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NetLogic Microsystems Contact:
Don Witmer, CFO                     
NetLogic Microsystems, Inc.
650-961-6676
dwitmer@netlogicmicro.com 

Investor Relations Contact:
Leslie Green
Green Communications Consulting, LLC
650-312-9060
leslie@greencommunicationsllc.com

NetLogic Microsystems Announces First Quarter 2006 Financial Results

Triple-Play Applications Drive Record Revenue and Design Wins for Knowledge-based Processors

Q1 2006 Net Revenues:       $23.3 million
Q1 2006 GAAP Net Loss:     $7.3 million; $0.39 per share (diluted)
Q1 2006 Non-GAAP Net Income:   $6.4 million; $0.31 per share (diluted),
representing a 19 percent increase over
Q4 2005 non-GAAP net income

Mountain View, Calif. – April 26, 2006 – NetLogic Microsystems, Inc. (NASDAQ: NETL), the leader in the design and development of knowledge-based processors, today announced financial results for the first quarter ended March 31, 2006.

Revenue in the first quarter of 2006 was $23.3 million, up 10 percent from $21.2 million in the fourth quarter of 2005.

First quarter 2006 net loss, including costs for the acquisition of Cypress’ NSE assets completed during the first quarter, in accordance with generally accepted accounting principles (GAAP), was $7.3 million or a loss of $0.39 per share. First quarter 2006 net loss included an in-process research and development charge of $10.7 million and amortization of intangible assets of $400,000 related to the acquisition.  Excluding these costs, the effect of a fair value adjustment to inventory acquired from Cypress and stock-based compensation, non-GAAP net income for the first quarter of 2006 was $6.4 million or $0.31 per share.

By comparison, GAAP net income was $5.0 million or $0.26 per share in the fourth quarter of 2005.  Non-GAAP net income for that period, which excludes amortization of stock-based compensation, was $5.3 million or $0.27 per share.

New NETL7™ Platform in Collaboration with AMD
The company announced this week the availability of the NLS1000HDK reference platform that delivers the industry’s best-in-class Layer 7 content processing solution in collaboration with Advanced Micro Devices, Inc. (AMD).  By adopting a highly optimized architecture that allows NetLogic Microsystems’ NETL7™ knowledge-based processor to connect directly to the AMD Opteron™ processor through a HyperTransport™ link, the NLS1000HDK platform enables customers to develop cost-effective, leading-edge systems with enhanced functionality, proven interoperability and improved time-to-market.

NetLogic Microsystems’ ability to accelerate intensive content processing for the AMD Opteron processor is an important development that enables customers to significantly enhance the functionality of x86-based systems, and at the same time allows NetLogic Microsystems to expand its market footprint beyond the current networking and communications sectors into the computing and security markets.  The tight coupling between the NETL7 knowledge-based processor and the AMD Opteron processor allows the NETL7 processor to efficiently perform comprehensive Layer 7 deep-packet content inspection and complex signature recognition at 10 Gigabits per second (Gbps) while minimizing system bottlenecks and resource utilization. 

Management Qualitative Comments
“During the first quarter, we continued to execute on our strategy of customer and product diversification through the introduction of our NETL7 family of Layer 7 knowledge-based processors, the introduction of our second generation NETLiteTM processors and our acquisition of the standard network search engine products of Cypress Semiconductor Corporation,” said Ron Jankov, president and CEO of NetLogic Microsystems.  “This enhanced product portfolio allows us to address the needs of a broad market segment – from entry-level packet processing to complex content processing at wire speed.  Our products are enabling networking OEMs to supply network service providers with systems offering more advanced functionality for the Internet, such as application-based routing, voice transmission over the Internet, unified threat management network security, virtual private networks and streaming video and audio.

“We were pleased to announce an innovative NLS1000HDK that directly attaches our NETL7 knowledge-based processor to the AMD Opteron processor for intensive deep packet content inspection and signature recognition.  This is an important development that enables customers to deliver unparalleled content processing performance and functionality while leveraging significant industry investments in, and broad technology infrastructure for, x86-based systems, and is the first solution that allows network managers to perform full content inspection on every bit of data, voice and video traffic traversing the network at 10Gbps at wire speeds.

“We are also pleased to report continued strength in the adoption of our knowledge-based processors with a record number of new design wins in the first quarter, including several for our latest generation NL6000 knowledge-based processor.  The NL6000 family is based on an entirely new core architecture, which has a top performance nearly double that of our NL5000, while consuming approximately one half of the power. This makes the NL6000 particularly well suited for very high bandwidth 10Gigabit Ethernet, Internet Protocol Version 6 and triple play voice, video and data applications, which require the highest processing performance and strictest power management. The NL6000 now has design wins at numerous companies, including Alaxala Networks, Alcatel, Cisco Systems, Force 10 Networks, Foundry Networks, Huawei Technologies and Lucent Technologies.

“We have begun 2006 with solid momentum in the growth and diversification of our product, customer and revenue base.   In addition, our expanded product offering in the NETLite family of processors is allowing us to advance our market share in emerging entry-level applications and will be a meaningful driver of our revenue growth late this year.  Further, the launch of the NETL7 family of processors and our collaboration with AMD significantly expands our addressable market and should provide revenue growth drivers for 2007 and beyond.”

First Quarter Highlights

  • NetLogic Microsystems announced the launch of its newest, second generation NL3280GLQ NETLite processor, specifically designed for cost-sensitive, high-volume applications such as entry level switches, routers and access equipment. The NL3280GLQ processor is a complete turn key project designed by the company’s rapidly growing India Design Center (IDC). IDC is a state-of-art design center located in Bangalore, India, which currently represents about 25 percent of the company’s worldwide engineering resources.
  • The company announced in February a collaboration with Broadcom Corporation to provide Ethernet routing solutions spanning the enterprise to the carrier market, setting the foundation for carriers to launch a new class of services based on cost-effective, pervasively used, Ethernet communications technology.  NetLogic Microsystems’ NL3180GLQ and recently announced NL3280GLQ families of NETLite processors seamlessly interface to Broadcom’s StrataXGS® III 600 Series of carrier-class Ethernet router devices to offer a multitude of intelligent packet based protocols at wire-speed on multiple gigabit Ethernet ports.
  • Also in February, NetLogic Microsystems completed the acquisition of assets and intellectual property associated with Cypress’s standard Network Search Engine products.  The company acquired Cypress’s Ayama™ 10000, Ayama 20000, and NSE70000 Network Search Engine families, as well as the Sahasra™ 50000 Algorithmic Search Engine family.
  • In January, NetLogic Microsystems announced the launch of its new NETL7 family of Layer 7 content processors. The first product in the NETL7 family is the NLS1000 content processor, which is the industry’s first content processor capable of processing application networking and security functions with a single 10 Gigabit-per-second engine. The high-performance NLS1000 content processor accelerates compute-intensive pattern and signature recognition tasks for enterprise and carrier-class networks, and is used to perform 10 Gbps wire-speed content inspection of packets traveling through the network.

Conference Call
The company will host its first quarter 2006 financial results conference call today at 2:00 p.m. Pacific time. To listen to the conference call, dial (800) 299-9086 ten minutes prior to the start of the call, using the passcode 12671847. A taped replay will be made available approximately two hours after the conclusion of the call and will remain available for one week. To access the replay, dial (888) 286-8010 and enter passcode 95300572.

The conference call will be available via a live webcast on the investor relations section of the NetLogic Microsystems web site at http://www.netlogicmicro.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 3 months.

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About NetLogic Microsystems
NetLogic Microsystems, Inc., a fabless semiconductor company located in Mountain View, Calif., designs, develops and markets high performance knowledge-based and content processors for a variety of advanced Internet, corporate and other networking systems, such as routers, switches, network security appliances, network access equipment and networked storage devices. NetLogic Microsystems' knowledge-based and content processors use an advanced processor architecture and a large knowledge or signature database to make complex decisions about individual packets of information traveling through the network. Content and knowledge-based processors from NetLogic Microsystems significantly enhance the ability of networking OEMs to supply network service providers with systems offering more advanced functionality for the Internet, such as application-based routing, voice transmission over the Internet, or VoIP, unified threat management (UTM) network security, virtual private networks, or VPNs, and streaming video and audio. NetLogic Microsystems' knowledge-based processors and content processors are interoperable with industry-leading CPUs, NPUs and routing/switching processors. For more information about products offered by NetLogic Microsystems, call 650.961.6676 or visit the NetLogic Microsystems Web site at
http://www.netlogicmicro.com

NetLogic Microsystems, the NetLogic Microsystems logo, NetLite and NETL7 are trademarks of NetLogic Microsystems, Inc.  All other trademarks are properties of their respective owners.

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"Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:  Statements in this press release regarding NetLogic Microsystems’ business which are not historical facts may be "forward-looking statements” that involve risks and uncertainties. Forward-looking statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Actual results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors. These factors include, but are not limited to, customer acceptance and demand for our products, the volume of sales to our principal product customers, manufacturing yields for our products, the timing of manufacture and delivery of product by our foundry suppliers, the length of our sales cycles, our average selling prices, the strength of the OEM networking equipment market and the cyclical nature of that market and the semiconductor industry. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors” in the Company's reports on Forms 10-K and 10-Q, as well as other reports that NetLogic Microsystems files from time to time with the Securities and Exchange Commission.  All forward-looking statements are qualified in their entirety by this cautionary statement, and NetLogic Microsystems undertakes no obligation to update publicly any forward-looking statement for any reason, except as required by law, even as new information becomes available or other events occur in the future.