2016 Annual Report Sandvine

ANNUAL REPORT
2016
Contents
• Letter to Shareholders
• Products
• Management’s Discussion and Analysis
• Financial Statements
• Corporate Information
Sandvine’s network policy control solutions add intelligence to fixed, mobile and converged communications
service provider networks, to increase revenue, reduce network costs and improve subscriber quality
of experience. Our networking solutions perform end-to-end policy control functions, including traffic
classification, policy decision and enforcement. Deployed as virtualized network functions or on Sandvine’s
purpose built hardware, the products provide actionable business insight, and the ability to deploy
new consumer and business subscriber services, optimize and secure network traffic, and engage with
subscribers.
Sandvine’s network policy control solutions are deployed in more than 300 networks in over 100 countries,
serving hundreds of millions of data subscribers worldwide. www.sandvine.com.
CAUTION REGARDING FORWARD LOOKING INFORMATION

Certain statements in this Annual Report which are not historical facts constitute forward-looking statements or forward-looking information
within the meaning of applicable securities laws (“forward-looking statements”). Statements related to Sandvine’s projected revenues, earnings,
growth rates, revenue mix and product plans are forward-looking statements as are any statements relating to future events, conditions or
circumstances. The use of terms such as “anticipated”, “expected”, “projected”, “targeting”, “estimate”, “intend” and similar terms are intended to
assist in identification of these forward-looking statements. Readers are cautioned not to place undue reliance upon any such forward-looking
statements. Such forward-looking statements are not promises or guarantees of future performance and involve both known and unknown risks
and uncertainties that may cause the actual results, performance or achievements of Sandvine to differ materially from the results, performance,
achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements are based on management’s
current plans, estimates, projections, beliefs and opinions, and Sandvine does not undertake any obligation to update forward-looking statements
should assumptions related to these plans, estimates, projections, beliefs and opinions change. Additional risks and uncertainties that relate to an
investment in the securities of Sandvine are discussed in Management’s Discussion and Analysis dated January 12, 2017, included as part of this
report and in Sandvine’s most recent Annual Information Form, which is available on SEDAR at www.sedar.com.
Letter to Shareholders
Sandvine’s revenue in 2016 was $120.7 million, essentially flat with the result in the previous two years. During
2016, wireless market revenue grew to record levels for Sandvine, but orders from cable companies were down
$21 million, or approximately 60%, as that market experienced significant change in the year. Major operators like
Charter, Time Warner, Brighthouse and Cablevision all went through significant M&A activity.
While market conditions didn’t support revenue growth, 2016 was our fourth consecutive year of profitability. We
also developed innovative new functionality and products that increase the value of our solutions for customers.
Our strong cash balance supported the acquisition of our TCP Accelerator product, the ongoing repurchase of our
stock, and the introduction of our quarterly dividend which we have since increased to C$0.08 per year. We won a
record 67 new customers for the year, which reflects well on our competitive position and the value proposition of
our growing roster of products.
We outlined six growth strategies at the beginning of 2016. They were:
1. To continue to extend our lead in our traditional areas of strength: Subscriber Services, Business Intelligence
and Traffic Optimization.
2. To further enhance our Cyber Security offerings.
3. To take advantage of the leadership position of our PTS 32000 in the 100 Gigabit-Ethernet upgrade cycle.
4. To take advantage of the current PCRF, or Policy Server, upgrade cycle; and
5. To gain traction in Business Services, with our fully-virtualized Cloud Services Policy Controller.
6. To look at acquisitions that could accelerate growth.
We made progress on all these initiatives. We announced significant advancements in our Business Intelligence
and Cyber Security offerings. For example, we launched quality of experience metrics for encrypted video that
will allow communications service providers to accurately measure the many factors that impact a subscriber’s
experience when watching encrypted video. We also announced multiple new features for our Network Security
product, including QuickSand, an innovative feature that protects networks using “decoy and deception” techniques
to prevent the success of malicious attackers and increase the costs of the attacks for the perpetrators. Finally,
we launched our Traffic Steering Engine, which represents a major step forward in solving the challenges that our
customers face in deploying virtualized network functions, like security, business intelligence and others at a large
scale and in service chains.
Our PTS 32000 is now deployed at roughly 50 of our customers globally and is still the market leader in its class.
It was a key part of most of the major deals we announced throughout the year. We also gained new reference
customers for our PCRF, including Bakcell in Azerbaijan, Paratus Telecom in Namibia and Eastlink in Canada.
Our acquisition strategy has created new opportunities for us, including the addition of our TCP Accelerator product
and key aspects of our OutReach product to our portfolio. We continue to analyze acquisition opportunities.
Given these important successes, what aspects of our strategy developed more slowly than expected? I’d highlight
three things:
1. First, as mentioned, the cable market was slow for us during the year, due largely to M&A amongst major
cable operators. Overall, there is slowing subscriber growth in our customers’ markets and even the largest
networking equipment vendors saw revenue from communications services providers decline in 2016.
2. Second, the 100-gigabit-ethernet upgrade cycle is progressing slower than similar upgrade cycles in the past. I
believe that this is largely due to the sheer increase in throughput speeds involved – not all operators see the
need to move to that scale right away, though inevitably they all will over the next few years.
3. Finally, opportunities for our Business Services offering are taking slower to develop than we had hoped.
We have always seen this as a long-term growth strategy because it requires that our customers be ready to
deploy and sell cloud offerings, and not all of them are. We are optimistic that recent enhancements to the
offering, for mobile operators, will accelerate uptake.
As we head into 2017, there is still uncertainty in the market but I am optimistic. We remain the technology and
market share leader in our space. We have strong relationships with a rapidly-growing group of customers and
our expanded product set offers them a greater number of value propositions than ever. Our focus in 2017 will
be to identify the next, quickest way we can add value for each of our 300-plus customers, and execute on those
opportunities as quickly as we can across the entire team.
I’d like to thank everyone on Team Sandvine for their efforts during the year, and thank you, our shareholders, for
your ongoing belief in the company.
Dave Caputo
Products
Sandvine’s award-winning network policy control products provide actionable business insight, and the ability to
deploy new consumer and business subscriber services, optimize and secure network traffic, and engage with
subscribers.
Business Intelligence
Communications service providers (CSPs) need to make important strategic decisions every day:
• What new services should we explore?

• Where should capital investments go?
• What new devices should we offer our subscribers?
Yet, the Internet was not built with any intelligence to help operators understand their traffic. Sandvine has a
long history of providing the critical insight to help CSPs make informed decisions. Sandvine measures what
matters—including application traffic volume, time, events, and even video and web browsing subscriber quality of
experience. We allow CSPs to consume the data however they want: in our own Network Demographics or Network
Analytics products or in their own big data and customer experience management (CEM) systems. With this
information, CSPs can turn insight into action.
Subscriber Services
Our customers’ average revenue per user (ARPU) is declining, and studies show that this is the trend even in
emerging markets. Increased competition and a lack of easy sources of growth mean that communications service
providers need to create new revenue sources while maximizing existing ones.
To outpace the competition and reap the revenue rewards, CSPs can use our network policy control platform to
create innovative prepaid and postpaid services built around real subscriber demand:
• Application-based service tiers

• Shared data services for family plans, multi-device bundles, and multi-radio (e.g., EVDO and LTE) devices
• Sponsored data promotions
• Roaming services and WiFi passes
• Postpaid plans with data rollover
Subscriber Engagement
Sandvine helps CSPs build profitable ongoing relationships with personalized, real-time multi-channel interaction.
Different messages are best presented through different channels, such as mobile apps, in-browser, through web
portals or even “out-of-band” engagement. Devices have widely varying capabilities and different channels provide
different engagement options.
Sandvine’s Subscriber Engagement solutions lets CSPs rapidly implement a wide variety of specific use cases to
achieve subscriber engagement goals, such as usage or other notifications and promotions, subscriber self-service,
and digital content marketplaces.
Traffic Optimization
Traffic volumes continue to explode, largely driven by over-the-top video services. At the same time, network
budgets are flattening or, in some cases, declining. That’s why Sandvine offers a wide range of solutions that helps
CSPs balance the need to deliver high-quality network services with budget realities.
Protecting and maximizing subscriber quality of experience are key parts of any subscriber retention strategy. We
arm CSPs with the tools and technologies they need—including quality-based routing, TCP acceleration and precise
congestion management—to maximize quality of experience for the maximum number of subscribers for the
maximum amount of time.
Cyber Security
As part of a multi-layer security strategy, CSPs must secure their
infrastructure’s ability to deliver services, while at the same time
protecting subscribers from online threats and complying with regulatory
requirements. Our Cyber Security products offer a quick and easy way to
help deliver a “secure pipes” solution for networks of any type or size.
With Sandvine’s Cyber Security solutions, CSPs can protect both the network
and subscribers:
Network Subscribers
• Network threat deception • Dynamic vulnerability masking

• Precision Denial of Service/Distributed Denial of • Malware scanning and infection prevention
Service attacks • Phishing scams
• DNS cache poisoning • Web filtering and parental controls
• Botnets • Parental controls
• Reflector attacks
Business Services
Sandvine lets CSPs help their business customers reduce their mobile and fixed data usage costs, protect users,
and increase productivity, without requiring on-device software, on-premises hardware, or extensive IT expertise.
CSPs or IT organizations can host Sandvine’s capabilities as a software-only, “virtualized” solution to offer Sandvine’s
capabilities as-a-service for a recurring, periodic fee.
Sandvine’s “View” services provide traffic and usage insight, diagnostics, and QoE and application latency reporting.
“Control” services let businesses manage their traffic, perhaps for application-specific performance needs, or
productivity controls that define access to certain applications. “Protect” services protect users from malware,
botnet infections, known phishing sites, and more.
MANAGEMENT’S DISCUSSION AND ANALYSIS
Dated: January 12, 2017
This Management's Discussion and Analysis ("MD&A") for the three months ended November 30, 2016 (fourth
quarter of fiscal 2016) provides detailed information on the operating activities, performance and financial position
of Sandvine Corporation (“Sandvine” or the “Company”). This discussion should be read in conjunction with the
Company’s audited consolidated financial statements and accompanying notes for the year ended November 30,
2016. The financial statements have been prepared in compliance with International Financial Reporting Standards
(“IFRS”) and are reported in United States dollars. The information contained herein is dated as of January 12,
2017, and is current to that date, unless otherwise stated.
The Company’s fiscal year commences December 1st of each year and ends on November 30th of the following year.
The Company’s current fiscal year, which ends on November 30, 2016, is referred to as the “current fiscal year,”
“fiscal 2016”, “2016”, “FY-16” or using similar words. The previous fiscal year, which ended on November 30,
2015, is referred to as “previous fiscal year,” “fiscal 2015,” “2015”, “FY-15” or using similar words.
In this document, “we”, “us”, “our”, “Company” and “Sandvine” all refer to Sandvine Corporation collectively
with its subsidiaries. The content of this MD&A has been approved by the Board of Directors, on the recommendation
of its Audit Committee.
Additional information relating to the Company is available on SEDAR at www.sedar.com, and on the Company’s
web-site at www.sandvine.com.
Management's Discussion and Analysis
CAUTION REGARDING FORWARD LOOKING INFORMATION

Certain statements in this MD&A, constitute “forward-looking information” and "forward looking
statements" (collectively, "forward looking statements") within the meaning of applicable Canadian securities
laws and are based on assumptions, expectations, estimates and projections as of the date of this MD&A. Forward-
looking statements include, without limitation, statements with respect to projected revenues, earnings, growth
rates, targets, revenue mix and product plans and the Company’s future growth, results of operations, performance
and business prospects and opportunities. The words “plans”, “expects”, “projected”, “estimated”, “forecasts”,
“anticipates”, “intend”, “guidance”, “outlook”, “potential”, “prospects”, “seek”, “aim”, “strategy”, “targets” or
“believes”, or variations of such words and phrases or statements that certain future conditions, actions, events or
results “will”, “may”, “could”, “would”, “should”, “might” or “can”, or negative versions thereof, “occur”,
“continue” or “be achieved”, and other similar expressions, identify forward-looking statements. Forward-looking
statements are necessarily based upon management’s perceptions of historical trends, current conditions and
expected future developments, as well as a number of specific factors and assumptions that, while considered
reasonable by the Company as of the date of such statements, outside of the Company's control and are inherently
subject to significant business, economic and competitive uncertainties and contingencies which could result in
the forward-looking statements ultimately being entirely or partially incorrect or untrue. Forward looking statements
contained in this MD&A are based on various assumptions, including, but not limited to the following: the overall
Network Policy Control market including reliance on major customers; adoption of Virtual Series solutions; the
requirement for increasingly innovative product solutions; the Company's ability to achieve its growth strategy;
the demand for the Company’s products and fluctuations in future revenues; target blended gross margin; target
business model and assumptions; expectations of growth in the wireless market; expectations for DSO; sufficiency
of current working capital to support future operating and working capital requirements; the stability of general
economic and market conditions; currency exchange rates and interest rates; equity and debt markets continuing
to provide the Company with access to capital; and the Company’s continued compliance with third party intellectual
property rights; foreign exchange hedging; ability of the Company to declare and pay quarterly dividends; and that
the risk factors noted below, collectively, do not have a material impact on the Company's business, operations,
revenues and/or results. By their nature, forward-looking statements are subject to inherent risks and uncertainties
that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions,
projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives,
strategic goals and priorities will not be achieved.
Known and unknown risk factors, many of which are beyond the control of the Company, could cause the actual
results of the Company to differ materially from the results, performance, achievements or developments expressed
or implied by such forward-looking statements. Such risk factors include, but are not limited to each of the
following, and those factors which are discussed in the Company’s 2016 Annual Information Form (“AIF”), a copy
of which is available on SEDAR at www.sedar.com.
• The Company’s revenues may fluctuate from quarter to quarter and year to year depending upon sales cycles,
customer demand, the timing of customer purchase decisions, including the recent trend of slowing customer
activity in the summer months, as well as the timing of when an order meets the Company’s revenue recognition
criteria;
• The Company’s gross margins may fluctuate from quarter to quarter and year to year depending upon a variety
of factors including product mix in the quarter, competitive pricing pressures and the level of sales generated
through indirect channels;
• The Company is dependent upon and expects to continue to derive a large percentage of its revenue from both
a small number of key customers and key reseller partners, none of whom are bound to any fixed purchase
commitment or exclusivity obligations and could change their buying patterns and/or source of supply at any
time, which could have a material impact on the Company’s revenues. In addition, the Company extends credit
to its customers and resellers by virtue of agreed upon payment terms and could be exposed to collection risk
on its receivables particularly if any key customer or key reseller were to face financial challenges. The
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Company’s reseller partners may also offer their own products which are competitive with the Company’s
products;
• By selling its products in certain markets through resellers, the Company is able to avoid certain costs related
to operating in those markets including but not limited to local support costs, costs of maintaining a local legal
entity, administration costs, and logistics. Should the Company choose or be required to sell direct in these
markets (due to customer preference, termination of a reseller relationship or other reasons) the cost advantages
described will no longer be available to the Company which could result in an increase in operating costs. In
addition, direct sales to Tier 1 communications service providers (CSPs) involve risks that may not be present
(or that are present to a lesser extent) while sales to smaller CSPs or through the reseller channel. These risks
include but are not limited to increased purchasing power held by large customers, longer sales cycles, more
complicated infrastructure requirements or more intense and time-consuming customer support practices;
• The Company faces intense competition in markets where there are typically several different competing
technologies and rapid technological changes. The Company faces the risk of the emergence of new
technologies and new approaches to network architecture that may be either competitive to those of the
Company or that change the requirements of the Company’s customers for solutions such as those offered by
the Company. If the Company is unable to adapt its offerings in response to these trends it could have a material
impact on the ability of the Company to market and sell its solutions;
• The Company’s growth is dependent on the development of the market for Network Policy Control solutions
and the decisions of the Company’s target customers to deploy and further invest in those technologies, which
decisions may be impacted by changing requirements in the area of network management policies and/or
changes in the regulatory framework to which the Company’s customers may be subject. In particular, numerous
telecommunications legislators and regulators in various jurisdictions have considered or are considering what,
if any, regulations or laws might be appropriate with respect to how CSPs manage and charge for different
types of traffic on their networks. These ongoing processes may cause uncertainty in the network investment
decisions of the Company’s target customers, and any new rules or regulations that result from these
considerations may impact the demand for the Company’s products within various markets, including markets
that may not be considering any new regulation but where the Company’s customers may look to other markets
for future guidance or trends;
• With the adoption of network functions virtualization (NFV) and software defined networks (SDN), the market
in which Sandvine operates may face a shift in how some of its customers purchase the Company’s products.
It is the Company’s intention to continue to offer and develop Network Policy Control products for customer
networks architected for NFV or SDN. These products will run on commercial off-the-shelf hardware. The
introduction of these product offerings could see a shift in the Company’s pricing practices from perpetual
based software licenses to term based software licenses. As such, depending on the rate of adoption, the
Company could experience a loss or delay in hardware and/or software revenue and reduced profits in 2017
and beyond;
• The Company is dependent on certain third party sub-assembly manufacturers in its supply chain and any
disruption in the operations or quality of those suppliers or any increase in expected lead times from those
suppliers could result in lost or delayed revenue and/or reduced profits;
• The majority of the Company’s operating expenses are denominated in Canadian dollars, U.S. dollars, Euros
and Indian rupees. The Company’s earnings are impacted by fluctuations in the exchange rates between the
U.S. dollar and these currencies;
• The Company operates in various jurisdictions throughout the world and generates revenues through its
international sales efforts. The Company’s financial results may be impacted by political and economic
developments of a particular country or geography. The Company has operations in India and Hong Kong,
both considered by management to be emerging markets. The operations in India are predominantly a contract
research and development facility and the Company conducts business in Hong Kong through a branch sales
representative office;
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• The Company is subject to government regulations concerning the sale and export of its products outside of
North America and its failure or inability to comply with these regulations could materially restrict the
Company’s operations and subject it to penalties;
• The Company is dependent on effectively managing acquisitions and integrations. Acquisitions present a
number of risks which are disclosed in the AIF. These risks or the inability of the Company to successfully
realize upon the intended benefits of an acquisition could have a material adverse effect on its business, financial
condition and results of operations.
• The Company’s policy of paying dividends on the common shares in the capital of the Company (the "Common
Shares") is subject to the discretion of the board of directors of the Company (the "Board") and is dependent
on, among other matters, the Company’s financial position, results of operations, available cash, cash
requirements and alternative uses of cash.
• The Company may experience interruptions in its information systems on which its global operations depend.
Further, the Company may face attempts by others to gain unauthorized access through the Internet to its
information technology systems, to intentionally hack, interfere with or cause physical or digital damage to
or failure of such systems (such as significant viruses or worms), which attempts the Company may be unable
to prevent. The Company could be unaware of an incident or its magnitude and effects until after it is too late
to prevent it and the damage it may cause. Any security breaches, unauthorized access, unauthorized usage,
virus or similar breach or disruption could result in loss of confidential information, personal data and customer
content, damage to the Company’s reputation, early termination of contracts, litigation, regulatory
investigations or other liabilities.
• The possibility that the Company’s products may infringe the intellectual property rights of third parties and
the potential exposure of the Company to a judgement for damages, royalties and injunctive relief precluding
the sale or licensing of the Company’s products.
These risk factors are not intended to represent a complete list of the factors that could affect the Company and
the reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to
put undue reliance on forward-looking statements. There can be no assurance that forward-looking statements will
prove to be accurate, as actual results and future events could differ materially from those anticipated in such
statements. Forward-looking statements are provided for the purpose of providing information about management’s
expectations and plans relating to the future. The Company disclaims any intention or obligation to update or revise
any forward-looking statements whether as a result of new information, future events or otherwise, or to explain
any material difference between subsequent actual events and such forward-looking statements, except to the extent
required by applicable law. All of the forward-looking statements contained in this MD&A are qualified by these
cautionary statements.
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Non-IFRS Financial Measures
This MD&A discloses net income before interest, taxes, depreciation and amortization (EBITDA) and the related
per share amounts (EBITDA per share) for the periods indicated. These non-IFRS financial measures, which are
used internally by management to evaluate the Company’s ongoing performance, exclude the impact of interest,
taxes, depreciation and amortization (collectively referred to as “Excluded expenses”). The Company provides
these non-IFRS financial measures as it is the Company’s view that the Excluded expenses either (i) affect the
comparability of results from period to period as the Excluded expenses are not part of its normal day-to-day
operations or only impact the current or comparable period and/or (ii) represent a “non-cash” accounting charge
that does not deplete its cash resources. Accordingly, the Company believes that such financial measures may also
be useful to investors in enhancing their understanding of the Company’s operating performance. These non-IFRS
measures are not recognized under IFRS and do not have standardized meanings prescribed by IFRS. Therefore
it is unlikely that these measures will be comparable to similarly titled measures reported by other issuers. Non-
IFRS financial measures should be considered in the context of the Company’s IFRS results.
The following table provides a reconciliation of net income and related per share amounts to EBITDA and the
related per share amounts (“EBITDA per share”) for the periods indicated.
Three month period ended Twelve month period ended

November 30, November 30, November 30, November 30,
2016 2015 2016 2015
Amounts in US$ thousands $ $ $ $
Net income ** 2,043 25,178 13,121 41,278

Adjustment for
Interest, net * (147) (68) (467) (358)
Taxes 1,124 (1,193) 5,153 (377)
Depreciation 1,033 1,095 3,987 3,958
Amortization 689 604 2,654 1,501
EBITDA 4,742 25,616 24,448 46,002
Basic EBIDTA per share ** 0.036 0.175 0.176 0.312
Diluted earnings per share 0.015 0.168 0.092 0.273

Impact on diluted earnings per share of non-IFRS
measures 0.020 0.003 0.080 0.031
Diluted EBITDA per share ** 0.035 0.171 0.172 0.304
* Interest, net is defined as the aggregate of finance income and finance costs.
** Net income for the three month period and year ended November 30, 2015 included the recognition of $17.6
million related to the recognition of deferred tax assets with $16.0 million by a reduction of its research and
development expenses in the fourth quarter of 2015. The impact of this recognition of deferred tax assets as a
reduction of its research and development expenses on Basic EBITDA per share and Diluted EBITDA per share
was $0.109 and $0.107, and $0.109 and $0.106, respectively, for the three month period and year ended November
30, 2015.
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FINANCIAL HIGHLIGHTS
The Company’s total revenues for the current quarter were $27.0 million, a decrease of $8.0 million or 23.1%
compared to the fourth quarter of 2015. This decrease is as a result of a $8.0 million decrease in product revenue.
The decrease in product revenue is consistent with a market that has seen certain major network equipment vendors
who also reported slowing product revenues from CSPs. For Sandvine, this was most pronounced in the Cable
market where product revenue and orders received decreased $5.1 million and $16.3 million respectively, in the
current quarter as compared to the fourth quarter of 2015. The Company believes this decline is the result of longer
sales cycles partially attributable to consolidation in the North American Cable market in 2016. The Company
continues to experience extended sales cycles with larger orders in other geographies.
The percentage breakdown of revenue generated from a particular geography or access technology will fluctuate
significantly based on the origin of larger orders received during the quarter. In the current quarter, the largest
access technology market was Wireless (64% of revenues). Geographically, EMEA (38% of revenue) was the most
significant sales region in the quarter.
During the current quarter, the Company received initial purchase orders from sixteen new customers (Q4 2015:
ten), comprised of seven Wireless/other, seven Fixed Telco and two Fixed Cable service providers, and recognized
revenue from thirteen new customers. The value of orders received from customers during the fourth quarter of
2016 was greater than total revenue recognized during the quarter.
EBITDA for the current quarter was $4.7 million, a decrease of $20.9 million as compared to the same period last
year. This decrease was primarily the result of the Company recording a deferred tax asset for previously
unrecognized non-refundable investment tax credits ("SR&ED ITCs") in the amount of $16.0 million by a reduction
of its research and development expenses in the fourth quarter of 2015 as well as a decline in current quarter
revenues of $8.0 million as compared to the same period last year.
EBITDA for the year ended November 30, 2016 was $24.4 million, a decrease of $21.6 million compared to the
same period last year. This decrease was primarily the result of the Company recording a deferred tax asset for
previously unrecognized SR&ED ITCs in the amount of $16.0 million by a reduction of its research and development
expenses in the fourth quarter of 2015 and a decline in revenues of $2.6 million compared to the prior year. In
addition, Other income for the year ended November 30, 2015 included $2.8 million related to a one time gain on
the sale of a private company investment which is included EBITDA.
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SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following table sets out selected consolidated financial information for the periods indicated. The selected
financial information set out below has been derived from the audited consolidated financial statements for the
year ended November 30, 2016, as well as the November 30, 2015 audited consolidated financial statements. Each
investor should read the following information in conjunction with those statements and related notes. The financial
information for the three month period ended November 30, 2016 and November 30, 2015 has been prepared by
management in compliance with IFRS in a manner consistent with the Company’s annual financial statements.
For the three month period ended For the twelve month period ended
2016 2015 2016 2015
$ $ $ $
Amounts in US$ thousands, except share and per share data
Revenue
Product 15,100 23,128 73,879 79,294
Service 11,853 11,911 46,854 44,037
26,953 35,039 120,733 123,331
Cost of sales
Product 2,997 4,198 16,075 16,493
Service 3,270 2,842 12,990 10,943
6,267 7,040 29,065 27,436
Gross margin 20,686 27,999 91,668 95,895
Expenses
Sales and marketing 8,893 10,325 37,528 36,860
Research and development 5,436 (9,403) 22,881 7,974
General and administrative 3,297 2,980 13,357 13,234
Other losses, net — 3 2 23
17,626 3,905 73,768 58,091
Income from operations 3,060 24,094 17,900 37,804
Finance income 147 68 467 358
Foreign exchange gain (loss) (112) (177) (165) (39)
Other income — — — 2,778
35 (109) 302 3,097
Share of profit of equity accounted
investees, net of tax 72 — 72 —
Income before provision for
3,167 23,985 18,274 40,901
income taxes
Current and deferred provision
1,124 (1,193) 5,153 (377)
for income taxes
Net income for the period 2,043 25,178 13,121 41,278
Basic earnings per share 0.015 0.172 0.095 0.280

Diluted earnings per share 0.015 0.168 0.092 0.273
Weighted average common shares

outstanding
Basic 132,644,416 146,305,032 138,583,284 147,243,881
Diluted 135,976,061 149,543,483 142,045,130 150,974,373
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SELECTED CONSOLIDATED FINANCIAL INFORMATION (continued)
As at November As at November 30,

30, 2016 2015
Amounts in US$ thousands $ $
Consolidated Balance Sheet Data:
Cash 14,922 8,826
Short term investments 118,064 136,515
Total assets 220,123 240,458
Total liabilities 40,593 38,781
Shareholders’ equity 179,530 201,677
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OVERVIEW
Our Company
Sandvine develops and markets Network Policy Control solutions for communications service providers. The
Company’s solutions help service providers better understand their networks and apply specific network policies
that will improve the quality of service for their subscribers, support the creation of new revenue-generating
services, mitigate malicious traffic, more efficiently manage network traffic and notify subscribers of important
information and let them take action on it.
Sandvine has over 300 communications service provider customers in over 100 countries who serve hundreds of
millions of fixed line and mobile broadband Internet subscribers.
The Market
Sandvine’s target market is broadband communications service providers worldwide, including those which offer
such services through mobile, DSL, cable, fixed wireless, FTTx, and satellite Internet access technologies. Within
the fixed line component, which is comprised cable and Fixed Telco (DSL and FTTx) of the market, Sandvine
primarily targets the top 250 operators around the world, by subscriber count, which represents the vast majority
of the global subscriber base. Industry analyst reports estimate that there were approximately 682 million fixed
line broadband subscribers globally at the end of 2015.
In the wireless market (mobile, fixed wireless and satellite), Sandvine primarily targets the top 350 service providers
in the world. According to industry analysts there were approximately 2.8 billion mobile broadband users at the
end of 2015. This figure is expected to grow rapidly over the next few years with ongoing adoption of smart devices.
Products and solutions
The Company’s Network Policy Control solutions typically comprise a hardware platform and proprietary software
modules that are typically bundled together to provide a system for broadband communications service providers
to identify (e.g., video streams like Netflix, VoIP traffic like Skype, or online gaming), report on and take action
on the data traversing their networks.
The core of Sandvine’s hardware platform is the Policy Traffic Switch (“PTS”). The PTS product line includes
three hardware models, the PTS 22000, PTS 24000, and PTS 32000, each of which is available in a range of
variants with different performance characteristics. Starting in 2014 and going forward, Sandvine also offers the
PTS Virtual Series, which is a software-only version of the PTS functionality suitable for networks architected for
Network Functions Virtualization (“NFV”) and Software Defined Networking (“SDN”).
NFV is an industry wide, carrier-led effort to move away from proprietary hardware (like Sandvine’s), motivated
by desires to increase agility, enable faster service launches, and to reduce the cost of deployment by using standard
commercial off-the-shelf (“COTS”) hardware, for all network functions, in a shared environment. Running all
functions on identical, shared hardware promises a much simpler, more efficient network. A related concept, SDN,
seeks to establish the linkage/paths between virtualized network functions in software, on-the-fly, via application
program interfaces (“APIs”). SDN is a deployment tool that enables a programmable network.
For Sandvine, the shift to NFV- and SDN-enabled network means that the functions running on its PTS, other
aspects of its hardware platform and existing software offerings will all be offered as software-only to run on COTS
hardware.
Sandvine’s solutions provide the tools to help service providers understand and forecast network traffic, and apply
specific network policies that will support the creation of new revenue-generating services, improve the quality
9
of experience for their subscribers, more efficiently manage their network, mitigate malicious traffic and more
effectively engage with subscribers.
Business Intelligence
In the era of big data, Sandvine’s Business Intelligence solutions help communications service providers make
informed business decisions with unique measurements, easy-to-use reporting, powerful analytics, and
configurable data records. The Company’s Business Intelligence solutions aim to enable confident business
decisions regarding service plans, traffic management policies and capital investments.
Subscriber Services
To help service providers stay competitive in a dynamic consumer marketplace, Sandvine offers a flexible platform
that enables a wide-range of subscriber services. CSPs can satisfy subscriber demand by launching new services
like:
• Application-based service tiers and bolt-ons that appeal to specific subscriber tastes
• Roaming packages, real-time notification, and bill shock prevention
• Shared data plans, including family plans and multi-device data bundles
• Sponsored connectivity and third-party bundles, including zero-rating of partner services
• Universal service plans that bridge access technologies
Traffic Optimization
In times of congestion, a relatively small number of users and applications can consume the majority of network
resources. The Company’s Traffic Optimization solutions aim to mitigate network congestion and ensure fairness
and maximize the subscribers’ quality of experience through the optimal use of network resources to:
• Control bandwidth to contain transit costs and to cap traffic peaks;

• Protect subscriber quality of experience with the world’s most accurate congestion management
solution; and
• Optimize routing and media delivery to deliver superior subscriber quality of experience.
Cyber Security
As part of a multi-layer security strategy, Sandvine’s Cyber Security solutions help service providers protect network
infrastructure and subscribers from online threats, and comply with regulatory requirements. Sandvine’s Cyber
Security solutions are designed to help CSPs address these issues by gaining actionable insight into the threats on
their networks:
• Reducing outbound spam to prevent blacklisting

• Preventing service outages, reducing support calls and lowering incident response costs by protecting
network services from malicious traffic
• Identifying and communicating with subscribers infected by known botnets and other malicious
activities
• Achieving regulatory URL filtering compliance
Subscriber Engagement
Sandvine’s Subscriber Engagement solutions help CSPs build relationships with subscribers through personalized,
real-time multi-channel interaction. Different messages are best presented through different channels, devices have
widely varying capabilities, and different channels provide different engagement options. Sandvine lets service
providers choose the right channel or combination of channels aimed at optimizing the experience, and lets CSPs
implement a wide variety of subscriber engagement use cases targeted to help CSPs grow revenue, increase loyalty,
and reduce operating expenses.
10
Business Services
Sandvine’s Business Services is targeted at enabling CSPs to help their business customers reduce network
management costs and increase productivity without requiring on-premises hardware or extensive IT expertise.
By selling a cloud-based, “as-a-service” offering that enables business customers to view, control and protect their
network traffic, a service provider can differentiate their Internet access offering and create new revenue streams.
Sales and distribution
Sandvine distributes its products and services through a combination of direct and indirect sales channels in order
to obtain global sales coverage and retain direct contact with the customer base. The direct sales channel is organized
across four sales regions: (i) North America; (ii) Europe, the Middle East and Africa (“EMEA”); (iii) Asia-Pacific
(“AsiaPac”); and (iv) Caribbean and Latin America (“CALA”). With direct sales, the ultimate end customer
purchases products directly from the Company. The direct sales team comprises Sandvine employees and local
area representatives, who generally have fixed and variable components to their compensation. The indirect sales
channel utilizes reseller partners such as global network equipment vendors, systems integrators and regional
resellers to market and sell Sandvine’s products. Sales may be initiated by partners or initiated by
Sandvine and then fulfilled and serviced through reseller partners. In all cases the partner purchases the Company’s
product for the purpose of reselling it to the ultimate end customer.
Growth strategy
The Company believes that investing in research, development, and sales and marketing activities are critical to
increasing revenues in future periods and maximizing the long-term success of the Company. Sandvine’s customers
continue to seek innovative ways to create new revenue sources, improve quality of experience of its subscribers,
differentiate services, network security, and transform how their subscribers are engaged via Digital Channels.
Sandvine continues to enhance and invest in the solution sets that support these objectives. These solutions are
increasingly deployed through software-only offerings, including virtualized ones.
The Company has sales and marketing efforts in strategic locations globally. The Company believes that it has
built strong products in each solution area and needs to leverage these product investments into increased sales
globally, both to new customers and through accelerated expansion orders from its large existing customer base.
The Company believes that its current investment in sales and marketing and research and development is sufficient
to support its 2017 revenue targets.
The Company anticipates that throughout fiscal 2017 and beyond it will continue to selectively assess acquisition
opportunities to strengthen its market position and augment its growth. The evaluation of potential acquisitions
will include whether the target company has technology that will extend the Company’s core capabilities in network
policy control, has a complementary customer base, has prospective growth rates commensurate with those of the
Company, and has a compatible culture.
11
Target Business Model
In broad terms, excluding the impact of stock based compensation and amortization of acquired intangible assets,
the Company is working within a target business model (outlined below) that includes a gross margin at or above
70%, and net income before income taxes between 10% and 20% of total revenue.
The company has achieved net income within this targeted business model for the past three years. The Company
is focused on achieving net income within this targeted business model for 2017.
Target Business Model
Percentage of revenue
Product revenue 65% - 70%
Service revenue 30% - 35%
Percentage of total revenue

Gross margin 70+%
Research and development 20% - 25%
Selling, general and administrative 30% - 35%
Net income before provision for income taxes (as a percentage of total
revenue) 10% - 20%
The target business model represents the Company’s targeted goal for net income and the relative breakdown of
the major components impacting upon that targeted net income. Readers are cautioned that this information is
provided solely as a means to communicate the targeted level of investment in the Company’s various expense
categories relative to revenue, and expenses within the Company’s business that management believes are
achievable as the Company’s business matures, subject to the various assumptions relied upon in making such
projections, including those set out below and the various risk factors contained in this MD&A. Readers are
cautioned that use of the information reflected in this target business model may not be appropriate for any other
purpose.
In arriving at this target business model, and in providing any other forward looking statements contained in this
MD&A, management has relied on a number of assumptions, including, but not limited to each of the following:
• The Company’s projected investment in research and development, coupled with the Company’s
prior investment in sales and marketing will result in growth in the Company’s revenue at targeted
rates;
• The Company’s existing customers, including its largest end customers and reseller partners will
continue to make significant purchases of the Company’s products and services;
• The Company will be able to maintain its target pricing models for its products and services and
obtain its supply of components at pricing that permits the Company to achieve its target gross
margins;
• This target business model does not consider or provide for any significant extraordinary one-time
expense(s) or any significant incremental investment in a new market or technology in advance
of its associated revenue;
• Any increase in sales through the Company’s indirect channel can be managed without significantly
impacting the Company’s blended gross margin;
• The regulatory and legislative environment applicable to the use of technology of the type marketed
by the Company will continue to permit service providers to use the Company’s solutions and its
full breadth of applications;
12
• Any acquisition will advance the Company’s objectives and be accretive to shareholders;
• The Company’s ability to manage foreign exchange risk within the Company’s forecasted foreign
exchange rates;
• The Company will be able to continue to attract and retain personnel and third party contractors
at compensation levels consistent with the Company’s historical practices.
Again, readers are cautioned that a variety of factors could cause the Company’s future results, and its ability to
achieve this targeted business model, to materially differ from that projected in any forward looking information
in this MD&A including, but not limited to those risk factors outlined in the Company’s most recently filed Annual
Information Form (“AIF”) (a copy of which can be obtained on www.sedar.com) as well as those risk factors
outlined earlier in this document under the heading “Caution Regarding Forward Looking Information”.
COMPOSITION OF REVENUES AND EXPENSES
The Company’s product revenue consists of revenues derived from the sale of its hardware products and the license
of its software products. The Company’s service revenue consists of revenues from post contract support (generally
referred to as support and maintenance services) as well as various professional services including consulting,
training and installation that is provided to its customers. The Company also derives revenue from selling cloud-
based, customer engagement services to mobile operators which is included with product revenues. From time to
time the Company has customers who place support and maintenance orders (including renewals) in a quarter
subsequent to the commencement of the related support and maintenance period. In such situations the Company
recognizes revenues related to a prior quarter in the quarter in which the order is received (this revenue is defined
as “Arrears Maintenance Revenue”). The vast majority of the Company’s revenues are denominated in U.S. dollars.
Product cost of sales consists of the cost of direct materials, plus direct labour and an allocation of overhead applied
to the product as well as direct costs associated with selling cloud-based, customer engagement services.
Service cost of sales includes certain overhead costs, warranty costs, the costs of salaries and other personnel costs
for staff dedicated to providing professional and customer support services.
Sales and marketing expenses consist primarily of salaries, variable compensation costs and other personnel costs,
local area representative payments, variable agency costs, occupancy costs, depreciation and amortization, travel,
advertising, trade analyst research, software maintenance costs, trial material costs as well as trade show and
conference costs.
Research and development expenses consist primarily of salaries and other personnel costs, occupancy costs,
depreciation and amortization, certification, material costs (including prototype costs) associated with new product
introduction and software maintenance costs. The Company also recognizes the benefits of utilizing SR&ED ITCs
by recording a reduction in its research and development expenses. The associated ITC receivable has been included
in the deferred tax asset balance on the statement of financial position.
General and administrative expenses consist primarily of salaries and other personnel costs, occupancy costs,
depreciation and amortization, professional costs associated with tax, accounting and legal advice, public company
costs (including compliance costs), information system and software maintenance costs.
Sales and marketing, research and development, and general and administrative expenses are presented on the
Company’s consolidated financial statements net of the benefit of non-repayable government assistance received.
Non-refundable investment tax credits are netted against the related research and development expenses in the
period when there is reasonable assurance that the investment tax credit will be realized against current or future
income tax liabilities.
13
The Company entered into an agreement with the Province of Ontario relating to the Jobs and Prosperity Fund.
This program will provide funding relating to one of the Company's research and development projects. Under the
agreement, the Company is eligible to receive funding equal to 8.9% of eligible project expenditures from March
1, 2016 to November 30, 2023 to a maximum of $15.0 million CAD, with certain annual caps related to
disbursements. Payments made in respect of the program can be made conditionally repayable if certain investment,
cumulative job and payroll targets are not met.
The majority of the Company’s operating expenses are denominated in Canadian dollars, U.S. dollars, Euros and
Indian Rupees. The Company’s earnings are impacted by fluctuations in the exchange rates between the U.S. dollar
and these other currencies. In order to minimize the impact of this foreign exchange movement on the Company’s
consolidated financial statements, the Company enters into forward foreign exchange contracts for a portion of
this exposure.
Other losses (gains), net consist primarily of gains or losses on disposal of assets.
Finance income consists primarily of interest income (net of related expenses) earned on the Company’s cash and
short term investments.
Foreign exchange gains (losses) relate primarily to realized and unrealized foreign exchange on the Company’s
foreign denominated cash, accounts receivable and accounts payable.
Other income consists of the gain on the disposition on a preferred share investment in a private company.
Provision for income taxes consists of current and deferred income taxes. The Company recognizes the benefits
of utilizing SR&ED ITCs by recording a reduction in its research and development expenses.
14
CURRENT PERIOD OPERATING RESULTS
Revenue

2016 2015 2016 2015
$ $ $ $
Amounts in US$ thousands
Product 15,100 23,128 73,879 79,294

Service
Support and maintenance 8,951 9,072 36,467 32,706
Professional services 2,191 2,180 7,492 8,975
Training, installation and other 711 659 2,895 2,356
11,853 11,911 46,854 44,037
Total 26,953 35,039 120,733 123,331
Q4 2016 compared to Q4 2015
The Company’s total revenue for the current quarter was $27.0 million, a decrease of $8.0 million from the $35.0
million recognized during the same period last year. Product revenue decreased by $8.0 million. The decrease in
product revenue is consistent with a market that has seen certain major network equipment vendors who also
reported slowing product revenues from CSPs. For Sandvine, this was most pronounced in the Cable market where
product revenue and orders received decreased $5.1 million and $16.3 million respectively, in the current quarter
as compared to the fourth quarter of 2015. The Company believes this decline is the result of longer sales cycles
partially attributable to consolidation in the North American Cable market in 2016. The Company continues to
experience extended sales cycles with larger orders in other geographies.
The Company expects to continue to see significant quarterly fluctuations in the revenues generated from the
Company’s various access technology markets, sales regions and sales channels due to variability associated with
the timing of significant customer purchase decisions.
2016 compared to 2015
The Company’s total revenue for the year ended November 30, 2016 was $120.7 million, a decrease of $2.6 million
from the $123.3 million recognized during the same period last year. Product revenue decreased by $5.4 million
and service revenue increased $2.8 million compared to the prior year. The decrease in product revenue is consistent
with major network equipment vendors who also reported slowing product revenues from CSPs. For Sandvine,
this was most pronounced in the Cable market where product revenue and orders received decreased $3.9 million
and $21.0 million respectively, in the current year as compared to the prior year. In addition, the Company continues
to experience extended sales cycles with larger orders in other geographies.
Service revenue for the year ended November 30, 2016 was $46.9 million, an increase of $2.8 million compared
to the same period last year. Support and maintenance revenue increased $3.8 million as compared to the same
period last year primarily due net increases in the support and maintenance base as well as an increase in Arrears
Maintenance Revenue in the current year compared to the prior year. The decrease in professional services of $1.5
million is consistent with a decrease in professional services activity and lower profitability on certain projects
compared to the same period last year.
15
The Company expects to continue to see significant quarterly fluctuations in the revenues generated from the
Company’s various access technology markets, sales regions and sales channels due to variability associated with
the timing of significant customer purchase decisions.
Revenue by access technology
The Company evaluates its revenue based on customer access technology. In the case where revenue is generated
from a customer with converged network technology, revenue is allocated to the specific customer access technology
where the Company’s product and services are being deployed within the network. The breakdown of total revenue
generated by customer access technology is outlined in the following table.

2016 2015 2016 2015
% % % %
Fixed Cable 12.7 24.3 20.8 23.6

Fixed Telco * 20.7 26.2 27.5 30.8
Wireless ** 63.8 49.1 50.3 44.6
Other *** 2.8 0.4 1.4 1.0
Total 100.0 100.0 100.0 100.0
* Fixed Telco includes revenue generated from DSL and FTTx.

** Wireless includes revenue generated from mobile, fixed wireless and satellite.
*** The other category is primarily comprised of sales to partners (including resellers and solutions partners) who have purchased the
product for their own internal use e.g. for interoperability testing.
In previous MD&As, the Company included FTTx in the Wireless category.
In situations where a reseller or partner of the Company has purchased products for resale to an end customer, the
Company has allocated such revenue based on the access technology of the end customer.
Over the long-term, the Company expects the Wireless access technology to remain its largest market.
Revenue by sales channel
The breakdown of revenue by the direct and indirect sales channel is as follows:

2016 2015 2016 2015
% % % %
Direct 44.1 50.5 51.8 47.7
Indirect 55.9 49.5 48.2 52.3
Total 100.0 100.0 100.0 100.0
Revenue by geographic region
The Company evaluates its revenue performance based on four geographic regions. The proportion of total revenue
attributable to each is outlined in the following table. In situations where a reseller has purchased equipment for
resale to an end customer, the location of the end customer is used in allocating revenue.
16

2016 2015 2016 2015
% % % %
North America 25.6 29.5 32.8 33.3
Caribbean and Latin America (“CALA”) 18.2 23.0 17.5 17.5
Europe, Middle East and Africa (“EMEA”) 38.5 38.6 31.7 36.3
Asia Pacific 17.7 8.9 18.0 12.9
Total 100.0 100.0 100.0 100.0
Generally, revenues by geographic region will be impacted by the location of end customers.
Revenue derived from major customers
“Major customers” are customers who represent 10% or more of total revenues in a given period. Major customers
can also include resellers who may have sold to multiple end customers. Currently, the Company’s quarterly
revenues can be significantly impacted by the buying patterns of individual large customers, which will also impact
the Company’s revenue split by region, sales channel and/or access technology. The Company continues to expand
its customer base and the composition of the individual service providers or resellers who are Major customers in
any quarter often changes between quarters.
The following summarizes revenue from Major customers on a quarterly basis.

Three month period ended
November 30, August 31, May 31, February 29, November 30,
2016 2016 2016 2016 2015
% % % % %
Percentage of revenue
Major customers 13.0 — — 33.4 12.6
Other customers 87.0 100.0 100.0 66.6 87.4
Total 100.0 100.0 100.0 100.0 100.0
For the year ended November 31, 2016 there were no major customers (November 30, 2015 - none).
In situations where a Major customer is a reseller, the number of end customers that generated product revenue
through such reseller is highlighted for each of the applicable periods noted.
17

November 30, August 31, May 31, February 29, November 30,
2016 2016 2016 2016 2015
Major customers – resellers** 1 — — 1 —

# of end customers represented by the
above resellers 1 — — 2 —
Percentage of revenue 13.0% —% —% 11.2% —%

** It should be noted that the identity of resellers in the table above may not be the same from period to period.
Deferred revenue
The Company enters into complex arrangements that may involve meeting customer based specifications or
multiple deliverable revenue arrangements. This may result in the deferral of revenue if the Company has not
completed the customer based specification requirements, or has not established that the delivered elements of a
multiple deliverable revenue arrangement represent a separate unit(s) of accounting. Where the Company has sold
post contract support, the resulting revenue is deferred and recognized rateably over the service period, which is
typically one to three years. The Company does not recognize any revenue or deferred revenue related to initial
support and maintenance or support and maintenance renewals until evidence of such an arrangement exists or
cash in respect of such renewal is received.
The breakdown of deferred revenue is as follows:
November 30, August 31, November 30,

2016 2016 2015
$ $ $
In US$ thousands
Deferred revenue:
Service 18,800 19,654 15,354
Product 1,156 1,337 1,663
Total 19,956 20,991 17,017
Reported as:
Current 16,243 17,753 14,786
Non-current 3,713 3,238 2,231
Total 19,956 20,991 17,017
The Company’s characterization of deferred revenue between current and non-current is based on management’s
best estimate of when it expects to meet the criteria required to permit revenue recognition.
The increase in deferred service revenue as compared to November 30, 2015 primarily relates to net increases in
the support and maintenance base and increased deferred professional services revenue where the services have
not yet been performed.
18
Gross margin
The following table outlines the Company’s gross margin levels for the revenue categories indicated.
2016 2015 2016 2015
% % % %
Product 80.2 81.8 78.2 79.2

Service 72.4 76.1 72.3 75.2
Blended 76.7 79.9 75.9 77.8
The blended gross margin realized in the current quarter decreased 3.2% to 76.7% compared to 79.9% in the fourth
quarter of 2015. Product gross margin decreased by 1.6% to 80.2% compared to 81.8% in the fourth quarter of
2015. This decrease in product gross margin was primarily the result of a less favorable hardware product margins
in the current quarter as compared to the same period last year.
Service gross margin decreased 3.7% to 72.4% compared to 76.1% in the fourth quarter of 2015. This decrease
was primarily due to lower profitability on certain professional services projects compared to the same period last
year.
The Company continues to target a blended gross margin at or above 70%.
The blended gross margin realized for the year ended November 30, 2016 decreased 1.9% to 75.9% compared to
77.8% in the year ended November 30, 2015. Product gross margin decreased by 1.0% to 78.2% compared to
79.2% for the year ended November 30, 2015. This decrease was primarily the result of software being lower as
a proportion of total product revenue in the current period as compared to the same period last year, partially offset
by a more favorable hardware product margins.
Service gross margin decreased 2.9% to 72.3% compared to 75.2% for the year ended November 30, 2015. This
decrease was primarily due to lower profitability on certain professional services projects compared to the same
period last year.
The Company continues to target a blended gross margin at or above 70%.
19
Expenses
The following table provides analysis of the Company’s expenses and government assistance.

2016 2015 2016 2015
$ $ $ $
Revenue 26,953 35,039 120,733 123,331
Sales and marketing 8,915 10,325 37,585 36,863

% of revenue 33.1 % 29.4 % 31.1 % 29.9 %
Research and development 6,278 6,611 25,398 24,408

% of revenue 23.3 % 18.9 % 21.0 % 19.8 %
General and administrative 3,297 2,980 13,357 13,234

% of revenue 12.2 % 8.5 % 11.1 % 10.7 %
Other losses, net — 3 2 23

% of revenue —% —% —% —%
Total operating expenses before

government assistance1 18,490 19,919 76,342 74,528
% of revenue 68.6 % 56.8 % 63.2 % 60.4 %
Government assistance2 (864) (16,014) (2,574) (16,437)

% of revenue (3.2)% (45.7)% (2.1)% (13.3)%
Total operating expenses 17,626 3,905 73,768 58,091

% of revenue 65.4 % 11.1 % 61.1 % 47.1 %
1
The Company believes that total operating expenses before government assistance is an important measure as a
result of the variability in the nature and timing of government assistance and how government assistance programs
impact Sales and marketing, Research and development and General and administrative expenses in its
consolidated financial statements. This measure does not have a standardized meaning under IFRS and is unlikely
to be comparable to similarly titled measures reported by other issuers. The calculation of this item is summarized
above.
2
Government assistance can include SR&ED ITCs and other non-repayable government assistance. These amounts
are included within Sales and marketing, Research and development and General and administrative expenses in
the Company’s consolidated financial statements.
The following government assistance is included in Sales and marketing, Research and development and General
and administrative:
20

2016 2015 2016 2015
$ $ $ $
Government assistance
Sales and marketing (22) — (57) (3)
Research and development (842) (16,014) (2,517) (16,434)
Total government assistance in operating expenses (864) (16,014) (2,574) (16,437)
The following stock compensation, depreciation and amortization expenses are included in Cost of sales, Sales
and marketing, Research and development and General and administrative:

2016 2015 2016 2015
$ $ $ $
Stock compensation
Cost of sales 8 14 81 69
Sales and marketing 208 209 759 715
Research and development 157 107 677 545
General and administrative 200 173 756 721
Total stock compensation 573 503 2,273 2,050
Depreciation and amortization

Cost of sales 88 105 369 395
Sales and marketing 254 243 1,011 378
Research and development 1,007 946 3,733 2,953
General and administrative 373 406 1,528 1,734
Total depreciation and amortization 1,722 1,700 6,641 5,460
21
Sales and marketing expenses, excluding government assistance

November 30, November 30, Increase Increase
2016 2015 (decrease) (decrease)
$ $ $ %
Sales and marketing 8,915 10,325 (1,410) (13.7)%
The decrease in sales and marketing expense compared to the fourth quarter of 2015 is primarily related to decreased
personnel costs as a result of lower variable compensation given record high orders received in the fourth quarter
of 2015.
Twelve month period ended

$ $ $ %
Sales and marketing 37,585 36,863 722 2.0%
The increase in sales and marketing expense compared to the year ended November 30, 2015 is primarily related
to increased personnel costs (consistent with investments in sales and marketing that occurred later in 2015),
partially offset by favourable foreign exchange fluctuations.
22
Research and development expenses, excluding government assistance

$ $ $ %
Research and development 6,278 6,611 (333) (5.0)%
Research and development expense in the current quarter did not materially change as compared to the same period
last year.
.

$ $ $ %
Research and development 25,398 24,408 990 4.1%
The increase in research and development expense compared to the year ended November 30, 2015 is primarily
related to increased personnel costs and increased amortization related to the acquisitions of the acquired technology
from MoMac and Teclo, partially offset by favourable foreign exchange fluctuations.
23
General and administrative expenses, excluding government assistance

$ $ $ %
General and administrative 3,297 2,980 317 10.6%
The increase in general and administrative expenses compared to the fourth quarter of 2015 is primarily related to
increased professional fees related to patent infringement claims outlined in the Legal Proceedings section of this
MD&A, partially offset by decrease in several individually immaterial cost categories.

$ $ $ %
General and administrative 13,357 13,234 123 0.9%
The increase in administrative expenses for the current twelve months end November 30, 2016 is primarily related
to increased professional fees related to the patent infringement claims outlined in the Legal Proceedings section
of this MD&A, partially offset by decreases in several individually immaterial cost categories.
.
24
Government assistance

November 30, November 30, (Increase)
2016 2015 decrease
$ $ $
Jobs and Prosperity Fund (227) — (227)

ITCs and other non repayable assistance (637) (16,014) 15,377
(864) (16,014) 15,150
The decrease in ITCs and other non repayable assistance compared to the prior quarter is related to the Company
recognizing a deferred tax asset for SR&ED ITCs in the amount of $16.0 million by a reduction of research and
development expenses. This decrease was partially offset as the Company recorded non repayable assistance
associated with the Ontario Government's Jobs and Prosperity Fund (see Composition of Revenue and Expenses
Section of this MD&A for additional information), which began March 1, 2016.

November 30, November 30, (Increase)
2016 2015 decrease
$ $ $
Jobs and Prosperity Fund (760) — (760)

ITCs and other non repayable assistance (1,814) (16,437) 14,623
(2,574) (16,437) 13,863
The decrease in ITCs and other non repayable assistance compared to the year ended November 30, 2015 is related
to the Company recognizing a deferred tax asset for SR&ED ITCs in the amount of $16.0 million by a reduction
of research and development expenses. This decrease was partially offset as the the Company recorded non
repayable assistance associated with the Ontario Government's Jobs and Prosperity Fund (see Composition of
Revenue and Expenses Section of this MD&A for additional information), which began March 1, 2016.
25
Impact of foreign exchange on operating expenses
The Company has a significant percentage of its operating expenses denominated in currencies other than U.S.
dollars, including Canadian dollars, Euro and Indian rupees. Changes in foreign exchange rates can cause
fluctuations in the Company’s operating expenditures from period to period and are reflected in the individual
operating expense line item. Management of foreign exchange currency exposure is governed by the Company’s
foreign exchange policy as approved by its Board of Directors. The objective of the policy is to minimize the
earnings impact of foreign currency gains and losses associated with foreign exchange rate fluctuations. The
Company enters into forward contracts to reduce its exposure to fluctuations in foreign exchange rates related to
Canadian payroll and related expenditures and rent costs.
Fluctuations in foreign exchange rates between the current quarter of 2016 and the fourth quarter of 2015 resulted
in a decrease in Sales and marketing, Research and development and General and administrative expenses by
approximately $0.5, $0.3 million, and $0.1 million, respectively, or $0.9 million of operating expenses.
Fluctuations in foreign exchange rates between the year ended November 30, 2016 and the same period in 2015
resulted in a decrease in Sales and marketing, Research and development and General and administrative expenses
by approximately $1.6 million, $1.5 million, and $0.7 million, respectively, or $3.8 million of operating expenses.
Other income
In the first quarter of 2015, the Company sold its preferred share investment in a private company for consideration
of $3.1 million. Consequently, the Company has recorded a gain related to the disposition of its preferred share
investment of $2.8 million in Other income. Subsequent to February 28, 2015 the Company collected $2.6 million
with the balance collected August 29, 2016.
Provision for income taxes
During the fourth quarter of fiscal 2015, the Company determined that based on its historical financial results in
fiscal 2013, 2014 and 2015, the realization of certain deferred tax assets was probable and as a result recognized
previously unrecognized deferred tax assets of $19.7 million. As a result, the Company now records deferred
income tax expense each period the Company is profitable and therefore the provision for income taxes is not
comparable to prior period in fiscal 2015. The Company is entitled to non-refundable SR&ED ITCs for qualifying
research and development activities performed in Canada which can be applied against Federal and Provincial
income taxes payable.
The Company's combined tax provision for the fourth quarter of 2016 is 35.5% of its income before taxes. This is
higher than the expected Canadian tax rate of approximately 26% due to a non-recurring adjustments related to
prior quarters adjustments. The fourth quarter 2016 provision for income taxes is not comparable to the comparative
quarter in the prior year for the reason outlined above. The Company's current tax provision (which approximates
cash taxes) relates to minimum tax and income taxes owing by foreign subsidiaries. For the three months ended
November 30, 2016 the Company paid $0.3 million for income tax in cash (November 30, 2015 - $0.2 million).
26
In the current period, the company utilized $4.1 million in non-refundable SR&ED ITCs to reduce its taxes payable.
The Company also recorded non-refundable SR&ED ITCs in the amount of $1.7 million during the twelve months
ended November 30, 2016 resulting in a reduction of its research and development expenses. Excluding the
utilization of deductible temporary differences to offset current taxes otherwise owing, the Company’s current
provision for income taxes relates to minimum tax and income taxes owing by foreign subsidiaries. For the twelve
months ended November 30, 2016 the Company paid $1.7 million for income tax in cash (November 30, 2015 -
$1.6 million).
The Company's combined tax provision for the twelve months ended November 30, 2016 is 28% of its income
before taxes. This rate is reasonably consistent with the expected Canadian tax rate of approximately 26% - slightly
higher due to foreign rate impacts. The provision for income taxes for the twelve months ended November 30,
2016 is not comparable to the comparative period in the prior year for the reason outlined above.
LIQUIDITY AND CAPITAL
The Company has financed its operations and met its capital expenditure requirements primarily through the sale
of equity securities and through cash flows from operations.
November 30, November 30,

2016 2015
Key Balance Sheet Amounts and Ratios: US$ thousands, except balance sheet
ratios and metrics
Cash and short term investments 132,986 145,341

Working capital 141,032 164,910
Working capital ratio (:1) 5.0 5.7
Days sales outstanding in accounts receivable (days) 112 91
Pro forma days sales outstanding in accounts receivable (days) 97 73
Inventory turnover (times) 2.2 2.0
Pro forma inventory turnover (times) 2.7 2.3
The Company uses working capital, working capital ratio, days sales outstanding in accounts receivable, pro forma
days sales outstanding in accounts receivable, inventory turnover and pro forma inventory turnover as measures
to enhance comparisons between periods. Management believes that DSO and pro forma DSO to be important
indicators of the Company’s ability to convert trade receivables into cash. A lower DSO or pro forma DSO indicates
a more efficient cash collection process. Management believes that inventory turnover and pro forma inventory
turnover to be important indicators for how well the Company is managing inventory in relation to customer
demand. A higher level of inventory turnover or pro forma inventory reflects a more efficient use of our capital.
These terms do not have a standardized meaning under IFRS and are unlikely to be comparable to similarly titled
measures reported by other issuers. The calculation of each of these items is more fully described below.
Days sales outstanding (“DSO”) - The Company has calculated DSO based on the most recent three months
annualized revenue and the average of the beginning and ending accounts receivable balance for such three-month
period.
Pro forma days sales outstanding (“pro forma DSO”) - The Company has calculated pro forma DSO in the same
manner as DSO. However, the beginning and ending accounts receivable balances have been reduced for amounts
27
which are also included in the Company’s deferred revenue balance (November 30, 2016 - $5.7 million;
November 30, 2015 - $6.6 million).
Inventory turnover - The Company has calculated its inventory turnover using the annualized most recent three
months product cost of sales and the average of the beginning and ending inventory balance for such three month
period.
Pro forma inventory turnover - The Company has calculated its pro forma inventory turnover using the annualized
most recent three months product cost of sales and the average of the beginning and ending inventory balances
excluding demonstration inventory for such three month period (demonstration inventory: November 30, 2016 -
$0.8 million; November 30, 2015 - $1.2 million).
Cash and short term investments
Investments in cash equivalents and short term investments are governed by the Company’s investment policy
guidelines as approved by the Board of Directors. The policy stipulates that investments will at all times be based
on the requirements for safety, liquidity and yield in that order of importance.
The Company’s short-term investment portfolio of $118.1 million at November 30, 2016 included mutual funds
invested in money market instruments and high interest savings accounts with yields ranging from 0.30% to 1.05%.
At November 30, 2016, the Company’s cash and short term investments decreased by $12.3 million, to $133.0
million, compared to $145.3 million at November 30, 2015. The decrease is primarily due to $29.8 million used
for common share repurchases (see Share Capital section of this MD&A for additional information), $7.4 million
used for the payment of four quarterly dividends, $3.5 million used to acquire Teclo, $3.7 million used to purchase
the real estate and leases, including the building and land, where the Company's head office is located, $1.4 million
used to purchase shares under the Company’s share unit plan and $4.1 million used for purchasing of capital assets.
These uses of cash were partially offset by $36.2 million generated by operating activities.
Working capital
Working capital represents the Company’s current assets less its current liabilities. The Company’s working capital
balance decreased by $23.9 million to $141.0 million at November 30, 2016 from $164.9 million at the end of
fiscal 2015. The decrease is due to decreases in cash and short term investments (discussed above), accounts
28
receivable and inventory of $12.3 million, $8.1 million and $3.1 million, respectively as well as the increase in
deferred revenue of $1.5 million. The Company’s working capital ratio at November 30, 2016 (current assets
divided by its current liabilities) decreased to 5.0 compared to 5.7 at November 30, 2015.
The Company’s DSO increased to 112 days, compared to 91 days reported at the end of fiscal 2015. The Company’s
pro forma DSO was 97 days at November 30, 2016, compared to 73 days at the end of fiscal 2015. The increase
in the Company’s DSO and pro-forma DSO primarily is consistent with the decrease in product revenue in the
current quarter, moving to direct customer relationships, as well as an increase in past due balances as percentage
of total accounts receivable as at November 30, 2016 compared to the end of fiscal 2015. The increase in past due
balances primarily relates to a small number of customers for differing reasons including administrative challenges,
changing from an indirect to direct relationship, as well as certain resellers not paying within terms (some of which
has been subsequently collected). Of the past due balances at November 30, 2016, $4,378 has been subsequently
collected. No material past due amounts have been disputed or challenged by these customers and these customers
and the Company continues to conduct business with them on an ongoing basis. Accordingly, management has
no reason to believe that these balances are not fully collectible in the future. In addition, as the Company has
moved to a direct fulfillment relationship with some of its larger customers and is seeing increased focus on this
term during contract negotiations it is anticipated that the typical pro forma DSO will extend to 90-120 days.
The Company’s inventory turnover for the current quarter was 2.2 times per year, compared to 2.0 times per year
at the end of fiscal of 2015. The Company also assesses its inventory turnover on a pro forma basis, which excludes
demonstration inventory. The Company’s pro forma inventory turnover for the current quarter was 2.7 times per
year, compared to 2.3 times per year for the fourth quarter of 2015. The increase compared to the fourth quarter
of 2015 is the result of lower inventory levels as at November 30, 2016 primarily due to fewer orders received in
the current quarter as compared to a record high amount of orders received the same period last year, partially
offset by decreased product costs of sales as a result of decreased revenue in the current quarter.
Historically, the Company has carried relatively high levels of inventory as a result of variability in product mix,
the need to secure supply of long lead time parts and a strategic decision to maintain inventory levels that permit
the Company to minimize customer delivery times. The Company continues to leverage a manufacturing services
agreement to subcontract the manufacturing of some of its sub-assemblies reducing the levels of inventory on-
hand.
Cash flow

2016 2015 2016 2015
$ $ $ $
Cash inflows and (outflows) by activity:

Operating activities 2,318 (5,594) 35,919 13,258
Investing activities (3,039) 8,182 7,632 (8,631)
Financing activities (3,463) (6,622) (37,455) (9,783)
Net increase (decrease) in cash (4,184) (4,034) 6,096 (5,156)
29
Cash provided by operating activities
During the current quarter the Company generated $2.3 million of cash from operating activities, compared to
using cash of $5.6 million for the fourth quarter of 2015. During the current quarter, the Company had net income,
adjusted for items not affecting cash, of $4.2 million and used $1.6 million from changes in non-cash working
capital balances and used $0.3 million for income tax paid. During the fourth quarter of 2015, the Company had
net income, adjusted for items not affecting cash, of $9.7 million and used $15.0 million from changes in non-cash
working capital balances and used $0.2 million for income tax paid.
During the year ended November 30, 2016 the Company generated $35.9 million of cash from operating activities,
compared to generating cash of $13.3 million for the same period of 2015. During the year ended November 30,
2016 the Company had net income, adjusted for items not affecting cash, of $23.6 million and generated $14.0
million from changes in non-cash working capital balances and used $1.7 million for income tax paid. During the
year ended November 30, 2015, the Company had net income, adjusted for items not affecting cash, of $27.9
million and used $13.1 million from changes in non-cash working capital balances and used $1.6 million for income
tax paid.
Additions of capital and intangible software assets
Additions to capital and intangible software assets, including the acquisitions, were $1.4 million during the fourth
quarter of fiscal 2016, compared to $1.4 million for the same period last year. The current quarter’s acquisitions
are primarily related continued investment in hardware equipment to support the Company’s research and
development and IT infrastructure activities.
30
Liquidity and capital resource requirements
Given the items outlined above and the Company’s performance expectations, the Company believes that it has
sufficient working capital to fund its current operating and working capital requirements for at least twelve months.
Contractual obligations
The following table summarizes the Company’s contractual commitments; in thousands of dollars, as of November
30, 2016 and the effect those commitments are expected to have on liquidity and cash resources.
Less than Between Between Beyond

Contractual Obligations (US$ 000’s) Total 1 year 1-3 years 4-5 years 5 years
Operating leases 4,309 1,042 2,000 1,267 —

Purchase obligations 2,684 2,684 — — —
Other obligations (trade and other payables) 18,293 18,293 — — —
Total 25,286 22,019 2,000 1,267 —
Included within other obligations due within 1 year is $8.2 million related to the Company’s share repurchase
commitment under the automatic share purchase plan that is in place at year end (see Share Capital section of this
MD&A for additional information).
FINANCIAL INSTRUMENTS
The fair value of accounts receivable, other current assets, accounts payable and accrued liabilities approximates
their carrying value due to the immediate or short-term maturity of these financial instruments. At November 30,
2016, the Company had a significant concentration of credit risk with one customer representing 13.2% of the
Company's accounts receivable (November 30, 2015; one customer representing 13.6%).
Management of foreign exchange currency exposure is governed by the Company’s foreign exchange policy as
approved by its Board of Directors. The objective of the policy is to minimize the earnings impact of foreign
currency gains and losses associated with foreign exchange rate fluctuations. The Company enters into forward
contracts to reduce its exposure to fluctuations in foreign exchange rates. The following table summarizes the
Company’s commitments to buy and sell foreign currencies under foreign exchange contracts, all of which have
a maturity date of less than fifteen months, as at November 30, 2016:
Notional
Amount Weighted
Currency Currency Sold (in Average
Designation and maturity Sold Bought thousands) Rate
Foreign exchange contracts – Cash flow hedges,

maturing within one year USD CAD 18,310 1.320
Foreign exchange contracts – Cash flow hedges,
maturing between one year and fifteen months USD CAD 1,751 1.319
31
The cash flow hedges are measured at fair value with the effective portion of the change in fair value initially
recorded in other comprehensive income and reclassified to the consolidated statements of operations in the same
period that the hedged anticipated transaction affects earnings. As at November 30, 2016, the cash flow hedges
were assessed to be fully effective.
OUTSTANDING SHARE DATA
The Company has one class of shares consisting of an unlimited number of common shares. As of January 12,
2017, the Company has issued 133,038,948 common shares and 7,965,268 common share options under the
Company’s stock option plan (as further described in note 10 of its November 30, 2016 consolidated interim
financial statements).
SHARE CAPITAL
On November 3, 2016, the TSX approved the repurchase of the Company’s common shares through a NCIB (“2016
NCIB”). Under the 2016 NCIB the Company may purchase for cancellation up to 12.5 million common shares
(approximately) over a twelve month period. Transactions were executed from time to time in the open market in
accordance with the rules and policies of the TSX. Purchase and payment for the shares made by the Company
were made in accordance with the rules of the TSX and the price that the Company paid for any shares acquired
by it at the market price of the shares at the time of acquisition. The Company entered into an automatic share
purchase plan (the "Plan") with a broker in order to facilitate the repurchase of its Shares under the 2016 NCIB
which covers the period from November 7, 2016 to November 6, 2017. Under the Plan, Sandvine’s broker is able
to repurchase common shares under the 2016 NCIB. Purchases are made by Sandvine’s broker based upon the
parameters prescribed by the TSX and the terms of the Plan.
On October 7, 2015, the TSX approved the repurchase of the Company’s common shares through a NCIB (“2015
NCIB”). The 2015 NCIB permitted the Company to purchase for cancellation up to 13.6 million common shares
(approximately) over a twelve month period with transactions, purchases and payments to be in accordance and
consistent with those outlined above. The Company entered into an automatic share purchase plan with a broker
in order to facilitate the repurchase of its Shares under the 2015 NCIB which covered the period from October 13,
2015 to October 12, 2016.
During the year ended ended November 30, 2016, the Company repurchased 12,401,900 shares under the 2015
and 2016 NCIB's for a total cost of $29.8 million. The excess amount of $16.8 million paid for these shares,
relative to their weighted average carrying amount of $13.0 million, was charged to retained earnings. All common
shares repurchased by the Company have been cancelled. The Company has also recognized a share repurchase
commitment under this Plan of $8.2 million, representing the maximum number of shares that must be purchased
by the broker, if certain agreed share prices are achieved, from December 1, 2016 to January 13, 2017, which
represents the date the Company anticipates coming out of a “blackout” period, during which it is prohibited from
amending or cancelling the Plan.
The Company has implemented a share unit plan as part of its long term incentive compensation strategy. To satisfy
the Company’s potential obligations to deliver common shares to settle the share units issued under the plan, the
Company has arranged for a third party trustee to hold common shares that are purchased on the open market.
During the three month period ended November 30, 2016 the third party trustee purchased nil common shares on
the open market (November 30, 2015 – nil common shares). The cost of the purchase of the common shares held
in trust has reduced share capital. Excluded from the outstanding common shares of the Company as of
November 30, 2016 are 2,796,994 unvested common shares which are held by the trust (November 30, 2015 –
1,779,994).
32
SUBSEQUENT EVENTS
NCIB repurchases
During the period from December 1, 2016 to January 11, 2017, the Company repurchased 2,234,300 shares under
the 2016 NCIB for a total cost of $4.5 million.
Declaration of cash dividend
On January 11, 2017 the Company’s Board of Directors declared a quarterly dividend of $0.02 per common share
payable on February 13, 2017 to shareholders of record at the close of business on January 25, 2017.
The Company currently expects to continue paying comparable cash dividends on a quarterly basis. However,
future declarations of dividends are subject to the final determination of the Company’s Board of Directors, in its
discretion based on a number of factors that it deems relevant, including the Company’s financial position, results
of operations, available cash resources, cash requirements and alternative uses of cash that the Company’s Board
of Directors may conclude would be in the best interest of shareholders.
LEGAL PROCEEDINGS
From time to time, the Company may be involved in certain claims and litigation arising out of the ordinary course
and conduct of business. Management assesses such claims and, if considered likely to result in a loss and, when
the amount of the loss is quantifiable, provisions for loss are made, based on management’s assessment of the most
likely outcome. The Company does not provide for claims for which the outcome is not determinable or claims
where the amount of the loss cannot be reasonably estimated. Any settlements or awards under such claims are
provided for when reasonably determinable.
A patent infringement claim against the Company and its wholly owned subsidiary Sandvine Incorporated ULC
was filed on February 17, 2016 in the United States District Court of the Eastern District of Texas by Packet
Intelligence LLC. Damages have not been specified. In addition, a patent infringement claim against the Company
and its wholly owned subsidiary Sandvine Incorporated ULC, and Sandvine GmbH (Germany) was filed on July
7, 2016 in Regional Court of Mannheim, Germany. Damages have been specified at 0.7 million Euros.
The outcome of all the proceedings and claims against the Company, including the matters described above, are
subject to future resolution that includes the uncertainties of litigation. It is not possible for the Company to predict
the result or magnitude of the claims described above due to the various factors and uncertainties involved in the
legal process. If it becomes probable that the Company will be held liable for claims against the Company, the
Company will recognize a provision during the period in which the change in probability occurs, which could be
material to the Company’s consolidated statements of income or consolidated statements of financial position.
OFF BALANCE SHEET ARRANGEMENTS
The Company has entered into forward currency contracts (disclosed under “Financial Instruments” above), and
letters of credit (disclosed under note 20 of the November 30, 2016 unaudited consolidated interim financial
statements) which are considered “off-balance sheet” arrangements as that term is described in National Instrument
51-102F.
SIGNIFICANT ACCOUNTING POLICIES
The preparation of the consolidated financial statements in compliance with IFRS requires management to exercise
judgement in applying the Company’s accounting policies. The Company’s significant accounting policies are
33
discussed in note 2.2 of the Company’s audited consolidated financial statements for the year ended November
30, 2016.
SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATION UNCERTAINTIES
The preparation of consolidated financial statements in compliance with IFRS requires the use of certain critical
accounting estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses
and the disclosure of contingent assets and liabilities. It also requires management to exercise judgement in applying
the Company’s accounting policies. These estimates and assumptions are affected by management’s application
of accounting policies and historical experience, and are believed by management to be reasonable under the
circumstances. Such estimates and assumptions are evaluated on an ongoing basis and form the basis for making
judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual
results could differ significantly from these estimates. Revisions to accounting estimates are recognized in the
period in which the estimates are revised and in any future periods affected. The areas involving a higher degree
of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial
statements include:
Judgements
In the process of applying the Company’s accounting policies, management has made the following
judgements, which have the most significant effect on the amounts recognized in the consolidated financial
statements:
a) Revenue recognition
Revenue is derived primarily from the sales of product (including network equipment, embedded
software and application software) and services (including consulting services and support and
maintenance contracts for its network policy control solutions).
In recognizing revenue, the Company makes judgements about the probability of collection of the
revenue from the customer. Judgments are also applied in the determination of the amount of revenue
to allocate to individual elements in a multiple element arrangement, the determination of whether
deliverables constitute a separate unit of accounting, and as part of the assessment of the project
technical feasibility when assessing professional services arrangements.
b) Determination of functional currency
The Company has used judgement in determining the functional currency of each of its entities.
Functional currency is determined based on the currency in which an entity operates normally. The
factors the Company took into account in making its determination include both primary factors and
secondary factors, including the currency that influences sales prices, the currency that influences
labour material and other costs and the currency in which receipts are usually retained.
c) Income taxes
The ultimate realization of deferred tax assets is dependent upon future taxable income during the
years in which these assets are deductible. A deferred tax asset is recognized to the extent that it is
probable that the assets can be recovered based upon the probable timing and level of future taxable
income together with future tax planning strategies. The Company regularly assesses all negative and
positive evidence to evaluate the recoverability of its deferred tax assets including an evaluation of
the nature and the amount of significant tax assets and their carry-forward period, the Company’s
34
recent earnings history, forecasts of future earnings and the Company’s ability to reasonably forecast
sufficient future earnings.
The Company is subject to taxation in numerous jurisdictions. The Company participates in

transactions for which the ultimate tax treatment is uncertain. The Company may provide a provision
from time to time in respect of uncertain tax positions that it believes appropriately reflect its risk.
These provisions are made using the best estimate of the amount expected to be incurred based on an
assessment of all relevant factors. It is possible that at some future date, liabilities in excess of the
Company’s provisions could result from audits by, or litigation with, relevant taxing authorities. The
Company believes that such additional liabilities would not have a material adverse impact on its
financial condition taken as a whole.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described below. The Company based its assumptions and
estimates on parameters available when the consolidated financial statements were prepared. Existing
circumstances and assumptions about future developments, however, may change due to market changes
or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions
when they occur.
In recognizing revenue, the Company makes estimates and assumptions on factors such as the
determination of fair values of individual elements of an arrangement, and the methodology used to
determine estimated fair value of the individual units of accounting. The Company makes these
estimates and assumptions using past experience, taking into account any other current information
that may be relevant. These estimates and assumptions may differ from the actual outcome for a given
arrangement which could impact operating results in a future period.
Arrangement consideration in a multiple unit of accounting arrangement is allocated at contract

inception to all units of accounting based on their relative fair value. Multiple element arrangements
are recognized as the revenue for each unit of accounting is earned based on the relative fair value of
each unit of accounting. Fair values for support and maintenance and consulting services deliverables
are based on an analysis of historical transactions where the deliverable is sold separately. For network
equipment and application software, as these deliverables are generally not sold separately, fair values
are determined based on an assessment of discounts present in historical sales transactions, pricing
strategy and market conditions. Fair values are reassessed annually unless required by changes in
business practices or new product introductions. Any changes in fair values are accounted for on a
prospective basis.
b) Valuation of inventory
The Company’s policy for the valuation of inventory, including the determination of obsolete or excess
inventory, requires the estimate of future demand for the Company’s products. Inventory purchases
and purchase commitments are based upon forecasts of future demand. Management estimates the
likelihood that inventory carrying values will be affected by changes in market pricing or demand for
the products and by changes in technology or design which could make inventory on hand obsolete
or recoverable at less than the recorded value. The business environment in which the Company
operates is subject to long lead-time order requirements for certain components and rapid changes in
35
technology and customer demand. The Company performs a detailed assessment of inventory each
reporting period, which includes a review of, among other factors, anticipated demand requirements,
impact of changes in technology and design, sales trends, component part purchase commitments of
the Company and key suppliers, current inventory levels, and usage. If customer demand differs from
the Company’s forecasts, actual requirements for inventory write-offs could differ from the Company’s
estimates. If the Company determines that forecasted demand does not allow the Company to sell
inventories above cost or at all, such inventory is written down to net realizable value or is written
off. If the Company determines an inventory provision is required or inventory is written off, it would
impact the inventory balance and product cost of sales in the Consolidated Statement of Income.
c) Valuation of accounts receivable
The valuation of accounts receivable is based on management's best estimate of the provision for
doubtful accounts. During this review, historical experience, the age of the receivable balance, the
credit worthiness of the customer and the reason for delinquency are considered.
ACCOUNTING CHANGES AND IMPACT OF RECENTLY ISSUED ACCOUNTING

PRONOUNCEMENTS
Standards issued but not yet effective or amended up to the date of issuance of the Company’s consolidated interim
financial statements are listed below. This listing is of standards and interpretations issued, which the Company
reasonably expects to be applicable at a future date. The Company has not determined if they will early adopt any
standards at this time.
In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments which reflects all phases of the
financial instruments project and replaces IAS 39 Financial Instruments: Recognition and Measurement and all
previous versions of IFRS 9. The standard introduces new requirements for classification and measurement,
impairment, and hedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January 2018,
with early application permitted. Retrospective application is required, but comparative information is not
compulsory. The Company is evaluating the impact of adopting this new standard.
In May 2014, the IASB issued IFRS 15, Revenue from Contracts with Customers, which establishes a single
comprehensive model of accounting for revenue arising from contracts with customers that an entity will apply to
determine the measurement of revenue and timing of when it is recognized. IFRS 15 supersedes current revenue
recognition guidance, which is found currently across several standards and interpretations including IAS 11,
Construction Contracts and IAS 18, Revenue. The core principle of IFRS 15 is that an entity recognizes revenue
to depict the transfer of promised goods and services to customers in an amount that reflects the amount an entity
expects to be entitled in exchange for those goods and services. The new standard will also result in enhanced
disclosures about revenue that would result in an entity providing comprehensive information about the nature,
amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. This
amendment is applicable for annual periods beginning on January 1, 2018. The Company has not yet assessed the
impact of the adoption of this standard on its consolidated financial statements.
On January 13, 2016 the IASB issued IFRS 16, Leases. The new standard is effective for annual periods beginning
on or after January 1, 2019. Earlier application is permitted for entities that apply IFRS 15 at or before the date
of initial adoption of IFRS 16. IFRS 16 will replace IAS 17, Leases ("IAS 17"). This standard introduces a single
lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more
than 12 months, unless the underlying asset is of low value. A lessee is required to recognize a right-of-use asset
representing its right to use the underlying asset and a lease liability representing its obligation to make lease
payments. This standard substantially carries forward the lessor accounting requirements of IAS 17, while requiring
enhanced disclosures to be provided by lessors. Other areas of the lease accounting model have been impacted,
36
including the definition of a lease. Transitional provisions have been provided. The Company has not yet assessed
the impact of the adoption of this standard on its consolidated financial statements.
DISCLOSURE CONTROLS AND PROCEDURES
The Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) are responsible for
establishing and maintaining disclosure controls and procedures for the Company. As such, the Company maintains
a set of disclosure controls and procedures designed to ensure that information required to be disclosed in filings
is recorded, processed, summarized and reported within the time periods specified in the Canadian Securities
Administrators rules and forms. An evaluation of the design of and operating effectiveness of the Company’s
disclosure controls and procedures was conducted as of November 30, 2016 under the supervision of the CEO and
CFO as required by CSA Multilateral Instrument 52-109, Certification of Disclosure in Issuers’ Annual and Interim
Filings. The evaluation included documentation, review, enquiries and other procedures considered appropriate in
the circumstances. Based on that evaluation, the CEO and the CFO have concluded that such disclosure controls
and procedures are effective.
INTERNAL CONTROLS AND PROCEDURES
The CEO and CFO are responsible for establishing and maintaining adequate internal control over financial
reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in compliance with IFRS. The Company’s management, under the
supervision of the CEO and CFO have evaluated whether there were changes to the Company’s internal control
over financial reporting during the period ended November 30, 2015 that have materially affected, or are reasonably
likely to materially affect, its internal control over financial reporting. There were no material changes to the
Company’s internal controls during the fourth quarter of fiscal 2016.
Management, including the CEO and CFO, does not expect that the Company’s disclosure controls or internal
controls over financial reporting will prevent or detect all errors and all fraud or will be effective under all future
conditions. A control system is subject to inherent limitations and, no matter how well designed and operated, can
provide only reasonable, not absolute assurance that the control system objectives will be met.
The CEO and CFO have, using the criteria established in “Internal Control - Integrated Framework (2013)” issued
by the Sponsoring Organizations of the Treadway Commission, evaluated the design and operating effectiveness
of the Company’s internal controls over financial reporting and concluded that, as of November 30, 2016, and
subject to the inherent limitations described above, internal controls over financial reporting were effective to
provide reasonable assurance over the reliability of financial reporting and preparation of financial statements in
accordance with IFRS.
37
SELECTED CONSOLIDATED QUARTERLY FINANCIAL INFORMATION
The following table provides an analysis of the Company’s unaudited operating results for each of the quarters
ended on the date indicated:
Fiscal 2016 Three months ended Fiscal year to

(in thousands of US dollars) date
February 29, May 31, August 31, November 30, November 30,
2016 2016 2016 2016 2016
$ $ $ $ $
Revenue 34,158 33,538 26,084 26,953 120,733
Expenses 18,655 19,576 17,911 17,626 73,768
Net income 5,619 3,988 1,471 2,043 13,121
Basic earnings per share 0.039 0.028 0.011 0.015 0.095
Diluted earnings per share 0.038 0.028 0.010 0.015 0.092
Total assets 243,141 241,124 221,335 220,123 220,123

2015 2015 2015 2015 2015
$ $ $ $ $
Revenue 32,441 28,586 27,265 35,039 123,331
Expenses 17,195 18,124 18,867 3,905 58,091
Net income 10,164 2,985 2,951 25,178 41,278
Total assets 213,485 220,720 219,934 240,458 240,458

2014 2014 2014 2014 2014
$ $ $ $ $
Revenue 31,547 29,726 27,897 34,224 123,394
Expenses 16,929 17,870 15,009 15,631 65,439
Net income 7,481 4,389 3,055 8,058 22,983
Total assets 190,116 197,771 202,582 205,373 205,373
Historically, the Company‘s operating results have fluctuated on a quarterly basis and it is expected that quarterly
financial results will continue to fluctuate in the future. Fluctuations in results relate to the growth in the Company’s
revenue, the timing of revenue being recognized and sales to reseller customers, which may place large single
orders in any one quarter, and to the timing of staffing and infrastructure additions to support growth.
38
Sandvine Corporation
Consolidated Financial Statements
November 30, 2016
January 11, 2017
Independent Auditor’s Report
To the Shareholders of Sandvine Corporation
We have audited the accompanying consolidated financial statements of Sandvine Corporation and its subsidiaries,
which comprise the consolidated statements of financial position as at November 30, 2016 and November 30, 2015
and the consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for
the years then ended, and the related notes, which comprise a summary of significant accounting policies and other
explanatory information.
Management’s responsibility for the consolidated financial statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in
accordance with International Financial Reporting Standards, and for such internal control as management determines
is necessary to enable the preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted
our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks
of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the
consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for
our audit opinion.
PricewaterhouseCoopers LLP
95 King Street South, Suite 201, Waterloo, Ontario, Canada N2J 5A2
T: +1 519 570 5700, F: +1 519 570 5730
PwC refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of
Sandvine Corporation and its subsidiaries as at November 30, 2016 and November 30, 2015 and their financial
performance and their cash flows for the years then ended in accordance with International Financial Reporting
Standards.
Chartered Professional Accountants, Licensed Public Accountants
PricewaterhouseCoopers LLP
95 King Street South, Suite 201, Waterloo, Ontario, Canada N2J 5A2
T: +1 519 570 5700, F: +1 519 570 5730
PwC refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

Consolidated Statements of Financial Position
(in thousands of United States dollars, except share and per share data)
As at
2016 2015
$ $
Assets Notes
Current assets
Cash 14,922 8,826
Investments 118,064 136,515
Accounts receivable 3 33,829 41,939
Inventory 4 5,580 8,728
Other current assets 3,484 4,340
175,879 200,348
Non current assets
Plant and equipment 6 9,812 9,753
Intangible assets and goodwill 7 11,668 9,651
Deferred tax assets 17 18,679 20,706
Investment in associates 8 3,732 —
Other assets 353 —
44,244 40,110
220,123 240,458
Liabilities
Current liabilities
Trade and other payables 9 18,604 20,652
Deferred revenue 16,243 14,786
34,847 35,438
Non current liabilities
Deferred revenue 3,713 2,231
Other liabilities 5 1,188 —
Deferred tax liabilities 17 845 1,112
5,746 3,343
40,593 38,781
Shareholders’ equity
Share capital 10 125,944 139,084
Contributed surplus 17,961 16,577
Accumulated comprehensive loss 12 (231) (833)
Retained earnings 35,856 46,849
179,530 201,677
220,123 240,458
On behalf of the Board:
Roger Maggs Dave Caputo
See accompanying notes to the consolidated financial statements
Consolidated Statements of Income
For the year ended November 30
2016 2015
$ $
Revenue Notes
Product 73,879 79,294
Service 46,854 44,037
120,733 123,331
Cost of sales
Product 16,075 16,493
Service 12,990 10,943
29,065 27,436
Gross margin 91,668 95,895
Expenses
Sales and marketing 37,528 36,860
Research and development 16 22,881 7,974
General and administrative 13,357 13,234
Other losses, net 2 23
73,768 58,091
Income from operations 17,900 37,804
Finance income 467 358

Foreign exchange loss (165) (39)
Other income 22 — 2,778
302 3,097
Share of profit of equity accounted

investees, net of tax 8 72 —
Income before provision for income

taxes 18,274 40,901
Current and deferred provision

(recovery) for income taxes 17 5,153 (377)
Net income for the period 13,121 41,278
Earnings per share

Basic earnings per share 18 0.095 0.280
Diluted earnings per share 18 0.092 0.273

Consolidated Statements of Comprehensive Income
2016 2015
$ $
Net income for the year 13,121 41,278
Other comprehensive income (loss):

Items that may be reclassified to profit loss in
subsequent years:
Net unrealized loss on derivative financial
instruments designated as cash flow hedges (132) (2,466)
Amount transferred to net income for
derivatives designated as cash flow hedges 944 1,933
Income tax related to these items (note 17) (210) 290
Net other comprehensive income (loss) for items to be

reclassified to profit or loss in subsequent years, net
of tax 602 (243)
Other comprehensive income (loss) for the year, net of tax 602 (243)
Total comprehensive income for the year 13,723 41,035

Consolidated Statements of Changes in Shareholders’ Equity
Accumulated
other
Share Contributed Retained comprehensive
capital surplus earnings income (loss)1 Total
$ $ $ $ $
Notes
Balance, December 1, 2014 139,473 16,209 9,449 (590) 164,541
Net income — — 41,278 — 41,278

Other comprehensive loss — — — (243) (243)
Total comprehensive income 41,035
Stock based compensation 11 — 1,871 — — 1,871

Exercise of stock options 10,11 3,612 (1,484) — — 2,128
Employee share purchase plan and
share unit plan 10,11 (3,442) (19) — — (3,461)
Repurchased and cancelled 10 (3,823) — (3,878) — (7,701)
Share repurchase commitment 10 1,464 — — — 1,464
Tax benefit of previously incurred
share issuance costs 17 1,800 — — — 1,800
Balance, November 30, 2015 139,084 16,577 46,849 (833) 201,677
Net income — — 13,121 — 13,121

Other comprehensive income — — — 602 602
Total comprehensive income 13,723
Stock based compensation 11 — 2,124 — — 2,124

Exercise of stock options 10,11 1,785 (740) — — 1,045
Employee share purchase plan and
share unit plan 10,11 (1,234) — — — (1,234)
Repurchased and cancelled 10 (13,001) — (16,762) — (29,763)
Share repurchase commitment 10 (690) — — — (690)
Dividends paid 10 — — (7,352) — (7,352)
Balance, November 30, 2016 125,944 17,961 35,856 (231) 179,530

1
Accumulated other comprehensive income (loss) is attributable to unrealized gains (losses) on derivative financial
instruments designated as cash flow hedges.

Consolidated Statements of Cash Flows
2016 2015
$ $
Cash provided by (used in) Notes
Operating activities
Net income for the period 13,121 41,278
Items not affecting cash
Amortization of intangible assets 7 2,654 1,501
Depreciation of plant and equipment 6 3,987 3,958
Unrealized foreign exchange loss (gains) 259 (214)
Gain on sale of investment 22 — (2,778)
Stock-based compensation 11 2,273 2,050
Deferred recovery (provision) for income taxes 17 (623) (1,644)
Investment tax credit (increase) decrease 17 2,354 (16,000)
Share of profit of equity accounted investees, net of tax 8 (72) —
Other (73) (32)
23,880 28,119
Changes in non-cash working capital balances 19 13,964 (13,112)
Income tax paid 19 (1,666) (1,563)
36,178 13,444
Investing activities
Purchase of plant, equipment and intangible software assets (4,121) (5,860)
Purchase of short term investments (549) (16,887)
Proceeds from sale of short term investments 19,000 17,500
Proceeds from sale of investment 22 462 2,827
Acquisition of business 5 (3,500) (6,211)
Investment in associates 8 (3,660) —
7,632 (8,631)
Financing activities
Proceeds from the issuance of shares under the employee stock
option plan 10 1,045 2,128
Common share repurchase 10 (29,763) (8,100)
Common shares purchased under the share unit plan 10 (1,385) (3,475)
Dividends paid 10 (7,352) —
Repayment of acquired bank loan — (336)
(37,455) (9,783)
Effect of foreign exchange on cash (259) (186)
Net increase (decrease) in cash during year 6,096 (5,156)
Cash– Beginning of year 8,826 13,982
Cash– End of year 14,922 8,826
Notes to the Consolidated Financial Statements
November 30, 2016
Index to notes to the consolidated interim financial statements

1. Corporate information........................................................................................................................................... 1
2. Significant accounting policies ............................................................................................................................. 1
2.1 Basis of presentation ................................................................................................................................... 1
2.2 Summary of significant accounting policies ............................................................................................... 1
2.3 Significant accounting judgements and estimation uncertainties ............................................................... 9
2.4 Future changes in accounting policies ........................................................................................................ 11
3. Accounts receivable .............................................................................................................................................. 12
4. Inventory ............................................................................................................................................................... 12
5. Business acquisitions ............................................................................................................................................ 13
6. Plant and equipment.............................................................................................................................................. 17
7. Intangible assets and goodwill .............................................................................................................................. 18
8. Investment in associate ......................................................................................................................................... 19
9. Trade and other payables....................................................................................................................................... 19
10. Share capital .......................................................................................................................................................... 20
11. Stock based compensation .................................................................................................................................... 23
12. Accumulated other comprehensive loss................................................................................................................ 26
13. Expenses by nature................................................................................................................................................ 27
14. Personnel expenses................................................................................................................................................ 27
15. Government grants ................................................................................................................................................ 28
16. Research and development.................................................................................................................................... 28
17. Income taxes.......................................................................................................................................................... 29
18. Earnings per share ................................................................................................................................................. 32
19. Supplemental cash flow information .................................................................................................................... 32
20. Financial instruments ............................................................................................................................................ 33
20.1 Categories of financial assets and liabilities ............................................................................................. 33
20.2 Fair value................................................................................................................................................... 33
20.3 Risks arising from financial instruments and risk management ............................................................... 34
21. Capital management.............................................................................................................................................. 38
22. Other income......................................................................................................................................................... 38
23. Segment disclosures .............................................................................................................................................. 39
24. Related parties....................................................................................................................................................... 40
25. Credit facility ........................................................................................................................................................ 41
26. Commitments and contingencies .......................................................................................................................... 42
27. Legal claim contingency ....................................................................................................................................... 42
28. Subsequent events ................................................................................................................................................. 43
November 30, 2016
1 Corporate information
Sandvine Corporation and its subsidiary companies (collectively “the Company” or “Sandvine”) develops and markets Network
Policy Control solutions for communications service providers. The Company’s solutions help service providers better understand
their networks and apply specific network policies that will improve the quality of service for their subscribers, support the
creation of new revenue-generating services, mitigate malicious traffic, more efficiently manage network traffic and notify
subscribers of important information.
Sandvine Corporation is incorporated under the Business Corporations Act (Ontario), domiciled in Canada, with its registered
head office at 408 Albert Street, Waterloo, Ontario, Canada N2L 3V3. The Company’s common shares are listed on the Toronto
Stock Exchange (“TSX”) under the symbol SVC.
These consolidated financial statements were approved by the Company’s board of directors on January 11, 2017.
2 Significant accounting policies
2.1 Basis of presentation
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
(“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
These consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation
of available for sale financial assets, and financial assets and liabilities (including certain derivative instruments) at fair value
through profit and loss or other comprehensive income.
2.2 Summary of significant accounting policies
a) Basis of consolidation
The consolidated financial statements include the accounts of Sandvine Corporation and each of the companies over which the
Company has control. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity.
A Special Purpose Entity (“SPE”) is consolidated if, based on an evaluation of the substance of its relationship with the Company
and its exposure to variable returns of the SPE, the Company concludes that it controls the SPE. The Company has trust vehicles
to facilitate its employee share ownership program and its share unit plan. These trusts have been consolidated by the Company
as it has concluded that it in substance controls the trusts through its design and sponsorship of the trusts as well as its exposure
to variability in gains and losses of the trusts.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and
continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for
the same reporting period as the Company, using consistent accounting policies. All intercompany transactions and balances
have been eliminated.
The Company also owns a 49% equity interest in WTC1 Inc. and WTC2 Inc., created to purchase the real estate and leases,
including the buildings and land, where the Company's head office is located and have accounted for such using the equity
method as it has concluded that its ownership interest and other facts do not provide control or joint control over the investee
but rather significant influence.
1
November 30, 2016
b) Investment in associates
An associate is an entity over which the Company has significant influence. The Company has significant influence when it
has the power to participate in the financial and operating policy decisions of the investee but does not have control or joint
control. The Company accounts for its investment in associates using the equity method. Under the equity method, the investment
is initially recognized at cost. Subsequent to initial recognition, the consolidated financial statements include the Company’s
share of the earnings and losses of the associate until the date significant influence ceases. Distributions received from an
associate reduce the carrying amount of the investment. The consolidated statements of comprehensive income include the
Company’s share of any amounts recognized by associates in other comprehensive income. Intercompany balances between
the Company and its associates are not eliminated.
c) Business combinations and goodwill
The Company measures goodwill as the fair value of the consideration transferred including the recognized amount of any non-
controlling interest in the acquiree, less the net recognized amount (generally fair value) of the identifiable assets acquired and
liabilities assumed, all measured as of the acquisition date. The determination of fair values for the acquired intangible assets
involves the use of discounted cash flow analyses. Transaction costs, other than those associated with the issue of debt or equity
securities, that the Company incurs in connection with a business combination are expensed as incurred.
The allocation of the purchase price to the net assets acquired should be adjusted to reflect new information obtained about facts
and circumstances that exist at the acquisition date up to a maximum of 12 months following the date of acquisition. Changes
to the allocation of the purchase price during this measurement period are recognized retrospectively. Goodwill is not amortized
but is tested for impairment annually in the second quarter of the fiscal year, or more frequently if events or changes in
circumstances indicate the asset might be impaired. Based on the Company’s review, goodwill is allocated fully to the Network
Policy Control solutions cash-generating unit (“CGU”) which is also a reportable segment.
d) Foreign currency
Functional currency
Items included in the financial statements of each of the Company’s subsidiaries are measured using the currency of the primary
economic environment in which the entity operates (the “functional currency”). The consolidated financial statements have been
presented in United States dollars, which is also the Company's and its subsidiaries functional currency.
Foreign currency transactions and balances
Foreign currency transactions are translated into the functional currency of the relevant Company entity using the exchange rates
prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date
are translated into the functional currency at the exchange rate at that date. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation of period-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognized in the consolidated statement of income. For cash flow hedges which meet
the criteria for hedge accounting, the effective portion of the change in fair value of the derivative is initially recorded in other
comprehensive income and is reclassified to the consolidated statements of income in the same period that the hedged anticipated
transaction affects earnings. The ineffective portion of the gain or loss on the hedging instrument is recognized immediately in
the consolidated statement of income.
2
November 30, 2016
e) Short term investments
Short term investments include mutual funds invested in money market instruments and interest bearing securities with original
maturities of greater than three months and remaining maturities of less than one year. All short term investments are classified
as available-for-sale financial assets. Related interest income is included in Finance income on the consolidated statement of
income.
f) Financial instruments
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the
instrument. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been
transferred and the Company has transferred substantially all risks and rewards of ownership.
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when the
Company has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the
liability simultaneously.
The Company classifies financial assets into the following categories: financial assets at fair value through profit or loss, loans
and receivables and available-for-sale financial assets.
Financial assets at fair value through profit or loss
A financial asset is classified at fair value through profit or loss if it is acquired principally for the purpose of selling in the short-
term, it is a derivative not designated for hedge accounting, or is designated as such upon initial recognition. Transaction costs
are recognized in profit or loss as incurred. Financial assets at fair value through profit or loss are measured at fair value, and
changes are recognized in profit or loss. Financial assets designated at fair value through profit or loss consist of forward exchange
contracts unless they are designated as hedges.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such
assets are recognized initially at fair value plus any direct attributable transaction costs. Subsequent to initial recognition, loans
and receivables are measured at amortized cost using the effective interest method, less any impairment losses. Loans and
receivables consist of cash, accounts receivable and other current assets.
Available-for-sale financial assets
Available-for-sale financial assets are those that are either designated in this category or not classified in any other category. The
Company’s short term investments are classified as available-for-sale financial assets. Available-for-sale financial assets are
initially recognized at fair value plus transaction costs. Subsequent to initial recognition, they are measured at fair value with
gains or losses arising from changes in fair value being recognized in other comprehensive income in the period in which they
arise. When an investment is derecognized, the gain or loss accumulated in Accumulated Other Comprehensive Income is
reclassified to profit or loss.
Financial liabilities at amortized cost
Financial liabilities at amortized cost include trade and other payables and other non current liabilities. Accounts payables and
accrued liabilities are initially recognized at the amount required to be paid less, when material, a discount to reduce the payable
to fair value. Subsequently, accounts payable and accrued liabilities are measured at amortized cost using the effective interest
3
November 30, 2016
rate method. Financial liabilities at amortized cost are classified as current liabilities if the payment is due within 12 months.
Otherwise they are presented as non-current liabilities.
Derivative financial instruments
The Company may enter into forward contracts to reduce its exposure to fluctuations in foreign exchange rates. The Company
does not use any derivative financial instrument for speculative purposes. The Company has elected to apply hedge accounting
for certain forward foreign exchange contracts used to manage foreign currency exposure on anticipated operational expenditures
and has designated these as cash flow hedges.
The effective portion of the change in fair value of the derivative is initially recorded in other comprehensive income and is
reclassified to the consolidated statements of income in the same period that the hedged anticipated transaction affects earnings.
Any ineffective portion of the gain or loss on the derivative is recognized in income immediately. Hedge accounting is discontinued
prospectively when it is determined that the hedging relationship is no longer effective, the derivative is terminated or sold, or
the Company terminates its designation of the hedging relationship. When a forecasted transaction is no longer expected to occur,
the cumulative gain or loss that was reported in other comprehensive income is immediately transferred to the income statement.
The Company formally documents all relationships between the hedging instruments and hedged items. This process includes
linking all derivatives to forecasted foreign currency cash flows or to a specific asset or liability. The Company also formally
documents and assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative financial instruments that
are used in the hedging transactions are highly effective in offsetting the changes in the fair value or cash flows of the hedged
items.
The fair value of these derivatives is included in Other current assets when in an asset position and in Trade and other payables
when in a liability position. Gains or losses arising from hedging activities are reported in the same caption on the consolidated
statements of income as the hedged item.
Impairment of Financial Assets
A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is
objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred
after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows that can
be measured reliably.
Short term investments
The Company assesses declines in the value of individual short term investments to determine if there is objective evidence that
impairment has occurred. The Company makes this assessment by considering available objective evidence, including changes
in general market conditions, specific industry and individual company data, the length of time and the extent to which the fair
value has been less than cost, the financial condition and the near-term prospects of the individual investment. A significant or
prolonged decline in the fair value of the security below its cost is also evidence that the assets are impaired. In the event that
an investment is considered to be impaired, a charge is recorded and included in Finance costs. If in a subsequent period, the
fair value of a short term investment classified as available-for-sale increases and the increase can be objectively related to an
event occurring after the impairment loss was recognized in profit or loss, the impairment loss is reversed through the consolidated
statement of income.
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November 30, 2016
The Company considers the evidence of impairment for loans and receivables at a specific asset level. The loss is the difference
between the amortized cost of the loan or receivable and the present value of the estimated future cash flows, discounted using
the instrument’s original effective interest rate. The carrying amount of the asset is reduced by this amount either directly or
indirectly through the use of an allowance account.
g) Inventory
Raw materials, work-in-process, finished goods, deferred cost of sales and demonstration systems are stated at the lower of cost
and net realizable value. Net realizable value is the estimated selling price less applicable selling costs and estimated costs of
completion. The cost of raw materials is determined using the weighted average cost method. The cost of work in progress,
finished goods, deferred cost of sales and demonstration systems are assigned by specific identification of their individual costs.
Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present
location and condition. The allocation of fixed production overheads is based on the normal production capacity of the production
facilities. In establishing any provision for inventory, management estimates the likelihood that inventory carrying values will
be affected by changes in market demand, technology and design, which would impair the value of inventory on hand. Any
provision is recognized immediately as an expense in cost of sales and is subsequently reversed if indications exist that previously
recognized impairment losses no longer exist or have decreased.
h) Income taxes
The Company follows the liability method of tax allocation to account for income taxes. Under this method, deferred tax assets
and liabilities are determined based upon the difference between the financial reporting and tax basis of assets and liabilities,
and measured using the substantively enacted tax rates and laws that will be in effect when the differences are expected to reverse.
A deferred tax asset is recognized to the extent that it is probable that the assets can be recovered. However, a deferred tax is
not recognized if it arises from the initial recognition of goodwill or initial recognition of an asset or liability in a transaction
other than a business combination that, at the time of the transaction, affects neither accounting, nor taxable profit or loss. The
Company does not provide for deferred income taxes on temporary differences arising on investments in subsidiaries where the
timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference
will not reverse in the foreseeable future. Income tax is recognized in the statement of income except to the extent that it relates
to items recognized directly in other comprehensive income or equity, in which case the income tax is also recognized directly
in other comprehensive income or equity, respectively.
i) Plant and equipment
Plant and equipment are recorded at cost less accumulated depreciation and any recognized impairment losses. Cost includes
expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of
materials and direct labour and any other costs directly attributable to bringing the assets to a working condition for their intended
use. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when
it is probable that future economic benefits are present and the cost of the item can be measured reliably. Gains and losses on
disposal of an item of plant and equipment are determined by comparing the proceeds from disposal with the carrying amount
of the asset disposed, and is recognized in Other losses (gains), net.
5
November 30, 2016
Depreciation is provided using the following rates and methods:
Lab equipment 30- 50% diminishing balance

Computer hardware 2-7 years straight line
Furniture and fixtures 7-10 years straight line
Leasehold improvements Straight-line basis lesser of 10 years or over
relevant lease term
Depreciation methods, useful lives and residual values are reviewed at least annually and adjusted if appropriate.
j) Intangible assets
Intangible assets are comprised of computer software, as well as certain identified intangible assets acquired through the
Company’s business acquisitions such as non-patented technology with finite lives and customer contracts.
Computer software is recorded at cost less accumulated amortization and any recognized impairment losses. Directly attributable
costs, that are capitalized as part of computer software include development costs to bring the asset to its intended use. Computer
software assets are amortized on a straight line basis over three to seven years. Acquired non-patented technology and customer
contracts are initially recorded at fair value based on the estimated net present value of future cash flow streams associated with
these intangible assets. Acquired non-patented technology assets are amortized on a straight line basis over their estimated useful
life of five years and customer contracts are amortized on a straight line basis over two years.
Amortization method and useful lives are reviewed at least annually and adjusted if appropriate.
k) Research and development
The Company is engaged in research and development activities. Expenditures on research activities, undertaken with the
prospect of gaining new scientific or technical knowledge and understanding, are recognized in profit or loss as incurred.
Development costs are recognized in profit or loss as incurred, unless the costs can be measured reliably, the product or process
is technically feasible, future economic benefits are probable and the Company intends to and has sufficient resources to complete
the development and to use or sell the asset. To date, no development costs have met the criteria for deferral. The Company
recognizes the benefits of utilizing non-refundable investment tax credits (“SR&ED ITCs”) by recording a reduction in its
research and development expenses. The associated ITC receivable has been included in the deferred tax asset balance on the
statement of financial position.
l) Impairment of long-lived assets
The carrying amounts of the Company’s long-lived non financial assets are reviewed at each reporting date to determine whether
there is any indication of impairment. If any indication of impairment exists, then the asset’s recoverable amount is estimated.
For the purpose of measuring recoverable amounts, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows (cash-generating units or CGU’s). The recoverable amount is the higher of an asset’s fair value less
costs to sell and value in use (being the present value of the expected future cash flows of the relevant asset or CGU). An
impairment loss is recognized for the amount by which the asset’s (or CGU’s) carrying amount exceeds its recoverable amount.
6
November 30, 2016
m) Revenue recognition
Revenue is derived primarily from the sales of product (including network equipment, embedded software and application
software) and services (including consulting services and support and maintenance contracts for its products). The Company
also derives revenue from selling cloud-based, customer engagement services to mobile operators.
The Company recognizes revenue at the fair value of the consideration received or receivable when it is probable that the economic
benefits will flow to the Company, delivery has occurred, the amount of the revenue and costs incurred or to be incurred can be
measured reliably, and collectability is probable. Generally, where final acceptance of the product, system, or solution is specified
by the customer, revenue is deferred until all acceptance criteria have been met unless the Company can reliably demonstrate
its ability to meet the customer specified acceptance criteria. The Company typically does not provide for a right of return to
its customers.
Revenue for network equipment is generally recognized when the product is shipped and all other revenue recognition criteria,
as described above, have been satisfied. Revenue from perpetually licensed software is recognized at the inception of the license
term if all other revenue recognition criteria, as described above, have been satisfied. Revenue from selling cloud-based, customer
engagement services is recognized over the term of the service contract. Support and maintenance revenue is deferred and
recognized rateably over the period during which the services are to be performed, which is typically one year. Revenue from
consulting services is recognized as services are delivered, for time and material contracts, and using the percentage of completion
method for fixed price contracts. The Company estimates the percentage of completion on contracts with fixed fees using labour
costs incurred as a percentage of total estimated labour costs to complete the consulting service. If there is a significant uncertainty
about the project completion, receipt of payment or required effort, revenue is only recognized to the extent of contract costs
likely to be recovered. Once the uncertainty is resolved, revenue will be recognized using the percentage of completion method
described above. If circumstances arise that may change the estimates of revenues, costs or extent of progress toward completion,
estimates are revised. These revisions may result in increases or decreases in estimated revenues or remaining costs to complete
and are reflected in income in the period in which the circumstances that gave rise to the revision become known to the Company.
When total cost estimates exceed estimated revenues, the Company will accrue for the estimated losses immediately.
Revenue recognition for arrangements with multiple units of accounting
The Company enters into revenue arrangements that may consist of multiple deliverables of network equipment, application
software, consulting services and support and maintenance. Typically the Company’s network equipment and application software
are delivered together with support and maintenance being provided over subsequent reporting periods. In arrangements including
consulting services, these services are generally concluded in a subsequent reporting period.
Each deliverable within a multiple deliverable revenue arrangement is accounted for as a separate unit of accounting if both of
the following criteria are met: (1) the delivered item has value to the customer on a stand-alone basis, and (2) if the arrangement
includes a general right of return relative to the delivered element, delivery or performance of the undelivered item is considered
probable and substantially in the control of the Company. The Company’s customers typically purchase a combination of network
equipment and at least one application software license. The combination of network equipment and a single application software
license will generally form one unit of accounting when a specific order includes both elements. However, as both the network
equipment and application software licenses are typically delivered concurrently, this assessment will generally not impact the
timing of revenue recognition. In addition, if consulting services are considered to be critical to the functionality of the delivered
product in a specific revenue arrangement, the product revenue and the related consulting services are considered to be one unit
of accounting.
Arrangement consideration in a multiple unit of accounting arrangement is allocated to all units of accounting based on their
relative fair value.
7
November 30, 2016
n) Cost of sales
Cost of product revenues includes costs of inventory and the costs related to shipping and handling as well as direct costs
associated with selling cloud-based, customer engagement services. Cost of service revenues includes direct labour and related
additional direct and indirect expenditures.
o) Earnings (loss) per share
Basic earnings (loss) per share is computed by dividing net earnings (loss) by the weighted average number of common shares.
Diluted earnings (loss) per share represents the amount of earnings available or loss attributable to each common share and each
potential common share, if dilutive, outstanding during the year and is calculated using the treasury stock method.
p) Stock-based compensation plans
The Company has stock-based compensation plans, which are described in note 10. Stock based payment awards are accounted
for using the fair value method of accounting, whereby the Company recognizes compensation expense equal to the fair value
of the award expected to vest over its vesting period. Each tranche of an award is considered a separate award with its own
vesting period and grant date fair value. The fair value of awards is determined using the Black-Scholes option pricing model.
Volatility assumptions used in the option pricing model are based on historical averages. The number of awards expected to vest
is reviewed at least annually, with any impact being recognized immediately. On the exercise of stock options, the consideration
paid and any related compensation expense recorded through contributed surplus, is credited to share capital.
The Company has an employee share ownership program which allows employees to voluntarily participate in a share purchase
plan. Under the terms of the plan, the employees can contribute up to a specified percentage of their salary. Subject to certain
conditions the Company will match a percentage of the employee’s contributions. All contributions are used by the plan’s trustee
to purchase common shares in the open market. The Company’s contributions are recognized over the vesting period for the
underlying shares on a straight line basis.
The Company has a share unit plan (“SU plan”) that permits the issuance of both restricted share units (“RSUs”) and performance
share units (“PSUs”). PSUs based on the Company’s relative shareholder return as compared to a peer index are measured using
a lattice-binomial pricing approach which incorporates the risk free rate, dividend yield, historical volatility of the Company and
peer index and correlation between the stock price return of the Company and the peer index. Other PSUs entitle participants to
receive up to one common share of the Company for each share unit granted if certain performance criteria and vesting conditions
are achieved. RSUs and all other PSUs are measured based on the VWAP of the Company’s common stock for the five consecutive
trading days prior to the day of the grant. The number of awards expected to meet the service requirements is reviewed at least
annually, with any impact being recognized immediately. RSUs are measured at fair value based on the average volume weighted
average price (“VWAP”) of the Company’s common stock for the five consecutive trading days prior to the day of the grant. It
is the Company’s intention to settle vested share units (“SUs”) with the participant, after provision for the payment of the
participant’s minimum statutory withholding tax requirements, by way of disbursement of common shares acquired through an
open market purchase by a share purchase trust. As such, the Company accounts for SU compensation expense using the equity
settlement method. The Company recognizes compensation expense equal to the fair value of the SU awards expected to meet
service requirements over the corresponding service vesting period.
q) Government assistance
Government assistance towards research and development expenditures received in the form of investment tax credits on account
of eligible expenditures is recorded when there is reasonable assurance that the Company will comply with the conditions attached
to the investment tax credits and the investment tax credit will be received. Investment tax credits are credited against related
expenses as incurred. The Company also recognizes the benefits of utilizing SR&ED ITCs by recording a reduction in its research
8
November 30, 2016
and development expenses. The associated ITC receivable has been included in the deferred tax asset balance on the statement
of financial position.
The Company is participating in another government program which was non-repayable government assistance (fully described
in note 15). Assistance related to non repayable programs is recorded when there is reasonable assurance that the contribution
will be received and all conditions will be complied with. Assistance is presented as a reduction of the related expense or capital
asset.
r) Lease payments
Payments made under operating leases are recognized in profit or loss on a straight-line basis over the term of the lease. Lease
incentives received are recognized as an integral part of the total lease expense, over the term of the lease.
s) Segment reporting
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and
incur expenses. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker. The chief operating decision maker, who is responsible for allocating resources to and assessing performance
of operating segments, has been identified as the chief executive officer.
2.3 Significant accounting judgements and estimation uncertainties
The preparation of consolidated financial statements in compliance with IFRS requires the use of certain critical accounting
estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of
contingent assets and liabilities. It also requires management to exercise judgement in applying the Company’s accounting
policies. These estimates and assumptions are affected by management’s application of accounting policies and historical
experience, and are believed by management to be reasonable under the circumstances. Such estimates and assumptions are
evaluated on an ongoing basis and form the basis for making judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results could differ significantly from these estimates. Revisions to accounting
estimates are recognized in the period in which the estimates are revised and in any future periods affected.
Judgements
In the process of applying the Company’s accounting policies, management has made the following judgements, which have the
most significant effect on the amounts recognized in the consolidated financial statements:
Revenue is derived primarily from the sales of product (including network equipment, embedded software and application
software) and services (including consulting services and support and maintenance contracts for its network policy control
solutions).
9
November 30, 2016
In recognizing revenue, the Company makes judgements about the probability of collection of the revenue from the customer.
Judgments are also applied in the determination of the amount of revenue to allocate to individual elements in a multiple
element arrangement, the determination of whether deliverables constitute a separate unit of accounting, and as part of the
assessment of the project technical feasibility when assessing professional services arrangements.
b) Determination of functional currency
The Company has used judgement in determining the functional currency of each of its entities. Functional currency is
determined based on the currency in which an entity operates normally. The factors the Company took into account in
making its determination include both primary factors and secondary factors, including the currency that influences sales
prices, the currency that influences labour material and other costs and the currency in which receipts are usually retained.
c) Income taxes
The ultimate realization of deferred tax assets is dependent upon future taxable income during the years in which these
assets are deductible. A deferred tax asset is recognized to the extent that it is probable that the assets can be recovered
based upon the probable timing and level of future taxable income together with future tax planning strategies. The Company
regularly assesses all negative and positive evidence to evaluate the recoverability of its deferred tax assets including an
evaluation of the nature and the amount of significant tax assets and their carry-forward period, the Company’s recent
earnings history, forecasts of future earnings and the Company’s ability to reasonably forecast sufficient future earnings.
The Company is subject to taxation in numerous jurisdictions. The Company participates in transactions for which the
ultimate tax treatment is uncertain. The Company may provide a provision from time to time in respect of uncertain tax
positions that it believes appropriately reflect its risk. These provisions are made using the best estimate of the amount
expected to be incurred based on an assessment of all relevant factors. It is possible that at some future date, liabilities in
excess of the Company’s provisions could result from audits by, or litigation with, relevant taxing authorities. The Company
believes that such additional liabilities would not have a material adverse impact on its financial condition taken as a whole.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year,
are described below. The Company based its assumptions and estimates on parameters available when the consolidated financial
statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to
market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions
when they occur.
a. Revenue recognition
In recognizing revenue, the Company makes estimates and assumptions on factors such as the determination of fair values
of individual elements of an arrangement, and the methodology used to determine estimated fair value of the individual
units of accounting. The Company makes these estimates and assumptions using past experience, taking into account any
other current information that may be relevant. These estimates and assumptions may differ from the actual outcome for a
given arrangement which could impact operating results in a future period.
Arrangement consideration in a multiple unit of accounting arrangement is allocated at contract inception to all units of
accounting based on their relative fair value. Multiple element arrangements are recognized as the revenue for each unit
of accounting is earned based on the relative fair value of each unit of accounting. Fair values for support and maintenance
and consulting services deliverables are based on an analysis of historical transactions where the deliverable is sold
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November 30, 2016
separately. For network equipment and application software, as these deliverables are generally not sold separately, fair
values are determined based on an assessment of discounts present in historical sales transactions, pricing strategy and
market conditions. Fair values are reassessed annually unless required by changes in business practices or new product
introductions. Any changes in fair values are accounted for on a prospective basis.
b. Valuation of inventory
The Company’s policy for the valuation of inventory, including the determination of obsolete or excess inventory, requires
the estimate of future demand for the Company’s products. Inventory purchases and purchase commitments are based
upon forecasts of future demand. Management estimates the likelihood that inventory carrying values will be affected by
changes in market pricing or demand for the products and by changes in technology or design which could make inventory
on hand obsolete or recoverable at less than the recorded value. The business environment in which the Company operates
is subject to long lead-time order requirements for certain components and rapid changes in technology and customer
demand. The Company performs a detailed assessment of inventory each reporting period, which includes a review of,
among other factors, anticipated demand requirements, impact of changes in technology and design, sales trends, component
part purchase commitments of the Company and key suppliers, current inventory levels, and usage. If customer demand
differs from the Company’s forecasts, actual requirements for inventory write-offs could differ from the Company’s
estimates. If the Company determines that forecasted demand does not allow the Company to sell inventories above cost
or at all, such inventory is written down to net realizable value or is written off. If the Company determines an inventory
provision is required or inventory is written off, it would impact the inventory balance and product cost of sales in the
Consolidated Statement of Income.
c. Valuation of accounts receivable
The valuation of accounts receivable is based on management's best estimate of the provision for doubtful accounts. During
this review, historical experience, the age of the receivable balance, the credit worthiness of the customer and the reason
for delinquency are considered.
2.4 Future changes in accounting policies
Standards issued but not yet effective or amended up to the date of issuance of the Company’s consolidated interim financial
statements are listed below. This listing is of standards and interpretations issued, which the Company reasonably expects to be
applicable at a future date. The Company has not determined if they will early adopt any standards at this time.
In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments which reflects all phases of the financial
instruments project and replaces IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS
9. The standard introduces new requirements for classification and measurement, impairment, and hedge accounting. IFRS 9 is
effective for annual periods beginning on or after 1 January 2018, with early application permitted. Retrospective application
is required, but comparative information is not compulsory. The Company is evaluating the impact of adopting this new standard.
In May 2014, the IASB issued IFRS 15, Revenue from Contracts with Customers, which establishes a single comprehensive
model of accounting for revenue arising from contracts with customers that an entity will apply to determine the measurement
of revenue and timing of when it is recognized. IFRS 15 supersedes current revenue recognition guidance, which is found
currently across several standards and interpretations including IAS 11, Construction Contracts and IAS 18, Revenue. The core
principle of IFRS 15 is that an entity recognizes revenue to depict the transfer of promised goods and services to customers in
an amount that reflects the amount an entity expects to be entitled in exchange for those goods and services. The new standard
will also result in enhanced disclosures about revenue that would result in an entity providing comprehensive information about
the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. This
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November 30, 2016
amendment is applicable for annual periods beginning on January 1, 2018. The Company has not yet assessed the impact of the
adoption of this standard on its consolidated financial statements.
On January 13, 2016 the IASB issued IFRS 16, Leases. The new standard is effective for annual periods beginning on or after
January 1, 2019. Earlier application is permitted for entities that apply IFRS 15 at or before the date of initial adoption of IFRS
16. IFRS 16 will replace IAS 17, Leases ("IAS 17"). This standard introduces a single lessee accounting model and requires
a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of
low value. A lessee is required to recognize a right-of-use asset representing its right to use the underlying asset and a lease
liability representing its obligation to make lease payments. This standard substantially carries forward the lessor accounting
requirements of IAS 17, while requiring enhanced disclosures to be provided by lessors. Other areas of the lease accounting
model have been impacted, including the definition of a lease. Transitional provisions have been provided. The Company has
not yet assessed the impact of the adoption of this standard on its consolidated financial statements.
3 Accounts receivable
Accounts receivable include the following:

2016 2015
$ $
Trade receivables 33,559 41,577

Allowance for doubtful accounts (251) (98)
Service revenue in excess of billings 521 460
33,829 41,939
The Company’s exposure to credit and currency risks related to accounts receivable is disclosed in note 20.
4 Inventory
Inventory includes the following:

2016 2015
$ $
Raw materials 1,905 4,378

Work-in-process 2,035 3,001
Finished goods 853 293
Demonstration systems 787 1,034
Deferred cost of sales — 22
5,580 8,728
During the year ended November 30, 2016, the amount of inventory recognized as an expense and included in product cost of
sales was $14,980 (2015 - $16,089). During the year ended November 30, 2016, the Company recognized an inventory write
down of $273 relating primarily to inventory volumes in excess of forecast for particular subcomponents (2015 - $786). The
Company reversed previously recognized write downs of $nil (2015 - $nil).
12
November 30, 2016
5 Business acquisitions
5.1 Teclo Networks AG
On March 24, 2016 the Company acquired certain assets of Teclo Networks AG (“Teclo”). Teclo was a Switzerland-based
company that offered Transmission Control Protocol (TCP) Acceleration solutions to mobile operators, including satellite
technologies. The acquisition will enhance Sandvine’s portfolio of products for its communications service provider customers.
Specifically, Teclo’s products will work with Sandvine to enhance the quality of experience for mobile Internet subscribers,
such that subscribers can see increases in TCP traffic throughput and meaningful decreases in latency, including for encrypted
traffic.
The acquisition involved the purchase of Teclo's non-patented technology along with the transfer of certain Teclo employees.
The acquisition has been accounted for as a business combination under the acquisition method. The results of operations of
the Teclo business since the date of acquisition have been consolidated.
a) Consideration transferred
Total consideration transferred by the Company was $4,712: consisting of a payment of $3,500 at the closing date and $1,212
in contingent consideration. There is a contingent payment of up to $1,750 subject to achievement of certain revenue targets.
At the time of acquisition, the Company estimated the fair value at $1,212 based on the Company's estimated amount of payment
with the estimated range of contingent consideration to be between $762 and $1,662. The non current portion of this contingent
payment of $1,188 has been presented within Other liabilities. The contingent consideration that becomes payable will be paid
annually in February following each fiscal year through November 30, 2018. Subsequent to initial measurement, contingent
consideration changes in fair value are recognized in profit or loss.
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November 30, 2016
b) Identifiable assets acquired and liabilities assumed
The fair values of the assets acquired and liabilities assumed in the acquisition are as follows:
Assets
Accounts receivable 196
Non-patented technology 2,026
Total identifiable net assets at fair value 2,222
Goodwill arising on acquisition 2,490

Purchase price 4,712
Analysis of cash flows on acquisition

Purchase price (4,712)
Less contingent consideration payable 1,212
Total cash paid on acquisition (3,500)
The determination and measurement of fair value of the identified intangible assets are based on management’s best estimates
and assumptions and utilizes established methodologies. Estimates in valuing the identified intangible assets and contingent
consideration include future expected cash flows and discount rates applied to future expected cash flows based on a weighted
average probability of possible outcomes.
c) Other items
During the three months ended May 31, 2016, the Company incurred acquisition and related costs of $78 and have been recorded
within General and administrative expenses. Revenue included in the consolidated statement of income since the acquisition
date for the year ended November 30, 2016 related to the acquisition was $484. The loss before provision for income taxes
included in the consolidated statement of income, including amortization expense related to the acquired intangible assets of
$270 was $299.
The primary factors that contributed to a residual purchase price resulting in the recognition of goodwill is primarily the expected
synergies and other benefits from combining the assets and activities of Teclo with those of the Company. The goodwill is
deductible for tax purposes.
5.2 MoMac B.V.
On July 31, 2015, the acquisition date, the Company acquired 100% of the voting shares of MoMac B.V. (“MoMac”). The
acquisition was made to enhance Sandvine’s portfolio of products for its communications service provider customers.
Specifically, MoMac’s products will work with Sandvine to enhance its customer engagement capabilities, such that subscribers
are presented with the most relevant message, offer or alert at the right time, on any screen, such that they can take immediate
action.
14
November 30, 2016
The acquisition involved the purchase of 100% of the issued and outstanding shares of MoMac B.V. (and its wholly owned
subsidiaries) between MoMac Wireless Holdings B.V. and Sandvine resulting in the purchase of certain assets and obligations,
which included MoMac’s customer and supplier contracts, non-patented technology, tangible assets and associated liabilities,
along with the transfer of MoMac employees. The acquisition has been accounted for as a business combination under the
acquisition method. The results of operations of the MoMac business since the date of acquisition have been consolidated.
a) Consideration transferred
Total consideration paid by the Company was €6,095 ($6,690 USD) which included €306 ($336 USD) paid to settle an
outstanding bank loan. In addition, €859 ($943 USD) was paid subsequent to the acquisition to settle certain assumed liabilities.
b) Identifiable assets acquired and liabilities assumed
The fair values of the assets acquired and liabilities assumed in the acquisition are as follows:
€ $
Assets
Cash 130 143
Plant and equipment 171 188
Accounts receivable 798 876
Identified intangible assets
Non-patented technology 2,780 3,051
Customer contracts 1,701 1,867
Deferred tax asset 800 878
6,380 7,003
Liabilities
Trade and other payables 1,899 2,084
Bank loan 306 336
Deferred tax liability 1,120 1,230
3,325 3,650
Total identifiable net assets at fair value 3,055 3,353
Goodwill arising on acquisition 2,734 3,001

Purchase price 5,789 6,354
Analysis of cash flows on acquisition

Purchase price (5,789) (6,354)
Net cash acquired 130 143
Net cash flow on acquisition of business (5,659) (6,211)
Cash paid to repay acquired bank loan (306) (336)
Total cash paid on acquisition (5,965) (6,547)
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November 30, 2016
The determination and measurement of fair value of the identified intangible assets are based on management’s best estimates
and assumptions and utilizes established methodologies. Estimates in valuing the identified intangible assets include future
expected cash flows and discount rates applied to future expected cash flows.
c) Other items
During the year ended November 30, 2015, the Company incurred acquisition and related costs of $172 and have been recorded
within General and administrative expenses. Revenue included in the consolidated statement of income since the acquisition
date for the year ended November 30, 2015 related to the acquisition was $981. The loss before provision for income taxes
included in the consolidated statement of income, including amortization expense related to the acquired intangible assets of
$470, since the acquisition date for the year ended November 30, 2015 was $828.
The primary factors that contributed to a residual purchase price resulting in the recognition of goodwill include MoMac’s
assembled workforce and the expected synergies and other benefits from combining the assets and activities of MoMac with
those of the Company. The goodwill is not deductible for tax purposes.
16
November 30, 2016
6 Plant and equipment
Lab Computer Furniture and Leasehold

Equipment Hardware Fixtures Improvements Total
Cost
At December 1, 2014 24,087 13,730 1,778 2,288 41,883

Additions 2,872 1,661 21 6 4,560
Additions through business
acquisition (note 5.2b) 95 93 — — 188
Disposals (148) (54) — — (202)
At November 30, 2015 26,906 15,430 1,799 2,294 46,429
Additions 2,811 1,107 76 96 4,090

Disposals (30) (25) — — (55)
At November 30, 2016 29,687 16,512 1,875 2,390 50,464
Accumulated Depreciation
At December 1, 2014 (18,668) (11,243) (1,281) (1,636) (32,828)

Depreciation (2,451) (1,286) (146) (74) (3,957)
Disposals 109 — — — 109
At November 30, 2015 (21,010) (12,529) (1,427) (1,710) (36,676)
Depreciation (2,392) (1,349) (113) (133) (3,987)

Disposals 6 5 — — 11
At November 30, 2016 (23,396) (13,873) (1,540) (1,843) (40,652)
Net Book Value

December 1, 2014 5,419 2,487 497 652 9,055
November 30, 2015 5,896 2,901 372 584 9,753
November 30, 2016 6,291 2,639 335 547 9,812
Depreciation expense of $369 (2015 - $395) has been charged to cost of sales, $147 (2015 - $123) to sales and marketing expenses,
$2,747 (2015 - $2,661) to research and development expenses, and $724 (2015 - $779) to general and administrative expenses
for the year ended November 30, 2016.
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November 30, 2016
7 Intangible assets and goodwill
Computer Acquired Customer

Software Technology Contracts Goodwill Total
Cost
At December 1, 2014 10,115 3,722 — — 13,837
Additions 364 — — — 364
acquisition (note 5.2b) — 3,051 1,867 3,001 7,919
Disposals (30) — — — (30)
At November 30, 2015 10,449 6,773 1,867 3,001 22,090
Additions 155 — — — 155

acquisition (note 5.1b) — 2,026 — 2,490 4,516
At November 30, 2016 10,604 8,799 1,867 5,491 26,761
Accumulated Amortization
At December 1, 2014 (7,222) (3,722) — — (10,944)

Amortization (1,031) (203) (267) — (1,501)
Disposals 6 — — — 6
At November 30, 2015 (8,247) (3,925) (267) — (12,439)
Amortization (964) (890) (800) — (2,654)

At November 30, 2016 (9,211) (4,815) (1,067) — (15,093)
Net Book Value

December 1, 2014 2,893 — — — 2,893
November 30, 2015 2,202 2,848 1,600 3,001 9,651
November 30, 2016 1,393 3,984 800 5,491 11,668
Amortization expense of $864 (2015 - $255) has been charged to sales and marketing, $986 (2015 - $292) to research and
development, and $804 (2015 - $954) to general and administrative.
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November 30, 2016
8 Investment in associates
On September 19, 2016, the Company acquired a 49% interest in WTC1 Inc. and WTC2 Inc., created to purchase the real estate
and leases, including the buildings and land, where the Company’s head office is located in Waterloo, Ontario. The acquisition
of the 49% interest in WTC1 Inc. and WTC2 Inc. was completed for cash consideration of $4,802 CAD ($3,660 USD).
The following table provides the summarized financial information of the associates as at November 30, 2016:
Current assets 1,121

Non current assets 23,444
Cash (included in current assets) 898
Current liabilities 340

Mortgage payable (non current liabilities) 16,350
Current financial liabilities (included in current liabilities) 365
Revenue 697
Profit from continuing operations and comprehensive income 146
Company’s share of profit for the period 72
Mortgage payable balance of $16,350 is a five year fixed rate mortgage maturing on October 1, 2012 with an an annual interest
rate of 3.67%, secured by the buildings and land.
9 Trade and other payables
Trade and other payables is comprised of the following:

2016 2015
$ $
Trade payables 1,946 1,926

Accrued payroll and related compensation 4,536 5,693
Supplier accruals 357 881
Foreign currency forward contracts 311 1,123
Share repurchase commitment (note 8b) 8,178 7,488
Income taxes payable 373 688
Other 2,903 2,853
18,604 20,652
The Company’s exposure to currency and liquidity risk related to trade and other payables is disclosed in note 20.
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November 30, 2016
10 Share capital and shareholders’ equity

Share capital continuity consists of the following:
Employee share ownership
Outstanding program – shares held in SU plan –
common shares trust * shares held in trust * Net common shares
# $ # $ # $ # $
Balance, December 1, 2014 148,935,809 142,545 (58,513) (216) (834,994) (2,856) 148,042,302 139,473
Issued under the employee stock option plan 1,614,737 2,128 — — — — 1,614,737 2,128
Transfer from contributed surplus — 1,484 — — — — — 1,484
Repurchased and cancelled (3,718,300) (3,823) — — — — (3,718,300) (3,823)
Share repurchase commitment — 1,464 — — — — — 1,464
Purchased and held in trust — — (67,738) (177) (1,397,000) (3,475) (1,464,738) (3,652)
Vested shares released from trust — — 66,649 210 — — 66,649 210
Tax benefit of previously incurred share
issuance costs (note 17) — 1,800 — — — 1,800
Balance, November 30, 2015 146,832,246 145,598 (59,602) (183) (2,231,994) (6,331) 144,540,650 139,084
Issued under the employee stock option plan 839,616 1,045 — — — — 839,616 1,045
Transfer from contributed surplus — 740 — — — — — 740
Repurchased and canceled (12,401,900) (13,001) — — — — (12,401,900) (13,001)
Share repurchase commitment — (690) — — — — — (690)
Purchased and held in trust — — (92,661) (200) (565,000) (1,204) (657,661) (1,404)
Vested shares released from trust — — 68,681 170 — — 68,681 170
Balance, November 30, 2016 135,269,962 133,692 (83,582) (213) (2,796,994) (7,535) 132,389,386 125,944
*
The Company has trust vehicles to facilitate its employee share ownership program and share unit plan. These trusts have been consolidated by the Company as it has
concluded that it in substance controls the trusts through their design and sponsorship as well as its exposure to variability in gains and losses of the trusts.
The Company has authorized an unlimited number of common shares.
20
November 30, 2016
a) Stock option, employee share ownership plan and share unit plan
During the year ended November 30, 2016, the Company issued 839,616 common shares for cash proceeds of $1,045, as a
result of option holders exercising their options (November 30, 2015 – 1,614,737 common shares for $2,128).
The Company has a trust vehicle to facilitate its employee share ownership plan and hold shares of the Company allocated to
individual employees. This trust has been consolidated by the Company. Excluded from the outstanding common shares of
the Company as of November 30, 2016 are 83,582 unvested common shares which are held by the trust (November 30, 2015
– 59,602).
To satisfy the Company’s obligations to deliver common shares to settle upon vesting SUs issued, the Company has arranged
for a third party trustee to hold common shares which were purchased on the open market. During the year ended November 30,
2016, the third party trustee purchased 565,000 common shares on the open market for $1,385 (November 30, 2015 – 1,397,000
common shares for $3,475). The purchases are net of $181 representing the excess tax benefit of shares held in trust and
recognized against Share capital. The cost of the purchase of the common shares held in trust has reduced share capital.
Excluded from the outstanding common shares of the Company as of November 30, 2016 are 2,796,994 unvested common
shares which are held by the trust (November 30, 2015 – 2,231,994).
b) Normal course issuer bid
On November 3, 2016, the TSX approved the repurchase of the Company’s common shares through a NCIB (“2016 NCIB”).
Under the 2016 NCIB the Company may purchase for cancellation up to 12.5 million common shares (approximately) over
a twelve month period. Transactions were executed from time to time in the open market in accordance with the rules and
policies of the TSX. Purchase and payment for the shares made by the Company were made in accordance with the rules of
the TSX and the price that the Company paid for any shares acquired by it at the market price of the shares at the time of
acquisition. The Company entered into an automatic share purchase plan (the "Plan") with a broker in order to facilitate the
repurchase of its Shares under the 2016 NCIB which covers the period from November 7, 2016 to November 6, 2017. Under
the Plan, Sandvine’s broker is able to repurchase common shares under the 2016 NCIB. Purchases are made by Sandvine’s
broker based upon the parameters prescribed by the TSX and the terms of the Plan.
On October 7, 2015, the TSX approved the repurchase of the Company’s common shares through a NCIB (“2015 NCIB”).
The 2015 NCIB permitted the Company to purchase for cancellation up to 13.6 million common shares (approximately) over
a twelve month period with transactions, purchases and payments to be in accordance and consistent with those outlined above.
The Company entered into an automatic share purchase plan with a broker in order to facilitate the repurchase of its Shares
under the 2015 NCIB which covered the period from October 13, 2015 to October 12, 2016. As of September 7, 2016, the
Company had purchased and cancelled the limit of 13.6 million common shares under the 2015 NCIB.
During the year ended ended November 30, 2016, the Company repurchased 12,401,900 shares under the 2015 and 2016
NCIB’s for a total cost of $29,763. The excess amount of $16,762 paid for these shares, relative to their weighted average
carrying amount of $13,001, was charged to retained earnings. All common shares repurchased by the Company have been
cancelled. The Company has also recognized a share repurchase commitment under this Plan of $8,178, representing the
maximum number of shares that must be purchased by the broker, if certain agreed share prices are achieved, from December
1, 2016 to January 13, 2017, which represents the date the Company anticipates coming out of a “blackout” period, during
which it is prohibited from amending or cancelling the Plan.
21
November 30, 2016
During the year ended ended November 30, 2015, the Company repurchased 3,718,300 shares under the 2014 and 2015 NCIB's
for a total cost of $7,701. The excess amount of $3,878 paid for these shares, relative to their weighted average carrying
amount of $3,823, was charged to retained earnings during the year ended ended November 30, 2015.
c) Cash dividends
On October 5, 2016 the Company’s Board of Directors declared a quarterly dividend of $0.0175 CAD per common share, in
the aggregate amount of $2,325 CAD ($1,633 USD) paid on November 8, 2016 to shareholders of record at the close of
business on October 20, 2016. A summary of the dividend activity for the year ended November 30, 2016 is presented below:
Amount per
common Aggregate Aggregate
Declaration date Date of Record Date Paid share CAD paid CAD paid USD
$ $ $
January 6, 2016 January 20, 2016 February 8, 2016 0.0175 2,558 1,827
April 6, 2016 April 20, 2016 May 8, 2016 0.0175 2,523 2,010
July 6, 2016 July 20, 2016 August 8, 2016 0.0175 2,457 1,882
October 5, 2016 October 20, 2016 November 8, 2016 0.0175 2,325 1,633
9,863 7,352
22
November 30, 2016
11 Stock based compensation
a) Stock option plan
The Company has adopted a stock option plan for employees and directors. Options granted typically vest over a 5 year term.
All options have a contractual life of 7 or 10 years and allow for the purchase of one common share per option. The exercise
price of the options is the volume weighted average share price of the Company’s common shares for the five days prior to the
date of grant. As at November 30, 2016, there were 5,593,410 options available for future grants under the stock option plan.
A summary of the stock option activity is presented below:
Options
Weighted
average
price
Number CAD $
Options outstanding, December 1, 2014 9,586,471 1.96

Option activity for the year
Granted 685,473 3.36
Forfeited (384,266) 2.89
Exercised (1,614,737) 1.64
Options outstanding, November 30, 2015 8,272,941 2.10
Option activity for the year
Granted 838,733 2.97
Forfeited (303,448) 3.58
Exercised (839,616) 1.65
Options outstanding, November 30, 2016 7,968,610 2.18
b) Stock based compensation
Stock based compensation (related to the Company’s stock option plan) recognized for the year ended November 30, 2016 was
$909 with a corresponding credit to contributed surplus (November 30, 2015 - $1,099). Previously recognized compensation
expense of $740 relating to options exercised during the year ended November 30, 2016 has been transferred from contributed
surplus to share capital (November 30, 2015 - $1,484).
23
November 30, 2016
2016 2015
Number of options granted 838,733 685,473
Weighted average Black-Scholes

value of each option (CAD $) $ 1.17 $ 1.57
Assumptions
Risk free interest rate 0.71% 0.80%
Expected life in years 5.58 5.56
Expected dividend yield 2.33% 0.00%
Volatility 51.36% 52.18%
The following table summarizes information regarding stock options outstanding at November 30, 2016:
Options Outstanding Options Exercisable
Weighted Weighted Weighted

Range of average average average
exercise price Number contractual life exercise price Number exercise price
CAD$ outstanding (years) CAD$ outstanding CAD$
0.79 - 0.82 282,578 2.14 0.79 282,578 0.79

1.03 - 2.57 5,430,738 2.54 1.70 4,227,319 1.69
2.70 - 4.91 2,126,294 4.92 3.33 552,571 3.81
6.59 - 6.95 129,000 0.70 6.72 129,000 6.72
0.79 - 6.95 7,968,610 3.14 2.18 5,191,468 1.99
c) Share unit plan
The Company has a share unit (SU) plan that allows for the granting of both restricted share units (RSUs) and performance
share units (PSUs). PSUs entitle participants to receive common shares of the Company if certain performance and vesting
criteria are achieved. The performance criteria are based on the Company’s relative shareholder return as compared to a peer
index or other performance criteria set by the Board of Directors from time to time. RSUs granted entitle participants to receive
one common share of the Company for each share unit granted if certain vesting conditions are achieved. SUs granted and
outstanding attract dividend equivalent SUs based upon the VWAP of the Company’s common stock for the five consecutive
trading days prior to the record date equal to the product of the cash dividend paid and the number of SUs granted and
outstanding as of the record date.
24
November 30, 2016
PSUs based on the Company’s relative shareholder return as compared to a peer index are measured using a lattice-binomial
pricing approach which incorporates the risk free rate, dividend yield, historical volatility of the Company and peer index and
correlation between the stock price return of the Company and the peer index. Expected volatility is based on historical volatility
of the Company’s common stock and other factors. RSUs and all other PSUs are measured based on the VWAP of the Company’s
common stock for the five consecutive trading days prior to the day of the grant. A summary of the SU activity is presented
below:
SUs
# of PSUs1 # of RSUs
SUs outstanding, December 1, 2014 302,172 111,150
Share unit activity for the year

Granted 516,168 387,024
Forfeited — (23,913)
SUs outstanding, November 30, 2015 818,340 474,261
Share unit activity for the year

Granted 326,412 236,211
Dividend equivalents 25,846 14,113
Forfeited (81,039) (60,102)
SUs outstanding, November 30, 2016 1,089,559 664,483
Weighted average fair value CAD $ 3.16 3.31

Weighted average remaining contractual life (years) 1.27 1.68
1
As at November 30, 2016, the PSUs outstanding includes 81,519 units that entitle participants to receive one common share
of the Company for each share unit granted if certain performance criteria and vesting conditions are achieved (November 30,
2015 – 159,370). The remaining PSUs entitle participants to receive up to two common shares of the Company for each share
unit granted if certain performance criteria and vesting conditions are achieved.
25
November 30, 2016
A summary of the SU grant assumptions is presented below:
2016 2015
Number of SUs granted 562,623 903,192
Assumptions
Share spot price (CAD $) $ 3.35 $ 3.01
VWAP (CAD $) $ 3.30 $ 3.07
Risk free interest rate 0.66% 1.18%
Expected dividend yield 2.18% 0.00%
Volatility 44.67% 56.00%
Stock based compensation (related to the Company’s share unit plan) recognized for the year ended November 30, 2016 was
$1,216 with a corresponding credit to contributed surplus (November 30, 2015 - $771).
12 Accumulated other comprehensive loss
2016 2015
$ $
Accumulated unrealized net loss on derivative financial

instruments designated as cash flow hedges (311) (1,123)
Deferred tax recovery (note 17) 80 290
Total accumulated other comprehensive loss (231) (833)
26
November 30, 2016
13 Expenses by nature
2016 2015
$ $
Changes in inventories of finished goods and work in process 6,586 4,213

Raw materials and consumables used 7,768 9,903
Personnel expenses (note 14) 60,617 59,324
Consulting expenses 6,902 6,295
Depreciation and amortization charges 6,641 5,460
Facilities 3,365 2,920
Travel 5,336 5,568
Software support and maintenance 1,474 1,559
Professional fees 1,976 904
Non-refundable investment tax credits (note 16) (1,745) (16,000)
Non-repayable government assistance (note 16) (829) (437)
Other 4,742 5,818
Total cost of sales and operating expenses 102,833 85,527
14 Personnel expenses
2016 2015
$ $
Salaries and wages 50,282 49,184

Other employee benefits 7,743 7,056
Stock based compensation 2,273 2,050
Other 319 1,034
Total personnel expenses 60,617 59,324
27
November 30, 2016
15 Government grants
The Company entered into an agreement with the Province of Ontario relating to the Jobs and Prosperity Fund. This program
will provide funding relating to one of the Company's research and development projects. Under the agreement, the Company
is eligible to receive funding equal to 8.9% of eligible project expenditures from March 1, 2016 to November 30, 2023 to a
maximum of $15,000 CAD ($11,436 USD), with certain annual caps related to disbursements. Payments made in respect of
the program can be made conditionally repayable if certain investment, cumulative job and payroll targets are not met. The
amount of funding recognized in respect of eligible expenses for the year ended November 30, is as follows:
2016 2015
$ $
Sales and marketing 57 —

Research and development 703 —
760 —
Purchase of plant, equipment and intangible

software assets 212 —
972 —
16 Research and development
The Company recognizes the benefits of earning non-refundable investment tax credits ("SR&ED ITCs") by recording a
reduction in its research and development expenses. The associated ITC receivable has been included in the deferred tax asset
balance on the statement of financial position. A summary of the SR&ED ITCs and other government assistance recorded
against research and development expenses is presented below:
2016 2015
$ $
Research and development expenses before government

assistance 25,400 24,411
Non repayable government assistance - Jobs and
Prosperity Fund (note 15) (703) —
Non repayable government assistance - Other (71) (437)
SR&ED ITCs (note 17) (1,745) (16,000)
Research and development expenses 22,881 7,974
28
November 30, 2016
17 Income taxes
a) Income tax expense (recovery)
The major components of income tax expense (recovery) are:
Consolidated statements of income
2016 2015
$ $
Current 5,776 1,266

Deferred (623) (1,643)
Income tax expense (recovery) reported in

statements of income 5,153 (377)
Consolidated statements of comprehensive income
2016 2015
$ $
Income tax expense (recovery) related to unrealized gain on cash

flow hedges 210 (290)
Deferred tax related to other comprehensive income 210 (290)
Consolidated statements of changes in shareholders’ equity

2016 2015
$ $
Tax benefit of previously incurred share issuance costs — (1,800)

Excess tax benefit recognized on share units (note 10) 181 —
Deferred tax (recovery) to shareholders’ equity 181 (1,800)
In assessing the value of deferred tax assets, the Company’s management considers if it is probable that taxable profit will be
available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilized. Available
evidence considered by the Company includes, but is not limited to, the Company’s historic operating results, sales backlog,
projected future operating results, and changing business and market circumstances. As at November 30, 2015, the Company
determined that based on its historical financial results in fiscal 2013, 2014 and 2015, realization of certain deferred tax assets
is probable and as a result has recognized previously unrecognized deferred tax assets of $19,690. This has been recorded as a
recovery for income taxes in the statement of profit and loss, other comprehensive income and shareholders’ equity in the amounts
29
November 30, 2016
of $1,600, $290 and $1,800, respectively. In addition the Company recorded SR&ED ITCs in the amount of $16,000 by a
reduction of its research and development expenses.
The difference between the amount of the provision for (recovery of) income taxes and the amount computed by multiplying
income before income taxes by the statutory Canadian rate is reconciled as follows:
2016 2015
$ $
Statutory tax rate 25.89% 25.83%

Income tax expense at statutory rate 4,731 10,562
Tax rate differential (30) (72)
Effect of foreign rate differences 170 (505)
Stock based compensation 334 1,230
Other permanent differences 313 (320)
Recognition of previously unrecognized losses
and other deductions (365) (11,272)
5,153 (377)
Recognized deferred tax assets
Deferred tax includes the following:
2016 2015
$ $
Investment tax credits 18,930 16,000

Tax losses to be recovered in 12 months 89 409
Tax losses to be recovered after 12 months 710 475
Deductible temporary differences (1,130) 3,532
Taxable temporary differences (845) (1,112)
Other comprehensive income 80 290
Net deferred tax asset (liabilities) 17,834 19,594
Deferred tax asset 18,679 20,706

Deferred tax liability (845) (1,112)
Deferred tax asset (liability), net 17,834 19,594
30
November 30, 2016
Reconciliation of deferred tax asset (liability), net:

2016 2015
$ $
As of December 1 19,594 212

Recognized in profit or loss (1,731) 17,644
Recognized in other comprehensive income (210) 290
Recognized in shareholders’ equity 181 1,800
Acquired in business acquisition — (352)
As of November 30 17,834 19,594
b) Unrecognized deferred tax assets
The following deferred tax assets have not been recognized for financial statement purposes:
2016 2015
$ $
Deductible temporary differences 834 633

Tax losses 1,500 1,556
2,334 2,189
The Company has not provided for temporary differences related to investments in subsidiaries as the Company controls
whether the liability will be incurred and as these earnings are intended to be reinvested indefinitely. The Company had
unremitted earnings at November 30, 2016 of $12,412 (2015 - $9,782) and the tax losses expire in fiscal 2022.
31
November 30, 2016
18 Earnings per share

2016 2015
$ $
Numerator for basic and diluted earnings per

share available to common shareholders 13,121 41,278
Denominator for earnings per share, weighted

average number of shares outstanding
Basic 138,583,284 147,243,881
Effect of stock options and share
units issued 3,461,846 3,730,492
Diluted 142,045,130 150,974,373

Earnings per share:
Basic 0.095 0.280
Diluted 0.092 0.273
19 Supplemental cash flow information
The components of Changes in non-cash working capital balances are as follows:
2016 2015
$ $
Changes related to:
Accounts receivable 8,306 (10,396)
Inventory 3,148 (521)
Other current assets 761 (773)
Trade and other payables (1,190) (762)
Deferred revenue 2,939 (660)
Changes in non-cash working capital balances 13,964 (13,112)
For the year ended November 30, 2016 the Company paid $1,666 for income tax in cash (November 30, 2015 - $1,563). The
cash paid for income taxes is included in operating activities. The Company did not pay any interest in cash during the year
ended November 30, 2016 (November 30, 2015 - $nil). The Company received cash interest during the year ended November 30,
2016 of $467 (November 30, 2015 - $358).
Including acquisitions, additions of plant, equipment and intangible assets were $6,269 for the year ended November 30, 2016
(November 30, 2015 - $10,054).
32
November 30, 2016
20 Financial Instruments
20.1 Categories of financial assets and liabilities
Financial instruments are classified into one of the following categories: financial assets at fair value through profit and loss,
derivatives designated as effective hedges, available-for-sale, loans and receivables and financial liabilities at amortized cost.
The following table summarizes information regarding the carrying values of the Company’s financial instruments:
2016 2015
$ $
Derivatives designated as effective hedges
Derivatives designated as cash flow hedges - gain / (loss) * (311) (1,123)
Available-for-sale
Investments 118,064 136,515

Cash 14,922 8,826
Accounts receivable 33,308 41,479
Other receivables 1,013 2,178
Financial liabilities at amortized cost

Trade and other payables 18,293 19,529
(*) Derivative financial instruments have been included in Accounts payable and accrued liabilities on the Company’s consolidated
balance sheet.
20.2 Fair value
The estimated fair values of cash, accounts receivable, trade and other payables approximate their respective carrying values
due to the short period to maturity. The fair value of the share repurchase commitment was calculated using the maximum
contractual share prices and daily purchase limits in the automatic share purchase plan. For fair value estimates relating to
derivatives and investments, the Company classifies its fair value measurements within a fair value hierarchy, which reflects the
significance of the inputs used in making the measurements.
Level 1 - Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.
Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities
in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that
are observable or can be corroborated by observable market data.
Level 3 - Significant unobservable inputs which are supported by little or no market activity.
33
November 30, 2016
As at November 30, 2016, the Company held the following financial instruments carried at fair value in the statement of financial
position:
Level 1 Level 2 Level 3 Total
Financial assets
Short term investments — 118,064 — 118,064
Financial liabilities
Foreign exchange forward contracts,
net — (311) — (311)
As at November 30, 2015, the Company held the following financial instruments carried at fair value in the statement of financial
position:
Level 1 Level 2 Level 3 Total
Financial assets
Short term investments — 136,515 — 136,515
Financial liabilities
Foreign exchange forward contracts,
net — (1,123) — (1,123)
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value.
The fair value of short term investments are classified within Level 2 because they are based on quoted prices for similar assets
in active markets, and/or observable inputs such as interest rates.
The Company’s derivative financial instruments typically include foreign exchange forward contracts. The fair values of currency
forward contracts are based upon the difference between the forward exchange rate and the contract rate with expected cash
flows and effect on profit or loss to occur within one year. The Company’s foreign exchange forward contracts are classified
within Level 2 because they are based on foreign currency rates quoted by banks and other public data sources.
The fair value of the share repurchase commitment is classified within Level 2 because it is based on the maximum contractual
share prices and daily purchase limits in the automatic share purchase plan.
The Company has not reclassified financial instruments between levels of the fair value hierarchy in fiscal 2016 and 2015.
20.3 Risks arising from financial instruments and risk management
The Company is exposed to financial risks that may potentially impact its operating results including market risks (foreign
exchange rate and interest rate risks), credit risk and liquidity risk. The Company’s overall risk management program focuses
on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s financial
performance.
Foreign currency risk
The Company’s financial results are reported in United States dollars. The Company transacts business in multiple currencies,
the most significant of which are the USD, the CAD, the Euro, the Great British Pound and the Indian Rupee. As a result, the
Company has foreign currency exposure with respect to items denominated in foreign currencies. The Company’s objective
34
November 30, 2016
with regard to its foreign currency risk is to minimize the impact of foreign exchange movements on the Company’s consolidated
financial statements.
The Company generates the majority of its revenues in the USD. If a significant sales transaction is generated in a currency
other than the USD and this transaction exceeds the natural hedge provided by expenditures in those currencies the Company
may enter into forward foreign exchange contracts. The timing and amount of these forward foreign exchange contracts are
estimated based on customer contracts on hand and expected future cash outflows. The Company does not account for these
forward contracts using hedge accounting. As a result these instruments are measured at fair value with changes in fair value
recognized in earnings.
The Company incurs costs, primarily payroll and related expenditures, in the CAD, Indian Rupee and Euro which exceed the
natural hedge provided by inflows in these currencies. The Company utilizes a hedging program to manage certain of these net
foreign currencies using forward foreign exchange contracts. The Company also incurs rent costs, in CAD, which are hedged
using forward foreign exchange contracts. The timing and amount of these forward foreign exchange contracts is based on
expected future cash outflows. The Company applies hedge accounting to these forward contracts. As a result these instruments
are measured at fair value with the effective portion of the change in fair value initially recorded in other comprehensive income
and reclassified to the consolidated statements of operations in the same period that the hedged anticipated transaction affects
earnings.
As at November 30, 2016. the cash flow hedges were assessed to be fully effective and a net unrealized loss of $231 was included
in other comprehensive income (2015 - a loss of $833). The amounts retained in other comprehensive income at November 30,
2016 will mature and affect the consolidated statement of income in fiscal 2017 and 2018.
The following table summarizes the Company’s commitments to buy and sell foreign currencies under foreign exchange contracts,
all of which have a maturity date of less than fifteen months, as at November 30, 2016 and November 30, 2015:
Currency Currency Notional Amount Weighted Average

Designation Sold Bought Sold Rate
2016
Foreign exchange contract - Cash flow
hedges, maturing within one year USD CAD 18,310 1.320
hedges, maturing between one year and
fifteen months USD CAD 1,751 1.319
2015
hedges, maturing within one year USD CAD 19,039 1.258
hedges, maturing between one year and USD CAD 1,757 1.314
fifteen months
The Company has assessed the net foreign currency exposure of its foreign denominated financial instruments relative to the
USD. A fluctuation of +/- 5%, provided as an indicative range in a volatile currency environment, would, with all other variables
35
November 30, 2016
held constant, have an effect on accumulated other comprehensive income for the year ended November 30, 2016 of +/- $402
(2015 - $1,215) and on net income for the year ended November 30, 2016 of approximately +/- $161 (2015 - $149).
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The Company’s exposure to interest rate risk mainly arises from the interest rate impact on its short term
investments. The Company’s short term investments are comprised of various mutual funds invested in money market instruments
and interest bearing securities with fixed interest rates and varying maturities. The Company’s objective with regard to these
investments is to minimize liquidity and credit risk while maximizing the interest income earned. The Company only invests
in short term investments that have remaining maturities one year or less at the date of purchase. The Company believes that
fluctuations in interest rates do not have a significant impact on the fair value of its short term investments due to the short term
maturity of its short term investments. The Company does not use financial instruments to mitigate this interest rate risk. During
2016, there were no significant changes to the Company’s exposure to interest rate risk, or its objectives and policies to manage
these risks. Recognized interest income for the Company’s short term investments for the year ended November 30, 2016 was
$467 (2015 - $358).
At November 30, 2016, a change in interest rates of +/- 100 basis points (2015- +/- 100 basis points), with all other variables
held constant, would have increased/decreased by $199 Other comprehensive income, arising mainly as a result of the impact
of the change in interest rates to forward rates used to value foreign currency forward contracts (2015 - $196).
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss being incurred by the Company. The Company is exposed to credit risk in its cash, short term investments,
accounts receivable, other current assets and to the credit risk of its derivative financial instrument counterparties if they do not
meet their obligations. The Company’s objective with regard to credit risk in its investing activities is to limit its short term
investments to those that meet or exceed specific credit ratings. The Company’s objective with regard to credit risk in its operating
activities is to reduce its exposure to losses. There were no significant changes to the Company’s exposure to credit risk, or its
objectives and policies to manage these risks. As the Company does not utilize credit derivatives or similar instruments, the
maximum exposure to credit risk is the full carrying value of the financial instrument asset or face value of open derivative
financial instruments. The Company minimizes the credit risk of balances with banks and currency forward contracts by depositing
with or transacting with Schedule 1 banks in Canada and reputable financial institutions in other countries and monitoring the
credit risk, including counterparty credit risk, of these financial institutions. Significant levels of cash are not held in financial
institutions outside of Canada. The Company minimizes its credit risk of cash and short term investments by only investing in
securities that meet minimum credit ratings as stipulated by the Company’s investment policy and limiting exposure to any one
issuing entity. As at November 30, 2016 two issuers, Schedule 1 Banks, represented 71.0% (42.9% and 28.1% respectively) of
the total short-term investments (2015 - one; 67.6%), with no other individual issuer representing more than 9% (2015 - 8%) of
the total short-term investments. The Company minimizes its credit risk of its accounts receivable and other receivables by
performing credit reviews for each of its customers, routinely reviewing the status of individual accounts receivable balances
and contacting customers who have overdue balances.
36
November 30, 2016
As at November 30, 2016, one customer, with greater than ten percent concentration in accounts receivable, accounted for 13.2%
of the Company’s total accounts receivable (2015 - one; 13.6%). The Company’s allowance for doubtful accounts is not significant.
Of the Company’s accounts receivable, $12,745 was past due as of November 30, 2016 (2015 - $10,553). The definition of
items that are past due is determined by reference to terms agreed with individual customers. Of the past due balances at November
30, 2016, $4,378 (2015 - $4,625) has been subsequently collected. As at November 30, the past due balances are as follows:
2016 2015
$ $
0 - 30 days past due 2,804 2,044

31 - 60 days past due 1,784 5,297
61 - 90 days past due 1,319 1,508
Greater than 91 days past due 6,838 1,704
12,745 10,553
No material amounts outstanding have been challenged by the respective customer(s) and the Company continues to conduct
business with them on an ongoing basis. Accordingly, management has no reason to believe that these balances are not fully
collectible in the future.
The Company’s accounts receivable could be sensitive to changing market risk conditions in particular geographic regions.
Accounts receivable is attributed to geographic regions based on the location of the reseller, when applicable. The geographic
allocation, by country, of the Company’s accounts receivable with greater than ten percent, the percentage considered to indicate
a significant concentration, is as follows at November 30:
2016 2015
% %
United Arab Emirates 13.7 18.0

United States 13.1 19.9
Jamaica 1.5 11.7
Other 71.7 50.4
100.0 100.0
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting its obligations associated with financial liabilities
that are settled by delivering cash or another financial asset. The Company currently settles its financial obligations out of cash
and short term investments. The ability to do this relies on the Company collecting its accounts receivables in a timely manner
and by maintaining sufficient cash in excess of anticipated needs. The Company invests in short term investments which are
highly liquid, which enables their use to meet financial obligations if necessary. During 2016, there were no significant changes
to the Company’s exposure to liquidity risk, or its objectives and policies to manage these risks.
37
November 30, 2016
A summary of the Company’s other financial liabilities at November 30 is as follows:
2016 2015
$ $
Due within 1 month 15,382 17,401

Due later than 1 month and not later than 3 months 2,538 1,440
Due later than 3 months and not later than 1 year 373 688
18,293 19,529
As at November 30, 2016, included within the other financial liabilities due within 1 month and due later than 1 month and not
later than 3 months is $5,640 and $2,538, respectively, related to the Company’s share repurchase commitment under this Plan
(see note 10b for additional disclosure related to the repurchase obligation) (2015 - $6,048 and $1,440).
21 Capital management
In the management of capital, the Company considers shareholder’s equity, excluding accumulated other comprehensive
income. The Company manages its capital to ensure that financial flexibility is present to increase shareholder value through
organic growth and selective acquisitions as well as to allow the Company to respond to changes in economic and/or marketplace
conditions. In order to maintain or adjust its capital structure the Company may issue new shares, purchase shares for cancellation
or raise debt. At this time, the Company has not utilized debt facilities as part of its capital management program.
On January 6, 2016 the Company's Board of Directors for the first time declared a quarterly dividend of $0.0175 per common
share. There were no other changes in the Company’s approach to capital management during the period. To maintain or adjust
the capital structure, the Company may adjust the dividend payment to shareholders.
22 Other income
On February 27, 2015, the Company sold its preferred share investment in a private company for consideration of $3,057.
Consequently, the Company has recorded a gain related to the disposition of its preferred share investment of $2,778 during
the year ended November 30, 2015.
38
November 30, 2016
23 Segment disclosures
The Company has one reportable segment. The Company’s operations are substantially all related to the research, design,
manufacturing and sales of Network Policy Control solutions for communications service providers. Selected financial
information is as follows:
2016 2015
$ $
Sales
Canada 6,179 6,462
United States 33,436 34,637
Caribbean and Latin America 21,108 21,629
Europe, Middle East and Africa 38,300 44,755
Asia Pacific 21,710 15,848
120,733 123,331
% %
Sales
Canada 5.1% 5.2%
United States 27.7% 28.1%
Caribbean and Latin America 17.5% 17.5%
Europe, Middle East and Africa 31.7% 36.3%
Asia Pacific 18.0% 12.9%
100.0% 100.0%
In situations where a sale is made through a reseller, revenue associated with that sale is attributed to the geographic location
of the end customer. Revenue from individually significant countries contained within these geographic regions included Japan,
which represented 10.5% of revenue for the year ended November 30, 2016 (November 30, 2015 – none).
Major customers are customers which represent more than 10% of total revenues for a given period. There were no major
customers for the year ended November 30, 2016 (November 30, 2015 - none).
39
November 30, 2016
The breakdown of assets by region is as follows:

2016 2015
$ $
Plant and equipment, intangibles and goodwill

Canada 15,388 14,338
Asia Pacific 496 456
21,480 19,404
Total assets
Canada 207,391 231,407
United States 428 339
Asia Pacific 3,125 2,120
South America 474 261
220,123 240,458
24 Related parties
a) Key management
Key management is comprised of the Company’s directors and executive officers.

2016 2015
$ $
Salaries and wages 2,021 2,471

Other employee benefits 47 30
Stock based compensation 1,085 1,097
Total compensation of key

management 3,153 3,598
40
November 30, 2016
b) Subsidiaries
The Company has the following principal subsidiaries consolidated within the financial statements:
Name Country/province of incorporation % of equity interest

Sandvine Incorporated ULC Alberta, Canada 100
Sandvine Ltd. Ontario, Canada 100
Sandvine (USA), Inc. Delaware, USA 100
Sandvine Limited United Kingdom 100
Sandvine SarL France 100
Sandvine Singapore Pte. Ltd. Singapore 100
Sandvine Technologies (India) Private Limited India 100
Sandvine BV (formerly Momac BV) Netherlands 100
Sandvine GmBH (Switzerland) Switzerland 100
c) Transactions with associates
For the year ended November 30, 2016, Sandvine Corporation incurred rent expense of $299, at terms equivalent to those that
prevail in arm's length transations, paid to WTC1 Inc., a company Sandvine has significant influence over. Future minimum
operating lease payments for premises owned by WTC1 Inc. over the next five years are $2,272.
25 Credit facility
The Company has a demand credit facility with a major Canadian chartered bank. Under the terms of the facility, the Company
has available to it a $1,000 operating line to provide letters of credit and a $3,750 contingency line to permit the Company to
enter into foreign currency forward contracts. Borrowings made from the facility attract interest at the bank’s prime rate of
interest plus 0.5%. Cash of $4,750 is pledged as security for the credit facility. The assets pledged as security, being the cash,
can be called by the lender upon default of the facility or insolvency of the Company. The facility and the related security will
remain in effect until the facility, which has no term, is terminated. In addition, the Company has available to it a $10,000 spot
foreign exchange facility.
As of November 30, 2016, the Company had issued one letter of credit under its operating line. The individual letter of credit
is US$16 expiring July 24, 2017. As of November 30, 2016, the Company had utilized $1,601 of its contingency line relating
to foreign currency forward contracts.
41
November 30, 2016
26 Commitments and contingencies
a) Lease Commitments
Future minimum operating lease payments for premises over the next five years and thereafter are as follows:
$
Less than one year 1,042
Between one and five years 3,267
Greater than five years —
4,309
Expenses for operating leases for the year ended November 30, 2016 were $1,782 (2015 - $1,458).
b) Other
In the normal course of operations, the Company will provide indemnification agreements to counterparties that would require
the Company to compensate them for costs incurred as a result of litigation against an indemnified third party. These agreements
generally do not contain specified limits on the Company’s liability; therefore, it is not possible to estimate the Company’s
maximum liability under these indemnities.
27 Legal claim contingency
From time to time, the Company may be involved in certain claims and litigation arising out of the ordinary course and conduct
of business. Management assesses such claims and, if considered likely to result in a loss and, when the amount of the loss is
quantifiable, provisions for loss are made, based on management’s assessment of the most likely outcome. The Company does
not provide for claims for which the outcome is not determinable or claims where the amount of the loss cannot be reasonably
estimated. Any settlements or awards under such claims are provided for when reasonably determinable.
A patent infringement claim against the Company and its wholly owned subsidiary Sandvine Incorporated ULC was filed on
February 17, 2016 in the United States District Court of the Eastern District of Texas by Packet Intelligence LLC. Damages have
not been specified. In addition, a patent infringement claim against the Company and its wholly owned subsidiary Sandvine
Incorporated ULC, and Sandvine GmbH (Germany) was filed on July 7, 2016 in Regional Court of Mannheim, Germany.
Damages have been specified at 750 Euros.
The outcome of all the proceedings and claims against the Company, including the matters described above, are subject to future
resolution that includes the uncertainties of litigation. It is not possible for the Company to predict the result or magnitude of the
claims described above due to the various factors and uncertainties involved in the legal process. If it becomes probable that the
Company will be held liable for claims against the Company, the Company will recognize a provision during the period in which
the change in probability occurs, which could be material to the Company’s consolidated statements of income or consolidated
statements of financial position.
42
November 30, 2016
28 Subsequent events
a) NCIB repurchases
During the period from December 1, 2016 to January 11, 2017, the Company repurchased 2,234,300 shares under the 2016 NCIB
for a total cost of $4,533.
b) Declaration of cash dividend
On January 11, 2017 the Company’s Board of Directors declared a quarterly dividend of $0.02 CAD per common share payable
on February 13, 2017 to shareholders of record at the close of business on January 25, 2017. Future declarations of dividends
are subject to the final determination of the Company’s Board of Directors, in its discretion based on a number of factors that it
deems relevant, including the Company’s financial position, results of operations, available cash resources, cash requirements
and alternative uses of cash that the Company’s Board of Directors may conclude would be in the best interest of shareholders.
43
COMMON SHARES AUDITORS
Sandvine’s common shares are listed on the TSX, Ernst & Young LLP
ticker symbol SVC Chartered Accountants
Waterloo, Ontario, Canada
DIRECTORS
TRANSFER AGENTS AND REGISTRARS
Osama Arafat
Corporate Director Computershare Investor Services Inc.
Former Chief Executive Officer Toronto, Ontario, Canada
Q9 Networks
CONTACT
Roger Maggs, Chairman
Corporate Director 408 Albert Street
Former Founder, Senior Partner Waterloo, Ontario
Celtic House Canada N2L 3V3
Dermot O’Carroll Tel: 519-880-2600

Corporate Director Fax: 519-884-9892
Former Senior Vice President
Network Engineering and Operations INVESTOR INQUIRIES
Rogers Communications, Inc.
investor_relations@sandvine.com
Kenneth James Taylor
Chief Financial Officer CORPORATE INQUIRIES
Capital Sports and Entertainment Inc.
marketing@sandvine.com
Gemma Toner www.sandvine.com
Corporate Director
Former Senior Vice President
Cablevision
Dave Caputo
Co-founder, President and Chief Executive Officer
Sandvine
Scott Hamilton
Chief Financial Officer
Sandvine
Sandvine is an ISO 14001 and ISO 9001 certified company, reflecting our commitments to quality and the environment.
Copyright © 2017 Sandvine Incorporated ULC. Sandvine and the Sandvine logo are registered trademarks of Sandvine Incorporated ULC. All rights reserved.

2016 Annual Report Sandvine

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2016 Annual Report Sandvine

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ANNUAL REPORT

• Management’s Discussion and Analysis

CAUTION REGARDING FORWARD LOOKING INFORMATION

We outlined six growth strategies at the beginning of 2016. They were:

• What new services should we explore?

• Application-based service tiers

• Network threat deception • Dynamic vulnerability masking

CAUTION REGARDING FORWARD LOOKING INFORMATION

Non-IFRS Financial Measures

Three month period ended Twelve month period ended

Net income ** 2,043 25,178 13,121 41,278

Basic EBIDTA per share ** 0.036 0.175 0.176 0.312

Diluted earnings per share 0.015 0.168 0.092 0.273

Diluted EBITDA per share ** 0.035 0.171 0.172 0.304

SELECTED CONSOLIDATED FINANCIAL INFORMATION

Basic earnings per share 0.015 0.172 0.095 0.280

Weighted average common shares

SELECTED CONSOLIDATED FINANCIAL INFORMATION (continued)

As at November As at November 30,

Products and solutions

• Control bandwidth to contain transit costs and to cap traffic peaks;

• Reducing outbound spam to prevent blacklisting

Sales and distribution

Target Business Model

Target Business Model

Percentage of total revenue

COMPOSITION OF REVENUES AND EXPENSES

CURRENT PERIOD OPERATING RESULTS

Three month period ended Twelve month period ended

Product 15,100 23,128 73,879 79,294

Total 26,953 35,039 120,733 123,331

Q4 2016 compared to Q4 2015

2016 compared to 2015

Revenue by access technology

Three month period ended Twelve month period ended

Fixed Cable 12.7 24.3 20.8 23.6

* Fixed Telco includes revenue generated from DSL and FTTx.

Revenue by sales channel

Three month period ended Twelve month period ended

Revenue by geographic region

Three month period ended Twelve month period ended

Revenue derived from major customers

The following summarizes revenue from Major customers on a quarterly basis.

Three month period ended

Major customers – resellers** 1 — — 1 —

Percentage of revenue 13.0% —% —% 11.2% —%

The breakdown of deferred revenue is as follows:

November 30, August 31, November 30,

Product 80.2 81.8 78.2 79.2

Q4 2016 compared to Q4 2015

The Company continues to target a blended gross margin at or above 70%.

2016 compared to 2015

The Company continues to target a blended gross margin at or above 70%.

Three month period ended Twelve month period ended

Revenue 26,953 35,039 120,733 123,331

Sales and marketing 8,915 10,325 37,585 36,863

Research and development 6,278 6,611 25,398 24,408

General and administrative 3,297 2,980 13,357 13,234

Other losses, net — 3 2 23

Total operating expenses before

Government assistance2 (864) (16,014) (2,574) (16,437)

Total operating expenses 17,626 3,905 73,768 58,091

Three month period ended Twelve month period ended

Total government assistance in operating expenses (864) (16,014) (2,574) (16,437)