Aruba Networks, Inc. (ARUN)

[eastunder]

ARUBA NETWORKS ANNOUNCES FISCAL SECOND QUARTER FINANCIAL RESULTS

Board of Directors Approves Stock Repurchase Plan

SUNNYVALE, California, February 26, 2008 — Aruba Networks, Inc.(NASDAQ: ARUN), a global leader in wireless LANs and secure unified mobility solutions, today released financial results for the fiscal second quarter ended January 31, 2008.
Revenues for the fiscal second quarter of 2008 were approximately $40.6 million, an increase of 53% from $26.6 million reported in the fiscal second quarter of 2007. GAAP net loss for the fiscal second quarter of 2008 was $3.5 million, or $0.04 per share, compared to a net loss of $7.2 million, or $0.52 per share, in the fiscal second quarter of 2007. GAAP results for the second fiscal quarter of 2008 included $4.1 million of non-cash stock-based expenses.

Non-GAAP net income for the fiscal second quarter of 2008 was $0.6 million, or $0.01 per diluted share, compared to a non-GAAP net loss of $3.2 million, or $0.23 per diluted share, in the fiscal second quarter of 2007. Non-GAAP net income excludes the impact of stock-based expenses in all periods and, for the second fiscal quarter of 2007, expense related to the revaluation of warrants to fair value.

“Despite short term softness in our Federal and retail verticals, we added a record number of customers in the second quarter and saw continued strength in our education, healthcare and high tech verticals,” said Dominic Orr, president and chief executive officer of Aruba Networks. “Moving forward, we expect the Federal vertical to return to normal levels with the approval of the Federal budget. Additionally, we continue to believe that two key drivers in the retail sector — the need for PCI compliance and the need to replace aging wireless infrastructure — will drive long term growth for our wireless LAN solutions. With strong growth of new customer acquisitions, we now have a base of over 3,750 total customers worldwide.”

“We have been especially pleased with the strong interest in our 802.11n solutions,” continued Mr. Orr. “The education vertical accounts for approximately 50% of our current pipeline for this technology; however, we are seeing orders and evaluations by companies spread across our different vertical markets. We believe that the competitive differentiation of our architecture and products will continue to drive sales and help grow our business in coming quarters.”

“Gross margins were very strong, reflecting a favorable product mix,” said Steffan Tomlinson, Aruba’s chief financial officer. “We closely managed expenses during the period and were able to deliver non-GAAP profitability in a tougher quarter.”
Stock Repurchase Plan

Aruba also announced today that it has been authorized by its Board of Directors to institute a stock repurchase program for up to $10 million worth of its common stock. Purchases may be made, from time to time, in the open market and will be funded from available working capital. The number of shares to be purchased and the timing of purchases will be based on the price of the Company’s common stock, general business and market conditions, and other investment considerations.