InfoVista Reports Q2 FY2006 Financial Results; License Revenues up 21% Year on Year; Total Revenues up 15% to Record EUR 10 Mill

InfoVista (Euronext: IFV, ISIN: FR0004031649, NASDAQ:
IVTA), the leading service-centric performance management software
company, today announced results for its fiscal year 2006 second
quarter, ended December 31, 2005. Total revenues were EUR 10.0
million, a 15% increase over the same period in the prior year. Net
income for the quarter amounted to EUR 85 thousand, after a
stock-based compensation charge of EUR 276 thousand.
   Commenting on InfoVista's performance in the period, Gad Tobaly,
Chief Executive Officer, noted: "Our solid results in the quarter
reflect good execution in all regions. We are particularly gratified
by the growth of license revenues from both Service Providers and
Enterprise customers, and the industry validation that we have
received for our VistaInsight for IP Telephony solution from
customers, analysts and the media. The consolidation that continues in
our market is further proof of the value these solutions deliver and
strengthens our relationships with partners and customers seeking to
work with a leading performance management software developer that
they can trust. All told, Q2 was a strong quarter in which we were
able to secure our market position and deliver further improved
financial performance."

   Financial Highlights

   Revenues

   --  Total revenues in the quarter rose 15% to EUR 10.0 million.
        License revenues grew by 21% to EUR 5.6 million, or 57% of
        total revenues, while service revenues increased by 9% to EUR
        4.3 million.

   --  For the first six months of fiscal 2006, total revenues
        increased by 17% to EUR 19.0 million. License revenues
        increased by 21% to EUR 10.5 million, representing 55% of
        total revenues, while service revenues increased by 12% to EUR
        8.5 million.

   Expenses

   --  Gross margin in the quarter improved to 80.9% of total
        revenues, as compared to 80.4% in the comparable quarter of
        the previous year.

   --  Second quarter operating expenses totaled EUR 8.0 million as
        compared to EUR 6.7 million in the comparable period last
        year. The increase is primarily due to additional spending in
        sales and marketing combined with higher commission expenses
        of EUR 0.6 million, stock-based compensation for approximately
        EUR 0.3 million, further investment in research and
        development for EUR 0.2 million. Additionally, the stronger
        exchange rate of the US dollar against the Euro boosted
        operating expenses by approximately EUR 0.1 million.

   Earnings

   --  Net income for the second quarter was EUR 85 thousand.
        Excluding stock-based compensation, net income for the second
        quarter would have been EUR 0.4 million, compared to EUR 0.1
        million.

   Balance Sheet

   --  Days Sales Outstanding (DSOs) improved to 80 days from 108
        days at prior quarter end.

   --  The Company's balance sheet remains strong, with no debt and
        with cash and marketable securities of EUR 34.1 million, a
        quarterly increase of EUR 2.1 million that primarily came from
        operating activities.

   --  There were a total of 17,802,394 InfoVista shares outstanding
        as at December 31, 2005.

   Operational Highlights

   Sales growth across all geographical regions

   --  The sharpest revenue growth in the quarter was recorded in
        America, where sales were up 29% to EUR 4.0 million over the
        comparable quarter last year. European revenues were up 6%
        over the comparable quarter last year, to EUR 5.1 million.
        Finally, revenues in the Asia-Pacific region increased by 20%
        in the quarter, to EUR 0.9 million. Europe, America and
        Asia-Pacific contributed 51%, 39% and 10%, respectively, of
        the second quarter's total revenues.

   --  Existing customers increased their commitment to InfoVista
        solutions, with revenues from repeat customers representing
        90% of total revenues for the quarter. Repeat customers
        included the American and Canadian telecommunication
        incumbents, Telefonica and Cable & Wireless in Europe, and
        SingTel in Asia.

   --  Revenues from the direct sales channel increased 30% over the
        same period last year to contribute 63% of total revenues for
        the second quarter. Indirect revenues totaled EUR 3.7 million
        in the quarter, accounting for 37% of total revenues.

   Strong demand from Service Providers and sharp growth in the
Enterprise segment

   --  Revenues from Service Providers increased 9% year-on-year to
        EUR 6.8 million in the quarter, representing 69% of total
        revenues. During the quarter, InfoVista recorded revenues from
        the telecommunication incumbents in the US, Canada, Mexico, UK
        and Singapore. InfoVista secured revenues of at least EUR 250
        thousand each from eight Service Providers during the quarter,
        including a combined deal of EUR 1 million with the T-Mobile
        Group and two other large deals from Telefonica and new
        customer Eircom of Ireland.

   Mobile operators are enhancing their core networks to deploy a new
generation of wireless data services as they require superior Quality
of Service and network performance management solutions to manage
their MPLS backbone. In Q2, InfoVista was chosen over the competition
by wireless operators such as SingTel Mobile, Polkomtel, PT Excelcom,
Bouygues Telecom and two distinct T-Mobile operations, to address a
combination of those needs, vindicating the Company's transformation
from strict resource performance management to service-centric quality
monitoring.

   --  Revenues from the Enterprise market jumped 34% to EUR 3.1
        million in the quarter, contributing 31% of total revenues.
        Three important contracts were signed with financial
        institutions, including a EUR 0.5 million competitive deal
        with a top-five banking firm that selected InfoVista to
        provide comprehensive management solution for its IP Telephony
        system, considered one of the world's largest such deployments
        to date. InfoVista also booked orders from government entities
        in the US, Germany and the Czech Republic during the quarter.

   Further Industry recognition

   --  VistaInsight for IP Telephony is the recipient of Internet
        Telephony's 2005 Product of the Year Award and was
        acknowledged as a leading IP telephony management solution in
        the Yankee Group's recent report, "VoIP Management Solutions
        Guide: Managing Cisco IP Communications in the Enterprise."

   Strengthened Partnerships and Alliances

   --  In Q2, InfoVista hosted successful Executive Advisory Panels
        in Rome, Italy and Washington, DC. InfoVista customers and
        partners representing a diverse range of operators,
        outsourcers and industry experts throughout EMEA and the
        Americas shared their perspectives, lessons learned,
        recommendations and plans for next-generation network success.

   New Solution Released

   --  During the quarter, the Company announced the launch of
        VistaInsight(TM) for Servers 2.0, the latest version of
        InfoVista's performance management solution for maximizing
        server and system infrastructure investments in enterprise
        data centers. In addition to new functionalities to expand its
        addressable market, VistaInsight for Servers 2.0 includes
        capabilities geared toward the support of server
        virtualization.

   Outlook

   Despite the seasonality that comes with the first quarter of the
calendar year, InfoVista anticipates positive year on year growth in
Q3, with a revenue range of EUR 9.0 to EUR 9.5 million. The Company
also expects its third quarter net results to be at or near breakeven.

   SFAF meeting

   The company will host a SFAF (Societe Francaise des Analystes
Financiers) Meeting today in Paris in French at 10.00 am (Continental
Europe).

   About InfoVista

   InfoVista is the Service-Centric Performance Management Software
Company that assures the optimal delivery of business-critical IT
services. Driven by a uniquely adaptive and real-time technology
foundation, InfoVista solutions improve business effectiveness, reduce
operating risk, lower cost of operations, increase agility and create
competitive advantage. Eighty percent of the world's largest service
providers as ranked by Fortune(R), as well as leading Global 2000
enterprises, rely on InfoVista to enhance the business value of their
technology assets. Representative customers include ABN AMRO,
Allstream, Banques Populaires, AXA, Banque de France, Bell Canada,
British Telecom, Broadwing Communications, Cable & Wireless, Com Hem,
Defense Information Systems Agency (DISA), Deloitte & Touche, Deutsche
Telecom, France Telecom, Savvis Corporation, SingTel, Telefonica, and
US Cellular. A Software Magazine 500 company, InfoVista stock is
traded on the NASDAQ (IVTA) and on Eurolist by Euronext
(FR0004031649). For more information about the company, please visit
www.infovista.com.

   Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995: Except for
historical information contained herein, the matters discussed in this
news release are "forward looking statements." These statements
involve risks and uncertainties which could cause actual results to
differ materially from those in such forward-looking statements;
including, without limitation, risks and uncertainties arising from
the rapid evolution of our markets, competition, market acceptance of
our products, our dependence upon spending by the telecommunications
industry and our ability to develop and protect new technologies. For
a description of other factors which might affect our actual results,
please see the "Risk Factors" section and other disclosures in
InfoVista's public filings with the US Securities & Exchange
Commission and French Autorite des Marches Financiers. Readers of this
news release are cautioned not to put undue reliance on any
forward-looking statement. The Company undertakes no obligation to
publicly update any forward-looking statements, whether as a result of
new information, future events or otherwise.

   InfoVista is a registered trademark of InfoVista, S.A.

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                              INFOVISTA
                CONSOLIDATED STATEMENTS OF OPERATIONS
         (In thousands, except for share and per share data)

                      ----------- ----------- ------------ -----------
                        For the six months     For the three months
                        ended December 31,     ended December 31,
                      ----------------------- ------------------------
                         2005 (1)       2004      2005 (1)       2004
                      ----------- ----------- ------------ -----------
                      (unaudited) (unaudited)  (unaudited) (unaudited)
Revenues
  License revenues    EUR 10,538  EUR  8,678  EUR   5,648  EUR  4,667
  Service revenues         8,473       7,569        4,303       3,955
                      ----------- ----------- ------------ -----------
Total revenues            19,011      16,247        9,951       8,622

Cost of revenues
  Cost of licenses           349         368          210         198
  Cost of services         3,433       2,857        1,693       1,495
                      ----------- ----------- ------------ -----------
Total cost of
 revenues                  3,782       3,225        1,903       1,693

                      ----------- ----------- ------------ -----------
Gross profit              15,229      13,022        8,048       6,929

Operating expenses
  Sales and marketing
   expenses                8,711       7,365        4,465       3,548
  Research and
   development
   expenses                3,690       3,269        1,894       1,650
  General and
   administrative
   expenses                3,297       2,721        1,683       1,468

  Impairment of fixed 
   assets                      -           4            -           3
  Amortization of
   acquired intangibles        -         158            -          63
                      ----------- ----------- ------------ -----------
Total operating
 expenses                 15,698      13,517        8,042       6,732

                      ----------- ----------- ------------ -----------
Operating (loss)
 income                     (469)       (495)           6         197

Other income
 (expense):
  Realized gains on 
   marketable securities     224         227          109         120
  Net foreign currency
   transaction losses         (9)       (262)         (18)       (208)
  Other income, net           43          14           34           2
                      ----------- ----------- ------------ -----------
(Loss) Income before
 income taxes               (211)       (516)         131         111

Income tax (expense)
 benefit                    (156)         10          (46)         (3)
                      ----------- ----------- ------------ -----------

Net (loss) income     EUR   (367) EUR   (506) EUR       85 EUR     108
                      =========== =========== ============ ===========

Basic net (loss)      
 income per share     EUR  (0.02) EUR  (0.03) EUR     0.00 EUR    0.01
Diluted net (loss)    
 income per share     EUR  (0.02) EUR  (0.03) EUR     0.00 EUR    0.01

Basic weighted
 average shares
 outstanding          17,477,352  17,205,645   17,587,631  17,246,502
Diluted weighted
 average shares
 outstanding          17,477,352  17,205,645   18,966,581  20,883,505

(1) For the three and six months ended December 31, 2005, the
    operating expenses and cost of services include a stock-based
    compensation charge of EUR 276 thousand and EUR 552 thousand,
    reflecting the adoption of FAS123(R). Excluding this charge, the
    Company would have recorded net income of EUR 361 thousand and EUR
    185 thousand, respectively, for the three and six months ended
    December 31, 2005.
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                              INFOVISTA
                     CONSOLIDATED BALANCE SHEETS
                (In thousands, except for share data)

                                                ----------------------
                                                        As of
                                                ----------------------
                                                 December    June 30,
                                                    31,
                                                   2005       2005
                                                ----------- ----------
                                                (unaudited)
ASSETS

Cash and cash equivalents                       EUR  8,605  EUR 8,781
Marketable securities                               25,509     24,965
Trade receivables, net of allowance of EUR
 232 and EUR 253, respectively                       8,795     11,310
Prepaid expenses and other current assets            1,697      2,071
                                                ----------- ----------
     Total current assets                           44,606     47,127
                                                ----------- ----------

Fixed assets, net                                    2,328      2,200
Intangible assets, net                               1,717      1,158
Investment in equity securities                      1,027      1,027
Deposits and other assets                              838        717
                                                ----------- ----------
     Total long-term assets                          5,910      5,102
                                                ----------- ----------

Total assets                                    EUR 50,516 EUR 52,229
                                                =========== ==========

LIABILITIES & STOCKHOLDERS' EQUITY
Trade payables                                  EUR  2,314  EUR 2,465
Accrued salaries and commissions                     1,618      2,523
Accrued social security and other payroll taxes      1,203      1,026
Deferred revenue                                     5,438      7,202
Accrued VAT                                            796      1,541
Other current liabilities                              362        363
                                                ----------- ----------
     Total current liabilities                      11,731     15,120
                                                ----------- ----------

Other long term liabilities                            150        113
                                                ----------- ----------
     Total long-term liabilities                       150        113
                                                ----------- ----------

Stockholders' equity
Common stock (18,967,363 and 18,524,721 shares
 authorized and issued, and 17,802,394 and
 17,372,867 shares outstanding)                     10,242     10,003
Capital in excess of par value of stock             86,851     84,893
Accumulated deficit                                (52,556)   (52,189)
Unrealized gains(losses) on available for sale
 securities                                              6        (33)
Cumulative translation adjustment                   (1,050)    (1,200)
Less common stock in treasury, at cost              (4,858)    (4,478)
                                                ----------- ----------
     Total stockholders' equity                     38,635     36,996
                                                ----------- ----------

Total liabilities and stockholders' equity      EUR 50,516 EUR 52,229
                                                =========== ==========
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