<Page>
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                                 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 SEPTEMBER 30, 2001
                        COMMISSION FILE NUMBER 000-30229
 
                            ------------------------
 
                              SONUS NETWORKS, INC.
 
             (Exact name of registrant as specified in its charter)
 

<Table>
<S>                                            <C>
                  DELAWARE                                      04-3387074
       (State or other jurisdiction of             (I.R.S. Employer Identification No.)
       incorporation or organization)
 
  5 CARLISLE ROAD, WESTFORD, MASSACHUSETTS                         01886
  (Address of principal executive offices)                 (including Zip Code)
</Table>

 
                                 (978) 692-8999
              (Registrant's telephone number, including area code)
 
                            ------------------------
 
    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past
90 days. (1) Yes /X/ No / /  (2) Yes /X/ No / /
 
    As of November 12, 2001, there were 203,933,972 shares of Common Stock,
$0.001 par value per share, outstanding.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
                                        None
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<Page>
                              SONUS NETWORKS, INC.
                                   FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 2001
 
                               TABLE OF CONTENTS
 

<Table>
<Caption>
                                                                                     PAGE
                                                                                   --------
<S>                  <C>                                                           <C>

PART I--FINANCIAL INFORMATION
 

    Item 1:          Financial Statements
                     Condensed Consolidated Balance Sheets as of September 30,
                       2001 (unaudited) and December 31, 2000....................      1
                     Condensed Consolidated Statements of Operations for the
                       Three and Nine Months Ended September 30, 2001 and 2000
                       (unaudited)...............................................      2
                     Condensed Consolidated Statement of Stockholders' Equity for
                       the Nine Months Ended September 30, 2001 (unaudited)......      3
                     Condensed Consolidated Statements of Cash Flows for the Nine
                       Months Ended September 30, 2001 and 2000 (unaudited)......      4

                     Notes to Condensed Consolidated Financial Statements
                       (unaudited)...............................................      5
 

 
   Item 2:          Management's Discussion and Analysis of Financial Condition
                       and Results of Operations.................................     16
 
                     Cautionary Statements.......................................     22
 

    Item 3:          Quantitative and Qualitative Disclosures About Market
                       Risk......................................................     30
 

PART II--OTHER INFORMATION
 

    Item 1:          Legal Proceedings...........................................     31
 

    Item 2:          Changes in Securities and Use of Proceeds...................     31
 

    Item 6:          Exhibits and Reports on Form 8-K............................     31
 
                     Signature...................................................     31
</Table>

<Page>

PART I--FINANCIAL INFORMATION
 

ITEM 1: FINANCIAL STATEMENTS
 
                              SONUS NETWORKS, INC.
 
                     CONDENSED CONSOLIDATED BALANCE SHEETS
 
                       (IN THOUSANDS, EXCEPT SHARE DATA)
 

<Table>
<Caption>
                                                              SEPTEMBER 30,   DECEMBER 31,
                                                                  2001            2000
                                                              -------------   ------------
                                                               (UNAUDITED)
<S>                                                           <C>             <C>
                           ASSETS
CURRENT ASSETS:
  Cash and cash equivalents.................................    $  47,563       $ 87,108
  Marketable securities.....................................       89,874         54,957
  Accounts receivable, net..................................        7,116         14,100
  Inventories...............................................       24,109         20,668
  Other current assets......................................        3,752          2,893
                                                                ---------       --------
    Total current assets....................................      172,414        179,726
PROPERTY AND EQUIPMENT, net.................................       25,788         14,273
GOODWILL AND PURCHASED INTANGIBLES, net.....................        5,016             --
OTHER ASSETS, net...........................................          602            836
                                                                ---------       --------
                                                                $ 203,820       $194,835
                                                                =========       ========
 
            LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Current portion of long-term obligations..................    $   1,153       $     --
  Accounts payable..........................................        8,116         13,439
  Accrued expenses..........................................       31,613         16,239
  Accrued restructuring expenses............................       12,489             --
  Deferred revenue..........................................       18,949         14,451
                                                                ---------       --------
Total current liabilities...................................       72,320         44,129
LONG-TERM OBLIGATIONS, less current portion.................       12,741             --
CONVERTIBLE SUBORDINATED NOTES..............................       10,000             --
COMMITMENTS.................................................
STOCKHOLDERS' EQUITY:
  Preferred stock, $0.01 par value, 5,000,000 shares
    authorized; none issued and outstanding.................           --             --
  Common stock, $0.001 par value, 600,000,000 shares
    authorized; 204,926,502 and 184,244,474 shares issued
    and 203,912,752 and 183,471,974 shares outstanding at
    September 30, 2001 and December 31, 2000,
    respectively............................................          205            184
  Capital in excess of par value............................      860,515        266,488
  Accumulated deficit.......................................     (715,997)       (83,966)
  Stock subscriptions receivable............................           --           (238)
  Deferred compensation.....................................      (35,882)       (31,697)
  Treasury stock, at cost: 1,013,750 and 772,500 common
    shares at September 30, 2001 and December 31, 2000,
    respectively............................................          (82)           (65)
                                                                ---------       --------
    Total stockholders' equity..............................      108,759        150,706
                                                                ---------       --------
                                                                $ 203,820       $194,835
                                                                =========       ========
</Table>

 
  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.
 
                                       1
<Page>
                              SONUS NETWORKS, INC.
 
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
 
                                  (UNAUDITED)
 

<Table>
<Caption>
                                                      THREE MONTHS ENDED     NINE MONTHS ENDED
                                                        SEPTEMBER 30,          SEPTEMBER 30,
                                                     --------------------   --------------------
                                                       2001        2000       2001        2000
                                                     ---------   --------   ---------   --------
<S>                                                  <C>         <C>        <C>         <C>
REVENUES...........................................  $  40,286   $ 15,568   $ 134,336   $ 23,171
Cost of revenues (1)...............................     18,129      8,830      58,300     14,846
                                                     ---------   --------   ---------   --------
GROSS PROFIT.......................................     22,157      6,738      76,036      8,325
OPERATING EXPENSES:
  Research and development (1).....................     18,746      7,032      49,362     18,231
  Sales and marketing (1)..........................     12,660      5,833      31,763     13,576
  General and administrative (1)...................      3,330      1,763       9,272      3,750
  Stock-based compensation.........................     39,069      6,982      68,339     20,347
  Amortization of goodwill and purchased
    intangibles....................................     41,368         --     107,279         --
  Write-off of goodwill and purchased
    intangibles....................................    376,719         --     376,719         --
  Restructuring charges............................     25,807         --      25,807         --
  In-process research and development..............      3,800         --      43,800         --
                                                     ---------   --------   ---------   --------
    Total operating expenses.......................    521,499     21,610     712,341     55,904
                                                     ---------   --------   ---------   --------
LOSS FROM OPERATIONS...............................   (499,342)   (14,872)   (636,305)   (47,579)
Interest expense...................................       (147)        --        (428)      (209)
Interest income....................................      1,328      2,495       4,702      4,022
                                                     ---------   --------   ---------   --------
NET LOSS...........................................  $(498,161)  $(12,377)  $(632,031)  $(43,766)
                                                     =========   ========   =========   ========
 
NET LOSS PER SHARE (NOTE 1(H)):
  Basic and diluted................................  $   (2.81)  $  (0.09)  $   (3.71)  $  (0.57)
                                                     =========   ========   =========   ========
 
  Pro forma basic and diluted......................                                     $  (0.34)
                                                                                        ========
 
SHARES USED IN COMPUTING NET LOSS PER SHARE (NOTE
  1(H)):
  Basic and diluted................................    177,313    144,836     170,220     77,448
                                                     =========   ========   =========   ========
 
  Pro forma basic and diluted......................                                      130,291
                                                                                        ========
</Table>

 
------------------------
 
(1) Excludes non-cash, stock-based compensation expense as follows:
 

<Table>
<S>                                                  <C>         <C>        <C>         <C>
Cost of revenues...................................  $     535   $    113   $   1,157   $    302
Research and development...........................     23,391      2,617      39,773      8,784
Sales and marketing................................      8,127      3,442      16,021      9,108
General and administrative.........................      7,016        810      11,388      2,153
                                                     ---------   --------   ---------   --------
                                                     $  39,069   $  6,982   $  68,339   $ 20,347
                                                     =========   ========   =========   ========
</Table>

 
  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.
 
                                       2
<Page>
                              SONUS NETWORKS, INC.
            CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                       (IN THOUSANDS, EXCEPT SHARE DATA)
                                  (UNAUDITED)

<Table>
<Caption>
                                           COMMON STOCK         CAPITAL IN                     STOCK
                                      -----------------------   EXCESS OF    ACCUMULATED   SUBSCRIPTIONS     DEFERRED
                                        SHARES      PAR VALUE   PAR VALUE      DEFICIT      RECEIVABLE     COMPENSATION
                                      -----------   ---------   ----------   -----------   -------------   ------------
<S>                                   <C>           <C>         <C>          <C>           <C>             <C>
BALANCE, JANUARY 1, 2001............  184,244,474     $184       $266,488     $ (83,966)       $(238)        $(31,697)
  Issuance of common stock in
    connection with the employee
    stock purchase program..........    1,021,333        1          7,865            --           --               --
  Issuance of common stock in
    connection with acquisition of
    TELECOM TECHNOLOGIES, INC. (TTI)
    (Note 3)........................   15,000,000       15        504,998            --           --               --
  Issuance of common stock in
    connection with acquisition of
    certain assets of
    LINGUATEQ, INC. (Note 4)........      221,753       --          4,995            --           --               --
  Issuance of restricted stock
    awards in connection with
    acquisition of TTI (Note 3).....    3,000,000        3         55,193            --           --          (55,196)
  Deferred compensation related to
    unvested stock options assumed
    in connection with acquisition
    of TTI (Note 3).................           --       --         22,600            --           --          (22,600)
  Exercise of stock options.........    1,438,942        2          3,648            --           --               --
  Amortization of deferred
    compensation....................           --       --             --            --           --           42,910
  Deferred compensation for
    terminated employees (Note 2)...           --       --         (5,272)           --           --           30,701
  Payment on subscriptions
    receivable......................           --       --             --            --          238               --
  Repurchase of common stock........           --       --             --            --           --               --
  Net loss..........................           --       --             --      (632,031)          --               --
                                      -----------     ----       --------     ---------        -----         --------
BALANCE, SEPTEMBER 30, 2001.........  204,926,502     $205       $860,515     $(715,997)       $  --         $(35,882)
                                      ===========     ====       ========     =========        =====         ========
 
<Caption>
                                         TREASURY STOCK          TOTAL
                                      --------------------   STOCKHOLDERS'
                                       SHARES       COST        EQUITY
                                      ---------   --------   -------------
<S>                                   <C>         <C>        <C>
BALANCE, JANUARY 1, 2001............    772,500     $(65)      $ 150,706
  Issuance of common stock in
    connection with the employee
    stock purchase program..........         --       --           7,866
  Issuance of common stock in
    connection with acquisition of
    TELECOM TECHNOLOGIES, INC. (TTI)
    (Note 3)........................         --       --         505,013
  Issuance of common stock in
    connection with acquisition of
    certain assets of
    LINGUATEQ, INC. (Note 4)........         --       --           4,995
  Issuance of restricted stock
    awards in connection with
    acquisition of TTI (Note 3).....         --       --              --
  Deferred compensation related to
    unvested stock options assumed
    in connection with acquisition
    of TTI (Note 3).................         --       --              --
  Exercise of stock options.........         --       --           3,650
  Amortization of deferred
    compensation....................         --       --          42,910
  Deferred compensation for
    terminated employees (Note 2)...         --       --          25,429
  Payment on subscriptions
    receivable......................         --       --             238
  Repurchase of common stock........    241,250      (17)            (17)
  Net loss..........................         --       --        (632,031)
                                      ---------     ----       ---------
BALANCE, SEPTEMBER 30, 2001.........  1,013,750     $(82)      $ 108,759
                                      =========     ====       =========
</Table>

 
  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.
 
                                       3
<Page>
                              SONUS NETWORKS, INC.
 
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                                 (IN THOUSANDS)
 
                                  (UNAUDITED)
 

<Table>
<Caption>
                                                               NINE MONTHS ENDED
                                                                 SEPTEMBER 30,
                                                              --------------------
                                                                2001        2000
                                                              ---------   --------
<S>                                                           <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss..................................................  $(632,031)  $(43,766)
  Adjustments to reconcile net loss to net cash used in
    operating activities:
    Depreciation and amortization...........................     11,036      3,150
    Stock-based compensation................................     68,339     20,347
    Amortization of goodwill and purchased intangibles......    107,279         --
    Write-off of goodwill and purchased intangibles.........    376,719         --
    In-process research and development.....................     43,800         --
    Changes in current assets and liabilities:
      Accounts receivable...................................      9,006     (7,617)
      Inventories...........................................     (2,960)   (12,178)
      Other current assets..................................        281     (1,581)
      Accounts payable......................................     (6,179)    10,388
      Accrued expenses......................................     10,545     11,072
      Accrued restructuring expenses........................     12,489         --
      Deferred revenue......................................     (1,181)    11,233
                                                              ---------   --------
        Net cash used in operating activities...............     (2,857)    (8,952)
                                                              ---------   --------
 
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment.......................    (21,427)    (9,384)
  Maturities of marketable securities.......................     26,287     32,262
  Purchases of marketable securities........................    (61,204)   (17,581)
  Other assets..............................................        (30)      (672)
  Acquisitions, net of cash acquired........................     (6,125)        --
                                                              ---------   --------
        Net cash provided by (used in) investing
          activities........................................    (62,499)     4,625
                                                              ---------   --------
 
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net proceeds from sale of common stock....................      7,866    128,074
  Proceeds from exercise of stock options...................      3,650        146
  Net proceeds from issuance of redeemable convertible
    preferred stock.........................................         --     24,710
  Payment of stock subscriptions receivable.................        238         --
  Additions to long-term obligations........................     12,460        405
  Payments of long-term obligations.........................       (386)    (5,143)
  Payment of note payable to bank...........................     (8,000)        --
  Proceeds from issuance of convertible subordinated
    notes...................................................     10,000         --
  Repurchase of common stock................................        (17)       (65)
                                                              ---------   --------
        Net cash provided by financing activities...........     25,811    148,127
                                                              ---------   --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........    (39,545)   143,800
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD..............     87,108      8,885
                                                              ---------   --------
CASH AND CASH EQUIVALENTS, END OF PERIOD....................  $  47,563   $152,685
                                                              =========   ========
</Table>

 
  The accompanying notes are an integral part of these condensed consolidated
                             financial statements.
 
                                       4
<Page>
                              SONUS NETWORKS, INC.
 

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
                                  (UNAUDITED)
 
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
(a) BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
 
    The accompanying unaudited condensed consolidated financial statements have
been prepared by Sonus Networks, Inc. (the Company or Sonus) and reflect all
adjustments, consisting only of normal recurring adjustments, which in the
opinion of management are necessary for a fair statement of the results for the
interim periods. The unaudited condensed consolidated financial statements have
been prepared in accordance with the regulations of the Securities and Exchange
Commission (SEC), and omit or condense certain information and footnote
disclosure pursuant to existing SEC rules and regulations. Results for the
interim periods are not necessarily indicative of results to be expected for the
entire fiscal year. These statements should be read in conjunction with the
financial statements and related footnotes included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2000, filed with the SEC on
March 28, 2001.
 
    The unaudited condensed consolidated financial statements include the
accounts of Sonus and its wholly-owned subsidiaries. All material intercompany
transactions and balances have been eliminated.
 
(b) CASH EQUIVALENTS AND MARKETABLE SECURITIES
 
    Cash equivalents are stated at cost plus accrued interest, which
approximates market value, and have maturities of three months or less at the
date of purchase.
 
    Marketable securities are classified as held-to-maturity, as Sonus has the
intent and ability to hold to maturity. Marketable securities are reported at
amortized cost. Cash equivalents and marketable securities are invested in
high-quality credit instruments, primarily U.S. Government obligations and
corporate obligations with contractual maturities of less than one year. There
have been no gains or losses to date.
 
(c) GOODWILL AND PURCHASED INTANGIBLES
 
    Goodwill and purchased intangibles are being amortized over two and three
year periods (Notes 3 and 4). Statement of Financial Accounting Standards (SFAS)
No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED
ASSETS TO BE DISPOSED OF, requires that long-lived assets, goodwill and other
intangibles be reviewed for impairment whenever circumstances indicate that the
carrying value of an asset may not be recoverable. The carrying value of
long-lived assets, goodwill and other intangibles are considered impaired when
the anticipated undiscounted future cash flows from such assets is less than the
carrying value (Note 2).
 
(d) CONCENTRATION OF CREDIT RISK, SIGNIFICANT CUSTOMERS AND LIMITED SUPPLIERS
 
    Financial instruments that potentially subject Sonus to concentrations of
credit risk are cash, cash equivalents, marketable securities and receivables.
Sonus has no foreign exchange contracts, option contracts or other foreign
hedging arrangements. Sonus' cash, cash equivalents and marketable security
holdings are diversified between three financial institutions.
 
    For the nine months ended September 30, 2001 and 2000, four and three
customers each contributed more than 10% of our revenues which represented an
aggregate of 69% and 71% of total revenues. Two customers represented 82% of the
Company's accounts receivable balance as of
 
                                       5
<Page>
                              SONUS NETWORKS, INC.
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
September 30, 2001. International revenues, primarily to Asia and Europe, were
21% and 12% of revenues for the nine months ended September 30, 2001 and 2000.
Certain components and software licenses from third-parties used in Sonus'
products are procured from a single source. The failure of a supplier, including
a subcontractor, to deliver on schedule could delay or interrupt Sonus' delivery
of products and thereby adversely affect Sonus' revenues and operating results.
 
(e) REVENUE RECOGNITION
 
    Sonus recognizes revenue from product sales to end users, resellers and
distributors upon shipment, provided there are no uncertainties regarding
acceptance, persuasive evidence of an arrangement exists, the sales price is
fixed or determinable and collection of the related receivable is probable. If
uncertainties exist, Sonus recognizes revenue when those uncertainties are
resolved. In multiple element arrangements, in accordance with Statement of
Position 97-2 and 98-9, Sonus uses the residual method when vendor specific
evidence does not exist for one of the delivered elements in the arrangement.
Service revenues are recognized as the services are provided. Revenues from
maintenance and support arrangements are recognized ratably over the term of the
contract. Amounts collected prior to satisfying the revenue recognition criteria
are reflected as deferred revenue. Warranty costs are estimated and recorded by
Sonus at the time of product revenue recognition.
 
    In December 1999, the SEC issued Staff Accounting Bulletin No. 101, REVENUE
RECOGNITION IN FINANCIAL STATEMENTS. This bulletin established guidelines for
revenue recognition. Sonus' revenue recognition policy complies with this
pronouncement.
 
(f) STOCK-BASED COMPENSATION
 
    Sonus uses the intrinsic value-based method of Accounting Principles Board
(APB) Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, to account for
all of its employee stock-based compensation plans and uses the fair value
method to account for all non-employee stock-based compensation.
 
(g) COMPREHENSIVE LOSS
 
    Sonus applies Financial Accounting Standards Board (FASB) SFAS No. 130,
REPORTING COMPREHENSIVE INCOME. The comprehensive loss for the period for the
three and nine months ended September 30, 2001 and 2000 does not differ from the
reported loss.
 
(h) NET LOSS PER SHARE
 
    Basic net loss per share is computed by dividing the net loss for the period
by the weighted average number of shares of unrestricted common stock
outstanding during the period. Diluted net loss per share is computed by
dividing the net loss for the period by the weighted average number of shares of
unrestricted common stock and potential common stock outstanding during the
period, if dilutive. Potential common stock consists of restricted shares of
common stock, shares of common stock issuable upon the exercise of stock options
and conversion of convertible subordinated notes and shares of common stock
issued in connection with our acquisition of telecom technologies, inc. (TTI)
which are subject to the achievement of milestones and employee retention
(Note 3). For both basic and diluted net loss per share, shares of common stock
issuable upon the conversion of Sonus' redeemable convertible preferred stock
have been excluded from the date of issuance until conversion into common
 
                                       6
<Page>
                              SONUS NETWORKS, INC.
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
stock. There were no dilutive shares of potential common stock for these periods
as the Company incurred a net loss in each period.
 
    Pro forma basic and diluted net loss per share for the nine months ended
September 30, 2000 is computed using the weighted average number of unrestricted
common shares outstanding, including the pro forma effects of the automatic
conversion of Sonus' Series A, B, C and D redeemable convertible preferred stock
into shares of Sonus' common stock which occurred upon the closing of Sonus'
initial public offering, as if such conversion occurred at the date of original
issuance.
 
    The following table sets forth the computation of basic and diluted net loss
per share and pro forma basic and diluted net loss per share:
 

<Table>
<Caption>
                                                      THREE MONTHS ENDED     NINE MONTHS ENDED
                                                        SEPTEMBER 30,          SEPTEMBER 30,
                                                     --------------------   --------------------
                                                       2001        2000       2001        2000
                                                     ---------   --------   ---------   --------
                                                        (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                  <C>         <C>        <C>         <C>
NET LOSS...........................................  $(498,161)  $(12,377)  $(632,031)  $(43,766)
                                                     =========   ========   =========   ========
 
HISTORICAL--
  Weighted average common shares outstanding.......    200,537    183,144     197,034    118,761
  Less weighted average restricted common shares
    outstanding....................................    (23,224)   (38,308)    (26,814)   (41,313)
                                                     ---------   --------   ---------   --------
  Shares used in computing basic and diluted net
    loss per share.................................    177,313    144,836     170,220     77,448
                                                     =========   ========   =========   ========
 
  Basic and diluted net loss per share.............  $   (2.81)  $  (0.09)  $   (3.71)  $  (0.57)
                                                     =========   ========   =========   ========
 
PRO FORMA--
  Shares used in computing historical basic and
    diluted net loss per share.....................                                       77,448
  Weighted average number of shares assumed upon
    conversion of redeemable convertible preferred
    stock..........................................                                       52,843
                                                                                        --------
  Shares used in computing pro forma basic and
    diluted net loss per share.....................                                      130,291
                                                                                        ========
 
  Pro forma basic and diluted net loss per share...                                     $  (0.34)
                                                                                        ========
</Table>

 
    Excluded from the computation of diluted net loss per share in the above
table are options to purchase shares of common stock and shares of common stock
issuable upon conversion of convertible subordinated notes representing an
aggregate of 21,393,658 and 12,471,249 shares for the three and nine months
ended September 30, 2001 and 2000, as their effects would have been
anti-dilutive. Had Sonus recorded net income for the three and nine months ended
September 30, 2001 and used the treasury stock method in accordance with SFAS
No. 128, EARNINGS PER SHARE, approximately 210,000,000 weighted average shares
of common stock would have been used in the computation of diluted earnings per
share.
 
                                       7
<Page>
                              SONUS NETWORKS, INC.
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
(i) RECENT ACCOUNTING PRONOUNCEMENTS
 
    In June 2001, the FASB issued SFAS No. 141, BUSINESS COMBINATIONS, and SFAS
No. 142, GOODWILL AND OTHER INTANGIBLE ASSETS. SFAS No. 141 requires that all
business combinations initiated after June 30, 2001 be accounted for using the
purchase method of accounting and prohibits the use of the pooling of interest
method. SFAS No. 142 eliminates the amortization of goodwill and certain other
intangibles and instead subjects these assets to periodic impairment
assessments. SFAS No. 142 is effective immediately for all goodwill and certain
other intangible assets acquired after June 30, 2001 and shall commence on
January 1, 2002 for all goodwill and certain other intangibles existing on
June 30, 2001. Sonus is currently assessing the potential impact SFAS No. 141
and SFAS No. 142 will have on its financial statements.
 
    In August 2001, the FASB issued SFAS No. 144, ACCOUNTING FOR THE IMPAIRMENT
OR DISPOSAL OF LONG-LIVED ASSETS, which supersedes SFAS No. 121 and the
accounting and reporting provisions of APB No. 30, REPORTING THE RESULTS OF
OPERATIONS--REPORTING THE EFFECTS OF DISPOSAL OF A SEGMENT OF A BUSINESS, AND
EXTRAORDINARY, UNUSUAL AND INFREQUENTLY OCCURRING EVENTS AND TRANSACTIONS. SFAS
No. 144 addresses financial accounting and reporting for the impairment or
disposal of long-lived assets and is effective for fiscal years beginning after
December 15, 2001, and interim periods within those fiscal years. The Company is
currently reviewing this statement to determine the effect on its financial
statements.
 
NOTE 2. RESTRUCTURING CHARGES AND WRITE-OFF OF GOODWILL AND PURCHASED
INTANGIBLES
 
    On September 26, 2001, in response to unfavorable business conditions
primarily caused by declines in capital spending by telecommunications service
providers, Sonus announced a restructuring plan designed to reduce expenses and
align its cost structure with its revised business outlook. The restructuring
plan includes a worldwide workforce reduction, consolidation of excess
facilities and other charges. Additionally, Sonus recorded a write-off of
goodwill and purchased intangibles related to the acquisition of TTI (Note 3).
 
    Sonus' restructuring related reserves as of September 30, 2001 are
summarized as follows, in thousands:
 

<Table>
<Caption>
                                                 TOTAL
                                             RESTRUCTURING              ACCRUAL    CURRENT    LONG-TERM
                                                CHARGES      PAYMENTS   BALANCE    PORTION     PORTION
                                             -------------   --------   --------   --------   ---------
<S>                                          <C>             <C>        <C>        <C>        <C>
Workforce reduction........................     $ 4,506        $ --     $ 4,506    $ 4,506     $    --
 
Consolidation of facilities and other
  charges..................................      21,301         858      20,443      7,983      12,460
                                                -------        ----     -------    -------     -------
Total......................................     $25,807        $858     $24,949    $12,489     $12,460
                                                =======        ====     =======    =======     =======
</Table>

 
    Cash expenditures relating to the workforce reductions will be substantially
paid in the fourth quarter of fiscal 2001. Amounts related to the net lease
expense due to the consolidation of excess facilities and other miscellaneous
charges will begin to be paid in the fourth quarter of fiscal 2001 and are
expected to continue through January 2009.
 
    A) WORKFORCE REDUCTION
 
    Restructuring actions resulted in the reduction of Sonus' workforce by
approximately 150 employees, or 21%. The affected employees are entitled to
severance and other benefits for which
 
                                       8
<Page>
                              SONUS NETWORKS, INC.
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
Sonus recorded a charge of $4,506,000 in the third quarter of fiscal 2001. In
addition, the Company recorded non-cash stock-based compensation expense of
$25,429,000 related to the write-off of deferred compensation associated with
shares and options held by terminated employees.
 
    B) CONSOLIDATION OF EXCESS FACILITIES AND OTHER CHARGES
 
    The Company recorded a restructuring charge in the third quarter of fiscal
2001 of $21,301,000 for the consolidation of excess facilities and other
miscellaneous charges, which are included on the balance sheet in accrued
restructuring expenses and long-term obligations.
 
    C) WRITE-OFF OF GOODWILL AND PURCHASED INTANGIBLES.
 
    In light of negative industry and economic conditions, a general decline in
technology valuations and our decision to discontinue the development and use of
non-strategic and overlapping products and services, we performed an assessment
of the carrying value of the goodwill and purchased intangibles recorded in
connection with our acquisition of TTI. In accordance with SFAS 121, Sonus
recorded a non-cash impairment charge of $376,719,000 in the third quarter of
fiscal 2001 for the write-off of goodwill and certain purchased intangibles
because the estimated undiscounted future cash flows of these assets was less
than the carrying value.
 
NOTE 3. ACQUISITION OF TELECOM TECHNOLOGIES, INC.
 
    On January 18, 2001, Sonus acquired privately-held TTI. Upon the closing of
this acquisition, an aggregate of 10,800,000 shares of Sonus common stock
(Merger Shares) were exchanged for all outstanding shares of TTI common stock.
Of the 10,800,000 shares issued to the TTI stockholders, 1,200,000 shares were
placed into escrow as security for TTI's indemnity obligations under the merger
agreement and will be released to TTI stockholders upon expiration of those
indemnity obligations, expected to be on the first anniversary of the closing
date. In addition to the Merger Shares, the TTI stockholders will have the right
to receive up to an aggregate of 4,200,000 additional shares of Sonus common
stock which have been issued and placed in escrow in the event that TTI achieves
certain specified business expansion and product development milestones from
time to time prior to December 31, 2002. As of September 30, 2001, 2,400,000
milestone related shares had been released from escrow.
 
    Sonus has also issued contingent awards of 3,000,000 shares of common stock
under the 2000 Retention Plan (the Plan) to certain employees of TTI who became
employees of Sonus as a result of the acquisition. Pursuant to the Plan, these
awards will vest in equal installments on each of October 31, 2002,
November 30, 2002, January 31, 2003 and February 28, 2003, if (i) the recipients
do not voluntarily terminate employment with TTI or Sonus prior to such vesting
dates and (ii) the business expansion and product development escrow release
conditions are satisfied in whole or in part. The portion of the total number of
shares of Sonus common stock awarded to each employee that will be deemed vested
on each vesting date will not exceed the proportion of all of the shares
escrowed in the acquisition subject to the satisfaction of the business
expansion and product development escrow release conditions that have been
released prior to such vesting date. Generally, any awards forfeited by
employees who terminate employment with TTI, other than a termination by Sonus
or TTI without cause, prior to the date on which they would otherwise vest, may
be reallocated to remaining TTI employees, awarded to replacement hires or
returned to Sonus as provided by the terms of the Plan. The value of the
3,000,000 shares awarded under the Plan is $55,196,000. This amount is being
 
                                       9
<Page>
                              SONUS NETWORKS, INC.
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
expensed during the approximate two-year vesting period and has been adjusted
for changes in the fair value of Sonus common stock on the date the related
milestone release conditions were earned for accounting purposes. Upon
termination of an employee, the remaining value of shares held to which such
employee is entitled, if any, will be expensed. Due to the termination of
certain TTI employees in connection with the restructuring plan announced in
September 2001, approximately 1,000,000 shares of common stock are scheduled to
be released.
 
    The acquisition of TTI was accounted for using the purchase method of
accounting in accordance with APB Opinion No. 16, BUSINESS COMBINATIONS.
Accordingly, the total purchase price was allocated to the assets acquired and
liabilities assumed based upon their estimated fair values. The purchase price
has been determined by using the average market value of Sonus common stock for
the period from two days before to two days after the announcement of the TTI
acquisition ($41.61 per share) to value the 10,800,000 Sonus common shares
issued to the TTI stockholders at the closing date and adding the fair value of
liabilities assumed and expenses of the acquisition. Additionally, since the
closing date, the purchase price has increased as the 4,200,000 escrowed shares
subject to milestone conditions have been earned for accounting purposes. As of
September 30, 2001, the purchase price has been computed as follows, in
thousands:
 

<Table>
<S>                                                           <C>
Fair market value of shares issued..........................  $527,119
Liabilities assumed.........................................    21,184
Acquisition expenses........................................     6,327
                                                              --------
                                                              $554,630
                                                              ========
</Table>

 
    In accordance with APB Opinion No. 16 and with the assistance of valuation
experts, the purchase price was allocated to the tangible and intangible assets
acquired based upon their fair values. Based upon these appraisals, the purchase
price allocation is as follows, in thousands:
 

<Table>
<S>                                                           <C>
Tangible assets.............................................  $  6,312
Intangible assets:
  Workforce, developed technology and customer list.........    32,300
  In-process research and development.......................    40,000
  Deferred compensation related to unvested options.........    22,600
  Goodwill..................................................   453,418
                                                              --------
                                                              $554,630
                                                              ========
</Table>

 
    Sonus engaged third-party appraisers to conduct a valuation of the tangible
and intangible assets and to assist in the determination of the useful lives for
such assets. Based on the results of the appraisal, $40,000,000 was allocated to
in-process research and development, which was expensed in the first quarter of
fiscal 2001. The amounts allocated to developed technology, customer list,
assembled workforce and goodwill have been amortized over their estimated useful
lives of three years. During the three and nine months ended September 30, 2001,
amortization of goodwill and purchased intangibles for the TTI acquisition was
$41,301,000 and $107,212,000. In the third quarter of fiscal 2001, Sonus
recorded a non-cash impairment charge of $376,719,000 for the write-off of TTI
goodwill and certain purchased intangibles (Note 2). Deferred compensation was
computed based on the intrinsic value of the unvested TTI options assumed by
Sonus and will be expensed over the remaining vesting period of up to four
years.
 
                                       10
<Page>
                              SONUS NETWORKS, INC.
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
    The valuation of in-process research and development was determined using
the income method. Revenue and expense projections for the in-process
development project were prepared by the management of Sonus through 2008 and
the present value was computed using a discount rate of 22.5%. In the event that
the project is not completed and technological feasibility is not achieved,
there is no alternative future use for the in-process technology. The
assumptions used for the valuation of in-process research and development are
the responsibility of management.
 
PRO FORMA INFORMATION
 
    The following unaudited pro forma information presents a summary of the
consolidated results of operations of Sonus and TTI as if the acquisition had
occurred on January 1, 2001 and 2000. The pro forma adjustments exclude the
one-time write-off of TTI in-process research and development but include the
restructuring charges and the write-off of TTI goodwill and certain purchased
intangibles for the nine months ended September 30, 2001.
 

<Table>
<Caption>
                                                            NINE MONTHS ENDED
                                                              SEPTEMBER 30,
                                                          ---------------------
                                                            2001        2000
                                                          ---------   ---------
                                                          (IN THOUSANDS, EXCEPT
                                                             PER SHARE DATA)
<S>                                                       <C>         <C>
Revenues................................................  $134,670    $ 43,139
Net loss................................................  (593,612)   (198,158)
Basic and diluted net loss per share....................     (3.47)      (2.19)
Pro forma basic and diluted net loss per share..........                 (1.38)
</Table>

 
    The pro forma results are not necessarily indicative of what would have
occurred if the acquisition had been in effect for the periods presented. In
addition, they are not intended to be a projection of future results and do not
reflect any synergies from combining operations.
 
NOTE 4. ACQUISITION OF CERTAIN ASSETS OF LINGUATEQ, INC.
 
    On July 31, 2001, Sonus completed the acquisition of certain intellectual
property and other assets of privately-held Linguateq Incorporated. Linguateq
was a provider of data distribution and billing application software for both
next generation and legacy networks.
 
    The acquisition of certain intellectual property and other assets was
accounted for using the purchase method of accounting in accordance with
SFAS 141, BUSINESS COMBINATIONS. The purchase price has been determined by using
the average market value of Sonus common stock for the period from two days
before to two days after the terms were agreed upon for the acquisition ($22.53
per share) to value the 221,753 Sonus common shares issued to the Linguateq
stockholders at the closing date and adding payments to employees and vendors
and expenses of the acquisition. As of September 30, 2001, the purchase price
has been computed as follows, in thousands:
 

<Table>
<S>                                                           <C>
Fair market value of shares issued..........................   $4,995
Payments to employees and vendors...........................      241
Acquisition expenses........................................      141
                                                               ------
                                                               $5,377
                                                               ======
</Table>

 
                                       11
<Page>
                              SONUS NETWORKS, INC.
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
    In accordance with SFAS No. 142, GOODWILL AND OTHER INTANGIBLE ASSETS and
with the assistance of valuation experts, the purchase price was allocated to
the intangible assets acquired based upon their fair values. Based upon these
appraisals, the purchase price allocation is as follows, in thousands:
 

<Table>
<S>                                                           <C>
Intangible assets:
  Developed technology and customer list....................   $  700
  In-process research and development.......................    3,800
  Goodwill..................................................      877
                                                               ------
                                                               $5,377
                                                               ======
</Table>

 
    Sonus engaged third-party appraisers to conduct a valuation of the
intangible assets and to assist in the determination of useful lives for such
assets. Based on the results of the appraisal, $3,800,000 was allocated to
in-process research and development, which was expensed in the third quarter of
fiscal 2001. The amounts allocated to developed technology and customer list are
being amortized over their estimated useful lives of up to two years. During the
three and nine months ended September 30, 2001, amortization of purchased
intangibles for Linguateq was $67,000.
 
    The valuation of in-process research and development was determined using
the income method. Revenue and expense projections for the in-process
development project were prepared by the management of Sonus through 2007 and
the present value was computed using a discount rate of 25.0%. In the event that
the project is not completed and technological feasibility is not achieved,
there is no alternative future use for the in-process technology. The
assumptions used for the valuation of in-process research and development are
the responsibility of management.
 
NOTE 5. INVENTORIES
 
    Inventories are stated at the lower of cost (first-in, first-out basis) or
market and consist of the following, in thousands:
 

<Table>
<Caption>
                                                      SEPTEMBER 30,   DECEMBER 31,
                                                          2001            2000
                                                      -------------   ------------
<S>                                                   <C>             <C>
Raw materials.......................................     $ 7,798         $ 3,082
Work in process.....................................       3,500           3,021
Finished goods......................................      12,811          14,565
                                                         -------         -------
                                                         $24,109         $20,668
                                                         =======         =======
</Table>

 
NOTE 6. LONG-TERM OBLIGATIONS
 
    Long-term obligations consist of capital leases and operating lease
obligations related to the restructuring. Sonus assumed certain capital leases
as part of the acquisition of TTI. The capital leases are due in monthly
installments expiring at various dates through March 2005 and accrue interest at
 
                                       12
<Page>
                              SONUS NETWORKS, INC.
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
annual rates ranging from 4.62% to 14.39%. The future payments under these
capital leases and amounts due for long-term obligations, as of September 30,
2001, are as follows, in thousands:
 

<Table>
<S>                                                           <C>
CAPITAL LEASES:
Total minimum lease payments................................  $ 1,566
Less amount representing interest...........................     (132)
                                                              -------
Present value of minimum payments...........................    1,434
Less current portion of capital leases......................   (1,153)
                                                              -------
Long-term portion of capital leases.........................      281
 
RESTRUCTURING EXPENSES:
Long-term portion of restructuring expenses.................   12,460
                                                              -------
Total long-term obligations.................................  $12,741
                                                              =======
</Table>

 
NOTE 7. CONVERTIBLE SUBORDINATED NOTES
 
    In May 2001, Sonus completed a private placement of an aggregate principal
amount of $10,000,000 of 4.75% convertible subordinated notes, due May 1, 2006,
with a customer. Interest payments are due semi-annually on May 1 and
November 1 of each year through 2006. The notes may be converted by the holder
into shares of Sonus' common stock at any time before their maturity or prior to
their redemption or repurchase by Sonus. The conversion rate is 33.314 shares
per each $1,000 principal amount of notes, subject to adjustment in certain
circumstances. After May 1, 2004, Sonus has the option to redeem all or a
portion of the notes at 100% of the principal amount. Also, at any time if the
market price of Sonus' common stock exceeds $60.04 per share for twenty trading
days in any thirty trading-day period, Sonus may redeem these notes through the
issuance of shares of common stock or for cash.
 
NOTE 8. LEASE COMMITMENTS
 
    Sonus leases its facilities under operating leases, which expire through
January 2009. Sonus is responsible for certain real estate taxes, utilities and
maintenance costs under these leases. The future minimum annual payments under
operating lease arrangements, including those leases assumed as part of the TTI
acquisition, as of December 31, 2000 are as follows: $4,015,000 in 2001;
$5,376,000 in 2002; $4,236,000 in 2003; $2,786,000 in 2004; $2,339,000 in 2005;
and $6,898,000 thereafter.
 
NOTE 9. STOCKHOLDERS' EQUITY
 
(a) AUTHORIZED CAPITAL STOCK
 
    In May 2001, Sonus' stockholders approved an increase in the authorized
common stock from 300,000,000 to 600,000,000 shares.
 
(b) STOCK SPLIT
 
    On October 6, 2000, the Company effected a three-for-one stock split in the
form of a stock dividend. All shares of common stock, common stock options and
per share amounts in the accompanying financial statements and footnotes have
been retroactively adjusted to reflect the stock split.
 
                                       13
<Page>
                              SONUS NETWORKS, INC.
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
(c) INITIAL PUBLIC OFFERING
 
    On May 31, 2000, the Company completed its initial public offering of
17,250,000 shares of common stock, which included the exercise of the
underwriters' over-allotment option of 2,250,000 shares, at $7.67 per share. The
proceeds from the initial public offering were $121,600,000, after deducting the
underwriters' discounts and commissions and offering expenses paid by us of
approximately $10,600,000.
 
(d) STOCK-BASED COMPENSATION
 
    Stock-based compensation expenses include the amortization of deferred
employee compensation and other equity related expenses for non-employees.
 
    In connection with certain employee stock option grants and the issuance of
employee restricted common stock during the years ended December 31, 1999 and
2000, Sonus recorded deferred compensation representing the aggregate difference
between the exercise price or purchase price and the fair value of the common
stock on the date of grant or sale for accounting purposes. The deferred
compensation is recognized as an expense over the vesting period of the
underlying stock options and restricted common stock.
 
    Upon the closing of our acquisition of TTI, Sonus recorded deferred
stock-based compensation of $22,600,000 related to the intrinsic value of
unvested TTI stock options assumed by Sonus. This deferred compensation will be
recognized as an expense over the remaining vesting period of the underlying
stock options of up to four years. Additionally, Sonus recorded $55,196,000 of
deferred stock-based compensation on 3,000,000 restricted shares of common stock
awarded to TTI employees under the 2000 Retention Plan. This deferred
compensation will be expensed over the approximate two-year vesting period of
the retention shares and has been adjusted for changes in the fair value of
Sonus common stock on the date the related milestone release conditions were
earned for accounting purposes. Upon termination of an employee, the remaining
value of shares held under the 2000 Retention Plan, to which such employee is
entitled, if any, will be expensed.
 
    Sonus has valued the stock options and the issuances of restricted common
stock to non-employees based upon the fair market value of the services rendered
where Sonus believes the value of these services is more readily determinable
than the value of the options or restricted stock. All other grants of options
and issuances of restricted stock to non-employees are valued based upon the
Black-Scholes option-pricing model. As of September 30, 2001, Sonus has 135,000
stock options and 120,000 shares of restricted common stock outstanding to
non-employees. In accordance with Emerging Issues Task Force 96-18, Sonus will
record the value at the time the services are provided.
 
    Total stock-based compensation expense was $39,069,000 and $6,982,000 for
the three months ended September 30, 2001 and 2000, and $68,339,000 and
$20,347,000 for the nine months ended September 30, 2001 and 2000. Total
stock-based compensation expense for the three and nine months ended
September 30, 2001 includes $25,429,000 related to the write-off of deferred
compensation with respect to shares held by terminated employees impacted by the
restructuring plan (Note 2). Based on the grant of stock options, sale of
restricted common stock and grant of awards of restricted common stock through
September 30, 2001, Sonus expects stock-based compensation expense to impact its
results through fiscal 2005.
 
                                       14
<Page>
                              SONUS NETWORKS, INC.
 
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
NOTE 10. SUPPLEMENTAL CASH FLOW INFORMATION
 

<Table>
<Caption>
                                                            NINE MONTHS ENDED
                                                              SEPTEMBER 30,
                                                           -------------------
                                                             2001       2000
                                                           --------   --------
<S>                                                        <C>        <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during the period for interest...............  $    230   $   209
                                                           ========   =======
 
  ACQUISITION OF TELECOM TECHNOLOGIES, INC:
  Tangible assets........................................  $  6,312   $    --
  Liabilities assumed....................................   (21,184)       --
  Goodwill and purchased intangibles.....................   525,718        --
  Issuance of common stock in connection with
    acquisition..........................................  (505,013)       --
  Cash acquired..........................................       (90)       --
                                                           --------   -------
  Acquisition, net of cash acquired......................     5,743        --
                                                           --------   -------
 
  ACQUISITION OF CERTAIN ASSETS OF LINGUATEQ, INC.:
  Goodwill and purchased intangibles.....................     5,377        --
  Issuance of common stock in connection with
    acquisition..........................................    (4,995)       --
                                                           --------   -------
  Acquisition............................................       382        --
                                                           --------   -------
 
  TOTAL ACQUISITIONS, NET OF CASH ACQUIRED...............  $  6,125   $    --
                                                           ========   =======
 
SUPPLEMENTARY DISCLOSURE OF NON-CASH TRANSACTION:
  Conversion of redeemable convertible preferred stock
    into common stock....................................  $     --   $70,859
                                                           ========   =======
</Table>

 
NOTE 11. SUBSEQUENT EVENT
 
    On November 8, 2001, a securities class action complaint was filed against
the Company, two of its officers and the lead underwriters in connection with
our initial public offering. The complaint alleges violations of federal
securities laws by making material false and misleading statements in the
Company's prospectus incorporated in its registration statement on Form S-1
filed with the SEC in May 2000. The complaint is generally related to the
alleged receipt of undisclosed compensation by the underwriters and the
existence of undisclosed arrangements between the underwriters and certain
purchasers to make additional purchases in the after market. Sonus is in the
process of reviewing the complaint and anticipates it will defend this action
vigorously.
 
                                       15
<Page>

I
TEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
 
    This Management's Discussion and Analysis of Financial Condition and Results
of Operations contains forward-looking statements, which are subject to a number
of risks and uncertainties. These forward-looking statements are based on our
current expectations, assumptions, estimates and projections about ourselves and
our industry. Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of various factors, including
the factors set forth in "Cautionary Statements" beginning on page 22 of this
Quarterly Report on Form 10-Q. This discussion should be read in conjunction
with the unaudited condensed consolidated financial statements and related notes
for the periods specified. Further reference should be made to Sonus' Annual
Report on Form 10-K for the year ended December 31, 2000.
 
OVERVIEW
 
    We are a leading provider of voice infrastructure products for the new
public network. We offer a new generation of carrier-class switching equipment
and software that enable voice services to be delivered over packet-based
networks.
 
    Since our inception, we have incurred significant losses and, as of
September 30, 2001 had an accumulated deficit of $716.0 million. We have not
achieved profitability on a quarterly or an annual basis, and anticipate that we
will continue to incur net losses. We have a lengthy sales cycle for our
products and, accordingly, we expect to incur sales and other expenses before we
realize the related revenues. We expect to incur significant sales and
marketing, research and development and general and administrative expenses and,
as a result, we will need to generate significant revenues to achieve and
maintain profitability.
 
    We sell our products primarily through a direct sales force and in some
markets, through resellers and distributors. In the future, we anticipate
expanding our sales efforts to include additional overseas distribution
partners. Customers' decisions to purchase our products to deploy in commercial
networks involve a significant commitment of resources and a lengthy evaluation,
testing and product qualification process. We believe these long sales cycles,
as well as our expectation that customers will tend to sporadically place large
orders with short lead times, will cause our revenues and results of operations
to vary significantly and unexpectedly from quarter to quarter. We expect to
recognize revenues from a limited number of customers for the foreseeable
future.
 
    Sonus began shipping product to customers during the fourth quarter of
fiscal 1999 and recorded its first revenues of $51.8 million in fiscal 2000. For
the first nine months of fiscal 2001, Sonus recognized $134.3 million in
revenue. For the six consecutive quarters ending June 30, 2001, our revenue
increased each quarter sequentially compared to the previous quarter. However,
our revenue declined sequentially in the third quarter of fiscal 2001 to
$40.3 million due to unfavorable business conditions primarily caused by
declines in capital spending by telecommunications service providers. In
response to these unfavorable economic conditions, in September 2001 Sonus
announced a restructuring plan designed to reduce expenses and align its cost
structure with its revised business outlook. Accordingly, Sonus recorded a
restructuring charge in the third quarter of fiscal 2001 of $25.8 million for a
worldwide workforce reduction, consolidation of excess facilities and other
charges, a non-cash impairment charge of $376.7 million for the write-off of
goodwill and certain purchased intangibles of TTI and a $25.4 million write-off
of deferred compensation for shares and options held by terminated employees.
See Note 2 to our unaudited condensed consolidated financial statements.
 
ACQUISITION OF TELECOM TECHNOLOGIES, INC.
 
    On January 18, 2001, we acquired TTI. Upon the closing of this acquisition,
we issued an aggregate of 10,800,000 shares of common stock in exchange for all
outstanding capital stock of TTI. Of the 10,800,000 shares issued to the TTI
shareholders, 1,200,000 shares were placed into escrow as security for indemnity
obligations under the merger agreement, and will be released to TTI
 
                                       16
<Page>
shareholders upon expiration of those indemnity obligations, expected to be on
the first anniversary of the closing date. In addition, TTI shareholders have
the right to receive an aggregate of 4,200,000 additional shares of common
stock, which have been placed in escrow in the event that TTI achieves certain
specified business expansion and product development milestones from time to
time prior to December 31, 2002. As of September 30, 2001, 2,400,000 milestone
related shares had been released from escrow. In connection with our acquisition
of TTI, we adopted our 2000 Retention Plan and issued 3,000,000 shares of common
stock under this plan to certain employees of TTI who became employees of Sonus,
the vesting of which shares are subject to continued employment and the
attainment of business expansion and product development milestones. Due to the
termination of certain TTI employees in connection with the restructuring plan,
approximately 1,000,000 shares of common stock under the 2000 Retention Plan are
scheduled to be released.
 
    We have accounted for the acquisition as a purchase for financial reporting
purposes. Accordingly, Sonus' financial statements for the three and nine months
ended September 30, 2001 reflect the results of operations of TTI since the date
of acquisition. The purchase price was allocated to TTI's assets and liabilities
based on the fair value of the assets acquired and the liabilities assumed. The
excess of the purchase price over the fair value of the net tangible assets and
identifiable intangible assets acquired has been classified as goodwill. In
addition, a portion of the purchase price has been allocated to in-process
research and development. Additionally, since the closing date, the purchase
price has been increased as escrowed shares subject to milestone conditions were
earned for accounting purposes. Goodwill and other intangibles have been
amortized by charges to operations over their estimated useful lives of three
years and purchased in-process research and development was charged to
operations at the time of closing. Sonus has recorded deferred stock-based
compensation relating to the issuance of awards under our 2000 Retention Plan.
The amount of charges for stock-based compensation will be significant and will
therefore have a material negative impact on the combined company's future
operating results. In the third quarter of fiscal 2001, Sonus recorded a
non-cash impairment charge of $376.7 million for the write-off of goodwill and
purchased intangibles related to the acquisition of TTI.
 
RESULTS OF OPERATIONS
 
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
 
  REVENUES.  Revenues were $40.3 million for the three months ended
September 30, 2001, an increase of $24.7 million, or 159% from $15.6 million for
the same period in fiscal 2000. Revenues were $134.3 million for the nine months
ended September 30, 2001, an increase of $111.1 million, or 480% from
$23.2 million for the same period in fiscal 2000. The increase in revenues for
these periods was the result of a significant increase in the sale of voice
infrastructure products. For the nine months ended September 30, 2001 and 2000,
four and three customers each contributed more than 10% of our revenues which
represented an aggregate of 68.8% and 71.1% of total revenues. International
revenues, primarily to Asia and Europe, were 21.0% and 12.1% of revenues for the
nine months ended September 30, 2001 and 2000.
 
  GROSS PROFIT.  Cost of revenues consist primarily of amounts paid to
third-party manufacturers for purchased materials and services, and
manufacturing and professional services personnel and related costs. Gross
profit was $22.2 million, or 55.0% of revenues, for the three months ended
September 30, 2001, compared with $6.7 million, or 43.3% of revenues, for the
same period in fiscal 2000. Gross profit was $76.0 million, or 56.6% of
revenues, for the nine months ended September 30, 2001, compared with
$8.3 million, or 35.9% of revenues, for the same period in fiscal 2000. These
increases in gross profit as a percentage of revenues are primarily the result
of improved manufacturing efficiencies due to increased volume, product mix and
a reduction in material costs. We expect gross profit as a percentage of
revenues to increase modestly in the future due to continuing product mix
changes and increases in support and maintenance revenues.
 
                                       17
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  RESEARCH AND DEVELOPMENT EXPENSES.  Research and development expenses consist
primarily of salaries and related personnel costs, recruiting expenses and
prototype costs related to the design, development, testing and enhancement of
our products. We expense our research and development costs as incurred.
Research and development expenses were $18.7 million for the three months ended
September 30, 2001, an increase of $11.7 million, or 167%, from $7.0 million for
the same period in fiscal 2000. Research and development expenses were
$49.4 million for the nine months ended September 30, 2001, an increase of
$31.2 million, or 171%, from $18.2 million for the same period in fiscal 2000.
These increases reflect costs primarily associated with a significant increase
in personnel and personnel-related expenses including our acquisition of TTI,
and, to a lesser extent, prototype and software expenses for the development of
our products. We believe that our restructuring actions will reduce research and
development expenses from the current level beginning in the fourth quarter of
fiscal 2001, with the full effect being realized during the first quarter of
fiscal 2002. However, we believe that rapid technological innovation is critical
to our long-term success and we intend to continue to make substantial
investments to enhance our products and technologies.
 
  SALES AND MARKETING EXPENSES.  Sales and marketing expenses consist primarily
of salaries and related personnel expenses, commissions, travel and
entertainment expenses, promotions, customer evaluations and other marketing
expenses. Sales and marketing expenses were $12.7 million for the three months
ended September 30, 2001, an increase of $6.8 million, or 117%, from
$5.9 million for the same period in fiscal 2000. Sales and marketing expenses
were $31.8 million for the nine months ended September 30, 2001, an increase of
$18.2 million, or 134%, from $13.6 million for the same period in fiscal 2000.
These increases reflect costs primarily associated with the hiring of additional
U.S. and international sales and marketing personnel including our acquisition
of TTI, commissions, the opening of international sales offices and, to a lesser
extent, travel-related expenses, marketing program costs and trade shows. We
believe that our restructuring actions will reduce sales and marketing expenses
from the current level beginning in the fourth quarter of fiscal 2001, with the
full effect being realized during the first quarter of fiscal 2002.
 
  GENERAL AND ADMINISTRATIVE EXPENSES.  General and administrative expenses
consist primarily of salaries and related expenses for executive and
administrative personnel, recruiting expenses and professional fees. General and
administrative expenses were $3.3 million for the three months ended
September 30, 2001, an increase of $1.5 million, or 89%, from $1.8 million for
the same period in fiscal 2000. General and administrative expenses were
$9.3 million for the nine months ended September 30, 2001, an increase of
$5.5 million, or 147%, from $3.8 million for the same period in fiscal 2000.
These increases reflect the hiring of additional general and administrative
personnel including our acquisition of TTI, and, to a lesser extent, costs
associated with being a public company. We believe that our restructuring
actions will reduce general and administrative expenses from the current level
beginning in the fourth quarter of fiscal 2001, with the full effect being
realized during the first quarter of fiscal 2002.
 
  STOCK-BASED COMPENSATION EXPENSES.  Stock-based compensation expenses include
the amortization of stock compensation charges resulting from the granting of
stock options, including those TTI stock options assumed by Sonus, stock awards
to TTI employees under the 2000 Retention Plan, and the sales of restricted
common stock to employees and compensation expense associated with the grant of
stock options and issuance of restricted stock to non-employees. See Note 9(d)
to our unaudited condensed consolidated financial statements. Deferred
compensation related to the granting of stock options and sales of restricted
common stock to employees, including those TTI stock options assumed by Sonus,
are being amortized over the vesting periods of four to five years. The deferred
compensation associated with the 2000 Retention Plan awarded to TTI employees
will be expensed over the approximate two-year vesting period of the retention
shares. These amounts have been adjusted for changes in the fair value of Sonus
common stock on the date the related milestone release conditions were earned
for accounting purposes. Upon the termination of an employee, the remaining
 
                                       18
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value of shares held under the 2000 Retention Plan, to which such employee is
entitled, if any, will be expensed. The compensation expense associated with
non-employees is recorded at the time services are provided.
 
    Stock-based compensation expenses were $39.1 million for the three months
ended September 30, 2001, an increase of $32.1 million, from $7.0 million for
the same period in fiscal 2000. Stock-based compensation expenses were
$68.3 million for the nine months ended September 30, 2001, an increase of
$48.0 million, from $20.3 million for the same period in fiscal 2000. These
increases are primarily due to the amortization of deferred stock-based
compensation resulting from the unvested TTI stock options assumed by Sonus,
retention stock awards issued to TTI employees and the write-off of
$25.4 million of deferred compensation of shares held by terminated employees
impacted by the restructuring plan. Based on the grant of stock options, sale of
restricted common stock and grant of awards of restricted common stock through
September 30, 2001, we expect stock-based compensation expense to impact our
results through fiscal 2005.
 
  GOODWILL, PURCHASED INTANGIBLES AND IN-PROCESS RESEARCH AND DEVELOPMENT
EXPENSES.  In January 2001, Sonus acquired certain intellectual property,
in-process research and development and intangible assets in connection with our
acquisition of TTI, which resulted in the recording of $525.7 million of
goodwill and other intangibles. Results of operations for the three months ended
September 30, 2001 include $41.3 million in amortization of TTI goodwill and
purchased intangibles. Results of operations for the nine months ended
September 30, 2001, include $107.2 million in amortization of TTI goodwill and
purchased intangibles and a $40.0 million write-off of purchased in-process
research and development. Due to the write-off of $376.7 million in TTI goodwill
and certain purchased intangibles in the third quarter of fiscal 2001,
amortization expense for the fourth quarter of fiscal 2001 will be substantially
reduced from its current level. See Notes 2 and 3 to our unaudited condensed
consolidated financial statements.
 
    In July 2001, Sonus completed the acquisition of certain intellectual
property and other assets of privately-held Linguateq Incorporated, a provider
of data distribution and billing application software. Results of operations for
the three and nine months ended include the amortization of purchased
intangibles and a non-cash charge of $3.8 million for purchased in-process
research and development.
 
  RESTRUCTURING CHARGES.  On September 26, 2001, in response to unfavorable
business conditions largely caused by a rapid further decrease in capital
spending by telecommunications service providers, Sonus announced a
restructuring plan designed to reduce expenses and align its cost structure with
its revised business outlook. Accordingly, during the third quarter of fiscal
2001, Sonus recorded a restructuring charge of $25.8 million for a worldwide
workforce reduction, consolidation of excess facilities and other charges.
 
    WORKFORCE REDUCTION
 
    Restructuring actions resulted in the reduction of Sonus' workforce by
approximately 150 employees, or 21%. The affected employees are entitled to
severance and other benefits for which Sonus recorded a charge of $4.5 million
in the third quarter of fiscal 2001. Cash expenditures relating to workforce
reductions will be substantially paid in the fourth quarter of fiscal 2001.
 
    CONSOLIDATION OF EXCESS FACILITIES AND OTHER CHARGES
 
    The Company recorded a restructuring charge in the third quarter of fiscal
2001 of $21.3 million for the consolidation of excess facilities and other
miscellaneous charges, which are included on the balance sheet as accrued
restructuring expenses and long-term obligations. Cash expenditures relating to
the consolidation of excess facilities and other miscellaneous charges will
begin to be paid in the fourth quarter of fiscal 2001 and are expected to
continue through January 2009.
 
                                       19
<Page>
  WRITE-OFF OF GOODWILL AND PURCHASED INTANGIBLES.  In light of negative
industry and economic conditions, a general decline in technology valuations and
our decision to discontinue the development and use of non-strategic and
overlapping products and services, we performed an assessment of the carrying
value of the goodwill and purchased intangibles recorded in connection with our
acquisition of TTI. In accordance with SFAS 121, Sonus recorded a non-cash
impairment charge of $376.7 million in the third quarter of fiscal 2001 for the
write-off of goodwill and certain purchased intangibles because the estimated
undiscounted future cash flows of these assets was less than the carrying value.
 
  INTEREST INCOME (EXPENSE), NET.  Interest income, net of interest expense was
$1.2 million for the three months ended September 30, 2001, a decrease of
$1.3 million from $2.5 million for the same period in fiscal 2000. Interest
income, net of interest expense was $4.3 million for the first nine months ended
September 30, 2001, an increase of $461,000 from $3.8 million for the same
period in fiscal 2000. The decrease for the third quarter of fiscal 2001
compared to the same period of the prior year reflects decreasing interest rates
and invested balances and increasing interest expenses incurred on convertible
subordinated notes and capital lease arrangements. The increase for the first
nine months of fiscal 2001 compared to the same period of the prior year
reflects higher invested balances partially offset by decreasing interest rates
and increasing interest expense.
 
  INCOME TAXES.  No provision for income taxes has been recorded for the three
and nine months ended September 30, 2001 and 2000, due to accumulated net
losses. We did not record any tax benefits relating to these losses or other tax
benefits due to the uncertainty surrounding the realization of these future tax
benefits.
 
LIQUIDITY AND CAPITAL RESOURCES
 
    Prior to our initial public offering, we financed our operations primarily
through private sales of redeemable convertible preferred stock totaling
$70.7 million in net proceeds. Upon the closing of our initial public offering
on May 31, 2000, the Company received cash proceeds, net of underwriters'
discount and offering expenses, totaling $121.6 million, and all of our
redeemable convertible preferred stock converted into 96,957,222 shares of
common stock. At September 30, 2001, cash, cash equivalents and marketable
securities totaled $137.4 million.
 
    Net cash used in operating activities was $2.9 million for the nine months
ended September 30, 2001, as compared to $9.0 million for the nine months ended
September 30, 2000. The cash used in operating activities in the nine months
ended September 30, 2001 compared to the same period of the prior year reflects
a significantly higher net loss and a reduction in accounts payable offset by
higher non-cash charges, decreases in accounts receivable and an increase in
accrued restructuring expenses.
 
    Net cash used in investing activities was $62.5 million for the nine months
ended September 30, 2001, as compared to cash provided by investing activities
of $4.6 million for the nine months ended September 30, 2000. Net cash used in
investing activities for the nine months ended September 30, 2001 primarily
reflects net purchases of marketable securities of $34.9 million, purchases of
property and equipment of $21.4 million and cash expenditures associated with
our acquisitions of $6.1 million. The amount of capital expenditures in the near
term are anticipated to be consistent with the current quarterly level.
 
    Net cash provided by financing activities was $25.8 million for the nine
months ended September 30, 2001, as compared to $148.1 million for the nine
months ended September 30, 2000. The net cash provided for the nine months ended
September 30, 2001 resulted from the sale of common stock, long-term
restructuring obligations, the exercise of stock options and the issuance of
$10.0 million in convertible subordinated notes offset by the repayment of
$8.0 million in a bank note payable assumed as part of the acquisition of TTI.
The net cash provided for the nine months ended September 30, 2000, is primarily
a result of net proceeds received from the Sonus' initial public offering and to
a lesser extent, from the sale of Series D redeemable convertible preferred
stock, partially offset by repayment of long-term obligations.
 
                                       20
<Page>
    We believe our current cash, cash equivalents and marketable securities will
be sufficient to meet our anticipated cash needs for working capital and capital
expenditures for at least 12 months. If our existing resources and cash
generated from operations are insufficient to satisfy our liquidity
requirements, we may seek to sell additional equity or debt securities. The sale
of additional equity or convertible debt securities could result in additional
dilution to our stockholders, and we cannot be certain that additional financing
will be available in amounts or on terms acceptable to us, if at all. If we are
unable to obtain this 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.
 
RECENT ACCOUNTING PRONOUNCEMENTS
 
    In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS
No. 141, BUSINESS COMBINATIONS, and SFAS No. 142, GOODWILL AND OTHER INTANGIBLE
ASSETS. SFAS No. 141 requires that all business combinations initiated after
June 30, 2001 be accounted for using the purchase method of accounting and
prohibits the use of the pooling of interest method. SFAS No. 142 eliminates the
amortization of goodwill and certain other intangibles and instead subjects
these assets to periodic impairment assessments. SFAS No. 142 is effective
immediately for all goodwill and certain other intangible assets acquired after
June 30, 2001 and shall commence on January 1, 2002 for all goodwill and certain
other intangibles existing on June 30, 2001. Sonus is currently assessing the
potential impact SFAS No. 141 and SFAS No. 142 will have on its financial
statements.
 
    In August 2001, the FASB issued SFAS No. 144, ACCOUNTING FOR THE IMPAIRMENT
OR DISPOSAL OF LONG-LIVED ASSETS, which supersedes SFAS No. 121, ACCOUNTING FOR
THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF,
and the accounting and reporting provisions of APB No. 30, REPORTING THE RESULTS
OF OPERATIONS--REPORTING THE EFFECTS OF DISPOSAL OF A SEGMENT OF A BUSINESS, AND
EXTRAORDINARY, UNUSUAL AND INFREQUENTLY OCCURRING EVENTS AND TRANSACTIONS. SFAS
No. 144 addresses financial accounting and reporting for the impairment or
disposal of long-lived assets and is effective for fiscal years beginning after
December 15, 2001, and interim periods within those fiscal years. Sonus is
currently reviewing this statement to determine the effect on its financial
statements.
 
                                       21
<Page>
CAUTIONARY STATEMENTS
 
    This Quarterly Report on Form 10-Q contains forward-looking statements
within the meaning of the Securities Litigation Reform Act of 1995 that involve
risks and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of a number of
factors, including those set forth in the following cautionary statements and
elsewhere in this Quarterly Report on Form 10-Q. If any of the following risks
were to occur, our business, financial condition or results of operations would
likely suffer and the trading price of our common stock would likely decline.
 
WE EXPECT THAT A MAJORITY OF OUR REVENUES WILL BE GENERATED FROM A LIMITED
NUMBER OF CUSTOMERS AND OUR REVENUES WILL NOT GROW IF WE DO NOT SUCCESSFULLY
SELL PRODUCTS TO THESE CUSTOMERS.
 
    To date, we have shipped our products to a limited number of customers and
only during the first quarter of fiscal 2000 did we begin to recognize revenues.
We expect that in the foreseeable future, substantially all of our revenues will
depend on sales of our products to a limited number of customers. For example,
four and three customers each contributed more than 10% of our revenues for the
nine months ended September 30, 2001 and 2000, which represented an aggregate of
69% and 71% of total revenues. Some of the customers to whom we have shipped
products have deployed our products in their commercial networks, while others
are using our products in laboratory testing or internal trials. Our customers
may not, or may not continue to, deploy our products in their commercial
networks on a timely basis, or at all, and any delay or failure by our customers
to introduce commercial services based on our products, or a downturn in their
business, would seriously harm our ability to sell products and generate
revenues.
 
WE WILL NOT BE SUCCESSFUL IF WE DO NOT GROW OUR CUSTOMER BASE.
 
    Our future success will depend on our ability to attract additional
customers beyond our current limited number. The growth of our customer base
could be adversely affected by:
 
    - customer unwillingness to implement our new voice infrastructure products;
 
    - any delays or difficulties that we may incur in completing the development
      and introduction of our planned products or product enhancements;
 
    - our customers' inability to raise capital to finance their business plans;
 
    - new product introductions by our competitors;
 
    - any failure of our products to perform as expected; or
 
    - any difficulty we may incur in meeting customers' delivery requirements.
 
    If we do not expand our customer base to include additional customers that
deploy our products in operational commercial networks, our revenues will not
grow significantly, or at all.
 
THE MARKET FOR VOICE INFRASTRUCTURE PRODUCTS FOR THE NEW PUBLIC NETWORK IS NEW
AND EVOLVING AND OUR BUSINESS WILL SUFFER IF IT DOES NOT DEVELOP AS WE EXPECT.
 
    The market for our products is rapidly evolving. Packet-based technology may
not be widely accepted as a platform for voice and a viable market for our
products may not develop or be sustainable. If this market does not develop, or
develops more slowly than we expect, we may not be able to sell our products in
significant volumes, or at all.
 
WE HAVE BEEN IN BUSINESS FOR A SHORT PERIOD OF TIME WHICH MAKES FORECASTING
DIFFICULT.
 
    We were founded in August 1997, and only during the first quarter of fiscal
2000 did we begin to recognize any revenues. As a result of our limited
operating history, it is difficult to accurately forecast revenues and there is
limited meaningful historical financial data upon which to base planned
operating expenses. In addition, our operating expenses are largely based on
anticipated revenue trends and a high percentage of our expenses are, and will
continue to be, fixed in the short-term. Changes in capital spending levels by
telecommunications service providers further complicate the forecasting process.
 
                                       22
<Page>
WE ARE EXPOSED TO GENERAL ECONOMIC CONDITIONS.
 
    Our business is subject to the effects of general economic conditions in the
United States and globally, and, in particular, market conditions in the
telecommunications industry. In the third quarter of fiscal 2001, our operating
results have been adversely affected as a result of unfavorable business
conditions primarily caused by declines in capital spending from
telecommunications service providers. If the economic conditions in the United
States and globally do not improve, or if we experience a worsening in the
global economic and/or telecommunications industry slowdown, we may continue to
experience adverse impacts on our business, operating results and financial
condition.
 
REVENUES TO EMERGING SERVICE PROVIDERS MAY INCREASE THE UNPREDICTABILITY OF OUR
RESULTS.
 
    A substantial portion of our revenues have come from emerging service
providers who are the primary early adopters of our voice infrastructure
products. As a result of current economic and market conditions, many emerging
service providers have seen a decrease in funding available to finance large
capital expenditures. This has contributed to the uncertainty of the amounts and
timing of capital expenditures by emerging service provider customers for
products such as those we offer. Additionally, ability to recognize revenue from
emerging service provider customers will depend on the relative financial
strength of the particular customer. Our operating results could be materially
and adversely affected if any present or future emerging service providers were
to choose to reduce its level of orders or were to experience financial,
operational or other difficulties that resulted in a reduction of orders to us
or a delay or failure to pay our receivables.
 
WE ARE ENTIRELY DEPENDENT UPON OUR VOICE INFRASTRUCTURE PRODUCTS AND OUR FUTURE
REVENUES DEPEND UPON THEIR COMMERCIAL SUCCESS.
 
    Our future growth depends upon the commercial success of our voice
infrastructure products. We intend to develop and introduce new products and
enhancements to existing products in the future. We may not successfully
complete the development or introduction of these products. If our target
customers do not adopt, purchase and successfully deploy our current or planned
products, our revenues will not grow.
 
BECAUSE OUR PRODUCTS ARE SOPHISTICATED AND DESIGNED TO BE DEPLOYED IN COMPLEX
ENVIRONMENTS, THEY MAY HAVE ERRORS OR DEFECTS THAT WE FIND ONLY AFTER FULL
DEPLOYMENT, WHICH COULD SERIOUSLY HARM OUR BUSINESS.
 
    Our products are sophisticated and are designed to be deployed in large and
complex networks. Because of the nature of our products, they can only be fully
tested when substantially deployed in very large networks with high volumes of
traffic. Some of our customers have only recently begun to commercially deploy
our products and they may discover errors or defects in the software or
hardware, or the products may not operate as expected.
 
    If we are unable to fix errors or other performance problems that may be
identified after full deployment of our products, we could experience:
 
    - loss of, or delay in, revenues;
 
    - loss of customers and market share;
 
    - a failure to attract new customers or achieve market acceptance for our
      products;
 
    - increased service, support and warranty costs and a diversion of
      development resources; and
 
    - costly and time-consuming legal actions by our customers.
 
                                       23
<Page>
IF WE DO NOT RESPOND RAPIDLY TO TECHNOLOGICAL CHANGES OR TO CHANGES IN INDUSTRY
STANDARDS, OUR PRODUCTS COULD BECOME OBSOLETE.
 
    The market for voice infrastructure products for the new public network is
likely to be characterized by rapid technological change and frequent new
product introductions. We may be unable to respond quickly or effectively to
these developments. We may experience difficulties with software development,
hardware design, manufacturing or marketing that could delay or prevent our
development, introduction or marketing of new products and enhancements. The
introduction of new products by our competitors, the market acceptance of
products based on new or alternative technologies or the emergence of new
industry standards could render our existing or future products obsolete. If the
standards adopted are different from those that we have chosen to support,
market acceptance of our products may be significantly reduced or delayed. If
our products become technologically obsolete, we may be unable to sell our
products in the marketplace and generate revenues.
 
WE DEPEND UPON CONTRACT MANUFACTURERS AND ANY DISRUPTION IN THESE RELATIONSHIPS
MAY CAUSE US TO FAIL TO MEET THE DEMANDS OF OUR CUSTOMERS AND DAMAGE OUR
CUSTOMER RELATIONSHIPS.
 
    We rely on a small number of contract manufacturers to manufacture our
products according to our specifications and to fill orders on a timely basis.
Our contract manufacturers provide comprehensive manufacturing services,
including assembly of our products and procurement of materials. Each of our
contract manufacturers also builds products for other companies and may not
always have sufficient quantities of inventory available to fill our orders or
may not allocate their internal resources to fill these orders on a timely
basis. We do not have long-term supply contracts with our manufacturers and they
are not required to manufacture products for any specified period.
 
    We do not have internal manufacturing capabilities to meet our customers'
demands. Qualifying a new contract manufacturer and commencing commercial-scale
production is expensive and time consuming and could result in a significant
interruption in the supply of our products. If a change in contract
manufacturers results in delays in our fulfillment of customer orders or if a
contract manufacturer fails to make timely delivery of orders, we may lose
revenues and suffer damage to our customer relationships.
 
THE UNPREDICTABILITY OF OUR QUARTERLY RESULTS MAY ADVERSELY AFFECT THE TRADING
PRICE OF OUR COMMON STOCK.
 
    Our revenues and operating results will vary significantly from quarter to
quarter due to a number of factors, many of which are outside of our control and
any of which may cause our stock price to fluctuate. Generally, purchases by
service providers of telecommunications equipment from manufacturers have been
unpredictable and clustered, rather than steady, as the providers build out
their networks. The primary factors that may affect our revenues and results
include the following:
 
    - fluctuation in demand for our voice infrastructure products and the timing
      and size of customer orders;
 
    - the cancellation or deferral of existing customer orders;
 
    - the length and variability of the sales cycle for our products and the
      corresponding timing of recognizing or deferring revenues;
 
    - new product introductions and enhancements by our competitors and us;
 
    - changes in our pricing policies, the pricing policies of our competitors
      and the prices of the components of our products;
 
    - our ability to develop, introduce and ship new products and product
      enhancements that meet customer requirements in a timely manner;
 
    - the mix of product configurations sold;
 
                                       24
<Page>
    - our ability to obtain sufficient supplies of sole or limited source
      components;
 
    - our ability to attain and maintain production volumes and quality levels
      for our products;
 
    - costs related to acquisitions of complementary products, technologies or
      businesses; and
 
    - general economic conditions, as well as those specific to the
      telecommunications, networking and related industries and other factors.
 
    As with other telecommunications product suppliers, we may recognize a
substantial portion of our revenue in a given quarter from sales booked and
shipped in the last weeks of that quarter. As a result, a delay in customer
orders is likely to result in a delay in shipments and recognition of revenue
beyond the end of a given quarter, which would have a significant impact on our
operating results for that quarter.
 
    Our operating expenses are largely based on anticipated organizational
growth and revenue trends. As a result, a delay in generating or recognizing
revenues for the reasons set forth above, or for any other reason, could cause
significant variations in our operating results. We believe that
quarter-to-quarter comparisons of our operating results are not a good
indication of our future performance. It is likely that in some future quarters,
our operating results may be below the expectations of public market analysts
and investors. In this event, the price of our common stock will probably
substantially decrease.
 
WE MAY NOT BECOME PROFITABLE.
 
    We have incurred significant losses since inception and expect to continue
to incur losses in the future. As of September 30, 2001, we had an accumulated
deficit of $716.0 million and had only recognized cumulative revenues since
inception of $186.2 million through September 30, 2001. We have not achieved
profitability on a quarterly or annual basis. As a result of our acquisition of
telecom technologies, inc., or TTI, we expect to incur significant additional
expenses for stock-based compensation which will make achieving profitability
more difficult in the near to mid-term. Our revenues may not grow and we may
never generate sufficient revenues to achieve or sustain profitability.
 
WE WILL NOT RETAIN CUSTOMERS OR ATTRACT NEW CUSTOMERS IF WE DO NOT ANTICIPATE
AND MEET SPECIFIC CUSTOMER REQUIREMENTS OR IF OUR PRODUCTS DO NOT INTEROPERATE
WITH OUR CUSTOMERS' EXISTING NETWORKS.
 
    To achieve market acceptance for our products, we must effectively
anticipate, and adapt in a timely manner to, customer requirements and offer
products and services that meet changing customer demands. Prospective customers
may require product features and capabilities that our current products do not
have. The introduction of new or enhanced products also requires that we
carefully manage the transition from older products in order to minimize
disruption in customer ordering patterns and ensure that adequate supplies of
new products can be delivered to meet anticipated customer demand. If we fail to
develop products and offer services that satisfy customer requirements, or to
effectively manage the transition from older products, our ability to create or
increase demand for our products would be seriously harmed and we may lose
current and prospective customers.
 
    Many of our customers will require that our products be designed to
interface with their existing networks, each of which may have different
specifications. Issues caused by an unanticipated lack of interoperability may
result in significant warranty, support and repair costs, divert the attention
of our engineering personnel from our hardware and software development efforts
and cause significant customer relations problems. If our products do not
interoperate with those of our customers' networks, installations could be
delayed or orders for our products could be cancelled, which would seriously
harm our gross margins and result in loss of revenues or customers.
 
                                       25
<Page>
IF WE FAIL TO COMPETE SUCCESSFULLY, OUR ABILITY TO INCREASE OUR REVENUES OR
ACHIEVE PROFITABILITY WILL BE IMPAIRED.
 
    Competition in the telecommunications market is intense. This market has
historically been dominated by large companies, such as Lucent Technologies and
Nortel Networks, both of whom are our direct competitors. We also face
competition from other large telecommunications and networking companies,
including Cisco Systems, which have entered our market by acquiring companies
that design competing products. In addition, a number of smaller and mostly
private companies have announced plans for new products that target market
opportunities similar to those we address. Because this market is rapidly
evolving, additional competitors with significant financial resources may enter
these markets and further intensify competition.
 
    Many of our current and potential competitors have significantly greater
selling and marketing, technical, manufacturing, financial and other resources,
including the ability to offer vendor-sponsored financing programs. If we are
unable or unwilling to offer vendor-sponsored financing, prospective customers
may decide to purchase products from one of our competitors that offers this
type of financing. Furthermore, some of our competitors are currently selling
significant amounts of other products to our current and prospective customers.
Our competitors' broad product portfolios coupled with already existing
relationships may cause our customers to buy our competitors' products or harm
our ability to attract new customers.
 
    To compete effectively, we must deliver innovative products that:
 
    - provide extremely high reliability and voice quality;
 
    - scale easily and efficiently;
 
    - interoperate with existing network designs and other vendors' equipment;
 
    - provide effective network management;
 
    - are accompanied by comprehensive customer support and professional
      services; and
 
    - provide a cost-effective and space-efficient solution for service
      providers.
 
    If we are unable to compete successfully against our current and future
competitors, we could experience price reductions, order cancellations, loss of
revenues and reduced gross margins.
 
WE AND OUR CONTRACT MANUFACTURERS RELY ON SINGLE OR LIMITED SOURCES FOR SUPPLY
OF SOME COMPONENTS OF OUR PRODUCTS AND IF WE FAIL TO ADEQUATELY PREDICT OUR
MANUFACTURING REQUIREMENTS OR IF OUR SUPPLY OF ANY OF THESE COMPONENTS IS
DISRUPTED, WE WILL BE UNABLE TO SHIP OUR PRODUCTS.
 
    We and our contract manufacturers currently purchase several key components
of our products, including commercial digital signal processors, from single or
limited sources. We purchase these components on a purchase order basis. If we
overestimate our component requirements, we could have excess inventory, which
would increase our costs. If we underestimate our requirements, we may not have
an adequate supply, which could interrupt manufacturing of our products and
result in delays in shipments and revenues.
 
    We currently do not have long-term supply contracts with our component
suppliers and they are not required to supply us with products for any specified
periods, in any specified quantities or at any set price, except as may be
specified in a particular purchase order. In the event of a disruption or delay
in supply, or inability to obtain products, we may not be able to develop an
alternate source in a timely manner or at favorable prices, or at all. A failure
to find acceptable alternative sources could hurt our ability to deliver
high-quality products to our customers and negatively affect our operating
margins. In addition, our reliance on our suppliers exposes us to potential
supplier production difficulties or quality variations. Our customers rely upon
our ability to meet committed delivery dates, and any disruption in the supply
of key components would seriously impact our ability to meet these
 
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dates and could result in legal action by our customers, loss of customers or
harm to our ability to attract new customers.
 
IF WE ARE NOT ABLE TO OBTAIN NECESSARY LICENSES OF THIRD-PARTY TECHNOLOGY AT
ACCEPTABLE PRICES, OR AT ALL, OUR PRODUCTS COULD BECOME OBSOLETE.
 
    We have incorporated third-party licensed technology into our current
products. From time to time, we may be required to license additional technology
from third parties to develop new products or product enhancements. Third-party
licenses may not be available or continue to be available to us on commercially
reasonable terms. The inability to maintain or re-license any third-party
licenses required in our current products or to obtain any new third-party
licenses to develop new products and product enhancements could require us to
obtain substitute technology of lower quality or performance standards or at
greater cost, and delay or prevent us from making these products or
enhancements, any of which could seriously harm the competitiveness of our
products.
 
OUR FAILURE TO MANAGE OUR EXPANSION EFFECTIVELY IN A RAPIDLY CHANGING MARKET
COULD INCREASE OUR COSTS, HARM OUR ABILITY TO SELL FUTURE PRODUCTS AND IMPAIR
OUR FUTURE GROWTH.
 
    We have expanded our operations rapidly and have hired a significant number
of employees during fiscal 2001. Our growth has placed, and our anticipated
growth will continue to place, a significant strain on our management systems
and resources. Our ability to successfully offer our products and implement our
business plan in a rapidly evolving market requires effective planning and
management processes. We expect that we will need to continue to improve our
financial, managerial and manufacturing controls and reporting systems, and will
need to continue to train and manage our worldwide workforce. If we fail to
implement adequate control systems in an efficient and timely manner, our costs
may be increased and our growth could be impaired and we may not be able to
accurately anticipate and fulfill market demand, the result of which will be a
loss of revenues and customers.
 
IF WE FAIL TO HIRE AND RETAIN NEEDED PERSONNEL, THE IMPLEMENTATION OF OUR
BUSINESS PLAN COULD SLOW OR OUR FUTURE GROWTH COULD HALT.
 
    Competition for highly skilled engineering, sales, marketing and support
personnel is intense because there are a limited number of people available with
the necessary technical skills and understanding of our market. Any failure to
attract, assimilate or retain qualified personnel to fulfill our current or
future needs could impair our growth. The support of our products requires
highly trained customer support and professional services personnel. Once we
hire them, they may require extensive training in our voice infrastructure
products. If we are unable to hire, train and retain our customer support and
professional services personnel, we may not be able to increase sales of our
products. Our future success depends upon the continued services of our
executive officers who have critical industry experience and relationships that
we rely on to implement our business plan. Most of our officers or key employees
are not bound by an employment agreement for any specific term. The loss of the
services of any of our officers or key employees could delay the development and
introduction of, and negatively impact our ability to sell, our products.
 
OUR ABILITY TO COMPETE AND OUR BUSINESS COULD BE JEOPARDIZED IF WE ARE UNABLE TO
PROTECT OUR INTELLECTUAL PROPERTY OR BECOME SUBJECT TO INTELLECTUAL PROPERTY
RIGHTS LITIGATION, WHICH COULD REQUIRE US TO INCUR SIGNIFICANT COSTS.
 
    We rely on a combination of patent, copyright, trademark and trade secret
laws and restrictions on disclosure to protect our intellectual property rights.
Despite our efforts to protect our proprietary rights, unauthorized parties may
attempt to copy or otherwise obtain and use our products or technology.
Monitoring unauthorized use of our products is difficult and we cannot be
certain that the steps we have taken will prevent unauthorized use of our
technology, particularly in foreign countries
 
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where the laws may not protect our proprietary rights as fully as in the United
States. If competitors are able to use our technology, our ability to compete
effectively could be harmed.
 
    In addition, we may become involved in litigation as a result of allegations
that we infringe the intellectual property rights of others. Any parties
asserting that our products infringe upon their proprietary rights would force
us to defend ourselves and possibly our customers or contract manufacturers
against the alleged infringement. These claims and any resulting lawsuit, if
successful, could subject us to significant liability for damages and
invalidation of our proprietary rights. Any potential intellectual property
litigation also could force us to do one or more of the following:
 
    - stop selling, incorporating or using our products that use the challenged
      intellectual property;
 
    - obtain from the owner of the infringed intellectual property right a
      license to sell or use the relevant technology, which license may not be
      available on reasonable terms, or at all; or
 
    - redesign those products that use any allegedly infringing technology.
 
    Any lawsuits regarding intellectual property rights, regardless of their
success, would be time-consuming, expensive to resolve and would divert our
management's time and attention.
 
ANY INVESTMENTS OR ACQUISITIONS WE MAKE COULD DISRUPT OUR BUSINESS AND SERIOUSLY
HARM OUR FINANCIAL CONDITION.
 
    Although we have no current agreements to do so, we intend to consider
investing in, or acquiring, complementary products, technologies or businesses.
In the event of future investments or acquisitions, we could:
 
    - issue stock that would dilute our current stockholders' percentage
      ownership;
 
    - incur debt or assume liabilities;
 
    - incur significant impairment charges related to the write-off of goodwill
      and purchased intangible assets;
 
    - incur significant amortization expenses related to purchased intangible
      assets; or
 
    - incur large and immediate write-offs for in-process research and
      development and stock-based compensation.
 
    Our integration of any acquired products, technologies or businesses will
also involve numerous risks, including:
 
    - problems and unanticipated costs associated with combining the purchased
      products, technologies or businesses;
 
    - diversion of management's attention from our core business;
 
    - adverse effects on existing business relationships with suppliers and
      customers;
 
    - risks associated with entering markets in which we have limited or no
      prior experience; and
 
    - potential loss of key employees, particularly those of the acquired
      organizations.
 
    We may be unable to successfully integrate any products, technologies,
businesses or personnel that we might acquire in the future without significant
costs or disruption to our business.
 
WE MAY FACE RISKS ASSOCIATED WITH OUR INTERNATIONAL EXPANSION THAT COULD IMPAIR
OUR ABILITY TO GROW OUR REVENUES ABROAD.
 
    Our expansion into international markets will require significant management
attention and financial resources to successfully develop direct and indirect
international sales and support channels.
 
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In addition, we may not be able to develop international market demand for our
products, which could impair our ability to grow our revenues.
 
    We have limited experience marketing and distributing our products
internationally and, to do so, we expect that we will need to develop versions
of our products that comply with local standards. Furthermore, international
operations are subject to other inherent risks, including:
 
    - greater difficulty collecting accounts receivable and longer collection
      periods;
 
    - difficulties and costs of staffing and managing international operations;
 
    - the impact of differing technical standards outside the United States;
 
    - the impact of recessions in economies outside the United States;
 
    - unexpected changes in regulatory requirements and currency exchange rates;
 
    - certification requirements;
 
    - reduced protection for intellectual property rights in some countries; and
 
    - potentially adverse tax consequences.
 
IF WE ARE SUBJECT TO UNFAIR HIRING CLAIMS, WE COULD INCUR SUBSTANTIAL COSTS IN
DEFENDING OURSELVES.
 
    Companies in our industry whose employees accept positions with competitors
frequently claim that their competitors have engaged in unfair hiring practices.
We may be subject to claims of this kind in the future as we seek to hire
qualified personnel. Those claims may result in material litigation. We could
incur substantial costs defending ourselves or our employees against those
claims, regardless of their merits. In addition, defending ourselves from those
types of claims could divert our management's attention from our operations. If
we are found to have engaged in unfair hiring practices, or our employees are
found to have violated agreements with previous employers, we may suffer a
significant disruption in our operations.
 
WE MAY NEED ADDITIONAL CAPITAL IN THE FUTURE, WHICH MAY NOT BE AVAILABLE TO US,
AND IF IT IS AVAILABLE, MAY DILUTE THE OWNERSHIP OF OUR COMMON STOCK.
 
    We may need to raise additional funds through public or private debt or
equity financings in order to:
 
    - fund ongoing operations and capital requirements;
 
    - take advantage of opportunities, including more rapid expansion or
      acquisition of complementary products, technologies or businesses;
 
    - develop new products; or
 
    - respond to competitive pressures.
 
    Any additional capital raised through the sale of equity may dilute an
investor's percentage ownership of our common stock. Furthermore, additional
financings may not be available on terms favorable to us, or at all. A failure
to obtain additional funding could prevent us from making expenditures that may
be required to grow or maintain our operations.
 
OUR STOCK PRICE HAS BEEN AND MAY CONTINUE TO BE VOLATILE.
 
    The market for technology stocks has been and will likely continue to be
extremely volatile. The following factors could cause the market price of our
common stock to fluctuate significantly:
 
    - loss of any of our major customers;
 
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<Page>
    - changes in the financial condition or anticipated capital expenditure
      purchases of any of our major customers;
 
    - the addition or departure of key personnel;
 
    - variations in our quarterly operating results;
 
    - announcements by us or our competitors of significant contracts, new
      products or product enhancements, acquisitions, distribution partnerships,
      joint ventures or capital commitments;
 
    - changes in financial estimates by securities analysts;
 
    - sales of common stock or other securities by us or by our stockholders in
      the future;
 
    - release and sale of shares of common stock currently held in escrow;
 
    - worldwide economic instability; and
 
    - any acquisitions, distribution partnerships, joint ventures or capital
      commitments.
 
    On November 8, 2001, a securities class action complaint was filed against
Sonus, two of its officers and the lead underwriters in connection with our
initial public offering. Sonus is in the process of reviewing the complaint and
anticipates it will defend this action vigorously. In the past securities class
action litigation has often been brought against companies following periods of
volatility in the market price of their securities. Securities litigation could
result in substantial costs and divert management's attention and resources,
which could seriously harm our business.
 
SALES OF A SUBSTANTIAL AMOUNT OF OUR COMMON STOCK IN THE FUTURE COULD CAUSE OUR
STOCK PRICE TO FALL.
 
    Some stockholders who acquired shares prior to our initial public offering
or in connection with our acquisition of TTI hold a substantial number of shares
of our common stock that have not yet been sold in the public market. Further,
additional shares may become available for sale upon the conversion or
redemption of convertible subordinated notes.
 
    Sales of a substantial number of shares of our common stock within a short
period of time in the future could impair our ability to raise capital through
the sale of additional debt or stock and/or cause our stock price to fall.
 
INSIDERS HAVE SUBSTANTIAL CONTROL OVER US AND COULD LIMIT YOUR ABILITY TO
INFLUENCE THE OUTCOME OF KEY TRANSACTIONS, INCLUDING A CHANGE OF CONTROL.
 
    Our executive officers, directors and entities affiliated with them in the
aggregate, beneficially own a significant portion of our outstanding common
stock. These stockholders, if acting together, would be able to influence
significantly all matters requiring approval by our stockholders, including the
election of directors and the approval of mergers or other business combination
transactions.
 
PROVISIONS OF OUR CHARTER DOCUMENTS AND DELAWARE LAW MAY HAVE ANTI-TAKEOVER
EFFECTS THAT COULD PREVENT A CHANGE OF CONTROL.
 
    Provisions of our amended and restated certificate of incorporation, our
amended and restated by-laws and Delaware law could make it more difficult for a
third party to acquire us, even if doing so would be beneficial to our
stockholders.
 

I
TEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
    We do not currently use derivative financial instruments. We generally place
our marketable security investments in high-quality credit instruments,
primarily U.S. Government obligations and corporate obligations with contractual
maturities of less than one year. We do not expect any material loss from our
marketable security investments and therefore believe that our potential
interest rate exposure is not material.
 
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PART II--OTHER INFORMATION
 

ITEM 1: LEGAL PROCEEDINGS
 
    On November 8, 2001, a purchaser of the Company's common stock filed a
complaint in the federal district court for the Southern District of New York
against the Company, two of its officers and the lead underwriters alleging
violations of the federal securities laws in connection with our initial public
offering and seeking unspecified monetary damages. The purchaser seeks to
represent a class of persons who purchased the Company's common stock between
the offering on May 24, 2000 and December 6, 2000. The complaint alleges that
the Company's registration statement contained false or misleading information
or omitted to state material facts concerning the alleged receipt of undisclosed
compensation by the underwriters and the existence of undisclosed arrangements
between underwriters and certain purchasers to make additional purchases in the
after market. The claims against the Company are asserted under Section 11 of
the Securities Act of 1933 and against the individual defendants under Sections
11 and 15 of that Act. Sonus is in the process of reviewing the complaint and
anticipates it will defend this action vigorously.
 

ITEM 2: CHANGES IN SECURITIES AND USE OF PROCEEDS
 
    On July 31, 2001, Sonus completed the acquisition of certain intellectual
property and other assets of privately-held Linguateq Incorporated. Sonus
purchased these assets from Linquateq and its secured creditors in exchange for
221,753 shares of Sonus common stock and approximately $382,000 in cash,
including acquisition expenses. This transaction was made in reliance on
Rule 506 of Regulation D, promulgated under the Securities Act, and
Section 4(2) of the Securities Act as a transaction with an accredited investor
not involving a public offering.
 

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
 
(a) Exhibits: None
 
(b) Reports on Form 8-K:
 
    Sonus filed on August 7, 2001 a Current Report on Form 8-K dated July 31,
    2001 with the SEC in connection with the purchase of certain intellectual
    property and other assets of privately-held Linguateq Incorporated.
 
    Sonus filed on October 11, 2001 a Current Report on Form 8-K dated
    September 26, 2001 with the SEC in connection with its revised business and
    financial outlook for the third and fourth quarters of fiscal 2001.
 

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

<Table>
<S>                                                    <C>  <C>
Dated: November 14, 2001                               SONUS NETWORKS, INC.
 
                                                       By:             /s/ STEPHEN J. NILL
                                                            -----------------------------------------
                                                                         Stephen J. Nill
                                                            CHIEF FINANCIAL OFFICER, VICE PRESIDENT OF
                                                             FINANCE AND ADMINISTRATION AND TREASURER
                                                                (AUTHORIZED OFFICER AND PRINCIPAL
                                                                FINANCIAL AND ACCOUNTING OFFICER)
</Table>

 
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