Press Release

Redback Networks Announces First Quarter 2004 Operating Results $30.2 million Q1’04 revenue; third consecutive quarter of revenue growth

SAN JOSE, Calif., April 14, 2004 — Redback Networks Inc. (NASDAQ: RBAK), a leading provider of broadband networking systems, today announced its first quarter 2004 results for the period ended March 31, 2004. Net revenue for the first quarter of 2004 was $30.2 million, compared with $28.4 million for the fourth quarter of 2003 and $29.5 million for the first quarter of 2003. On January 5, 2004 the company received $30.0 million from Technology Crossover Ventures in exchange for 651,749 shares of the company’s Series B Convertible Preferred shares and warrants exercisable for 1,629,373 shares of common stock. The company ended its first quarter of 2004 with $42.0 million of unrestricted cash.

GAAP net loss for the first quarter of 2004 was $33.0 million or $0.64 per share attributable to common stockholders based on weighted average shares outstanding of 51.4 million compared to a GAAP net loss of $24.9 million or $0.14 per share based on weighted average shares outstanding of 179.7 million in the first quarter of 2003. Included in the GAAP net loss for the first quarter of 2004 were charges of $25.1 million including a deemed dividend and accretion on preferred stock of $16.8 million, deferred stock compensation charges of $5.3 million, amortization of intangible assets resulting from fresh start accounting of $2.7 million and other charges of $0.3 million.

Non-GAAP net loss for the first quarter of 2004 was $7.9 million or $0.15 per share based on weighted average shares outstanding of 51.4 million compared to a non-GAAP net loss of $23.2 million or $0.13 per share based on weighted average shares outstanding of 179.7 million in the first quarter of 2003.

Non-GAAP results exclude amortization of intangible assets arising from fresh-start accounting, the proceeds from the sale of inventory as scrap, amortization of stock-based compensation, amortization of the fair value of warrants issued in connection with a lease agreement, a deemed dividend to the preferred stockholders due to a beneficial conversion feature and accretion of a dividend payable to the preferred stockholders. See the attached table for a reconciliation of our non-GAAP results to GAAP results.

The company emerged from Chapter 11 bankruptcy on January 2, 2004. Results for the period following our emergence from Chapter 11 reflect fresh-start accounting adjustments as required by generally accepted accounting principles (GAAP). Additionally, on January 2, 2004, in connection with our restructuring, we canceled our existing common stock and issued new common stock. The recapitalization of the company resulted in approximately 52 million shares of common stock outstanding as compared with 183 million shares of common stock outstanding before the restructure. Accordingly, our financial results for periods following our emergence from bankruptcy are not comparable to our results for prior periods. The activity of the company for the period January 1, 2004 through January 2, 2004 is included in the pre-bankruptcy or “predecessor” company. The activity of the company for the period January 3, 2004 through March 31, 2004 is included in the post bankruptcy or “successor” company.

Redback Networks will discuss these quarterly results in an investor conference call today at 1:45 p.m. Pacific Time. The conference telephone number is 1-847-619-6820. A live web cast is also available from the investor relations portion of the Redback’s web site, www.redback.com, under Investor Center. A telephone replay of the conference call will be available later in the day. Replay information will be available at 1-630-652-3018, access code: 8732390. Information on these calls and web cast can also be found on the company’s web site.

About Redback Networks Inc.
Redback Networks Inc., a leading provider of broadband networking systems, enables carriers and service providers to build third-generation broadband networks that can profitably deliver simplified, personalized, portable subscriber services to consumers and businesses. The company's carrier-class, consumer-scale SmartEdge® Router and Service Gateway platforms for Consumer IP combine subscriber management systems and edge routing in conjunction with the NetOp™ element and policy management platform to provide a powerful, flexible infrastructure for managing both subscribers and value-added services.

Founded in 1996 and headquartered in San Jose, Calif., with sales and technical support centers located worldwide, Redback Networks maintains a growing and global customer base of more than 500 carriers and service providers, including major local exchange carriers (LECs), inter-exchange carriers (IXCs), PTTs and service providers.

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REDBACK and SmartEdge are trademarks registered at the U.S. Patent and Trademark Office and in other countries. SMS, NetOp, and User Intelligent Networks are trademarks or service marks of Redback Networks Inc.

Note Regarding Forward Looking Statements
The statements contained in this press release that are not purely historical are forward-looking statements that involve a number of risks and uncertainties, the outcome of which could materially and/or adversely affect Redback’s actual future results . All forward-looking statements included in this document are based upon information available as of the date hereof, and Redback assumes no obligation to update these statements. These risks and other risks relating to Redback’s business are set forth in the documents filed by Redback Networks with the Securities and Exchange Commission (SEC), specifically the most recent report on Form 10-K, Form 8-K, Redback’s Registration Statement on Form S-3 (File No. 333-114352), and amendments thereto, and the other reports filed from time to time with the SEC.

Non-GAAP Disclosure
To supplement our consolidated financial statements presented in accordance with GAAP, we use non-GAAP financial results, which are adjusted from results based on GAAP to exclude certain items. These non-GAAP results are provided to enhance the user’s overall understanding of our current financial performance and our prospects in the future. Specifically, we believe the non-GAAP results provide useful information to both management and investors by excluding certain items that we believe are not indicative of our core operating results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with United States GAAP.