Cepheid Reports Second Quarter Revenue of $42... (ith no impact on product availability. W...)

Cepheid Reports Second Quarter Revenue of $42.1 Million

Date:7/24/2008

ith no impact on product availability. We expect our product gross margin to return to first quarter levels in the current third quarter."

Operational Overview

-- Total product sales increased 65% to $39.0 million, from $23.6 million

in the second quarter of fiscal 2007. By industry, product sales

were, in millions:

Three Months Ended June 30

2008 2007 Change

Core Clinical $20.9 $6.1 239%

Clinical Partner 5.0 4.5 13%

Total Clinical 25.9 10.6 144%

Industrial 3.7 4.0 -7%

Biothreat 9.4 9.0 4%

Total Product Sales $39.0 $23.6 65%

-- System product sales increased 32% to $12.4 million from $9.4 million

in the second quarter of fiscal 2007.

-- Test and disposable sales increased 87% to $26.5 million from $14.2

million in the second quarter of fiscal 2007.

-- By geography, product sales were, in millions:

Three Months Ended June 30

2008 2007 Change

North America $29.7 $18.2 64%

Europe 9.0 5.1 74%

Rest of World 0.3 0.3 1%

Total Product Sales $39.0 $23.6 65%

Excluding biothreat revenue to the US Postal Service, North America sales increased 121% when compared to the same quarter a year ago.

-- During the quarter, Cepheid installed a total of 108 GeneXpert systems

and 426 modules, primarily in North America and Europe. As of June

30, 2008, a cumulative total of 717 GeneXpert systems and 3,560

modules have been placed worldwide.

-- GAAP gross margin on product sales was 41%
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Cepheid Reports Second Quarter Revenue of $42...(ith no impact on product availability. W...)