Main Highlights

Revenues total $10.7 million, compared to $7.7 million revenues in first quarter 2009

Gross margin totals 52.9%, down from first quarter 2009 following change in product mix

Substantially lower operating and net loss, on higher revenues and implemented cost efficiencies

Cash, cash equivalents and marketable securities at June 30, 2009 total $50.6 million

Financial Results

Revenues for the second quarter of 2009 totaled $10.7 million, compared to $17.1 million in the second quarter of 2008. Revenues increased 39% sequentially from the $7.7 million in the first quarter 2009.

Gross profit for the second quarter of 2009 totaled $5.7 million, compared to $9.3 million in the second quarter of 2008. Gross profit increased 30% sequentially from the $4.4 million in the first quarter 2009. Gross margin for the second quarter of 2009 totaled 52.9%, compared to 54.5% gross margin for the second quarter of 2008. Gross margin for the first quarter of 2009 totaled 56.7% due to a more favorable product mix.

Operating loss for the second quarter of 2009 totaled $2.8 million, compared to operating profit of $0.3 million in the second quarter of 2008. Operating loss for the quarter was down substantially from the $5.9 million operating loss in the first quarter of 2009 which also included a one time provision of $1.7 million for a doubtful debt.

Net loss for the second quarter of 2009 totaled $2.9 million, or $0.14 per share, compared to net income of $0.4 million, or $0.02 earnings per diluted share, in the second quarter of 2008. Net loss for the first quarter of 2009 totalled $6.1 million, or $0.29 per share.

On a non-GAAP basis, net loss for the second quarter of 2009 totaled $2.3 million, or $0.11 per share, compared to net income of $0.8 million, or $0.04 earnings per diluted share, in the second quarter of 2008. On a non-GAAP basis, net loss for the first quarter of 2009 totalled $5.5 million, or $0.26 per share, which also included a one time $1.7 million provision for doubtful debt.

Cash, cash equivalents, and marketable bonds and securities as of June 30, 2009, totaled $50.6 million, compared to $54.8 million as of March 31, 2009.

Mr. Ronnie Kenneth, Chairman and CEO of Voltaire commented, "Our second quarter results demonstrate that we are back on track. We returned to double-digit sequential revenue growth, while narrowing our operating and net losses."

Mr. Kenneth added, "During the quarter we witnessed demand for both our existing and new products, with orders from the government sector returning to over 30% of our total order intake, followed by financial services which contributed 25%. Our new 40 Gb/s QDR InfiniBand director switches, which shipped towards the end of the quarter, experienced strong demand as nearly all major HPC deals emerging today view these switches as the interconnect technology that best maximizes the new capacity provided by next generation server architectures. Furthermore, our recently released UFM software is gaining interest given its ability to dramatically optimize performance and management of scale-out server and storage fabrics. We ended the quarter with a healthy backlog enabling us to enter the third quarter, and second half the year, with a high degree of visibility -- higher than in recent quarters, granting us the confidence to reiterate our annual revenue guidance."

Mr. Kenneth concluded, "As we look ahead to the second half of the year, we are already seeing growing excitement among partners and end users for our upcoming 10 Gigabit Ethernet switches. In June we announced the first switch in our Ethernet portfolio, the Voltaire Vantage 8500. Slated for general availability towards the end of this year, we expect these switches to open the door to new markets and expansion opportunities for Voltaire, increasing our addressable market from hundreds of millions of dollars to billions of dollars. These new products, paired with our market leading InfiniBand product portfolio, will serve as the key growth drivers for the company in 2010 and beyond."

Outlook

Management reiterates previously announced guidance, and expects revenues for the full year of 2009 to be around $50 million. Gross margin for the year is expected to be around 50%, and to return to approximately 55% in 2010. Non-GAAP operating expense levels are expected to remain at a similar level to 2008.

Conference Call Details

The Company will be hosting a conference call later today, at 10:00 am ET. On the call, management will review and discuss the results and will be available to answer questions. To participate, please either call one of the following teleconferencing numbers, or access the live webcast on the Company's website. Please begin placing your calls at least 10 minutes before the conference call is due to commence. If you are unable to connect using the toll-free numbers, please try the international dial-in number.

  US Dial-in Number:         1-888-668-9141    UK Dial-in Number:                0-800-917-5108    Israel Dial-in Number:     03-918-0609       International Dial-in Number:     +972-3-918-0609   at 10:00 am Eastern Time; 7:00 am Pacific Time; 3:00 pm UK Time; 5:00 pm Israel Time              -------------------------------------------------------------------------------  

The conference call will be broadcast live on the Company's website. To participate, please access the investor relations section of Voltaire's website -- www.voltaire.com, at least 10 minutes before the conference call is due to commence. A replay of the call will be available following the call under the Investor Relations section of the website at: www.voltaire.com.

Use of Non-GAAP Financial Measure

Voltaire reports its results of operations in accordance with GAAP and, additionally, on a non-GAAP basis. Non-GAAP operating income (loss) and non-GAAP net income (loss) are calculated based on the operating income (loss) or net income (loss) in Voltaire's financial statements excluding (i) non-cash equity-based compensation charges recorded in accordance with SFAS 123R, and (ii) the $2.1 million expense recorded in the first quarter of 2008 under cost of revenues for the one-time repayment of grants to the Office of the Israeli Chief Scientist. Reconciliation of this non-GAAP measure to operating income (loss) and net income (loss), the most comparable GAAP measures, is provided in the schedules attached to this release. Voltaire provides these non-GAAP financial measures because its management believes that they are useful in enhancing an understanding of Voltaire's ongoing performance. Voltaire uses internally the Non-GAAP information to evaluate the Company's ongoing performance. Voltaire is providing this information to investors to enable them to perform comparisons of operating results in a manner similar to how the Company analyzes its operating results.

About Voltaire

Voltaire is a leading provider of scale-out computing fabrics for data centers, high performance computing and cloud environments. Voltaire's family of server and storage fabric switches and advanced management software improve performance of mission-critical applications, increase efficiency and reduce costs through infrastructure consolidation and lower power consumption. Used by more than 30 percent of the Fortune 100 and other premier organizations across many industries, including many of the TOP500 supercomputers, Voltaire products are included in server and blade offerings from Bull, HP, IBM, NEC and Sun and provide the internal server-to-storage connectivity for the HP-Oracle Database Machine. Founded in 1997, Voltaire is headquartered in Ra'anana, Israel and Billerica, Massachusetts. More information is available at www.voltaire.com or by calling 1-800-865-8247.

Forward Looking Statements

Information provided in this press release contains statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to Voltaire's plans, objectives and expectations for future operations and are based upon management's current estimates and projections of future results or trends. They also include third-party projections regarding expected industry growth rates. Actual future results may differ materially from those projected as a result of certain risks and uncertainties. These factors include in particular, but are not limited to, the impact of the economic downturn on capital expenditures by our customers and our product mix during the balance of the year. These factors and others are those discussed in detail under the heading "Risk Factors" in Voltaire's annual report on Form 20-F for the year ended December 31, 2008. These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

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  VOLTAIRE LTD.                                                                                               CONSOLIDATED BALANCE SHEETS                                                                                 (U.S.