Sandvine Reports Q3 2008 Results

Sandvine Corporation, (TSX: SVC)(AIM: SAND) a leading provider of intelligent broadband network solutions for DSL, cable, FTTx, fixed wireless and mobile operators, today reported third quarter revenue of $13.1 million. Net loss was $6.3 million, or $0.046 per diluted share, which includes a $1.1 million non-cash charge related to the Company's future tax assets, and $1.9 million attributable to non-cash acquisition-related expenses and stock-based compensation.

Sandvine won a record 15 new customers in the third quarter and continued to successfully diversify its revenue base. The Company realized record revenues from the DSL, EMEA and CALA markets, and from reseller partners - each strategic to Sandvine's growth plans.

"By customer count, DSL service providers worldwide have become the largest part of Sandvine's customer base, and more than a quarter of our revenue in Q3 came from reseller partners," said Dave Caputo, Sandvine's president and chief executive officer. "We have increasingly focused on expanding our business into new access technologies, new geographies and with new reseller partners. The results this quarter and in the year to date demonstrate our ongoing success with this diversification."

While the historically-strong North American market remained slow in the quarter, the FCC decision announced on August 1st may lift some of the regulatory uncertainty concerning reasonable network management practices that the Company believes has been impacting its market.

Dave Caputo said, "Subsequent to the FCC's decision, Comcast once again selected Sandvine's solutions to help improve their subscribers' online experience. The FCC's statements offered U.S. service providers some measure of clarity, but Comcast's decision to stick with Sandvine shows the industry a viable direction."

FINANCIAL HIGHLIGHTS (All amounts are in Canadian dollars unless otherwise
specified)
----------------------------------------------------------------------------
Millions of dollars, except
per share data and where
otherwise indicated               Q3 2008  Q3 2007  Change  Q2 2008  Change
----------------------------------------------------------------------------
Revenue                              13.1     21.2     -38%    11.1      18%
Gross Margin percent                   75%      74%   1 pp       77%  -2 pp
R&D, SG&A                            12.6     10.9      15%    12.1       4%
Other Operating Expenses(i)           3.0      1.4     119%     2.1      44%
Net (Loss) Income(ii)                (6.3)     2.7             (4.6)
Diluted (Loss) Earnings Per Share  (0.046)   0.020           (0.034)
----------------------------------------------------------------------------

(i) Includes $1.9 million attributable to non-cash acquisition-related
expenses and stock-based compensation (Q3 2007: $0.7 million ; Q2 2008 $1.2
million).

(ii) Includes a $1.1 million non-cash charge related to an increase in the
valuation allowance related to the Company's future tax assets (Q3 2007 and
Q2 2008: nil).

STRATEGIC UPDATE

Sandvine is focused on growing its service provider customer base and the number of broadband subscribers those customers represent. The Company has well over 100 customers serving more than 60 million broadband subscribers in over 50 countries.

In the third quarter Sandvine won 15 new customers.

- By access technology: 11 DSL providers, two mobile data operators, one fibre-to-the- home operator and one cable company.

- By geography: six from EMEA, three from Asia Pacific, three from the Caribbean and Latin America, and three from North America.

- Large customers: initial orders from a new DSL customer with over one million broadband subscribers and a new wireless customer, which by subscriber count is one of the Top 100 worldwide.

- Strategic partners: won four customers through global resellers.

In August, Sandvine's Congestion Management for Fairshare solution was named as a finalist for the highly competitive and prestigious International Engineering Consortium (IEC) InfoVision Awards in the category of Access Network Technologies and Services.

CONFERENCE CALL

The Company will discuss the results and business outlook on a conference call at 8:30 a.m. Eastern time (1:30 BST) today. A webcast will also be available from the Investor Relations section of Sandvine's website.

Date                      October 8
Time                      8:30 a.m. Eastern (1:30 BST)
Local dial-in number      416 644 3415
Toll-free North America   800 733 7571
Toll-free United Kingdom  00 800 2288 3501

A replay of the call will be available at 416-640-1917 or at 877-289-8525 (passcode 21284298#) from approximately 10:30 a.m. Eastern time today through October 15.

ABOUT SANDVINE

Sandvine is focused on protecting and improving the quality of experience on the Internet. Our award-winning network equipment helps DSL, FTTx, cable, fixed wireless and mobile operators better understand network traffic, increase customer satisfaction, mitigate the proliferation of malicious traffic, manage network congestion, and deliver QoS-prioritized multimedia services. With well over 100 customers in more than 50 countries, Sandvine is enhancing the Internet experience for millions of broadband and mobile subscribers worldwide. www.sandvine.com.

CAUTION REGARDING FORWARD LOOKING INFORMATION

Certain statements in this release which are not historical facts constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws ("forward-looking statements") and are made pursuant to the "safe harbour" provisions of such laws. Statements related to Sandvine's projected revenues, earnings, growth rates, revenue mix and product plans are forward-looking statements as are any statements relating to future events, conditions or circumstances. The use of terms such as "may", "anticipated", "expected", "projected", "targeting", "estimate", "believe" and similar terms are intended to assist in identification of these forward-looking statements. Readers are cautioned not to place undue reliance upon any such forward-looking statements. Such forward-looking statements are not promises or guarantees of future performance and involve both known and unknown risks and uncertainties that may cause the actual results, performance or achievements of Sandvine to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements.

Many factors could cause the actual results of Sandvine to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements, including, without limitation, those factors discussed under the heading "Risk Factors" in Sandvine's most recent Annual Information Form ("AIF"), a copy of which is available on SEDAR at www.sedar.com, as well as each of the following.

- Sandvine's revenues may fluctuate from quarter to quarter and year to year depending upon sales cycles, customer demand and the timing of customer order purchase decisions.

- Sandvine's gross margins may fluctuate from period to period depending upon a variety of factors including product mix in the quarter, competitive pricing pressures and the level of sales generated through indirect channels.

- Sandvine is dependent upon and has derived a large percentage of its revenue from both a small number of key customers and customers who are predominantly cable based broadband service providers.

- Sandvine faces intense competition in markets where there are typically several different competing technologies and rapid technological changes.

- Sandvine's growth is dependent on the development of the market for intelligent broadband network management solutions and the decisions of the Company's target customers to deploy and further invest in those technologies which decisions may be impacted upon by changing regulations and requirements in the area of broadband network management policies.

- Overall economic conditions and the availability of credit may negatively impact the Company's customers and suppliers.

- The majority of Sandvine's expenses are denominated in Canadian dollars while its sales are generally denominated in U.S. dollars. The Company's earnings are impacted by fluctuations in the exchange rates between these and other currencies in which Sandvine trades.

- The introduction and sale of new products by Sandvine may impact the timing of revenue recognition which could raise greater revenue fluctuations from quarter to quarter than has been experienced historically.

Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and Sandvine does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change.

Sandvine Corporation

Consolidated Balance Sheets
As at August 31, 2008
(in Canadian dollars, amounts in thousands, except share and per share data)
(unaudited)


                                         August 31  November 30
                                              2008         2007
                                                 $            $
Assets

Current assets
Cash and cash equivalents                    8,716        7,878
Marketable securities                       87,374      105,136
Accounts receivable                         11,794       10,003
Inventory                                   15,658       13,874
Future tax asset                                 -        1,075
Other                                        1,638        1,637
                                         ----------------------
                                           125,180      139,603
                                         ----------------------

Non current assets
Property, plant and equipment               12,141       10,137
Intangible assets                            6,100        7,300
Goodwill                                     2,425        2,425
                                         ----------------------
                                            20,666       19,862
                                         ----------------------
                                           145,846      159,465
                                         ----------------------
                                         ----------------------

Liabilities

Current liabilities
Accounts payable and accrued liabilities     5,854        6,094
Current portion of deferred revenue          6,751        4,028
                                         ----------------------
                                            12,605       10,122
                                         ----------------------

Non current liabilities
Deferred revenue                                36           57
Future tax liability                           283          374
Other                                          335          342
                                         ----------------------
                                               654          773
                                         ----------------------
                                            13,259       10,895
                                         ----------------------

Shareholders' equity

Share capital                              145,414      146,568
Contributed surplus                          4,354        1,532
Accumulated other comprehensive income          27           69
Retained earnings (deficit)                (17,208)         401
                                         ----------------------
                                           132,587      148,570
                                         ----------------------

                                           145,846      159,465
                                         ----------------------
                                         ----------------------



Sandvine Corporation

Consolidated Statements of Operations
For the three and nine month periods ended August 31, 2008
(in Canadian dollars, amounts in thousands, except share and per share data)
(unaudited)




                               Three months ended         Nine months ended
                         ---------------------------------------------------
                           August 31    August 31    August 31    August 31
                                2008         2007         2008         2007
                                   $            $            $            $
Revenue
Product                       10,263       19,016       22,977       50,371
Service                        2,862        2,160        9,523        6,202
                         ---------------------------------------------------
                              13,125       21,176       32,500       56,573
                         ---------------------------------------------------
Cost of sales
Product                        2,682        5,143        6,221       11,055
Service                          629          377        1,667        1,091
                         ---------------------------------------------------
                               3,311        5,520        7,888       12,146
                         ---------------------------------------------------

Gross margin                   9,814       15,656       24,612       44,427

Expenses
Sales and marketing            4,408        4,264       12,580       10,728
Research and development       6,283        4,764       18,142       11,230
General and administrative     1,886        1,872        6,386        4,200
Stock based compensation       1,538          423        3,036          827
Amortization of intangible
 assets                          400          267        1,200          267
Depreciation                   1,055          674        2,755        1,836
                         ---------------------------------------------------
                              15,570       12,264       44,099       29,088
                         ---------------------------------------------------
Income (loss) from
 operations                   (5,756)       3,392      (19,487)      15,339

Interest and other income        706        1,244        2,686        2,541
                         ---------------------------------------------------
Income (loss) before
 provision for income
 taxes                        (5,050)       4,636      (16,801)      17,880
                         ---------------------------------------------------

Provision for (recovery
 of) income taxes
Current                           40          (35)          79          135
Future                         1,166        1,971          984       (1,147)
                         ---------------------------------------------------
                               1,206        1,936        1,063       (1,012)
                         ---------------------------------------------------

Net income (loss) for
 the period                   (6,256)       2,700      (17,864)      18,892
                         ---------------------------------------------------
                         ---------------------------------------------------

Earnings (loss) per
 share
Basic                         (0.046)       0.021       (0.131)       0.151
                         ---------------------------------------------------
Diluted                       (0.046)       0.020       (0.131)       0.143
                         ---------------------------------------------------
Basic weighted average
 number of shares
 outstanding             136,191,095  130,392,708  136,654,074  125,514,727
                         ---------------------------------------------------
                         ---------------------------------------------------
Diluted weighted average
 number of shares
 outstanding             136,191,095  137,837,689  136,654,074  132,519,583
                         ---------------------------------------------------
                         ---------------------------------------------------



Sandvine Corporation

Consolidated Statements of Cash Flows
For the three and nine month periods ended August 31, 2008
(in Canadian dollars, amounts in thousands, except share and per share data)
(unaudited)


                                   Three months ended     Nine months ended
                                --------------------------------------------
                                 August 31  August 31  August 31  August 31
                                      2008       2007       2008       2007
                                         $          $          $          $

Cash provided by (used in)

Operating activities
Net income (loss) for the
 period                             (6,256)     2,700    (17,864)    18,892
Items not affecting cash
 Amortization of intangible
  assets                               400        267      1,200        267
 Depreciation                        1,081        674      2,818      1,836
 Foreign exchange (gain) loss         (129)       259       (161)       267
 Stock-based compensation            1,538        423      3,036        827
 Future income tax provision
  (recovery)                         1,166      1,971        984     (1,147)
 Other                                   -          1       (328)        52
                                --------------------------------------------

                                    (2,200)     6,295    (10,315)    20,994

Changes in non-current
 balances                              (31)       192        (21)        (8)
Changes in non-cash working
 capital balances                    1,573       (392)      (472)    (3,911)
                                --------------------------------------------

                                      (658)     6,095    (10,808)    17,075
                                --------------------------------------------

Investing activities
Purchase of property, plant
 and equipment                      (1,951)    (1,850)    (4,494)    (5,270)
Business acquisitions, net of
 cash acquired                           -     (5,030)         -     (5,030)
Purchase of marketable
 securities                       (140,179)  (126,673)  (571,185)  (309,327)
Sale of marketable securities      144,990     84,626    588,906    242,956
                                --------------------------------------------

                                     2,860    (48,927)    13,227    (76,671)
                                --------------------------------------------

Financing activities
Proceeds from the issuance of
 share capital                          66     50,005        240     50,825
Common shares repurchased           (1,069)         -     (1,821)         -
                                --------------------------------------------

                                    (1,003)    50,005     (1,581)    50,825
                                --------------------------------------------

Net increase (decrease) in
 cash during period                  1,199      7,173        838     (8,771)

Cash and cash equivalents -
 Beginning of period                 7,517      3,620      7,878     19,564
                                --------------------------------------------

Cash and cash equivalents -
 End of period                       8,716     10,793      8,716     10,793
                                --------------------------------------------
                                --------------------------------------------

Cash and cash equivalents are
 represented by
Balances with banks                  5,941        713      5,941        713
Cash equivalents                     2,775     10,080      2,775     10,080