Press Release

Data Domain, Inc. Reports First Quarter Financial Results

Revenue Increases 17% Compared to the Fourth Quarter 2007, 160% Compared to First Quarter 2007

SANTA CLARA, Calif. — April 24, 2008 —Data Domain, Inc. (Nasdaq: DDUP) today announced results for its first quarter ended March 31, 2008. Revenue for the first quarter of 2008 was $52.6 million, an increase of 17% from the fourth quarter of 2007 and an increase of 160% from the first quarter of 2007.

Data Domain posted net income under U.S. generally accepted accounting principles (“GAAP”) for the first quarter of 2008 of $2.7 million, or $0.04 per diluted share. This compares to a GAAP net loss of $76,000, or $0.00 per diluted share in the immediately preceding fourth quarter of 2007, and a GAAP net loss of $1.5 million, or $0.18 per diluted share in the first quarter of 2007.

Excluding the impact of stock-based compensation and related taxes in all periods, the non-GAAP net income for the first quarter of 2008 was $7.7 million, or $0.12 per diluted share, compared to a non-GAAP net income of $5.1 million, or $0.08 per diluted share in the immediately preceding fourth quarter of 2007, and a non-GAAP net loss of $363,000, or $0.05 per diluted share in the first quarter of 2007.

"In the first quarter of 2008, Data Domain again achieved record revenues with strong gross margins," said Frank Slootman, President and Chief Executive Officer of Data Domain. “Approximately 285 new customers were added during the quarter, bringing our cumulative customer count to over 1,800 worldwide that have purchased our systems. In addition, with new solution platforms, expanded protocol support, and nearline application support, Data Domain is positioning deduplication storage as a new tier of data center storage for data that customers don’t want on tape for performance reasons and don’t want on primary storage for cost reasons. As our storage platform expands in scale and scope, we plan to further deepen and broaden this growing position in the data center.”

“Data Domain has again exceeded its revenue targets for the quarter, while improving key financial metrics and continuing its investment in infrastructure to promote and accommodate future growth,” added Michael Scarpelli, Chief Financial Officer for Data Domain. “GAAP net income rose to $2.7 million, and while the company added 92 new employees, gross margins were strong at 74%.”

First Quarter Highlights

• In February 2008, Data Domain announced the new DD120 appliance for remote offices. The addition of the DD120 underscores Data Domain’s focus on addressing the full range of data protection needs of large distributed enterprises.
• In March 2008, Data Domain established a new strategic North American distribution agreement with Ingram, one of the world’s largest technology distributors.
• The Company announced it will establish a new Operations Center in North Carolina’s Research Triangle Park. The new facility will house additional Engineering, Customer Support and Inside Sales personnel to help support the Company’s expected continued expansion.
• The Company expanded its executive team with the addition of Pete Rukavina as Senior Vice President of Operations. Mr. Rukavina comes to Data Domain from Cisco Systems, Inc., where he last served as Vice President of Business Operations.
• In March 2008, Data Domain announced the availability of its OpenStorage software option. Data Domain was the first vendor to ship product in support of the new Veritas NetBackup OpenStorage (OST) API by Symantec.

Conference Call Information
Data Domain will host a conference call for analysts and investors to discuss its first quarter of 2008 results today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). The dial-in number for this conference call is 800.591.6945 (617.614.4911 international) and the participant passcode is 46364463#. A live webcast of the conference call will be accessible from the Investor Relations section of the Company’s website at www.datadomain.com. Following the webcast, an archived version will be available on the company’s website for 30 days. To hear the replay, parties in the United States and Canada should call 1-888-286-8010 and enter passcode 69749574#. International parties can access the replay at 617-801-6888 and should enter passcode 69749574#.

Use of Non-GAAP Financial Information
Data Domain has supplemented the financial measures contained in this press release that are provided in accordance with GAAP with non-GAAP financial measures. Data Domain believes that these non-GAAP financial measures better reflect its core operating results and thus are appropriate to enhance the overall understanding of its past financial performance and its prospects for the future. These adjustments to Data Domain’s GAAP results are made with the intent of providing both management and investors a more complete understanding of Data Domain’s underlying operational results and trends and performance. Management uses these non-GAAP measures to evaluate Data Domain’s financial results, develop budgets and manage expenditures. The method Data Domain uses to produce non-GAAP financial results may differ from the methods used by other companies. Data Domain’s reference to these non-GAAP financial results should be considered in addition to results that are prepared under current accounting standards but should not be considered as a substitute for, or superior to, the financial results that are presented as consistent with GAAP. Reconciliation of the non-GAAP financial measures to the nearest GAAP financial measures is included in the financial measures attached hereto.

ABOUT DATA DOMAIN
Data Domain® is a leading provider of deduplication storage appliances for disk-based backup and network-based disaster recovery. Approximately 1,800 companies worldwide have purchased Data Domain storage systems to reduce costs and simplify data management. Data Domain delivers the performance, reliability and scalability to address the data protection needs of enterprises of all sizes. Data Domain products integrate into existing customer infrastructures and are compatible with leading enterprise backup software products. To find out more about Data Domain, visit www.datadomain.com. Data Domain is headquartered at 2421 Mission College Blvd., Santa Clara, CA 95054 and can be contacted by phone at 1-866-933-3873 or by e-mail at sales@datadomain.com.

Forward Looking Statements
This press release contains forward-looking statements regarding our products addressing the full range of data protection needs of large distributed enterprises, our continuing investment in infrastructure to promote and accommodate future growth, our positioning deduplication storage as a new tier of data center storage, and our plans to further deepen and broaden this growing position in the data center and our plans to establish a new Operations Center in North Carolina’s Research Triangle Park to help support our expected continued expansion. These forward-looking statements involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties include any weakening of general economic and market conditions and customer budgets for information technology spending, our ability to react to trends and challenges in our business and the markets in which we operate; our ability to anticipate market needs or develop new or enhanced products to meet those needs; market acceptance of our products; our ability to scale our distribution channels; our ability to recruit and retain personnel; our ability to compete in our industry; our ability to maintain and expand relationships with technology partners; our ability to protect our intellectual property; shortages or price fluctuations in our supply chain and the performance of our contract manufacturer; and other risks and uncertainties described more fully in our documents filed with or furnished to the Securities and Exchange Commission. More information about these and other risks that may impact our business are set forth in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2007 filed with the SEC. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.

Data Domain and the Data Domain logo are trademarks or registered trademarks of Data Domain, Inc. All other trademarks used or mentioned herein belong to their respective owners.

A copy of this press release can be found on the Investor Relations page of Data Domain’s website at www.datadomain.com

Consolidated Balance Sheets

Consolidated Statements of Operations

GAAP to Non-GAAP Reconciliation Q1-08 vs. Q1-07

GAAP to Non-GAAP Reconciliation Q1-08 vs. Q4-07

Consolidated Statements of Cash Flows

Contact Information

Data Domain

Michael P. Scarpelli
Chief Financial Officer
408.980.4800
ir@datadomain.com

© 2003-2008 Data Domain • Phone: 866-WE-DDUPE or 408-980-4800 • sales@datadomain.com • PRIVACY POLICY