Glowpoint Reports Record 2007 Revenues of $22.8 Million

Business Wire, March 27, 2008

Achieved Annual Core Revenue Growth of 20.6%

HILLSIDE, N.J. -- Glowpoint, Inc. (OTC BB: GLOW), a premiere, IP-based managed video communications services provider, today announced financial results for the fourth quarter and year ended December 31, 2007.

Financial Highlights

* Realized the highest year-over-year growth in the Company's core revenue at 20.6% for the 2007 year. Core revenue includes our base subscription fees and related services, bridging events and one time services, the foundation of our business. Core revenue excludes our low margin Nuvision business which declined as expected 5.8% for the 2007 year and 22.3% for the 4th quarter of 2007. The two largest components of core revenue, are base monthly subscriptions which grew about 16.1% for the 2007 year and 20.3% for the 4th quarter of 2007 and multi-point bridging which grew by 21.1% for the 2007 year and 24% for the 4th quarter of 2007 as compared to the same period in 2006.

* Achieved highest single month multi-point bridging revenue of $325,000 in 4th quarter of 2007.

* Revenue derived from channel partners increased to 14.2% of total revenue in the month December 2007 from 8.5% of total revenue in the month of December 2006.

Full-Year Financial Results

For the year ended December 31, 2007, revenue increased $3.3 million, or 16.8%, to $22.8 million from $19.5 million in the 2006 year. Cost of revenue for the 2007 year increased $1.6 million, or 12.0%, to $15.2 million from $13.6 million in the 2006 year. Gross profit for the 2007 year increased $1.7 million, or 27.9%, to $7.6 million from $5.9 million in the 2006 year. Gross margin as a percentage of sales was 33.3% for the 2007 year compared to 30.4% in the 2006 year, with the increase primarily due to continuing efforts to eliminate network costs and ongoing activity involving the renegotiation of rates and the migration of service to lower cost providers as well as a reduction in depreciation costs. Excluding the one-time integration services implementation, the Company's gross margin percentage is 34.5% for the 2007 year.

Total operating expense for the 2007 year decreased to $12.2 million or 15.5% from $14.4 million in the 2006 year. The loss from operations improved 45.7%, to $4.6 million in the 2007 year from $8.5 million in the 2006 year.

Michael Brandofino, Glowpoint's President and Chief Executive Officer, commented, "Our core subscription-based business and multi-point bridging solutions posted respectable year-over-year growth and we also saw profit margin expansion while simultaneously reducing our operating expenses. The effectiveness of our approach over the last two years is clearly demonstrated by the positive trends in several key financial metrics. We have successfully expanded both revenue and margins, while stabilizing the cost of goods and reducing operational expenses at a rapid and accelerating pace. Revenue has grown almost 30% to $22.8 million in the 2007 year from $17.7 million in the 2005 year while cost of revenues has been approximately stable at $15 million or just below during that time. During this timeframe, gross profit has increased approximately 176% to $7.6 million in the 2007 year from $2.8 million in the 2005 year while operating expenses have declined 37% to $12.2 million in the 2007 year from $19.4 million in the 2005 year. We are encouraged by these trends."

Operational Highlights

* Received first Patent for Video Operator services.

* Signed a three-year agreement with Polycom, one of the world's leading manufacturers of video communications equipment to use Glowpoint as an underlying provider for a branded, managed service offering tailored specifically for Telepresence rooms.

* Signed a two-year agreement with a leading publishing firm, listed as one of the "Forbes 400 Best Big Companies," to provide managed video services at 15 of its locations around the world.

* Signed two-year agreement with NASCAR for HD video solution.

* Signed deal with Big TenTV for HD Broadcast solution to cover College sports.

* Participated in the Sports Video Group League Technology Summit by enabling panelists to participate remotely from a Glowpoint-connected NFL site using the "TeamCamHD[TM]" solution that Glowpoint has deployed for a number of broadcasters, including Big Ten Network.

* Selected by the Tepper School of Business at Carnegie Mellon University to facilitate multi-point video classroom sessions for their FlexMode MBA Program to employees of some of the country's leading corporations.

* Channel partners involved in approximately 40% of closed deals, up from 25% in 2006.

"We realized the highest year-over-year growth in our core subscription in the 4th quarter of 2007 compared to the same period in 2006 and reported our sixth consecutive quarter of growth in our core subscription revenue, due in large part to the success of our channel partners," continued Mr. Brandofino. "In 2007, Glowpoint partnered with three out of the four Tandberg Master Distributors in the United States and is focused on expanding our channel program further in 2008. With the growing adoption of telepresence and HD technologies, our services become even more critical to our partners as they deploy these solutions."