<PAGE>
 
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 10-Q


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


 
                  FOR THE QUARTERLY PERIOD ENDED AUGUST 3, 1997


                         Commission file number 1-13316


                         NEWBRIDGE NETWORKS CORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)



                Canada                                    98-0077506
      -------------------------------                --------------------
      (State or other jurisdiction of                (I.R.S. Employer
      incorporation or organization)                  Identification No.)


      600 March Road, Kanata, Ontario, Canada               K2K 2E6
      ----------------------------------------            ----------
      (Address of principal executive offices)            (Zip Code)

Registrant's telephone number, including area code      (613) 591-3600


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 X   No
                                       ---    ---
The number of Common Shares of the registrant outstanding as at September 15,
1997 was 174,666,814.



                       (Exhibit index located on page 20)


                                (Page 1 of 23) 
<PAGE>
 
                         NEWBRIDGE NETWORKS CORPORATION


                                TABLE OF CONTENTS
<TABLE> 
<CAPTION> 
                                                                                               Page No.
                                                                                               --------
<S>                                                                                            <C> 
PART I.  FINANCIAL INFORMATION                                                               
                                                                                             
       Item 1.        Financial Statements                                                   
                                                                                             
                           Consolidated Statements of Earnings and Retained                  
                               Earnings -- Fiscal quarters ended August 3, 1997              
                               and July 28, 1996...............................................    3
                                                                                             
                           Consolidated Balance Sheets --                                    
                               August 3, 1997 and April 30, 1997...............................    4
                                                                                             
                           Consolidated Statements of Cash Flows --                          
                               Fiscal quarters ended August 3, 1997 and July 28, 1996..........    5
                                                                                             
                           Notes to the Consolidated Financial Statements...................... 6-10
                                                                                             
       Item 2.        Management's Discussion and Analysis of Financial                      
                           Condition and Results of Operations.................................11-16
                                                                                             
                                                                                             
PART II. OTHER INFORMATION                                                                   
                                                                                             
       Item 1.        Legal Proceedings........................................................   17
                                                                                             
       Item 4.        Submission of Matters to a Vote of Security Holders......................17-18
                                                                                             
       Item 5.        Other Information........................................................   18
                                                                                             
       Item 6.        Exhibits and Reports on Form 8-K.........................................   18
                                                                                             
                                                                                             
SIGNATURES.....................................................................................   19

</TABLE> 

                                (Page 2 of 23) 
<PAGE>
 
                          PART I. FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS


                         NEWBRIDGE NETWORKS CORPORATION

            CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS

         (Canadian dollars, amounts in thousands except per share data)
                                   (Unaudited)

<TABLE> 
<CAPTION> 
                                                               Fiscal quarter ended
                                                           ---------------------------
                                                           August 3,          July 28,
                                                             1997               1996
                                                           --------           --------
<S>                                                        <C>                <C> 
Sales                                                      $434,738           $286,037
                                                     
Cost of sales                                               160,730            100,743
                                                            -------            -------
Gross margin                                                274,008            185,294
                                                     
Expenses                                             
     Selling, general and administrative                    123,857             66,258
     Research and development                                59,683             30,235
                                                           --------           --------
Income from operations                                       90,468             88,801
                                                     
Interest income                                               3,022              5,472
Interest expense on long term obligations                      (284)               (72)
Other expenses                                               (2,185)            (2,145)
                                                           --------           --------
Earnings before income taxes                         
     and non-controlling interest                            91,021             92,056
                                                     
Provision for income taxes                                   27,034             29,697
                                                     
Non-controlling interest                                       (367)             1,558
                                                           --------           --------
                                                     
Net earnings                                                 64,354             60,801
                                                     
Retained earnings, beginning of the period                  768,148            611,231
                                                           --------           --------
                                                     
Retained earnings, end of the period                       $832,502           $672,032
                                                           ========           ========
                                                     
Earnings per share (Note 6)                          
     Basic                                                 $   0.37           $   0.36
     Fully diluted                                         $   0.36           $   0.35
                                                     
Weighted average number of shares                    
     Basic                                                  172,964            169,228
     Fully diluted                                          189,082            181,710

</TABLE> 

       See accompanying Notes to the Consolidated Financial Statements.

                                (Page 3 of 23) 
<PAGE>
 
                         NEWBRIDGE NETWORKS CORPORATION

                           CONSOLIDATED BALANCE SHEETS

                         (Canadian dollars in thousands)

<TABLE> 
<CAPTION> 
                                                                               August 3,                 April 30,
                                                                                 1997                      1997
                                                                              ----------                ----------
                                                                              (unaudited)
<S>                                                                          <C>                       <C> 
ASSETS

Cash and cash equivalents (Note 2)                                            $  353,961                $  333,904
Accounts receivable, net of provision for returns and
     doubtful accounts of $11,379 (April 30, 1997 - $10,572)                     413,686                   387,338
Inventories (Note 3)                                                             191,495                   159,495
Prepaid expenses and other current assets                                         48,285                    64,191
                                                                              ----------                ----------

                                                                               1,007,427                   944,928

Property, plant and equipment                                                    319,659                   294,939
Deferred income taxes                                                             27,957                    37,393
Goodwill (Note 4)                                                                121,102                   125,565
Software development costs                                                        23,599                    22,299
Other assets                                                                      80,120                    71,579
                                                                              ----------                ----------

                                                                              $1,579,864                $1,496,703
                                                                              ==========                ==========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
     Accounts payable                                                         $  125,533                $  105,884
     Accrued liabilities                                                          89,240                    95,804
     Provision for restructuring (Note 5)                                          7,240                    35,944
     Income taxes                                                                 45,902                    61,551
     Current portion of long term obligations                                     10,028                     7,353
                                                                              ----------                ----------

                                                                                 277,943                   306,536

Long term obligations                                                             11,898                    10,817
Deferred income taxes                                                             28,546                    32,439
Non-controlling interest                                                          20,010                    20,412
                                                                              ----------                ----------
                                                                                 338,397                   370,204
                                                                              ----------                ----------

Common shares - 174,244,706 outstanding
     (April 30, 1997 - 171,858,984 outstanding)                                  412,069                   351,388
Accumulated foreign currency translation adjustment                               (3,104)                    6,963
Retained earnings                                                                832,502                   768,148
                                                                              ----------                ----------
                                                                               1,241,467                 1,126,499
                                                                              ----------                ----------
                                                                              $1,579,864                $1,496,703
                                                                              ==========                ==========
</TABLE> 



       See accompanying Notes to the Consolidated Financial Statements.

                                (Page 4 of 23)
<PAGE>
 
                         NEWBRIDGE NETWORKS CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                         (Canadian dollars in thousands)
                                   (Unaudited)
<TABLE> 
<CAPTION> 
                                                                  Fiscal quarter ended
                                                                --------------------------
                                                                August 3,         July 28,
                                                                  1997              1996
                                                                --------          --------
<S>                                                            <C>               <C> 
OPERATING ACTIVITIES                                          

Net earnings                                                    $ 64,354          $ 60,801
                                                              
Items not affecting cash                                      
     Amortization                                                 27,556            17,684
     Deferred income taxes                                         5,158             4,111
     Non-controlling interest                                       (367)            1,558
     Other                                                         1,979             1,554
                                                              
Cash effect of changes in:                                    
     Accounts receivable                                         (23,980)          (21,005)
     Inventories                                                 (29,283)            1,798
     Prepaid expenses and other current assets                    15,109            (6,006)
     Accounts payable and accrued liabilities                    (22,330)          (17,780)
     Income taxes                                                (13,314)            1,629
                                                                --------          --------

                                                                  24,882            44,344
                                                                --------          --------
INVESTING ACTIVITIES                                          
                                                              
Additions to property, plant and equipment                       (53,643)          (20,049)
Acquisition of subsidiaries, excluding cash acquired               --                 (866)
Capitalized software development costs                            (3,085)           (2,940)
Additions to other assets                                         (7,560)           (7,228)
                                                                --------          --------
                                                              
                                                                 (64,288)          (31,083)
                                                                --------          --------
                                                              
FINANCING ACTIVITIES                                          
                                                              
Issue of common shares                                            53,580            17,598
Increase in long term obligations                                  4,060             --
Repayment of long term obligations                                (1,415)           (1,259)
                                                                --------          --------
                                                              
                                                                  56,225            16,339
                                                                --------          --------
                                                              
Increase in cash and cash equivalents                             16,819            29,600
Effect of foreign currency translation on cash                     3,238               283
                                                                --------          --------
                                                              
                                                                  20,057            29,883
                                                              
Cash and cash equivalents, beginning of period                   333,904           455,749
                                                                --------          --------
                                                              
Cash and cash equivalents, end of period                        $353,961          $485,632
                                                                ========          ========
</TABLE> 


       See accompanying Notes to the Consolidated Financial Statements.

                                (Page 5 of 23)
<PAGE>
 
                         NEWBRIDGE NETWORKS CORPORATION

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

    (Canadian dollars, tabular amounts in thousands except per share data)
                                  (Unaudited)


1.  BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements of
Newbridge Networks Corporation (the "Company") have been prepared in accordance
with accounting principles generally accepted in Canada for interim financial
information. These accounting principles are also generally accepted in the
United States ("U.S. GAAP") in all material respects except for the disclosure
of certain cash equivalents on the Consolidated Balance Sheets and investing
activities on the Consolidated Statements of Cash Flows, as disclosed in Note 2,
and the method of calculation of earnings per share, as disclosed in Note 6.

In the opinion of Management, the unaudited interim consolidated financial
statements reflect all normal and recurring adjustments considered necessary for
fair presentation.

The results of operations for the first fiscal quarter ended August 3, 1997 are
not necessarily indicative of the results to be expected for the fiscal year
ending April 30, 1998.


2.  CASH AND CASH EQUIVALENTS

Components of cash and cash equivalents are:

                                                      August 3,      April 30,
                                                        1997           1997
                                                      --------       --------
                                                                  
       Cash                                           $295,803       $197,007
       Held to maturity marketable securities                     
            (at amortized cost, which                               
            approximates fair market value)             57,545        136,278
       Available for sale marketable securities                   
            (at fair market value)                         613            619
                                                      --------       --------
                                                                  
                                                      $353,961       $333,904
                                                      ========       ========

Held to maturity marketable securities are investments with original maturities
of three months or more. Available for sale marketable securities are common
shares of publicly traded companies acquired upon the Company's disposition of
minority interests in privately held companies. Under accounting principles
generally accepted in the United States ("U.S. GAAP"), marketable securities
would be disclosed as a separate caption on the Consolidated Balance Sheets.


                                (Page 6 of 23)
<PAGE>
 
                           NEWBRIDGE NETWORKS CORPORATION
 
                   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  
    (Canadian dollars, tabular amounts in thousands except per share data)
                                  (Unaudited)

If the Consolidated Statements of Cash Flows were prepared under U.S. GAAP,
maturities, purchases and sales of marketable securities would be disclosed as
an investing activity. Disclosure in the Consolidated Statements of Cash Flows
prepared under U.S. GAAP would be as follows.
<TABLE> 
<CAPTION> 
                                                                      Fiscal quarter ended
                                                                    --------------------------
                                                                    August 3,         July 28,
                                                                      1997              1996
                                                                    --------          --------
         <S>                                                       <C>               <C> 
         Investing activities in short                            
          term marketable securities:                             
                                                                  
              Held to maturity securities                         
                  Maturities                                        $128,751          $123,883
                  Purchases                                          (50,018)         (117,846)
                                                                    --------          --------
                                                                      78,733             6,037
              Available for sale securities                       
                  Sales                                                 --               5,330
                                                                    --------          --------
                                                                      78,733            11,367
                                                                  
         Investing activities, as reported                           (64,288)          (31,083)
                                                                    --------          --------
                                                                  
         Investing activities, U.S. GAAP                            $ 14,445          $(19,716)
                                                                    ========          ========
                                                                  
         Increase in cash and cash equivalents, as reported         $ 20,057          $ 29,883
                                                                  
         Investing activities in short                            
            term marketable securities                                78,733            11,367
                                                                    --------          --------
                                                                  
         Increase in cash and cash equivalents, U.S. GAAP           $ 98,790          $ 41,250
                                                                    ========          ========
</TABLE> 
The Company uses financial instruments, principally forward exchange contracts,
in its management of foreign currency exposures. Realized and unrealized forward
exchange contracts are recognized and offset foreign exchange gains and losses
on the underlying net asset or net liability position. These contracts primarily
require the Company to purchase and sell certain foreign currencies with or for
Canadian dollars at contractual rates. At August 3, 1997 the Company had
$191,440,000 in outstanding forward exchange contracts (April 30, 1997 --
$293,414,000).

3.  INVENTORIES
<TABLE> 
<CAPTION> 
                                                                   August 3,         April 30,
                                                                     1997              1997
                                                                   --------          --------
           <S>                                                    <C>               <C> 
           Finished goods                                          $137,975          $100,405
           Work in process                                           12,160            20,938
           Raw materials                                             41,360            38,152
                                                                   --------          --------
                                                                 
                                                                   $191,495          $159,495
                                                                   ========          ========
</TABLE> 
                                (Page 7 of 23)
    
<PAGE>
 
                        NEWBRIDGE NETWORKS CORPORATION
    
                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
    
    (Canadian dollars, tabular amounts in thousands except per share data)
                                  (Unaudited)

4.  GOODWILL

                                                    August 3,        April 30,
                                                      1997             1996
                                                    --------         --------

           Goodwill                                 $131,508         $133,854
           Accumulated amortization                  (10,406)          (8,289)
                                                    --------         --------
                                                    
                                                    $121,102         $125,565
                                                    ========         ========
5.  PROVISION FOR RESTRUCTURING

On January 17, 1997, the Company acquired a 100% equity interest in
Ungermann-Bass Networks, Inc. ("UB Networks"), a manufacturer of local area
network equipment based in Santa Clara, California. The provision for
restructuring relates to programs instituted by the Company to integrate the
operations of UB Networks with the Company and to eliminate redundant functions.
The components of the provision for restructuring and related spending to August
3, 1997 are as follows.
<TABLE> 
<CAPTION> 
                                Reduction in      Reduction       Discontinued       Other
                                 Work Force     in Facilities      Activities     Restructuring        Total
                               -------------    -------------    -------------    -------------    -------------
<S>                            <C>              <C>              <C>              <C>              <C> 
Provision upon
   acquisition                     $  26,153        $  11,582        $   9,787        $   6,457        $  53,979
              
Incurred to
   April 30, 1997                     (9,496)            (970)          (4,478)          (3,091)         (18,035)
                                   ---------        ---------        ---------        ---------        ---------

Provision balances
   at April 30, 1997                  16,657           10,612            5,309            3,366           35,944

Incurred in the fiscal quarter
   ended August 3, 1997              (15,782)          (6,919)          (3,422)          (2,581)         (28,704)
                                   ---------        ---------        ---------        ---------        ---------
Provision balances
   at August 3, 1997               $     875        $   3,693        $   1,887        $     785        $   7,240
                                   =========        =========        =========        =========        =========
</TABLE> 

The provision for reduction in work force includes severance, related medical
and other benefits, relocation costs and other obligations to employees. The
provision includes termination benefits for approximately 300 employees. The
work force reductions are in all functions and in all regions in which UB
Networks operates. The Company believes that these work force reductions have
been substantially completed. The provision for reduction in facilities
comprises primarily lease payments and fixed costs associated with the closing
of sales, support and administrative facilities in the Americas, Europe and Asia
Pacific geographic areas. The provision for discontinued activities includes
costs associated with the disposition of assets and fulfilling prior commitments
related to certain discontinued product lines and activities. The Company
anticipates that the balance of these costs will be incurred over the remainder
of the fiscal year. The provision for other restructuring costs comprises
various direct incremental costs associated with the integration of operations
of UB Networks with the Company.


                                (page 8 of 23)
<PAGE>
 
                         NEWBRIDGE NETWORKS CORPORATION

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

    (Canadian dollars, tabular amounts in thousands except per share data)
                                  (Unaudited)

6.  EARNINGS PER SHARE

Basic earnings per share has been calculated as net earnings for the period
divided by the daily weighted average number of Common Shares outstanding during
the fiscal quarter. Fully diluted earnings per share has been calculated as net
earnings plus after tax imputed earnings on the cash which would have been
received on the exercise of options, divided by the daily weighted average
number of Common Shares and common share equivalents outstanding during the
period.

Under accounting principles generally accepted in the United States, earnings
per share is calculated using the treasury stock method. Earnings per share in
U.S. dollars is disclosed for the convenience of the reader. The exchange rates
used for translation are based on the daily average exchange rate of a Canadian
dollar for U.S. dollars as reported by the Federal Reserve Bank of New York. The
calculation of earnings per share under U.S. GAAP is as follows.
<TABLE> 
<CAPTION> 
                                                         Fiscal quarter ended
                                                       ------------------------
                                                         August 3,      July 28,
                                                           1997          1996
                                                         =======        =======
   <S>                                                 <C>            <C> 
   Earnings per share                                  
                                                       
         Primary                                         $  0.36        $  0.35
                                                         =======        =======
                                                       
         Fully diluted                                   $  0.36        $  0.35
                                                         =======        =======
   Earnings per share -- in U.S. dollars               
                                                       
         Primary                                         $  0.26        $  0.25
                                                         =======        =======

         Fully diluted                                   $  0.26        $  0.25
                                                         =======        =======
     Weighted average number of shares                 
                                                       
         Primary                                         179,821        174,930
                                                         =======        =======
                                                       
         Fully diluted                                   181,269        174,930
                                                         =======        =======
</TABLE> 

The United States Financial Accounting Standards Board ("FASB") issued the
Statement of Financial Accounting Standards No. 128 ("SFAS 128") in February
1997 related to changes to the methodologies used in calculating earnings per
share under U.S. GAAP. Under SFAS 128 primary earnings per share would be
replaced by basic earnings per share, the calculation of which, given the
Company's capital structure, would be the same as the calculation of basic
earnings per share under accounting principles generally accepted in Canada. The
calculation of fully diluted earnings per share under U.S. GAAP would be
replaced by diluted earnings per share, the calculation of which, given the
Company's capital structure, would be the same as the calculation of primary
earnings per share under U.S. GAAP. The Company plans to implement SFAS 128 in
the third quarter of fiscal 1998.

                                (Page 9 of 23)
<PAGE>
 
                         NEWBRIDGE NETWORKS CORPORATION

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

    (Canadian dollars, tabular amounts in thousands except per share data)
                                  (Unaudited)


7.  LITIGATION

Lucent Technologies Inc. ("Lucent Technologies") filed a complaint dated June
24, 1997 in United States District Court in Delaware against the Company and its
United States subsidiary, Newbridge Networks Inc. Lucent Technologies
manufactures and sells telecommunications systems, software and products, and is
both a distributor of the Company's products and a competitor of the Company.
The complaint alleges that the Company's manufacture and sale in the United
States of Newbridge frame relay and ATM (asynchronous transfer mode) switch
products infringe certain United States patent rights claimed by Lucent
Technologies, and requests actual and trebled damages in an unspecified amount.
The Company is in the process of responding to the complaint, and intends to
defend this action vigorously. Based upon its present understanding of the laws
in the United States and the facts, the Company believes it has meritorious
defenses to these claims. Because the outcome of the action is not certain at 
this time, no provision for any liability that may result upon adjudication has 
been made in these Consolidated Financial Statements.

During the fiscal year ended April 30, 1995, the Company was served with one of
several complaints filed in United States District Court in Washington, D.C. by
certain persons purporting to be purchasers of Common Shares of the Company. On
or about May 8, 1995 these complaints were combined into a single consolidated
and amended complaint (the "First Amended Complaint") which named the Company
and certain of its executive officers as defendants. The First Amended Complaint
purported to be a class action on behalf of a class of persons who purchased
securities of the Company between March 29 and August 1, 1994 and alleged that
the Company made false and misleading statements in violation of United States
securities law and common law, for which damages were sought in unspecified
amounts. On June 3, 1996, the Court issued an order granting in part and denying
in part the defendants' motion to dismiss. Among other things, the Court
dismissed with prejudice the claim alleging violation of common law. The Court
also dismissed the majority of plaintiffs' allegations of violation of United
States securities law, but granted plaintiffs leave to replead these allegations
in a Second Amended Complaint, which plaintiffs filed on July 3, 1996. The Court
further conditionally certified the action as a class action without prejudice
to the Company's right to renew its objection to class action certification upon
completion of discovery. On April 10, 1997, the Court issued an order granting
in part and denying in part the defendants' motion to dismiss the Second Amended
Complaint. Among other things, the Court dismissed with prejudice a substantial
portion of plaintiffs' allegations. The Company has served an answer denying
plaintiffs' claims. The Company intends to continue to defend this action
vigorously. Based upon its present understanding of the laws in the United
States and the facts, the Company believes it has meritorious defenses to the
action. Because the outcome of the action is not certain at this time, no
provision for any liability that may result upon adjudication has been made in
these Consolidated Financial Statements.




                                (Page 10 of 23)

<PAGE>
 
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                   CONDITION AND RESULTS OF OPERATIONS


Certain parts of the following discussion and analysis may be forward-looking
statements that involve a number of risks and uncertainties. As a consequence,
actual results might differ materially from results forecast or suggested in any
forward-looking statements. See "Market for Registrant's Common Equity and
Related Stockholder Matters -- Cautionary Statement Regarding Forward-Looking
Information" in the Company's Annual Report on Form 10-K, which is incorporated
by reference herein.

During the fiscal year ended April 30, 1997, the Company acquired a 100% equity
interest in Ungermann-Bass Networks, Inc. ("UB Networks"), a manufacturer of
local area network equipment based in Santa Clara, California, for cash
consideration of $146,590,000. The operating results of UB Networks have been
consolidated into the operating results of the Company commencing in the fourth
fiscal quarter ended April 30, 1997.


RESULTS OF OPERATIONS

Sales increased in the first quarter of fiscal 1998 ended August 3, 1997 by 52%
compared to sales in the first quarter of fiscal 1997 ended July 28, 1996. The
increase in sales, largely offset by an increase in operating expenses, resulted
in net earnings of $64,354,000 for the first quarter of fiscal 1998, an increase
of 6% over net earnings for the first quarter of fiscal 1997.

Sales for the first quarter of fiscal 1998 of $434,738,000 declined 1% relative
to the sales of $441,341,000 for the fourth quarter of fiscal 1997. Net earnings
for the first quarter of fiscal 1998 of $64,354,000 increased compared to a net
loss of $29,696,000 for the fourth quarter of fiscal 1997. However, net earnings
for the first quarter of fiscal 1998 represented a decline relative to pro forma
net earnings for the fourth quarter of fiscal 1997 of $67,244,000, which exclude
the write off of $96,940,000 of purchased research and development in process
related to the acquisition of UB Networks. The declines in sales and net
earnings in the first quarter of fiscal 1998 compared to the fourth quarter of
fiscal 1997 were principally the result of revenue declines associated with the
former UB Networks.


SALES

                                     Fiscal Quarter Ended
                                -------------------------------
                                 Aug 3,       Jul 28,     %
                                  1997         1996    Increase
                                --------     --------  --------
                                (Canadian dollars in thousands)
                              
   Sales                        $434,738     $286,037     52%
                                ========     ========          

Growth in sales in the first quarter of fiscal 1998 compared to the first
quarter of fiscal 1997 was due to an increase in sales of products based on
packet technologies. Sales in the first quarter of fiscal 1998 included just
under $60,000,000 of packet product and service revenue associated with the
former UB Networks. New product lines and product line enhancements introduced
over the past two years also contributed to the sales growth in the first
quarter of fiscal 1998 as compared to the first quarter of fiscal 1997,
predominantly through increased acceptance and demand for the Company's
asynchronous transfer mode (ATM) products. The proportion of product sales from
products based on packet technologies was approximately 55% in the first 



                                (Page 11 of 23)
<PAGE>
 
quarter of fiscal 1998 compared to approximately 30% in the first quarter of
fiscal 1997. The Company expects the proportion of sales derived from products
based on packet technologies to continue to increase relative to sales derived
from circuit switched networking products in fiscal 1998 when compared to fiscal
1997. As a result quarter to quarter revenues may be subject to greater
variability due to longer sales cycles often associated with the adoption of new
technologies.

The sales increase in the first quarter of fiscal 1998 relative to the first
quarter of fiscal 1997 reflect growth in all of the Company's business regions,
most notably in Europe and Latin America. Deliveries to original equipment
manufacturers (OEMs) for carrier customers and deliveries under certain large
contracts with carriers contributed significantly to sales in the first quarter
of fiscal 1998 and the first quarter of fiscal 1997. Sales to Siemens A.G. and
subsidiaries, generally under OEM arrangements for resale to end users, were 19%
of total sales for the first quarter of fiscal 1998 and 18% of total sales for
the first quarter of fiscal 1997.

Sales to carriers of central office applications for tariffed services, for use
within their internal networks and for resale to end users, represented 64% of
total sales in the first quarter of fiscal 1998 compared to 68% of total sales
in the first quarter of fiscal 1997. The proportion of revenue derived from
corporate network customers increased due to the acquisition of UB Networks.

Sales for the first quarter of fiscal 1998 of $434,738,000 represented a 1%
decline from sales of $441,341,000 recorded in the fourth quarter of fiscal
1997. The decline was a reflection of a decrease in sales of over $30,000,000
from the former UB Networks largely offset by an increase in revenues from the
Company's ATM products for wide area networks. The revenue decline associated
with the former UB Networks was primarily due to a faster than expected decline
in sales of third party products and sales declines in shared media hub
products.

A significant portion of the Company's sales are derived from products shipped
against orders received in each fiscal quarter and from products shipped against
firm purchase orders released in that fiscal quarter. In addition, customers
have the ability to revise or cancel orders and change delivery schedules
without significant penalty. As a result, the Company operates without
significant backlog and schedules some production and budgets expenses based on
forecasts of sales, which are difficult to predict. Unforeseen delays in product
deliveries or closing large sales, introductions of new products by the Company
or its competitors, seasonal patterns of customer capital expenditures or other
conditions affecting the networking industry in particular or the economy
generally during any fiscal quarter could cause quarterly revenue and, to a
greater degree, net earnings, to vary greatly.

Because substantial portions of the Company's sales, cost of sales and other
expenses are denominated in U.S. dollars and Pounds Sterling, the Company's
results of operations are subject to change based on fluctuations in the rates
of exchange of those currencies for the Canadian dollar. During the first
quarter of fiscal 1998, the decrease in the value of the Canadian dollar against
the Pound Sterling and the U.S. dollar, relative to exchange rates in the first
quarter of fiscal 1997, resulted in no material variance in reported sales,
gross margin or income from operations.


                                (Page 12 of 23)
<PAGE>
 
COST OF SALES AND GROSS MARGIN

                                             Fiscal Quarter Ended
                                           ------------------------
                                            Aug 3,          Jul 28,
                                             1997            1996
                                           --------        --------
                                    
                                        (Canadian dollars in thousands)
                                    
   Gross margin                            $274,008        $185,294
                                           ========        ========
                                    
   As % of sales                               63%             65%

Cost of sales consists of manufacturing costs, warranty expense and costs
associated with the provision of services. The gross margin as a percentage of
sales declined in the first quarter relative to the first quarter of fiscal 1997
primarily as a result of gross margins earned on revenues of the former UB
Networks, which have been below the average gross margins earned on the
Company's other products.


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
<TABLE> 
<CAPTION> 
                                                        Fiscal Quarter Ended
                                                    ------------------------------
                                                      Aug 3,    Jul 28,      %
                                                       1997      1996     Increase
                                                    --------   --------   --------
   <S>                                              <C>        <C>        <C>                                                  
                                                   (Canadian dollars in thousands)

   Selling, general and administrative expenses     $123,857   $ 66,258      87%
                                                    ========   ========
                                                    
   As a % of sales                                      28%        23%
</TABLE> 

Selling, general and administrative expenses increased in the first quarter of
fiscal 1998 relative to the first quarter of fiscal 1997 primarily as a result
of increases in sales and service personnel. The majority of the increase in
personnel was the result of acquisitions made to enhance the Company's business
and diversify its marketing and distribution channels. Incremental hiring and
spending was directed at programs to strengthen its sales and support
infrastructure throughout the world and to market new products.

The increase in selling, general and administrative expenses as a percentage of
sales in the first quarter of fiscal 1998 over the first quarter of fiscal 1997
is the reflection of the higher cost structure of companies acquired during
fiscal 1997, most significantly the former UB Networks, as well as the result of
the sequential sales decline from the fourth quarter of fiscal 1997.


                                (Page 13 of 23)
<PAGE>
 
RESEARCH AND DEVELOPMENT
<TABLE> 
<CAPTION> 
                                                                        Fiscal Quarter Ended
                                                                   ------------------------------
                                                                    Aug 3,    Jul 28,       %
                                                                    1997       1996      Increase
                                                                   -------   --------    --------
   <S>                                                            <C>        <C>         <C> 
                                                                   (Canadian dollars in thousands)
                                                               
   Gross research and development expenditures                     $70,817    $39,451       80%    
                                                                                                   
   Investment tax credits                                           (8,400)    (5,800)      45%    
                                                                                                   
   Customer, government and other funding                           (1,502)    (2,587)     (42%)   
                                                                                                   
   Net deferral of software development costs                       (1,232)      (829)      49%    
                                                                   -------    -------    
                                                               
   Net research and development expenses                           $59,683    $30,235       97%
                                                                   =======    =======
   Gross expenditures as a % of sales                                  16%        14%
                                                               
   Recoveries as a % of gross expenditures                             16%        23%
                                                               
   Net expenses as a % of sales                                        14%        11%
</TABLE> 
Research and development expenditures consist primarily of software and hardware
engineering personnel expenses, costs associated with equipment and facilities,
and subcontracted research and development costs. The increased gross research
and development expenditures in the first quarter of fiscal 1998 compared to the
first quarter of fiscal 1997 reflect spending on new networking products,
features and interfaces, particularly for ATM platforms in carrier, carrier
access and enterprise network applications and network and services management
software. The majority of the increase was the result of increased engineering
personnel, a portion of which relates to the acquisition of UB Networks.

Recoveries decreased as a percentage of gross expenditures in the first quarter
of fiscal 1998 compared to the first quarter of fiscal 1997 due to a decline in
investment tax credits as a proportion of gross research and development
expenditures and a decline in customer, government and other funding. Based on
Management's estimates of the proportion of fiscal 1998 gross research and
development expenditures to be incurred in Canada and therefore eligible for
investment tax credits, and current levels of committed funding, Management
expects the level of recoveries as a percentage of gross research and
development expenditures in fiscal 1998 to continue to be lower than in fiscal
1997.

The markets for the Company's products are characterized by continuing
technological change. The Company has determined to increase the pace of its
product development in fiscal 1998 to address the requirements of carriers as
they invest in new infrastructures to meet the challenges of increased
competition and growing demand for new communications services. As a result,
Management anticipates that net research and development expenses, expressed as
a percentage of sales, in fiscal 1998 will be higher than in fiscal 1997.


                                (Page 14 of 23)
<PAGE>
 
INTEREST AND OTHER EXPENSES
<TABLE> 
<CAPTION> 
                                                          Fiscal Quarter Ended
                                                     -------------------------------- 
                                                      Aug 3,     Jul 28,        %
                                                       1997       1996       Increase
                                                     --------   --------     --------                                      
   <S>                                               <C>        <C>          <C>    
                                                      (Canadian dollars in thousands)
                                                    
   Interest income                                     $3,022     $5,472          (45%)
                                                    
   Interest expense on long term obligations             (284)       (72)         294%
                                                    
   Other expenses                                      (2,185)    (2,145)           2%
</TABLE> 

Interest income for the first quarter of fiscal 1998 decreased compared to the
first quarter of fiscal 1997 due to a decline in the cash position maintained,
and due to a decline in interest rates earned on investments. Interest expense
on long term obligations increased in the first quarter of fiscal 1998 due to
the assumption of long term obligations of companies acquired by the Company
during fiscal 1997. Other expenses represented less than 1% of sales in the
first quarters of fiscal 1998 and fiscal 1997.


INCOME TAXES

                                       Fiscal Quarter Ended
                                       --------------------
                                        Aug 3,      Jul 28,
                                         1997        1996
                                       --------    --------       

   Income tax rate                        30%         32%

The composite rates of income tax for the first quarter of fiscal 1998 and the
first quarter of fiscal 1997 were reduced from the statutory rate primarily as a
result of the application of certain deductions related to manufacturing and
processing activities and to research and development expenditures in Canada.
Future changes in the composite rate of income tax will be primarily due to the
relative profitability of operations and the national tax policies in each of
the various countries in which the Company operates. Management believes that
the composite rate of income tax will remain lower than the statutory rate
through the application of deductions related to manufacturing and processing
activities and research and development expenditures in Canada as well as other
tax planning measures undertaken by the Company.


NON-CONTROLLING INTEREST

The non-controlling interests' share of subsidiary losses of $367,000 in the
first quarter of fiscal 1998 and the non-controlling interests' share of
subsidiary net earnings of $1,558,000 in the first quarter of fiscal 1997 were
both derived principally from the activities of Transistemas S.A., an Argentine
systems integrator of networking products. The Company has a 51% equity interest
in Transistemas S.A.


NET EARNINGS

Sales increased in the first quarter of fiscal 1998 ended August 3, 1997 by 52%
compared to sales in the first quarter of fiscal 1997 ended July 28, 1996. The
sales increase of 52% for the first quarter of fiscal 1998 relative to the first
quarter of fiscal 1997, largely offset by an increase in operating expenses,
resulted in net earnings of $64,354,000 for the first quarter of fiscal 1998, an
increase of 6% over net earnings for the first quarter of fiscal 1997.


                                (Page 15 of 23)
<PAGE>
 
Net earnings for the first quarter of fiscal 1998 of $64,354,000 increased
compared to a net loss of $29,696,000 for the fourth quarter of fiscal 1997.
However, net earnings for the first quarter of fiscal 1998 represented a decline
relative to pro forma net earnings for the fourth quarter of fiscal 1997 of
$67,244,000, which exclude the write off of $96,940,000 of purchased research
and development in process related to the acquisition of UB Networks. The
decline in net earnings in the first quarter of fiscal 1998 compared to the
fourth quarter of fiscal 1997 was principally the result of revenue declines
associated with the former UB Networks.


FINANCIAL CONDITION

During the first quarter of fiscal 1998 ended August 3, 1997 working capital
increased from $638,392,000 to $729,484,000. As at August 3, 1997 the Company
had $353,961,000 of cash and cash equivalents, which increased by $20,057,000
during the first quarter of fiscal 1998. The increase is due mainly to net
earnings for the quarter of $64,354,000 and cash generated from stock option
exercises of $53,580,000, net of an increase in inventory levels from the fourth
quarter of fiscal 1997 of $32,000,000 and additions to property, plant and
equipment of $53,643,000.

Two principal components of the Company's working capital are accounts
receivable and inventory. Management believes that the payment terms and
conditions extended to the Company's customers, arrangements with the Company's
suppliers, and the levels of inventory the Company carries relative to its
levels of sales are consistent with practices generally prevailing in the
networking industry.

Existing short term bank credit facilities consist of operating lines of credit
with certain banks in the aggregate amount of $107,629,000. At August 3, 1997
Coasin S.A. and Acacia S.A. were utilizing $10,604,000 under these lines of
credit.

Management anticipates that capital expenditures for fiscal 1998 will exceed
those of fiscal 1997 as the Company plans to invest in new facilities in Canada,
in land and facilities in the metropolitan area of Washington, D.C., in research
and development and manufacturing equipment and in information systems. The
Company intends to extinguish its existing long term obligations as they become
due, and may also increase its current investments in subsidiaries and
associated companies. The Company intends to fund the increased capital
expenditures, retirement of long term obligations and increased investments with
existing cash and cash expected to be generated from operations during fiscal
1998. In addition, the Company may use a portion of its cash resources,
supplemented as appropriate by the issuance of shares or debt, to extend or
enhance its business and diversify its marketing and distribution channels
through acquisitions of or investments in businesses, products or technologies
or through the formation of strategic partnerships with other companies.

The Company's normal course issuer bid for common share repurchases expired in
August 1997. The Company had been permitted to purchase up to 8,000,000
outstanding Common Shares in open market transactions in the United States and
Canada. The Company did not purchase any of its Common Shares prior to expiry of
the bid.

Management believes that the Company's liquidity in the form of existing cash
resources and its credit facilities, as well as cash generated from operations,
will prove adequate to meet its operating and capital expenditure requirements
through the end of fiscal 1998 and into the foreseeable future.


                                (Page 16 of 23)
<PAGE>
 
                           PART II. OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

Lucent Technologies Inc. ("Lucent Technologies") filed a complaint dated June
24, 1997 in United States District Court in Delaware against the Company and its
United States subsidiary, Newbridge Networks Inc. Lucent Technologies
manufactures and sells telecommunications systems, software and products, and is
both a distributor of the Company's products and a competitor of the Company.
The complaint alleges that the Company's manufacture and sale in the United
States of Newbridge frame relay and ATM (asynchronous transfer mode) switch
products infringe certain United States patent rights claimed by Lucent
Technologies, and requests actual and trebled damages in an unspecified amount.
The Company is in the process of responding to the complaint, and intends to
defend this action vigorously. Based upon its present understanding of the laws
in the United States and the facts, the Company believes it has meritorious
defenses to these claims.

During the fiscal year ended April 30, 1995, the Company was served with one of
several complaints filed in United States District Court in Washington, D.C. by
certain persons purporting to be purchasers of Common Shares of the Company. On
or about May 8, 1995 these complaints were combined into a single consolidated
and amended complaint (the "First Amended Complaint") which named the Company
and certain of its executive officers as defendants. The First Amended Complaint
purported to be a class action on behalf of a class of persons who purchased
securities of the Company between March 29 and August 1, 1994 and alleged that
the Company made false and misleading statements in violation of United States
securities law and common law, for which damages were sought in unspecified
amounts. On June 3, 1996, the Court issued an order granting in part and denying
in part the defendants' motion to dismiss. Among other things, the Court
dismissed with prejudice the claim alleging violation of common law. The Court
also dismissed the majority of plaintiffs' allegations of violation of United
States securities law, but granted plaintiffs leave to replead these allegations
in a Second Amended Complaint, which plaintiffs filed on July 3, 1996. The Court
further conditionally certified the action as a class action without prejudice
to the Company's right to renew its objection to class action certification upon
completion of discovery. On April 10, 1997, the Court issued an order granting
in part and denying in part the defendants' motion to dismiss the Second Amended
Complaint. Among other things, the Court dismissed with prejudice a substantial
portion of plaintiffs' allegations. The Company has served an answer denying
plaintiffs' claims. The Company intends to continue to defend this action
vigorously. Based upon its present understanding of the laws in the United
States and the facts, the Company believes it has meritorious defenses to the
action.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On September 4, 1997 the Company held an annual and special meeting of its
shareholders. The Company solicited proxies pursuant to the Canada Business
Corporations Act from the holders of record of Common Shares of the Company as
at July 21, 1997. At July 11, 1997 there were 173,670,862 Common Shares issued
and outstanding. The total representation at the meeting was 122,935,479 Common
Shares, of which 122,727,617 were represented by proxy and 207,862 were
represented by shareholders present at the meeting. The shareholders were asked
to vote as to the election of directors, the appointment of auditors, the
approval of amendments to the Company's Consolidated Key Employee Stock Option
Plan, and the repeal of By-law No. 2 and the enactment of By-law No. 3. All the
nominees for the board of directors were elected, the appointment of auditors
was confirmed, the amendments to the Company's Consolidated Key Employee Stock
Option Plan were approved, and the repeal of By-law No.2 and the enactment of
By-law No. 3 was approved.


                                (Page 17 of 23)
<PAGE>
 
The following number of votes were withheld or cast against:

                                                                  Withheld/
                                                                   Against
                                                                 ----------   
     Election of directors                              
         Peter D. Charbonneau                                      174,757
         Denzil J. Doyle                                            94,277
         Alan D. Horn                                              113,657
         Trevor G. Jones                                            96,137
         Peter C. Madsen                                            94,157
         Terence H. Matthews                                     1,247,029
         Graham C. C. Miller                                       788,137
         Donald Mills                                              176,957
         Kent H. E. Plumley                                        176,357
         Daniel C. Rusheleau                                       198,427
         Peter Sommerer                                            200,197
         John C. J. Thynne                                          94,337
                                                        
     Appointment of Deloitte & Touche                   
         as the Company's auditors                                  41,737
                                                        
     Amendments to the Company's                        
         Consolidated Key Employee                      
         Stock Option Plan                                      33,351,309
                                                        
     Repeal of By-law No. 2 and                         
         enactment of By-law No. 3                                 778,414


ITEM 5.   OTHER INFORMATION

The "Cautionary Statement Regarding Forward-Looking Information" contained in
"Market for Registrant's Common Equity and Related Stockholder Matters" in the
Company's Annual Report on Form 10-K for the fiscal year ended April 30, 1997 is
incorporated herein by reference and made a part hereof.


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

         a)  Exhibits

                  Exhibit 11.1       Computation of earnings per share under
                                     accounting principles generally accepted in
                                     Canada.

                  Exhibit 11.2       Computation of earnings per share under
                                     accounting principles generally accepted in
                                     the United States.


                  Exhibit 27         Financial data schedule







                                (Page 18 of 23)
<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.




                                            NEWBRIDGE NETWORKS CORPORATION
                                                    (Registrant)





Date: September 16, 1997                        By:  /s/ Terence H. Matthews
                                                     ---------------------------
                                                     TERENCE H. MATTHEWS,
                                                     Chairman of the Board of
                                                     Directors and Chief
                                                     Executive Officer


Date: September 16, 1997                        By:  /s/ Kenneth B. Wigglesworth
                                                     ---------------------------
                                                     KENNETH B. WIGGLESWORTH,
                                                     Vice President,
                                                     Chief Financial Officer

                                (Page 19 of 23)
<PAGE>
 
                                 EXHIBIT INDEX



     
                                                                        Page No.
                                                                        --------
                                                                            
11.1        Computation of earnings per share under accounting           
             principles generally accepted in Canada.....................  21
                                                                         
11.2        Computation of earnings per share under accounting           
             principles generally accepted in the United States..........  22
                                                                         
27          Financial data schedule......................................  23






                                (Page 20 of 23)