Revenue in the second quarter was $112.2 million, compared to $87.9 million reported in the first quarter of 2009 and $121.5 million reported in the second quarter of 2008.

In accordance with U.S. generally accepted accounting principles (GAAP), the company recorded a second quarter GAAP net loss of $0.3 million or $0.00 per diluted share. This compares with a GAAP net loss of $7.6 million or $0.12 per diluted share in the first quarter of 2009. GAAP net income in the second quarter of 2008 was $10.1 million or $0.16 per diluted share. Cash, cash equivalents and short-term marketable securities were $340.6 million at June 30, 2009, up $51.8 million from the prior quarter. Cash flow from operations for the second quarter was $44.9 million, up $49.4 million sequentially from cash flow used in operations of $4.5 million reported in the first quarter of 2009.

Atheros reports gross margins, operating expenses, operating income (loss), net income (loss) and basic and diluted net income (loss) per share in accordance with GAAP and additionally on a non-GAAP basis. Non-GAAP net income excludes, where applicable, the effect of stock-based compensation, amortization of acquired intangible assets and acquisition-related charges, the impairment of long-term investments, the tax benefit due to a change in state tax filing position and the tax impact of these excluded items. A reconciliation of preliminary GAAP net income (loss) to non-GAAP net income, as well as a description of items excluded in the calculation of non-GAAP net income is presented in the financial statements portion of this release.

Non-GAAP gross margins in the second quarter were 47.4 percent, compared to 48.1 percent reported in the first quarter of 2009 and 50.8 percent in the second quarter of 2008. Non-GAAP operating income in the second quarter of 2009 was 10.8 percent of revenue, compared to 3.2 percent in the first quarter of 2009 and 16.6 percent in the second quarter of 2008.

Non-GAAP net income in the second quarter was $12.3 million or $0.20 per diluted share, compared to $3.9 million or $0.06 per diluted share in the first quarter of 2009 and $19.3 million or $0.31 per diluted share in the second quarter of 2008.

"Our better-than-expected results for the June quarter were primarily driven by strong product cycles and market share gains, particularly in the PC and retail router markets," said Dr. Craig Barratt, Atheros' president and chief executive officer. "During the quarter, shipments of our ETHOS(R) line of Ethernet products were particularly strong while revenue from our 11n-based XSPAN(TM) and Align(TM) solutions increased significantly across multiple channels. We are quite pleased with the increasing customer demand for our expanding connectivity product lines and we look forward to bringing innovative new products to market that will enhance our customers' success and provide Atheros with added growth opportunities," Dr. Barratt said.

Conference Call

Atheros will broadcast its second quarter financial results conference call today, Tuesday, July 21, 2009 at 2 p.m. Pacific time (5 p.m. Eastern time).

To listen to the call from within the United States, please dial 877-835-9268 approximately 10 minutes prior to the start of the call. To listen to the call from outside the United States, please dial 706-634-9690 approximately 10 minutes prior to the start of the call. The pass code is Atheros. A taped replay will be made available approximately one hour after the conclusion of the call and will remain available for one week after the live call. To access the replay, please dial 706-645-9291 and use the pass code 87027913.

Atheros' financial results conference call will be available via a live webcast on the investor relations section of the Atheros web site at http://www.atheros.com. Access the web site 15 minutes prior to the start of the call to download and install any necessary audio software. An archived webcast replay will be available on the web site for 6 months.

About Atheros Communications, Inc.

Atheros Communications is a global leader in innovative technologies for wireless and wired communications products. Atheros combines its wireless and networking systems expertise with high-performance radio frequency (RF), mixed signal and digital semiconductor design skills to provide highly integrated chipsets that are manufactured on low-cost, standard complementary metal-oxide semiconductor (CMOS) processes. Atheros technology is used by a broad base of leading customers, including personal computer, networking equipment and consumer device manufacturers. For more information, please visit http://www.atheros.com or send email to info@atheros.com.

NOTE: Atheros, the Atheros logo, ETHOS, XSPAN and Align are trademarks of Atheros Communications, Inc.

NOTE ON FORWARD-LOOKING STATEMENTS:

Except for the historical information contained herein, the matters set forth in this press release, including our prospects and growth opportunities, the expected growth in customer demand for our products, and our expected introduction of additional products, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, including, but not limited to, difficulties in the development of new and enhanced products, general economic conditions, the effects of competition and technological change, and the risks detailed in Atheros' Annual Report on Form 10-K for the year ended December 31, 2008 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, as filed with the Securities and Exchange Commission, and in other reports filed with the SEC by Atheros from time to time. These forward-looking statements speak only as of the date hereof. Atheros disclaims any obligation to update these forward-looking statements.

 ATHEROS COMMUNICATIONS, INC. PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data)                                                  Three Months Ended                                            -------------------------------                                             June 30,  March 31,   June 30,                                               2009       2009       2008                                            ---------  ---------  --------- Net revenue                                $ 112,224  $  87,925  $ 121,518 Cost of goods sold                            59,181     45,844     60,057                                            ---------  ---------  --------- Gross profit                                  53,043     42,081     61,461 Operating expenses:   Research and development                    30,480     29,045     29,947   Sales and marketing                         14,305     13,416     12,500   General and administrative                   6,872      5,930      6,309   Amortization of acquired intangible    assets                                      2,885      2,885      3,010                                            ---------  ---------  ---------     Total operating expenses                  54,542     51,276     51,766 Income (loss) from operations                 (1,499)    (9,195)     9,695 Interest income, net                           1,563      1,671      1,944 Impairment of long-term investments              (30)    (1,107)    (1,387) Income tax benefit (provision)                  (284)     1,079       (127)                                            ---------  ---------  --------- Net income (loss)                          $    (250) $  (7,552) $  10,125                                            =========  =========  ========= Basic earnings (loss) per share            $    0.00  $   (0.12) $    0.17                                            =========  =========  ========= Diluted earnings (loss) per share          $    0.00  $   (0.12) $    0.16                                            =========  =========  ========= Shares used in computing basic earnings  (loss) per share                             61,427     60,918     59,607                                            =========  =========  ========= Shares used in computing diluted earnings  (loss) per share                             61,427     60,918     62,113                                            =========  =========  ========= ATHEROS COMMUNICATIONS, INC.