Answer
$$(xy+1)(xy-1)$$
Work Step by Step
$x^{2}y^{2}-1$
This is the difference between two squares.
There is a simple formula for this case:
$x^{2}-y^{2}=(x+y)(x-y)$
So, applying this formula:
We need to take the square of both terms.
$\sqrt (x^{2}y^{2})=xy$
$\sqrt 1=1$
So the answer would look like:
$$(xy+1)(xy-1)$$
(One with a positive sign and one with a negative sign.)