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ActivIdentity Reports Fiscal Second Quarter 2008 Financial Results

ActivIdentity reports GAAP net loss for the quarter of $0.93 per share and a non-GAAP loss of $0.03 per share

Fremont, Calif, May 12, 2008 - ActivIdentity Corporation (NASDAQ: ACTI), a global leader in digital identity assurance, today announced its financial results for its fiscal second quarter ended March 31, 2008.

Revenue for the quarter ended March 31, 2008 was $13.6 million, compared to $14.9 million for the quarter ended March 31, 2007.

Our GAAP net loss for the second quarter of fiscal 2008 was $42.5 million or $0.93 per basic and diluted share, compared to a GAAP net loss of $3.4 million or $0.08 per share for the second quarter of fiscal 2007.

Non-GAAP net loss for the quarter ended March 31, 2008 was $1.5 million or a loss of $0.03 per basic and diluted share compared to a loss of $0.05 for the second quarter of fiscal 2007. Non-GAAP net loss excluded $35.9 million relating to a non-cash impairment charge to Goodwill in the quarter. Other excluded items were $0.6 million of stock based compensation expense, $0.6 million of amortization expense, $0.8 million of severance expenses related to our global cost reduction program and an other-than-temporary impairment charge of $3.0 million for auction rate securities. Please refer to the GAAP to non-GAAP reconciliation table for further detail.

Cash, cash equivalents, and investments were $116.7 million at March 31, 2008 compared to $121.3 million in the quarter ending December 31, 2007.

Business Highlights:

• In North America, we worked to increase our market penetration in the commercial sector by securing customers such as HP, ING Direct, Erickson Healthcare and Cadence.
• ING Direct, one of the largest online banks, is deploying ActivIdentity SecureLogin SSO and is in the process of deploying ActivIdentity 4TRESS AAA to the organization.
• Erickson Healthcare, a privately held retirement community system with 20 campuses throughout the United States and over 11,000 employees, continues to deploy Actividentity 4TRESS AAA remote access.
• We secured a significant contract with a new European government agency and are currently deploying our Smart Employee ID suite to this organization of approximately 100,000 employees.
• A large European Border Crossing Enforcement organization is utilizing ActivIdentity solutions for issuance, management and usage of smart cards specifically designed to reduce security risks and improve efficiencies while ensuring compliance to the latest governmental mandates.
• We secured a new contract with a European oil and gas company this quarter for physical and logical convergence implementation. We are providing our Card Management System, ActivClient Middleware and two-factor authentication for approximately 15,000 users.
• In Asia Pacific, we are continuing to see the benefits of our deployments in the Korean banking sector. We are now providing two factor authentication to one of the largest banks in Korea. This is a continuation of our successful drive into the two factor banking market in Korea and tokens deployments over the last 6 months.
• Additionally, a major Australian Government Department is implementing our Smart Employee ID solution. This ongoing project is for 30,000 users.

"ActivIdentity's customer base is growing and I believe that the contracts the company secured in the second quarter and in the recent past demonstrated the market penetration of ActivIdentity solutions in both the commercial and government sectors. We will be focusing on improving our execution and building on ActivIdentity's technological strength and stronghold in the commercial sector to attain to a leadership position in the identity and security market place," said Grant Evans, CEO of AcitvIdentity.

Conference Call Details

ActivIdentity will host its earnings conference call to discuss results of its second quarter fiscal 2008 at 1:30 p.m. PST (4:30 p.m. EST) this afternoon. There will be a live audio web cast and dial in to the conference call.

Live audio web cast: The conference call web cast will be available on the investor relations section of the Company's website. A replay of the web cast will be available approximately two hours after the conclusion of the call through May, 29 2008.

Dial-in conference call: To access the conference call within the U.S. or Canada, please dial (877) 292-2820 and enter conference ID 45539370. To access the conference call outside the U.S. or Canada please dial (706) 679-4390 and enter conference ID 45539370.

About ActivIdentity

ActivIdentity Corporation is a global leader in strong authentication and credential management, providing solutions to confidently establish a person's identity when interacting digitally. For more than two decades the company's experience has been leveraged by security-minded organizations in large-scale deployments such as the U.S. Department of Defense, Nissan, and Saudi Aramco. The company's customers have issued more than 100 million credentials, securing the holder's digital identity. ActivIdentity is headquartered in Silicon Valley, California. For more information, visit www.actividentity.com.

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ActivIdentity is a registered trademark in the United States and/or other countries. All other trademarks are the property of their respective owners in the United States and/or other countries.

Safe Harbor Statement

The statements in this press release that are not historical facts are forward-looking statements that involve risks and uncertainties. These risks and uncertainties include risks relating to our history of losses and need for revenue growth and cost containment, the integration of acquired business and technologies, the variability of our quarterly results, and other risks identified under the caption "Risk Factors" in our most recent Annual Report on Form 10-K, and in subsequent Quarterly Reports on Form 10-Q, which are filed with the United States Securities and Exchange Commission (SEC). There can be no assurance that we will achieve targeted levels of revenues for fiscal 2009 or that our strategic initiatives will result in the anticipated benefits. Copies of our SEC filings, which have more information about these and other risks, are available from the Company and on the SEC website at www.sec.gov. Actual results, events and performance may differ materially from our forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company disclaims any intention to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

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