Press Release

Redback Networks Announces Fourth Quarter

SAN JOSE, Calif., January 21, 2004 - Redback Networks Inc. (NASDAQ: RBAK), a leading provider of broadband networking systems, today announced its fourth quarter and fiscal year end results for the period ended December 31, 2003. Net revenue for the fourth quarter of 2003 was $28.4 million, compared with $27.4 million for the third quarter of 2003 and $27.6 million for the fourth quarter of 2002. Net revenue for the fiscal year ending December 31, 2003 was $107.5 million, compared with $125.6 million for the fiscal year 2002.

"I am extremely pleased with the results this quarter, especially in light of the high potential for distractions as we worked through the final phase of our financial restructuring process," said Kevin DeNuccio president and chief executive officer of Redback Networks. "We successfully completed the financial restructuring during the first week in January. As we look forward to 2004 our focus will be on execution of our business model, in what appears to an improving business climate."

The financial results for the fourth quarter and fiscal year 2003 reflect the company undergoing the transition of a complete financial restructuring, a process successfully completed January 2, 2004. GAAP net loss for the fourth quarter of 2003 was $ 24.9 million or $ 0.14 per share compared to a GAAP net loss of $34.2 million or $0.20 per share in the fourth quarter of 2002. GAAP net loss for fiscal year 2003 was $ 118.8 million or $ 0.65 per share compared to a GAAP net loss of $186.9 million or $1.13 per share in fiscal year 2002. Non-GAAP net loss for the fourth quarter of 2003 was $24.2 million or $0.13 per share compared to a non-GAAP net loss of $26.8 million or $0.15 per share in the fourth quarter of 2002. Non-GAAP net loss for fiscal year 2003 was $95.1 million or $0.52 per share compared to a non-GAAP net loss of $117.0 million or $0.71 per share in fiscal year 2002. Non-GAAP results exclude impairment charges relating to fixed assets, amortization of intangible assets, restructuring charges, stock-based compensation, write-off of certain investments, certain impairment and inventory charges, the reversal of an accrual for cancellation of an engineering services contract, the sale of previously reserved inventory, partial recovery of previously written down investments, and bond redemption charges. See the attached table for a reconciliation of our non-GAAP results to GAAP results.

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 1-847-619-6534. A replay of the conference call will be available later in the day. Replay information will be available at 1-630-652-3041, access code: 8246778. Information on these calls can also be found on Redback's Web site, http://www.redback.com, under Investor Center.

As announced January 5, 2004, Redback successfully completed its financial restructuring, eliminating approximately $467 million of its existing debt, resulting in a stronger financial model with an improved balance between revenue and expenses. In addition, Redback Networks received $30 million in equity funding from Technology Crossover Ventures (TCV), a premier provider of growth capital to technology companies. The financial restructuring and new equity funding strengthens the ability of Redback Networks to address the long-term needs of existing and potential customers and to participate fully in new market growth opportunities for strategic broadband infrastructure.

About Redback Networks Inc.

Redback Networks enables carriers and service providers to build profitable next-generation broadband networks. The company's User Intelligent Networks™ product portfolio includes the industry-leading SMS™ family of subscriber management systems, and the SmartEdge® Router and Service Gateway platforms, as well as a comprehensive User-to-Network operating system software, and a set of network provisioning and management software.

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 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 10-Q, Form 8-K, Redback?s Registration Statements on Form S-4 (File Nos. 333-107714 and 333-108170), 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.