<PAGE>

                                   FORM 10-Q

               UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549
                            _______________________



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

                  For the quarterly period ended July 1, 2000

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

     For the transition period from_______________ to ___________________


                        Commission file number 0-12751


                              Corvis Corporation
            (Exact name of registrant as specified in its charter)


             Delaware                                   52-2041343

(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                        Identification No.)


           7015 Albert Einstein Drive, Columbia, Maryland 21046-9400
            (Address of principal executive offices)    (Zip Code)

                                (443) 259-4000
             (Registrant's telephone number, including area code)

     ____________________________________________________________________
             (Former name, former address and formal fiscal year,
                         if changed since last report)


     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
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                   Yes                             No   X
                         --------                    -------

Number of shares of Common Stock, $0.01 par value, outstanding at August 24,
2000: 336,163,645
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                        Page
                                                                                        -----
                               Part I - Financial Information
<S>                                                                                     <C>
Item 1.  Financial Statements

         Condensed consolidated balance sheets as of January 1, 2000 and July 1,
         2000.........................................................................      3

         Condensed consolidated statements of operations for the three months
         ended July 3, 1999 and July1, 2000, the six months ended July 3, 1999 and
         July 1, 2000 and the period from June 2, 1997 (date of inception) through
         July 1, 2000.................................................................      4

         Condensed consolidated statements of cash flows for the six months ended
         July 3, 1999 and July 1, 2000 and the period from June 2, 1997 (date of
         inception) through July 1, 2000..............................................      5

         Notes to condensed consolidated financial statements.........................   6-10

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations................................................................  11-17

Item 3.  Quantitative and Qualitative Disclosure About Market Risk....................     17

                              Part II - Other Information

Item 1.  Legal Proceedings............................................................     18

Item 2.  Changes in Securities and Use of Proceeds....................................  18-19

Item 3.  Defaults Upon Senior Securities..............................................     19

Item 4.  Submission of Matters to a Vote of Security Holders..........................  19-20

Item 5.  Other Information............................................................     20

Item 6.  Exhibits and Reports on Form 8-K.............................................     20
</TABLE>


                                      -2-
<PAGE>

                        PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

                              CORVIS CORPORATION
                         (A Development Stage Company)

                     CONDENSED CONSOLIDATED BALANCE SHEETS

               (Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                                          January 1,     July 1,
                                                                                             2000          2000
                                                                                          ----------    ----------
                                                                                                        (Unaudited)
<S>                                                                                       <C>          <C>
ASSETS
------
Current assets:
  Cash and cash equivalents............................................................     $244,597    $ 186,645
  Restricted cash......................................................................        2,103        2,042
  Inventory, net.......................................................................       15,869       71,436
  Other current assets.................................................................        1,641        6,178
                                                                                            --------    ---------
     Total current assets..............................................................      264,210      266,301

Restricted cash........................................................................       15,000       15,000
Property and equipment, net............................................................       22,355       50,614
Deposits and intangible assets, net....................................................        2,148      158,926
Deferred financing fees, net...........................................................        3,566        2,821
                                                                                            --------    ---------
     Total assets......................................................................     $307,279    $ 493,662
                                                                                            ========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
  Notes payable, current portion.......................................................     $ 15,287    $  17,542
  Capital lease obligations, current portion...........................................        1,587        1,664
  Accounts payable.....................................................................        6,823       28,599
  Accrued expenses.....................................................................        3,674        3,555
                                                                                            --------    ---------
     Total current liabilities.........................................................       27,371       51,360
Noncurrent liabilities:
  Notes payable, net of current portion................................................       35,807       27,583
  Capital lease obligations, net of current portion....................................        2,964        2,162
  Deferred lease liability.............................................................        1,512        2,192
                                                                                            --------    ---------
     Total liabilities.................................................................       67,654       83,297

Commitments and contingencies
Stockholders' equity:
  Series A convertible preferred stock; $0.01 par value; 1,550,000 shares authorized;
    1,550,000 issued and outstanding (liquidation preference of $3,100)................           16           16
  Series B convertible preferred stock; $0.01 par value; 6,685,931 shares authorized;
    6,328,955 issued and outstanding (liquidation preference of $13,607)...............           63           63
  Series C convertible preferred stock; $0.01 par value; 3,270,819 shares authorized;
    3,120,118 issued and outstanding as of January 1, 2000; 3,148,299 issued and
    outstanding as of July 1, 2000 (unaudited) (liquidation preference of $28,540 and
    $28,797 (unaudited) as of January 1, 2000 and July 1, 2000, respectively)..........           31           31
  Series D convertible preferred stock; $0.01 par value; 273,314 shares authorized;
    211,928 issued and outstanding (liquidation preference of $1,939)..................            2            2
  Series E convertible preferred stock; $0.01 par value; 641,121 shares authorized; none
    issued and outstanding (liquidation preference of $0)..............................           --           --
  Series F convertible preferred stock; $0.01 par value; 1,946,906 shares authorized;
    1,898,406 issued and outstanding (liquidation preference of $46,036)...............           19           19
  Series G convertible preferred stock; $0.01 par value; 573,989 shares authorized;
    292,825 issued and outstanding (liquidation preference of $10,000).................            3            3
  Series H convertible preferred stock; $0.01 par value; 3,186,710 shares authorized;
    2,685,954 issued and outstanding as of January 1, 2000; 3,182,943 issued and
    outstanding as of July 1, 2000 (unaudited) (liquidation preference of $216,300
    and $256,322 (unaudited) as of January 1, 2000 and July 1, 2000, respectively).....           27           32
  Series I convertible preferred stock; $0.01 par value; 2,496,564 shares authorized;
    1,301,822 issued and outstanding as of July 1, 2000  (liquidation preference of
    $218,706)..........................................................................           --           13
  Common stock--$0.01 par value; 425,121,094 shares authorized; 61,114,020 shares
    issued and outstanding as of  January 1, 2000; 63,288,800 issued and outstanding
    as of July 1, 2000.................................................................          609          631
  Stockholder note receivable..........................................................       (1,224)      (1,224)
  Additional paid-in capital...........................................................      331,302      629,574
  Deficit accumulated during development stage.........................................      (91,223)    (218,795)
                                                                                            --------    ---------
     Total stockholders' equity........................................................      239,625      410,365
                                                                                            --------    ---------
     Total liabilities and stockholders' equity........................................     $307,279    $ 493,662
                                                                                            ========    =========
</TABLE>

    See accompanying notes to condensed consolidated financial statements.


                                      -3-
<PAGE>

                              CORVIS CORPORATION
                         (A Development Stage Company)

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

          (Dollars in thousands, except share and per share amounts)
                                  (Unaudited)


<TABLE>
<CAPTION>

                                             Three Months Ended           Six Months Ended              June 2, 1997
                                         -------------------------   ------------------------------      (date of
                                           July 3,       July 1,       July 3,          July 1,        inception) to
                                            1999          2000          1999             2000           July 1, 2000
                                         -----------   -----------   -----------      -----------      --------------

<S>                                     <C>           <C>           <C>           <C>                <C>
Revenue...............................   $        --   $        --   $        --   $        --        $      --

Operating expenses:
   Research and development,
     exclusive of equity-based
     expense..........................         8,890        12,013        17,302        31,074           86,259
   Sales and marketing, exclusive of
     equity-based expense.............         1,354         4,349         1,637         8,979           12,565
   General and administrative.........         3,308         5,038         5,007         7,391           29,124
   Equity-based expense:
     Research and development.........            --           904            --         1,649            1,775
     Sales and marketing..............            --        35,529            --        35,529           40,374
     General and administrative.......            --         1,457            --         1,457            1,457
   Depreciation and amortization......           452         2,077           794         3,558            6,845
   Purchased research and development.            --        40,300            --        40,300           40,300
                                         -----------   -----------   -----------   -----------        ---------
     Total operating expenses.........        14,004       101,667        24,740       129,937          218,699
                                         -----------   -----------   -----------   -----------        ---------
     Operating loss...................       (14,004)     (101,667)      (24,740)     (129,937)        (218,699)
   Interest income (expense), net.....          (313)          925          (739)        2,365              (96)
                                         -----------   -----------   -----------   -----------        ---------
     Net loss.........................   $   (14,317)  $  (100,742)  $   (25,479)  $  (127,572)       $(218,795)
                                         ===========   ===========   ===========   ===========        =========
Basic and diluted net loss per common
 share................................        $(0.55)       $(2.51)       $(1.03)       $(3.31)
                                         ===========   ===========   ===========   ===========
Weighted average number of common
 shares outstanding...................    26,181,997    40,076,930    24,835,849    38,594,639
</TABLE>


    See accompanying notes to condensed consolidated financial statements.


                                      -4-
<PAGE>

                              CORVIS CORPORATION
                         (A Development Stage Company)

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                            (Dollars in thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                              Six Months Ended                  June 2, 1997
                                                            --------------------                  (date of
                                                             July 3,    July 1,                 inception) to
                                                              1999       2000                   July 1, 2000
                                                            --------   ---------                -------------
<S>                                                        <C>         <C>                      <C>
Cash flows from operating activities:
Net loss..................................................  $(25,479)  $(127,572)                 $(218,795)
Adjustments to reconcile net loss to net cash used in
 operating activities:
  Depreciation and amortization...........................       794       3,558                      6,845
  Equity-based expense....................................       504      38,635                     43,606
  Amortization of deferred financing fees.................        --         745                      3,542
  Purchased research and development expense..............        --      40,300                     40,300

  Changes in operating assets and liabilities:
    Increase in inventory, net............................    (4,334)    (55,567)                   (71,436)
    Increase in other assets..............................      (843)     (1,305)                    (2,649)
    Increase in accounts payable and other accrued
     liabilities..........................................     5,862      15,982                     25,143
                                                            --------   ---------                  ---------
     Net cash used in operating activities................   (23,496)    (85,224)                  (173,444)
                                                            --------   ---------                  ---------

Cash flows from investing activities:
    Purchase of property and equipment....................    (4,519)    (26,842)                   (43,453)
    Cash acquired in business combination.................        --      20,782                     20,819
    Increase (decrease) in deposits and other long-term
     assets...............................................        --         179                       (118)
                                                            --------   ---------                  ---------
     Net cash used in investing activities................    (4,519)     (5,881)                   (22,752)
                                                            --------   ---------                  ---------

Cash flows from financing  activities:
    Restricted cash.......................................        --          61                    (17,042)
    Proceeds from issuance of note payable and capital
     leases, net of payments..............................    19,572      (7,880)                    49,939
    Proceeds from the issuance of stock...................    19,449      40,972                    349,944
                                                            --------   ---------                  ---------
     Net cash provided by financing activities............    39,021      33,153                    382,841
                                                            --------   ---------                  ---------
     Net increase (decrease) in  cash and cash
      equivalents.........................................    11,006     (57,952)                   186,645
Cash and cash equivalents--beginning......................     4,041     244,597                         --
                                                            --------   ---------                  ---------
Cash and cash equivalents--ending.........................  $ 15,047   $ 186,645                  $ 186,645
                                                            ========   =========                  =========

Supplemental disclosure of cash flow information:
    Interest paid.........................................  $    615   $   3,616                  $   4,250
                                                            ========   =========                  =========
Supplemental disclosure of noncash activities:
    Financed leasehold improvements.......................  $  1,225   $     923                  $   4,187
                                                            ========   =========                  =========
    Obligations under capital lease.......................  $  2,298   $      --                  $   5,001
                                                            ========   =========                  =========
    Issuance of warrants under capital lease obligation...  $    143   $      --                  $     144
                                                            ========   =========                  =========
    Conversion of stockholder note payable................  $ 10,000   $     --                   $  10,000
                                                            ========   =========                  =========
    Stockholder note received for exercise of stock
     options..............................................  $      --  $      --                  $   1,224
                                                            =========  =========                  =========
    Purchase business combinations consideration paid
     with preferred stock.................................  $      --  $ 218,706                  $ 220,594
                                                            =========  =========                  =========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                      -5-
<PAGE>

                              CORVIS CORPORATION
                         (A Development Stage Company)

                  NOTES TO CONDENSED CONSOLIDATED STATEMENTS

          (Dollars in thousands, except share and per share amounts)

                                  (Unaudited)



(1) Summary of Significant Accounting Policies and Practices

    The condensed consolidated financial statements included herein for Corvis
Corporation (the "Company") have been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
In the opinion of management, the financial statements included in this report
reflect all normal recurring adjustments which the Company considers necessary
for the fair presentation of the results of operations for the interim periods.
Certain information and footnote disclosures normally included in the annual
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations.  However, the Company believes that the disclosures are adequate to
understand the information presented.  The operating results for interim periods
are not necessarily indicative of the operating results for the entire year.
These financial statements should be read in conjunction with the Company's
January 1, 2000 audited consolidated financial statements and notes thereto
included in the Company's Registration Statements on Form S-1 declared effective
July 27, 2000.

(2) Inventory

    Inventories are comprised of the following (in thousands):

<TABLE>
                                                       January 1,  July 1,
                                                         2000       2000
                                                       ----------  -------
<S>                                                   <C>          <C>
Raw materials..........................................  $13,467   $42,058
Work-in-process........................................    4,173    20,997
Finished goods.........................................       --    14,824
                                                         -------   -------
                                                          17,640    77,879
Less reserve for excess inventory and obsolescence.....   (1,771)   (6,443)
                                                         -------   -------
                                                         $15,869   $71,436
                                                         =======   =======
</TABLE>

(3) Private Placements

    In May 2000, the Company sold 124,177 shares of Series H convertible
preferred stock to Williams Communications in a private placement transaction
for an aggregate purchase price of $10 million.

    In June 2000, the Company sold 372,533 shares of Series H convertible
preferred stock to Broadwing Communications in a private placement transaction
for an aggregate purchase price of $30 million.

(4) Acquisitions

    On May 19, 2000, the Company acquired Baylight Networks, Inc. ("Baylight"),
a company that designs network systems and subsystems. Baylight, based in Palo
Alto, California, was formed in February 2000 and is a development stage company
with no revenue. In consideration for all of the outstanding shares of Baylight,
the Company assumed $0.1 million of Baylight's liabilities and agreed to issue
2,400,012 shares of common stock over the term of three-year employment
agreements with the former Baylight shareholders. The Company accounted for the
acquisition as a purchase. Accordingly, the operating results of Baylight are
included in the Company's financial results from the date of acquisition. The
allocation of the purchase price to the fair value of the assets acquired and
liabilities

                                      -6-
<PAGE>

                              CORVIS CORPORATION
                         (A Development Stage Company)

                  NOTES TO CONDENSED CONSOLIDATED STATEMENTS

          (Dollars in thousands, except share and per share amounts)

                                  (Unaudited)



assumed has been based on an internal analysis of the fair value of the assets
and liabilities of Baylight. The excess of the aggregate purchase price over the
fair value of net assets acquired of approximately $0.1 million will be
amortized on a straight-line basis over five years. The Company will recognize
compensation expense over the term of the employment agreements equal to the
fair value of the shares to be issued.

    On July 1, 2000, the Company acquired Algety Telecom S.A. ("Algety"), a
French company that develops and markets high-capacity, high-speed optical
transmission equipment. Algety, based in Lannion, France was formed in April
1999, and is a development stage company with no revenue. The acquisition price
is equal to 1,301,822 shares of Series I convertible preferred stock, valued at
$218.7 million at the date of purchase. The Company may be required to increase
the purchase price up to an aggregate of 8.0% of the Company's outstanding
stock, depending on certain conditions within 90 days from the original closing.
The Company accounted for the acquisition as a purchase. Accordingly, the
operating results of Algety will be included in the Company's financial results
from the date of acquisition. The allocation of the purchase price to the fair
value of the assets acquired and liabilities assumed has been based upon an
independent third party valuation of the assets and liabilities of Algety. Based
upon the results of the valuation, the Company allocated $40.3 million of the
purchase price to in-process technology. The excess of the aggregate purchase
price over the fair value of net assets acquired of $154.8 million, based on the
purchase price allocation, will be amortized on a straight-line basis over five
years.

    The following pro forma data summarize the results of operations for the
period indicated as if the Algety acquisition had been completed as of the
beginning of the periods presented.  The pro forma data give effect to actual
operating results prior to the acquisition, adjusted to include the pro forma
effect of amortization of intangibles.  These pro forma amounts do not purport
to be indicative of the results that would have actually been obtained if the
acquisition occurred as of the beginning of the periods presented or that may be
obtained in the future.

<TABLE>
<CAPTION>
                              Three months ended             Six months ended
                         ---------------------------   -----------------------------
<S>                      <C>            <C>            <C>            <C>
                         July 3, 1999   July 1, 2000   July 3, 1999     July 1, 2000
                         ------------   ------------   ------------     ------------
Revenues...............  $        --    $         --   $         --     $         --
                         ============   ============   ============     ============
Net loss...............  $     25,633   $    114,456   $     36,795     $    155,000
                         ============   ============   ============     ============
Basic and diluted
   net loss per share..  $      (0.98)  $      (2.86)  $      (1.48)    $      (4.02)
                         ============   ============   ============     ============
</TABLE>

(5) Equity-Based Compensation

    Equity-based expense related to research and development, sales and
marketing and general and administrative functions equal $900, $35,500 and
$1,500 for the three months ended July 1, 2000 and $1,600, $35,500 and $1,500
for the six months ended July 1, 2000. These expenses are primarily due to the
waiving of certain vesting terms contained in warrants granted to certain
customers.

                                      -7-
<PAGE>

                              CORVIS CORPORATION
                         (A Development Stage Company)

                  NOTES TO CONDENSED CONSOLIDATED STATEMENTS

          (Dollars in thousands, except share and per share amounts)

                                  (Unaudited)


(6) Basic and Diluted Net Loss Per Share

<TABLE>
<CAPTION>
                                                 For the three months ended July 3, 1999
                                                ------------------------------------------
                                                     Loss         Shares       Per share
                                                  (numerator)  (denominator)    amount
                                                  -----------  -------------   ---------
<S>                                               <C>            <C>             <C>
Basic and diluted loss per share:
        Net loss to common stockholders.......    $   (14,317)    26,181,997   $   (0.55)
                                                  ===========  =============   =========
</TABLE>

    Convertible preferred stock outstanding as of July 3, 1999, convertible into
113,388,876 shares of common stock, options and warrants to purchase 14,814,384
and 13,785,612 shares of common stock, respectively, and 22,012,860 unvested
shares acquired through the exercise of options were not included in the
computation of diluted loss per share for the three months ended July 3, 1999 as
their inclusion would be anti-dilutive.

<TABLE>
<CAPTION>
                                                 For the three months ended July 1, 2000
                                                ------------------------------------------
                                                     Loss         Shares       Per share
                                                  (numerator)  (denominator)    amount
                                                  -----------  -------------   ---------
<S>                                               <C>            <C>             <C>
Basic and diluted loss per share:
        Net loss to common stockholders.......    $(100,742)      40,076,930   $   (2.51)
                                                  ===========  =============   =========
</TABLE>

    Convertible Preferred Stock outstanding as of July 1, 2000, convertible into
217,956,916 shares of common stock, options and warrants to purchase 41,921,932
and 22,092,228 shares of common stock, respectively, and 21,543,896 unvested
shares acquired through the exercise of options were not included in the
computation of diluted loss per share for the three months ended July 1, 2000 as
their inclusion would be anti-dilutive.

<TABLE>
<CAPTION>
                                                  For the six months ended July 3, 1999
                                                ------------------------------------------
                                                     Loss         Shares       Per share
                                                  (numerator)  (denominator)    amount
                                                  -----------  -------------   ---------
<S>                                               <C>            <C>             <C>
Basic and diluted loss per share:
        Net loss to common stockholders.......    $   (25,479)    24,835,849   $   (1.03)
                                                  ===========  =============   =========
</TABLE>

    Convertible Preferred Stock outstanding as of July 3, 1999, convertible into
113,388,876 shares of common stock, options and warrants to purchase 14,814,384
and 13,785,612 shares of common stock,

                                      -8-
<PAGE>

                              CORVIS CORPORATION
                         (A Development Stage Company)

                  NOTES TO CONDENSED CONSOLIDATED STATEMENTS

          (Dollars in thousands, except share and per share amounts)

                                  (Unaudited)


respectively, and 22,012,860 unvested shares acquired through the exercise of
options were not included in the computation of diluted loss per share for the
six months ended July 3, 1999 as their inclusion would be anti-dilutive.

<TABLE>
<CAPTION>
                                                   For the six months ended July 1, 2000
                                                ------------------------------------------
                                                     Loss         Shares       Per share
                                                  (numerator)  (denominator)    amount
                                                  -----------  -------------   ---------
<S>                                               <C>            <C>             <C>
Basic and diluted loss per share:
        Net loss to common stockholders.......    $  (127,572)    38,594,639   $   (3.31)
                                                  ===========  =============   =========
</TABLE>

    Convertible Preferred Stock outstanding as of July 1, 2000, convertible into
217,956,916 shares of common stock, options and warrants to purchase 41,921,932
and 22,092,228 shares of common stock, respectively, and 21,543,896 unvested
shares acquired through the exercise of options were not included in the
computation of diluted loss per share for the six months ended July 1, 2000 as
their inclusion would be anti-dilutive.

(7) Subsequent Events

(a) Stock Split

    On July 21, 2000, the Company declared a 4-for-1 split of its common stock.
All share and per share amounts of common stock in the accompanying consolidated
financial statements have been retroactively adjusted to reflect the stock
split.

(b) Legal Matters

    In July 2000, Ciena Corporation ("Ciena"), a competitor, filed a lawsuit
alleging that the Company infringed on certain of Ciena's patents. Ciena is
seeking injunctive relief, an unspecified amount of damages including treble
damages, as well as costs of the lawsuit including attorney's fees. The Company
intends to defend itself vigorously against such claims and the Company believes
that it will prevail in this litigation. Based on the information currently
available, the Company cannot reasonably predict the likelihood of any potential
outcome.

(c) Initial Public Offering

    On August 2, 2000, the Company sold 31,625,000 of common stock in our
initial public offering and 277,778 shares of common stock in a concurrent
private placement for proceeds of $1,067.2 million after deducting underwriter
discounts and commissions and offering expenses.

                                      -9-
<PAGE>

                              CORVIS CORPORATION
                         (A Development Stage Company)

                  NOTES TO CONDENSED CONSOLIDATED STATEMENTS

          (Dollars in thousands, except share and per share amounts)

                                  (Unaudited)


(8) Recent Accounting Pronouncements

    In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No.  133, Accounting for
Derivative Instruments and Hedging Activities.  The new standard establishes
accounting and reporting standards for derivative instruments embedded in other
contracts and for hedging activities.  This statement, as amended, is effective
for all fiscal quarters of all fiscal years beginning after June 15, 2000.  The
Company does not expect SFAS 133 to have a material affect on its financial
position or results of operations.

    In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation ("FIN") No. 44, Accounting for Certain Transactions Involving
Stock Compensation.  FIN 44 further defines the accounting consequence of
various modifications to the terms of a previously fixed stock option or award
under APB 25.  FIN 44 becomes effective on July 1, 2000, but certain conclusions
in FIN 44 cover specific events that occur after December 15, 1998 or January
12, 2000.

                                      -10-
<PAGE>

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

  You should read the following discussion and analysis along with our
consolidated financial statements and the notes to those statements included
elsewhere in this report.

Overview

  We design, manufacture and market products that enable a fundamental shift in
the design and efficiency of backbone networks by allowing for the transmission,
switching and management of communications traffic entirely in the optical
domain. Our products enable the creation of all-optical backbone networks that
support transmission over long distances and eliminate the need for expensive
and bandwidth-limiting electrical regeneration and switching equipment.

  Since our inception on June 2, 1997, we have been a development stage company.
Our operating activities consist primarily of research and development, product
design, manufacturing and testing. Additionally, we have recruited and trained
our administrative, financial, marketing and customer support organizations, and
we are establishing a direct sales force.

  We currently have only three customers, Broadwing, Williams Communications and
Qwest. We shipped, installed and activated a laboratory trial system for each of
Broadwing and Williams Communications during the first quarter of 2000. We began
shipping, installing and activating field trial systems to Broadwing and
Williams during the second quarter of 2000. We successfully completed our field
trial with Broadwing in July 2000, and Broadwing has agreed to purchase $200
million of our products and services over a two-year period. Williams
Communications has agreed to purchase $200 million of our products and services
over a two-year period, subject to its successful completion of field trials. We
expect the Williams Communications field trial to be completed during the second
half of 2000. Qwest has agreed to purchase $150 million of certain of our
products, some of which are currently under development, over a two year period
beginning on the date that the products meet agreed upon technical requirements.
Qwest's purchase obligations are subject to our products being competitively
priced and our ability to make products that meet agreed upon technical
requirements by the end of 2001.

  We are in discussions with other service providers to begin field trials and
to purchase our products.

  Revenue.  We have not recognized revenue as of July 1, 2000. Our policy will
be to recognize revenue from product sales when a purchase commitment has been
received, delivery has been made, collection is probable and, if contractually
required, a customer's product acceptance has been received. Costs of revenues
will include the costs of manufacturing our products and other costs associated
with warranty and other contractual obligations. Under the two current customer
contracts where shipments have occurred, we did not recognize revenue from the
shipment of laboratory units or field trial units at the time of their shipment.
Revenue will be recognized upon field trial acceptance.

  Research and Development. Research and development expenses consist primarily
of salaries and related personnel costs, test and prototype expenses related to
the design of our hardware and software products, laboratory units and
facilities costs. All costs related to product development, both hardware and
software, are recorded as expenses in the period in which they are incurred. Due
to the timing and nature of the expenses associated with this process,
significant quarterly fluctuations may result. We believe that research and
development is critical in achieving current and future strategic product
objectives. We expect that research and development expenses will significantly
increase in the future as we continue to enhance our existing products and
develop new products.

  Sales and Marketing. Sales and marketing expenses consist primarily of
salaries and related personnel costs, laboratory trial systems, trade shows and
other marketing programs and events and travel expenses. We intend to expand our
sales operations significantly in order to increase market awareness and
acceptance of our products, including establishing sales offices throughout the
United States and internationally. We also expect to initiate additional
marketing programs to support our current products. Our success depends on
establishing and maintaining key customer relationships. In order to achieve
this

                                      -11-
<PAGE>

objective, we expect to expand our customer service and support
organization. We anticipate that our sales and marketing expenses will increase
significantly in the future.

  General and Administrative. General and administrative expenses consist
primarily of salaries and related personnel costs, information systems support,
recruitment expenses and facility demands associated with establishing the
proper infrastructure to support our expanding organization. This infrastructure
consists of executive, financial, legal, information systems and other
administrative responsibilities. We anticipate that these costs will increase
significantly in the future.

  Since our inception, we have incurred significant losses, and as of July 1,
2000 we had an accumulated deficit of $218.8 million. We do not expect to
generate net income before at least 2002. We have a lengthy sales cycle for our
products and accordingly expect to incur significant research and development,
sales and marketing and general and administrative expenses before we realize
any related revenue. As a result, we will need to generate significant revenue
to achieve and maintain profitability.

  During 1999, we changed our accounting reporting period from a calendar year-
end to a manufacturing 52- or 53-week fiscal year-end, ending on the Saturday
closest to December 31 in each year.

Results of Operations

Three months ended July 1, 2000 compared to three months ended July 3, 1999

  Revenue. We did not recognize revenue in either period.

  Research and Development. Research and development expenses increased to $12.0
million for the three months ended July 1, 2000 from $8.9 million for the three
months ended July 3, 1999. The increase in expenses was primarily attributable
to $1.7 million of salaries and related benefits due to the hiring of additional
personnel and $1.9 million of material prototype costs associated with
development.

  Sales and Marketing. Sales and marketing expenses increased to $4.3 million
for the three months ended July 3, 2000 from $1.4 million for the three months
ended July 3, 1999. The increase in expenses was primarily attributable to $1.0
million of salaries and related benefits due to the hiring of additional
personnel, $0.8 million related to advertising and trade show expenses, $0.5
million of travel expenses and $0.5 million in expenses associated with
developing customer support functions.

  General and Administrative. General and administrative expenses increased to
$5.0 million for the three months ended July 1, 2000 from $3.3 million for the
three months ended July 3, 1999. The increase in expenses was primarily
attributable to salaries and related benefits due to the hiring of additional
personnel.

  Equity-based Expense.  Equity-based expense related to research and
development, sales and marketing and general and administrative functions for
the three months ended July 1, 2000 increased to $0.9 million, $35.5 million and
$1.5 million, respectively from zero in the three months ended July 3, 1999.
The increase in equity-based compensation principally resulted from expenses
recognized upon the waiving of certain vesting terms contained in warrants
granted to certain customers.

  Depreciation and Amortization. Depreciation and amortization expenses
increased to $2.1 million for the three months ended July 1, 2000 from $0.5
million for the three months ended July 3, 1999. The increase was primarily
attributable to depreciation associated with administrative and manufacturing
facilities and research and development equipment. We expect depreciation and
amortization expenses to increase significantly in future years due primarily to
the amortization of intangibles resulting from our recent acquisitions, as well
as to increased depreciation expenses associated with the build-out of our new
facilities.

                                      -12-
<PAGE>

  Interest Income (Expense), Net. Interest income, net of interest expense,
increased to $0.9 million for the three months ended July 1, 2000 from $0.3
million of net interest expense for the three months ended July 3, 1999. The
increase was primarily attributable to higher invested cash balances from the
proceeds of private placements, offset in part by interest incurred under new
credit facilities.

Six months ended July 1, 2000 compared to six months ended July 3, 1999

  Revenue. We did not recognize revenue in either period.

  Research and Development. Research and development expenses increased to $31.1
million for the six months ended July 1, 2000 from $17.3 million for the six
months ended July 3, 1999. The increase in expenses was primarily attributable
to $2.8 million of salaries and related benefits due to the hiring of additional
personnel, $8.9 million of prototype and laboratory materials, $1.5 million of
facilities costs.

  Sales and Marketing. Sales and marketing expenses increased to $9.0 million
for the six months ended July 1, 2000 from $1.6 million for the six months ended
July 3, 1999. The increase in expenses was primarily attributable to $2.3
million of salaries and related benefits due to the hiring of additional
personnel, $3.8 million of promotional and trade show expenses, $0.6 million of
expenses associated with the development of the customer service center and $0.3
million related to increased facilities expenses.

  General and Administrative. General and administrative expenses increased to
$7.4 million for the six months ended July 1, 2000 from $5.0 million for the
year ended July 3, 1999. The increase in expenses was primarily attributable
$1.6 million of personnel and related benefits due to the hiring of additional
personnel and $0.7 million related to expenses incurred during the development
of manufacturing processes.

  Equity-based Expense.  Equity-based expense related to research and
development, sales and marketing and general and administrative functions for
the six months ended July 1, 2000 increased to $1.6 million, $35.5 million and
$1.5 million, respectively from zero in the six months ended July 3, 1999. The
increase in equity-based compensation principally resulted from expenses
recognized upon the waiving of certain vesting terms contained in warrants
granted to certain customers.

  Depreciation and Amortization. Depreciation and amortization expenses
increased to $3.6 million for the six months ended July 1, 2000 from $0.8
million for the six months ended July 3, 1999. The increase was primarily
attributable to depreciation associated with administrative and manufacturing
facilities and research and development equipment.

  Interest Income (Expense), Net. Interest income, net of interest expense,
increased to $2.4 million for the six months ended July 1, 2000 from $0.7
million of net interest expense for the six months ended July 3, 1999.  The
increase was primarily attributable to higher invested cash and cash equivalent
balances from the proceeds of  private placements, offset in part by interest
incurred under new credit facilities.

Liquidity and Capital Resources

  Since inception through July 1, 2000, we have financed our operations, capital
expenditures and working capital primarily through private sales of our capital
stock and borrowings under credit and lease facilities. At July 1, 2000, cash
and cash equivalents totaled $186.6 million.

  Since inception through July 1, 2000, net cash used in operating activities
was $173.4 million. Net cash used in operating activities for the six months
ended July 1, 2000 was $85.0 million, primarily attributable to a net loss of
$127.6 million and a $55.6 million increase in inventory, offset by an increase
in accounts payable of $16.0 million, and non-cash items of $83.2 million.

  Since inception through July 1, 2000, net cash used in investing activities
was $22.7 million. Net cash used in investing activities for the six months
ended July 1, 2000 was $6.1 million. Net cash used in investing activities was
primarily attributable to purchases of manufacturing and test

                                      -13-
<PAGE>

equipment, information systems equipment and office equipment, offset by cash
acquired in the Algety purchase. We are currently building out our second
production facility and have executed agreements with our existing landlord to
build-out and improve additional facilities. Significant capital expenditures
will be required for facility modification, equipment, systems and other capital
additions.

  Since inception through July 1, 2000, net cash provided by financing
activities was $382.8 million as described below. Net cash provided by financing
activities for the six months ended July 1, 2000 was $33.2 million, primarily
attributable to proceeds of $41.0 million from the private placement of
preferred stock and the exercise of options and warrants, offset in part by
payments on debt and capital lease obligations.

  In 1997, we completed the private placement of 21,600,000 shares of common
stock and 1,500,000 shares of Series A convertible preferred stock for an
aggregate purchase price of $3.0 million.

  In 1998, we completed the private placement of 50,000 shares of Series A
convertible preferred stock for an aggregate purchase price of $100,000 and
6,328,955 shares of Series B convertible preferred stock for an aggregate
purchase price of $13.6 million.

  In 1999, we completed the private placement of 3,075,736 shares of Series C
convertible preferred stock for an aggregate purchase price of $28.1 million,
1,898,406 shares of Series F convertible preferred stock for an aggregate
purchase price of $46.0 million, 292,825 shares of Series G convertible
preferred stock for an aggregate purchase price of $10.0 million and 2,685,954
shares of Series H convertible preferred stock for an aggregate purchase price
of $216.3 million.

  In 1999, we established a 36-month term facility of up to $40.0 million. As of
July 1, 2000, we owed $34.4 million under this facility. Under the facility we
are required to maintain minimum cash balances. As of July 1, 2000, we were in
compliance with those requirements. Outstanding amounts under the facility bear
interest at an effective weighted average rate of 13.2%.

  In May 2000, we sold 124,177 shares of Series H convertible preferred stock to
Williams Communications in a private placement transaction for an aggregate
purchase price of $10 million.

  In June 2000, we sold 372,533 shares of Series H convertible preferred stock
to Broadwing Communications in a private placement transaction for an aggregate
purchase price of $30 million.

  On August 2, 2000, we sold 31,625, 000 of common stock in our initial public
offering and 277,778 shares of common stock in a concurrent private placement
for proceeds of $1,067.2 million after deducting underwriter discounts and
commissions and offering expenses.

  As of July 1, 2000, we had outstanding irrevocable letters of credit
aggregating $2.0 million relating to lease obligations for various manufacturing
and office facilities and other business arrangements. These letters of credit
are collateralized by funds in our operating account. Various portions of the
letters of credit expire at the end of each respective lease term or agreement
term.

  We believe that the net proceeds from our recent offering and the concurrent
private placement, together with our current cash and cash equivalents and lines
of credit, will be sufficient to meet our anticipated cash needs for working
capital and capital expenditures for at least the next 12 months.

  The optical network equipment industry is currently experiencing price
increases and shortages associated with certain component parts. A significant
price increase or a shortage of these parts could adversely affect

                                      -14-
<PAGE>

our liquidity, capital resources, and results of operations. We continue to
evaluate our need to acquire additional production and other facilities to
accommodate our expanding operations. We expect our expenditures associated with
this expansion to be significant over the next several years. Our liquidity will
also be dependent on our ability to manufacture and sell our products. Changes
in the timing and extent of the sale of our products will affect our liquidity,
capital resources and results of operations. We currently have only three
customers that will provide substantially all of our revenues. The loss of any
of these customers, or any substantial reduction in anticipated orders, could
materially adversely affect our liquidity and results of operations. We plan to
diversify our customer base by seeking new customers both domestically and
internationally.

  If cash generated from operations is insufficient to satisfy our liquidity
requirements, we may seek to sell additional equity or debt securities. To the
extent that we raise additional capital through the sale of equity or
convertible debt securities, the issuance of such securities could result in
dilution to our existing stockholders. If additional funds are raised through
the issuance of debt securities, the terms of such debt could impose additional
restrictions on our operations. Additional capital, if required, may not be
available on acceptable terms, or at all. If we are unable to obtain additional
financing, we may be required to reduce the scope of our planned product
development and sales and marketing efforts, which could harm our business,
financial condition and operating results. Increasingly, as a result of the
financial demands of major network deployments, service providers are looking to
their suppliers for financing assistance. From time to time we may provide or
commit to extend credit or credit support to our customers, as we consider
appropriate in the course of our business, considering our limited resources.

Ciena Litigation

  On July 19, 2000, Ciena Corporation ("Ciena") filed a lawsuit in United States
District Court alleging that we are willfully infringing three of Ciena's
patent. Ciena is seeking injunctive relief, an unspecified amount of damages
including treble damages, as well as costs of the lawsuit including attorneys'
fees. We intend to defend ourselves vigorously against these claims and we
believe that we will prevail in this litigation. An adverse determination in, or
settlement of, the Ciena litigation could involve the payment of significant
amounts by us, or could include terms in addition to payments, such as a
redesign of some of our products, which could have a material adverse effect on
our business, financial condition and results of operations. If we are required
to redesign our products, we have to stop selling our current products until
they have been redesigned. We expect that defense of the lawsuit will be costly
and will divert the time and attention of some members of our management.

Recent Acquisitions

Algety Telecom S.A.

  On July 1, 2000, we acquired Algety, a French company that develops and
markets high capacity, high speed optical transmission equipment. Algety, based
in Lannion, France, was formed in April 1999, and is a development stage company
with no revenue.

  At the initial closing on July 1, 2000, we delivered to the Algety
shareholders 1,301,822 shares of our Series I convertible preferred stock, less
348,402 shares delivered to our escrow agent to secure potential warranty
claims, which shares converted into 15,621,858 shares of common stock upon the
closing of our initial public offering. In addition, 189,586 shares will be
released from escrow contingent upon satisfaction of certain minimum employment
terms for certain Algety employees. We incurred approximately $1.0 million of
transaction costs relating to the transaction.

  A second closing will occur under several circumstances, provided the value of
the stock that we deliver at the initial closing does not exceed $2 billion at
the time set for the second closing. At the second closing, we will deliver to
the Algety shareholders additional shares of common stock. If the second closing
occurs either because (a) our common stock has been publicly traded for at least
90 days following our initial public offering or (b) because a public company
acquires us, then the number of our shares delivered at the second closing will
depend upon our value, which will be our average market capitalization for the
highest 10 days of a 20 trading day period ending on the 90th day following our
initial public offering under condition (a) or our enterprise value under
condition (b). If our average market capitalization or enterprise value is less
than $13.5 billion, we will be required to deliver a number of additional shares
of our stock which, when combined with the shares delivered at the initial
closing, equals 7.4% of our outstanding common stock on the second closing date.
If our average market capitalization or enterprise value equals or exceeds $13.5
billion, we will deliver additional shares of

                                      -15-
<PAGE>

common stock so that the stock we have delivered at both closings will have an
aggregate value of $1 billion (at the 10-day average price during the
measurement period under condition (a) or at the transaction value under
condition (b)), plus an additional $43.5 million for each $500 million of
average market capitalization or enterprise value in excess of $13.5 billion, up
to a maximum purchase price of $2 billion.

  If we issue more than 50% of our shares in a single transaction or a series of
related transactions, or if a private company acquires control of us, we will be
required to deliver to the shareholders participating in the second closing a
number of shares of common stock which, when combined with the shares delivered
at the initial closing, equals 8.0% of our outstanding common stock on the
second closing date.

  We may at any time elect to settle our obligation to deliver additional shares
by delivering to the Algety shareholders a number of shares of common stock
which, when combined with the shares delivered at the initial closing, equals
8.0% of our outstanding common stock on the second closing date.

  We have accounted for the acquisition using the purchase method whereby the
net tangible and identifiable intangible assets acquired and liabilities assumed
are recognized at their estimated fair market values at the date of acquisition.
The allocation of the purchase price to the fair value of the assets acquired
and liabilities assumed is preliminary and will be finalized following
completion of a full valuation of the assets and liabilities of Algety. The
excess of the aggregate purchase price over the fair value of net assets
acquired of $154.8 million, based upon the purchase price allocation, will be
amortized on a straight-line basis over five years. Based upon preliminary
results of the valuation, we expect that $40.3 million of the purchase price
will be allocated to in- process technology.

Baylight Networks, Inc.

  On May 19, 2000, we acquired Baylight, a company that designs optical network
access systems and subsystems. Baylight, based in Palo Alto, California, was
formed in February 2000 and is a development stage company with no revenue. In
consideration for all of the outstanding shares of Baylight, we assumed $0.1
million of Baylight liabilities and placed in escrow 2,400,012 shares of common
stock for release over the term of three-year employment agreements with the
former Baylight shareholders. We have accounted for the acquisition as a
purchase. Accordingly, the operating results of Baylight are included in our
financial results from the date of acquisition. The allocation of the purchase
price to the fair value of the assets acquired and liabilities assumed is based
on an internal analysis of the fair value of the assets and liabilities of
Baylight. The excess of the aggregate purchase price over the fair value of net
assets acquired of approximately $0.1 million is being amortized on a straight-
line basis over five years. We are recognizing compensation expense over the
terms of the employment agreements equal to the fair value of the shares to be
issued.

Corvis Canada, Inc.

  In July 1999, we purchased all of the outstanding common stock of Corvis
Canada, Inc., a Canadian company formerly known as Kromafibre, Inc., for 211,928
shares of Series D convertible preferred stock valued at approximately $1.9
million. Corvis Canada develops fiber optic technology that we use in some of
our products. We accounted for the acquisition as a purchase. Accordingly, the
operating results of Corvis Canada have been included in our results since the
date of our acquisition of Corvis Canada. We are amortizing the excess of the
aggregate purchase price over the fair value of net assets acquired of
approximately $1.7 million on a straight-line basis over five years. We will
release an additional 61,386 shares of Series D convertible preferred stock
originally valued at approximately $0.6 million to an officer and shareholder of
Corvis Canada over the term of a three-year employment agreement. We are
recognizing compensation expense over the term of the employment agreement for
the fair value of the shares issued.

                                      -16-
<PAGE>

Year 2000 Compliance

  The year 2000 computer problem refers to the potential for system and
processing failures of date-related data as a result of computer controlled
systems using two digits rather than four to define the applicable year. For
example, software programs that have time-sensitive components may recognize a
date represented as "00" as the year 1900 rather than the year 2000. In
addition, programs may fail to recognize February 29, 2000, as a result of an
exception to the calculation of leap year that occurred in the year 2000. This
problem could result in miscalculation, data corruption, system failures or
disruptions of operations. As of July 1, 2000, we had not experienced any
significant disruptions in our business related to year 2000 issues, nor do we
expect to experience any year 2000 related disruption in the operation of our
systems.

  We are not aware of any of the companies to which we have shipped our test
products experiencing any year 2000 related problems with our products or their
ability to deploy our products. In addition, we have not received notice from
any of our contract manufacturers or our other suppliers that they have
experienced any year 2000 problems with the parts supplied by them or that would
affect their ability to supply products and services to us. Although most year
2000 problems should have become evident on or shortly after January 1, 2000,
additional year 2000 related problems may occur. We will continue to monitor our
mission critical equipment and computer applications and those of our suppliers
and vendors throughout the year, in an effort to ensure that any late year 2000
matters that may arise are promptly addressed.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

  The following discussion about our market risk disclosures involves forward-
looking statements. Actual results could differ materially from those projected
in the forward-looking statements.  We are exposed to market risk related to
changes in interest rates and foreign currency exchange rates.  We do not use
derivative financial instruments for speculative or trading purposes.

Interest Rate Sensitivity

  We maintain a portfolio of cash equivalents in a variety of securities
including: commercial paper, certificates of deposit, money market funds and
government and non-government debt securities.  These available for sale
securities are subject to interest rate risk and may fall in value if market
interest rates increase.  We have the ability to hold our fixed income
investments until maturity, and therefore do not expect our operation results or
cash flows to be affected to any significant degree by the effect of a sudden
change in market interest rates on its securities portfolio. The Company's long-
term debt obligations bear fixed interest rates.  As such, we have minimal cash
flow exposure due to general interest rate changes associated with its long-term
debt obligations.

Exchange Rate Sensitivity

  We are also subject to risk from changes in foreign exchange rates for our
international operations which use a foreign currency as their functional
currency and are translated into U.S. dollars. To date, due to limited
international operations, the impact on this risk has been minimal.

                                      -17-
<PAGE>

                          PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

  By letter dated July 10, 2000, Ciena Corporation ("Ciena") informed us of its
belief that there is significant correspondence between products that we offer
and several U.S. patents held by Ciena relating to optical networking systems
and related dense wavelength division multiplexing communications systems
technologies. On July 19, 2000, Ciena filed a lawsuit in the United States
District Court for the District of Delaware alleging that we are willfully
infringing three of Ciena's patents. Ciena is seeking injunctive relief, an
unspecified amount of damages including treble damages, as well as costs of the
lawsuit, including attorneys' fees.

  We have designed our products in an effort to respect the intellectual
property rights of others. We intend to defend ourselves vigorously against
these claims and we believe that we will prevail in this litigation. However,
there can be no assurance that we will be successful in the defense of the
litigation, and an adverse determination in the litigation could result from a
finding of infringement of only one claim of a single patent. We may consider
settlement due to the costs and uncertainties associated with litigation in
general, and patent infringement litigation in particular, and due to the fact
that an adverse determination in the litigation could preclude us from producing
some of our products until we were able to implement a non-infringing
alternative design to any portion of our products to which such a determination
applied. Even if we consider settlement, there can be no assurance that we will
be able to reach a settlement with Ciena. An adverse determination in, or
settlement of, the Ciena litigation could involve the payment of significant
amounts by us, or could include terms in addition to payments, such as a
redesign of some of our products, which could have a material adverse effect on
our business, financial condition and results of operations.

  We expect that defense of the lawsuit will be costly and will divert the time
and attention of some members of our management. Further, Ciena and other
competitors may use the existence of the Ciena lawsuit to raise questions in
customers' and potential customers' minds as to our ability to manufacture and
deliver our products. There can be no assurance that questions raised by Ciena
and others will not disrupt our existing and prospective customer relationships.

Item 2.  Changes in Securities and Use of Proceeds

(a)  None.

(b)  None.

(c)  During the quarter ended July 1, 2000, we granted stock options to purchase
     23,564,592 shares of common stock at an exercise price of $13.43 per share
     to employees, consultants and directors pursuant to our 1997 Stock Option
     Plan, as amended.

     During the quarter ended July 1, 2000, we issued and sold an aggregate of
     1,201,584 shares of common stock to employees, consultants and directors
     for aggregate consideration of $584,443 pursuant to exercises of options
     pursuant to its 1997 Stock Option Plan, as amended. Such sales were made in
     reliance upon an exemption from the registration provisions of the
     Securities Act set forth in Rule 701 of the Securities Act of 1933, for
     those employees who are our officers or directors or Section 4(2) of the
     Securities Act for those employees, consultants and directors who are
     accredited investors..

     In May 2000, we sold 124,177 shares of Series H convertible preferred stock
     to Williams Communications in a transaction exempt from registration
     pursuant to Section 4(2) of the Securities Act for an aggregate purchase
     price of $10 million.

                                      -18-
<PAGE>

     In June 2000, we sold 372,533 shares of Series H convertible preferred
     stock to Broadwing Communications in a transaction exempt from registration
     pursuant to Section 4(2) of the Securities Act for an aggregate purchase
     price of $30 million.

     On May 19, 2000, we issued to the founders of Baylight Networks, Inc.
     2,400,012 shares of common stock in connection with our acquisition of
     Baylight. The offer and sale were determined to be exempt from registration
     pursuant to Section 4(2) of the Securities Act.

     On July 1, 2000, we issued to the stockholders of Algety Telecom S.A.
     shares of common stock in connection with our acquisition of Algety. The
     Algety stockholders that are U.S. persons (as defined in Regulation S under
     the Securities Act) were accredited investors. In addition, we issued
     options to purchase shares of common stock to the employees of Algety that
     had options to purchase shares of Algety common stock. The offers and sales
     to shareholders of Algety that are U.S. persons were determined to be
     exempt from registration under Section 4(2) of the Securities Act. Offers
     and sales to Algety stockholders that are non-U.S. persons and to Algety's
     employees were determined to be exempt from registration in reliance on
     Section 4(2) of the Securities Act or Regulation S under the Securities Act
     involving an offer and sale of securities outside the United States.

(d)  We filed two registration statements on Form S-1 (File Nos. 333-36238 and
     333-42430) registering a total of $1,138.5 million of our common stock.
     Registration statement 333-36238 was declared effective by the Securities
     and Exchange Commission on July 27, 2000. Registration statement 333-42430
     was filed on July 28, 2000 pursuant to Rule 462(b) and, in accordance with
     that rule, became effective upon filing. The offering commenced immediately
     after effectiveness of the registration statements. The offering closed on
     August 2, 2000. All of the common stock registered on the registration
     statements was sold in the offering. All of the common stock was sold by
     us; no shares of common stock were sold on behalf of any of our
     stockholders. The managing underwriters for the offering were Credit Suisse
     First Boston Corporation, FleetBoston Robertson Stephens Inc., Banc of
     America Securities LLC, Chase Securities Inc., J.P. Morgan Securities Inc.
     and CIBC World Markets Corp. We estimate that our fees and expenses in
     connection with the offering were $1.6 million. Underwriting discounts and
     commissions were $79.7 million. We received net proceeds, after deducting
     estimated fees and expenses and underwriting discounts and commissions, of
     $1,057.2 million. We intend to use the net proceeds of the offering for
     additional working capital and other general corporate purposes, including
     the funding of operating losses, the expansion of sales and marketing and
     product research and development activities. The amounts that we actually
     expend for working capital and other general corporate purposes will vary
     significantly depending on a number of factors, including future revenue
     growth, if any, and the amount of cash that we generate from operations. As
     a result, we retain broad discretion over the allocation of the net
     proceeds from the offering. We may also use a portion of the net proceeds
     for the acquisition of businesses, products and technologies that are
     complementary to the Company's. Complementary businesses may include
     optical system manufacturers and companies with intellectual property
     portfolios relating to optical and networking technology. Pending these
     uses, we will invest the net proceeds of the offering in short-term and
     investment grade securities.

Item 3.  Defaults upon Senior Securities.

None.

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

  On May 16, 2000, our stockholders approved by written consent an amendment to
our certificate of incorporation increasing the number of authorized shares of
common stock and creating a class of preferred stock designed "series I
preferred stock."  The affirmative vote of 245,622,636 shares was received by
written consent.

  On June 30, 2000 our stockholders approved by written consent the following
matters: (i) our Amended and Restated Certificate of Incorporation, to be filed
upon the closing of our initial public

                                      -19-
<PAGE>

offering; (ii) a split of our common stock in connection with our initial public
offering; (iii) an amendment to our 1997 Stock Option Plan, (iv) our 2000 Stock
Incentive Plan; (v) our Employee Stock Purchase Plan; and (v) the fourth amended
Investor Rights Agreement. The affirmative vote of 238,038,456 shares was
received by written consent.

Item 5.  Other Information

None.

Item 6.  Exhibits and Reports on Form 8-K

(a) A list of exhibits filed herewith is contained on the Index to Exhibits
    immediately preceding such exhibits, which is incorporated herein by
    reference.

(b) We did not file any reports on Form 8-K during the quarter ended July 1,
    2000.





                                      -20-
<PAGE>

                                   SIGNATURES

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

                                      Corvis Corporation



Date:_____________________            ___________________________________
                                      Anne H. Stuart
                                      Senior Vice President, Chief Financial
                                          Officer and Treasurer



Date:_____________________            ___________________________________
                                      Timothy C. Dec
                                      Chief Accounting Officer and
                                           Corporate Controller

                                      -21-
<PAGE>

                               INDEX TO EXHIBITS

Exhibit
Number      Description
------      -----------

27.1        Financial Data Schedule

                                      -22-