Answer
$$(1+xy)(1-xy)$$
Work Step by Step
$1-x^{2}y^{2}$
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.
$\sqrt 1=1$
$\sqrt x^{2}y^{2}=xy$
So the answer would look like:
$$(1+xy)(1-xy)$$
(One with a positive sign and one with a negative sign.)