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ArcSight Achieves Record Revenue for Fiscal Second Quarter Ended October 31, 2008

Company Posts Total Revenues of $32.8M for Fiscal Second Quarter and GAAP and Non-GAAP Earnings per Diluted Share of $0.06 and $0.11, Respectively

For the Fiscal Second Quarter:
• Total Revenue: $32.8M, a 33% increase year-over-year
• GAAP Net Income: $1.8M or $0.06 per diluted share
• Non-GAAP Net Income: $3.6M or $0.11 per diluted share
• Positive Cash Flows from Operations: $0.7M

CUPERTINO, CA - December 9, 2008

ArcSight, Inc. (NASDAQ: ARST), a leading global
provider of compliance and security management solutions that protect enterprises and
government agencies, today announced financial results for its fiscal second quarter ended
October 31, 2008.

For the second quarter of fiscal 2009, ArcSight reported total revenues of $32.8 million compared
to total revenues of $24.6 million reported in the second quarter of fiscal 2008. Net income on a
GAAP basis for the second quarter of fiscal 2009 was $1.8 million, or $0.06 per diluted share,
including $210,000 in amortization of intangible assets and $1.5 million in stock-based
compensation expense. This compares to a GAAP net loss of $0.4 million, or $0.03 per diluted
share, reported in the second quarter of fiscal 2008, including $143,000 in amortization of
intangible assets and $1.4 million in stock-based compensation expense.

Non-GAAP net income for the second quarter of fiscal 2009 was $3.6 million, or $0.11 per
diluted share, excluding the above-mentioned amortization and stock-based compensation
charges. This compares to a non-GAAP net income of $1.2 million, or $0.04 per diluted share,
reported in the second quarter of fiscal 2008, excluding the above-mentioned charges.

During the second quarter of fiscal 2009, the company generated $0.7 million in cash from
operations and closed the second quarter with cash and cash equivalents of $75.7 million.

"This past quarter we continued to see strong demand for our solutions despite the accelerated
macro-economic decline during this period," commented Tom Reilly, president and CEO of
ArcSight. "Continued strength from financial services customers and the federal sector, and
consistent results across all verticals supports our belief that our family of compliance and
security solutions delivers a compelling value proposition even in difficult macro-economic
conditions."

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