Zoran Corporation Reports Third Quarter 2007 Results

Company achieves records in total revenues, units shipped, and revenues from DTV and Printer Imaging product lines

SUNNYVALE, Calif. — Zoran Corporation (Nasdaq GS: ZRAN), a leading provider of digital solutions for applications in the growing digital entertainment and digital imaging markets, today reported results for its third quarter ended September 30, 2007.

Revenues for the third quarter were $146.4 million, compared to $129.9 million last quarter and $129.4 million in the third quarter of 2006. The Company reported third quarter GAAP net income of $13.1 million, or $0.26 per diluted share, which includes charges of $9.6 million for amortization of acquired intangible assets and $3.6 million for stock-based compensation expense. This compares with GAAP net income of $0.2 million, or $0.00 per diluted share, for the previous quarter and GAAP net income of $1.9 million, or $0.04 per diluted share, for the third quarter last year.

Non-GAAP net income for the third quarter was $26.4 million, or $0.51 per diluted share. This compares with non-GAAP net income of $16.9 million, or $0.33 per diluted share, for the previous quarter, and $18.0 million, or $0.35 per diluted share, for the third quarter last year. For all periods, non-GAAP net income excludes charges related to the amortization of acquired intangible assets and stock-based compensation expense.

“The results of the quarter reflect the continued success of our diversification strategy and our ability to grow revenues, profits and market share within our expanding target markets,” said Dr. Levy Gerzberg, Zoran’s president and chief executive officer. “We are also leveraging synergies across all product lines to develop new applications, enabling continued leadership in the digital media markets we serve.”

Recent Highlights

• Revenues by product line for the third quarter of 2007 were 33 percent Digital Camera, 31 percent DVD, 18 percent Printer Imaging, 16 percent DTV, and 2 percent other.
• Zoran’s APPROACH 5C processor was selected for high-end 3.5G 5 megapixel camera phone by major manufacturer.
• Zoran and its customers demonstrate new HDTV, DVD, digital camera and digital printing platforms at CEATEC Japan.
• Zoran demonstrates SupraHD® based ATSC DTV set-top converter box designed to meet ENERGY STAR requirements.
• Zoran demonstrates new SupraHD® family of highly integrated 1080P HDTV processors for ATSC market at IBC.
• Zoran demonstrates highly integrated SupraHD® HDTV 1080P processor with HDMI 1.3 European DVB-T market at IBC.
• Zoran’s Vaddis® processor selected by Sony for its Car In-Dash AV entertainment system with Super Audio CD Playback.
• Zoran’s Vaddis® 9 DVD multimedia processor plus HDXtreme® 2 upscaler power Samsung’s new generation of 1080P HDMI DVD players.
• Zoran delivers enhanced IPS Interpreter for XPS Printer and multifunction printer manufacturers.