Cambridge, MA - August 12 2008 -Bitstream Inc. today reported that it increased total revenue by $481,000 or 8% to $6,518,000 for the three months ended June 30, 2008 as compared to total revenue of $6,037,000 for the three months ended June 30, 2007. The Company's cash and cash equivalents at June 30, 2008 totaled $13,939,000. Cash generated by operations and cash received from the exercise of stock options was $471,000 and $444,000, respectively, for the three months ended June 30, 2008, while $81,000 was invested in equipment and intangible assets and $2,350,000 was used to repurchase 388,800 shares of the Company's common stock during the quarter.

"Our revenue grew sequentially from the first quarter, as we achieved our highest level of quarterly revenue as compared to any previous quarter since going public. Our diluted earnings per share increased $0.02 to $0.08 for the second quarter and compared to $0.06 for the three months ended March 31, 2008," said Anna M. Chagnon, President and Chief Executive Officer. "Given general economic concerns affecting the US economy as a whole, we have decided to delay certain planned expenditures for the remainder of 2008. We do not expect that the deferral of such expenditures will negatively affect our projected growth plans."

GAAP Results

Our income from operations decreased $288,000 or 27% to $792,000 for the three months ended June 30, 2008 as compared to $1,080,000 for the three months ended June 30, 2007, while net income decreased $412,000 or 34% to $813,000 or $0.08 per diluted share for the three months ended June 30, 2008 as compared to net income of $1,225,000 or $0.11 per diluted share for the three months ended June 30, 2007.

Non-GAAP Results

Our income from operations, not including the effect of stock-based compensation expense decreased $196,000 or 17% to $980,000 for the three months ended June 30, 2008 as compared to $1,176,000 for the three months ended June 30, 2007. Net income decreased $320,000 or 24% to $1,001,000 or $0.10 per diluted share for the three months ended June 30, 2008 as compared to net income of $1,321,000 or $0.12 per diluted share for the three months ended June 30, 2007.

A reconciliation between GAAP and non-GAAP results is provided at the end of this press release.