SonicWALL Revenues Increase 61% in Second Quarter

SUNNYVALE, Calif., July 19 /PRNewswire/ — SonicWALL, Inc. (Nasdaq: SNWL), a leading provider of Internet security solutions, today reported revenues of $26.6 million for the second quarter ended June 30, 2001, representing an increase of 61% compared to revenues of $16.5 million for the same period of 2000. Revenues increased by 8% sequentially over the $24.6 million reported in the first quarter of 2001.

Pro forma net income for the second quarter of 2001, which excludes acquisition related charges and stock based compensation expense, decreased 3% to $5.2 million, or $0.08 per diluted share, compared to pro forma net income of $5.4 million, or $0.09 per diluted share in the same period a year ago. The net loss for the second quarter of 2001, which includes acquisition related charges and stock based compensation expense, was $5.4 million, or $(0.08) per share, compared to net income of $4.2 million during the same period of the previous year.

“In addition to strong financial results, we made significant progress this quarter in our strategic initiatives to diversify our business and penetrate the large enterprise market,” said Sreekanth Ravi, President and CEO of SonicWALL. “During the second quarter, we introduced the GX Series of gigabit performance access security appliances as well as our new, scalable SSL appliances, the R3 and R6. All of these products are designed for the high-performance security requirements of medium to large enterprises and data centers. In addition, transaction security product sales were fueled by our partnership with Cisco Systems, which transitioned from a marketing partnership to an OEM agreement during the quarter. We believe that the continued strength of our core access security products targeted at the small to medium enterprise, combined with our penetration into the large enterprise market, uniquely positions us for long term growth and market leadership.”

“We are encouraged by several significant developments during the second quarter,” said Michael Sheridan, COO and Interim CFO of SonicWALL. “Our installed base of access security appliances grew to over 165,000 units worldwide, reflecting an increase in both revenue and unit market share. We broadened our security services portfolio with the introduction of our Vulnerability Scanning Service. This new service, along with our content filtering, VPN, Anti-Virus and Authentication Services, contributed to a 172% increase over last year in our license and service revenues, which represented 21% of total revenues for the second quarter.”

Highlights from the second quarter include:

— Increased worldwide installed base of access security appliances to more than 165,000 units;

— Introduced GX Series of gigabit performance access security appliances, featuring ICSA certified firewall and VPN functionality;

— Introduced high performance, scalable SSL-R3 and SSL-R6 transaction security appliances, delivering greater web server performance for networks running e-commerce, web-based email, and other SSL-intensive applications;

— Introduced Vulnerability Scanning Service, which identifies and proposes solutions for potential security threats facing customers’ networks;

— Announced OEM agreement with Cisco Systems for our SSL products.

Cautionary Note Regarding Forward-looking Statements

Certain statements in this press release are “forward-looking statements” within the meaning of the Securities Act of 1933, as amended. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could affect SonicWALL’s actual results include, but are not limited to, the “Risk Factors” described in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the year ended December 31, 2000. All forward-looking statements included in this release are based upon information available to SonicWALL as of the date of the release, and we assume no obligation to update any such forward-looking statement.

About SonicWALL

SonicWALL, Inc. is the leading provider of integrated Internet security appliances offering access security, transaction security and security services for the enterprise, e-commerce, SME, education and government markets. Core technologies include firewall, VPN, SSL, high availability, anti-virus, strong authentication with digital certificates, vulnerability assessment and content filtering. Together, these products and technologies provide the most comprehensive Distributed Security Architecture available. SonicWALL, Inc. is headquartered in Sunnyvale, CA. SonicWALL trades on the NASDAQ exchange under the symbol SNWL. For more information, contact SonicWALL at +1-408-745-9600 or visit the company Web site at .

NOTE: SonicWALL is a registered trademark of SonicWALL, Inc. Other product and company names mentioned herein may be trademarks and/or registered trademarks of their respective companies.

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