Sonus : Releases Third Quarter 2017 Financial Results

Sonus Networks Releases Third Quarter 2017 Financial Results

October 30, 2017

WESTFORD, Mass. - Sonus Networks, Inc. (Nasdaq: SONS), a global leader in secure and intelligent cloud communications, today announced results for Sonus and GENBAND for the third quarter ended September 30, 2017.

"Sonus' third quarter results were highlighted by 14.8% year-over-year revenue growth and non-GAAP gross margin of 75.6%. We are very pleased on delivering major milestones for the large competitive displacement for a North American Tier 1 carrier. These achievements demonstrate our evolution to software solutions and the result of many years of investment in network virtualization," said Raymond Dolan, president and chief executive officer.

Mr. Dolan continued, "We have completed extensive Sonus and GENBAND integration planning with significant first day integration execution underway and remain committed to attaining the $40 million to

$50 million of annual cost savings anticipated when we announced our plans this past May. As a combined company, our product offerings are even more strategic to customers, and our scale will allow us to invest even more in key areas as both service providers and enterprises migrate to fully-virtualized, cloud architectures. "

Financial Highlights

The following table summarizes Sonus' consolidated third quarter financial results (in millions, except per share amounts):

Product revenue Service revenue Total revenue

GAAP gross margin

Non-GAAP gross margin1

GAAP income (loss) from operations as a % of revenue Non-GAAP income from operations as a % of revenue1GAAP diluted earnings per share or (loss) per share Non-GAAP diluted earnings per share 1

Quarter Ended

Sept. 30, Sept. 30,

2017 2016

$44.1 $38.6

$30.5 $26.4

$74.6 $65.0

73.1% 67.0%

75.6% 69 .9%

5.3% (6.6)%

18.0% 9.9%

$0.07 $(0.08)

$0.26 $0.12

1 Please see the reconciliation of non-GAAP and GAAP financial measures in the press release appendix.

Cash and investments were $131.6 million at the end of the third quarter of 2017, compared to $125 .9 million at the end of the second quarter of 2017 .

The Company had two customers that contributed 10% or more of total revenue in the third quarter of 2017: Verizon, which contributed approximately 16% of revenue, and AT&T, which contributed approximately 11% of revenue.

GENBAND revenue for the third quarter of 2017 was in line with the preliminary results reported on October 13, 2017; please see the "Third Quarter 2017 Results" presentation on our IR Website for more information regarding GENBAND's historical financial results.

Q3'17 Technology Highlights

• Sonus

  • SBC 5400 Session Border Controller Delivers Miercom Certified Security and Performance

  • Virtual Session Border Controller JITC-Certified for Deployment in U.S. Department of Defense Communications Networks

  • Delivers Secure, Smart and Simple Network Migration for Microsoft Skype for Business

• GENBAND

  • Expands NFV Portfolio with a Converged Intelligent Messaging Solution to offer Service Providers an End-to-End Cloud Messaging Platform

  • Expands VolTE Media Processing Solutions to Help Mobile Service Providers Enhance Network Capacity & Voice Quality

  • Wins Silver Stevie® for Most Innovative Tech Company of the Year with Kandy cPaaS in 2017 International Business Awards'M

    Q3'17 Customer Wins

• Sonus

  • Algar Telecom Selects Sonus Cloud-Native Session Border Controller for Nationwide SIP Services Expansion

• GENBAND

  • "Paltel" Upgrades its Fixed Voice Network with GENBAND's Industry-Leading NGN Transformation Solutions

o Los Angeles Public Library Leverages GENBAND's Kandy Business Solutions for Advanced Real Time Communications and Collaboration Capabilities

FY17 Guidance (Sonus and GENBAND Combined)

Sonus 01/01/2017 to

12/31/2017

GENBAND 1

10/30/2017 to

12/31/2017

(2-month stub period)

Restructuring 10/30/2017 to

12/31/2017

Combined FY'17

Total revenue, excluding impact of purchase accounting

$252.6M2 $80M3 to $90M3 $332 .6M3 to

$342.6M3

Non-GAAP diluted earnings per share

$0.22 $0.15 to $0.24 $0.04 $0.41 to $0.50

Diluted shares4 59.1M 59.1M 59.1M 59.1M

1. Projections are post close from 10/30/2017 to 12/31/2017 for GENBAND.

2. Flat from FY'16 revenue for Sonus of $252.6M.

3. Revenue does not include impact of purchase accounting reductions, which are expected to be completed in 04'17.

4. Share count increased from prior projections due to -51M shares issued on 10/30/2017 related to the Sonus/GENBAND merger.

We are unable to provide a reconciliation of the forward-looking non-GAAP measures presented above to the most directly comparable GAAP measures without unreasonable efforts due to our inability at this

time to estimate the amount and timing of charges (including acquisition-related, restructuring, merger integration and stock-based compensation expenses) to be incurred during the remainder of the year as a result of the Sonus/GENBAND merger, which was completed on October 27, 2017. We are also unable

at this time to estimate the impact of purchase accounting reductions affecting GENBAND revenues.

Sonus Networks will offer a live, listen-only webcast of the conference call to discuss the complete financial results of Sonus and GENBAND for the third quarter ended September 30, 2017 on October 30, 2017, via the investor section of its website at http://investors . sonusnet.com/events.cfm, where a replay will also be available shortly following the conference call.

Dial-in number: 888-612-1048 - International callers: +1-303-223-2690

A telephone playback of the call will be available following the conference call until November 13, 2017 and can be accessed by calling 800-633-8284 or +1-402-977-9140 for international callers. The reservation number for the replay is 21859826 .

November 1, 2017 - Drexel Sponsored Non-Deal Roadshow, Boston, Massachusetts November 7. 2017 - Wells Fargo Media & Telecom Conference, Intercontinental New York Barclay, New York City

November 15, 2017 - William Blair Sponsored Non-Deal Roadshow, Baltimore, MD

November 20 , 2017 - William Blair Sponsored Non-Deal Roadshow, San Francisco, California

Sonus Networks, Inc. is a company with two decades of leadership in real-time communications. Built on world class technology and intellectual property, the company delivers intelligent, secure, embedded real­ time communications for today's world. The company transforms fixed, mobile and enterprise networks from legacy environments to secure IP and cloud-based architectures, enabling highly productive communications for consumers and businesses. With locations in 27 countries around the globe, the company's innovative, market leading portfolio empowers service providers and enterprises with rapid service creation in a fully virtualized environment. The company's Kandy Communications Platform as a Service (CPaaS) delivers a comprehensive set of advanced embedded communications capabilities that enables this transformation. To learn more visit sonus.net

References to Sonus Networks, Inc. ("Sonus Networks") relate to a Delaware holding company that was previously named Solstice Sapphire Investments, Inc., which was formed for the purpose of effecting a merger of Sonus, Inc., a Delaware corporation, and GENBAND Holdings Company and its two related holding companies, GENBAND Inc. and GENBAND II, Inc., pursuant to the Agreement and Plan of Merger between the parties, dated May 23, 2017.

References to Sonus relate to Sonus, Inc., which was previously known as Sonus Networks, Inc. and is now the operating company of Sonus Networks.

References to GENBAND relate to GENBAND Holdings Company.

This press release contains "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, which are subject to a number of risks and uncertainties. All statements other than statements of historical facts contained in this release, including statements made by our chief executive officer, statements regarding outlook for Sonus and GENBAND combined in the section "FY17

Guidance (Sonus and GENBAND Combined)", the future results of operations, financial position, integration efforts and opportunities for the combined company, business strategy, strategic position, and plans and objectives of management for future operations are forward-looking statements . Without limiting the foregoing, the words "anticipates" , "believes", "could", "estimates", "expects", "expectations", "intends", "may", "plans", "seeks", "projects" and other similar language, whether in the negative or affirmative, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, adjustments identified in the course of the Company's quarter-end and accounting review; the timing of customer purchasing decisions and our recognition of revenues; economic conditions; our ability to recruit and retain key personnel; difficulties supporting our strategic focus on channel sales; difficulties retaining and expanding our customer base; difficulties leveraging market opportunities; the impact of restructuring and cost­ containment activities; our ability to realize benefits from the acquisitions that we have completed; the effects of disruption from the acquisitions that we have completed, making it more difficult to maintain relationships with employees, customers, business partners or government entities; the success implementing the integration strategies with respect to acquisitions; litigation; actions taken by significant stockholders; difficulties providing solutions that meet the needs of customers; market acceptance of our products and services; rapid technological and market change; our ability to protect our intellectual property rights; our ability to maintain partner, reseller, distribution and vendor support and supply relationships; higher risks in international operations and markets; the impact of increased competition;

currency fluctuations; changes in the market price of our common stock; and/or failure or circumvention of our controls and procedures. Additional information about these and other important factors that could cause actual results to differ materially from those in these forward-looking statements is contained in the joint proxy statement/prospectus that is included in the registration statement on Form S-4 (File No. 333- 219008) that was filed with the SEC by Sonus Networks, Inc. (formerly Solstice Sapphire Investments, Inc.) in connection with the transaction and the most recent Quarterly Report on Form 10-Q filed by Sonus, Inc. (formerly Sonus Networks, Inc.).

Our forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We caution you against relying on any of these forward-looking statements . Any forward-looking statement made by us in this release speaks only as of the date of this release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Sonus is a registered trademark of Sonus, Inc. All other Company and product names may be trademarks of the respective companies with which they are associated .

Sonus management uses several different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of the business, making operating decisions, planning and forecasting future periods, and determining payments under compensation programs. Our annual financial plan is prepared both on a GAAP and non-GAAP basis, and the non-GAAP annual financial plan is approved by our board of directors. Continuous budgeting and forecasting for revenue and expenses are conducted on a non-GAAP basis (in addition to GAAP) and actual results on a non-GAAP basis are assessed against the annual financial plan. We consider the use of non-GAAP financial measures helpful in assessing the core performance of our continuing operations and liquidity, and when planning and forecasting future periods. By continuing operations, we mean the ongoing results of the business excluding certain expenses and credits, including, but not limited to: stock-based compensation, amortization of intangible assets, merger integration costs, settlement expense, acquisition-related expense, restructuring and certain gains included in other income (expense). While our management