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

Exhibit 99.1

CONTACT:
Robert Travis	Scott Larson
Investor Relations	Press Inquiries
Sycamore Networks, Inc.	Sycamore Networks, Inc.
978-250-3432	978-250-3433
bob.travis@sycamorenet.com	scott.larson@sycamorenet.com

SYCAMORE NETWORKS, INC. REPORTS THIRD QUARTER FISCAL YEAR

2007 FINANCIAL RESULTS

Current in SEC Reporting Obligations

CHELMSFORD, Mass., July 19, 2007 – Sycamore Networks, Inc. (NASDAQ: SCMR), a leader in intelligent networking solutions for fixed line and mobile network operators worldwide, today reported its third quarter results for the period ended April 28, 2007. Revenue for the third quarter of fiscal 2007 was $43.5 million, compared with $22.9 million for the third quarter of fiscal 2006. Sycamore’s multiservice access product line, added to its portfolio during the first quarter of fiscal 2007, contributed $5.0 million in product revenue for the third quarter of fiscal 2007.

Net income for the third quarter of fiscal 2007, on a generally accepted accounting principles (“GAAP”) basis, was $6.7 million, or $0.02 per fully diluted share, compared with a net income of $10.5 million, or $0.04 per fully diluted share for the third quarter of fiscal 2006. Non-GAAP net income for the third quarter of fiscal 2007 was $8.9 million, or $0.03 per fully diluted share, compared with non-GAAP net income of $12.3 million, or $0.04 per fully diluted share for the third quarter of fiscal 2006. The reconciliation between net income on a GAAP basis and net income on a non-GAAP basis is provided in a table immediately following the Unaudited Non-GAAP Consolidated Statements of Operations included with this release.

Revenue for the first nine months of fiscal 2007 was $118.0 million, compared with $71.1 million for the first nine months of fiscal 2006. Sycamore’s multiservice access product line contributed $20.5 million in product revenue for the first nine months of fiscal 2007.

Net loss for the first nine months of fiscal 2007, on a GAAP basis, was $7.1 million or $(0.03) per fully diluted share, compared with a net income of $22.4 million or $0.08 per fully diluted share for the first nine months of fiscal 2006. Non-GAAP net income for the first nine months of fiscal 2007 was $20.2 million, or $0.07 per fully diluted share, compared with non-GAAP net income of $27.7 million, or $0.10 per fully diluted share for the first nine months of fiscal 2006. The reconciliation between net income (loss) on a GAAP basis and net income on a non-GAAP basis is provided in a table immediately following the Unaudited Non-GAAP Consolidated Statements of Operations included with this release.

“We are pleased with the positive Q3 results, the strength of our product portfolio and the growth of the core networking products being used for intelligent bandwidth management applications,” said Daniel E. Smith, Sycamore’s president and chief executive officer. “As a result, we reported strong revenue growth and another quarter of positive cash generation. We continue to execute on our business strategy and our continued progress, we believe, underscores the unique value our intelligent networking solutions deliver to our customers.”

The Company also reported that, with the filing on July 19, 2007 of its Quarterly Reports on Form 10-Q for the periods ended October 28, 2006, January 27, 2007, and April 28, 2007, it has now filed all previously delinquent periodic reports with the Securities and Exchange Commission (“SEC”). The Company believes it is now current in its SEC reporting obligations and believes that it has complied with all conditions set forth for continued listing by the Nasdaq Listing Qualifications Panel; however, the Company awaits confirmation of compliance from NASDAQ.

Fourth Quarter Conference Call

Sycamore Networks will discuss the financial results and other information presented in its SEC filings when it issues the results of its fourth quarter and fiscal year ended July 31, 2007.

About Sycamore Networks

Sycamore Networks, Inc. (NASDAQ: SCMR) is a leading provider of intelligent networking solutions for fixed line and mobile network operators worldwide. From multiservice access networks to the optical core, Sycamore products enable network operators to lower overall network costs, increase operational efficiencies, and rapidly deploy new revenue-generating services. Sycamore’s global customer base includes Tier 1 service providers, government agencies, and utility companies. For more information, please visit www.sycamorenet.com.

Use of Non-GAAP Financial Measures

The Company provides non-GAAP financial data in addition to providing financial results in accordance with generally accepted accounting principles (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 Company believes that the items excluded from the 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. 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 results, cash flows, or other measures of financial performance prepared in accordance with GAAP.

We wish to caution you that certain matters discussed in this news release constitute forward-looking statements regarding future events 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, the findings, including possible tax liabilities and penalties resulting from the audit of certain of the Company’s tax returns by the Internal Revenue Service, risks relating to the formal investigations commenced by the Securities and Exchange Commission and the U.S. Attorney’s office with respect to certain stock options granted by the Company, additional actions and findings that may result from the investigation into such stock options and the accounting therefor, including the restatement of previously issued financial statements, certain purported shareholder derivative actions filed against the Company and certain of its current and former officers and its directors, the Company’s inability to file timely periodic reports on Form 10-K and Form 10-Q with the Securities and Exchange Commission and the possible delisting of the Company’s common stock by NASDAQ. Certain additional risks are set forth in more detail in the section entitled “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed by the Company 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.

Sycamore Networks, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

	April 28, 2007			July 31, 2006
Assets
Current assets:
Cash and cash equivalents	$	363,946		$	169,820
Short-term investments		539,687			674,518
Accounts receivable, net		30,446			14,090
Inventories		17,448			6,013
Prepaids and other current assets		3,967			4,184
Total current assets		955,494			868,625
Property and equipment, net		18,599			7,824
Long-term investments		15,192			140,799
Purchased intangibles, net		23,019			—
Goodwill		20,334			—
Other assets		853			804
Total Assets	$	1,033,491		$	1,018,052
Liabilities and Stockholders’ Equity
Current liabilities:
Deferred revenue	$	10,946		$	6,918
Other current liabilities		39,177			32,849
Total current liabilities		50,123			39,767
Long term deferred revenue		4,454			2,579
Long term liability		1,648			—
Total liabilities		56,225			42,346
Common stock		280			279
Additional paid-in capital		2,018,823			2,011,147
Accumulated deficit		(1,041,570	)		(1,034,464	)
Other equity		(267	)		(1,256	)
Total stockholders’ equity		977,266			975,706
Total Liabilities and Stockholders’ Equity	$	1,033,491		$	1,018,052

Sycamore Networks, Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except per share data)

	Three Months Ended					Nine Months Ended
	April 28, 2007			April 29, 2006		April 28, 2007			April 29, 2006
Revenue	$	43,540		$	22,944	$	118,008		$	71,077
Cost of revenue		23,379			9,405		67,825			33,398
Gross profit		20,161			13,539		50,183			37,679
Operating expenses:
Research and development		12,240			7,975		33,379			24,201
Sales and marketing		5,879			2,951		17,810			8,482
General and administrative		6,990			2,294		21,677			7,893
In-process research and development		—			—		12,400			—
Asset impairment		—			—		6,555			—
Litigation settlement		—			—		—			750
Total operating expenses		25,109			13,220		91,821			41,326
Income (loss) from operations		(4,948	)		319		(41,638	)		(3,647	)
Interest and other income, net		11,803			10,564		34,892			26,720
Income (loss) before income taxes		6,855			10,883		(6,746	)		23,073
Income tax expense		159			362		360			692
Net income (loss)	$	6,696		$	10,521	$	(7,106	)	$	22,381
Net income (loss) per share:
Basic	$	0.02		$	0.04	$	(0.03	)	$	0.08
Diluted	$	0.02		$	0.04	$	(0.03	)	$	0.08
Weighted average shares outstanding:
Basic		279,664			278,560		279,557			277,423
Diluted		282,276			282,491		279,557			280,886

Sycamore Networks, Inc.

Unaudited Non-GAAP Consolidated Statements of Operations

(in thousands, except per share data)

	Three Months Ended					Nine Months Ended
	April 28, 2007			April 29, 2006		April 28, 2007			April 29, 2006
Revenue	$	43,540		$	22,944	$	118,008		$	71,077
Cost of revenue		23,296			9,224		66,415			32,562
Gross profit		20,244			13,720		51,593			38,515
Operating expenses:
Research and development		11,666			7,150		32,066			22,240
Sales and marketing		5,697			2,534		15,722			7,572
General and administrative		5,609			1,835		17,761			6,855
Total operating expenses		22,972			11,519		65,549			36,667
Income (loss) from operations		(2,728	)		2,201		(13,956	)		1,848
Interest and other income, net		11,803			10,564		34,892			26,720
Income before income taxes		9,075			12,765		20,936			28,568
Income tax expense		210			425		767			857
Net income	$	8,865		$	12,340	$	20,169		$	27,711
Net income per share:
Basic	$	0.03		$	0.04	$	0.07		$	0.10
Diluted	$	0.03		$	0.04	$	0.07		$	0.10
Weighted average shares outstanding:
Basic		279,664			278,560		279,557			277,423
Diluted		282,276			282,491		282,236			280,886

Sycamore Networks, Inc.

Reconciliation of GAAP to Non-GAAP Net Income

(in thousands, except per share data)

	Three Months Ended						Nine Months Ended
	April 28, 2007			April 29, 2006			April 28, 2007			April 29, 2006
GAAP net income (loss)	$	6,696		$	10,521		$	(7,106	)	$	22,381
Stock-based compensation expense:
Cost of revenue		83			181			296			836
Research and development		574			825			1,313			1,961
Sales and marketing		182			417			2,088			910
General and administrative		207			459			885			1,038
Total stock based compensation expense		1,046			1,882			4,582			4,745
Asset impairment charge and related inventory commitment charges:
Operating expense		—			—			6,555			—
Cost of revenue		—			—			1,114			—
In-process research and development		—			—			12,400			—
Amortization of purchased intangible assets		1,174			—			3,031			—
Litigation settlement		—			—			—			750
Tax effect		(51	)		(63	)		(407	)		(165	)
Non-GAAP net income	$	8,865		$	12,340		$	20,169		$	27,711