Exhibit 99.1

Interactive Intelligence Reports 2011 First-Quarter Operating Results

Revenues increase 36 percent; total orders up 55 percent

INDIANAPOLIS, April 25, 2011 -- Interactive Intelligence (Nasdaq: ININ), a global provider of unified IP business communications solutions, has announced operating results for the three months ended March 31, 2011.

The company reported revenues of $47.7 million, an increase of 36 percent from revenues of $35.0 million in the first quarter of 2010. Product revenues increased by 32 percent, recurring revenues by 30 percent, and services revenues by 88 percent compared to the 2010 first quarter.

First-quarter operating results included the following:

-	On a generally accepted accounting principles (GAAP) basis, net income of $3.1 million in 2011, with diluted earnings per share (EPS) of $0.16, compared to net income of $1.9 million in 2010, or EPS of $0.10.

-	Net income on a non-GAAP* basis of $5.5 million in 2011, with EPS of $0.28, compared to non-GAAP net income of $4.2 million in 2010, or EPS of $0.22.

-	GAAP operating income of $4.9 million in 2011, up 23 percent from $4.0 million in 2010.

-	Non-GAAP operating income of $6.8 million in 2011, up 34 percent from 2010.

-	Other expense of $123,000 in 2011, compared to $733,000 in 2010, reflecting foreign currency translation losses in both years.

-	An increase in cash flows from operations to $6.7 million in 2011, compared to $5.3 million in 2010.

For the first quarter of 2011, non-GAAP net income and EPS excluded charges for stock-based compensation of $1.3 million, or EPS of $0.07, purchase accounting adjustments of $510,000, or EPS of $0.03, and non-cash income tax expense of approximately $549,000, or EPS of $0.02.

For the first quarter of 2010, non-GAAP net income and EPS excluded charges for stock-based compensation of $1.0 million, or EPS of $0.05, and non-cash income tax expense of $1.2 million, or EPS of $0.07.

Cash and investment balances, including long-term investments, as of March 31, 2011, increased to $91.9 million with no debt.

“We again saw strong year-over-year order increases across all major geographies and product groups,” said Interactive Intelligence founder and CEO, Dr. Donald E. Brown. “Total orders were up 55 percent over the first quarter of 2010, which included a near tripling in cloud-based contracts year-over-year. We’re executing well on our sales and marketing plans and are benefiting from an increase in new opportunities as a result of our relationships with key strategic partners.”

During the first quarter of 2011, the company was also named a “2011 Service Leader” by CRM Magazine and a "Need to Know Vendor” by Computer Reseller News.

On April 11, 2011, Interactive Intelligence announced that it will ask shareholders at its 2011 annual shareholder meeting to vote on a proposal to reorganize the company as a holding company incorporated in Indiana. The annual meeting is scheduled for June 10, 2011 at 9 a.m., Eastern time (EDT) at the company's world headquarters located at 7601 Interactive Way, Indianapolis, Indiana 46278. Shareholders of record as of the close of business on April 21, 2011 will be entitled to vote by proxy or in person at the annual meeting.

Interactive Intelligence and Interactive Intelligence Group, Inc., its wholly owned subsidiary, have filed a registration statement with the Securities and Exchange Commission (SEC) that includes a preliminary proxy statement/prospectus and other relevant documents in connection with the proposed reorganization. More information regarding the proposed reorganization is available on the company's website at www.inin.com, under the "About Us" tab.

Interactive Intelligence will host a first quarter 2011 earnings conference call April 25 at 4:30 p.m. Eastern time (EDT) featuring Dr. Brown and the company’s CFO, Stephen R. Head. A live Q&A session will follow opening remarks.

To access the teleconference, please dial 1.877.324.1969 at least five minutes prior to the start of the call. Ask for the teleconference by the following name: "Interactive Intelligence first quarter earnings call."

The teleconference will also be broadcast live on the company's investor relations' page at http://investors.inin.com. An archive of the teleconference will be posted following the call.

About Interactive Intelligence, Inc.

Interactive Intelligence, Inc. (Nasdaq: ININ) is a global provider of unified business communications solutions for contact center automation, enterprise IP telephony, and business process automation. The company’s solutions, which can be deployed via an on-premise or hosted model, include vertical-specific applications for insurance and collections. Interactive Intelligence was founded in 1994 and has more than 4,000 customers worldwide. The company is among Software Magazine’s 2010 Top 500 Global Software and Services Suppliers, and Forbes Magazine’s 2010 Best Small Companies in America. Interactive Intelligence is also positioned in the leaders’ quadrant of the Gartner Magic Quadrant for Contact Center Infrastructure, Worldwide report (Feb. 22, 2010). The company employs more than 800 people and is headquartered in Indianapolis, Indiana. It has 19 offices throughout North America, Latin America, Europe, Middle East, Africa and Asia Pacific. Interactive Intelligence can be reached at +1 317.872.3000 or info@inin.com; on the Net: www.inin.com.

Interactive Intelligence Forward-Looking Statement Disclosure

This release contains certain forward-looking statements that involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially are the following: rapid technological changes in the industry; the company's ability to maintain profitability; to manage successfully its growth; to manage successfully its increasingly complex third-party relationships resulting from the software and hardware components being licensed or sold with its solutions; to maintain successful relationships with certain suppliers which may be impacted by the competition in the technology industry; to maintain successful relationships with its current and any new partners; to maintain and improve its current products; to develop new products; to protect its proprietary rights adequately; to successfully integrate acquired businesses; and other factors described in the company's SEC filings, including the company's latest annual report on Form 10-K.

* Non-GAAP Measures

The non-GAAP measures shown in this release include revenue which was not recognized on a GAAP basis due to purchase accounting adjustments and exclude non-cash stock-based compensation expense for stock options, the amortization of certain intangible assets related to acquisitions by the company and non-cash income tax expense. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included with the financial information included in this press release. These measures are not in accordance with, or an alternative for, GAAP and may be different from non-GAAP measures used by other companies. Stock-based compensation expense and amortization of intangibles related to acquisitions are non-cash and income tax expense is primarily non-cash. Management believes that the presentation of non-GAAP results, when shown in conjunction with corresponding GAAP measures, provides useful information to management and investors regarding financial and business trends related to the company's results of operations. Further, management believes that these non-GAAP measures improve management's and investors' ability to compare the company's financial performance with other companies in the technology industry. Because stock-based compensation expense, non-cash income tax expense amounts and amortization of intangibles related to acquisitions can vary significantly between companies, it is useful to compare results excluding these amounts. Management also uses financial statements that exclude stock-based compensation expense related to stock options, non-cash income tax amounts and amortization of intangibles related to acquisitions for its internal budgets.

Where to Find Additional Information

Interactive Intelligence, Inc. and Interactive Intelligence Group, Inc. (ININ Group) have filed a registration statement that includes a preliminary proxy statement/prospectus and other relevant documents in connection with the proposed reorganization. INTERACTIVE INTELLIGENCE SHAREHOLDERS ARE URGED TO CAREFULLY READ THESE DOCUMENTS AND THE DEFINITIVE PROXY STATEMENT/PROSPECTUS, WHEN FILED AND MAILED, BECAUSE THEY CONTAIN AND WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED REORGANIZATION. The definitive proxy statement/prospectus will be mailed to Interactive Intelligence shareholders prior to the shareholder meeting. In addition, investors may obtain a free copy of the preliminary proxy statement/prospectus and other filings containing information about Interactive Intelligence, ININ Group, and the proposed reorganization, from the SEC at the SEC’s website at http://www.sec.gov. In addition, copies of the preliminary proxy statement/prospectus and other filings containing information about Interactive Intelligence, ININ Group, and the proposed reorganization can be obtained without charge by sending a request to Interactive Intelligence, Inc., 7601 Interactive Way, Indianapolis, Indiana 46278, Attention: Investor Relations; by calling (317) 872-3000; or by accessing them on Interactive Intelligence, Inc.’s investor relations Web page at http://investors.inin.com/.

Participants in the Solicitation

Interactive Intelligence, its directors, executive officers, certain other members of management, and employees may be deemed to be participants in the solicitation of proxies from the shareholders of Interactive Intelligence in favor of the proposed holding company reorganization. Additional information regarding the interests of potential participants in the proxy solicitation is included in the preliminary proxy statement/prospectus and will be included in the definitive proxy statement/prospectus and other relevant documents that Interactive Intelligence and ININ Group have filed and intend to file with the SEC in connection with the annual meeting of shareholders of Interactive Intelligence, Inc.

This press release is being made pursuant to and in compliance with the Securities Act of 1933, as amended, and does not constitute an offer of any securities for sale or a solicitation of an offer to buy any securities, nor shall there be any sale of the securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction. Any offer of the securities will be made solely by means of a prospectus included in the registration statement and any prospectus supplement that may be issued in connection with such offering.

Interactive Intelligence Inc. is the owner of the marks INTERACTIVE INTELLIGENCE, its associated LOGO and numerous other marks. All other trademarks mentioned in this document are the property of their respective owners.

ININ-G

Contacts:

Stephen R. Head

Chief Financial Officer

Interactive Intelligence Inc.

+1 317.715.8412

steve.head@inin.com

Christine Holley

Director of Market Communications

Interactive Intelligence Inc.

+1 317.715.8220

christine.holley@inin.com

Follow Interactive Intelligence:

Twitter: http://www.inin.com/twitter

Blog: www.inin.com/blog

YouTube: http://www.inin.com/YouTube

Facebook: http://www.inin.com/facebook

LinkedIn: http://www.inin.com/linkedin

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Interactive Intelligence, Inc.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)

	Three Months Ended
	March 31,
	2011			2010
Revenues:
Product	$	20,766		$	15,786
Recurring		20,746			15,925
Services		6,218			3,312
Total revenues		47,730			35,023
Costs of revenues:
Product		6,196			4,799
Recurring		5,282			3,423
Services		3,712			2,174
Amortization of intangible assets		35			16
Total cost of revenues		15,225			10,412
Gross profit		32,505			24,611
Operating expenses:
Sales and marketing		14,157			10,352
Research and development		8,147			6,425
General and administrative		5,095			3,836
Amortization of intangible assets		184			9
Total operating expenses		27,583			20,622
Operating income		4,922			3,989
Other income (expense):
Interest income, net		43			42
Other expense		(166	)		(775	)
Total other income (expense)		(123	)		(733	)
Income before income taxes		4,799			3,256
Income tax expense		1,704			1,388
Net income	$	3,095		$	1,868

Net income per share:
Basic	$	0.17		$	0.11
Diluted		0.16			0.10

Shares used to compute net income per share:
Basic		18,417			17,320
Diluted		19,780			18,708

Interactive Intelligence, Inc.
Reconciliation of Supplemental Financial Information
(in thousands, except per share amounts)
(unaudited)

	Three Months Ended
	March 31,
	2011		2010

Net income, as reported	$	3,095	$	1,868
Purchase accounting adjustments:
Increase to revenues:
Recurring		59		7
Services		31		2
Reduction of operating expenses:
Customer relationships		139		9
Technology		35		16
Non-compete agreements		45		-
Acquisition costs		201		-
Total		510		34
Non-cash stock-based compensation expense:
Cost of recurring revenues		105		31
Cost of services		25		48
Sales and marketing		392		324
Research and development		408		298
General and administrative		388		311
Total		1,318		1,012
Non-cash income tax expense		549		1,241
Non-GAAP net income	$	5,472	$	4,155

Operating income, as reported	$	4,922	$	3,989
Purchase accounting adjustments		510		34
Non-cash stock-based compensation expense		1,318		1,012
Non-GAAP operating income	$	6,750	$	5,035

Diluted EPS, as reported	$	0.16	$	0.10
Purchase accounting adjustments		0.03		0.00
Non-cash stock-based compensation expense		0.07		0.05
Non-cash income tax expense		0.02		0.07
Non-GAAP diluted EPS	$	0.28	$	0.22

Interactive Intelligence, Inc.
Condensed Consolidated Balance Sheets
(in thousands)


	March 31,			December 31,
	2011			2010
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	51,870		$	48,300
Short-term investments		34,439			37,582
Accounts receivable, net		37,295			36,130
Deferred tax assets, net		5,112			5,499
Prepaid expenses		9,054			7,456
Other current assets		4,773			4,989
Total current assets		142,543			139,956
Long-term investments		5,566			-
Property and equipment, net		11,877			10,336
Deferred tax assets, net		2,494			2,765
Goodwill		14,567			11,371
Intangible assets, net		12,068			11,001
Other assets, net		931			803
Total assets	$	190,046		$	176,232

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities	$	15,139		$	16,364
Accrued compensation and related expenses		5,303			6,553
Deferred product revenues		4,989			3,350
Deferred services revenues		47,109			43,281
Total current liabilities		72,540			69,548
Deferred revenue		8,935			7,420
Total liabilities		81,475			76,968

Shareholders' equity:
Preferred stock		-			-
Common stock		186			182
Additional paid-in-capital		109,990			103,837
Accumulated other comprehensive income		(235	)		(290	)
Accumulated deficit		(1,370	)		(4,465	)
Total shareholders' equity		108,571			99,264
Total liabilities and shareholders' equity	$	190,046		$	176,232

Interactive Intelligence, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

	Three Months Ended
	March 31,
	2011			2010

Operating activities:
Net income	$	3,095		$	1,868
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization and other non-cash items		1,481			1,059
Stock-based compensation expense		1,318			1,012
Tax benefits from stock-based payment arrangements		(862	)		(1,251	)
Deferred income tax		34			(150	)
Accretion of investment income		(682	)		27
Changes in operating assets and liabilities:
Accounts receivable		(49	)		5,110
Prepaid expenses		(1,311	)		(346	)
Other current assets		272			(47	)
Other assets		(128	)		53
Accounts payable and accrued liabilities		(1,598	)		143
Accrued compensation and related expenses		(1,585	)		(1,304	)
Deferred product revenues		1,793			(615	)
Deferred services revenues		4,889			(214	)
Net cash provided by operating activities		6,667			5,345

Investing activities:
Sales of available-for-sale investments		21,028			2,550
Purchases of available-for-sale investments		(22,740	)		(7,828	)
Purchases of property and equipment		(2,139	)		(985	)
Acquisition, net of cash		(4,111	)		-
Unrealized gain on investment		26			-
Net cash used in investing activities		(7,936	)		(6,263	)

Financing activities:
Proceeds from stock options exercised		3,881			691
Proceeds from issuance of common stock		96			158
Tax benefits from stock-based payment arrangements		862			1,251
Net cash provided by financing activities		4,839			2,100

Net increase in cash and cash equivalents		3,570			1,182
Cash and cash equivalents, beginning of period		48,300			48,497
Cash and cash equivalents, end of period	$	51,870		$	49,679

Cash paid during the period for:
Interest	$	-		$	1
Income taxes		842			318

Other non-cash item:
Purchases of property and equipment payable at end of period	$	746		$	57

Condensed Consolidated Statements of Income - GAAP
(in thousands, except per share amounts)
(unaudited)
	2010														2011
		Q1			Q2			Q3		Q4		Total				Q1

Revenues:
Product	$	15,786		$	18,315		$	20,671	$	25,045		$	79,817		$	20,766
Recurring		15,925			16,322			16,595		19,898			68,740			20,746
Services		3,312			4,174			4,565		5,707			17,758			6,218
Total revenues		35,023			38,811			41,831		50,650			166,315			47,730
Costs of revenues:
Product		4,799			5,502			6,198		7,369			23,868			6,196
Recurring		3,423			4,043			4,302		5,223			16,991			5,282
Services		2,174			2,144			2,465		3,005			9,788			3,712
Amortization of intangibles		16			16			16		35			83			35
Total cost of revenues		10,412			11,705			12,981		15,632			50,730			15,225
Gross profit		24,611			27,106			28,850		35,018			115,585			32,505
Operating expenses:
Sales and marketing		10,352			11,480			12,106		13,134			47,072			14,157
Research and development		6,425			6,945			7,193		7,786			28,349			8,147
General and administrative		3,836			4,013			3,935		4,800			16,584			5,095
Amortization of intangibles		9			9			9		184			211			184
Total operating expenses		20,622			22,447			23,243		25,904			92,216			27,583
Operating income		3,989			4,659			5,607		9,114			23,369			4,922
Other income (expense):
Interest income, net		42			67			120		111			340			43
Other income (expense)		(775	)		(590	)		337		(118	)		(1,146	)		(166	)
Total other income (expense)		(733	)		(523	)		457		(7	)		(806	)		(123	)
Income before income taxes		3,256			4,136			6,064		9,107			22,563			4,799
Income tax expense		1,388			1,680			2,561		2,033			7,662			1,704
Net income	$	1,868		$	2,456		$	3,503	$	7,074		$	14,901		$	3,095

Net income per share:
Basic	$	0.11		$	0.14		$	0.20	$	0.39		$	0.85		$	0.17
Diluted	$	0.10		$	0.13		$	0.19	$	0.37		$	0.79		$	0.16

Shares used to compute net income per share:
Basic		17,320			17,445			17,524		17,956			17,563			18,417
Diluted		18,708			18,772			18,695		19,302			18,894			19,780

Condensed Consolidated Statements of Income - Non-GAAP
(in thousands, except per share amounts)
(unaudited)
	2010														2011
		Q1			Q2			Q3		Q4		Total				Q1

Revenues:
Product	$	15,786		$	18,315		$	20,671	$	25,045		$	79,817		$	20,766
Recurring		15,932			16,323			16,595		19,978			68,828			20,805
Services		3,314			4,175			4,566		5,707			17,762			6,249
Total revenues		35,032			38,813			41,832		50,730			166,407			47,820
Costs of revenues:
Product		4,799			5,502			6,198		7,369			23,868			6,196
Recurring		3,392			3,983			4,234		5,155			16,764			5,177
Services		2,126			2,141			2,447		2,980			9,694			3,687
Total cost of revenues		10,317			11,626			12,879		15,504			50,326			15,060
Gross profit		24,715			27,187			28,953		35,226			116,081			32,760
Operating expenses:
Sales and marketing		10,028			11,162			11,774		12,878			45,842			13,765
Research and development		6,127			6,647			6,908		7,489			27,171			7,739
General and administrative		3,525			3,728			3,609		4,383			15,245			4,506
Total operating expenses		19,680			21,537			22,291		24,750			88,258			26,010
Operating income		5,035			5,650			6,662		10,476			27,823			6,750
Other income (expense):
Interest income, net		42			67			120		111			340			43
Other income (expense)		(775	)		(590	)		337		(118	)		(1,146	)		(166	)
Total other income (expense)		(733	)		(523	)		457		(7	)		(806	)		(123	)
Income before income taxes		4,302			5,127			7,119		10,469			27,017			6,627
Income tax expense		147			133			151		55			486			1,155
Net income	$	4,155		$	4,994		$	6,968	$	10,414		$	26,531		$	5,472

Net income per share:
Basic	$	0.24		$	0.29		$	0.40	$	0.58		$	1.51		$	0.30
Diluted		0.22			0.27			0.37		0.54			1.40			0.28

Shares used to compute net income per share:
Basic		17,320			17,445			17,524		17,956			17,563			18,417
Diluted		18,708			18,772			18,695		19,302			18,894			19,780

Supplemental Data
(Dollars in thousands)

	2010															2011
		Q1			Q2			Q3			Q4		Total				Q1
Non-GAAP Adjustments:
Purchase accounting adjustments:
Increase to revenues:
Recurring	$	7		$	1		$	-		$	80		$	88		$	59
Services		2			1			1			-			4			31

Reduction of operating expenses:
Customer relationships		9			9			9			139			166			139
Technology		16			16			16			35			83			35
Non-compete agreements		-			-			-			45			45			45
Acquisition costs		-			-			-			89			89			201
Total purchase accounting adjustments	$	34		$	27		$	26		$	388		$	475		$	510

Stock-based compensation expense:
Costs of recurring revenues	$	31		$	60		$	68		$	68		$	227		$	105
Costs of services revenues		48			3			18			25			94			25
Sales and marketing		324			318			332			256			1,230			392
Research and development		298			298			285			297			1,178			408
General and administrative		311			285			326			328			1,250			388
Total	$	1,012		$	964		$	1,029		$	974		$	3,979		$	1,318

Non-cash income tax expense	$	1,241		$	1,547		$	2,410		$	1,978		$	7,176		$	549

Other Information:
Margins (GAAP):
Product		69.6	%		70.0	%		70.0	%		70.6	%		70.1	%		70.2	%
Recurring		78.5	%		75.2	%		74.1	%		73.8	%		75.3	%		74.5	%
Services		34.4	%		48.6	%		46.0	%		47.3	%		44.9	%		40.3	%
Overall		70.3	%		69.8	%		69.0	%		69.1	%		69.5	%		68.1	%

Year-over-year Revenue Growth (GAAP):
Product		20.7	%		10.6	%		32.5	%		38.5	%		26.0	%		31.5	%
Recurring		18.8	%		23.2	%		15.7	%		34.4	%		23.2	%		30.3	%
Services		10.7	%		35.0	%		41.6	%		91.3	%		44.5	%		87.7	%
Overall		18.8	%		18.0	%		26.1	%		41.2	%		26.6	%		36.3	%

Orders:
Over $1 million		3			2			9			5			19			3
Between $250,000 and $1 million		11			18			16			26			71			24

Number of new customers		71			62			48			77			258			65

Average new customer order:
Overall	$	135		$	178		$	318		$	225		$	206		$	275
Cloud-based		535			446			617			139			401			488

INTERACTIVE INTELLIGENCE INC 8-K