Revenue, Losses Both Up at Terayon

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Santa Clara, Calif. -- Revenue skyrocketed as a result of
several cable deals, but losses continued to climb for the fourth quarter and year-end at
Terayon Communication Systems, a cable-modem manufacturer based here.

Terayon posted revenue of $31.7 million for the year ended
Dec. 31, more than 15 times sales of $2.1 million during the same period last year.
However, net losses rose 3 percent in fiscal 1998 to $23.2 million, or $1.68 per share,
from a loss of $22.5 million ($2.07 per share) in the previous year.

Including a $23.9 million dividend payment, Terayon's
1998 net loss was $47.1 million, or $3.41 per share.

The company cited deals with cable operators over the past
12 months -- including Cablevision Systems Corp., TCA Cable TV Inc. and Canada's Shaw
Communications Inc. -- as reasons for the dramatic increase in revenue.

Also during the past year, Terayon was selected by Cable
Television Laboratories Inc. to co-author the DOCSIS (Data Over Cable Service Interface
Specification) 1.2 standard for cable modems.

Terayon launched a $39 million initial public offering of
stock in August.

Fourth-quarter revenue was $12.9 million, up from $1.4
million last year. Net losses for the quarter were down by 52 percent to $5.4 million, or
33 cents per share, compared with $8.2 million (71 cents) in 1997.

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