Exhibit 99.1 to Form 8-K Q3 2014 Press Release



Comverse, Inc.:	Three Months Ended October 31,						Nine Months Ended October 31,
(In thousands)	2014			2013			2014			2013
Total revenue	$	123,119		$	160,416		$	357,571		$	485,987
Costs and expenses
Cost of revenue	76,624			95,888			232,948			290,336
Research and development, net	15,007			17,536			45,285			50,476
Selling, general and administrative	25,534			31,283			89,228			103,342
Other operating expenses	8,046			1,005			12,701			7,859
Total costs and expenses	125,211			145,712			380,162			452,013
(Loss) income from operations	(2,092		)	14,704			(22,591		)	33,974
Expense adjustments	12,114			5,634			27,877			10,220
Comverse performance ⁽¹⁾	10,022			20,338			5,286			44,194

Income (loss) before income tax (expense) benefit	5,138			11,816			(16,895		)	26,361
Income tax (expense) benefit	(4,188		)	11,320			(15,152		)	(23,452		)
Net income (loss)	950			23,136			(32,047		)	2,909
Basic earnings (loss) per share	$	0.04		$	1.04		$	(1.44	)	$	0.13
Diluted earnings (loss) per share	$	0.04		$	1.03		$	(1.44	)	$	0.13

Interest expense	(122		)	(211		)	(476		)	(565		)
Depreciation and amortization	$	(5,329	)	$	(4,753	)	$	(14,890	)	$	(14,070	)

Operating margin	(1.7		)%	9.2		%	(6.3		)%	7.0		%
Comverse performance margin	8.1		%	12.7		%	1.5		%	9.1		%

Net cash used in operating activities ⁽²⁾	$	(16,050	)	$	(15,028	)	$	(65,434	)	$	(5,387	)



	Three Months Ended October 31,						Nine Months Ended October 31,
	2014			2013			2014			2013
	(Dollars in thousands)
SEGMENT RESULTS
BSS
Segment revenue	$	68,235		$	70,892		$	185,262		$	221,314
Gross margin	45.1		%	40.3		%	43.0		%	38.6		%
Income from operations	17,925			12,513			39,280			35,301
Operating margin	26.3		%	17.7		%	21.2		%	16.0		%
Segment performance	18,625			13,204			41,377			37,522
Segment performance margin	27.3		%	18.6		%	22.3		%	17.0		%
Digital Services
Segment revenue	$	54,884		$	89,524		$	172,309		$	264,673
Gross margin	38.9		%	48.0		%	37.6		%	46.4		%
Income from operations	12,786			35,102			42,285			98,914
Operating margin	23.3		%	39.2		%	24.5		%	37.4		%
Segment performance	12,885			35,063			42,388			99,093
Segment performance margin	23.5		%	39.2		%	24.6		%	37.4		%
All Other
Loss from operations	$	(32,803	)	$	(32,911	)	$	(104,156	)	$	(100,241	)
Segment performance	(21,488		)	(27,929		)	(78,479		)	(92,421		)

Comverse will be conducting a conference call today, December 10, 2014 at 8:00 a.m. ET. To listen to the conference call live, please dial (678) 825-8369. Please dial-in at least ten minutes before the scheduled start time. A live webcast can be accessed at www.comverse.com by following links to the events and presentations page under the Investors section. Following the call, a replay of the webcast will be archived in the same location.

We evaluate our business by assessing the performance of each of our operating segments. Our Chief Executive Officer is our chief operating decision maker (“CODM”). The CODM uses segment performance, as defined below, as the primary basis for assessing the financial results of the operating segments and for the allocation of resources. Segment performance, as we define it in accordance with the Financial Accounting Standards Board's guidance relating to segment reporting, is not necessarily comparable to other similarly titled captions of other companies.

Segment performance is computed by management as (loss) income from operations adjusted for the following: (i) stock-based compensation expense; (ii) amortization of intangible assets; (iii) compliance-related professional fees; (iv) compliance-related compensation and other expenses; (v) strategic-related costs (vi) write-off of property and equipment; (vii) certain litigation settlements and related costs; (viii) Italian VAT recovery recorded within operating expense; (ix) restructuring expenses; and (x) certain other gains and expenses. Compliance-related professional fees relate to fees and expenses recorded in connection with our efforts to remediate material weaknesses in internal control over financial reporting for the fiscal year ended January 31, 2014.

We provide Comverse performance, a non-GAAP financial measure, as additional information for our operating results. This measure is not in accordance with, or an alternative for, GAAP financial measures and may be different from, or not comparable to similarly titled or other non-GAAP financial measures used by other companies. We believe that the presentation of this non-GAAP financial measure provides useful information to investors regarding certain additional financial and business trends relating to our results of operations as viewed by management in monitoring our businesses, reviewing financial results and for planning purposes. See “Consolidated Reconciliation of GAAP to Non-GAAP Financial Measures” below.

At the core of the evolution of how we communicate, exchange information and monetize the digital world, Comverse enables the creation and monetization of innovative digital services for telecom and enterprise service providers through its proven and innovative product portfolio that includes managed BSS and Policy (PCRF), Enterprise Billing and Digital Services - all backed by Managed and Professional Services. Comverse’s extensive customer base spans more than 125 countries with solutions successfully delivered to over 450 communication service providers serving more than two billion subscribers. Comverse’s solutions are available in a variety of delivery models, including on-site, cloud, hosted/SaaS and managed services. For more information, visit www.comverse.com.

This press release includes “forward-looking statements.” Forward-looking statements include financial projections, statements of plans and objectives for future operations, statements of future economic performance, and statements of assumptions relating thereto. In some cases, forward-looking statements can be identified by the use of terminology such as “may,” “expects,” “plans,” “anticipates,” “estimates,” “believes,” “potential,” “projects,” “forecasts,” “intends,” or the negative thereof or other comparable terminology. By their very nature, forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results, performance and the timing of events to differ materially from those anticipated, expressed or implied by the forward-looking statements in this press release. Such risks or uncertainties may give rise to future claims and increase exposure to contingent liabilities. These risks and uncertainties relate to (among other factors) the market price of our stock, operating expenses and cash flows, variability of our tax provision, and the additional risks described in the sections entitled “Forward-Looking Statements” and Item 1A, “Risk Factors” and elsewhere in the company's Annual Report on Form 10-K filed with the SEC on April 16, 2014, or in subsequently filed periodic, current or other reports. We undertake no commitment to update or revise any forward-looking statements except as required by law.



	Three Months Ended October 31,						Nine Months Ended October 31,
	2014			2013			2014			2013
Revenue:
Product revenue	$	25,482		$	49,413		$	73,768		$	158,808
Service revenue	97,637			111,003			283,803			327,179
Total revenue	123,119			160,416			357,571			485,987
Costs and expenses:
Product costs	13,729			23,551			39,537			79,936
Service costs	62,895			72,337			193,411			210,400
Research and development, net	15,007			17,536			45,285			50,476
Selling, general and administrative	25,534			31,283			89,228			103,342
Other operating expenses:
Restructuring expenses and write-off of property and equipment	8,046			1,005			12,701			7,859
Total other operating expenses	8,046			1,005			12,701			7,859
Total costs and expenses	125,211			145,712			380,162			452,013
(Loss) income from operations	(2,092		)	14,704			(22,591		)	33,974
Interest income	126			121			341			436
Interest expense	(122		)	(211		)	(476		)	(565		)
Foreign currency transaction gain (loss), net	7,257			(2,733		)	6,327			(7,761		)
Other (expense) income, net	(31		)	(65		)	(496		)	277
Income (loss) before income tax (expense) benefit	5,138			11,816			(16,895		)	26,361
Income tax (expense) benefit	(4,188		)	11,320			(15,152		)	(23,452		)
Net income (loss)	$	950		$	23,136		$	(32,047	)	$	2,909
Weighted average common shares outstanding:
Basic	22,216,878			22,218,600			22,304,366			22,138,389
Diluted	22,294,590			22,412,267			22,304,366			22,312,009
Earnings (loss) per share:
Basic earnings (loss) per share	$	0.04		$	1.04		$	(1.44	)	$	0.13
Diluted earnings (loss) per share	$	0.04		$	1.03		$	(1.44	)	$	0.13



	October 31, 2014			January 31, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	175,462		$	254,580
Restricted cash and bank deposits	35,546			34,343
Accounts receivable, net of allowance of $4,585 and $6,945, respectively	101,207			89,361
Inventories	14,379			16,166
Deferred cost of revenue	9,367			14,500
Deferred income taxes	2,080			2,329
Prepaid expenses	19,723			17,000
Other current assets	12,378			1,680
Total current assets	370,142			429,959
Property and equipment, net	45,998			41,541
Goodwill	151,846			150,346
Intangible assets, net	5,035			5,153
Deferred cost of revenue	33,805			45,717
Deferred income taxes	1,119			1,720
Long-term restricted cash	8,493			33,815
Other assets	33,176			40,586
Total assets	$	649,614		$	748,837
LIABILITIES AND (DEFICIT) EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	143,938		$	168,406
Deferred revenue	220,887			239,902
Deferred income taxes	845			514
Income taxes payable	158			2,102
Total current liabilities	365,828			410,924
Deferred revenue	94,197			113,426
Deferred income taxes	46,487			43,735
Other long-term liabilities	145,930			147,942
Total liabilities	652,442			716,027
Commitments and contingencies
Deficit (equity):
Common stock, $0.01 par value - authorized, 100,000,000 shares; issued 22,575,789 and 22,286,123 shares, respectively; outstanding, 21,910,740 and 22,251,226 shares, respectively	226			223
Treasury stock, at cost, 665,049 and 34,897 shares, respectively	(15,291		)	(1,024		)
Accumulated deficit	(56,298		)	(24,251		)
Additional paid in capital	43,173			34,530
Accumulated other comprehensive income	25,362			23,332
Total (deficit) equity	(2,828		)	32,810
Total liabilities and (deficit) equity	$	649,614		$	748,837



	Nine Months Ended October 31,
	2014			2013
Cash flows from operating activities:
Net (loss) income	$	(32,047	)	$	2,909
Non-cash operating items:
Depreciation and amortization	14,890			14,070
Provision for doubtful accounts	740			824
Stock-based compensation expense	8,606			8,011
Deferred income taxes	3,933			15,050
Inventory write-downs	2,174			3,916
Other non-cash items, net	1,622			(1,355		)
Changes in assets and liabilities:
Accounts receivable	(14,353		)	37,156
Inventories	(2,484		)	(19		)
Deferred cost of revenue	17,055			30,322
Prepaid expense and other current assets	(10,179		)	(433		)
Accounts payable and accrued expense	(22,447		)	(16,870		)
Income taxes	(2,367		)	(1,379		)
Deferred revenue	(33,835		)	(89,955		)
Tax contingencies	4,290			(4,624		)
Other assets and liabilities	(1,032		)	(3,010		)
Net cash used in operating activities	(65,434		)	(5,387		)
Cash flows from investing activities:
Proceeds from sales and maturities of investments	—			100
Purchases of property and equipment	(17,698		)	(9,832		)
Acquisition of Solaiemes, net of cash acquired	(2,673		)	—
Net change in restricted cash and bank deposits	24,063			(27,324		)
Proceeds from asset sales	86			78
Other, net	—			743
Net cash provided by (used in) investing activities	3,778			(36,235		)
Cash flows from financing activities:
CTI capital contribution	—			25,000
Payment for repurchase of common stock in connection with tax liabilities upon settlement of stock awards	(984		)	(820		)
Payment for repurchase of common stock under repurchase program	(13,126		)	—
Proceeds from exercises of stock options	40			846
Proceeds from loan	87			—
Net cash (used in) provided by financing activities	(13,983		)	25,026
Effects of exchange rates on cash and cash equivalents	(3,479		)	(2,139		)
Net decrease in cash and cash equivalents	(79,118		)	(18,735		)
Cash and cash equivalents, beginning of period	254,580			262,921
Cash and cash equivalents, end of period	$	175,462		$	244,186
Non-cash investing transactions:
Accrued but unpaid purchases of property and equipment	$	3,348		$	1,278
Inventory transfers to property and equipment	$	2,082		$	3,201



Table of Reconciliation from GAAP Income (loss) from operations to Non GAAP Comverse Performance	Three Months Ended October 31,						Nine Months Ended October 31,
	2014			2013			2014			2013
	(Dollars in thousands)
(Loss) income from operations	$	(2,092	)	$	14,704		$	(22,591	)	$	33,974
Expense Adjustments:
Stock-based compensation expense	2,683			2,668			8,606			8,011
Amortization of intangible assets	796			692			2,191			2,070
Compliance-related professional fees	55			744			759			1,550
Compliance-related compensation and other expenses	—			(44		)	(70		)	163
Strategic related costs	186			—			2,576			—
Write-off of property and equipment	1,470			208			1,648			251
Certain litigation settlements and related costs	41			8			46			(15		)
Italian VAT refund recovery recorded within operating expenses	—			—			—			(10,861		)
Restructuring expenses	6,582			1,005			11,237			7,859
Gain on sale of fixed assets	(4		)	(14		)	(21		)	(32		)
Other	305			367			905			1,224
Total expense adjustments	12,114			5,634			27,877			10,220
Comverse performance	$	10,022		$	20,338		$	5,286		$	44,194



	BSS			Digital Services			All Other			Consolidated
	(In thousands)
Three Months Ended October 31, 2014
Total revenue	$	68,235		$	54,884		$	—		$	123,119
Total costs and expenses	$	50,310		$	42,098		$	32,803		$	125,211
Income (loss) from operations	$	17,925		$	12,786		$	(32,803	)	$	(2,092	)
Computation of segment performance:
Segment revenue	$	68,235		$	54,884		$	—
Total costs and expenses	$	50,310		$	42,098		$	32,803
Segment expense adjustments:
Stock-based compensation expense	—			—			2,683
Amortization of intangibles assets	698			98			—
Compliance-related professional fees	—			—			55
Strategic-related costs	—			—			186
Write-off of property and equipment	2			1			1,467
Certain litigation settlements and related cost	—			—			41
Restructuring expenses	—			—			6,582
Gain on sale of fixed assets	—			—			(4		)
Other	—			—			305
Segment expense adjustments	700			99			11,315
Segment expenses	49,610			41,999			21,488
Segment performance	$	18,625		$	12,885		$	(21,488	)
Interest expense	$	—		$	—		$	(122	)	$	(122	)
Depreciation	$	(887	)	$	(1,304	)	$	(2,342	)	$	(4,533	)



	BSS			Digital Services			All Other			Consolidated
	(In thousands)
Three Months Ended October 31, 2013
Total revenue	$	70,892		$	89,524		$	—		$	160,416
Total costs and expenses	$	58,379		$	54,422		$	32,911		$	145,712
Income (loss) from operations	$	12,513		$	35,102		$	(32,911	)	$	14,704
Computation of segment performance:
Segment revenue	$	70,892		$	89,524		$	—
Total costs and expenses	$	58,379		$	54,422		$	32,911
Segment expense adjustments:
Stock-based compensation expense	—			—			2,668
Amortization of intangibles assets	692			—			—
Compliance-related professional fees	—			—			744
Compliance-related compensation and other expenses	—			(39		)	(5		)
Write-off of property and equipment	—			—			208
Certain litigation settlements and related cost	—			—			8
Restructuring expenses	—			—			1,005
Gain on sale of fixed assets	(1		)	—			(13		)
Other	—			—			367
Segment expense adjustments	691			(39		)	4,982
Segment expenses	57,688			54,461			27,929
Segment performance	$	13,204		$	35,063		$	(27,929	)
Interest expense	$	—		$	—		$	(211	)	$	(211	)
Depreciation	$	(936	)	$	(1,268	)	$	(1,857	)	$	(4,061	)



	BSS			Digital Services			All Other			Consolidated
	(In thousands)
Nine Months Ended October 31, 2014
Total revenue	$	185,262		$	172,309		$	—		$	357,571
Total costs and expenses	$	145,982		$	130,024		$	104,156		$	380,162
Income (loss) from operations	$	39,280		$	42,285		$	(104,156	)	$	(22,591	)
Computation of segment performance:
Segment revenue	$	185,262		$	172,309		$	—
Total costs and expenses	$	145,982		$	130,024		$	104,156
Segment expense adjustments:
Stock-based compensation expense	—			—			8,606
Amortization of intangibles assets	2,093			98			—
Compliance-related professional fees	—			—			759
Compliance-related compensation and other expenses	—			1			(71		)
Strategic-related costs	—			—			2,576
Write-off of property and equipment	2			3			1,643
Certain litigation settlements and related cost	—			—			46
Restructuring expenses	—			—			11,237
Gain on sale of fixed assets	2			1			(24		)
Other	—			—			905
Segment expense adjustments	2,097			103			25,677
Segment expenses	143,885			129,921			78,479
Segment performance	$	41,377		$	42,388		$	(78,479	)
Interest expense	$	—		$	—		$	(476	)	$	(476	)
Depreciation	$	(2,632	)	$	(3,828	)	$	(6,239	)	$	(12,699	)



	BSS			Digital Services			All Other			Consolidated
	(In thousands)
Nine Months Ended October 31, 2013
Total revenue	$	221,314		$	264,673		$	—		$	485,987
Total costs and expenses	$	186,013		$	165,759		$	100,241		$	452,013
Income (loss) from operations	$	35,301		$	98,914		$	(100,241	)	$	33,974
Computation of segment performance:
Segment revenue	$	221,314		$	264,673		$	—
Total costs and expenses	$	186,013		$	165,759		$	100,241
Segment expense adjustments:
Stock-based compensation expense	—			—			8,011
Amortization of intangibles assets	2,070			—			—
Compliance-related professional fees	—			—			1,550
Compliance-related compensation and other expenses	122			179			(138		)
Write-off of property and equipment	29			1			221
Certain litigation settlements and related cost	—			—			(15		)
Italian VAT refund recovery recorded within operating expense	—			—			(10,861		)
Restructuring expenses	—			—			7,859
Gain on sale of fixed assets	—			(1		)	(31		)
Other	—			—			1,224
Segment expense adjustments	2,221			179			7,820
Segment expenses	183,792			165,580			92,421
Segment performance	$	37,522		$	99,093		$	(92,421	)
Interest expense	$	—		$	—		$	(565	)	$	(565	)
Depreciation	$	(2,822	)	$	(3,777	)	$	(5,401	)	$	(12,000	)



	As of
(In millions)	October 31, 2014		July 31, 2014

Cash and cash equivalents	$	175.5	$	181.6
Restricted cash (including long-term restricted cash) and bank time deposits	44.0		72.7
Total	$	219.5	$	254.3