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Hurray Reports Q2 2006 Unaudited Financial Results

Hurray (HRAY) recorded total second quarter revenues of US$18.3 million, a growth of 10.2% quarter-over-quarter and 22.1% year-over-year, exceeding previously reaffirmed guidance.

Total wireless value-added services revenues were US$16.6 million for the second quarter of 2006, a growth of 14.5% as compared with US$14.5 million in the previous quarter and growth of 23.7% as compared with US$13.4 million in the second quarter of 2005.

Total gross margin was 37.0% for the second quarter of 2006 as compared with 35.5% for the previous quarter and 59.2% for the second quarter of 2005. Gross margin for wireless value-added services was 36.0% for the second quarter of 2006, as compared with 34.6% in the previous quarter and 56.9% for the second quarter of 2005.

Hurray's total gross profit was US$6.8 million for the second quarter of 2006, representing a growth of 14.8% as compared with US$5.9 million for the previous quarter and a decline of 23.6% as compared with US$8.9 million for the second quarter of 2005.

Total operating expenses were US$5.5 million for the second quarter of 2006, representing an increase of 4.4% as compared to US$5.3 million for the previous quarter and an increase of 26.2% as compared to US$4.4 million for the second quarter of 2005. The increase in operating expenses in the quarter is mostly due to employee severance expenses associated with the company's previously announced cost cutting program.

Net income was US$1.7 million for the second quarter of 2006, representing an increase of 84.9% as compared to US$0.9 million for the previous quarter, and a decrease of 66.0% as compared to US$5.0 million for the second quarter of 2005. Net margin was 9.3% for the second quarter of 2006 as compared to 5.5% for the previous quarter and 33.4% for the second quarter of 2005.

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