NetLogic Microsystems, Inc. (NetLogic) has reported revenues of $139.9 million for the year-end 2008, up 28%, compared with the revenues of $109 million in the previous year-end. It has also reported a net income of $3.8 million, or $0.17 per diluted share, for the year-end 2008, compared with the net income of $2.6 million, or $0.12 per diluted share, in the previous year-end.

The revenue for the fourth quarter 2008 was $30.9 million compared with $38.3 million for the third quarter 2008 and with $32.3 million for the fourth quarter 2007.

The fourth quarter 2008 net loss, determined in accordance with generally accepted accounting principles (GAAP), was $0.9 million or $0.04 per diluted share. By comparison, GAAP net income was $1.3 million or $0.06 per diluted share for the third quarter 2008, and GAAP net loss was $4.8 million or $0.23 per diluted share for the fourth quarter 2007. The GAAP net income included stock-based compensation expense, the amortization of intangible assets, in-process research and development expense, and a fair value inventory adjustment. Excluding these items, non-GAAP net income for the fourth quarter 2008 was $7.0 million or $0.30 per diluted share, compared with $0.42 per diluted share for the third quarter 2008 and $0.33 per diluted share for the fourth quarter 2007.

For the fourth quarter 2008, cash, cash equivalents and short-term investments increased by $10.6 million to $96.5 million.

The non-GAAP net income for the year ended December 31, 2008, was $34.7 million or $1.50 per diluted share, excluding stock-based compensation expense, the amortization of intangible assets and fair value inventory adjustments. The non-GAAP net income for the year ended December 31, 2007 was $26.7 million or $1.20 per share, excluding stock-based compensation excluding stock-based compensation expense, the amortization of intangible assets, fair value inventory adjustments, the impact of a deferred tax asset valuation allowance release, the tax effect of an intercompany license agreement and in-process research and development expense.

Management Qualitative Comments:

Continued strong engineering and operational execution throughout 2008 allowed us to greatly advance our technology roadmap through the introduction of a broad range of new products across both our knowledge-based processing and physical layer product portfolios, said Ron Jankov, president and chief executive officer. In addition, we successfully completed the conversion of the majority of our knowledge-based processor product line to 55 nanometer process technology, a very significant and unique achievement. This upgrade gives us significant advantages over competing solutions in terms of our performance, power usage, size and cost-efficiency and underscores our commitment to technology leadership. By leveraging these accomplishments, we have established the strongest portfolio of design wins in the company’s history and have opened up new emerging growth markets for our products, including datacenters, mobile wireless infrastructure and network security. We believe that the expansion of our markets, coupled with industry-leading products, strong customer relationships and a solid financial model will drive our continued success in the coming years.

Recent Highlights:

In January 2009, the company announced the introduction of the NL9000 knowledge-based processor as part of the launch of its fifth-generation knowledge-based processor family. The NL9000 processor is a new fully-programmable hybrid knowledge-based processor that features the convergence of high-performance; massively parallel knowledge-based processing with flexible, power-efficient algorithmic Sahasra(TM) technology. This architecture dramatically reduces power consumption while delivering best-in-class performance and functionality for next-generation IPTV and advanced mobile wireless networks.

During the first quarter, the company introduced its AEL2020 dual-port SFP+ 10-Gigabit Ethernet PHY and AEL3020 dual-port 10GBASE-KR PHY products specifically optimized for advanced datacenter applications with the industry’s lowest power, smallest package footprint and lowest latency.

The company announced in April 2008 that it has started initial production shipments of its NL71024XT knowledge-based processor. This new device delivers up to three times higher IPv6 header processing performance compared with competing solutions, and has been optimized for next-generation Terabit routers and switches to accelerate Internet Protocol version 6 (IPv6) routing, quad-play convergence of video, voice, data and mobility, Internet Protocol Television (IPTV), WebTV and peer-to-peer (P2P) communications.

In April 2008, the company announced the availability of its NETLite processors targeted at next-generation merchant silicon switching and network processors. The NL56615 and NL3380 NETLite processors are manufactured in TSMC’s advanced 55nm process and interface to a new generation of merchant silicon switches and network processors to enable a multitude of intelligent packet-based protocols at wire-speed on multi-Gigabit systems at lower power consumption and higher port density.

During the second quarter, the company announced the availability and successful Tier 1 customer design win momentum of the NLS205 family of NETL7TM knowledge-based processors, the industry’s first single-chip content processing solution that is capable of scaling from 250 Megabits per second (Mbps) to 2.5 Gigabits per second (Gbps) line-rate performance without requiring external memory. The NLS205 family of processors is targeted at high-volume applications such as security and networking systems for small and medium-sized businesses and datacenter servers.

During the second quarter, the company announced the new NLP2040 and NLP3040 PHY devices, the industry’s first quad-port 10 Gigabit Ethernet physical layer devices that deliver the highest performance and lowest power consumption for next-generation switches, routers and blade servers addressing the data center, enterprise networking, storage and service provider markets.

In October 2008, the company announced the availability of its NLS220 Layer 7 knowledge-based processing solution, which provides up to 20Gbps of deep-packet inspection performance to accelerate advanced Layer 7 applications such as intrusion prevention, anti-virus/anti-spam, and application identification.

During the fourth quarter, the company announced it has developed the new 100 Gigabit Ethernet physical layer solution targeted at next-generation carrier, data center and access networks. The NLP10000 solution from the company incorporates innovations in high-speed PHY technology that will enable original equipment manufacturers (OEMs) to develop 100GE systems while minimizing power consumption and form factor.

On February 2, 2009, the company announced that it has reached volume production of a complete redesign of its third-generation of knowledge-based processors in TSMC’s advanced, low-power 55nm process node. The newly redesigned NL7512 knowledge-based processor family offers full backwards compatibility for current designs for a significant increase in both performance and functionality, using less than one-half of the power consumption of NetLogic Microsystems’ previous industry-leading third-generation products. For new designs, this product family also offers an expanded instruction set version which includes the powerful instruction set improvements that are currently integrated into the company‚Äôs new carrier-class NL71024XT knowledge-based processor specifically targeted at accelerating the processing of IPv6 packets.