Sycamore Networks (SCMR) 8-K Sycamore Networks, Inc. Reports First Quarter Fiscal Year 2006

Exhibit 99.1

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

SYCAMORE NETWORKS, INC. REPORTS FIRST QUARTER FISCAL YEAR 2006

FINANCIAL RESULTS

Revenues Increase 48% Sequentially and 92% Year-Over-Year; Gross Margins Remain Strong

CHELMSFORD, Mass., November 29, 2005 – Sycamore Networks, Inc. (NASDAQ: SCMR), a leader in optical networking, today reported its first quarter results for the period ended October 29, 2005.

Revenue for the first quarter of fiscal 2006 was $27.3 million, compared with $14.2 million for the first quarter of fiscal 2005.

Net income for the first quarter of fiscal 2006, on a generally accepted accounting principles (GAAP) basis, was $6.9 million, or $0.02 per share, compared with a net loss of $7.9 million, or $(0.03) per share for the first quarter of fiscal 2005. Non-GAAP net income for the first quarter of fiscal 2006, which excludes stock-based compensation expense, was $8.3 million, or $0.03 per share, compared with a non-GAAP net loss of $7.2 million, or $(0.03) per share for the first quarter of fiscal 2005. 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.

“Q1 was a strong quarter across the board as Sycamore delivered significant revenue growth on a quarter-over-quarter and year-over-year basis. In addition, Sycamore maintained solid gross margins, achieved operating profitability on a non-GAAP basis, and had another quarter of positive cash generation,” said Daniel E. Smith, president and chief executive officer. “This progress is the result of several key factors, including our success in expanding our Tier 1 customer base, a continued emphasis on disciplined financial management, and demonstrated leadership in optical switching technology.”

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 in Management Discussion and Analysis of Financial Conditions and Results of Operations in the Company’s most recently filed Form 10-K, Form 10-Q 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)

	October 29, 2005			July 31, 2005
Assets
Current assets:
Cash and cash equivalents	$	304,971		$	508,281
Short-term investments		650,300			446,258
Accounts receivable, net		18,056			8,384
Inventories		5,866			5,445
Prepaids and other current assets		3,379			3,812
Total current assets		982,572			972,180
Property and equipment, net		7,994			8,437
Long-term investments		—			496
Other assets		915			950
Total Assets	$	991,481		$	982,063
Liabilities and Stockholders’ Equity
Deferred revenue	$	7,669		$	8,700
Other current liabilities		23,623			23,779
Restructuring liabilities		7,672			8,455
Total current liabilities		38,964			40,934
Long term deferred revenue		2,234			1,584
Total liabilities		41,198			42,518
Common stock		277			276
Additional paid-in capital		1,783,433			1,780,243
Accumulated deficit		(831,679	)		(838,533	)
Other equity		(1,748	)		(2,441	)
Total stockholders’ equity		950,283			939,545
Total Liabilities and Stockholders’ Equity	$	991,481		$	982,063

Sycamore Networks, Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except per share data)

	Three Months Ended
	October 29,			October 30,
	2005			2004
Revenue	$	27,298		$	14,215
Cost of revenue		12,941			8,540
Stock-based compensation		323			124
Gross profit		14,034			5,551
Operating expenses:
Research and development		7,713			11,670
Sales and marketing		2,637			3,144
General and administrative		2,898			2,245
Stock-based compensation:
Research and development		625			289
Sales and marketing		242			48
General and administrative		276			216
Total operating expenses		14,391			17,612
Loss from operations		(357	)		(12,061	)
Interest and other income, net		7,430			4,198
Income (loss) before income taxes		7,073			(7,863	)
Income tax expense		219			—
Net income (loss)	$	6,854		$	(7,863	)
Earnings per share:
Basic	$	0.02		$	(0.03	)
Diluted	$	0.02		$	(0.03	)
Weighted average shares outstanding:
Basic		276,273			274,030
Diluted		279,133			274,030

Sycamore Networks, Inc.

Unaudited Non-GAAP Consolidated Statements of Operations (a)

(in thousands, except per share data)

	Three Months Ended October 29, 2005
	GAAP Results			Adjustments			Non-GAAP Results (a)
Revenue	$	27,298		$	—		$	27,298
Cost of revenue		12,941			—			12,941
Stock-based compensation		323			(323	)		—
Gross profit		14,034			323			14,357
Operating expenses:
Research and development		7,713			—			7,713
Sales and marketing		2,637			—			2,637
General and administrative		2,898			—			2,898
Stock-based compensation:
Research and development		625			(625	)		—
Sales and marketing		242			(242	)		—
General and administrative		276			(276	)		—
Total operating expenses		14,391			(1,143	)		13,248
Income (loss) from operations		(357	)		1,466			1,109
Interest and other income, net		7,430			—			7,430
Income before income taxes		7,073			1,466			8,539
Income tax expense		219			45			264
Net income	$	6,854		$	1,421		$	8,275
Earnings per share:
Basic	$	0.02					$	0.03
Diluted	$	0.02					$	0.03
Weighted average shares outstanding:
Basic		276,273						276,273
Diluted		279,133						279,133

(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 expense.

Sycamore Networks, Inc.

Unaudited Non-GAAP Consolidated Statements of Operations (a)

(in thousands, except per share data)

	Three Months Ended October 30, 2004
	GAAP Results			Adjustments			Non-GAAP Results (a)
Revenue	$	14,215		$	—		$	14,215
Cost of revenue		8,540			—			8,540
Stock-based compensation		124			(124	)		—
Gross profit		5,551			124			5,675
Operating expenses:
Research and development		11,670			—			11,670
Sales and marketing		3,144			—			3,144
General and administrative		2,245			—			2,245
Stock-based compensation:
Research and development		289			(289	)		—
Sales and marketing		48			(48	)		—
General and administrative		216			(216	)		—
Total operating expenses		17,612			(553	)		17,059
Loss from operations		(12,061	)		677			(11,384	)
Interest and other income, net		4,198			—			4,198
Net loss	$	(7,863	)	$	677		$	(7,186	)
Earnings per share:
Basic	$	(0.03	)				$	(0.03	)
Diluted	$	(0.03	)				$	(0.03	)
Weighted average shares outstanding:
Basic		274,030						274,030
Diluted		274,030						274,030

(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 expense.