Exhibit 99.01

LOGO

PR Contacts:
David Gennarelli		Jennifer Jennings
Investor Relations		Media Relations
NetScreen Technologies, Inc.		NetScreen Technologies, Inc.
(408) 543-8125		(408) 543-8243
dgennarelli@netscreen.com		jjennings@netscreen.com

NetScreen Technologies, Inc. Reports Record Fiscal First Quarter

2004 Financial Results

SUNNYVALE, Calif. January 21, 2004—NetScreen Technologies, Inc. (Nasdaq: NSCN), today announced financial results for its fiscal first quarter ended December 31, 2003.

Revenue in the quarter ended December 31, 2003 was a record $81.0 million, an increase of 59 percent over revenue of $51.1 million in the same quarter last year and an increase of 13 percent over revenue of $71.6 million in the quarter ended September 30, 2003.

Net income calculated on the basis of generally accepted accounting principles (GAAP) for the quarter ended December 31, 2003 was $6.4 million, or $0.07 per basic and diluted share, compared to a net income of $3.2 million or $0.04 per basic and diluted share, in the same quarter last year. GAAP income from operations for the quarter ended December 31, 2003 was $10.9 million. GAAP net income and GAAP income from operations for the quarter ended December 31, 2003 include a non-cash charge of $7.1 million for stock-based compensation associated primarily with stock options granted prior to the company’s initial public offering and stock options assumed in conjunction with the November 2003 acquisition of Neoteris, Inc. GAAP net income and GAAP income from operations for the quarter ended December 31, 2003 also include a charge of $2.0 million for amortization of intangible assets associated with the acquisition of Neoteris and the September 2002 acquisition of OneSecure, Inc. GAAP net income in the same quarter last year includes the effect of non-cash charges of $6.1 million for stock-based compensation associated primarily with stock options granted prior to the company’s initial public offering and a charge of approximately $244,000 for amortization of intangible assets associated with the OneSecure acquisition.

Pro forma net income for the quarter ended December 31, 2003 was $12.9 million, or $0.15 per basic and $0.14 per diluted share, compared to pro forma net income of $10.9 million, or $0.14 per basic and $0.13 per diluted share, in the same quarter last year and pro forma net income of $11.9 million, or $0.15 per basic and $0.14 per diluted share, in the quarter ended September 30, 2003. Pro forma net income and pro forma net income per share information differs from the GAAP results because it excludes the effect of the non-cash stock-based compensation charges and amortization of intangibles charges and the related tax effects.

“The December quarter was very eventful for NetScreen,” said Robert Thomas, president and chief executive officer. “We closed the acquisition of Neoteris, the market leader in SSL VPN products, launched three significant new products and we had another superbly executed quarter from a financial perspective. We are very pleased with the rapid progress we’ve made in integrating Neoteris into the NetScreen family. We introduced new products such as the NetScreen-5GT appliance that has embedded antivirus protection provided through our partnership with Trend Micro, Inc., the Deep Inspection firewall, which provides application-level attack prevention and we launched NetScreen-Security Manager 2004,

our next generation central management platform. Combined, we believe the acquisition of Neoteris and the new product introductions will be key contributors to our future growth.”

Remo Canessa, NetScreen’s chief financial officer, stated, “Strong sales in the Americas and Europe in the December quarter led NetScreen to another quarter of record revenues. We were pleased to see pro forma income from operations increase to $20.0 million, 7 percent over the September quarter despite the added operating expenses incurred with Neoteris. NetScreen generated a record $30.3 million in operating cash flow in the December quarter bringing our cash and short-term investments balance as of December 31, 2003 to $379.2 million.”

Recent Company Highlights

•

Completed the acquisition of Neoteris, Inc., the market leader in the SSL VPN product category, as well as a leader in the application security gateway market.

•

Launched the NetScreen-Hardware Security Client, a low-cost, centrally managed appliance with firewall, VPN, Deep Inspection and antivirus capabilities, designed for very large deployments in a distributed large enterprise or service provider managed service.

•

Delivered embedded antivirus functionality on the NetScreen-5GT, the industry’s first appliance to tightly integrate best-of-breed firewall, VPN, intrusion prevention and gateway antivirus security functionality in a single platform.

•

Expanded the NetScreen-5 series with the NetScreen-5GT Extended, which includes functionality for smaller sites of a large enterprise that require multiple redundancy options and additional network segmentation.

•

Received Common Criteria EAL4+ certification for the NetScreen-5200 using NSA developed protection profiles, becoming the first firewall platform to achieve this certification level for these stringent profiles. Common Criteria is a standard that helps government organizations evaluate IT security products more effectively.

•

Recognized by market research firm IDC, as the only security appliance vendor among the top 5 to grow worldwide factory revenue market share year-over-year.

•

Awarded the 2003 Security Technologies Product of the Year for our Neoteris Secure Access products by industry analyst firm Frost & Sullivan.

•

Ranked as a market leader in market research firm META Group’s METAspectrum^SM for enterprise firewalls.

•

Won the coveted Editor’s Choice Award from CMP Media LLC’s Network Computing magazine, for the NetScreen-SA 5000 series SSL VPN appliances.

Outlook

The following statements are based on information the company has available today, and will be the company’s only statements of this nature until updated in the future. NetScreen assumes no duty to update this information at any time. These statements are forward-looking, and actual results may differ materially.

For the quarter ending March 31, 2004, NetScreen currently expects to achieve revenue growth of between 10 and 12 percent over the December 2003 quarter. On a GAAP basis, gross margins are expected to be between 74 and 75 percent and operating expenses are expected to increase by 13 to 15 percent in the March 2004 quarter. Pro forma gross margins are expected to be between 77 and 78 percent. In addition, the company expects pro forma operating expenses for the March 2004 quarter to increase by 12 to 14 percent over the December 2003 quarter. Pro forma operating expense and pro forma gross margin expectations exclude stock-based compensation and the amortization of intangible assets.

For the fiscal year ending September 30, 2004, NetScreen is raising its projected total revenue to range between $360 million and $375 million, representing year over year revenue growth of approximately 47 percent to 53 percent.

Conference Call

NetScreen will host a public conference call to discuss the first quarter results and current business developments, and to provide guidance for the second quarter and full year fiscal 2004 today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). A live webcast of the call can be accessed at: http://ir.netscreen.com/ireye/ir_site.zhtml?ticker=nscn&script=2100. A replay of the webcast will be available at the same web address starting approximately two hours after the conclusion of the live webcast and running through February 29, 2004.

Institutional investors and research analysts can access the live conference by calling 877-266-4218 (U.S. and Canada) or 706-679-3421 (International). A taped replay of this call will be available starting approximately two hours after the conclusion of the live call and running through January 30, 2004. The dial-in numbers for the replay are 800-642-1687 (U.S. and Canada) and 706-645-9291 (International). The call’s ID number is: 4861311.

About NetScreen

NetScreen Technologies, Inc. is a leading developer of network security and access solutions for enterprises and carriers worldwide. NetScreen’s solutions offer multiple layers of network and application-level protection in purpose-built appliances and systems that meet customers’ security, performance and total cost of ownership objectives. NetScreen is located at 805 11th Ave., Sunnyvale, CA, 94089. More information on NetScreen’s products can be found at http://www.netscreen.com or by calling toll free at 1-800-638-8296.

NetScreen, Neoteris and the NetScreen logo are trademarks of NetScreen Technologies, Inc. in the United States and other countries. Other trademarks are the property of their respective owners.

This press release contains forward-looking statements about events and circumstances that have not yet occurred. Statements under the caption “Outlook,” quotations from NetScreen executives and statements containing words such as “will,” “expects,” “believe,” “growing,” “enable,” and other statements in the future tense are forward-looking statements. Actual outcomes and results may differ materially from the expectations contained in these statements due to a number of risks and uncertainties. These risks and uncertainties include volatility in the Internet infrastructure and networking market, increased competition from established and new companies, unexpected difficulties or costs in integrating the Neoteris business with the NetScreen business, potential problems integrating other acquired companies, long sales cycles that make the timing of sales difficult to predict, and product-related risks such as timing, performance and customer acceptance of new product introductions. Detailed information about potential factors that could affect NetScreen’s business, financial condition and results of operations is included in the company’s periodic reports on Forms 10-K and 10-Q, including (without limitation) under the captions, “Factors That May Affect Our Business and Future Results of Operations and Financial Condition” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are on file with the Securities and Exchange Commission and available at the SEC’s website at www.sec.gov. The company undertakes no duty to update the information in this press release.

(tables to follow)

NETSCREEN TECHNOLOGIES, INC.

GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share amounts)

	Three Months Ended December 31,
	2003			2002
Revenues:
Product	$	64,922		$	42,451
Maintenance and service		16,095			8,619

Total revenues		81,017			51,070

Cost of revenues:
Product (A) (B)		14,778			9,283
Maintenance and service (A)		4,249			2,417

Total cost of revenues		19,027			11,700

Gross margin		61,990			39,370

Operating expenses:
Research and development (A) (B)		13,597			9,782
Sales and marketing (A) (B)		31,522			20,162
General and administrative (A)		5,970			4,191

Total operating expenses		51,089			34,135

Income from operations		10,901			5,235
Interest and other income, net		1,126			1,063

Income before taxes		12,027			6,298
Provision for income taxes		(5,653	)		(3,086	)

Net income	$	6,374		$	3,212

Basic net income per share	$	0.07		$	0.04

Shares used in computing basic net income per share		86,539			77,003

Diluted net income per share	$	0.07		$	0.04

Shares used in computing diluted net income per share		90,730			82,893

(A) Includes stock-based compensation of the following:
Cost of product revenues	$	280		$	411
Cost of maintenance and service revenues		341			277
Research and development		2,689			1,983
Sales and marketing		2,709			2,697
General and administrative		1,064			724

Total stock-based compensation	$	7,083		$	6,092

(B) Includes amortization of intangible assets of the following:
Cost of product revenues	$	1,425		$	186
Research and development		23			23
Sales and marketing		538			35

Total amortization of intangible assets	$	1,986		$	244

Certain amounts have been reclassified to conform to the current presentation.

NETSCREEN TECHNOLOGIES, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(excludes stock-based compensation, amortization of intangible assets and related tax effects)

(in thousands, except per share amounts)

	Three Months Ended December 31,
	2003			2002
Revenues:
Product	$	64,922		$	42,451
Maintenance and service		16,095			8,619

Total revenues		81,017			51,070

Cost of revenues:
Product (A) (B)		13,073			8,686
Maintenance and service (A)		3,908			2,140

Total cost of revenues		16,981			10,826

Gross margin		64,036			40,244

Operating expenses:
Research and development (A) (B)		10,885			7,776
Sales and marketing (A) (B)		28,275			17,430
General and administrative (A)		4,906			3,467

Total operating expenses		44,066			28,673

Pro forma income from operations		19,970			11,571
Interest and other income, net		1,126			1,063

Pro forma income before taxes		21,096			12,634
Provision for income taxes		(8,228	)		(1,712	)

Pro forma net income	$	12,868		$	10,922

Basic pro forma net income per share	$	0.15		$	0.14

Shares used in computing basic pro forma net income per share		86,539			77,003

Diluted pro forma net income per share	$	0.14		$	0.13

Shares used in computing diluted pro forma net income per share		90,730			82,893

(A) Excludes stock-based compensation of the following:
Cost of product revenues	$	280		$	411
Cost of maintenance and service revenues		341			277
Research and development		2,689			1,983
Sales and marketing		2,709			2,697
General and administrative		1,064			724

Total stock-based compensation	$	7,083		$	6,092

(B) Excludes amortization of intangible assets of the following:
Cost of product revenues	$	1,425		$	186
Research and development		23			23
Sales and marketing		538			35

Total amortization of intangible assets	$	1,986		$	244

Certain amounts have been reclassified to conform to the current presentation.

NETSCREEN TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

	December 31, 2003		September 30, 2003
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	73,597	$	53,914
Short-term investments		305,622		286,738
Restricted cash		38		38
Accounts receivable, net		37,722		35,874
Refundable income taxes		48		943
Inventories		2,924		2,501
Deferred income taxes		27,220		28,368
Other current assets		6,048		6,613

Total current assets		453,219		414,989
Property and equipment		11,370		10,667
Restricted cash		139		823
Long-term deferred income taxes		1,439		5,640
Intangible assets		38,370		4,781
Goodwill		250,420		54,271
Other assets		762		552

Total assets	$	755,719	$	491,723

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	9,804	$	8,230
Accrued expenses		24,281		17,204
Accrued compensation		12,963		12,234
Deferred revenue		63,750		54,364
Current portion of restructuring liabilities		1,019		648
Current portion of debt and capital lease obligations		—		72

Total current liabilities		111,817		92,752
Restructuring liabilities, less current portion		3,754		2,042

Total liabilities		115,571		94,794
Total stockholders’ equity		640,148		396,929

Total liabilities and stockholders’ equity	$	755,719	$	491,723

Certain amounts have been reclassified to conform to the current presentation.

###

NetScreen Technologies, Inc.

Condensed Consolidated Statements of Operations

GAAP Reconciliation to Pro Forma

Three Months Ended December 31, 2003

(in thousands, except per share amounts and percentages)

	GAAP			GAAP to Pro Forma Adjustments			Pro Forma
Revenues:
Product	$	64,922					$	64,922
Maintenance and service		16,095						16,095

Total revenues		81,017						81,017

Cost of revenues:
					(1,425	) [a]
Product		14,778			(280	) [b]		13,073
Maintenance and service		4,249			(341	) [b]		3,908

Total cost of revenues		19,027			(2,046	)		16,981

Gross margin		61,990			2,046			64,036

Operating expenses:
					(23	) [a]
Research & development		13,597			(2,689	) [b]		10,885
					(538	) [a]
Sales & marketing		31,522			(2,709	) [b]		28,275
General and administrative		5,970			(1,064	) [b]		4,906

Total operating expenses		51,089			(7,023	)		44,066

Income from operations		10,901			9,069			19,970
Interest & other income, net		1,126			—			1,126

Income before income taxes		12,027			9,069			21,096
Provision for income taxes		(5,653	)		(2,575	) [c]		(8,228	)

Net income	$	6,374		$	6,494		$	12,868

Basic net income per share	$	0.07					$	0.15

Shares used in computing basic net income per share		86,539						86,539

Diluted net income per share	$	0.07					$	0.14

Shares used in computing diluted net income per share		90,730						90,730

Certain measures as a percentage of revenue:
Product gross margin		77.2	%					79.9	%
Maintenance and service gross margin		73.6	%					75.7	%
Gross Margin		76.5	%					79.0	%
Research & development expenses		16.8	%					13.4	%
Sales & marketing expenses		38.9	%					34.9	%
General and administrative expenses		7.4	%					6.1	%
Operating expenses		63.1	%					54.4	%
Income from operations		13.5	%					24.6	%


Notes:	[a]	reflects amortization of intangible assets
	[b]	reflects amortization of stock-based compensation
	[c]	primarily reflects the GAAP adjustments to provision for income taxes related to stock based compensation and amortization of intangible assets.

NetScreen Technologies, Inc.

Condensed Consolidated Statements of Operations

GAAP Reconciliation to Pro Forma

Three Months Ended September 30, 2003

(in thousands, except per share amounts and percentages)

	GAAP			GAAP to Pro Forma Adjustments			Pro Forma
Revenues:
Product	$	57,391					$	57,391
Maintenance and service		14,199						14,199

Total revenues		71,590						71,590

Cost of revenues:
					(186	) [a]
Product		11,796			(355	) [b]		11,255
Maintenance and service		3,858			(269	) [b]		3,589

Total cost of revenues		15,654			(810	)		14,844

Gross margin		55,936			810			56,746

Operating expenses:
					(23	) [a]
Research & development		11,924			(1,777	) [b]		10,124
					(35	) [a]
Sales & marketing		26,005			(2,516	) [b]		23,454
General and administrative		5,241			(683	) [b]		4,558

Total operating expenses		43,170			(5,034	)		38,136

Income from operations		12,766			5,844			18,610
Interest & other income, net		1,028			—			1,028

Income before income taxes		13,794			5,844			19,638
Provision for income taxes		(6,647	)		(1,062	) [c]		(7,709	)

Net income	$	7,147		$	4,782		$	11,929

Basic net income per share	$	0.09					$	0.15

Shares used in computing basic net income per share		81,125						81,125

Diluted net income per share	$	0.08					$	0.14

Shares used in computing diluted net income per share		86,390						86,390

Certain measures as a percentage of revenue:
Product gross margin		79.4	%					80.4	%
Maintenance and service gross margin		72.8	%					74.7	%
Gross Margin		78.1	%					79.3	%
Research & development expenses		16.7	%					14.1	%
Sales & marketing expenses		36.3	%					32.8	%
General and administrative expenses		7.3	%					6.4	%
Operating expenses		60.3	%					53.3	%
Income from operations		17.8	%					26.0	%


Notes:	[a]	reflects amortization of intangible assets
	[b]	reflects amortization of stock-based compensation
	[c]	primarily reflects the GAAP adjustments to provision for income taxes related to stock based compensation and amortization of intangible assets.

NetScreen Technologies, Inc.

Condensed Consolidated Statements of Operations

GAAP Reconciliation to Pro Forma

Three Months Ended December 31, 2002

(in thousands, except per share amounts and percentages)

	GAAP			GAAP to Pro Forma Adjustments			Pro Forma
Revenues:
Product	$	42,451					$	42,451
Maintenance and service		8,619						8,619

Total revenues		51,070						51,070

Cost of revenues:
					(186	) [a]
Product		9,283			(411	) [b]		8,686
Maintenance and service		2,417			(277	) [b]		2,140

Total cost of revenues		11,700			(874	)		10,826

Gross margin		39,370			874			40,244

Operating expenses:
					(23	) [a]
Research & development		9,782			(1,983	) [b]		7,776
					(35	) [a]
Sales & marketing		20,162			(2,697	) [b]		17,430
General and administrative		4,191			(724	) [b]		3,467

Total operating expenses		34,135			(5,462	)		28,673

Income from operations		5,235			6,336			11,571
Interest & other income, net		1,063			—			1,063

Income before income taxes		6,298			6,336			12,634
Provision for income taxes		(3,086	)		1,374	[c]		(1,712	)

Net income	$	3,212		$	7,710		$	10,922

Basic net income per share	$	0.04					$	0.14

		77,003						77,003

Shares used in computing basic net income per share
Diluted net income per share	$	0.04					$	0.13

Shares used in computing diluted net income per share		82,893						82,893

Certain measures as a percentage of revenue:
Product gross margin		78.1	%					79.5	%
Maintenance and service gross margin		72.0	%					75.2	%
Gross Margin		77.1	%					78.8	%
Research & development expenses		19.2	%					15.2	%
Sales & marketing expenses		39.5	%					34.1	%
General and administrative expenses		8.2	%					6.8	%
Operating expenses		66.8	%					56.1	%
Income from operations		10.3	%					22.7	%

Notes:	[a]	reflects amortization of intangible assets
	[b]	reflects amortization of stock-based compensation
	[c]	primarily reflects the GAAP adjustments to provision for income taxes related to stock based compensation and amortization of intangible assets.

NETSCREEN TECHNOLOGIES, INC.

Estimated Incremental Operating Expenses Related to the Acquisition of Neoteris, Inc. (3)

(in thousands)

	Three Months Ended December 31, 2003
	Low (1)		High (2)
	$		$
GAAP incremental operating expense	6,872		7,272
Stock based compensation	(2,370	)	(2,370	)
Amortization of intangible assets	(502	)	(502	)

Pro forma incremental operating expenses	4,000		4,400

(1)	Low guidance reflects the high end of the estimated incremental operating expenses.

(2)	High guidance reflects the low end of the estimated incremental operating expenses.

(3)	Acquisition closed on November 14, 2003.

# # #

NETSCREEN TECHNOLOGIES, INC.

Guidance Summary

Reconciliation of GAAP to Pro Forma Gross Margin and Operating Expense (Unaudited)

( in thousands, except percentages)

	Three Months Ending Mar. 31, 2004
	Low (1)				High (2)
	$		% of Revenue		$		% of Revenue
Revenues—GAAP and Pro forma	89,119		100.0	%	90,739		100.0	%

GAAP gross margin	66,212		74.3	%	68,366		75.3	%
Stock based compensation	558		0.6	%	558		0.6	%
Amortization of intangible assets	1,852		2.1	%	1,852		2.0	%

Pro Forma gross margin	68,622		77.0	%	70,776		78.0	%

GAAP operating expenses	58,527		65.7	%	57,646		63.5	%
Stock based compensation	(7,229	)	-8.1	%	(7,229	)	-8.0	%
Amortization of intangible assets	(1,063	)	-1.2	%	(1,063	)	-1.2	%

Pro forma operating expenses	50,235		56.4	%	49,354		54.4	%

Notes:

(1)	Low guidance reflects 10% revenue increase over the prior quarter, 77% pro forma gross margin and 14% pro forma operating expense increase over the prior quarter.

(2)	High guidance reflects 12% revenue increase over the prior quarter, 78% pro forma gross margin and 12% pro forma operating expense increase over the prior quarter.

# # #

NETSCREEN TECHNOLOGIES INC 8-K