GAAP Financial Highlights

• Revenue: Total revenue for the fourth quarter of 2007 was $145.6 million, compared with total revenue of $1.3 million in the fourth quarter of 2006. Total revenue for the full year 2007 was $305.8 million compared with total revenue of $170.3 million for 2006. A new commercial release of EV-DO Rev A software triggered significant revenue recognition in the fourth quarter of 2007.
• Net Income/Loss: Net income for the fourth quarter of 2007 was $104.2 million, compared with a net loss of $19.1 million for the fourth quarter of 2006. Net income for the full year 2007 was $153.3 million compared with net income of $74.1 million for 2006. Operating expenses for the full year 2007 increased to $98.5 million from $67.9 million in the prior year, reflecting the Company ' s investments in new product R&D, as well as funding for international expansion programs. In addition, results for the full year 2007 include a tax expense of $21.9 million, while the results for 2006 included a $10.7 million tax benefit.
• Net Cash Provided by Operating Activities: Net cash provided by operating activities was $10.4 million for the fourth quarter of 2007 and $91.8 million for the full year 2007, compared with $21.1 million for the fourth quarter of 2006 and $25.1 million for 2006. The Company ' s core EV-DO network infrastructure business continued to generate strong cash flow. Cash flow for full year 2007 includes a $31.9 million reduction in accounts receivable, as well as an $8.9 million income tax refund received during the fourth quarter.

Non-GAAP Product and Service Billings

• Product and Service Billings ( " Billings " ): On a non-GAAP basis, the Company ' s Billings for the fourth quarter of 2007 were $33.3 million compared with $72.9 million for the fourth quarter of 2006. The higher Billings in the fourth quarter of 2006 reflected spending for initial deployments of EV-DO Rev A software by wireless operators. For the full year 2007, Billings increased to $142.2 million from $140.6 million for 2006. Throughout 2007 wireless operators continued their deployment of EV-DO Rev A software to extend mobile broadband services coverage for their customers. In addition, operators continue to upgrade their networks with new versions of the Company ' s software to provide their subscribers with enhanced mobile broadband services.
• Gross Profit on Billings: On a non-GAAP basis, the Company ' s Gross Profit on Billings for the fourth quarter of 2007 was $30.8 million compared with $70.8 million for the fourth quarter of 2006. For the full year 2007, Gross Profit on Billings increased to $133.4 million from $128.0 million for 2006.
• Operating Profit on Billings: On a non-GAAP basis, Operating Profit on Billings for the fourth quarter of 2007 was $3.4 million, compared with $50.1 million for the fourth quarter of 2006. This decrease in fourth-quarter profit levels was primarily attributable to the Company ' s lower level of Billings in the fourth quarter of 2007 and increased investment in new femtocell product development and funding for international expansion programs. For the full year 2007, Operating Profit on Billings was $34.9 million, or 25% of Billings, compared with $60.2 million, or 43% of Billings in 2006.

A description of Airvana ' s revenue-recognition policy, which results in significant variability in reported revenue from quarter to quarter, and its non-GAAP financial measures is included at the end of this press release.

Comments on the Fourth Quarter and Fiscal Year 2007

" Q4 was another solid quarter for Airvana, " said Randy Battat, president and chief executive officer. " Consistent with our outlook, Billings increased sequentially to $33.3 million in the quarter and to $142.2 million for the year. During the fourth quarter we delivered a major EV-DO software release that facilitates high-performance multi-media applications, such as push-to-talk, as well as providing new proprietary ' clustering ' features that enable groups of Radio Network Controllers to act as a single, high-capacity entity, dramatically improving network scalability. In addition, we continued making great progress on the major new EV-DO software upgrades that we anticipate releasing in the second and fourth quarters of 2008. "

" In our fixed-mobile convergence (FMC) business, in the fourth quarter we began trials of both our CDMA and UMTS femtocell products with major operators and partners worldwide, " Battat said. " We announced the availability of our Universal Access Gateway, which incorporates Femto Gateway Services. This week we announced that Thomson Telecom plans to incorporate Airvana ' s UMTS femto technology in its home media gateways. We believe Airvana is the only player in the global FMC space delivering both UMTS and CDMA solutions for femtocells in the home as well as security gateways at the core of the operator ' s network. Our ability to provide operators and consumers with comprehensive FMC solutions differentiates Airvana on both a cost and performance basis and positions us for sustained leadership in this rapidly growing market. "

Recent Business Highlights

• New EV-DO Software Release Enables Advanced Push-To-Talk and Network Scalability: Airvana ' s latest EV-DO Rev A technology enables operators to deploy push-to-talk services on an All-IP mobile broadband network. Major operator deployments of push-to-talk services on EV-DO Rev A are planned in 2008. In addition, new patent-pending RNC clustering technology provides increased network scalability and performance.
• Universal Access Gateway Incorporates Femto Network Gateway Services: Airvana ' s innovative access gateway is designed to address the unique security, mobility and performance requirements of mobile operators using the Internet to provide fixed mobile convergence services. These products support mobile voice, video and data services accessed by subscribers using dual-mode mobile/Wi-Fi handsets, laptops, Wi-Fi access points and femtocells.
• Thomson Telecommunications Selects Airvana UMTS Femtocell Products: Airvana will supply Thomson Telecommunications, a world leader in media and communications technologies, with UMTS femtocell products in conjunction with Thomson ' s residential media gateways. This is a key element of Airvana ' s strategy to provide operators and consumers with comprehensive femto solutions.

Business and Financial Outlook

" Looking forward, we expect 2008 to be an important year of transition for Airvana, " said Battat. " In our core EV-DO business we expect to start seeing wireless operator demand for capacity expansion in the second half of the year, as most of the business has been so far driven by coverage deployments. In the fixed mobile convergence market, we expect our femtocell products to advance from concept to reality in 2008, with our first commercial shipments of both CDMA and UMTS femtocells taking place in the second half. As a result, our Billings growth should accelerate in the second half of the year. "

Financial Outlook

The Company expects Billings for the first half of 2008 to be somewhat lower than in the first half of 2007. Billings are expected to increase in the second half of 2008 based upon anticipated capacity-driven growth in the core EV-DO business as well as planned software releases. Billings in the second half of 2008 also are expected to reflect demand for both Universal Access Gateways and new femtocell solutions. For the full year 2008 the Company expects Billings to increase over 2007.

The following is Airvana ' s GAAP and non-GAAP financial outlook for the first quarter of 2008.

First-Quarter 2008 Outlook

• Total revenue in the range of $7 million to $8 million
• Billings (non-GAAP) in the range of $33 million to $36 million

Conference Call Details

In conjunction with this announcement, Airvana will host a conference call today at 8:30 a.m. (ET) to discuss the Company ' s financial results, highlights of the quarter, business strategy and financial outlook. The conference call will be webcast live on the Internet, and can be accessed on the Investor Relations section of the Company ' s website ( www.airvana.com ). The conference call can also be accessed by dialing 877-604-9668 or 719-325-4846. A replay of the webcast will be available on the Investor Relations section of the Company ' s website for approximately two weeks.

Revenue Recognition Policy

Airvana recognizes revenue in accordance with the American Institute of Certified Public Accountants ' Statement of Position (SOP) No. 97-2, Software Revenue Recognition. The Company collaborates with its OEM customers to develop specific features for products that they sell to their wireless operator customers. The Company and its OEM customers typically agree on software specifications and plans for specified upgrades several years in advance of delivery, and these upgrades are unique to each OEM customer.

The Company ' s typical sales arrangements involve multiple elements, including: perpetual licenses for software products and specified software upgrades; the sale of hardware, maintenance and support services; and the sale of professional services, including training. In order to recognize revenue from current product shipments, Airvana must establish vendor specific objective evidence, or VSOE, of fair value for all undelivered elements, including specified upgrades. The best objective evidence of fair value would be to sell these specified software upgrades separately to multiple customers at the same price. However, the specific features and functionality delivered in the Company ' s software upgrades are uniquely designed for each OEM, and therefore the Company is unable to establish VSOE of fair value for such upgrade.

Therefore, Airvana recognizes revenue from the sale of products and services under these OEM arrangements only after the Company delivers the upgrades that were committed at the time of sale. Airvana records as deferred revenue the product and service billings at the time of shipment. This revenue is recognized later upon delivery of these specified upgrades. As a result, the Company believes that its revenue, taken in isolation, provides limited insight into the performance of its business. Therefore, the Company also presents certain non-GAAP financial measures including: product and service billings, which reflects sales activity in a period; and costs related to product and service billings, which reflects the cost associated with product and service billings.

Non-GAAP Financial Measures

To supplement the Company ' s condensed consolidated financial statements presented on a US GAAP basis, Airvana uses non-GAAP billings measures of operating results, gross profit on billings and operating income on billings, which are adjusted to include changes in deferred revenue and deferred costs in a period. These adjustments to the Company ' s GAAP results are made with the intent of providing both management and investors with a more complete understanding of Airvana ' s underlying operating performance and trends. The Company believes that these non-GAAP financial measures enhance the overall understanding of its past financial performance and also its prospects for the future. These non-GAAP measures provide an indication of the Company ' s sales activity in the period and are considered by management for the purpose of making operational decisions. In addition, these non-GAAP measures are the primary indicators that management uses as a basis for the Company ' s planning and forecasting of future periods.

Management uses the following non-GAAP measures (detailed in Exhibits 1 and 2) as a supplement to GAAP revenue and cash flow from operations in evaluating the Company ' s performance:

• Product and Service Billings ( " Billings " ) reflects the amount invoiced for products and services in a period and equals GAAP revenue plus the change in deferred revenue in the period.
• Costs Related to Billings reflects the cost directly attributable to Billings in a period and equals GAAP cost of revenue plus the change in deferred product cost in the period.
• Gross Profit on Billings reflects Billings less costs related to Billings in the period.
• Operating Profit on Billings reflects Gross Profit on Billings less GAAP operating expenses in the period.

Management believes investors may find these measures useful for understanding the Company ' s operations, but cautions that they should not be considered a substitute for disclosure in accordance with GAAP. Exhibits 1 and 2 reconcile all non-GAAP metrics to the corresponding income statement items as determined in accordance with GAAP for all periods presented and for the eight quarters ending with the fourth quarter of 2007.

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