<PAGE>

================================================================================

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-Q

           [ X ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

               For the quarterly period ended September 30, 2000

                                       OR

          [    ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

                      (Commission file number:  000-30931)

                            OPNET TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                        <C>                                     <C>
              Delaware                                 7373                             52-1483235
(State or other jurisdiction of            (Primary Standard Industrial              (I.R.S. Employer
 incorporation ororganization)             Classification Code Number)              Identification No.)

</TABLE>

                         3400 International Drive, N.W.
                             Washington, DC  20008
                    (Address of principal executive office)

                                 (202) 364-4700
              (Registrant's telephone number, including area code)

  Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.     Yes [X]     No [  ]

  At November 9, 2000, there were outstanding 18,069,077 shares of common stock
of the registrant.

================================================================================
<PAGE>

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I.         FINANCIAL INFORMATION                                                                                 Page
                                                                                                                      ----
<S>             <C>                                                                                                   <C>
Item 1.         Financial Statements of OPNET Technologies, Inc. (unaudited)                                             3

                Consolidated Balance Sheets as of September 30, 2000 and March 31, 2000                                  3

                Consolidated Statements of Operations for the Three and Six Months Ended September 30, 2000 and 1999     4

                Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2000 and 1999               5

                Notes to Consolidated Financial Statements                                                               6

Item 2.         Management's Discussion and Analysis of Financial Condition and Results of Operations                   10

Item 3.         Quantitative and Qualitative Disclosures About Market Risk                                              20

PART II.        OTHER INFORMATION

Item 1.         Legal Proceedings                                                                                       21

Item 2.         Changes in Securities and Use of Proceeds                                                               21

Item 3.         Defaults Upon Senior Securities                                                                         22

Item 4.         Submission of Matters to a Vote of Security Holders                                                     22

Item 5.         Other Information                                                                                       22

Item 6.         Exhibits and Reports on Form 8-K                                                                        22

                Signatures                                                                                              23

</TABLE>

                                       2
<PAGE>

                         PART I.  FINANCIAL INFORMATION

ITEM 1.  Consolidated Financial Statements

                            OPNET Technologies, Inc.
                          Consolidated Balance Sheets
                     (in thousands, except per share data)
<TABLE>
<CAPTION>
                                                                    September 30,         March 31,
                                                                        2000                 2000
                                                                   --------------        -----------
                                   ASSETS                           (unaudited)           (audited)
<S>                                                               <C>                   <C>
Current assets:
   Cash and cash equivalents                                        $    66,101          $    8,765
   Accounts receivable, net of $100 in allowance for doubtful
     accounts at September 30 and March 31, 2000                          3,424               3,119
   Refundable income taxes                                                   29                 476
   Deferred offering costs                                                    -                 400
   Deferred income taxes                                                    218                 101
   Prepaid expenses and other current assets                                920                 376
                                                                   --------------        -----------
          Total current assets                                           70,692              13,237

Deferred income taxes                                                        74                  99
Property and equipment, net                                               2,895               2,272
Intangible assets, net                                                      208                 458
Other assets:
   Deposits                                                                 258                  62
   Loan to officer                                                          231                 231
   Purchased software, net                                                  458                 354
                                                                   --------------        -----------
          Total assets                                             $     74,816          $   16,713
                                                                   ==============        ===========

                LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                                 $       203          $      170
   Accrued liabilities                                                    3,607               2,479
   Deferred revenue                                                       4,811               3,476
                                                                   --------------        -----------
          Total current liabilities                                       8,621               6,125
                                                                   --------------        -----------
Non-current liabilities:
   Deferred rent                                                             32                  30
   Deferred revenue                                                         203                 142
                                                                   --------------        -----------
          Total non-current liabilities                                     235                 172
                                                                   --------------        -----------
Commitments and contingencies
Series A redeemable convertible preferred stock, par value $0.001
   - 160 shares authorized, 145 issued and outstanding at
   March 31, 2000, liquidation preference - $48.40 per share                  -               6,948
                                                                   --------------        -----------
Stockholders' equity:
     Preferred stock-par value $0.001; 5,000 shares authorized;
       160 designated as Series A (above), 145 issued and
       outstanding at March 31, 2000                                         -                   -
     Common stock-par value $0.001; 100,000 authorized; 24,148
       and 17,079 shares issued at September 30 and March 31,
       2000, respectively; 18,020 and 10,951 shares outstanding
       at September 30 and March 31, 2000, respectively                      24                  17
     Additional paid-in capital                                          62,101                 623
     Deferred compensation                                                 (239)               (287)
     Retained earnings                                                    8,084               7,125
     Treasury stock-6,128 shares at September 30 and March 31, 2000      (4,010)             (4,010)
                                                                   --------------        -----------
          Total stockholders' equity                                     65,960               3,468
                                                                   --------------        -----------
          Total liabilities and  stockholders' equity               $    74,816          $   16,713
                                                                   ==============        ===========
</TABLE>



                See notes to consolidated financial statements.

                                       3
<PAGE>

                            OPNET Technologies, Inc.
                     Consolidated Statements of Operations
                                  (unaudited)

<TABLE>
<CAPTION>
                                                            Three Months Ended                 Six Months Ended
                                                               September 30,                    September 30,
                                                        ---------------------------     ----------------------------
                                                            2000             1999            2000            1999
                                                        -----------       ---------      -----------      ----------
                                                                  (in thousands, except per share data)
<S>                                                     <C>               <C>            <C>              <C>
Revenues:
  Software licenses                                     $   4,314         $  2,447       $    7,967       $  4,585
  Services                                                  3,456            1,969            6,237          3,761
                                                        -----------       ---------      -----------      ----------
        Total revenues                                      7,770            4,416           14,204          8,346
                                                        -----------       ---------      -----------      ----------
Cost of revenues:
  Software licenses                                           124              201              301            270
  Services                                                  1,127              742            2,114          1,287
                                                        -----------       ---------      -----------      ----------
        Total cost of revenues                              1,251              943            2,415          1,557
                                                        -----------       ---------      -----------      ----------

Gross profit                                                6,519            3,473           11,789          6,789
                                                        -----------       ---------      -----------      ----------
Operating expenses:
  Research and development                                  1,946            1,315            3,628          2,550
  Sales and marketing                                       3,282            1,655            5,997          3,160
  General and administrative                                  792              512            1,452            979
                                                        -----------       ---------      -----------      ----------
        Total operating expenses                            6,020            3,482           11,077          6,689
                                                        -----------       ---------      -----------      ----------

Income (loss) from operations                                 499               (9)             712            100

Interest and other income                                     677               93              813            168
                                                        -----------       ---------      -----------      ----------
Income before provision for income taxes                    1,176               84            1,525            268

Provision for income taxes                                    435               23              560             75
                                                        -----------       ---------      -----------      ----------
Net income                                                    741               61              965            193

Accretion of transaction costs on redeemable
  convertible preferred stock                                  (2)              (4)              (6)            (7)
                                                        -----------       ---------      -----------      ----------
Net income applicable to common shares                  $     739         $     57       $      959       $    186
                                                        ===========       =========      ===========      ==========
Basic net income applicable per common share            $    0.05         $   0.01       $     0.07       $   0.02
                                                        ===========       =========      ===========      ==========
Diluted net income per common share                     $    0.04         $   0.00       $     0.06       $   0.01
                                                        ===========       =========      ===========      ==========
Weighted average common shares outstanding (basic)         15,399           10,688           13,270         10,685
                                                        ===========       =========      ===========      ==========
Weighted average common shares outstanding (diluted)       18,042           14,000           16,333         13,917
                                                        ===========       =========      ===========      ==========

</TABLE>

                See notes to consolidated financial statements.

                                       4
<PAGE>

                            OPNET Technologies, Inc.
                     Consolidated Statements of Cash Flows
                                  (unaudited)

<TABLE>
<CAPTION>
                                                                Six Months Ended
                                                                  September 30,
                                                           ----------------------------
                                                               2000            1999
                                                           -----------     ------------
                                                                   (in thousands)
<S>                                                        <C>             <C>
Cash flows from operating activities:
  Net income                                               $     965       $     193
  Adjustments to reconcile net income to net cash
    provided by operating activities:
        Expense related to employee stock options                 48               -
        Depreciation and amortization                            694             513
        Deferred income taxes                                    (40)            (33)
        Changes in assets and liabilities:
            Accounts receivable                                 (305)            (69)
            Prepaid expenses and other current assets           (544)           (223)
            Refundable income taxes                              593            (130)
            Deposits                                            (196)            (12)
            Accounts payable                                      33            (188)
            Accrued liabilities                                  685             700
            Deferred revenue                                   1,396           1,273
                                                           -----------     ------------
                Net cash provided by operating activities      3,329           2,024
                                                           -----------     ------------
Cash flows from investing activities:
  Purchase of software                                          (104)           (118)
  Purchase of property and equipment                          (1,067)           (559)
                                                           -----------     ------------
                Net cash used in investing activities         (1,171)           (677)
                                                           -----------     ------------
Cash flows from financing activities:
  Proceeds from sale of common stock                          59,800               -
  Costs incurred for initial public offering                  (4,840)              -
  Proceeds from exercise of common stock options                 218               2
                                                           -----------     ------------
                Net cash provided by financing activities     55,178               2
                                                           -----------     ------------
Net increase in cash and cash equivalents                     57,336           1,349

Cash and cash equivalents, beginning of period                 8,765           6,414
                                                           -----------     ------------
Cash and cash equivalents, end of period                   $  66,101       $   7,763
                                                           ===========     ============

</TABLE>
                See notes to consolidated financial statements.

                                       5
<PAGE>

                            OPNET Technologies, Inc.
                   Notes to Consolidated Financial Statements
                                  (unaudited)


1.  Basis of Presentation and Nature of Operations

  OPNET Technologies, Inc. ("OPNET" or the "Company") provides network
management software solutions that enable organizations to optimize the
performance and maximize the availability of communications networks and
networked applications.  Our suite of products advances network and application
management beyond reactive problem identification and reporting to proactive
problem resolution and avoidance.  The OPNET product suite combines predictive
simulation and a comprehensive understanding of network technologies to enable
network professionals to more effectively design and deploy networks, diagnose
network and application performance problems, and predict the impact of proposed
network modifications.  OPNET's corporate headquarters is located in Washington,
D.C. and it has sales offices nationwide.

  The accompanying consolidated financial statements include the results of
OPNET Technologies, Inc. and its wholly owned subsidiary, MIL 3 International
Limited. All significant intercompany accounts and transactions have been
eliminated in consolidation.  The interim financial statements included herein
are unaudited and have been prepared in accordance with generally accepted
accounting principles ("GAAP") and applicable rules and regulations of the
Securities and Exchange Commission (the "SEC") regarding interim financial
reporting.  Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. Accordingly, these interim financial statements should be read in
conjunction with the audited consolidated financial statements and accompanying
notes thereto contained in the Company's Registration Statement on Form S-1, as
amended, filed with the SEC on August 1, 2000.  In the opinion of management,
these interim financial statements reflect all adjustments of a normal and
recurring nature necessary to present fairly the Company's results for the
interim periods.  The preparation of financial statements in conformity with
GAAP requires management to make certain estimates and assumptions.  These
estimates and assumptions affect the reported amounts of assets and liabilities
as of the date of the financial statements, as well as the reported amount of
revenues and expenses during the reporting period.  Actual results could differ
from those estimates.  In addition, the Company's operating results for the
three and six months ended September 30, 2000 may not be indicative of the
operating results for the full fiscal year or any other future period.

2.  Initial Public Offering

  On August 1, 2000, the Company's registration statement for its initial public
offering of 4,000,000 shares of Common Stock became effective.  The offering
closed on August 7, 2000, yielding proceeds of approximately $46,860,000, after
deducting underwriting discounts and commissions and estimated offering expenses
payable by the Company.  The underwriters of the offering also exercised their
over-allotment option to purchase an additional 600,000 shares, which closed on
August 9, 2000, raising an additional $7,254,000 in net proceeds to the Company.
Upon the closing of the offering, the Series A Redeemable Convertible Preferred
Stock was converted into 2,171,769 shares of Common Stock as discussed in Note
5.

3.  Facilities Lease

  On June 2, 2000, the Company executed a new office lease agreement and plans
to relocate its corporate and principal operational offices to Bethesda,
Maryland.  The Company is scheduled to take possession of the premises,
consisting of approximately 60,000 square feet of office space, in February
2001.  The lease is for ten years with two five-year renewal options.  The first
year's rent will be approximately $2,267,000 and is subject to escalation based
upon a consumer price index adjustment of up to 3% each year.  The lease also
requires the Company to maintain a security deposit of approximately $3,400,000
(in the form of a bank letter of credit, as discussed below), which is subject
to annual reductions based upon meeting certain minimum financial requirements.

4.  Credit Agreements

  On June 10, 2000, the Company entered into a $5,000,000 line of credit
facility with a commercial bank which expires on June 10, 2001.  The line of
credit allows the Company to use the funds for corporate borrowings and issuance
of letters of credit up to a maximum of $5,000,000.  The Company used the
facility to issue a letter of credit for approximately $3,400,000 to satisfy the
security deposit requirements for its new corporate office facilities lease, as
discussed above.

                                       6
<PAGE>

  The outstanding principal balance on the credit facility is payable on June
10, 2001 with interest payable monthly, based on LIBOR plus the applicable
margin ranging from 2% to 2.5% as stated in the agreement. The credit facility
also has a renewal option for one additional year provided the Company meets
certain conditions by the original maturity date.

  The credit facility is collateralized by certain assets of the Company. There
are also certain financial ratios and conditions that the Company must maintain
under the terms of the loan agreement, as well as certain covenants with which
the Company must comply.

5.  Stockholders' Equity

    Common Stock

  On June 27, 2000, in connection with the Company's initial public offering of
Common Stock, the Board of directors approved a three-for-two split of Common
Stock.  All references to the number of common shares and per share amounts have
been restated as appropriate to reflect the effect of the split for all periods
presented.

  Effective upon closing of the initial public offering as discussed in Note 2,
the Board of Directors approved a resolution to increase the authorized capital
stock of the Company to 105,160,000 shares, consisting of 100,000,000 shares of
Common Stock, par value $0.001 per share, 5,000,000 shares of undesignated
preferred stock, par value of $0.001 per share and 160,000 shares of Series A
redeemable convertible preferred stock, par value of $0.001.

  On August 7, 2000, the Company filed its Third Amended and Restated
Certificate of Incorporation with the Secretary of the State of Delaware to
adjust the authorized capital stock of the Company to 105,000,000 shares,
consisting of 100,000,000 shares of Common Stock, par value $0.001 per share and
5,000,000 shares of undesignated preferred stock, par value of $0.001 per share.

  During the three and six months ended September 30, 2000, employee exercises
of stock options resulted in proceeds to the Company of approximately $132,000
and $218,000 and the issuance of 112,961 and 296,627 shares of Common Stock,
respectively.

    Preferred Stock

  On September 30, 1997, the Company entered into a Series A Redeemable
Convertible Preferred Stock Purchase Agreement (the "Agreement") with two
investors, pursuant to which the Company authorized 160,000 shares of the Series
A Redeemable Convertible Preferred Stock (the "Series A Preferred Stock") and
issued and sold 144,640 of those shares for approximately $7,001,000. The
difference between the carrying amount of the Series A Preferred Stock of
$6,948,000 at March 31, 2000, and the redemption amount of $7,001,000 based upon
the liquidation amount, represents the cost of issuance, which was accreted pro
rata over the period beginning on the September 1997 issuance date, and ending
upon the automatic conversion of all such shares of Series A Preferred Stock
upon the closing of the Company's initial public offering as discussed in Note
2.

                                       7
<PAGE>

6.  Net Income Per Common Share

  In February 1997, the Financial Accounting Standards Board ("FASB") issued
SFAS No.128, Earnings Per Share. This statement requires dual presentation of
basic and diluted earnings per share on the face of the income statement.  Basic
earnings per share is to be computed by dividing net income available to common
shareholders by the weighted average number of common shares outstanding for the
period. Diluted earnings per share is to reflect the potential dilution that
could occur if securities or other contracts to issue common shares were
exercised or converted into common shares for all periods presented.

<TABLE>
<CAPTION>
                                                              Three Months Ended               Six Months Ended
                                                                 September 30,                   September 30,
                                                           -------------------------      ------------------------
                                                               2000          1999            2000          1999
                                                           ------------   ----------      -----------   ----------
                                                                    (in thousands, except per share data)
<S>                                                        <C>            <C>             <C>           <C>
Income (Numerator):
     Net income applicable to common shares (basic)        $     739      $     57        $     959     $     186
     Plus:
     Accretion of transaction costs on redeemable
       convertible preferred stock                                 2             4                6             7
                                                           ----------     ---------       ----------    ----------
     Net income (diluted)                                  $     741      $     61        $     965     $     193
                                                           ==========     =========       ==========    ==========
Shares (Denominator):
     Weighted average shares outstanding (basic)              15,399        10,688           13,270        10,685
     Effect of other dilutive securities:
        Options                                                1,746         1,140            1,532         1,060
        Redeemable convertible preferred stock                   897         2,172            1,531         2,172
                                                           ----------     ---------       ----------    ----------
     Weighted average shares outstanding (diluted)            18,042        14,000           16,333        13,917
                                                           ==========     =========       ==========    ==========

Net income per common share:
     Basic net income applicable per common share          $    0.05      $   0.01        $    0.07     $    0.02
     Diluted net income per common share                        0.04          0.00             0.06          0.01
</TABLE>

7.  Business Segment and Geographic Area Information

  The Company operates in one industry segment, the development and sale of
computer software programs and related services.  There were no sales to any
customers within a single country except for the United States where such sales
accounted for 10% or more of total revenues.  Substantially all assets are held
in the United States for the quarter ended September 30, 2000 and fiscal year
ended March 31, 2000.

8.  Supplemental Cash Flow Information

<TABLE>
<CAPTION>
                                                                        Six Months Ended
                                                                         September 30,
                                                                   --------------------------
                                                                      2000            1999
                                                                   ----------      ----------
<S>                                                                <C>             <C>
Supplemental disclosure of cash flow information:
    Cash paid during the year for income taxes                      $      9        $    487

Supplemental disclosure of non cash activities:
    Accrued offering costs                                          $    799        $      -
    Accretion on preferred stock                                    $      6        $      7
    Conversion of preferred stock                                   $  6,954        $      -
    Tax effect of stock option plans                                $    198        $      -
</TABLE>

                                       8
<PAGE>

9.  New Accounting Pronouncements

  In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 133, "Accounting for Derivative Instruments
and Hedging Activities," which establishes accounting and reporting standards
for derivative instruments and hedging activities. As amended by Statement of
Financial Accounting Standard No. 137, this standard will be effective for the
Company for the fiscal years and quarters beginning after March 31, 2001, and
requires that an entity recognize all qualifying derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. The Company has not completed the process of evaluating the
impact of this statement and is therefore unable to disclose the potential
impact that implementing SFAS No. 133 will have on its financial position or
results of operations.

  In December 1999, the SEC issued Staff Accounting Bulletin ("SAB") No. 101-
Revenue Recognition in Financial Statements. This SAB expresses the SEC's views
on applying generally accepted accounting principles to revenue recognition in
financial statements. This SAB is effective the fourth fiscal quarter of the
fiscal year beginning after December 15, 1999.  The Company does not expect the
application of this SAB to have a material impact on its financial statements.

  In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, "Accounting for Certain transactions Involving Stock
Compensation, an Interpretation of APB Opinion No. 25." With the exception of
certain provisions which require earlier application, this interpretation is
effective for all applicable transactions beginning July 1, 2000. The Company
does not expect that the adoption of this Interpretation will have a material
impact on its financial statements.

10.  Subsequent Events

  In October 2000, the Company opened its first European corporate office, OPNET
Technologies Societe Par Actions Simplifiee, in Paris, France.  The financial
statements of the wholly owned subsidiary will be consolidated with OPNET
Technologies, Inc. and all significant intercompany accounts and transactions
will be eliminated in consolidation.

                                       9
<PAGE>

 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
         of Operations

  The following discussion and analysis relates to the financial condition and
results of operations of the Company for the three and six months ended
September 30, 2000, and should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contained in the prospectus included in the Company's Registration Statement on
Form S-1, filed with SEC on March 15, 2000 (No. 333-32588).

  This report contains forward-looking statements that involve substantial risks
and uncertainties. The statements contained in this report that are not purely
historical are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934.  You can identify these statements by forward-looking words such as
"anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan,"
"potential," "should," "will," and "would" or similar words. You should read
statements that contain these words carefully because they discuss our future
expectations, contain projections of our future results of operations or of our
financial position or state other forward-looking information. We believe that
it is important to communicate our future expectations to our investors.
However, there may be events in the future that we are not able to predict or
control accurately. The factors listed below in the section captioned "Certain
Factors That May Affect Future Results," as well as any cautionary language
contained herein, provide examples of risks, uncertainties, and events that may
cause our actual results to differ materially from the expectations we describe
in our forward-looking statements. Further, any forward-looking statement speaks
only as of the date on which such statement is made, and we undertake no
obligation to publicly update or revise any forward-looking information.

 Overview

  We provide predictive network management software products and related
services. Our product suite consists of three primary software products: OPNET
IT DecisionGuru, OPNET Modeler, and OPNET Netbiz. We sell our OPNET suite of
products to service providers, including telecommunications carriers, ISPs, and
ASPs, large and medium-sized organizations, and network equipment
manufacturers. We market our product suite in North America primarily through a
direct sales force and, to a lesser extent, several resellers and original
equipment manufacturers. Internationally, we market our products primarily
through third-party distributors.  In October 2000, we opened our first European
corporate office, OPNET Technologies Societe Par Actions Simplifiee, in Paris,
France, as part of our effort to expand our global sales and marketing
capabilities.

  We sold our first products in 1987. Our operations have been financed
principally through cash provided by operations and a venture financing in
October 1997. In August 1998, we introduced our OPNET IT DecisionGuru and OPNET
Netbiz products and launched a new marketing and sales strategy to focus on
these products.

  We generate revenues principally from licensing our software products and
providing related services, including maintenance and technical support,
consulting, and training.

  Our software license revenues consist of license sales of our software
products and royalty income. Software license revenues are recognized upon
delivery, provided that fees are fixed and determinable, no significant
modifications to the product are required, and collection of the related
receivable is probable. Where significant modifications are required, software
license revenues are recognized along with consulting fees on a percentage-of-
completion basis as the modifications are performed. We allow customers to
evaluate our software before purchase, and therefore it is our policy not to
allow returns.

  Our service revenues consist of fees from maintenance and technical support
agreements, consulting services, and training. The maintenance agreements
covering our products provide for technical support and periodic product
upgrades. Revenues from maintenance and technical support agreements are
deferred and recognized ratably over the support period. We offer consulting
services primarily to provide product customization and enhancements.
Consulting services are generally performed under fixed-price agreements and
recognized as the work is performed on a percentage-of-completion basis. We
provide classroom and on-site training to our customers on a daily fee basis.

  Software license revenues and service revenues for which payment has been
received, but that do not yet qualify for recognition as revenues, are reflected
as deferred revenues.

                                       10
<PAGE>

 Results of Operations

  The following table sets forth items from our statements of operations
expressed as a percentage of total revenues for the periods indicated:

<TABLE>
<CAPTION>
                                                  Three Months Ended           Six Months Ended
                                                     September 30,               September 30,
                                               -------------------------    ------------------------
                                                  2000           1999          2000         1999
                                               ----------     ----------    ----------    ----------
<S>                                            <C>            <C>           <C>           <C>
Revenues:
  Software licenses                                55.5%         55.4%         56.1%         54.9%
  Services                                         44.5          44.6          43.9          45.1
                                               ----------     ----------    ----------    ----------
        Total revenues                            100.0         100.0         100.0         100.0
                                               ----------     ----------    ----------    ----------
Cost of revenues:
  Software licenses                                 1.6           4.6           2.1           3.2
  Services                                         14.5          16.8          14.9          15.4
                                               ----------     ----------    ----------    ----------
        Total cost of revenues                     16.1          21.4          17.0          18.6
                                               ----------     ----------    ----------    ----------
Gross profit                                       83.9          78.6          83.0          81.4
                                               ----------     ----------    ----------    ----------
Operating expenses:
  Research and development                         25.0          29.8          25.5          30.6
  Sales and marketing                              42.3          37.4          42.3          37.9
  General and administrative                       10.2          11.6          10.2          11.7
                                               ----------     ----------    ----------    ----------
        Total operating expenses                   77.5          78.8          78.0          80.2
                                               ----------     ----------    ----------    ----------
Income from operations                              6.4          (0.2)          5.0           1.2
Interest and other income                           8.7           2.1           5.7           2.0
                                               ----------     ----------    ----------    ----------

Income before provision for income taxes           15.1           1.9          10.7           3.2
Provision for income taxes                          5.6           0.5           3.9           0.9
                                               ----------     ----------    ----------    ----------

Net income                                          9.5%          1.4%          6.8%          2.3%
                                               ==========     ==========    ==========    ===========
</TABLE>

  The following table sets forth, for each component of revenues, the cost of
these revenues as a percentage of the related revenues for the periods
indicated:

<TABLE>
<CAPTION>
                                                  Three Months Ended           Six Months Ended
                                                     September 30,               September 30,
                                               -------------------------    ------------------------
                                                  2000           1999          2000         1999
                                               ----------     ----------    ----------    ----------
<S>                                            <C>            <C>           <C>           <C>
   Cost of software license revenues              2.9%           8.2%           3.8%          5.9%
   Cost of service revenues                      32.6           37.7           33.9          34.2

</TABLE>

                                       11
<PAGE>

Comparison of Three Months Ended September 30, 2000 and 1999

  Revenues

  Total revenues increased 76.0% from $4.4 million for the three months ended
September 30, 1999 to $7.8 million for the three months ended September 30,
2000. Software license revenues were 55.4% and 55.5% of total revenues for the
three months ended September 30, 1999 and 2000, respectively. We believe that
the percentage increase in our total revenues achieved in this period is not
necessarily indicative of future results.

  Software License Revenues. Software license revenues increased 76.3% from $2.4
million for the three months ended September 30, 1999 to $4.3 million for the
three months ended September 30, 2000. The increase was primarily attributable
to the substantial growth in overall demand for our products and related models
and modules, as well as increased market acceptance of our OPNET IT DecisionGuru
and OPNET Netbiz products.

  Service Revenues. Service revenues increased 75.5% from $2.0 million for the
three months ended September 30, 1999 to $3.5 million for the three months ended
September 30, 2000. This increase was primarily due to an increase in
maintenance and technical support contracts related to new license sales and
increased renewals of contracts by our existing customer base, and increased
demand for consulting services.

  Cost of Revenues

  Cost of software license revenues consists primarily of royalties, media,
manuals, and distribution costs. Cost of service revenues consists primarily of
personnel-related costs in providing maintenance and technical support,
consulting, and training to customers. Gross margin on software license revenues
is substantially higher than gross margin on service revenues, reflecting the
low materials, packaging, and other costs of software products compared with the
relatively high personnel costs associated with providing services. Cost of
service revenues varies based upon the relative mix of maintenance and technical
support, consulting, and training services.

  Cost of Software License Revenues. Cost of software license revenues decreased
38.3% from $201,000 for the three months ended September 30, 1999 to $124,000
for the three months ended September 30, 2000. Gross margin on software license
revenues increased from 91.8% for the three months ended September 30, 1999 to
97.1% for the three months ended September 30, 2000. The increase in margin was
primarily due to a reduction in the level of sales requiring royalty payments
under the March 1999 agreement with Cadence that requires us to pay a 50%
royalty for specified sales of OPNET Modeler to the portion of Cadence's
customer base that uses an existing Cadence product. This agreement ends on
March 31, 2001 and may depress these margins through that date.

  Cost of Service Revenues. Cost of service revenues increased 51.9% from
$742,000 for the three months ended September 30, 1999 to $1.1 million for the
three months ended September 30, 2000. Gross margin on service revenues
increased from 62.3% for the three months ended September 30, 1999 to 67.4% for
the three months ended September 30, 2000. This increase in margin was primarily
due to a higher level of profitability in consulting services, as well as
increased volume of maintenance services, which provides higher gross margins
than consulting services.

  Operating Expenses

  Research and Development. Research and development expenses consist primarily
of salaries, related benefits, and other engineering related costs. Research and
development expenses increased 48.0% from $1.3 million for the three months
ended September 30, 1999 to $1.9 million for the three months ended September
30, 2000. The increase was primarily related to increased research and
development staffing levels for the development of new products. As a percentage
of total revenues, research and development expenses decreased from 29.8% for
the three months ended September 30, 1999 to 25.0% for the three months ended
September 30, 2000. This decrease as a percentage of total revenues resulted
from a proportionally smaller increase in research and development staffing
levels relative to a higher level of revenues in the three months ended
September 30, 2000.  We believe that a significant level of research and
development investment will be required to maintain our competitive advantage,
and expect that the dollar amount of these expenditures will continue to grow in
future periods.

  Sales and Marketing. Sales and marketing expenses increased 98.3% from $1.7
million for the three months ended September 30, 1999 to $3.3 million for the
three months ended September 30, 2000. This increase was primarily due to a
substantial increase in the size of our direct sales force, increased
commissions associated with the growth in revenues, and an overall increase in
our sales and marketing efforts. As a percentage of total revenues, sales and


                                       12
<PAGE>

marketing expenses increased from 37.4% for the three months ended September 30,
1999 to 42.3% for the three months ended September 30, 2000. The increase as a
percentage of total revenues was due primarily to our additional investment of
resources associated with developing a market for our OPNET IT DecisionGuru and
OPNET Netbiz products. We intend to continue to expand our global sales and
marketing infrastructure and, accordingly, expect our sales and marketing
expenses to increase in the future.

  General and Administrative. General and administrative expenses consist
primarily of salaries, related benefits, and fees for recruiting, legal,
accounting, and other services. General and administrative expenses increased
54.7% from $512,000 for the three months ended September 30, 1999 to $792,000
for the three months ended September 30, 2000. The increase in spending was
primarily due to additional personnel costs and other expenses associated with
our expansion of supporting infrastructure, as well as the increased costs of
running a public company.  As a percentage of total revenues, general and
administrative expenses decreased from 11.6% for the three months ended
September 30, 1999 to 10.2% for the three months ended September 30, 2000. We
expect that the dollar amount of general and administrative expenses will
increase as we expand our operations.

  Interest and Other Income

  Interest and other income increased from $93,000 for the three months ended
September 30, 1999 to $677,000 for the three months ended September 30, 2000.
The increase was primarily due to an increase in interest income from $93,000
for the three months ended September 30, 1999 to $686,000 for the three months
ended September 30, 2000.  The growth in interest income over the comparable
period in the prior year is a result of additional interest earned on the
proceeds from the initial public offering and the additional cash produced by
our operations offset by fees associated with our $3.4 million letter of credit
outstanding at September 30, 2000.

  Provision for Income Taxes

  The provision for income taxes increased from $23,000 for the three months
ended September 30, 1999 to $435,000 for the three months ended September 30,
2000.  The increase in the provision for the three months ended September 30,
2000 resulted from a growth in earnings offset by research and development tax
credits that should be available to us in fiscal year 2001.

Comparison of Six Months Ended September 30, 2000 and 1999

  Revenues

  Total revenues increased 70.2% from $8.3 million for the six months ended
September 30, 1999 to $14.2 million for the six months ended September 30, 2000.
Software license revenues were 54.9% and 56.1% of total revenues for the six
months ended September 30, 1999 and September 30, 2000, respectively. As
mentioned above under the comparison of quarterly results, we believe that the
percentage increase in our total revenues achieved in this period is not
necessarily indicative of future results.

  Software License Revenues. Software license revenues increased 73.8% from $4.6
million for the six months ended September 30, 1999 to $8.0 million for the six
months ended September 30, 2000. The increase was primarily attributable to the
substantial growth in overall demand for our products and related models and
modules, as well as increased market acceptance of our OPNET IT DecisionGuru and
OPNET Netbiz products.

  Service Revenues. Service revenues increased 65.8% from $3.8 million for the
six months ended September 30, 1999 to $6.2 million for the six months ended
September 30, 2000. This increase was primarily due to an increase in
maintenance and technical support contracts related to new license sales and
increased renewals of contracts by our existing customer base, and increased
demand for consulting and training services.

  Cost of Revenues

  Cost of Software License Revenues. Cost of software license revenues increased
11.5% from $270,000 for the six months ended September 30, 1999 to $301,000 for
the six months ended September 30, 2000. Gross margin on software license
revenues increased from 94.1% for the six months ended September 30, 1999 to
96.2% for the six months ended September 30, 2000. The increase in margin was
primarily due to a reduction in the level of sales requiring royalty payments
under the March 1999 agreement with Cadence that requires us to pay a 50%
royalty for specified sales of OPNET Modeler to the portion of Cadence's
customer base that uses an existing Cadence product.

                                       13
<PAGE>

  Cost of Service Revenues. Cost of service revenues increased 64.3% from $1.3
million for the six months ended September 30, 1999 to $2.1 million for the six
months ended September 30, 2000. Gross margin on service revenues increased from
65.8% for the six months ended September 30, 1999 to 66.1% for the six months
ended September 30, 2000. This increase in margin was primarily due to the
increased volume of maintenance services, which provides higher gross margins
than consulting services, as well as a higher level of profitability in
consulting services.

  Operating Expenses

  Research and Development. Research and development expenses increased 42.3%
from $2.6 million for the six months ended September 30, 1999 to $3.6 million
for the six months ended September 30, 2000. The increase was primarily related
to increased research and development staffing levels for the development of new
products. As a percentage of total revenues, research and development expenses
decreased from 30.6% for the six months ended September 30, 1999 to 25.5% for
the six months ended September 30, 2000.

  Sales and Marketing. Sales and marketing expenses increased 89.8% from $3.2
million for the six months ended September 30, 1999 to $6.0 million for the six
months ended September 30, 2000. This increase was primarily due to a
substantial increase in the size of our direct sales force, increased
commissions associated with the growth in revenues, and an overall increase in
our sales and marketing efforts. As a percentage of total revenues, sales and
marketing expenses increased from 37.9% for the six months ended September 30,
1999 to 42.3% for the six months ended September 30, 2000.

  General and Administrative. General and administrative expenses increased
48.3% from $979,000 for the six months ended September 30, 1999 to $1.5 million
for the six months ended September 30, 2000. The increase in spending was
primarily due to additional personnel costs and other expenses associated with
our expansion of supporting infrastructure, as well as increased costs of
running a public company. As a percentage of total revenues, general and
administrative expenses decreased from 11.7% for the six months ended September
30, 1999 to 10.2% for the six months ended September 30, 2000.

  Interest and Other Income

  Interest and other income increased from $168,000 for the six months ended
September 30, 1999 to $813,000 for the six months ended September 30, 2000.  The
increase was primarily due to an increase in interest income from $166,000 for
the six months ended September 30, 1999 to $824,000 for the six months ended
September 30, 2000.  The growth in interest income over the comparable period in
the prior year is a result of additional interest earned on the proceeds from
the initial public offering and the additional cash produced by our operations
offset by fees associated with our $3.4 million letter of credit outstanding at
September 30, 2000.

  Provision for Income Taxes

  The provision for income taxes increased from $75,000 for the six months ended
September 30, 1999 to $560,000 for the six months ended September 30, 2000.  The
increase in the provision for the six months ended September 30, 2000 resulted
from a growth in earnings offset by research and development tax credits that
should be available to us in fiscal year 2001.

  Liquidity and Capital Resources

  Since inception, we have funded our operations primarily through cash provided
by operating activities. In October 1997, we raised $7.0 million in venture
financing, of which we used $3.4 million to repurchase stock from our existing
stockholders.  In August 2000, we completed our initial public offering in which
we raised approximately $54.1 million, net of underwriting discounts and
commissions and estimated offering expenses payable by us.  As of September 30,
2000 we had cash, cash equivalents, and short-term marketable securities
totaling $66.1 million.

  Cash provided by operating activities was $2.0 million and $3.3 million for
the six months ended September 30, 1999 and 2000, respectively. Cash provided by
operating activities is primarily derived from net income, as adjusted for
depreciation and amortization and increases in deferred revenue.  Cash used in
investing activities was $677,000 and $1.2 million for the six months ended
September 30, 1999 and 2000, respectively. The funds were used primarily to
purchase property, equipment, and software.  Cash provided by financing
activities was $55.2 million for the six months ended September 30, 2000.  This
reflected cash received from the initial public offering net of cash paid for
costs incurred as discussed in Note 2.

                                       14
<PAGE>

  We have a $5.0 million revolving line of credit with a commercial bank, which
expires in June 2001. Borrowings under this line of credit bear interest an
annual rate equal to LIBOR plus 2% to 2.5%. We have currently used $3.4 million
of this facility for a letter of credit that secures the lease for our new
headquarters in Bethesda, Maryland.

  We expect to experience growth in our working capital needs for the
foreseeable future as we execute our business plan. We anticipate that operating
activities, as well as planned capital expenditures, will constitute a material
use of our cash resources. We recently entered into a new headquarters lease
agreement which will increase our facilities costs beginning in February 2001.
In addition, we may utilize cash resources to further extend the facility, fund
acquisitions or investments in complementary businesses, technologies, or
products.

  We believe that our current cash and cash equivalents and cash generated from
operations, along with available borrowings under our line of credit, will be
sufficient to meet our anticipated cash requirements for working capital and
capital expenditures for at least the next 12 months. If we require further
capital resources in excess of the resources currently available to us to grow
our business, execute our operating plan, or acquire complementary technologies
or businesses at any time in the future, we may seek to sell additional equity
or debt securities, which may result in additional dilution to our stockholders.
If additional funding is required, we cannot be certain that it will be
available on acceptable terms, or at all.

  Certain Factors That May Affect Future Results

  The following important factors, among others, could cause actual results to
differ materially from those indicated by forward-looking statements made in
this Quarterly Report on Form 10-Q and presented elsewhere by management from
time to time.

  Our operating results may fluctuate significantly as a result of factors
outside of our control, which could cause the market price of our stock to
decline

  Our operating results have fluctuated in the past, and are likely to fluctuate
significantly in the future. Our financial results may as a consequence fall
short of the expectations of public market analysts or investors, which could
cause the price of our common stock to decline. Our revenues and operating
results may vary significantly from quarter to quarter due to a number of
factors, many of which are beyond our control. Factors that could affect our
operating results include:

  o  the timing of large orders;

  o  changes in the mix of our sales, including the mix between higher margin
     software products and somewhat lower margin services and maintenance, and
     the proportion of our license sales requiring us to make royalty payments;

  o  the timing and amount of our marketing, sales, and product development
     expenses;

  o  the cost and time required to develop new software products;

  o  the introduction, timing, and market acceptance of new products introduced
     by us or our competitors;

  o  changes in network technology or in applications, which could require us to
     modify our products or develop new products;

  o  general economic conditions, which can affect our customers' purchasing
     decisions and the length of our sales cycle;

  o  changes in our pricing policies or those of our competitors; and

  o  the timing and size of potential acquisitions by us.

  We expect to make significant expenditures in all areas of our business,
particularly sales and marketing operations, in order to promote future growth.
Because the expenses associated with these activities are relatively fixed in
the short term, we may be unable to adjust spending quickly enough to offset any
unexpected shortfall in revenue growth or any decrease in revenue levels. In
addition, our revenues in any quarter depend substantially on orders we receive
and ship in that quarter. We typically receive a significant portion of orders
in any quarter during the last month of the quarter, and we cannot predict
whether those orders will be placed and shipped in

                                       15
<PAGE>

that period. If we have lower revenues than we expect, we probably will not be
able to reduce our operating expenses quickly in response. Therefore, any
significant shortfall in revenues or delay of customer orders could have an
immediate adverse effect on our operating results in that quarter.

  For all of these reasons, quarterly comparisons of our financial results are
not necessarily meaningful and you should not rely on them as an indication of
our future performance.

  The market for predictive network management software is new and evolving, and
if this market does not develop as anticipated, our revenues could decline

  We derive all of our revenues from the sale of products and services that are
designed to allow our customers to manage the performance of networks and
applications. Accordingly, if the market for predictive network management
software does not continue to grow, we could face declining revenues, which
could ultimately lead to our becoming unprofitable. The market for predictive
network management software solutions is in an early stage of development.
Therefore, we cannot accurately assess the size of the market and may be unable
to identify an effective distribution strategy, the competitive environment that
will develop, and the appropriate features and prices for products to address
the market. If we are to be successful, our current and potential customers must
recognize the value of predictive network management software solutions, decide
to invest in the management of their networks, and, in particular, adopt and
continue to use our software solutions.

  We will not be able to grow our business if service providers do not buy our
products

  A key element of our strategy is to increase sales to service providers, and
our future performance will be significantly dependent upon increased adoption
by service providers of our software products. Accordingly, the failure of our
products to perform favorably in the service provider environment or to gain
wider adoption by service providers could have a negative effect on our business
and future operating results.

  If our newest products, OPNET IT DecisionGuru and OPNET Netbiz, do not gain
widespread market acceptance, our revenues might not increase and could even
decline

  We expect to derive a substantial portion of our revenues in the future from
OPNET IT DecisionGuru and OPNET Netbiz, both of which were released in August
1998. Our business depends on customer acceptance of these products and our
revenues may not increase, or may decline, if our target customers do not adopt
and expand their use of OPNET IT DecisionGuru and OPNET Netbiz. To date, we have
not achieved widespread market acceptance of either product. In addition, if our
OPNET Modeler product, which we have been selling since 1987, encounters
declining sales, which could occur for a variety of reasons, including market
saturation, and sales of our newer products do not grow at a rate sufficient to
offset the shortfall, our revenues would decline.

  If we do not successfully expand our sales force, we may be unable to increase
our sales

  We sell our products primarily through our direct sales force, and we must
expand the size of our sales force to increase revenues. If we are unable to
hire or retain qualified sales personnel, if newly hired personnel fail to
develop the necessary skills to be productive, or if they reach productivity
more slowly than anticipated, our ability to increase our revenues and grow our
business could be compromised. Our sales people require a long period of time to
become productive, typically three to six months. The time required to reach
productivity, as well as the challenge of attracting, training, and retaining
qualified candidates, may make it difficult to meet our sales force growth
targets. Further, we may not generate sufficient sales to offset the increased
expense resulting from growing our sales force or we may be unable to manage a
larger sales force.

  Our ability to increase our sales will be impaired if we do not expand and
manage our indirect distribution channels

  To increase our sales, we must, among other things, further expand and manage
our indirect distribution channels, which consist primarily of international
distributors and original equipment manufacturers and resellers. If we are
unable to expand and manage our relationships with our distributors, our
distributors are unable or unwilling to effectively market and sell our
products, or we lose existing distributor relationships, we might not be able to
increase our revenues. Our international distributors and original equipment
manufacturers and resellers have no obligation to market or purchase our
products. In addition, they could partner with our competitors, bundle or resell
competitors' products, or internally develop products that compete with our
products.

                                       16
<PAGE>

  We may not be able to successfully manage our expanding operations, which
could impair our ability to operate profitably

  We may be unable to operate our business profitably if we fail to manage our
growth. Our rapid growth has sometimes strained, and may in the future continue
to strain, our managerial, administrative, operational, and financial resources
and controls. We plan to continue to expand our operations and increase the
number of our full-time employees. Our ability to manage growth will depend in
part on our ability to continue to enhance our operating, financial, and
management information systems. Our personnel, systems, and controls may not be
adequate to support our growth. In addition, our revenues may not continue to
grow at a sufficient rate to absorb the costs associated with a larger overall
employee base.

  If we are unable to introduce new and enhanced products on a timely basis that
respond effectively to changing technology, our revenues may decline

  Our market is characterized by rapid technological change, changes in customer
requirements, frequent new product and service introductions and enhancements,
and evolving industry standards. If we fail to develop and introduce new and
enhanced products on a timely basis that respond to these changes, our products
could become obsolete, demand for our products could decline and our revenues
could fall. Advances in network management technology, software engineering,
simulation technology, or the emergence of new industry standards, could lead to
new competitive products that have better performance, more features, or lower
prices than our products and could render our products unmarketable. In
addition, the introduction and adoption of future network technologies or
application architectures could reduce or eliminate the need for predictive
network management software.

  If we fail to retain our key personnel and attract and retain additional
qualified personnel, we might not be able to sustain our revenue growth

  Our future success and our ability to sustain our revenue growth depend upon
the continued service of our executive officers and other key sales and research
and development personnel. The loss of any of our key employees, in particular
Marc A. Cohen, our chairman of the board and chief executive officer, and Alain
J. Cohen, our president and chief technology officer, could adversely affect our
ability to pursue our growth strategy. We do not have employment agreements or
any other agreements that obligate any of our officers or key employees to
remain with us.

  We must also continue to hire large numbers of highly qualified individuals,
particularly software engineers and sales and marketing personnel. Our failure
to attract and retain technical personnel for our product development,
consulting services, and technical support teams may limit our ability to
develop new products or product enhancements. Competition for these individuals
is intense, and we may not be able to attract and retain additional highly
qualified personnel in the future. In addition, limitations imposed by federal
immigration laws and the availability of visas could impair our ability to
recruit and employ skilled technical professionals from other countries to work
in the United States.

  Our international operations subject our business to additional risks which
could cause our sales or profitability to decline

  We plan to increase our international sales activities, but these plans are
subject to a number of risks that could cause our sales to decline or could
otherwise cause a decline in profitability. These risks include:

  o   greater difficulty in accounts receivable collection and longer collection
      periods;

  o  political and economic instability;

  o  difficulty in attracting distributors that will market and support our
     products effectively;

  o  the need to comply with varying employment policies and regulations that
     could make it more difficult and expensive to manage our employees if we
     need to establish direct sales or support staff outside the United States;

  o  potentially adverse tax consequences; and

  o  the effects of currency fluctuations.

                                       17
<PAGE>

  Expanding our OPNET Netbiz consulting services business will be costly and may
not result in any compensating increase in sales or profitability

  We have recently begun to place additional emphasis on consulting services
delivered in conjunction with sales of OPNET Netbiz. The significant additional
expenditures and operational resources required to expand our OPNET Netbiz
consulting services business will place additional strain on our management,
financial, and operational resources and may make it more difficult for us to
maintain profitability. If OPNET Netbiz does not achieve significant market
acceptance, our customers will not engage our consulting services organization
to assist with consulting, custom development, implementation support, and
training for OPNET Netbiz. In addition, we may be unable to attract or retain a
sufficient number of the highly qualified consulting services personnel that we
expect the expansion of our consulting services business will require.

  We face intense competition, which could cause us to lose sales, resulting in
lower revenues and profitability

  The intense and increasing competition in our market could cause us to lose
sales, which could result in lower revenues and could cause us to become
unprofitable. The market for predictive network management software is evolving
rapidly and is highly competitive. We believe that this market is likely to
become more competitive as the demand for predictive network management
solutions continues to increase. Many of our current and potential competitors
are larger and have substantially greater financial and technical resources than
we do. In addition, it is possible that other vendors as well as some of our
customers or distributors will develop and market solutions that compete with
our products in the future.

  OPNET Modeler and OPNET IT DecisionGuru currently face or potentially will
face competition from several sources, including:

  o  software vendors with predictive network management offerings, such as
     Compuware, and application performance diagnosis solutions, such as
     Optimal Networks;

  o  consultants who offer predictive network management advisory services; and

  o  customers who develop their own predictive network management capabilities,
     either internally or through outsourcing.

  OPNET Netbiz competes with solutions designed to facilitate and automate sales
processes in general.

  If Internet infrastructure does not grow as currently anticipated, sales of
our OPNET Netbiz product may not grow and our revenues may decline

  Our OPNET Netbiz product addresses a new and emerging market for sales process
automation, including over the Internet, by service providers and network
equipment manufacturers. The failure of this market to develop, or a delay in
the development of this market, would reduce demand for OPNET Netbiz and cause
our revenues to decline. The success of OPNET Netbiz depends substantially upon
the widespread adoption of the Internet as a primary medium for commerce and
business applications. Moreover, critical issues concerning the commercial use
of the Internet, such as security, reliability, cost, accessibility, and quality
of service, remain unresolved and may negatively affect the growth of Internet
use or the attractiveness of commerce and business communication over the
Internet.

  Errors in our products and our inability to correct those errors could harm
our reputation and could cause our customers to demand refunds from us or assert
claims for damages against us

  Our software products could contain significant errors or bugs that may result
in:

  o  the loss of or delay in market acceptance and sales of our products;

  o  the delay in introduction of new products;

  o  diversion of our resources;

  o  injury to our reputation; and

                                       18
<PAGE>

  o  increased support costs.

  Bugs may be discovered at any point in a product's life cycle. We expect that
errors in our products will be found in the future, particularly in new product
offerings and new releases of our current products.

  Because our customers use our products to manage networks that are critical to
their business operations, any failure of our products could expose us to
product liability claims. In addition, errors in our products could cause our
customers' networks and systems to fail or compromise their data, which could
also result in liability to us. Product liability claims brought against us
could divert the attention of management and key personnel, could be expensive
to defend, and may result in adverse settlements and judgments.

  Our software products rely on our intellectual property, and any failure to
protect our intellectual property could enable our competitors to market
products with similar features that may reduce our revenues by decreasing demand
for our products, and could allow the use of our products by users who have not
paid the required license fee

  If we are unable to protect our intellectual property, our competitors could
use our intellectual property to market products similar to our products, which
could reduce our revenues by decreasing demand for our products. In addition, we
may be unable to prevent the use of our products by persons who have not paid
the required license fee, which could reduce our revenues. Our success and
ability to compete depend substantially upon the internally developed technology
that is incorporated in our products. Policing unauthorized use of our products
is difficult, and we may not be able to prevent misappropriation of our
technology, particularly in foreign countries where the laws may not protect our
proprietary rights as fully as those in the United States. Others may circumvent
the patents, copyrights, and trade secrets we own. In the ordinary course of
business, we enter into a combination of confidentiality, non-competition, and
non-disclosure agreements with our employees. These measures afford only limited
protection and may be inadequate, especially because our employees are highly
sought after and may leave our employ with significant knowledge of our
proprietary information. In addition, any confidentiality, non-competition, and
non-disclosure agreements we enter into may be found to be unenforceable, or our
copy protection mechanisms embedded in our software products could fail or could
be circumvented.

  Our products employ technology that may infringe on the proprietary rights of
others, and, as a result, we could become liable for significant damages

  We expect that our software products may be increasingly subject to third-
party infringement claims as the number of competitors in our industry segment
grows and the functionalities of products in different industry segments
overlap. Regardless of whether these claims have any merit, they could:

  o  be time-consuming to defend;

  o  result in costly litigation;

  o  divert our management's attention and resources;

  o  cause us to cease or delay product shipments; or

  o  require us to enter into royalty or licensing agreements.

  These royalty or licensing agreements may not be available on terms acceptable
to us, if at all. A successful claim of product infringement against us or our
failure or inability to license the infringed or similar technology could
adversely affect our business because we would not be able to sell the affected
product without redeveloping it or incurring significant additional expense.

  If we undertake acquisitions, they may be expensive and disruptive to our
business and could cause the market price of our common stock to decline

  We may acquire or make investments in companies, products, or technologies if
opportunities arise. Any acquisitions could be expensive, disrupt our ongoing
business, distract our management and employees, and adversely affect our
financial results and the market price of our common stock. We may not be able
to identify suitable acquisition or investment candidates, and if we do identify
suitable candidates, we may not be able to make these acquisitions or
investments on commercially acceptable terms or at all. If we

                                       19
<PAGE>

make an acquisition, we could have difficulty integrating the acquired
technology, employees, or operations. In addition, the key personnel of the
acquired company may decide not to work for us. We also expect that we would
incur substantial expenses if we acquired other businesses or technologies. We
might use the net proceeds of this offering, incur debt, or issue equity
securities to pay for any future acquisitions. If we issue additional equity
securities, our stockholders could experience dilution and the market price of
our stock may decline.

  Our products are subject to changing computing environments, including
operating system software and hardware platforms, which could render our
products obsolete

  The evolution of existing computing environments and the introduction of new
popular computing environments may require us to redesign our products or
develop new products. Computing environments, including operating system
software and hardware platforms, are complex and change rapidly. Our products
are designed to operate in currently popular computing environments. Due to the
long development and testing periods required to adapt our products to new or
modified computing environments, we could experience significant delays in
product releases or shipments, which could result in lost revenues and
significant additional expense.


ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

  We consider all highly liquid investments purchased with a maturity of three
months or less to be cash equivalents, and those with maturities greater than
three months are considered to be marketable securities. Cash equivalents and
marketable securities are stated at amortized cost plus accrued interest, which
approximates fair value. Cash equivalents and marketable securities consist
primarily of money instruments and U.S. Treasury bills. We currently do not
hedge interest rate exposure, but do not believe that an increase in interest
rates would have a material effect on the value of our marketable securities.

                                       20
<PAGE>


                           PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

  The Company is not party to any material legal proceedings.

ITEM 2. Changes in Securities and Use of Proceeds

  Since July 1, 2000, the Company issued an aggregate of 106,961 shares of
Common Stock upon the exercise of outstanding options under the Company's
Amended and Restated 1993 Incentive Stock Option Plan (the "1993 Plan") and
6,000 shares of Common Stock upon the exercise of outstanding options that were
not granted under the 1993 Plan. The Company relied on an exemption provided by
Rule 701 under the Securities Act of 1933, as amended (the "Securities Act"),
for the issuance of the shares of Common Stock issued upon exercise of the
indicated options. The purchasers in each of the above-mentioned transactions
represented their intention to acquire the securities for investment only and
not with a view to the distribution thereof. Appropriate legends were affixed to
the stock certificates issued in such transactions. All recipients had access,
through employment or other relationships, to information about the Company to
make an informed investment decision. No underwriters were involved in the
foregoing sales of securities.

  On August 1, 2000, the Company issued options to purchase 189,650 shares of
Common Stock at the initial public offering price of $13.00 per share to
employees pursuant to the Company's 2000 Stock Incentive Plan.  On August 7,
2000, the Company issued options to purchase 30,000 shares of Common Stock at
the initial public offering price of $13.00 per share to directors pursuant to
the Company's 2000 Director Stock Option Plan.  The Company relied on an
exemption provided by Rule 701 under the Securities Act for the issuance of
these options.

  On August 7, 2000, the Company closed an initial public offering of 4,000,000
shares of its Common Stock (the "Offering").  The shares of Common Stock sold in
the Offering were registered under the Securities Act on a Registration
Statement on Form S-1 (No. 333-32588) (the "Registration Statement") that was
declared effective by the Securities and Exchange Commission on August 1, 2000.
Morgan Stanley & Co. Incorporated, FleetBoston Robertson Stephens Inc. and
Friedman, Billings, Ramsey & Co., Inc., the managing underwriters of the
Offering, also exercised their over-allotment option to purchase an additional
600,000 shares of Common Stock from the Company, which closed on August 9, 2000.

  The Offering commenced on August 1, 2000 and terminated on August 1, 2000
after the sale of all securities registered under the Registration Statement.
In the Offering, for the account of the Company, (i) an aggregate of 4,600,000
shares of Common Stock were registered pursuant to the Registration Statement,
(ii) the aggregate offering price of the amount registered was $59.8 million,
(iii) the amount sold pursuant to the Offering was an aggregate of 4,600,000
shares of Common Stock and (iv) the aggregate offering price of the amount sold
was $59.8 million, at $13.00 per share.

  In connection with the Offering, the Company paid an aggregate of $4.2 million
in underwriting discounts and commissions and incurred approximately $1.5
million of other expenses.  These expenses included $164,000 of registration,
filing and application fees, $200,000 of printing fees, $400,000 of legal fees,
$400,000 of accounting fees and $336,000 of miscellaneous expenses.  None of
these amounts were paid directly or indirectly to any director, officer, general
partners of the Company or their associates, persons owning 10% or more of any
class of equity securities of the Company, or any affiliate of the Company.
After deducting the underwriting discounts and commissions and the estimated
Offering expenses, the net proceeds to the Company from the Offering were
approximately $54.1 million.

  The Company intends to use the net proceeds of the Offering for general
corporate purposes, including working capital and capital expenditures.  The
Company expects to use approximately $4.0 million of the net proceeds in the
third and fourth quarters of fiscal 2001 for capital expenditures and leasehold
improvements related to its new headquarters facility in Bethesda, Maryland and
approximately $1.0 million for other capital expenditures, including furniture
and equipment, throughout the remainder of fiscal 2001. The Company has not
allocated any of the remaining net proceeds to any identifiable uses.  The
Company may also use a portion of the net proceeds to acquire businesses,
products, or technologies that are complementary to its business.  Pending their
use, the Company plans to invest the net proceeds in investment grade, interest-
bearing securities.

                                       21
<PAGE>


ITEM 3. Defaults Upon Senior Securities

 None

ITEM 4. Submission of Matters to a Vote of Security Holders

 None

ITEM 5. Other Information

 None

ITEM 6. Exhibits and Reports on Form 8-K

 A.   Exhibits

 3.1   Third Amended and Restated Certificate of Incorporation (incorporated
       herein by reference to Exhibit 3.2 to the Company's Registration
       Statement on Form S-1; SEC file No. 333-32588)

 3.2   Amended and Restated By-Laws of the Company (incorporated herein by
       reference to Exhibit 3.4 to the Company's Registration Statement on Form
       S-1; SEC file No. 333-32588)

 4.1   Specimen common stock certificate (incorporated herein by reference to
       Exhibit 4.1 to the Company's Registration Statement on Form S-1; SEC file
       No. 333-32588)

 4.2   See Exhibits 3.1 and 3.2 for provisions of the Certificate of
       Incorporation and By-Laws of the Company defining the rights of holders
       of common stock of the Company

 27    Financial Data Schedule

 B. Reports on Form 8-K

       None

                                       22
<PAGE>

                                  SIGNATURES

  Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                  OPNET TECHNOLOGIES, INC.
                                  (Registrant)

                                   By: /s/ Joseph F. Greeves
                                       ---------------------------------
                                       Name:   Joseph F. Greeves
                                       Title:  Senior Vice President of
                                               Finance and Chief Financial
                                               Officer (Principal Financial
                                               and Accounting Officer)


Date: November 14, 2000


                                       23