Ottawa, Canada, July 9, 2014—DragonWave Inc. (TSX:DWI; NASDAQ:DRWI) a leading global supplier of packet microwave radio systems for mobile and access networks, today announced financial results for the first quarter of fiscal year 2015, ended May 31, 2014. All figures are in U.S. dollars and were prepared in accordance with U.S. generally accepted accounting principles.

Revenue for the first quarter of fiscal year 2015 was $28.8 million, compared with $17.9 million in the fourth quarter of fiscal year 2014 and $24.5 million in the first quarter of the fiscal year 2014. Revenue from the Nokia channel (formerly called Nokia Solutions and Networks) represented 61% of revenue in the first quarter of this fiscal year, versus 68% in the fourth quarter of fiscal year 2014 and 57% in first quarter of fiscal year 2014.

Gross margin for the first quarter of fiscal year 2015 was 20.5%, compared with 14.5% in the fourth quarter of fiscal year 2014 and 11.5% in the first quarter of fiscal year 2014.

Net loss applicable to shareholders in the first quarter of fiscal year 2015 was $6.6 million or ($0.11) per basic and diluted share. This compares to a net loss applicable to shareholders of $11.6 million or ($0.20) per basic and diluted share in the fourth quarter of fiscal year 2014 and a net loss applicable to shareholders of $6.6 million or ($0.17) per basic and diluted share in the first quarter of fiscal year 2014.

"We are pleased that the increased demand that we observed in Q1 2015 is continuing into our second quarter. Momentum is such that we anticipate revenue growth of between 25% and 40% relative to Q1," said DragonWave President and CEO Peter Allen.

Cash and cash equivalents totaled $15.6 million at the end of the first quarter of fiscal year 2015, compared to $19.0 million at the end of the fourth quarter of fiscal year 2014.

The DragonWave management team will discuss the results on a webcast and conference call beginning at 8:30 a.m. Eastern Time on July 10, 2014.

The live webcast and presentation slides will be available at the Investor Relations section of the DragonWave website at: http://investor.dragonwaveinc.com/events.cfm

Toll-free North America Dial-in: (877) 312-9202
International Dial-in: (408) 774-4000

DragonWave® is a leading provider of high-capacity packet microwave solutions that drive next-generation IP networks. DragonWave's carrier-grade point-to-point packet microwave systems transmit broadband voice, video and data, enabling service providers, government agencies, enterprises and other organizations to meet their increasing bandwidth requirements rapidly and affordably. The principal application of DragonWave's products is wireless network backhaul, including a range of products ideally suited to support the emergence of underlying small cell networks. Additional solutions include leased line replacement, last mile fiber extension and enterprise networks. DragonWave's

corporate headquarters is located in Ottawa, Ontario, with sales locations in Europe, Asia, the Middle East and North America. For more information, visit http://www.dragonwaveinc.com.

Certain statements in this release constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include statements as to DragonWave's growth opportunities and the potential benefits of, and demand for, DragonWave's products, as well as our expectations regarding Q2 FY2015 revenues and the funnel for both direct sales and the Nokia channel. These statements are subject to certain assumptions, risks and uncertainties, including our view of the relative position of DragonWave's products compared to competitive offerings in the industry, the timing of orders and deliveries, revenues and expenses, and constraints in the supply chain. Readers are cautioned not to place undue reliance on such statements. DragonWave's actual results, performance, achievements and developments may differ materially from the results, performance, achievements or developments expressed or implied by such statements. Risk factors that may cause the actual results, performance, achievements or developments of DragonWave to differ materially from the results, performance, achievements or developments expressed or implied by such statements can be found in the public documents filed by DragonWave with U.S. and Canadian securities regulatory authorities. DragonWave assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law.

Forward-looking statements are provided to assist external stakeholders in understanding DragonWave's expectations as of the date of this release and may not be appropriate for other purposes. Material risks and uncertainties relating to our business are described under the heading "Risks and Uncertainties" in the MD&A dated July 9, 2014 and in the Company's Annual Information Form and other public documents filed by DragonWave with Canadian and United States securities regulatory authorities, which are available at www.sedar.com and www.sec.gov, respectively.

CONSOLIDATED BALANCE SHEETS

Expressed in US $000's except share amounts

(Unaudited)



Assets
Current Assets
	Cash and cash equivalents	15,567		18,992
	Trade receivables	21,505		17,408
	Inventory	26,023		30,416
	Other current assets	4,974		5,909
	Deferred tax asset	119		69

		68,188		72,794
Long Term Assets
	Property and equipment	2,964		3,168
	Deferred tax asset	1,536		1,536
	Deferred financing cost	49		60
	Intangible assets	1,466		1,635
	Goodwill	11,927		11,927

		17,942		18,326
Total Assets		86,130		91,120

Liabilities
Current Liabilities
	Accounts payable and accrued liabilities	25,954		29,964
	Deferred revenue	889		984
	Capital lease obligation	1,633		1,795

		28,476		32,743
Long Term Liabilities
	Debt facility	17,500		15,000
	Other long term liabilities	3,549		574
	Warrant liability	1,048		1,360

		22,097		16,934
Shareholders' equity
	Capital stock	198,769		198,593
	Contributed surplus	7,478		7,118
	Deficit	(161,056	)	(154,505	)
	Accumulated other comprehensive loss	(9,682	)	(9,682	)

Total Shareholders' equity		35,509		41,524
	Non-controlling interests	48		(81	)

Total Equity		35,557		41,443
Total Liabilities and Equity		86,130		91,120

Shares issued & outstanding		58,491,243		58,008,746

CONSOLIDATED STATEMENT OF OPERATIONS

Expressed in US $000's except share amounts

(Unaudited)

		Three months ended

		May 31, 2014			May 31, 2013
REVENUE			28,771			24,532
	Cost of sales		22,885			21,712

Gross profit			5,886			2,820

EXPENSES
	Research and development		4,265			5,302
	Selling and marketing		3,365			3,382
	General and administrative		4,426			4,748

			12,056			13,432

Loss before other items			(6,170	)		(10,612	)
	Amortization of intangible assets		(309	)		(559	)
	Accretion expense		(40	)		(65	)
	Interest expense		(425	)		(538	)
	Gain on change in estimate		101			—
	Gain on contract amendment		—			5,285
	Fair value adjustment—warrant liability		150			—
	Foreign exchange gain (loss)		121			(98	)

Loss before income taxes			(6,572	)		(6,587	)
	Income tax expense		95			92

Net Loss			(6,667	)		(6,679	)
	Net Loss Attributable to Non-Controlling Interest		35			54

Net Loss applicable to shareholders			(6,632	)		(6,625	)
Net loss per share
	Basic and Diluted		(0.11	)		(0.17	)
Weighted Average Shares Outstanding
	Basic and Diluted		58,194,153			38,059,919


Nadine Kittle Marketing Communications DragonWave Inc. nkittle@dragonwaveinc.com Tel: 613-599-9991 ext. 2262		John Lawlor Investor Relations DragonWave Inc. jlawlor@dragonwaveinc.com Tel: 613-599-9991 ext. 2424		Becky Obbema Interprose Public Relations (for DragonWave) Becky.Obbema@interprosepr.com Tel: (408) 778-2024