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Company Carries Over 600 Million Minutes of Voice Traffic in 2000;
Annual Revenue More Than Triples

Company Achieves Nearly $1 Million in Positive Gross Margin in Fourth Quarter

BURLINGTON, MA - January 30, 2001 - iBasis, Inc., (Nasdaq: IBAS), today announced results for the fourth quarter and the full year ended December 31, 2000. Fourth quarter revenue was $20.67 million. Fourth quarter 2000 revenue increased by 172.0% over fourth quarter 1999 revenue of $7.60 million.

Net loss for the fourth quarter 2000 was $20.83 million, or a net loss of $0.61 per basic and diluted share based on 34.17 million weighted average shares outstanding. This net loss compares to a fourth quarter 1999 net loss of $7.55 million. Pro forma basic and diluted net loss per share for the fourth quarter 2000 was $0.59 as compared to a pro forma basic and diluted net loss per share for the fourth quarter 1999 of $0.26 based on 27.99 million weighted average shares outstanding for the quarter.

For the full year 2000, revenue totaled $61.22 million, more than triple the company’s full year 1999 revenue of $19.42 million. Net loss for the full year 2000 was $62.29 million, or a net loss of $1.85 per basic and diluted share based on 33.61 million weighted average shares outstanding. This compares to a net loss of $21.09 million in 1999. Pro forma basic and diluted net loss per share for 2000 was $1.82 as compared to a pro forma basic and diluted net loss per share for 1999 of $0.96 based upon 21.79 million pro forma weighted average shares outstanding in 1999.

Pro forma basic and diluted net loss per share and weighted average shares outstanding in the fourth quarters and full years were calculated excluding non-cash compensation charges and assuming that all preferred stock had converted into common stock as of the date of original issuance.

"2000 was a year of tremendous growth for iBasis as we continued to execute strongly in our core international voice over IP business, producing significant growth in revenue, minutes and overseas lines," said Ofer Gneezy, president and CEO of iBasis.

"We carried more than 600 million minutes of voice traffic during 2000, with an increasing percentage coming to us from the world’s largest and most selective carriers, providing further evidence of the unsurpassed quality and attractiveness of our global VoIP service. Our financial performance was also remarkable. In the fourth quarter, as we began to benefit from economies of scale and improving network utilization, we produced nearly $1 million in positive gross margin, creating net positive gross margin for the full year. We believe that the company is now in a position to achieve sustainable positive gross margin for the foreseeable future."

"In 2001, we will work to accelerate revenue generation from our enhanced services business through our Global Spoken Web initiative including our previously announced plans to acquire PriceInteractive. As we gain traction with these solutions, we expect to see further improvement in our gross margin and higher rates of utilization on our global network. Together, we believe that our growing international VoIP business, the addition of the PriceInteractive business, and the success of our enhanced services strategy can enable us to achieve profitability and positive cash flow in the first quarter of 2002."

PriceInteractive Transaction

In support of iBasis’ efforts to help create the emerging Global Spoken Web, the company recently announced an agreement to acquire PriceInteractive, a leading Speech ASP whose customers include AT&T, ExxonMobil, Gannett, H&R Block, Home Shopping Network, Morgan Stanley, Sabre Group, WorldCom, Sprint, Verizon, and Western Union. (See iBasis To Acquire Leading Enhanced Services Provider PriceInteractive; Adds Company’s Fortune 500 Customers to Growing Revenue Stream- - December 13, 2000). The PriceInteractive transaction is expected to close in the first quarter of 2001 following applicable regulatory approvals and assuming iBasis shareholder approval.

Key Indicators

Minutes of use rose to 227.8 million minutes in the fourth quarter of 2000 as compared to 63.8 million minutes in the fourth quarter of 1999, a 257% increase. For the full year, minutes totaled 600.4 million compared to 156.5 million minutes of use in 1999, a 284% increase.

The iBasis Network footprint significantly expanded during the fourth quarter and the full year. The company’s total overseas lines were 11,500 at the end of the fourth quarter of 2000, up from 3,220 at the end of the 1999, a 257% year-over-year increase. With more than 80% of iBasis traffic originating in the US and terminating overseas, the company believes that the number of overseas lines remains a good indicator of the total capacity of its global network.

The iBasis Network consists of high-capacity, carrier-class Internet Central OfficesTM (ICO’s) as well as Internet Branch OfficesTM (IBO’s) in more than 45 countries throughout Asia, Europe, the Middle East and the Americas. Through this global infrastructure as well as through relationships with other carriers, iBasis can terminate calls in virtually every country in the world.

The total number of Points of Presence (PoP’s) in the iBasis Network increased from 91 at the end of 1999 to 426 at the end of 2000, an increase of more than 368%.

Operational Milestones

During 2000, the company continued to increase both its volume and the percentage of traffic it routes for the world’s largest carriers (known in the industry as "tier one" carriers). By the end of 2000, tier one carriers were generating more than 30% of all traffic routed over the iBasis Network compared with less than 20% at the end of 1999.

The company also continued to increase the percentage of overseas-originated traffic it carries, which improves network utilization and generally produces higher margins than US-originated traffic. By the end of 2000, overseas-originated calls accounted for 11.7% of iBasis traffic and more than 17% of total revenue, up from 8.3% and 10% respectively, at the end of 1999.

iBasis also achieved significant market share on many of its routes, ending the year carrying traffic equivalent to between 10%-35% of all U.S.-outbound voice and fax traffic to fourteen of the countries served by its global network. The company expanded its network’s geographic reach during 2000, more than doubling the number of countries served by its global network, ending the year with more than 45 "on-net" countries, up from 20 "on-net" countries at the end of 1999. iBasis also doubled its customer base during the year, ending the year with more than 100 carrier customers, up from approximately 50 at the end of 1999.

iBasis also rolled out iTracTM (Interactive Traffic Analysis CenterTM), a Web-based service that provides customers with interactive analysis tools and critical data about their iBasis Network activity, including the total minutes of voice and fax traffic, total number of calls, call completion ratios and average call duration. iTrac data is organized for analysis by country of origin and termination. By analyzing their global VoIP traffic with iTrac, iBasis customers can streamline their network planning processes and optimize their utilization of the iBasis Network.

During the fourth quarter of 2000, iBasis announced a number of initiatives that will enable the company to leverage its VoIP infrastructure to deliver global access to speech-enabled business services. These included a joint marketing and development effort with SpeechWorks International (Nasdaq: SPWX), a leader in the telephony-based speech technology industry, to provide global access to speech-enabled Internet services and content for wireline and wireless carriers, enterprises, Voice Application Service Providers (Voice ASPs) and voice portals.

In December 2000, iBasis announced that it signed a definitive agreement to acquire privately-held PriceInteractive, a leading Speech Application Service Provider (ASP) whose products and services give enterprises and service providers the ability to speech-enable business-critical, customer-facing solutions, such as e-commerce, call-center, employee self-service, product and sales information, customer care and other interactive applications. PriceInteractive’s customers include AT&T, ExxonMobil, Gannett, H&R Block, Home Shopping Network, Morgan Stanley, Sabre Group, WorldCom, Sprint, Verizon, and Western Union. Connecting these services to the iBasis Network, with its extensive global reach and significantly reduced network costs, will greatly increase the value and scope of the solutions PriceInteractive provides to its large enterprise and carrier customers. By leveraging the iBasis Network and its global footprint with these hosted speech-enabled services, iBasis also expects to accelerate its revenue generation from enhanced services. The acquisition of PriceInteractive is an important step in iBasis’ strategy to enhance the capabilities of its global VoIP infrastructure with new, speech-enabled services that combine the power of the Internet with the convenience, simplicity and ubiquity of the phone.

Guidance

iBasis is maintaining its previous financial guidance.

In the fourth quarter, related to the PriceInteractive transaction, the company made a $10.0 million loan to PriceInteractive. Subject to closing of the transaction, this $10 million loan will revert to being a component of cash for the combined company. With more than $300 million in cash, cash equivalents and marketable securities at December 31, 2000, iBasis believes that it continues to be fully funded for growth through to profitability even after giving effect to the anticipated closing of the PriceInteractive transaction.

On a pro forma basis, not including any adjustments, and assuming the PriceInteractive transaction had closed on Jan. 1, 2000, the combined company would have had 2000 revenue of more than $79.3 million, an EBITDA loss of approximately $51.45 million, positive gross margin of $14.97 million, and a net loss of approximately $62.83 million. Based on an assumed 43.71 million weighted average shares outstanding, the net loss per share for the combined companies would have been $1.44 for 2000. In addition, iBasis anticipates achieving total 2001 revenue in the range of $150-160 million. This assumes a PriceInteractive revenue contribution in the second, third and fourth quarters of 2001. iBasis also anticipates a combined net loss in the range of $1.60 - $1.75 per share in 2001 (based on an assumed 46.0 million shares outstanding). iBasis believes that the combined company will achieve positive EBITDA in the fourth quarter of 2001. In addition, iBasis also believes that the combined company will become net income positive in the first quarter of 2002.

The combined company’s steady-state gross margin target is 25%-35%.

Consistent with previous guidance, on a stand-alone basis, iBasis expects accelerated improvement in gross margin and expects to begin approaching its steady-state gross margin target in the core VoIP business of 20-25% in the fourth quarter of 2001. Further, iBasis anticipates a net loss in the range of $2.10 - $2.25 per share in 2001 based on an assumed 35 million shares outstanding. In addition, the company expects to achieve positive EBITDA (earnings before interest, taxes and depreciation and amortization) in Q1 2002 and net income profitability in Q2 2002. The company is also maintaining its previous guidance on aggregate capital expenditure, which is expected to be in the range of $30-40 million in 2001. Further, iBasis expects EBITDA to be negative $14-16 million per quarter for the next several quarters, not inclusive of the PriceInteractive transaction, capital lease payments, interest expense and capital expenditures paid for in cash. Total cash outflow is anticipated to be in the range of $20-25 million per quarter through the first three quarters in 2001.

For full year 2000, based on unaudited financial results, PriceInteractive generated approximately $18.08 million in revenue, $537,000 in net loss and $2.03 million in positive EBITDA. On a stand-alone basis, PriceInteractive is expected to generate 2001 revenue in the range of $27-30 million with gross margins of approximately 40-50%. PriceInteractive expects to generate positive EBITDA of approximately $3-4 million in 2001.

We cannot determine the goodwill component of the PriceInteractive transaction at this time, as the total value of transaction is dependent upon the price of iBasis common stock at the time of the final closing of the transaction, which is anticipated in the first quarter of this year. At December 31, 2000, PriceInteractive had total assets of $31.01 million, of which fixed assets represent $9.78 million and current assets represent an additional $20.82 million inclusive of $6.7 million in accounts receivable. PriceInteractive long-term liabilities at December 31, 2000 were $3.06 million (not inclusive of a $10.0 million loan from iBasis). It is iBasis’ intent to write off approximately 20-25% of the purchase price in excess of the net assets acquired as an in-process research and development expense. Further, the company anticipates that the other identifiable intangible assets will be amortized over a period of between three and seven years. It is expected that the residual amount of goodwill will not be amortized once the new FASB exposure draft, which is expected to be finalized in Qdr2 2001, is released and adopted.

The iBasis Network: A Global Infrastructure for New, Enhanced Services

The iBasis Network is a robust, global platform for the delivery of IP-based communications services, including wholesale, phone-to-phone VoIP and enhanced services, such as unified communications and speech-enabled business solutions. The iBasis Network delivers IP-based voice services using Internet Telephony equipment from Cisco Systems deployed in large, carrier-class switching and application hosting facilities called Internet Central OfficesTM, strategically located in Amsterdam, Cambridge (Mass.), Frankfurt, Hong Kong, London, Los Angeles, Miami, New York, Paris, Singapore, Stockholm, Sydney, Tokyo, and Toronto. The network also comprises numerous smaller points of presence called Internet Branch Offices, which play an important role in connecting providers to iBasis services. With this global infrastructure in more than 45 countries and through its peering relationships with other communications providers, iBasis can provide IP-based voice services virtually anywhere in the world.

About iBasis

Founded in 1996, iBasis (Nasdaq: IBAS) is the leader in advanced Internet-based voice communications. iBasis delivers toll quality international voice services and provides the infrastructure for hosted communications solutions, including unified communications and speech-enabled content, e-commerce and customer service applications. More than 100 international service providers, including 11 of the top 12 US-based international carriers and four of the five largest carriers in China route traffic over the iBasis Network. iBasis customers include Worldcom, Cable & Wireless, NTT, Concert, China Unicom, China Mobile and Telstra. iBasis’ hosted, enhanced service solutions include VoCoreSM unified communications and the IP CallCard pre- and post-paid calling card platform. The iBasis Network is the world's largest international Cisco Powered Network for Internet Telephony and the first to receive the Unified Communications-Cisco Powered Network (UC-CPN) designation. iBasis is listed in both the Russell 2000® and Russell 3000® Indexes. The company can be reached at its worldwide headquarters in Burlington, Mass., USA at 781-505-7500 or on the Internet at www.ibasis.net.

Assured Quality Routing and AQR are registered trademarks, VoCore is a service mark and iBasis, The iBasis Network, Internet Central Office and Internet Branch Office, and IP CallCard are trademarks of iBasis, Inc. Cisco and Cisco Powered Network are registered trademarks of Cisco Systems, Inc. All other trademarks are the property of their respective owners

Except for historical information, all of the expectations, projections and assumptions contained in the foregoing press release, including those relating to the company's current expectations regarding revenue growth, sources of revenue, margin improvement and future capital expenditures constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties. Important factors that could cause actual results to differ materially from such forward-looking statements include, but are not limited to, (i) the extent of adoption of the company's new voice-based Internet services and the timing and amount of revenue generated by these services; (ii) fluctuations in the market for and pricing of VoIP services; and (iii) the other considerations described as "Risk Factors" in iBasis' Preliminary Prospectus dated January 16, 2001, and the company's other SEC filings.


Consolidated Statements of Operations and Consolidated Balance Sheets are available, please contact (Europe Media) Matthew Tucker +44 20 7861 3027, mtucker@landmarkconsultants.com.

Media: Adam Banker, iBasis, Inc. 781 505 7414, abanker@ibasis.net

Investors: John Quirk, iBasis, Inc. 781 505 7409, jquirk@ibasis.net

Openwave Media: Rowan Benecke, PR21, 415 369 8102, rowan.benecke@pr21.com

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