Sycamore Networks (SCMR) 8-K SYCAMORE NETWORKS, INC. REPORTS FOURTH QUARTER and FISCAL YEAR 2005

Exhibit 99.1

CONTACT: Press Inquiries Scott Larson Public Relations Sycamore Networks, Inc. 978-250-3433 scott.larson@sycamorenet.com
		Investor Inquiries Terry Adams Investor Relations Sycamore Networks, Inc. 978-250-3460 investor.info@sycamorenet.com

SYCAMORE NETWORKS, INC. REPORTS FOURTH QUARTER and FISCAL YEAR 2005

FINANCIAL RESULTS

CHELMSFORD, Mass., October 11, 2005 – Sycamore Networks, Inc. (NASDAQ: SCMR), a leader in optical networking, today reported its fourth quarter and fiscal year end results for the period ended July 31, 2005.

Revenue for the fourth quarter of fiscal 2005 was $18.5 million, compared with $14.5 million for the fourth quarter of fiscal 2004.

Net income for the fourth quarter of fiscal 2005, on a generally accepted accounting principles (GAAP) basis, was $1.4 million, or $0.01 per share, compared with a net loss of $9.2 million, or $(0.03) per share for the fourth quarter of fiscal 2004. Non-GAAP net income for the fourth quarter of fiscal 2005, which excludes stock-based compensation and payroll taxes on stock option exercises, was $1.6 million, or $0.01 per share, compared with a non-GAAP net loss of $8.1 million, or $(0.03) per share for the fourth quarter of fiscal 2004. The reconciliation between net income (loss) on a GAAP basis and net income (loss) on a non-GAAP basis is provided in a table immediately following the Unaudited Consolidated Statements of Operations included with this release.

Revenue for fiscal 2005 was $65.4 million, compared with $44.5 million for fiscal 2004.

Net loss for fiscal 2005, on a GAAP basis, was $23.8 million or $(0.09) per share, compared with a net loss of $44.8 million, or $(0.17) per share for fiscal 2004. Non-GAAP net loss for fiscal 2005, which excludes stock-based compensation and payroll taxes on stock option exercises, a reserve for contingent liabilities associated with certain claims, disputes and litigation, restructuring charges and related asset impairments, was $11.0 million, or $(0.04) per share, compared with a non-GAAP net loss of $39.1 million, or $(0.14) per share for fiscal 2004. The reconciliation between net loss on a GAAP basis and net loss on a non-GAAP basis is provided in a table immediately following the Unaudited Consolidated Statements of Operations included with this release.

“We were very pleased with our fourth quarter and fiscal year results, including revenue growth, improved gross margins and operating expense reductions,” said Daniel E. Smith, president and chief executive officer. “These improvements were the direct result of disciplined focus and diligent execution in our optical switching business. In addition, the combination of improvements in our core operating results and our ongoing efforts to maintain balance sheet strength resulted in positive cash generation in the fourth quarter.”

About Sycamore Networks

Sycamore Networks, Inc. (NASDAQ: SCMR) is a leading provider of intelligent optical switching products for telecommunications service providers worldwide. The company’s products form the reliable foundation for some of the world’s most respected and innovative communications networks. Sycamore’s fully integrated edge-to-core optical switching solutions enable network operators to efficiently and cost-effectively provision and manage optical network capacity to support a wide range of voice, video and data services. For more information, please visitwww.sycamorenet.com.

We wish to caution you that certain matters discussed in this news release constitute forward-looking statements that involve risks and uncertainties. Readers are cautioned that actual results or events could differ materially from those stated or implied in forward-looking statements. These risks and uncertainties include, but are not limited to, additional actions and findings that may result from the restatement of previously issued financial statements, the Company’s reliance on a limited number of customers, the significant cost structure required to support the Company’s strategy, variation of the Company’s quarterly results and competition in the telecommunications industry. Certain additional risks are set forth in more detail in the section entitled Factors that May Affect Future Results under Item 2 in Management Discussion and Analysis of Financial Conditions and Results of Operations in the Company’s most recently filed Form 10-Q, Form 10-K/A and the other reports filed by the Company from time to time with the Securities and Exchange Commission. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.

Use of Non-GAAP Financial Measures

The Company provides non-GAAP financial data in addition to providing financial results in accordance with GAAP. These measures are not in accordance with, or an alternative for GAAP, and may be different from non-GAAP measures used by other companies. The items excluded from non-GAAP results have one or more of the following characteristics: their magnitude and timing is largely outside of the Company’s control; they are unrelated to the ongoing operation of the business in the ordinary course; they are unusual, and the Company does not expect them to occur in the ordinary course of business; or they are non-operational, non-cash expenses involving stock option grants.

The non-GAAP financial data is provided to enhance the reader’s overall understanding of the Company’s current financial performance and its prospects for the future. Specifically, the Company believes the non-GAAP results provide useful information to both management and investors by excluding certain expense and income items that the Company believes are not indicative of the Company’s core operating results because such charges are associated with past events and are not related to current operations. In addition, since the Company has historically reported non-GAAP results to the investment community, the Company believes the inclusion of non-GAAP numbers provides consistency in its financial reporting. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting in future periods. The non-GAAP financial data should be considered in addition to, not as a substitute for or a more appropriate indicator of, operating losses, cash flows, or other measures of financial performance prepared in accordance with GAAP.

Sycamore Networks, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

	July 31, 2005			July 31, 2004
Assets
Current assets:
Cash and cash equivalents	$	508,281		$	45,430
Short-term investments		446,258			482,274
Accounts receivable, net		8,384			10,605
Inventories		5,445			4,294
Prepaids and other current assets		3,812			3,611
Total current assets		972,180			546,214
Property and equipment, net		8,437			9,419
Long-term investments		496			433,621
Other assets		950			1,664
Total Assets	$	982,063		$	990,918
Liabilities and Stockholders’ Equity
Deferred revenue	$	8,700		$	7,226
Other current liabilities		23,779			15,321
Restructuring liabilities		8,455			12,005
Total current liabilities		40,934			34,552
Long term deferred revenue		1,584			926
Total liabilities		42,518			35,478
Common stock		276			274
Additional paid-in capital		1,780,243			1,774,214
Accumulated deficit		(838,533	)		(814,744	)
Other equity		(2,441	)		(4,304	)
Total stockholders’ equity		939,545			955,440
Total Liabilities and Stockholders’ Equity	$	982,063		$	990,918

Sycamore Networks, Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except per share data)

	Three Months Ended							Year Ended
	July 31, 2005				July 31, 2004			July 31, 2005			July 31, 2004
Revenue	$	18,479			$	14,513		$	65,434		$	44,547
Cost of revenue		7,859				8,716			33,605			28,397
Stock-based compensation and payroll tax on stock option exercises		53				201			332			836
Gross profit		10,567				5,596			31,497			15,314
Operating expenses:
Research and development		9,094				11,382			42,656			45,681
Sales and marketing		3,040				4,456			11,822			18,101
General and administrative		2,967				2,273			9,156			7,365
Stock-based compensation and payroll tax on stock option exercises:
Research and development		115				459			825			2,775
Sales and marketing		12				216			123			1,042
General and administrative		23				210			328			1,082
Reserve for contingencies		—				—			10,282			—
Restructuring charges and related asset impairments		—				—			679			—
				��
Total operating expenses		15,251				18,996			75,871			76,046
Loss from operations		(4,684	)			(13,400	)		(44,374	)		(60,732	)
Interest and other income, net		6,183				4,242			20,648			15,890
Income (loss) before income taxes		1,499				(9,158	)		(23,726	)		(44,842	)
Income tax expense		63				—			63			—
Net income (loss)	$	1,436			$	(9,158	)	$	(23,789	)	$	(44,842	)
Basic net income (loss) per share	$	0.01			$	(0.03	)	$	(0.09	)	$	(0.17	)
Diluted net income (loss) per share	$	0.01			$	(0.03	)	$	(0.09	)	$	(0.17	)
Weighted average shares used in computing basic net income per share		275,774				273,564			275,023			272,123
Weighted average shares used in computing diluted net loss per share		276,614				273,564			275,023			272,123

Sycamore Networks, Inc.

Unaudited Non-GAAP Consolidated Statements of Operations (a)

(in thousands, except per share data)

	Three Months Ended July 31, 2005
	GAAP Results			Adjustments			Non-GAAP Results (a)
Revenue	$	18,479		$	—		$	18,479
Cost of revenue		7,859			—			7,859
Stock-based compensation and payroll tax on stock option exercises		53			(53	)		—
Gross profit		10,567			53			10,620
Operating expenses:
Research and development		9,094			—			9,094
Sales and marketing		3,040			—			3,040
General and administrative		2,967			—			2,967
Stock-based compensation and payroll tax on stock option exercises:
Research and development		115			(115	)		—
Sales and marketing		12			(12	)		—
General and administrative		23			(23	)		—
Total operating expenses		15,251			(150	)		15,101
Loss from operations		(4,684	)		203			(4,481	)
Interest and other income, net		6,183			—			6,183
Income before income taxes		1,499			203			1,702
Income tax expense		63			—			63
Net income	$	1,436		$	203		$	1,639
Basic net income per share	$	0.01					$	0.01
Diluted net income per share	$	0.01					$	0.01
Weighted average shares used in computing basic net income per share		275,774						275,774
Weighted average shares used in computing diluted net income per share		276,614						276,614

(a) These Unaudited non-GAAP Consolidated Statements of Operations are for informational purposes only and are not presented in accordance with GAAP. The adjustments necessary to provide a direct reconciliation of the non-GAAP to the GAAP basis consolidated statements of operations exclude stock-based compensation and payroll taxes on stock option exercises, a reserve for contingent liabilities associated with certain claims, disputes and litigation, restructuring charges and related asset impairments.

Sycamore Networks, Inc.

Unaudited Non-GAAP Consolidated Statements of Operations (a)

(in thousands, except per share data)

	Three Months Ended July 31, 2004
	GAAP Results			Adjustments			Non-GAAP Results (a)
Revenue	$	14,513		$	—		$	14,513
Cost of revenue		8,716			—			8,716
Stock-based compensation and payroll tax on stock option exercises		201			(201	)		—
Gross profit		5,596			201			5,797
Operating expenses:
Research and development		11,382			—			11,382
Sales and marketing		4,456			—			4,456
General and administrative		2,273			—			2,273
Stock-based compensation and payroll tax on stock option exercises:
Research and development		459			(459	)		—
Sales and marketing		216			(216	)		—
General and administrative		210			(210	)		—
Total operating expenses		18,996			(885	)		18,111
Loss from operations		(13,400	)		1,086			(12,314	)
Interest and other income, net		4,242			—			4,242
Net loss	$	(9,158	)	$	1,086		$	(8,072	)
Diluted net loss per share	$	(0.03	)				$	(0.03	)
Weighted average shares used in computing diluted net loss per share		273,564						273,564

(a) These Unaudited non-GAAP Consolidated Statements of Operations are for informational purposes only and are not presented in accordance with GAAP. The adjustments necessary to provide a direct reconciliation of the non-GAAP to the GAAP basis consolidated statements of operations exclude stock-based compensation and payroll taxes on stock option exercises, a reserve for contingent liabilities associated with certain claims, disputes and litigation, restructuring charges and related asset impairments.

Sycamore Networks, Inc.

Unaudited Non-GAAP Consolidated Statements of Operations (a)

(in thousands, except per share data)

	Year Ended July 31, 2005
	GAAP Results			Adjustments			Non-GAAP Results (a)
Revenue	$	65,434		$	—		$	65,434
Cost of revenue		33,605			(204	)		33,401
Stock-based compensation and payroll tax on stock option exercises		332			(332	)		—
Gross profit		31,497			536			32,033
Operating expenses:
Research and development		42,656			—			42,656
Sales and marketing		11,822			—			11,822
General and administrative		9,156			—			9,156
Stock-based compensation and payroll tax on stock option exercises:
Research and development		825			(825	)		—
Sales and marketing		123			(123	)		—
General and administrative		328			(328	)		—
Reserve for contingencies		10,282			(10,282	)		—
Restructuring charges and related asset impairments		679			(679	)		—
Total operating expenses		75,871			(12,237	)		63,634
Loss from operations		(44,374	)		12,773			(31,601	)
Interest and other income, net		20,648			—			20,648
Loss before income taxes		(23,726	)		12,773			(10,953	)
Income tax expense		63			—			63
Net loss	$	(23,789	)	$	12,773		$	(11,016	)
Diluted net loss per share	$	(0.09	)				$	(0.04	)
Weighted average shares used in computing diluted net loss per share		275,023						275,023

(a) These Unaudited non-GAAP Consolidated Statements of Operations are for informational purposes only and are not presented in accordance with GAAP. The adjustments necessary to provide a direct reconciliation of the non-GAAP to the GAAP basis consolidated statements of operations exclude stock-based compensation and payroll taxes on stock option exercises, a reserve for contingent liabilities associated with certain claims, disputes and litigation, restructuring charges and related asset impairments.

Sycamore Networks, Inc.

Unaudited Non-GAAP Consolidated Statements of Operations (a)

(in thousands, except per share data)

	Year Ended July 31, 2004
	GAAP Results			Adjustments			Non-GAAP Results (a)
Revenue	$	44,547		$	—		$	44,547
Cost of revenue		28,397			—			28,397
Stock-based compensation and payroll tax on stock option exercises		836			(836	)		—
Gross profit		15,314			836			16,150
Operating expenses:
Research and development		45,681			—			45,681
Sales and marketing		18,101			—			18,101
General and administrative		7,365			—			7,365
Stock-based compensation and payroll tax on stock option exercises:
Research and development		2,775			(2,775	)		—
Sales and marketing		1,042			(1,042	)		—
General and administrative		1,082			(1,082	)		—
Total operating expenses		76,046			(4,899	)		71,147
Loss from operations		(60,732	)		5,735			(54,997	)
Interest and other income, net		15,890			—			15,890
Net loss	$	(44,842	)	$	5,735		$	(39,107	)
Diluted net loss per share	$	(0.17	)				$	(0.14	)
Weighted average shares used in computing diluted net loss per share		272,123						272,123

(a) These Unaudited non-GAAP Consolidated Statements of Operations are for informational purposes only and are not presented in accordance with GAAP. The adjustments necessary to provide a direct reconciliation of the non-GAAP to the GAAP basis consolidated statements of operations exclude stock-based compensation and payroll taxes on stock option exercises, a reserve for contingent liabilities associated with certain claims, disputes and litigation, restructuring charges and related asset impairments.