Building Carrier Scale Personalized Networks

(NASDAQ: PKT)

Safe Harbor StatementCertain statements in this presentation relate to future events and expectations and as such constitute forward-looking statements involving known and unknown factors that may cause actual results of Procera Networks, Inc. (“we,” “our,” “Procera” or the “Company”) to be different from those expressed or implied in the forward-looking statements. In this context, words such as “will,” “would,” “expect,” “anticipate,” “should,” “projected” or other similar words and phrases often identify forward-looking statements made on behalf of Procera. It is important to note that our actual results may differ materially from those described or implied in such forward-looking statements based on a number of factors and uncertainties, including, but not limited to, (i) adverse changes in general economic conditions; (ii) adverse changes in the industries Procera serves including without limitation communications equipment and networking, telecommunications services, enterprise networking and systems integrators; (iii) our ability to manage material, including components used in our solution, and freight costs; (iv) our ability to generate cash from operations; (v) material adverse changes in customers’ access to liquidity and capital; (vi) currency exchange; (vii) market acceptance of our products; (viii) significant changes in the competitive environment; (ix) changes in law, regulations and tax rates; and (x) other general economic, business and financing conditions and factors described in more detail in “Item 1A – Risk Factors” in Part I of our Annual Report on Form 10-K filed with the SEC on March 15, 2012 and statements made in subsequent filings. These filings are available on our website at www.proceranetworks.com.  We do not undertake to update our forward-looking statements.

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Leading Provider Of Intelligent Policy Enforcement (IPE)

Founded in 2002; shifted focus to IPE in 2008 130 employees; 25% of headcount in R&D

Software Based Solution Focused On Traffic Intelligence And Management

Enabling Explosive Growth In Mobile DataAnd Video

Significant Customer GrowthOver 20 Tier-1 service provider wins in 4 years

IPE TAM Growing At 43% 5-year CAGR To $2.1 B

Procera at a Glance

2007 2008 2009 2010 2011$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$6.7

$11.5

$20.1 $20.3

$44.4

CAGR: 6

0%

Rapid Revenue Growth($ in millions)

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Investment Highlights

Leading Provider In The Large, High-growth IPE Market

Leveraging Significant Growth In Mobile And IP Data Consumption

Software Based Solution Offers Leading Technology Performance

Global Tier-1 Customer Footprint Across Mobile And Broadband

Revenue Growth With Profitable Business Model

Outstanding R&D Capabilities; Proven Leadership Team

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üü

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Accelerating Business MomentumTier-1 Customer Wins: 2010 – 2012 New Product Releases

Mobile Cable Fixed / Mobile

Strong Partnership Momentum Financial Momentum

Advanced Traffic Steering and Carrier Grade NAT

PacketLogic PL8920 – 50Gbps at appliance price

PL20000 – industry's highest performance IPE at 320Gbps and first to 100GE

Report Studio – customizable analytics and reports based on deepest collection engine available

Smart Campus 2.0 – turnkey network management solution for Higher Education adds User Awareness

Integrated policy management solution

Integrated policy management solution for LTE

Integrated policy and charging solution

Performance management and optimization

Technology license and re-sale agreement

Integrated policy management solution

Malaysian Mobile Operator

E. EuropeanCable Company

U.S. Cable Company

Canadian Cable Company

Scandinavian Carrier

E. European Carrier

Australian Carrier

2 New APAC Mobile Operators

APAC Fixed Carrier

Asian Fixed/Mobile

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52% revenue growth YoY for Q2:12; Bookings up 47%

Gross margin increased to 63% in Q2:12 from 62% in Q2:11

Non-GAAP net income $1.4M or $0.8 per share in Q2:12

Added 16 new service providers in Q2:12 (3 new Tier-1s) plus 27 new higher education product orders

Increased guidance to 40% revenue growth YoY in 2012

Consumers Have Unique “App Clouds”Service Personalization Delivers Individual Value

My Business Plan My Networking Plan My Apps Plan My Teen Plan

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Why Are Operators Buying IPE?

Network Intelligence Subscriber, Service Tier, Location, Device and Traffic Awareness Intuitively Combined to Assess Trends and User Behavior

Improve Quality and Postpone CAPEX Investments by Optimizing the Use of Network Resources to Function with Today’s Plethora of Applications

Intelligence Enables Early Detection and Mitigation of Anomalies that Indicate Security Issues

Offer and Manage Subscriber Offerings and Service Packages Based on User Behavior Analysis, Customer Requests and Demographic Preferences

Network Optimization

Security / Protection

Personalized Services

Solution Benefit

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Networking technologies for mobile and IP service providers across the globe Software-based solution focused on traffic intelligence and management Our customers’ businesses are being driven by the continued explosion of

mobile data, video and connected devices

Market

Intelligent Policy Enforcement sits at the core of a new ecosystem, providing the traffic intelligence that enables new applications

IPE is a requirement to effectively implement new services With IPE as a foundation, new, complementary products are possible

Technology

Advanced Traffic Steering – An application delivery networking technology enabling carriers to effectively route application services traffic in real time

Carrier Grade NAT – Carrier-grade network address translation that enables IPE-based subscriber aware analytics and business decisions

New Products

Procera’s Opportunities are Expanding

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Feb 2010 July 2010 Jan 2011 Feb 2011July 2008 Jan 2012

PL8720: 1st 10GE DPI Appliance – 1 year ahead of competition

IPv6: 1st IPE system to support IPv6 – 1 year ahead of competition

PSM 5

PSM 5: 1st 3GPP IPE system to support 50,000 TPS – no equivalent today

PL10000 & PL8820: 1st 120 Gbps and 30 Gbps shipping IPE solutions

PL10000: 1st 80 Gbps DPI solution – 3 years ahead of competition

Nov 2011

PL20000: 1st 100 GE capable IPE solution, 320 Gbps capacity

Report Studio: 1st fully customizable analytics leveraging rich IPE data

June 2012

PL ATS: 1st IPE Integrated Advanced Traffic Steering Application

PL CGN: 1st IPE-based large scale NAT solution for operators

Procera: A History of Innovation for IPEAccelerating the Pace of IPE Technology

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$0

$500

$1,000

$1,500

$2,000

$2,500

$344$518

$781

$1,138

$1,566

$2,055

($ in millions)

2010 2011E 2012E 2013E 2014E

CAGR: 43%

Source: Infonetics 2011.

Convergence of IPE + ADN Markets Significantly Expands TAM

Growing Need for Applicationand Session Awareness

Innovative Service Creation by Network Operators

2015E

Trend Towards Personalized Services

Application Delivery Networking (Layer 4-7)DPI Product Market

Catalysts for Continued Growth

$2,000

$2,500

$3,000

$3,500

$4,000

$2,372

$2,661

$2,979

$3,282

$3,552

$3,797

2010 2011E 2012E 2013E 2014ESource: IDC 2012.

2015E

CAGR: 9%

($ in millions)

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Intelligent Policy Enforcement is a Strategic Technology

• DPI Traffic Engineering P2P Traffic Management Congestion Management

• IPE Business Analytics Superior

Performance Network

Optimization

2005 – Reduce Expenses 2010 – Gain Business Intelligence Today – Deliver Innovative Services

Service Personalization Intelligent Charging High Resilience: 99.999%

IPE 2.0

Only IPE 2.0 Delivers Intelligence and Awareness

Subscriber

Content ProviderService PlanLocation

DeviceApplication

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PCRF

“Intelligent” Architecture is Needed, But Where?

GGSNPGW

InternetSGSNSGWRNC

OCS AAA/HLR/HSS

CMTS

FTTH Aggregation

DSL

Router

BRAS

FTTH

CABLE

2G/3G/LTE

Access Packet Core

WAN Edge

HIGH-ENDENTERPRISE

DSLAM

CLOUD SERVICES

Core Layer

Peering

Combine IPE and ADN:• Full “Awareness”• Policy Enforcement• Intelligent Charging• Address Management• Traffic Steering• Detailed Analytics

Integrated Edge:• Multivendor access

solutions fail• Requires extremely

sophisticated features• Drastically raises cost of

access solutions

“Smart” Core::• Designed for

Layer 3• “Box Only”

approach• Scalability

limits

Access Layer Service Layer

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ATS + NAT Leverages Feature-Rich IPE 2.0Advanced Traffic Steering Network Address Translation

Enables Per-subscriber, application, service plan, location, device, and content provider VAS

Enables insertion of services without requiring in-line deployments

Most efficient solution available today

Grow subscriber base by capitalizing on device explosion

Maintain detailed analytics to drive service decisions

Offer Intelligent charging services

Conserve address space by using private addresses in-network

Conserve resources on existing platforms to preserve performance

Minimize traffic analysis, eliminating latency and complexity

Create new service offerings leveraging IPE technlogy

Insert targeted services into existing traffic flow with minimal latency

Revenue share W / CDNs & content service providers

Dramatically reduce VAS hardware requirements through surgical steering

Deploy VAS services anywhere CDN integration leverages content

visibility to ensure high QoE

Operators experiencing shortage of IPv4 addresses

Subscribers and device count still growing fast

Enables oversubscription of subscribers -> IP addresses

Rev

enue

Gen

erat

ion

Net

wor

k O

ptim

izat

ion

Valu

e Pr

opos

ition

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New Intelligent Architecture Paradigm

Access Termination

IPE-Services,Analytics

Load Balancers(LB for FW,

Some Traffic Steering)

Firewall/Security Load Balancers(LB for FW,

Some Traffic Steering)

CGNDevices and Applications

Access Termination

IPE, Analytics,Traffic Steering,

Carrier Grade NAT,Network Protection

RoutingDevices and Applications

Legacy Approaches Utilize Point SolutionsToday

Future

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IPE & ADN Competitive Landscape

Procera is the First to Market with Integrated IPE + ADN + NAT Functionality

IPE 2.0 Products: Advanced Traffic Steering Carrier-Grade NAT Cloud Services Full IPE functionalityStand-Alone

ADNStand-Alone

IPE

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IPE Features

Perf

orm

ance

& S

cala

bilit

y

IPE Competitive Landscape

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Core

Edge

Access Bandwidth

PL1420PL1200 PLM1200

PL7k1RU appliance,

<4 Gbps, access + enterprise

PL8k2RU appliance,

<30 Gbps, SP/MNO edge + core

PL10k/PL20k13/14RU ATCA chassis, <320

Gbps, SP/MNO core

Real-Time Enforcement

Intelligence Center

Subscriber Manager

Procera PacketLogic Solutions

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Our Technology Differentiation

Highest Industry Performance

Scalable, Software-Based Solution

Seamless Partner Integration

Shortest Product Release Cycle –

Persistent Innovation

Robust Reporting and Analytics

Cutting Edge IPE Technology Performance

Largest Signature Database – Highly Accurate Traffic ID

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Illustrative Examples of Customer Oppty.

LargeTotal Opportunity:

$25 – $50 mm

Classification Size 3 Year Revenue Cycle

MediumTotal Opportunity:

$10 – $25 mm

SmallTotal Opportunity:

$3 – $5 mm

Year 1 Year 2 Year 3$0$5

$10$15$20$25$30$35$40

$15$10 $12

$15

$25

$37

Year 1 Year 2 Year 3$0

$5

$10

$15

$20

$8

$4$6

$8

$12

$18

Year 1 Year 2 Year 3$0.0$0.5$1.0$1.5$2.0$2.5$3.0$3.5$4.0

$1.5$1.0 $1.0

$1.5

$2.5

$3.5

Bookings Cumulative Bookings

> 40 mm Subscribers

5 – 40 mm Subscribers

< 5 mm Subscribers

Global Opportunities ~25 Large service providers globally Country incumbents; developed markets

and large emerging markets

~150 Medium service providers globally Regional operators; competitors to

incumbents

~325 Small service providers globally Greenfield operators, alternative

providers and emerging markets

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Our Growth Strategy

Increase our Tier-1 SP customer count

Harvest our current customer opportunity

Pursue new partnerships and tactical acquisitions

Extend our technology advantage and leadership

Drive margin improvement

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Solid Q2:12 Results Revenue of $14.7 million, up 52% from Q2:11

Bookings of $14.2 million, up 47% from Q2:11

Added 16 new service provider customers

Won 3 new Tier-1 customers in Asia Pacific and Western Europe regions

Received 23 follow on orders from existing service provider customers,

including 7 from existing Tier-1 customers

Support revenue of $2.8 million, up 101% from Q2:11

Non-GAAP net income of $1.4 million, compared to non-GAAP net income of

$595,000 in Q2:11

Generated $2.4 million of cash flow from operations

Cash & investments was $131.6 million at June 30, 2012

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Gross Margin 57% 59% 63% 65% – 70%

Research & Development 16% 10% 11% 12%

Sales & Marketing 32% 26% 28% 30%

General & Administrative 15% 11% 13% 6%

Total Operating Expenses 64% 47% 53% 48%

Operating Income (7%) 13% 11% 17% – 22%

Attractive Long-Term Financial Model(1)

Long-Term20112010

(1) Excludes stock-based compensation and business development expenses.

Q2 2012

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Thank You