CUPERTINO, Calif. – May 22, 2008 – Verigy Ltd. (NASDAQ: VRGY), a premier semiconductor test company, today reported financial results for its second quarter, ended Apr. 30, 2008.

Second quarter revenue was $162 million, an 11 percent decrease from revenue of $183 million in the prior year period, and a decrease of 19 percent from the prior quarter revenue of $200 million. Orders for the second quarter were $177 million, a 12 percent decrease from orders of $202 million in the prior year period, and essentially flat with the prior quarter.

Net income for the second quarter was $14 million or $0.23 per fully diluted share, compared with net income of $22 million or $0.36 per fully diluted share in the prior year period, and $32 million or $0.52 per fully diluted share in the prior quarter.

"Despite the challenging environment in certain segments of the semiconductor industry, we had a solid second quarter and a good first half," said Keith Barnes, Verigy chairman, chief executive officer and president. "For the first half of fiscal 2008, we delivered financial results that were better than those achieved in the first half of fiscal 2007. Our diversified product portfolio and leveraged operating model have helped us manage our business better than many of our peers."

"We benefited from strong demand for our SOC products and achieved earnings per share at the high end of our guidance range," added Bob Nikl, Verigy chief financial officer. "Our financial results demonstrate our ability to deliver superior returns to our shareholders while satisfying our customers' increasingly challenging test needs."

Financial Tables for Second Quarter 2008
Q208 Verigy Financial Tables.xls
  (40 KB)
Q208 Verigy Financial Tables.pdf
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Outlook for Q3 2008
For the quarter ending July 31, 2008, the company is providing the following guidance:

• Revenue is expected to be in the range of $170 to $180 million.
• Net income is expected to be in the range of $15 to $18 million, or $0.24 to $0.29 per fully diluted share, and will include between $4.3 to $4.6 million of share-based compensation expense.

Conference Call and Webcast
Verigy's management will present more details on its second quarter fiscal year 2008 financial results on a conference call with investors today beginning at 1:30 p.m. (Pacific). This event will be webcast live in listen-only mode. Listeners may log on at http://investor.verigy.com and select "Q2 Verigy Earnings Conference Call" in the "Webcasts & Presentations" section. The webcast will remain available on the company's Web site for fourteen days. A telephone replay of the conference call will be available from 4:30 p.m. (Pacific) today through June 5, 2008. The replay number is +1 888-286-8010 toll-free, or international callers may dial +1 617-801-6888; enter pass code 55432272.

About Verigy
Verigy designs, develops, manufactures, sells and services advanced test systems and solutions for the memory and system-on-chip segments of the semiconductor industry. Verigy's scalable platform systems are used by leading semiconductor companies worldwide in design validation, characterization, and high volume manufacturing test. Formerly part of Agilent Technologies, the company began doing business as Verigy on June 1, 2006, and completed its initial public offering on June 13, 2006. Information about Verigy can be found at www.verigy.com.

Forward-Looking Statements
This earnings release contains forward-looking statements, including statements regarding Verigy's guidance for the third quarter. These forward-looking statements are based on current information and estimates, and are not guarantees of future performance or events. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. The risks and uncertainties include, but are not limited to, unforeseen changes in demand for semiconductors and thus for semiconductor test solutions, the strength of our customers' businesses and unforeseen changes in the demand for current and new products and technologies. Additional factors that may cause results to differ materially from those in the forward-looking statements are discussed in our most recent Form 10-Q filing for the period ended January 31, 2008, and our 10-K for the period ended October 31, 2007. In those filings you will find descriptions of risk factors that could impact our future results. The forward-looking statements, including guidance, are only valid as of this date, and Verigy undertakes no duty to update any forward-looking statements.


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Investor Contact:
Judy Davies
VP, Investor Relations
+1 (408)864-7549

Media Contact:
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Media Relations Manager
+1 (408)864.7549