Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Ciena Reports Fiscal First Quarter 2024 Financial Results By: Ciena Corporation via Business Wire March 07, 2024 at 07:00 AM EST Ciena® Corporation (NYSE: CIEN), a networking systems, services and software company, today announced unaudited financial results for its fiscal first quarter ended January 27, 2024. Q1 Revenue: $1.04 billion Q1 Net Income per Share: $0.34 GAAP; $0.66 adjusted (non-GAAP) Share Repurchases: Repurchased approximately 691 thousand shares of common stock for an aggregate price of $32.0 million during the quarter "We delivered solid fiscal first quarter results, including strong profitability, as we continue to expand our relationships and gain share with cloud providers," said Gary Smith, president and CEO of Ciena. "While we remain very confident in the strength and durability of bandwidth demand as a long-term driver of our business, it is taking longer than expected for service providers to work through high levels of inventory." For fiscal first quarter 2024, Ciena reported revenue of $1.04 billion as compared to $1.06 billion for the fiscal first quarter 2023. Ciena's GAAP net income for the fiscal first quarter 2024 was $49.5 million, or $0.34 per diluted common share, which compares to a GAAP net income of $76.2 million, or $0.51 per diluted common share, for the fiscal first quarter 2023. Ciena's adjusted (non-GAAP) net income for the fiscal first quarter 2024 was $96.8 million, or $0.66 per diluted common share, which compares to an adjusted (non-GAAP) net income of $95.6 million, or $0.64 per diluted common share, for the fiscal first quarter 2023. Fiscal First Quarter 2024 Performance Summary The tables below (in millions, except percentage data) provide comparisons of certain quarterly results to the prior year. Appendices A and B set forth reconciliations between the GAAP and adjusted (non-GAAP) measures contained in this release. GAAP Results (unaudited) Q1 Q1 Period Change FY 2024 FY 2023 Y-T-Y* Revenue $ 1,037.7 $ 1,056.5 (1.8 )% Gross margin 45.0 % 43.2 % 1.8 % Operating expense $ 382.3 $ 370.7 3.1 % Operating margin 8.2 % 8.1 % 0.1 % Non-GAAP Results (unaudited) Q1 Q1 Period Change FY 2024 FY 2023 Y-T-Y* Revenue $ 1,037.7 $ 1,056.5 (1.8 )% Adj. gross margin 45.7 % 43.7 % 2.0 % Adj. operating expense $ 336.8 $ 329.3 2.3 % Adj. operating margin 13.2 % 12.6 % 0.6 % Adj. EBITDA $ 160.0 $ 155.1 3.2 % * Denotes % change, or in the case of margin, absolute change Revenue by Segment (unaudited) Q1 FY 2024 Q1 FY 2023 Revenue %** Revenue %** Networking Platforms Optical Networking $ 695.8 67.1 $ 735.6 69.6 Routing and Switching 111.4 10.7 119.5 11.3 Total Networking Platforms 807.2 77.8 855.1 80.9 Platform Software and Services 89.7 8.6 73.4 6.9 Blue Planet Automation Software and Services 14.0 1.4 15.4 1.5 Global Services Maintenance Support and Training 74.1 7.1 67.9 6.4 Installation and Deployment 42.7 4.1 34.6 3.3 Consulting and Network Design 10.0 1.0 10.1 1.0 Total Global Services 126.8 12.2 112.6 10.7 Total $ 1,037.7 100.0 $ 1,056.5 100.0 ** Denotes % of total revenue Additional Performance Metrics for Fiscal First Quarter 2024 Revenue by Geographic Region (unaudited) Q1 FY 2024 Q1 FY 2023 Revenue % ** Revenue % ** Americas $ 718.2 69.2 $ 765.1 72.4 Europe, Middle East and Africa 207.4 20.0 152.8 14.5 Asia Pacific 112.1 10.8 138.6 13.1 Total $ 1,037.7 100.0 $ 1,056.5 100.0 ** Denotes % of total revenue Two customers represented 10%-plus of revenue combining for a total of 26.5% of revenue Cash and investments totaled $1.48 billion Cash flow from operations totaled $266.1 million Average days' sales outstanding (DSOs) were 88 Accounts receivable, net balance was $865.2 million Unbilled contract asset, net balance was $151.6 million Inventories totaled $984.9 million, including: Raw materials: $571.7 million Work in process: $60.6 million Finished goods: $369.8 million Deferred cost of sales: $36.8 million Reserve for excess and obsolescence: $(54.0) million Product inventory turns were 1.9 Headcount totaled 8,647 Supplemental Materials and Live Web Broadcast of Unaudited Fiscal First Quarter 2024 Results Today, Thursday, March 7, 2024, in conjunction with this announcement, Ciena has posted to the Quarterly Results page of the Investor Relations section of its website certain related supporting materials for its unaudited fiscal first quarter 2024 results. Ciena's management will also host a discussion today with investors and financial analysts that will include the Company's outlook. The live audio web broadcast beginning at 8:30 a.m. Eastern will be accessible via www.ciena.com. An archived replay of the live broadcast will be available shortly following its conclusion on the Investor Relations page of Ciena's website. Notes to Investors Forward-Looking Statements. You are encouraged to review the Investors section of our website, where we routinely post press releases, Securities and Exchange Commission ("SEC") filings, recent news, financial results, supplemental financial information, and other announcements. From time to time we exclusively post material information to this website along with other disclosure channels that we use. This press release contains certain forward-looking statements that involve risks and uncertainties. These statements are based on current expectations, forecasts, assumptions and other information available to the Company as of the date hereof. Forward-looking statements include statements regarding Ciena's expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. Forward-looking statements in this release include: "We delivered solid fiscal first quarter results, including strong profitability, as we continue to expand our relationships and gain share with cloud providers. While we remain very confident in the strength and durability of bandwidth demand as a long-term driver of our business, it is taking longer than expected for service providers to work through high levels of inventory." Ciena's actual results, performance or events may differ materially from these forward-looking statements made or implied due to a number of risks and uncertainties relating to Ciena's business, including: the effect of broader economic and market conditions on our customers, their spending and their businesses and markets; our ability to execute our business and growth strategies; the impact of macroeconomic conditions and global supply chain constraints or disruptions including increased supply costs and lead times; the impact of the introduction of new technologies by us or our competitors; seasonality and the timing and size of customer orders, their delivery dates and our ability to recognize revenue relating to such sales; the level of competitive pressure we encounter; the product, customer and geographic mix of sales within the period; changes in foreign currency exchange rates; factors beyond our control such as natural disasters, climate change, acts of war or terrorism, geopolitical tensions or events, including but not limited to the ongoing conflicts between Ukraine and Russia, and Israel and Hamas, and public health emergencies or epidemics, including the COVID-19 pandemic; changes in tax or trade regulations, including the imposition of tariffs, duties or efforts to withdraw from or materially modify international trade agreements; cyberattacks, data breaches or other security incidents involving our enterprise network environment or our products; regulatory changes, litigation involving our intellectual property or government investigations; and the other risk factors disclosed in Ciena’s periodic reports filed with the Securities and Exchange Commission (SEC) including its Annual Report on Form 10-K filed with the SEC on December 15, 2023 and included in its Quarterly Report on Form 10-Q for the first quarter of fiscal 2024 to be filed with the SEC. Ciena assumes no obligation to update any forward-looking information included in this press release. Non-GAAP Presentation of Quarterly and Annual Results. This release includes non-GAAP measures of Ciena's gross profit, operating expense, income from operations, earnings before interest, tax, depreciation and amortization (EBITDA), Adjusted EBITDA, and measures of net income and net income per share. In evaluating the operating performance of Ciena's business, management excludes certain charges and credits that are required by GAAP. These items share one or more of the following characteristics: they are unusual and Ciena does not expect them to recur in the ordinary course of its business; they do not involve the expenditure of cash; they are unrelated to the ongoing operation of the business in the ordinary course; or their magnitude and timing is largely outside of Ciena's control. Management believes that the non-GAAP measures below provide management and investors useful information and meaningful insight to the operating performance of the business. The presentation of these non-GAAP financial measures should be considered in addition to Ciena's GAAP results and these measures are not intended to be a substitute for the financial information prepared and presented in accordance with GAAP. Ciena's non-GAAP measures and the related adjustments may differ from non-GAAP measures used by other companies and should only be used to evaluate Ciena's results of operations in conjunction with our corresponding GAAP results. To the extent not previously disclosed in a prior Ciena financial results press release, Appendices A and B to this press release set forth a complete GAAP to non-GAAP reconciliation of the non-GAAP measures contained in this release. About Ciena. Ciena (NYSE: CIEN) is a global leader in networking systems, services, and software. We build the most adaptive networks in the industry, enabling customers to anticipate and meet ever-increasing digital demands. For three-plus decades, Ciena has brought our humanity to our relentless pursuit of innovation. Prioritizing collaborative relationships with our customers, partners, and communities, we create flexible, open, and sustainable networks that better serve all users—today and into the future. For updates on Ciena, follow us on LinkedIn, X, the Ciena Insights blog, or visit www.ciena.com. CIENA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Quarter Ended January 27, January 28, 2024 2023 Revenue: Products $ 835,777 $ 877,715 Services 201,932 178,806 Total revenue 1,037,709 1,056,521 Cost of goods sold: Products 466,472 500,337 Services 104,275 100,238 Total cost of goods sold 570,747 600,575 Gross profit 466,962 455,946 Operating expenses: Research and development 187,269 181,730 Selling and marketing 128,158 123,807 General and administrative 54,683 50,896 Significant asset impairments and restructuring costs 4,971 4,298 Amortization of intangible assets 7,252 7,441 Acquisition and integration costs — 2,558 Total operating expenses 382,333 370,730 Income from operations 84,629 85,216 Interest and other income, net 10,650 31,973 Interest expense (23,776 ) (15,870 ) Income before income taxes 71,503 101,319 Provision for income taxes 21,956 25,078 Net income $ 49,547 $ 76,241 Net Income per Common Share Basic net income per common share $ 0.34 $ 0.51 Diluted net income per potential common share $ 0.34 $ 0.51 Weighted average basic common shares outstanding 145,291 149,081 Weighted average dilutive potential common shares outstanding 1 145,848 149,551 1 Weighted average dilutive potential common shares outstanding used in calculating GAAP diluted net income per potential common share includes the following number of shares underlying certain stock option and stock unit awards: (i) 0.6 million for the first quarter of fiscal 2024, and (ii) 0.5 million for the first quarter of fiscal 2023. CIENA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (unaudited) January 27, 2024 October 28, 2023 ASSETS Current assets: Cash and cash equivalents $ 1,264,751 $ 1,010,618 Short-term investments 106,678 104,753 Accounts receivable, net 865,239 1,003,876 Inventories, net 984,886 1,050,838 Prepaid expenses and other 387,193 405,694 Total current assets 3,608,747 3,575,779 Long-term investments 103,862 134,278 Equipment, building, furniture and fixtures, net 280,357 280,147 Operating lease right-of-use assets 35,679 35,140 Goodwill 445,084 444,765 Other intangible assets, net 195,682 205,627 Deferred tax asset, net 814,098 809,306 Other long-term assets 109,701 116,453 Total assets $ 5,593,210 $ 5,601,495 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 316,094 $ 317,828 Accrued liabilities and other short-term obligations 329,910 431,419 Deferred revenue 166,714 154,419 Operating lease liabilities 16,888 16,655 Current portion of long-term debt 11,700 11,700 Total current liabilities 841,306 932,021 Long-term deferred revenue 76,556 74,041 Other long-term obligations 176,313 170,407 Long-term operating lease liabilities 32,418 33,259 Long-term debt, net 1,543,118 1,543,406 Total liabilities 2,669,711 2,753,134 Stockholders’ equity: Preferred stock – par value $0.01; 20,000,000 shares authorized; zero shares issued and outstanding — — Common stock – par value $0.01; 290,000,000 shares authorized; 144,946,510 and 144,829,938 shares issued and outstanding 1,449 1,448 Additional paid-in capital 6,274,773 6,262,083 Accumulated other comprehensive loss (24,867 ) (37,767 ) Accumulated deficit (3,327,856 ) (3,377,403 ) Total stockholders’ equity 2,923,499 2,848,361 Total liabilities and stockholders’ equity $ 5,593,210 $ 5,601,495 CIENA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Quarter Ended January 27, January 28, 2024 2023 Cash flows provided by (used in) operating activities: Net income $ 49,547 $ 76,241 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements 22,808 22,208 Share-based compensation expense 37,827 30,512 Amortization of intangible assets 10,016 10,325 Deferred taxes (4,368 ) (7,247 ) Provision for inventory excess and obsolescence 10,350 5,503 Provision for warranty 4,841 8,230 Gain on cost method equity investments, net — (26,455 ) Other 5,051 7,325 Changes in assets and liabilities: Accounts receivable 135,160 (133,067 ) Inventories 56,157 (235,059 ) Prepaid expenses and other 17,116 4,667 Operating lease right-of-use assets 3,084 3,891 Accounts payable, accruals and other obligations (90,915 ) (56,979 ) Deferred revenue 14,022 29,459 Short and long-term operating lease liabilities (4,620 ) (5,193 ) Net cash provided by (used in) operating activities 266,076 (265,639 ) Cash flows provided by (used in) investing activities: Payments for equipment, furniture, fixtures and intellectual property (16,599 ) (30,030 ) Purchases of investments (21,213 ) (35,411 ) Proceeds from sales and maturities of investments 53,674 123,249 Settlement of foreign currency forward contracts, net 2,271 (4,001 ) Acquisition of business, net of cash acquired — (230,048 ) Net cash provided by (used in) investing activities 18,133 (176,241 ) Cash flows provided by (used in) financing activities: Proceeds from issuance of term loan, net — 497,500 Payment of long term debt — (1,732 ) Payment of debt issuance costs (2,402 ) (3,996 ) Payment of finance lease obligations (981 ) (913 ) Shares repurchased for tax withholdings on vesting of stock unit awards (10,076 ) (12,980 ) Repurchases of common stock - repurchase program (38,195 ) — Proceeds from issuance of common stock 16,934 14,315 Net cash provided by (used in) financing activities (34,720 ) 492,194 Effect of exchange rate changes on cash, cash equivalents and restricted cash 4,646 9,884 Net increase in cash, cash equivalents and restricted cash 254,135 60,198 Cash, cash equivalents and restricted cash at beginning of period 1,010,786 994,378 Cash, cash equivalents and restricted cash at end of period $ 1,264,921 $ 1,054,576 Supplemental disclosure of cash flow information Cash paid during the period for interest, net $ 18,582 $ 10,536 Cash paid during the period for income taxes, net $ 8,260 $ 8,383 Operating lease payments $ 5,080 $ 5,638 Non-cash investing and financing activities Purchase of equipment in accounts payable $ 4,225 $ 7,354 Repurchase of common stock in accrued liabilities from repurchase program $ 3,110 $ — Operating right-of-use assets subject to lease liability $ 3,498 $ 6,244 Gain on cost method equity investments, net $ — $ 26,455 APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Measurements (in thousands, except per share data) (unaudited) Quarter Ended January 27, January 28, 2024 2023 Gross Profit Reconciliation (GAAP/non-GAAP) GAAP gross profit $ 466,962 $ 455,946 Share-based compensation-products 1,318 1,051 Share-based compensation-services 3,020 2,297 Amortization of intangible assets 2,764 2,883 Total adjustments related to gross profit 7,102 6,231 Adjusted (non-GAAP) gross profit $ 474,064 $ 462,177 Adjusted (non-GAAP) gross profit percentage 45.7 % 43.7 % Operating Expense Reconciliation (GAAP/non-GAAP) GAAP operating expense $ 382,333 $ 370,730 Share-based compensation-research and development 12,880 9,234 Share-based compensation-sales and marketing 10,305 8,424 Share-based compensation-general and administrative 10,079 9,468 Significant asset impairments and restructuring costs 4,971 4,298 Amortization of intangible assets 7,252 7,441 Acquisition and integration costs — 2,558 Total adjustments related to operating expense 45,487 41,423 Adjusted (non-GAAP) operating expense $ 336,846 $ 329,307 Income from Operations Reconciliation (GAAP/non-GAAP) GAAP income from operations $ 84,629 $ 85,216 Total adjustments related to gross profit 7,102 6,231 Total adjustments related to operating expense 45,487 41,423 Total adjustments related to income from operations 52,589 47,654 Adjusted (non-GAAP) income from operations $ 137,218 $ 132,870 Adjusted (non-GAAP) operating margin percentage 13.2 % 12.6 % Net Income Reconciliation (GAAP/non-GAAP) GAAP net income $ 49,547 $ 76,241 Exclude GAAP provision for income taxes 21,956 25,078 Income before income taxes 71,503 101,319 Total adjustments related to income from operations 52,589 47,654 Gain on cost method equity investments, net — (26,455 ) Adjusted income before income taxes 124,092 122,518 Non-GAAP tax provision on adjusted income before income taxes 27,300 26,954 Adjusted (non-GAAP) net income $ 96,792 $ 95,564 Weighted average basic common shares outstanding 145,291 149,081 Weighted average dilutive potential common shares outstanding 1 145,848 149,551 Net Income per Common Share GAAP diluted net income per potential common share $ 0.34 $ 0.51 Adjusted (non-GAAP) diluted net income per potential common share $ 0.66 $ 0.64 1 Weighted average dilutive potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share includes the following number of shares underlying certain stock option and stock unit awards: (i) 0.6 million for the first quarter of fiscal 2024; and (ii) 0.5 million for the first quarter of fiscal 2023. APPENDIX B - Calculation of EBITDA and Adjusted EBITDA (unaudited) (in thousands) (unaudited) Quarter Ended January 27, January 28, 2024 2023 Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) Net income (GAAP) $ 49,547 $ 76,241 Add: Interest expense 23,776 15,870 Less: Interest and other income, net 10,650 31,973 Add: Provision for income taxes 21,956 25,078 Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements 22,808 22,208 Add: Amortization of intangible assets 10,016 10,325 EBITDA $ 117,453 $ 117,749 Add: Share-based compensation cost 37,602 30,474 Add: Significant asset impairments and restructuring costs 4,971 4,298 Add: Acquisition and integration costs — 2,558 Adjusted EBITDA $ 160,026 $ 155,079 * * * The adjusted (non-GAAP) measures above and their reconciliation to Ciena's GAAP results for the periods presented reflect adjustments relating to the following items: Share-based compensation - a non-cash expense incurred in accordance with share-based compensation accounting guidance. Significant asset impairments and restructuring costs - costs incurred as a result of restructuring activities taken to align resources with perceived market opportunities, the redesign of business processes and restructuring certain real estate facilities. Amortization of intangible assets - a non-cash expense arising from the acquisition of intangible assets, principally developed technologies and customer-related intangibles, that Ciena is required to amortize over an expected useful life. Acquisition and integration costs - primarily consist of financial, legal and accounting advisors' costs and employment-related costs related to Ciena's acquisitions in fiscal 2023. Gain on cost method equity investments, net - reflects changes in the carrying value of certain cost method equity investments due to triggering events. Non-GAAP tax provision - consists of current and deferred income tax expense commensurate with the level of adjusted income before income taxes and utilizes a current, blended U.S. and foreign statutory annual tax rate of 22.0% for both the fiscal first quarter 2024 and the fiscal first quarter 2023. This rate may be subject to change in the future, including as a result of changes in tax policy or tax strategy. View source version on businesswire.com: https://www.businesswire.com/news/home/20240306451513/en/Contacts Press Contact: Jamie Moody Ciena Corporation +1 (410) 694-5761 pr@ciena.com Investor Contact: Gregg Lampf Ciena Corporation +1 (410) 694-5700 ir@ciena.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Ciena Reports Fiscal First Quarter 2024 Financial Results By: Ciena Corporation via Business Wire March 07, 2024 at 07:00 AM EST Ciena® Corporation (NYSE: CIEN), a networking systems, services and software company, today announced unaudited financial results for its fiscal first quarter ended January 27, 2024. Q1 Revenue: $1.04 billion Q1 Net Income per Share: $0.34 GAAP; $0.66 adjusted (non-GAAP) Share Repurchases: Repurchased approximately 691 thousand shares of common stock for an aggregate price of $32.0 million during the quarter "We delivered solid fiscal first quarter results, including strong profitability, as we continue to expand our relationships and gain share with cloud providers," said Gary Smith, president and CEO of Ciena. "While we remain very confident in the strength and durability of bandwidth demand as a long-term driver of our business, it is taking longer than expected for service providers to work through high levels of inventory." For fiscal first quarter 2024, Ciena reported revenue of $1.04 billion as compared to $1.06 billion for the fiscal first quarter 2023. Ciena's GAAP net income for the fiscal first quarter 2024 was $49.5 million, or $0.34 per diluted common share, which compares to a GAAP net income of $76.2 million, or $0.51 per diluted common share, for the fiscal first quarter 2023. Ciena's adjusted (non-GAAP) net income for the fiscal first quarter 2024 was $96.8 million, or $0.66 per diluted common share, which compares to an adjusted (non-GAAP) net income of $95.6 million, or $0.64 per diluted common share, for the fiscal first quarter 2023. Fiscal First Quarter 2024 Performance Summary The tables below (in millions, except percentage data) provide comparisons of certain quarterly results to the prior year. Appendices A and B set forth reconciliations between the GAAP and adjusted (non-GAAP) measures contained in this release. GAAP Results (unaudited) Q1 Q1 Period Change FY 2024 FY 2023 Y-T-Y* Revenue $ 1,037.7 $ 1,056.5 (1.8 )% Gross margin 45.0 % 43.2 % 1.8 % Operating expense $ 382.3 $ 370.7 3.1 % Operating margin 8.2 % 8.1 % 0.1 % Non-GAAP Results (unaudited) Q1 Q1 Period Change FY 2024 FY 2023 Y-T-Y* Revenue $ 1,037.7 $ 1,056.5 (1.8 )% Adj. gross margin 45.7 % 43.7 % 2.0 % Adj. operating expense $ 336.8 $ 329.3 2.3 % Adj. operating margin 13.2 % 12.6 % 0.6 % Adj. EBITDA $ 160.0 $ 155.1 3.2 % * Denotes % change, or in the case of margin, absolute change Revenue by Segment (unaudited) Q1 FY 2024 Q1 FY 2023 Revenue %** Revenue %** Networking Platforms Optical Networking $ 695.8 67.1 $ 735.6 69.6 Routing and Switching 111.4 10.7 119.5 11.3 Total Networking Platforms 807.2 77.8 855.1 80.9 Platform Software and Services 89.7 8.6 73.4 6.9 Blue Planet Automation Software and Services 14.0 1.4 15.4 1.5 Global Services Maintenance Support and Training 74.1 7.1 67.9 6.4 Installation and Deployment 42.7 4.1 34.6 3.3 Consulting and Network Design 10.0 1.0 10.1 1.0 Total Global Services 126.8 12.2 112.6 10.7 Total $ 1,037.7 100.0 $ 1,056.5 100.0 ** Denotes % of total revenue Additional Performance Metrics for Fiscal First Quarter 2024 Revenue by Geographic Region (unaudited) Q1 FY 2024 Q1 FY 2023 Revenue % ** Revenue % ** Americas $ 718.2 69.2 $ 765.1 72.4 Europe, Middle East and Africa 207.4 20.0 152.8 14.5 Asia Pacific 112.1 10.8 138.6 13.1 Total $ 1,037.7 100.0 $ 1,056.5 100.0 ** Denotes % of total revenue Two customers represented 10%-plus of revenue combining for a total of 26.5% of revenue Cash and investments totaled $1.48 billion Cash flow from operations totaled $266.1 million Average days' sales outstanding (DSOs) were 88 Accounts receivable, net balance was $865.2 million Unbilled contract asset, net balance was $151.6 million Inventories totaled $984.9 million, including: Raw materials: $571.7 million Work in process: $60.6 million Finished goods: $369.8 million Deferred cost of sales: $36.8 million Reserve for excess and obsolescence: $(54.0) million Product inventory turns were 1.9 Headcount totaled 8,647 Supplemental Materials and Live Web Broadcast of Unaudited Fiscal First Quarter 2024 Results Today, Thursday, March 7, 2024, in conjunction with this announcement, Ciena has posted to the Quarterly Results page of the Investor Relations section of its website certain related supporting materials for its unaudited fiscal first quarter 2024 results. Ciena's management will also host a discussion today with investors and financial analysts that will include the Company's outlook. The live audio web broadcast beginning at 8:30 a.m. Eastern will be accessible via www.ciena.com. An archived replay of the live broadcast will be available shortly following its conclusion on the Investor Relations page of Ciena's website. Notes to Investors Forward-Looking Statements. You are encouraged to review the Investors section of our website, where we routinely post press releases, Securities and Exchange Commission ("SEC") filings, recent news, financial results, supplemental financial information, and other announcements. From time to time we exclusively post material information to this website along with other disclosure channels that we use. This press release contains certain forward-looking statements that involve risks and uncertainties. These statements are based on current expectations, forecasts, assumptions and other information available to the Company as of the date hereof. Forward-looking statements include statements regarding Ciena's expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. Forward-looking statements in this release include: "We delivered solid fiscal first quarter results, including strong profitability, as we continue to expand our relationships and gain share with cloud providers. While we remain very confident in the strength and durability of bandwidth demand as a long-term driver of our business, it is taking longer than expected for service providers to work through high levels of inventory." Ciena's actual results, performance or events may differ materially from these forward-looking statements made or implied due to a number of risks and uncertainties relating to Ciena's business, including: the effect of broader economic and market conditions on our customers, their spending and their businesses and markets; our ability to execute our business and growth strategies; the impact of macroeconomic conditions and global supply chain constraints or disruptions including increased supply costs and lead times; the impact of the introduction of new technologies by us or our competitors; seasonality and the timing and size of customer orders, their delivery dates and our ability to recognize revenue relating to such sales; the level of competitive pressure we encounter; the product, customer and geographic mix of sales within the period; changes in foreign currency exchange rates; factors beyond our control such as natural disasters, climate change, acts of war or terrorism, geopolitical tensions or events, including but not limited to the ongoing conflicts between Ukraine and Russia, and Israel and Hamas, and public health emergencies or epidemics, including the COVID-19 pandemic; changes in tax or trade regulations, including the imposition of tariffs, duties or efforts to withdraw from or materially modify international trade agreements; cyberattacks, data breaches or other security incidents involving our enterprise network environment or our products; regulatory changes, litigation involving our intellectual property or government investigations; and the other risk factors disclosed in Ciena’s periodic reports filed with the Securities and Exchange Commission (SEC) including its Annual Report on Form 10-K filed with the SEC on December 15, 2023 and included in its Quarterly Report on Form 10-Q for the first quarter of fiscal 2024 to be filed with the SEC. Ciena assumes no obligation to update any forward-looking information included in this press release. Non-GAAP Presentation of Quarterly and Annual Results. This release includes non-GAAP measures of Ciena's gross profit, operating expense, income from operations, earnings before interest, tax, depreciation and amortization (EBITDA), Adjusted EBITDA, and measures of net income and net income per share. In evaluating the operating performance of Ciena's business, management excludes certain charges and credits that are required by GAAP. These items share one or more of the following characteristics: they are unusual and Ciena does not expect them to recur in the ordinary course of its business; they do not involve the expenditure of cash; they are unrelated to the ongoing operation of the business in the ordinary course; or their magnitude and timing is largely outside of Ciena's control. Management believes that the non-GAAP measures below provide management and investors useful information and meaningful insight to the operating performance of the business. The presentation of these non-GAAP financial measures should be considered in addition to Ciena's GAAP results and these measures are not intended to be a substitute for the financial information prepared and presented in accordance with GAAP. Ciena's non-GAAP measures and the related adjustments may differ from non-GAAP measures used by other companies and should only be used to evaluate Ciena's results of operations in conjunction with our corresponding GAAP results. To the extent not previously disclosed in a prior Ciena financial results press release, Appendices A and B to this press release set forth a complete GAAP to non-GAAP reconciliation of the non-GAAP measures contained in this release. About Ciena. Ciena (NYSE: CIEN) is a global leader in networking systems, services, and software. We build the most adaptive networks in the industry, enabling customers to anticipate and meet ever-increasing digital demands. For three-plus decades, Ciena has brought our humanity to our relentless pursuit of innovation. Prioritizing collaborative relationships with our customers, partners, and communities, we create flexible, open, and sustainable networks that better serve all users—today and into the future. For updates on Ciena, follow us on LinkedIn, X, the Ciena Insights blog, or visit www.ciena.com. CIENA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Quarter Ended January 27, January 28, 2024 2023 Revenue: Products $ 835,777 $ 877,715 Services 201,932 178,806 Total revenue 1,037,709 1,056,521 Cost of goods sold: Products 466,472 500,337 Services 104,275 100,238 Total cost of goods sold 570,747 600,575 Gross profit 466,962 455,946 Operating expenses: Research and development 187,269 181,730 Selling and marketing 128,158 123,807 General and administrative 54,683 50,896 Significant asset impairments and restructuring costs 4,971 4,298 Amortization of intangible assets 7,252 7,441 Acquisition and integration costs — 2,558 Total operating expenses 382,333 370,730 Income from operations 84,629 85,216 Interest and other income, net 10,650 31,973 Interest expense (23,776 ) (15,870 ) Income before income taxes 71,503 101,319 Provision for income taxes 21,956 25,078 Net income $ 49,547 $ 76,241 Net Income per Common Share Basic net income per common share $ 0.34 $ 0.51 Diluted net income per potential common share $ 0.34 $ 0.51 Weighted average basic common shares outstanding 145,291 149,081 Weighted average dilutive potential common shares outstanding 1 145,848 149,551 1 Weighted average dilutive potential common shares outstanding used in calculating GAAP diluted net income per potential common share includes the following number of shares underlying certain stock option and stock unit awards: (i) 0.6 million for the first quarter of fiscal 2024, and (ii) 0.5 million for the first quarter of fiscal 2023. CIENA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (unaudited) January 27, 2024 October 28, 2023 ASSETS Current assets: Cash and cash equivalents $ 1,264,751 $ 1,010,618 Short-term investments 106,678 104,753 Accounts receivable, net 865,239 1,003,876 Inventories, net 984,886 1,050,838 Prepaid expenses and other 387,193 405,694 Total current assets 3,608,747 3,575,779 Long-term investments 103,862 134,278 Equipment, building, furniture and fixtures, net 280,357 280,147 Operating lease right-of-use assets 35,679 35,140 Goodwill 445,084 444,765 Other intangible assets, net 195,682 205,627 Deferred tax asset, net 814,098 809,306 Other long-term assets 109,701 116,453 Total assets $ 5,593,210 $ 5,601,495 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 316,094 $ 317,828 Accrued liabilities and other short-term obligations 329,910 431,419 Deferred revenue 166,714 154,419 Operating lease liabilities 16,888 16,655 Current portion of long-term debt 11,700 11,700 Total current liabilities 841,306 932,021 Long-term deferred revenue 76,556 74,041 Other long-term obligations 176,313 170,407 Long-term operating lease liabilities 32,418 33,259 Long-term debt, net 1,543,118 1,543,406 Total liabilities 2,669,711 2,753,134 Stockholders’ equity: Preferred stock – par value $0.01; 20,000,000 shares authorized; zero shares issued and outstanding — — Common stock – par value $0.01; 290,000,000 shares authorized; 144,946,510 and 144,829,938 shares issued and outstanding 1,449 1,448 Additional paid-in capital 6,274,773 6,262,083 Accumulated other comprehensive loss (24,867 ) (37,767 ) Accumulated deficit (3,327,856 ) (3,377,403 ) Total stockholders’ equity 2,923,499 2,848,361 Total liabilities and stockholders’ equity $ 5,593,210 $ 5,601,495 CIENA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Quarter Ended January 27, January 28, 2024 2023 Cash flows provided by (used in) operating activities: Net income $ 49,547 $ 76,241 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements 22,808 22,208 Share-based compensation expense 37,827 30,512 Amortization of intangible assets 10,016 10,325 Deferred taxes (4,368 ) (7,247 ) Provision for inventory excess and obsolescence 10,350 5,503 Provision for warranty 4,841 8,230 Gain on cost method equity investments, net — (26,455 ) Other 5,051 7,325 Changes in assets and liabilities: Accounts receivable 135,160 (133,067 ) Inventories 56,157 (235,059 ) Prepaid expenses and other 17,116 4,667 Operating lease right-of-use assets 3,084 3,891 Accounts payable, accruals and other obligations (90,915 ) (56,979 ) Deferred revenue 14,022 29,459 Short and long-term operating lease liabilities (4,620 ) (5,193 ) Net cash provided by (used in) operating activities 266,076 (265,639 ) Cash flows provided by (used in) investing activities: Payments for equipment, furniture, fixtures and intellectual property (16,599 ) (30,030 ) Purchases of investments (21,213 ) (35,411 ) Proceeds from sales and maturities of investments 53,674 123,249 Settlement of foreign currency forward contracts, net 2,271 (4,001 ) Acquisition of business, net of cash acquired — (230,048 ) Net cash provided by (used in) investing activities 18,133 (176,241 ) Cash flows provided by (used in) financing activities: Proceeds from issuance of term loan, net — 497,500 Payment of long term debt — (1,732 ) Payment of debt issuance costs (2,402 ) (3,996 ) Payment of finance lease obligations (981 ) (913 ) Shares repurchased for tax withholdings on vesting of stock unit awards (10,076 ) (12,980 ) Repurchases of common stock - repurchase program (38,195 ) — Proceeds from issuance of common stock 16,934 14,315 Net cash provided by (used in) financing activities (34,720 ) 492,194 Effect of exchange rate changes on cash, cash equivalents and restricted cash 4,646 9,884 Net increase in cash, cash equivalents and restricted cash 254,135 60,198 Cash, cash equivalents and restricted cash at beginning of period 1,010,786 994,378 Cash, cash equivalents and restricted cash at end of period $ 1,264,921 $ 1,054,576 Supplemental disclosure of cash flow information Cash paid during the period for interest, net $ 18,582 $ 10,536 Cash paid during the period for income taxes, net $ 8,260 $ 8,383 Operating lease payments $ 5,080 $ 5,638 Non-cash investing and financing activities Purchase of equipment in accounts payable $ 4,225 $ 7,354 Repurchase of common stock in accrued liabilities from repurchase program $ 3,110 $ — Operating right-of-use assets subject to lease liability $ 3,498 $ 6,244 Gain on cost method equity investments, net $ — $ 26,455 APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Measurements (in thousands, except per share data) (unaudited) Quarter Ended January 27, January 28, 2024 2023 Gross Profit Reconciliation (GAAP/non-GAAP) GAAP gross profit $ 466,962 $ 455,946 Share-based compensation-products 1,318 1,051 Share-based compensation-services 3,020 2,297 Amortization of intangible assets 2,764 2,883 Total adjustments related to gross profit 7,102 6,231 Adjusted (non-GAAP) gross profit $ 474,064 $ 462,177 Adjusted (non-GAAP) gross profit percentage 45.7 % 43.7 % Operating Expense Reconciliation (GAAP/non-GAAP) GAAP operating expense $ 382,333 $ 370,730 Share-based compensation-research and development 12,880 9,234 Share-based compensation-sales and marketing 10,305 8,424 Share-based compensation-general and administrative 10,079 9,468 Significant asset impairments and restructuring costs 4,971 4,298 Amortization of intangible assets 7,252 7,441 Acquisition and integration costs — 2,558 Total adjustments related to operating expense 45,487 41,423 Adjusted (non-GAAP) operating expense $ 336,846 $ 329,307 Income from Operations Reconciliation (GAAP/non-GAAP) GAAP income from operations $ 84,629 $ 85,216 Total adjustments related to gross profit 7,102 6,231 Total adjustments related to operating expense 45,487 41,423 Total adjustments related to income from operations 52,589 47,654 Adjusted (non-GAAP) income from operations $ 137,218 $ 132,870 Adjusted (non-GAAP) operating margin percentage 13.2 % 12.6 % Net Income Reconciliation (GAAP/non-GAAP) GAAP net income $ 49,547 $ 76,241 Exclude GAAP provision for income taxes 21,956 25,078 Income before income taxes 71,503 101,319 Total adjustments related to income from operations 52,589 47,654 Gain on cost method equity investments, net — (26,455 ) Adjusted income before income taxes 124,092 122,518 Non-GAAP tax provision on adjusted income before income taxes 27,300 26,954 Adjusted (non-GAAP) net income $ 96,792 $ 95,564 Weighted average basic common shares outstanding 145,291 149,081 Weighted average dilutive potential common shares outstanding 1 145,848 149,551 Net Income per Common Share GAAP diluted net income per potential common share $ 0.34 $ 0.51 Adjusted (non-GAAP) diluted net income per potential common share $ 0.66 $ 0.64 1 Weighted average dilutive potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share includes the following number of shares underlying certain stock option and stock unit awards: (i) 0.6 million for the first quarter of fiscal 2024; and (ii) 0.5 million for the first quarter of fiscal 2023. APPENDIX B - Calculation of EBITDA and Adjusted EBITDA (unaudited) (in thousands) (unaudited) Quarter Ended January 27, January 28, 2024 2023 Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) Net income (GAAP) $ 49,547 $ 76,241 Add: Interest expense 23,776 15,870 Less: Interest and other income, net 10,650 31,973 Add: Provision for income taxes 21,956 25,078 Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements 22,808 22,208 Add: Amortization of intangible assets 10,016 10,325 EBITDA $ 117,453 $ 117,749 Add: Share-based compensation cost 37,602 30,474 Add: Significant asset impairments and restructuring costs 4,971 4,298 Add: Acquisition and integration costs — 2,558 Adjusted EBITDA $ 160,026 $ 155,079 * * * The adjusted (non-GAAP) measures above and their reconciliation to Ciena's GAAP results for the periods presented reflect adjustments relating to the following items: Share-based compensation - a non-cash expense incurred in accordance with share-based compensation accounting guidance. Significant asset impairments and restructuring costs - costs incurred as a result of restructuring activities taken to align resources with perceived market opportunities, the redesign of business processes and restructuring certain real estate facilities. Amortization of intangible assets - a non-cash expense arising from the acquisition of intangible assets, principally developed technologies and customer-related intangibles, that Ciena is required to amortize over an expected useful life. Acquisition and integration costs - primarily consist of financial, legal and accounting advisors' costs and employment-related costs related to Ciena's acquisitions in fiscal 2023. Gain on cost method equity investments, net - reflects changes in the carrying value of certain cost method equity investments due to triggering events. Non-GAAP tax provision - consists of current and deferred income tax expense commensurate with the level of adjusted income before income taxes and utilizes a current, blended U.S. and foreign statutory annual tax rate of 22.0% for both the fiscal first quarter 2024 and the fiscal first quarter 2023. This rate may be subject to change in the future, including as a result of changes in tax policy or tax strategy. View source version on businesswire.com: https://www.businesswire.com/news/home/20240306451513/en/Contacts Press Contact: Jamie Moody Ciena Corporation +1 (410) 694-5761 pr@ciena.com Investor Contact: Gregg Lampf Ciena Corporation +1 (410) 694-5700 ir@ciena.com
Ciena® Corporation (NYSE: CIEN), a networking systems, services and software company, today announced unaudited financial results for its fiscal first quarter ended January 27, 2024. Q1 Revenue: $1.04 billion Q1 Net Income per Share: $0.34 GAAP; $0.66 adjusted (non-GAAP) Share Repurchases: Repurchased approximately 691 thousand shares of common stock for an aggregate price of $32.0 million during the quarter "We delivered solid fiscal first quarter results, including strong profitability, as we continue to expand our relationships and gain share with cloud providers," said Gary Smith, president and CEO of Ciena. "While we remain very confident in the strength and durability of bandwidth demand as a long-term driver of our business, it is taking longer than expected for service providers to work through high levels of inventory." For fiscal first quarter 2024, Ciena reported revenue of $1.04 billion as compared to $1.06 billion for the fiscal first quarter 2023. Ciena's GAAP net income for the fiscal first quarter 2024 was $49.5 million, or $0.34 per diluted common share, which compares to a GAAP net income of $76.2 million, or $0.51 per diluted common share, for the fiscal first quarter 2023. Ciena's adjusted (non-GAAP) net income for the fiscal first quarter 2024 was $96.8 million, or $0.66 per diluted common share, which compares to an adjusted (non-GAAP) net income of $95.6 million, or $0.64 per diluted common share, for the fiscal first quarter 2023. Fiscal First Quarter 2024 Performance Summary The tables below (in millions, except percentage data) provide comparisons of certain quarterly results to the prior year. Appendices A and B set forth reconciliations between the GAAP and adjusted (non-GAAP) measures contained in this release. GAAP Results (unaudited) Q1 Q1 Period Change FY 2024 FY 2023 Y-T-Y* Revenue $ 1,037.7 $ 1,056.5 (1.8 )% Gross margin 45.0 % 43.2 % 1.8 % Operating expense $ 382.3 $ 370.7 3.1 % Operating margin 8.2 % 8.1 % 0.1 % Non-GAAP Results (unaudited) Q1 Q1 Period Change FY 2024 FY 2023 Y-T-Y* Revenue $ 1,037.7 $ 1,056.5 (1.8 )% Adj. gross margin 45.7 % 43.7 % 2.0 % Adj. operating expense $ 336.8 $ 329.3 2.3 % Adj. operating margin 13.2 % 12.6 % 0.6 % Adj. EBITDA $ 160.0 $ 155.1 3.2 % * Denotes % change, or in the case of margin, absolute change Revenue by Segment (unaudited) Q1 FY 2024 Q1 FY 2023 Revenue %** Revenue %** Networking Platforms Optical Networking $ 695.8 67.1 $ 735.6 69.6 Routing and Switching 111.4 10.7 119.5 11.3 Total Networking Platforms 807.2 77.8 855.1 80.9 Platform Software and Services 89.7 8.6 73.4 6.9 Blue Planet Automation Software and Services 14.0 1.4 15.4 1.5 Global Services Maintenance Support and Training 74.1 7.1 67.9 6.4 Installation and Deployment 42.7 4.1 34.6 3.3 Consulting and Network Design 10.0 1.0 10.1 1.0 Total Global Services 126.8 12.2 112.6 10.7 Total $ 1,037.7 100.0 $ 1,056.5 100.0 ** Denotes % of total revenue Additional Performance Metrics for Fiscal First Quarter 2024 Revenue by Geographic Region (unaudited) Q1 FY 2024 Q1 FY 2023 Revenue % ** Revenue % ** Americas $ 718.2 69.2 $ 765.1 72.4 Europe, Middle East and Africa 207.4 20.0 152.8 14.5 Asia Pacific 112.1 10.8 138.6 13.1 Total $ 1,037.7 100.0 $ 1,056.5 100.0 ** Denotes % of total revenue Two customers represented 10%-plus of revenue combining for a total of 26.5% of revenue Cash and investments totaled $1.48 billion Cash flow from operations totaled $266.1 million Average days' sales outstanding (DSOs) were 88 Accounts receivable, net balance was $865.2 million Unbilled contract asset, net balance was $151.6 million Inventories totaled $984.9 million, including: Raw materials: $571.7 million Work in process: $60.6 million Finished goods: $369.8 million Deferred cost of sales: $36.8 million Reserve for excess and obsolescence: $(54.0) million Product inventory turns were 1.9 Headcount totaled 8,647 Supplemental Materials and Live Web Broadcast of Unaudited Fiscal First Quarter 2024 Results Today, Thursday, March 7, 2024, in conjunction with this announcement, Ciena has posted to the Quarterly Results page of the Investor Relations section of its website certain related supporting materials for its unaudited fiscal first quarter 2024 results. Ciena's management will also host a discussion today with investors and financial analysts that will include the Company's outlook. The live audio web broadcast beginning at 8:30 a.m. Eastern will be accessible via www.ciena.com. An archived replay of the live broadcast will be available shortly following its conclusion on the Investor Relations page of Ciena's website. Notes to Investors Forward-Looking Statements. You are encouraged to review the Investors section of our website, where we routinely post press releases, Securities and Exchange Commission ("SEC") filings, recent news, financial results, supplemental financial information, and other announcements. From time to time we exclusively post material information to this website along with other disclosure channels that we use. This press release contains certain forward-looking statements that involve risks and uncertainties. These statements are based on current expectations, forecasts, assumptions and other information available to the Company as of the date hereof. Forward-looking statements include statements regarding Ciena's expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. Forward-looking statements in this release include: "We delivered solid fiscal first quarter results, including strong profitability, as we continue to expand our relationships and gain share with cloud providers. While we remain very confident in the strength and durability of bandwidth demand as a long-term driver of our business, it is taking longer than expected for service providers to work through high levels of inventory." Ciena's actual results, performance or events may differ materially from these forward-looking statements made or implied due to a number of risks and uncertainties relating to Ciena's business, including: the effect of broader economic and market conditions on our customers, their spending and their businesses and markets; our ability to execute our business and growth strategies; the impact of macroeconomic conditions and global supply chain constraints or disruptions including increased supply costs and lead times; the impact of the introduction of new technologies by us or our competitors; seasonality and the timing and size of customer orders, their delivery dates and our ability to recognize revenue relating to such sales; the level of competitive pressure we encounter; the product, customer and geographic mix of sales within the period; changes in foreign currency exchange rates; factors beyond our control such as natural disasters, climate change, acts of war or terrorism, geopolitical tensions or events, including but not limited to the ongoing conflicts between Ukraine and Russia, and Israel and Hamas, and public health emergencies or epidemics, including the COVID-19 pandemic; changes in tax or trade regulations, including the imposition of tariffs, duties or efforts to withdraw from or materially modify international trade agreements; cyberattacks, data breaches or other security incidents involving our enterprise network environment or our products; regulatory changes, litigation involving our intellectual property or government investigations; and the other risk factors disclosed in Ciena’s periodic reports filed with the Securities and Exchange Commission (SEC) including its Annual Report on Form 10-K filed with the SEC on December 15, 2023 and included in its Quarterly Report on Form 10-Q for the first quarter of fiscal 2024 to be filed with the SEC. Ciena assumes no obligation to update any forward-looking information included in this press release. Non-GAAP Presentation of Quarterly and Annual Results. This release includes non-GAAP measures of Ciena's gross profit, operating expense, income from operations, earnings before interest, tax, depreciation and amortization (EBITDA), Adjusted EBITDA, and measures of net income and net income per share. In evaluating the operating performance of Ciena's business, management excludes certain charges and credits that are required by GAAP. These items share one or more of the following characteristics: they are unusual and Ciena does not expect them to recur in the ordinary course of its business; they do not involve the expenditure of cash; they are unrelated to the ongoing operation of the business in the ordinary course; or their magnitude and timing is largely outside of Ciena's control. Management believes that the non-GAAP measures below provide management and investors useful information and meaningful insight to the operating performance of the business. The presentation of these non-GAAP financial measures should be considered in addition to Ciena's GAAP results and these measures are not intended to be a substitute for the financial information prepared and presented in accordance with GAAP. Ciena's non-GAAP measures and the related adjustments may differ from non-GAAP measures used by other companies and should only be used to evaluate Ciena's results of operations in conjunction with our corresponding GAAP results. To the extent not previously disclosed in a prior Ciena financial results press release, Appendices A and B to this press release set forth a complete GAAP to non-GAAP reconciliation of the non-GAAP measures contained in this release. About Ciena. Ciena (NYSE: CIEN) is a global leader in networking systems, services, and software. We build the most adaptive networks in the industry, enabling customers to anticipate and meet ever-increasing digital demands. For three-plus decades, Ciena has brought our humanity to our relentless pursuit of innovation. Prioritizing collaborative relationships with our customers, partners, and communities, we create flexible, open, and sustainable networks that better serve all users—today and into the future. For updates on Ciena, follow us on LinkedIn, X, the Ciena Insights blog, or visit www.ciena.com. CIENA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Quarter Ended January 27, January 28, 2024 2023 Revenue: Products $ 835,777 $ 877,715 Services 201,932 178,806 Total revenue 1,037,709 1,056,521 Cost of goods sold: Products 466,472 500,337 Services 104,275 100,238 Total cost of goods sold 570,747 600,575 Gross profit 466,962 455,946 Operating expenses: Research and development 187,269 181,730 Selling and marketing 128,158 123,807 General and administrative 54,683 50,896 Significant asset impairments and restructuring costs 4,971 4,298 Amortization of intangible assets 7,252 7,441 Acquisition and integration costs — 2,558 Total operating expenses 382,333 370,730 Income from operations 84,629 85,216 Interest and other income, net 10,650 31,973 Interest expense (23,776 ) (15,870 ) Income before income taxes 71,503 101,319 Provision for income taxes 21,956 25,078 Net income $ 49,547 $ 76,241 Net Income per Common Share Basic net income per common share $ 0.34 $ 0.51 Diluted net income per potential common share $ 0.34 $ 0.51 Weighted average basic common shares outstanding 145,291 149,081 Weighted average dilutive potential common shares outstanding 1 145,848 149,551 1 Weighted average dilutive potential common shares outstanding used in calculating GAAP diluted net income per potential common share includes the following number of shares underlying certain stock option and stock unit awards: (i) 0.6 million for the first quarter of fiscal 2024, and (ii) 0.5 million for the first quarter of fiscal 2023. CIENA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (unaudited) January 27, 2024 October 28, 2023 ASSETS Current assets: Cash and cash equivalents $ 1,264,751 $ 1,010,618 Short-term investments 106,678 104,753 Accounts receivable, net 865,239 1,003,876 Inventories, net 984,886 1,050,838 Prepaid expenses and other 387,193 405,694 Total current assets 3,608,747 3,575,779 Long-term investments 103,862 134,278 Equipment, building, furniture and fixtures, net 280,357 280,147 Operating lease right-of-use assets 35,679 35,140 Goodwill 445,084 444,765 Other intangible assets, net 195,682 205,627 Deferred tax asset, net 814,098 809,306 Other long-term assets 109,701 116,453 Total assets $ 5,593,210 $ 5,601,495 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 316,094 $ 317,828 Accrued liabilities and other short-term obligations 329,910 431,419 Deferred revenue 166,714 154,419 Operating lease liabilities 16,888 16,655 Current portion of long-term debt 11,700 11,700 Total current liabilities 841,306 932,021 Long-term deferred revenue 76,556 74,041 Other long-term obligations 176,313 170,407 Long-term operating lease liabilities 32,418 33,259 Long-term debt, net 1,543,118 1,543,406 Total liabilities 2,669,711 2,753,134 Stockholders’ equity: Preferred stock – par value $0.01; 20,000,000 shares authorized; zero shares issued and outstanding — — Common stock – par value $0.01; 290,000,000 shares authorized; 144,946,510 and 144,829,938 shares issued and outstanding 1,449 1,448 Additional paid-in capital 6,274,773 6,262,083 Accumulated other comprehensive loss (24,867 ) (37,767 ) Accumulated deficit (3,327,856 ) (3,377,403 ) Total stockholders’ equity 2,923,499 2,848,361 Total liabilities and stockholders’ equity $ 5,593,210 $ 5,601,495 CIENA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Quarter Ended January 27, January 28, 2024 2023 Cash flows provided by (used in) operating activities: Net income $ 49,547 $ 76,241 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements 22,808 22,208 Share-based compensation expense 37,827 30,512 Amortization of intangible assets 10,016 10,325 Deferred taxes (4,368 ) (7,247 ) Provision for inventory excess and obsolescence 10,350 5,503 Provision for warranty 4,841 8,230 Gain on cost method equity investments, net — (26,455 ) Other 5,051 7,325 Changes in assets and liabilities: Accounts receivable 135,160 (133,067 ) Inventories 56,157 (235,059 ) Prepaid expenses and other 17,116 4,667 Operating lease right-of-use assets 3,084 3,891 Accounts payable, accruals and other obligations (90,915 ) (56,979 ) Deferred revenue 14,022 29,459 Short and long-term operating lease liabilities (4,620 ) (5,193 ) Net cash provided by (used in) operating activities 266,076 (265,639 ) Cash flows provided by (used in) investing activities: Payments for equipment, furniture, fixtures and intellectual property (16,599 ) (30,030 ) Purchases of investments (21,213 ) (35,411 ) Proceeds from sales and maturities of investments 53,674 123,249 Settlement of foreign currency forward contracts, net 2,271 (4,001 ) Acquisition of business, net of cash acquired — (230,048 ) Net cash provided by (used in) investing activities 18,133 (176,241 ) Cash flows provided by (used in) financing activities: Proceeds from issuance of term loan, net — 497,500 Payment of long term debt — (1,732 ) Payment of debt issuance costs (2,402 ) (3,996 ) Payment of finance lease obligations (981 ) (913 ) Shares repurchased for tax withholdings on vesting of stock unit awards (10,076 ) (12,980 ) Repurchases of common stock - repurchase program (38,195 ) — Proceeds from issuance of common stock 16,934 14,315 Net cash provided by (used in) financing activities (34,720 ) 492,194 Effect of exchange rate changes on cash, cash equivalents and restricted cash 4,646 9,884 Net increase in cash, cash equivalents and restricted cash 254,135 60,198 Cash, cash equivalents and restricted cash at beginning of period 1,010,786 994,378 Cash, cash equivalents and restricted cash at end of period $ 1,264,921 $ 1,054,576 Supplemental disclosure of cash flow information Cash paid during the period for interest, net $ 18,582 $ 10,536 Cash paid during the period for income taxes, net $ 8,260 $ 8,383 Operating lease payments $ 5,080 $ 5,638 Non-cash investing and financing activities Purchase of equipment in accounts payable $ 4,225 $ 7,354 Repurchase of common stock in accrued liabilities from repurchase program $ 3,110 $ — Operating right-of-use assets subject to lease liability $ 3,498 $ 6,244 Gain on cost method equity investments, net $ — $ 26,455 APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Measurements (in thousands, except per share data) (unaudited) Quarter Ended January 27, January 28, 2024 2023 Gross Profit Reconciliation (GAAP/non-GAAP) GAAP gross profit $ 466,962 $ 455,946 Share-based compensation-products 1,318 1,051 Share-based compensation-services 3,020 2,297 Amortization of intangible assets 2,764 2,883 Total adjustments related to gross profit 7,102 6,231 Adjusted (non-GAAP) gross profit $ 474,064 $ 462,177 Adjusted (non-GAAP) gross profit percentage 45.7 % 43.7 % Operating Expense Reconciliation (GAAP/non-GAAP) GAAP operating expense $ 382,333 $ 370,730 Share-based compensation-research and development 12,880 9,234 Share-based compensation-sales and marketing 10,305 8,424 Share-based compensation-general and administrative 10,079 9,468 Significant asset impairments and restructuring costs 4,971 4,298 Amortization of intangible assets 7,252 7,441 Acquisition and integration costs — 2,558 Total adjustments related to operating expense 45,487 41,423 Adjusted (non-GAAP) operating expense $ 336,846 $ 329,307 Income from Operations Reconciliation (GAAP/non-GAAP) GAAP income from operations $ 84,629 $ 85,216 Total adjustments related to gross profit 7,102 6,231 Total adjustments related to operating expense 45,487 41,423 Total adjustments related to income from operations 52,589 47,654 Adjusted (non-GAAP) income from operations $ 137,218 $ 132,870 Adjusted (non-GAAP) operating margin percentage 13.2 % 12.6 % Net Income Reconciliation (GAAP/non-GAAP) GAAP net income $ 49,547 $ 76,241 Exclude GAAP provision for income taxes 21,956 25,078 Income before income taxes 71,503 101,319 Total adjustments related to income from operations 52,589 47,654 Gain on cost method equity investments, net — (26,455 ) Adjusted income before income taxes 124,092 122,518 Non-GAAP tax provision on adjusted income before income taxes 27,300 26,954 Adjusted (non-GAAP) net income $ 96,792 $ 95,564 Weighted average basic common shares outstanding 145,291 149,081 Weighted average dilutive potential common shares outstanding 1 145,848 149,551 Net Income per Common Share GAAP diluted net income per potential common share $ 0.34 $ 0.51 Adjusted (non-GAAP) diluted net income per potential common share $ 0.66 $ 0.64 1 Weighted average dilutive potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share includes the following number of shares underlying certain stock option and stock unit awards: (i) 0.6 million for the first quarter of fiscal 2024; and (ii) 0.5 million for the first quarter of fiscal 2023. APPENDIX B - Calculation of EBITDA and Adjusted EBITDA (unaudited) (in thousands) (unaudited) Quarter Ended January 27, January 28, 2024 2023 Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) Net income (GAAP) $ 49,547 $ 76,241 Add: Interest expense 23,776 15,870 Less: Interest and other income, net 10,650 31,973 Add: Provision for income taxes 21,956 25,078 Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements 22,808 22,208 Add: Amortization of intangible assets 10,016 10,325 EBITDA $ 117,453 $ 117,749 Add: Share-based compensation cost 37,602 30,474 Add: Significant asset impairments and restructuring costs 4,971 4,298 Add: Acquisition and integration costs — 2,558 Adjusted EBITDA $ 160,026 $ 155,079 * * * The adjusted (non-GAAP) measures above and their reconciliation to Ciena's GAAP results for the periods presented reflect adjustments relating to the following items: Share-based compensation - a non-cash expense incurred in accordance with share-based compensation accounting guidance. Significant asset impairments and restructuring costs - costs incurred as a result of restructuring activities taken to align resources with perceived market opportunities, the redesign of business processes and restructuring certain real estate facilities. Amortization of intangible assets - a non-cash expense arising from the acquisition of intangible assets, principally developed technologies and customer-related intangibles, that Ciena is required to amortize over an expected useful life. Acquisition and integration costs - primarily consist of financial, legal and accounting advisors' costs and employment-related costs related to Ciena's acquisitions in fiscal 2023. Gain on cost method equity investments, net - reflects changes in the carrying value of certain cost method equity investments due to triggering events. Non-GAAP tax provision - consists of current and deferred income tax expense commensurate with the level of adjusted income before income taxes and utilizes a current, blended U.S. and foreign statutory annual tax rate of 22.0% for both the fiscal first quarter 2024 and the fiscal first quarter 2023. This rate may be subject to change in the future, including as a result of changes in tax policy or tax strategy. View source version on businesswire.com: https://www.businesswire.com/news/home/20240306451513/en/
Press Contact: Jamie Moody Ciena Corporation +1 (410) 694-5761 pr@ciena.com Investor Contact: Gregg Lampf Ciena Corporation +1 (410) 694-5700 ir@ciena.com