PLEASANTON, Calif. -January 24, 2007 Polycom, Inc. (NASDAQ: PLCM), the world's leading provider of unified collaborative communications solutions, today reported its earnings for the fourth quarter ended December 31, 2006.

Fourth quarter 2006 consolidated net revenues were $186.5 million, compared to $156.1 million for the fourth quarter of 2005. Non-GAAP net income in the fourth quarter of 2006 was $32.0 million, or 35 cents per diluted share. This compares to Non-GAAP net income of $21.0 million, or 23 cents per diluted share, for the fourth quarter of 2005. Non-GAAP financial measures exclude stock-based compensation expense, the effect of stock-based compensation expense on warranty rates, acquisition-related costs, purchased in-process research and development costs, amortization and impairment of purchased intangibles, restructuring costs, litigation reserves and payments, gain (loss) on strategic investments, income tax effect of the preceding adjustments, tax charge associated with the repatriation of foreign earnings at a one-time favorable tax rate under the American Jobs Creation Act of 2004, income (loss) from discontinued operations, net of taxes, and gain from sale of discontinued operations, net of taxes.

GAAP net income for the fourth quarter of 2006 was $25.8 million, or 28 cents per diluted share. GAAP net income for the fourth quarter of 2006 includes stock-based compensation expense related to the implementation of Statement of Financial Accounting Standard (SFAS) 123R in fiscal 2006 of $4.8 million, net of tax, or 5 cents per diluted share. GAAP net income for the fourth quarter of 2005 was $9.3 million, or 10 cents per diluted share. GAAP net income prior to fiscal 2006 did not include stock-based compensation expense. Including the pro forma stock-based compensation expense previously disclosed in Polycom's financial statement footnotes, GAAP net income for the fourth quarter of 2005 would have been $5.3 million, or 6 cents per diluted share.

For the year ended December 31, 2006, net revenues were $682.4 million, compared to $580.7 million for the year ended December 31, 2005. Non-GAAP net income for the year ended December 31, 2006 was $98.1 million, or $1.09 per diluted share, compared to $75.5 million, or 78 cents per diluted share for the comparable period of 2005. GAAP net income for the year ended December 31, 2006 was $71.9 million, or 80 cents per diluted share, compared to GAAP net income of $62.7 million, or 65 cents per diluted share, for the same period last year. GAAP net income for year ended December 31, 2006 includes stock-based compensation expense related to the implementation of SFAS 123R in fiscal 2006 of $16.3 million, net of tax, or 18 cents per diluted share. Including the pro forma stock-based compensation expense previously disclosed in Polycom's financial statement footnotes, GAAP net income for the year ended December 31, 2005 would have been $44.7 million or 46 cents per diluted share.

The reconciliation of the GAAP statement of operations amounts to the respective Non-GAAP figures, for the three and twelve months ended December 31, 2006 and 2005, is set forth at the end of this press release.

On a product line basis, consolidated net revenues for the fourth quarter of 2006 were comprised of 55 percent video communications, or $103.0 million; 28 percent voice communications, or $52.4 million; and 17 percent network systems, or $31.1 million. This compares to the fourth quarter of 2005, in which consolidated net revenues were comprised of 53 percent video communications, or $83.1 million; 25 percent voice communications, or $39.1 million; and 22 percent network systems, or $33.9 million.

"2006 was an excellent year for Polycom," said Robert Hagerty, president and CEO. "In fact, Q4 punctuated the year with strength in demand for Polycom voice and video over IP (V²IP) solutions across all geographies. Throughout 2006, we strengthened our strategic partnerships with Alcatel, Avaya, Cisco, IBM, Microsoft, and Nortel. We also added an important new partnership with Skype. In addition, we broadened our V²IP offerings with leading service providers across the globe. Collaborative communications has become a key and visible initiative for commercial and public organizations of all sizes, capturing the productivity and agility gains only possible through IP-based unified collaboration."

Hagerty continued, "We believe Polycom's product strength, coupled with our strategic partnerships, channel, sales force, and brand, makes us the best positioned company to lead the unified collaboration market space. With Polycom's recently launched Polycom HDX^TM9000 high definition video products, Polycom HD Voice^TMproducts, and our leading network systems, Polycom is again illustrating that we are a leading innovator in this industry and that our integrated product solution is unparalleled."

"Polycom's revenue grew 20 percent year-over-year in the fourth quarter to $186.5 million," said Michael Kourey, senior vice president, finance and administration, and CFO. "This growth was fueled by sequential revenue gains in all product segments, yielding backlog and deferred revenue growth to record levels - $40.4 million and $61.0 million, respectively. Polycom's operating margins also expanded in the fourth quarter, driving operating cash flow to $43.7 million."

About Polycom Polycom, Inc. is the worldwide leader in unified collaborative communications (UCC) that maximize the efficiency and productivity of people and organizations by integrating the broadest array of video, voice, data and Web solutions to deliver the ultimate communications experience. Polycom's high quality, standards-based conferencing and collaboration solutions are easy to deploy and manage, as well as intuitive to use. Supported by an open architecture, they integrate seamlessly with leading telephony and presence-based networks. With its market driving technologies, best-in-class products, alliance partnerships, and world-class service, Polycom is the smart choice for organizations seeking proven solutions and a competitive advantage in real-time communications and collaboration. For additional information call 1-800-POLYCOM (765-9266) or +1-408-526-9000, or visit the Polycom website at www.polycom.com.

This release contains forward-looking statements, within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, regarding future events, future demand for our products, and the future performance of the Company, including statements regarding Polycom as being best positioned to lead the unified collaboration market space. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the impact of competition on our product sales and for our customers and partners, potential fluctuations in results and future growth rates, the market acceptance of Polycom's products, such as voice and video over IP products and HD products, and changing market demands, including demands for differing technologies or product and services offerings, possible delays in the development, availability and shipment of new products, increasing costs and differing uses of capital, challenges associated with integrating acquired companies, changes in key personnel, the impact of global conflicts such as those in the Middle East, and risks associated with changes in general economic conditions. Many of these risks and uncertainties are discussed in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2006, and in other reports filed by Polycom with the SEC. Polycom disclaims any intent or obligations to update these forward-looking statements.

As has been noted on the Company's web site since January 17, 2007, Polycom will hold a conference call today, January 24, 2007, at 5:00 p.m. EST/2:00 p.m. PST to discuss its fourth quarter earnings. Robert Hagerty, chairman, president and CEO, and Michael Kourey, chief financial officer, will host the conference. You may participate by viewing the webcast at www.polycom.com or, for callers in the US and Canada, by calling 800-582-6982; and for callers outside of the US and Canada, by calling 415-537-1885, with the pass code being Polycom. A replay of the call will also be available at www.polycom.com or, for callers in the US and Canada, at 800-633-8284; and for callers outside of the US and Canada, at 402-977-9140. The access number for the replay is 21323974. A replay of the call will also be maintained on our website at www.polycom.com under Investor Relations - Archived Conference Calls for twelve months.

Polycom reserves the right to modify future product plans at any time. Products and/or related specifications referenced in this press release are not guaranteed, and will be delivered on a when and if available basis.

Polycom and the Polycom logo are registered trademarks and Polycom HDX 9000 and Polycom HD Voice are trademarks in the U.S. and various countries. All other trademarks are the property of their respective owners. ©2007, Polycom, Inc. All rights reserved.