its previously issued business outlook for 2007. Summary results are as follows:

Fiscal Year 2006 Q4:

* Total Revenues: $23.7 million, up 87% year over year;

* Net Income: $10.8 million GAAP and $6.5 million non-GAAP1;

* Diluted Earnings Per Share: $0.18 GAAP and $0.11 non-GAAP1;

* Tax benefit from the release of the Company’s deferred tax asset valuation allowance provided a one-time benefit of $4.8 million, or $0.08 per diluted share;

Fiscal Year 2006:

* Total Revenues: $84.1 million, up 133% year over year;

* Net Income: $28.9 million GAAP and $25.0 million non-GAAP1;

* Diluted Earnings Per Share: $0.89 GAAP and $0.77 non-GAAP1;

* Tax benefit from the release of the Company’s deferred tax asset valuation allowance provided a one-time benefit of $4.8 million, or $0.15 per diluted share;

Results for Three Month Period Ended December 31, 2006

Total revenues for the three month period ended December 31, 2006 were $23.7 million, an increase of 87% compared to total revenues of $12.7 million for the same period last year. Net income for the three month period ended December 31, 2006 was $10.8 million, or $0.18 per share on a diluted basis. Net income on a non-GAAP basis1 for the three month period ended December 31, 2006 was $6.5 million, or $0.11 per share on a diluted basis. Net income for the three month period ended December 31, 2005 was $2.4 million.

Non-GAAP net income1 for the three month period ended December 31, 2006 differs from GAAP net income as it excludes the one-time tax benefit from the release of the Company’s deferred tax asset valuation allowance of approximately $4.8 million, or $0.08 per share on a diluted basis, as well as stock-based compensation charges of approximately $458,000, or $0.01 per share on a diluted basis. The Company released the valuation allowance based on its projected ability to utilize its deferred tax assets to offset future taxable income. A reconciliation of GAAP to non-GAAP results is included at the end of this press release.