Press Release: Record 2005 Results

PGP Corporation Announces Record 2005 Results, Rapid Growth in Encryption Platform Customers, & Worldwide Expansion

Strong Demand for Integrated PGP Universal Encryption Platform Highlights 2005 Results

Palo Alto, CA / 07 February, 2006- PGP Corporation, a global leader in enterprise data security and encryption solutions, today announced outstanding 2005 results and its fourth consecutive year of record orders. Additionally, for the third consecutive year, PGP orders grew in excess of 40 percent. Growth was fueled by wide acceptance of the PGP Universal™ Encryption Platform, new PGP® Whole Disk Encryption, and updates to PGP® Command Line for batch/FTP transfers and backups.

"Capping a record year, the fourth quarter of 2005 saw record quarterly cash flow from operations--the largest in the company"s history," said Phillip Dunkelberger, president and CEO of PGP Corporation. "It also marked the 14th consecutive quarter of year-over-year growth in customer orders. The global mix of orders was particularly strong, highlighted by the opening of new subsidiaries in Germany and Japan.

"Additional growth capital raised during 2005 will allow us to accelerate R&D spending and expand the breadth of the PGP Universal Encryption Platform. These investments, plus accelerating customer adoption of our product platform, make us very optimistic about 2006 and beyond."

During 2005, the company increased its worldwide Engineering staff by more than one-third. It also expanded its global presence, opening German and Japanese subsidiaries, PGP Deutschland AG and PGP Japan K.K., launching foreign-language versions of its product and corporate website, and continuing to build infrastructure.

"Our enterprise encryption platform gives customers the best of both worlds: award-winning, industry-standard encryption now plus the flexibility to extend security to new users, new devices, and new data types in the future," said Jon Callas, chief technology officer of PGP Corporation. "We help customers reduce training and operational costs by integrating easily with existing infrastructure and applications. We maximize IT and support resources with interoperability and central management that share encryption keys and a common encryption architecture. These features allow customers to easily add new solutions as needs or regulatory requirements expand."

PGP Universal Encryption Platform. During 2005, PGP Corporation continued the expansion of its solution set to meet customer requirements for features and functionality. The company extended the PGP Ecosystem around PGP Universal to encompass technology from partners through its new Total Solution Provider (TSP) Program. Among the year"s highlights:

• Integrated encryption and gateway email or content management solutions with BorderWare, CipherTrust, Clearswift, IronPort, MailFrontier, Mirapoint, PortAuthority, Proofpoint, Sendmail, and Vontu.
• Continued customer use of joint partner solutions with Aladdin, Giesecke & Devrient, Sophos, and Symantec.

Among the new PGP "out-of-the-box" enterprise solutions introduced in 2005:

• PGP Universal Encryption Platform, providing unified key management, centralized policy management, a full spectrum of encryption applications, and simple integration with third-party products.
• Upgrade of the entire PGP product line to the PGP Universal architecture and its automatic, policy-based operation. New versions included PGP Universal Server 2.0, PGP® Desktop 9.0, and PGP Command Line 9.0.
• Introduction of the new PGP® Whole Disk Encryption solution for protecting every aspect of data stored on laptops and desktops; included both centrally managed and individual client versions.
• Addition of German and Japanese localized products.
• Introduction of the new RIM-developed PGP® Support Package for BlackBerry®, allowing BlackBerry users to also use secure PGP email encryption.

PGP Technology Leadership. In 2005, PGP Corporation continued to garner mind share. The company was recognized as the leading vendor in email and data security software by TheInfoPro, an independent research network and leading supplier of market intelligence for the information technology industry.

"In our last two Information Security Studies, conducted mid- and end-year 2005, security managers in the consumer goods/retail, financial services, telecommunications, health care, and technology industries, among others, consistently identified PGP Corporation as the lead vendor in the encryption software business," said Henry D. Nissenbaum, managing director for information security research at TheInfoPro. "Security managers felt PGP encryption was easy to use, easy to deploy, and provided comprehensive protection for their confidential and mission-critical data."

PGP Corporation was recognized in the Best Security Company category by SC Magazine Global Awards for the second consecutive year--the only company honored in both 2005 and 2006. PGP products also continued to win major industry recognition. Both PGP Universal and PGP Desktop received several key awards in 2005:

• PGP Universal: Best Encryption Solution - SC Magazine Global Awards
• PGP Universal: Best Security Solution for Healthcare - SC Magazine European Excellence Awards
• PGP Desktop Professional: 2005 Best of the Year Encryption Solution - PC Magazine
• PGP Desktop Home: 21st Annual Editors" Choice (Eddy) Award - Macworld

Expanded PGP Channel. Achievements in technology innovation and product development led to an increased channel presence in 2005. PGP Corporation continued to expand its channel operations, adding new distributors in Switzerland/Norway and Japan. The company now has a global network of 200 authorized resellers in 37 countries.

About PGP Corporation
The global customer standard for encryption and digital-signature solutions, PGP Corporation develops, markets, and supports an integrated data security suite used by more than 30,000 enterprises, businesses, and governments worldwide, including 84% of the Fortune® 100, 66% of the Fortune® Global 100, and thousands of individuals and cryptography experts. Customers depend on PGP solutions for regulatory and audit compliance, to protect confidential company information, to secure customer data, and to keep identity information private.

During the past 10 years, PGP® technology has earned a global reputation for innovative, standards-based, trusted solutions. The flexible PGP suite allows customers to phase-in gateway, partner, mobile or internal email security; data storage protection for laptops, desktops, and removable media; IM encryption; and FTP/batch transfer security using a single key management and recovery infrastructure. PGP Corporation is the only commercial security vendor to publish source code for peer review. Contact PGP Corporation at www.pgp.com or +1 650 319 9000.

Legal Notice Regarding Forward-Looking Statements
Some of the statements in this press release are forward-looking, including statements regarding the availability, plans, delivery, goals, development, expected features, expected benefits and competitive position of PGP products implementing or leveraging the PGP technologies. All references made to product feature enhancements, improvements in platform support or additional functionality are subject to change at solely PGP Corporation's discretion. All future descriptions of PGP technology and products are subject to availability only if PGP Corporation decides to build them and when PGP Corporation decides to make them commercially available. Actual results could differ materially from those expressed in any forward-looking statements. Risks and uncertainties that PGP Corporation faces that could cause results to differ materially include risks associated with any unforeseen technical difficulties or software errors related to the final development and launch of any of PGP Corporation's products; any technological or standards changes in the security, encryption and authentications market which could make PGP Corporation's products less competitive or require feature changes in these products; any slowdown in the adoption by businesses of encryption suites, secure email, Internet technologies or related standard. The forward-looking statements contained in this release are made as of the date hereof, and PGP Corporation does not assume any obligation to update such statements nor the reasons why actual results could differ materially from those projected in such statements.

PGP and the PGP logo are registered trademarks of PGP Corporation. Product and brand names used in the document may be trademarks or registered trademarks of their respective owners. Any such trademarks or registered trademarks are the sole property of their respective owners.