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 Second Quarter 2024 Financial Results By: Ciena Corporation via Business Wire June 06, 2024 at 07:00 AM EDT Ciena® Corporation (NYSE: CIEN), a networking systems, services and software company, today announced unaudited financial results for its fiscal second quarter ended April 27, 2024. Q2 Revenue: $910.8 million Q2 Net Income (Loss) per Share: $(0.12) GAAP; $0.27 adjusted (non-GAAP) Share Repurchases: Repurchased approximately 1.1 million shares of common stock for an aggregate price of $57.0 million during the quarter "Our fiscal second quarter performance underscores the strength in our business amid a challenging near-term environment as service providers continue to work through existing inventory," said Gary Smith, president and CEO, Ciena. “With continued robust growth in bandwidth demand, we remain focused on extending our leadership in optical as a foundation for expanding our addressable market.” For the fiscal second quarter 2024, Ciena reported revenue of $910.8 million as compared to $1.13 billion for the fiscal second quarter 2023. Ciena's GAAP net loss for the fiscal second quarter 2024 was $(16.8) million, or $(0.12) per diluted common share, which compares to a GAAP net income of $57.7 million, or $0.38 per diluted common share, for the fiscal second quarter 2023. Ciena's adjusted (non-GAAP) net income for the fiscal second quarter 2024 was $39.4 million, or $0.27 per diluted common share, which compares to an adjusted (non-GAAP) net income of $110.4 million, or $0.74 per diluted common share, for the fiscal second quarter 2023. Fiscal Second 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) Q2 Q2 Period Change FY 2024 FY 2023 Y-T-Y* Revenue $ 910.8 $ 1,132.7 (19.6 )% Gross margin 42.7 % 43.1 % (0.4 )% Operating expense $ 392.6 $ 384.9 2.0 % Operating margin (0.4 )% 9.1 % (9.5 )% Non-GAAP Results (unaudited) Q2 Q2 Period Change FY 2024 FY 2023 Y-T-Y* Revenue $ 910.8 $ 1,132.7 (19.6 )% Adj. gross margin 43.5 % 43.7 % (0.2 )% Adj. operating expense $ 333.9 $ 338.1 (1.2 )% Adj. operating margin 6.8 % 13.8 % (7.0 )% Adj. EBITDA $ 85.8 $ 180.6 (52.5 )% * Denotes % change, or in the case of margin, absolute change Revenue by Segment (unaudited) Q2 FY 2024 Q2 FY 2023 Revenue %** Revenue %** Networking Platforms Optical Networking $ 560.2 61.5 $ 784.5 69.3 Routing and Switching 116.1 12.7 130.4 11.5 Total Networking Platforms 676.3 74.2 914.9 80.8 Platform Software and Services 85.4 9.4 69.4 6.1 Blue Planet Automation Software and Services 14.4 1.6 20.6 1.8 Global Services Maintenance Support and Training 77.4 8.5 73.2 6.5 Installation and Deployment 43.8 4.8 39.5 3.5 Consulting and Network Design 13.5 1.5 15.1 1.3 Total Global Services 134.7 14.8 127.8 11.3 Total $ 910.8 100.0 $ 1,132.7 100.0 ** Denotes % of total revenue Additional Performance Metrics for Fiscal Second Quarter 2024 Revenue by Geographic Region (unaudited) Q2 FY 2024 Q2 FY 2023 Revenue % ** Revenue % ** Americas $ 662.9 72.8 $ 794.4 70.1 Europe, Middle East and Africa 155.8 17.1 173.4 15.3 Asia Pacific 92.1 10.1 164.9 14.6 Total $ 910.8 100.0 $ 1,132.7 100.0 ** Denotes % of total revenue One 10%-plus customer represented a total 13.8% of revenue Cash and investments totaled $1.42 billion Cash flow from operations totaled $58.5 million Average days' sales outstanding (DSOs) were 98 Accounts receivable, net balance was $840.1 million Unbilled contract asset, net balance was $151.9 million Inventories totaled $1.02 billion, including: Raw materials: $638.9 million Work in process: $68.2 million Finished goods: $331.3 million Deferred cost of sales: $43.7 million Reserve for excess and obsolescence: $(59.5) million Product inventory turns were 1.6 Headcount totaled 8,627 Supplemental Materials and Live Web Broadcast of Unaudited Fiscal Second Quarter 2024 Results Today, Thursday, June 6, 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 second 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: "Our fiscal second quarter performance underscores the strength in our business amid a challenging near-term environment as service providers continue to work through existing inventory. With continued robust growth in bandwidth demand, we remain focused on extending our leadership in optical as a foundation for expanding our addressable market.” 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 second 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 Year Ended April 27, April 29, April 27, April 29, 2024 2023 2024 2023 Revenue: Products $ 701,316 $ 935,330 $ 1,537,093 $ 1,813,045 Services 209,510 197,325 411,442 376,131 Total revenue 910,826 1,132,655 1,948,535 2,189,176 Cost of goods sold: Products 415,732 541,883 882,204 1,042,220 Services 106,433 103,089 210,708 203,327 Total cost of goods sold 522,165 644,972 1,092,912 1,245,547 Gross profit 388,661 487,683 855,623 943,629 Operating expenses: Research and development 195,380 189,993 382,649 371,723 Selling and marketing 124,071 125,083 252,229 248,890 General and administrative 49,573 50,939 104,256 101,835 Significant asset impairments and restructuring costs 15,655 8,153 20,626 12,451 Amortization of intangible assets 7,947 9,845 15,199 17,286 Acquisition and integration costs — 857 — 3,415 Total operating expenses 392,626 384,870 774,959 755,600 Income (loss) from operations (3,965 ) 102,813 80,664 188,029 Interest and other income, net 11,797 8,551 22,447 40,524 Interest expense (23,861 ) (23,889 ) (47,637 ) (39,759 ) Income (loss) before income taxes (16,029 ) 87,475 55,474 188,794 Provision for income taxes 820 29,821 22,776 54,899 Net income (loss) $ (16,849 ) $ 57,654 $ 32,698 $ 133,895 Net Income (Loss) per Common Share Basic net income (loss) per common share $ (0.12 ) $ 0.39 $ 0.23 $ 0.90 Diluted net income (loss) per potential common share $ (0.12 ) $ 0.38 $ 0.22 $ 0.89 Weighted average basic common shares outstanding 144,914 149,616 145,104 149,351 Weighted average dilutive potential common shares outstanding 1 144,914 150,147 146,059 149,852 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) 1.0 million for the first six months of fiscal 2024, and (ii) 0.5 million for both the second quarter and first six months of fiscal 2023. CIENA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (unaudited) April 27, 2024 October 28, 2023 ASSETS Current assets: Cash and cash equivalents $ 1,091,289 $ 1,010,618 Short-term investments 165,620 104,753 Accounts receivable, net 840,131 1,003,876 Inventories, net 1,022,615 1,050,838 Prepaid expenses and other 421,692 405,694 Total current assets 3,541,347 3,575,779 Long-term investments 165,960 134,278 Equipment, building, furniture and fixtures, net 274,353 280,147 Operating lease right-of-use assets 30,210 35,140 Goodwill 444,917 444,765 Other intangible assets, net 184,941 205,627 Deferred tax asset, net 821,879 809,306 Other long-term assets 151,196 116,453 Total assets $ 5,614,803 $ 5,601,495 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 332,106 $ 317,828 Accrued liabilities and other short-term obligations 355,258 431,419 Deferred revenue 196,989 154,419 Operating lease liabilities 16,138 16,655 Current portion of long-term debt 11,700 11,700 Total current liabilities 912,191 932,021 Long-term deferred revenue 80,365 74,041 Other long-term obligations 172,839 170,407 Long-term operating lease liabilities 28,513 33,259 Long-term debt, net 1,540,639 1,543,406 Total liabilities 2,734,547 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; 144,199,201 and 144,829,938 shares issued and outstanding 1,442 1,448 Additional paid-in capital 6,245,248 6,262,083 Accumulated other comprehensive loss (21,729 ) (37,767 ) Accumulated deficit (3,344,705 ) (3,377,403 ) Total stockholders’ equity 2,880,256 2,848,361 Total liabilities and stockholders’ equity $ 5,614,803 $ 5,601,495 CIENA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Six Months Ended April 27, April 29, 2024 2023 Cash flows provided by (used in) operating activities: Net income $ 32,698 $ 133,895 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 46,016 45,903 Share-based compensation expense 78,075 62,372 Amortization of intangible assets 20,726 23,600 Deferred taxes (8,946 ) (2,134 ) Provision for inventory excess and obsolescence 23,152 12,691 Provision for warranty 8,629 13,577 Gain on equity investments, net — (26,455 ) Other 11,509 11,331 Changes in assets and liabilities: Accounts receivable 155,107 (116,914 ) Inventories 5,346 (162,143 ) Prepaid expenses and other (37,441 ) (41,511 ) Operating lease right-of-use assets 6,111 7,644 Accounts payable, accruals and other obligations (56,064 ) (55,754 ) Deferred revenue 48,641 68,818 Short and long-term operating lease liabilities (9,010 ) (10,748 ) Net cash provided by (used in) operating activities 324,549 (35,828 ) Cash flows used in investing activities: Payments for equipment, furniture, fixtures and intellectual property (33,500 ) (58,034 ) Purchases of investments (171,131 ) (106,245 ) Proceeds from sales and maturities of investments 83,013 123,251 Settlement of foreign currency forward contracts, net (828 ) (6,194 ) Purchase of equity investments (16,256 ) — Acquisition of business, net of cash acquired — (230,048 ) Net cash used in investing activities (138,702 ) (277,270 ) Cash flows provided by (used in) financing activities: Proceeds from issuance of term loan, net — 497,500 Payment of long term debt (2,925 ) (3,465 ) Payment of debt issuance costs (2,554 ) (5,230 ) Payment of finance lease obligations (1,989 ) (1,864 ) Shares repurchased for tax withholdings on vesting of stock unit awards (22,428 ) (22,022 ) Repurchases of common stock - repurchase program, net (94,817 ) — Proceeds from issuance of common stock 16,876 14,656 Net cash provided by (used in) financing activities (107,837 ) 479,575 Effect of exchange rate changes on cash, cash equivalents and restricted cash 2,659 6,867 Net increase in cash, cash equivalents and restricted cash 80,669 173,344 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 $ 1,091,455 $ 1,167,722 Supplemental disclosure of cash flow information Cash paid during the period for interest, net $ 45,782 $ 37,514 Cash paid during the period for income taxes, net $ 29,193 $ 24,218 Operating lease payments $ 9,964 $ 11,689 Non-cash investing and financing activities Purchase of equipment in accounts payable $ 6,365 $ 4,618 Repurchase of common stock in accrued liabilities from repurchase program $ 3,859 $ — Operating right-of-use assets subject to lease liability $ 3,639 $ 6,177 Gain on equity investments, net $ — $ 26,455 APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Measurements (in thousands, except per share data) (unaudited) Quarter Ended April 27, April 29, 2024 2023 Gross Profit Reconciliation (GAAP/non-GAAP) GAAP gross profit $ 388,661 $ 487,683 Share-based compensation-products 1,760 1,155 Share-based compensation-services 3,344 2,659 Amortization of intangible assets 2,763 3,431 Total adjustments related to gross profit 7,867 7,245 Adjusted (non-GAAP) gross profit $ 396,528 $ 494,928 Adjusted (non-GAAP) gross profit percentage 43.5 % 43.7 % Operating Expense Reconciliation (GAAP/non-GAAP) GAAP operating expense $ 392,626 $ 384,870 Share-based compensation-research and development 14,066 10,731 Share-based compensation-sales and marketing 11,166 8,755 Share-based compensation-general and administrative 9,875 8,468 Significant asset impairments and restructuring costs 15,655 8,153 Amortization of intangible assets 7,947 9,845 Acquisition and integration costs — 857 Total adjustments related to operating expense 58,709 46,809 Adjusted (non-GAAP) operating expense $ 333,917 $ 338,061 Income (Loss) from Operations Reconciliation (GAAP/non-GAAP) GAAP income (loss) from operations $ (3,965 ) $ 102,813 Total adjustments related to gross profit 7,867 7,245 Total adjustments related to operating expense 58,709 46,809 Total adjustments related to income (loss) from operations 66,576 54,054 Adjusted (non-GAAP) income from operations $ 62,611 $ 156,867 Adjusted (non-GAAP) operating margin percentage 6.8 % 13.8 % Net Income (Loss) Reconciliation (GAAP/non-GAAP) GAAP net income (loss) $ (16,849 ) $ 57,654 Exclude GAAP provision for income taxes 820 29,821 Income (loss) before income taxes (16,029 ) 87,475 Total adjustments related to income from operations 66,576 54,054 Adjusted income before income taxes 50,547 141,529 Non-GAAP tax provision on adjusted income before income taxes 11,120 31,136 Adjusted (non-GAAP) net income $ 39,427 $ 110,393 Weighted average basic common shares outstanding 144,914 149,616 Weighted average dilutive potential common shares outstanding 1 146,268 150,147 Net Income (Loss) per Common Share GAAP diluted net income (loss) per potential common share $ (0.12 ) $ 0.38 Adjusted (non-GAAP) diluted net income per potential common share $ 0.27 $ 0.74 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) 1.4 million and 1.0 million for the second quarter and first six months of fiscal 2024, respectively; and (ii) 0.5 million for both the second quarter and first six months of fiscal 2023. APPENDIX B - Calculation of EBITDA and Adjusted EBITDA (in thousands) (unaudited) Quarter Ended April 27, April 29, 2024 2023 Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) Net income (loss) (GAAP) $ (16,849 ) $ 57,654 Add: Interest expense 23,861 23,889 Less: Interest and other income, net 11,797 8,551 Add: Provision for income taxes 820 29,821 Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements 23,208 23,695 Add: Amortization of intangible assets 10,710 13,275 EBITDA $ 29,953 $ 139,783 Add: Share-based compensation expense 40,211 31,768 Add: Significant asset impairments and restructuring costs 15,655 8,153 Add: Acquisition and integration costs — 857 Adjusted EBITDA $ 85,819 $ 180,561 * * * 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. 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 second quarter 2024 and the fiscal second 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/20240605221851/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 Second Quarter 2024 Financial Results By: Ciena Corporation via Business Wire June 06, 2024 at 07:00 AM EDT Ciena® Corporation (NYSE: CIEN), a networking systems, services and software company, today announced unaudited financial results for its fiscal second quarter ended April 27, 2024. Q2 Revenue: $910.8 million Q2 Net Income (Loss) per Share: $(0.12) GAAP; $0.27 adjusted (non-GAAP) Share Repurchases: Repurchased approximately 1.1 million shares of common stock for an aggregate price of $57.0 million during the quarter "Our fiscal second quarter performance underscores the strength in our business amid a challenging near-term environment as service providers continue to work through existing inventory," said Gary Smith, president and CEO, Ciena. “With continued robust growth in bandwidth demand, we remain focused on extending our leadership in optical as a foundation for expanding our addressable market.” For the fiscal second quarter 2024, Ciena reported revenue of $910.8 million as compared to $1.13 billion for the fiscal second quarter 2023. Ciena's GAAP net loss for the fiscal second quarter 2024 was $(16.8) million, or $(0.12) per diluted common share, which compares to a GAAP net income of $57.7 million, or $0.38 per diluted common share, for the fiscal second quarter 2023. Ciena's adjusted (non-GAAP) net income for the fiscal second quarter 2024 was $39.4 million, or $0.27 per diluted common share, which compares to an adjusted (non-GAAP) net income of $110.4 million, or $0.74 per diluted common share, for the fiscal second quarter 2023. Fiscal Second 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) Q2 Q2 Period Change FY 2024 FY 2023 Y-T-Y* Revenue $ 910.8 $ 1,132.7 (19.6 )% Gross margin 42.7 % 43.1 % (0.4 )% Operating expense $ 392.6 $ 384.9 2.0 % Operating margin (0.4 )% 9.1 % (9.5 )% Non-GAAP Results (unaudited) Q2 Q2 Period Change FY 2024 FY 2023 Y-T-Y* Revenue $ 910.8 $ 1,132.7 (19.6 )% Adj. gross margin 43.5 % 43.7 % (0.2 )% Adj. operating expense $ 333.9 $ 338.1 (1.2 )% Adj. operating margin 6.8 % 13.8 % (7.0 )% Adj. EBITDA $ 85.8 $ 180.6 (52.5 )% * Denotes % change, or in the case of margin, absolute change Revenue by Segment (unaudited) Q2 FY 2024 Q2 FY 2023 Revenue %** Revenue %** Networking Platforms Optical Networking $ 560.2 61.5 $ 784.5 69.3 Routing and Switching 116.1 12.7 130.4 11.5 Total Networking Platforms 676.3 74.2 914.9 80.8 Platform Software and Services 85.4 9.4 69.4 6.1 Blue Planet Automation Software and Services 14.4 1.6 20.6 1.8 Global Services Maintenance Support and Training 77.4 8.5 73.2 6.5 Installation and Deployment 43.8 4.8 39.5 3.5 Consulting and Network Design 13.5 1.5 15.1 1.3 Total Global Services 134.7 14.8 127.8 11.3 Total $ 910.8 100.0 $ 1,132.7 100.0 ** Denotes % of total revenue Additional Performance Metrics for Fiscal Second Quarter 2024 Revenue by Geographic Region (unaudited) Q2 FY 2024 Q2 FY 2023 Revenue % ** Revenue % ** Americas $ 662.9 72.8 $ 794.4 70.1 Europe, Middle East and Africa 155.8 17.1 173.4 15.3 Asia Pacific 92.1 10.1 164.9 14.6 Total $ 910.8 100.0 $ 1,132.7 100.0 ** Denotes % of total revenue One 10%-plus customer represented a total 13.8% of revenue Cash and investments totaled $1.42 billion Cash flow from operations totaled $58.5 million Average days' sales outstanding (DSOs) were 98 Accounts receivable, net balance was $840.1 million Unbilled contract asset, net balance was $151.9 million Inventories totaled $1.02 billion, including: Raw materials: $638.9 million Work in process: $68.2 million Finished goods: $331.3 million Deferred cost of sales: $43.7 million Reserve for excess and obsolescence: $(59.5) million Product inventory turns were 1.6 Headcount totaled 8,627 Supplemental Materials and Live Web Broadcast of Unaudited Fiscal Second Quarter 2024 Results Today, Thursday, June 6, 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 second 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: "Our fiscal second quarter performance underscores the strength in our business amid a challenging near-term environment as service providers continue to work through existing inventory. With continued robust growth in bandwidth demand, we remain focused on extending our leadership in optical as a foundation for expanding our addressable market.” 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 second 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 Year Ended April 27, April 29, April 27, April 29, 2024 2023 2024 2023 Revenue: Products $ 701,316 $ 935,330 $ 1,537,093 $ 1,813,045 Services 209,510 197,325 411,442 376,131 Total revenue 910,826 1,132,655 1,948,535 2,189,176 Cost of goods sold: Products 415,732 541,883 882,204 1,042,220 Services 106,433 103,089 210,708 203,327 Total cost of goods sold 522,165 644,972 1,092,912 1,245,547 Gross profit 388,661 487,683 855,623 943,629 Operating expenses: Research and development 195,380 189,993 382,649 371,723 Selling and marketing 124,071 125,083 252,229 248,890 General and administrative 49,573 50,939 104,256 101,835 Significant asset impairments and restructuring costs 15,655 8,153 20,626 12,451 Amortization of intangible assets 7,947 9,845 15,199 17,286 Acquisition and integration costs — 857 — 3,415 Total operating expenses 392,626 384,870 774,959 755,600 Income (loss) from operations (3,965 ) 102,813 80,664 188,029 Interest and other income, net 11,797 8,551 22,447 40,524 Interest expense (23,861 ) (23,889 ) (47,637 ) (39,759 ) Income (loss) before income taxes (16,029 ) 87,475 55,474 188,794 Provision for income taxes 820 29,821 22,776 54,899 Net income (loss) $ (16,849 ) $ 57,654 $ 32,698 $ 133,895 Net Income (Loss) per Common Share Basic net income (loss) per common share $ (0.12 ) $ 0.39 $ 0.23 $ 0.90 Diluted net income (loss) per potential common share $ (0.12 ) $ 0.38 $ 0.22 $ 0.89 Weighted average basic common shares outstanding 144,914 149,616 145,104 149,351 Weighted average dilutive potential common shares outstanding 1 144,914 150,147 146,059 149,852 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) 1.0 million for the first six months of fiscal 2024, and (ii) 0.5 million for both the second quarter and first six months of fiscal 2023. CIENA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (unaudited) April 27, 2024 October 28, 2023 ASSETS Current assets: Cash and cash equivalents $ 1,091,289 $ 1,010,618 Short-term investments 165,620 104,753 Accounts receivable, net 840,131 1,003,876 Inventories, net 1,022,615 1,050,838 Prepaid expenses and other 421,692 405,694 Total current assets 3,541,347 3,575,779 Long-term investments 165,960 134,278 Equipment, building, furniture and fixtures, net 274,353 280,147 Operating lease right-of-use assets 30,210 35,140 Goodwill 444,917 444,765 Other intangible assets, net 184,941 205,627 Deferred tax asset, net 821,879 809,306 Other long-term assets 151,196 116,453 Total assets $ 5,614,803 $ 5,601,495 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 332,106 $ 317,828 Accrued liabilities and other short-term obligations 355,258 431,419 Deferred revenue 196,989 154,419 Operating lease liabilities 16,138 16,655 Current portion of long-term debt 11,700 11,700 Total current liabilities 912,191 932,021 Long-term deferred revenue 80,365 74,041 Other long-term obligations 172,839 170,407 Long-term operating lease liabilities 28,513 33,259 Long-term debt, net 1,540,639 1,543,406 Total liabilities 2,734,547 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; 144,199,201 and 144,829,938 shares issued and outstanding 1,442 1,448 Additional paid-in capital 6,245,248 6,262,083 Accumulated other comprehensive loss (21,729 ) (37,767 ) Accumulated deficit (3,344,705 ) (3,377,403 ) Total stockholders’ equity 2,880,256 2,848,361 Total liabilities and stockholders’ equity $ 5,614,803 $ 5,601,495 CIENA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Six Months Ended April 27, April 29, 2024 2023 Cash flows provided by (used in) operating activities: Net income $ 32,698 $ 133,895 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 46,016 45,903 Share-based compensation expense 78,075 62,372 Amortization of intangible assets 20,726 23,600 Deferred taxes (8,946 ) (2,134 ) Provision for inventory excess and obsolescence 23,152 12,691 Provision for warranty 8,629 13,577 Gain on equity investments, net — (26,455 ) Other 11,509 11,331 Changes in assets and liabilities: Accounts receivable 155,107 (116,914 ) Inventories 5,346 (162,143 ) Prepaid expenses and other (37,441 ) (41,511 ) Operating lease right-of-use assets 6,111 7,644 Accounts payable, accruals and other obligations (56,064 ) (55,754 ) Deferred revenue 48,641 68,818 Short and long-term operating lease liabilities (9,010 ) (10,748 ) Net cash provided by (used in) operating activities 324,549 (35,828 ) Cash flows used in investing activities: Payments for equipment, furniture, fixtures and intellectual property (33,500 ) (58,034 ) Purchases of investments (171,131 ) (106,245 ) Proceeds from sales and maturities of investments 83,013 123,251 Settlement of foreign currency forward contracts, net (828 ) (6,194 ) Purchase of equity investments (16,256 ) — Acquisition of business, net of cash acquired — (230,048 ) Net cash used in investing activities (138,702 ) (277,270 ) Cash flows provided by (used in) financing activities: Proceeds from issuance of term loan, net — 497,500 Payment of long term debt (2,925 ) (3,465 ) Payment of debt issuance costs (2,554 ) (5,230 ) Payment of finance lease obligations (1,989 ) (1,864 ) Shares repurchased for tax withholdings on vesting of stock unit awards (22,428 ) (22,022 ) Repurchases of common stock - repurchase program, net (94,817 ) — Proceeds from issuance of common stock 16,876 14,656 Net cash provided by (used in) financing activities (107,837 ) 479,575 Effect of exchange rate changes on cash, cash equivalents and restricted cash 2,659 6,867 Net increase in cash, cash equivalents and restricted cash 80,669 173,344 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 $ 1,091,455 $ 1,167,722 Supplemental disclosure of cash flow information Cash paid during the period for interest, net $ 45,782 $ 37,514 Cash paid during the period for income taxes, net $ 29,193 $ 24,218 Operating lease payments $ 9,964 $ 11,689 Non-cash investing and financing activities Purchase of equipment in accounts payable $ 6,365 $ 4,618 Repurchase of common stock in accrued liabilities from repurchase program $ 3,859 $ — Operating right-of-use assets subject to lease liability $ 3,639 $ 6,177 Gain on equity investments, net $ — $ 26,455 APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Measurements (in thousands, except per share data) (unaudited) Quarter Ended April 27, April 29, 2024 2023 Gross Profit Reconciliation (GAAP/non-GAAP) GAAP gross profit $ 388,661 $ 487,683 Share-based compensation-products 1,760 1,155 Share-based compensation-services 3,344 2,659 Amortization of intangible assets 2,763 3,431 Total adjustments related to gross profit 7,867 7,245 Adjusted (non-GAAP) gross profit $ 396,528 $ 494,928 Adjusted (non-GAAP) gross profit percentage 43.5 % 43.7 % Operating Expense Reconciliation (GAAP/non-GAAP) GAAP operating expense $ 392,626 $ 384,870 Share-based compensation-research and development 14,066 10,731 Share-based compensation-sales and marketing 11,166 8,755 Share-based compensation-general and administrative 9,875 8,468 Significant asset impairments and restructuring costs 15,655 8,153 Amortization of intangible assets 7,947 9,845 Acquisition and integration costs — 857 Total adjustments related to operating expense 58,709 46,809 Adjusted (non-GAAP) operating expense $ 333,917 $ 338,061 Income (Loss) from Operations Reconciliation (GAAP/non-GAAP) GAAP income (loss) from operations $ (3,965 ) $ 102,813 Total adjustments related to gross profit 7,867 7,245 Total adjustments related to operating expense 58,709 46,809 Total adjustments related to income (loss) from operations 66,576 54,054 Adjusted (non-GAAP) income from operations $ 62,611 $ 156,867 Adjusted (non-GAAP) operating margin percentage 6.8 % 13.8 % Net Income (Loss) Reconciliation (GAAP/non-GAAP) GAAP net income (loss) $ (16,849 ) $ 57,654 Exclude GAAP provision for income taxes 820 29,821 Income (loss) before income taxes (16,029 ) 87,475 Total adjustments related to income from operations 66,576 54,054 Adjusted income before income taxes 50,547 141,529 Non-GAAP tax provision on adjusted income before income taxes 11,120 31,136 Adjusted (non-GAAP) net income $ 39,427 $ 110,393 Weighted average basic common shares outstanding 144,914 149,616 Weighted average dilutive potential common shares outstanding 1 146,268 150,147 Net Income (Loss) per Common Share GAAP diluted net income (loss) per potential common share $ (0.12 ) $ 0.38 Adjusted (non-GAAP) diluted net income per potential common share $ 0.27 $ 0.74 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) 1.4 million and 1.0 million for the second quarter and first six months of fiscal 2024, respectively; and (ii) 0.5 million for both the second quarter and first six months of fiscal 2023. APPENDIX B - Calculation of EBITDA and Adjusted EBITDA (in thousands) (unaudited) Quarter Ended April 27, April 29, 2024 2023 Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) Net income (loss) (GAAP) $ (16,849 ) $ 57,654 Add: Interest expense 23,861 23,889 Less: Interest and other income, net 11,797 8,551 Add: Provision for income taxes 820 29,821 Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements 23,208 23,695 Add: Amortization of intangible assets 10,710 13,275 EBITDA $ 29,953 $ 139,783 Add: Share-based compensation expense 40,211 31,768 Add: Significant asset impairments and restructuring costs 15,655 8,153 Add: Acquisition and integration costs — 857 Adjusted EBITDA $ 85,819 $ 180,561 * * * 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. 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 second quarter 2024 and the fiscal second 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/20240605221851/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 second quarter ended April 27, 2024. Q2 Revenue: $910.8 million Q2 Net Income (Loss) per Share: $(0.12) GAAP; $0.27 adjusted (non-GAAP) Share Repurchases: Repurchased approximately 1.1 million shares of common stock for an aggregate price of $57.0 million during the quarter "Our fiscal second quarter performance underscores the strength in our business amid a challenging near-term environment as service providers continue to work through existing inventory," said Gary Smith, president and CEO, Ciena. “With continued robust growth in bandwidth demand, we remain focused on extending our leadership in optical as a foundation for expanding our addressable market.” For the fiscal second quarter 2024, Ciena reported revenue of $910.8 million as compared to $1.13 billion for the fiscal second quarter 2023. Ciena's GAAP net loss for the fiscal second quarter 2024 was $(16.8) million, or $(0.12) per diluted common share, which compares to a GAAP net income of $57.7 million, or $0.38 per diluted common share, for the fiscal second quarter 2023. Ciena's adjusted (non-GAAP) net income for the fiscal second quarter 2024 was $39.4 million, or $0.27 per diluted common share, which compares to an adjusted (non-GAAP) net income of $110.4 million, or $0.74 per diluted common share, for the fiscal second quarter 2023. Fiscal Second 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) Q2 Q2 Period Change FY 2024 FY 2023 Y-T-Y* Revenue $ 910.8 $ 1,132.7 (19.6 )% Gross margin 42.7 % 43.1 % (0.4 )% Operating expense $ 392.6 $ 384.9 2.0 % Operating margin (0.4 )% 9.1 % (9.5 )% Non-GAAP Results (unaudited) Q2 Q2 Period Change FY 2024 FY 2023 Y-T-Y* Revenue $ 910.8 $ 1,132.7 (19.6 )% Adj. gross margin 43.5 % 43.7 % (0.2 )% Adj. operating expense $ 333.9 $ 338.1 (1.2 )% Adj. operating margin 6.8 % 13.8 % (7.0 )% Adj. EBITDA $ 85.8 $ 180.6 (52.5 )% * Denotes % change, or in the case of margin, absolute change Revenue by Segment (unaudited) Q2 FY 2024 Q2 FY 2023 Revenue %** Revenue %** Networking Platforms Optical Networking $ 560.2 61.5 $ 784.5 69.3 Routing and Switching 116.1 12.7 130.4 11.5 Total Networking Platforms 676.3 74.2 914.9 80.8 Platform Software and Services 85.4 9.4 69.4 6.1 Blue Planet Automation Software and Services 14.4 1.6 20.6 1.8 Global Services Maintenance Support and Training 77.4 8.5 73.2 6.5 Installation and Deployment 43.8 4.8 39.5 3.5 Consulting and Network Design 13.5 1.5 15.1 1.3 Total Global Services 134.7 14.8 127.8 11.3 Total $ 910.8 100.0 $ 1,132.7 100.0 ** Denotes % of total revenue Additional Performance Metrics for Fiscal Second Quarter 2024 Revenue by Geographic Region (unaudited) Q2 FY 2024 Q2 FY 2023 Revenue % ** Revenue % ** Americas $ 662.9 72.8 $ 794.4 70.1 Europe, Middle East and Africa 155.8 17.1 173.4 15.3 Asia Pacific 92.1 10.1 164.9 14.6 Total $ 910.8 100.0 $ 1,132.7 100.0 ** Denotes % of total revenue One 10%-plus customer represented a total 13.8% of revenue Cash and investments totaled $1.42 billion Cash flow from operations totaled $58.5 million Average days' sales outstanding (DSOs) were 98 Accounts receivable, net balance was $840.1 million Unbilled contract asset, net balance was $151.9 million Inventories totaled $1.02 billion, including: Raw materials: $638.9 million Work in process: $68.2 million Finished goods: $331.3 million Deferred cost of sales: $43.7 million Reserve for excess and obsolescence: $(59.5) million Product inventory turns were 1.6 Headcount totaled 8,627 Supplemental Materials and Live Web Broadcast of Unaudited Fiscal Second Quarter 2024 Results Today, Thursday, June 6, 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 second 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: "Our fiscal second quarter performance underscores the strength in our business amid a challenging near-term environment as service providers continue to work through existing inventory. With continued robust growth in bandwidth demand, we remain focused on extending our leadership in optical as a foundation for expanding our addressable market.” 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 second 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 Year Ended April 27, April 29, April 27, April 29, 2024 2023 2024 2023 Revenue: Products $ 701,316 $ 935,330 $ 1,537,093 $ 1,813,045 Services 209,510 197,325 411,442 376,131 Total revenue 910,826 1,132,655 1,948,535 2,189,176 Cost of goods sold: Products 415,732 541,883 882,204 1,042,220 Services 106,433 103,089 210,708 203,327 Total cost of goods sold 522,165 644,972 1,092,912 1,245,547 Gross profit 388,661 487,683 855,623 943,629 Operating expenses: Research and development 195,380 189,993 382,649 371,723 Selling and marketing 124,071 125,083 252,229 248,890 General and administrative 49,573 50,939 104,256 101,835 Significant asset impairments and restructuring costs 15,655 8,153 20,626 12,451 Amortization of intangible assets 7,947 9,845 15,199 17,286 Acquisition and integration costs — 857 — 3,415 Total operating expenses 392,626 384,870 774,959 755,600 Income (loss) from operations (3,965 ) 102,813 80,664 188,029 Interest and other income, net 11,797 8,551 22,447 40,524 Interest expense (23,861 ) (23,889 ) (47,637 ) (39,759 ) Income (loss) before income taxes (16,029 ) 87,475 55,474 188,794 Provision for income taxes 820 29,821 22,776 54,899 Net income (loss) $ (16,849 ) $ 57,654 $ 32,698 $ 133,895 Net Income (Loss) per Common Share Basic net income (loss) per common share $ (0.12 ) $ 0.39 $ 0.23 $ 0.90 Diluted net income (loss) per potential common share $ (0.12 ) $ 0.38 $ 0.22 $ 0.89 Weighted average basic common shares outstanding 144,914 149,616 145,104 149,351 Weighted average dilutive potential common shares outstanding 1 144,914 150,147 146,059 149,852 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) 1.0 million for the first six months of fiscal 2024, and (ii) 0.5 million for both the second quarter and first six months of fiscal 2023. CIENA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (unaudited) April 27, 2024 October 28, 2023 ASSETS Current assets: Cash and cash equivalents $ 1,091,289 $ 1,010,618 Short-term investments 165,620 104,753 Accounts receivable, net 840,131 1,003,876 Inventories, net 1,022,615 1,050,838 Prepaid expenses and other 421,692 405,694 Total current assets 3,541,347 3,575,779 Long-term investments 165,960 134,278 Equipment, building, furniture and fixtures, net 274,353 280,147 Operating lease right-of-use assets 30,210 35,140 Goodwill 444,917 444,765 Other intangible assets, net 184,941 205,627 Deferred tax asset, net 821,879 809,306 Other long-term assets 151,196 116,453 Total assets $ 5,614,803 $ 5,601,495 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 332,106 $ 317,828 Accrued liabilities and other short-term obligations 355,258 431,419 Deferred revenue 196,989 154,419 Operating lease liabilities 16,138 16,655 Current portion of long-term debt 11,700 11,700 Total current liabilities 912,191 932,021 Long-term deferred revenue 80,365 74,041 Other long-term obligations 172,839 170,407 Long-term operating lease liabilities 28,513 33,259 Long-term debt, net 1,540,639 1,543,406 Total liabilities 2,734,547 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; 144,199,201 and 144,829,938 shares issued and outstanding 1,442 1,448 Additional paid-in capital 6,245,248 6,262,083 Accumulated other comprehensive loss (21,729 ) (37,767 ) Accumulated deficit (3,344,705 ) (3,377,403 ) Total stockholders’ equity 2,880,256 2,848,361 Total liabilities and stockholders’ equity $ 5,614,803 $ 5,601,495 CIENA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Six Months Ended April 27, April 29, 2024 2023 Cash flows provided by (used in) operating activities: Net income $ 32,698 $ 133,895 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 46,016 45,903 Share-based compensation expense 78,075 62,372 Amortization of intangible assets 20,726 23,600 Deferred taxes (8,946 ) (2,134 ) Provision for inventory excess and obsolescence 23,152 12,691 Provision for warranty 8,629 13,577 Gain on equity investments, net — (26,455 ) Other 11,509 11,331 Changes in assets and liabilities: Accounts receivable 155,107 (116,914 ) Inventories 5,346 (162,143 ) Prepaid expenses and other (37,441 ) (41,511 ) Operating lease right-of-use assets 6,111 7,644 Accounts payable, accruals and other obligations (56,064 ) (55,754 ) Deferred revenue 48,641 68,818 Short and long-term operating lease liabilities (9,010 ) (10,748 ) Net cash provided by (used in) operating activities 324,549 (35,828 ) Cash flows used in investing activities: Payments for equipment, furniture, fixtures and intellectual property (33,500 ) (58,034 ) Purchases of investments (171,131 ) (106,245 ) Proceeds from sales and maturities of investments 83,013 123,251 Settlement of foreign currency forward contracts, net (828 ) (6,194 ) Purchase of equity investments (16,256 ) — Acquisition of business, net of cash acquired — (230,048 ) Net cash used in investing activities (138,702 ) (277,270 ) Cash flows provided by (used in) financing activities: Proceeds from issuance of term loan, net — 497,500 Payment of long term debt (2,925 ) (3,465 ) Payment of debt issuance costs (2,554 ) (5,230 ) Payment of finance lease obligations (1,989 ) (1,864 ) Shares repurchased for tax withholdings on vesting of stock unit awards (22,428 ) (22,022 ) Repurchases of common stock - repurchase program, net (94,817 ) — Proceeds from issuance of common stock 16,876 14,656 Net cash provided by (used in) financing activities (107,837 ) 479,575 Effect of exchange rate changes on cash, cash equivalents and restricted cash 2,659 6,867 Net increase in cash, cash equivalents and restricted cash 80,669 173,344 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 $ 1,091,455 $ 1,167,722 Supplemental disclosure of cash flow information Cash paid during the period for interest, net $ 45,782 $ 37,514 Cash paid during the period for income taxes, net $ 29,193 $ 24,218 Operating lease payments $ 9,964 $ 11,689 Non-cash investing and financing activities Purchase of equipment in accounts payable $ 6,365 $ 4,618 Repurchase of common stock in accrued liabilities from repurchase program $ 3,859 $ — Operating right-of-use assets subject to lease liability $ 3,639 $ 6,177 Gain on equity investments, net $ — $ 26,455 APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Measurements (in thousands, except per share data) (unaudited) Quarter Ended April 27, April 29, 2024 2023 Gross Profit Reconciliation (GAAP/non-GAAP) GAAP gross profit $ 388,661 $ 487,683 Share-based compensation-products 1,760 1,155 Share-based compensation-services 3,344 2,659 Amortization of intangible assets 2,763 3,431 Total adjustments related to gross profit 7,867 7,245 Adjusted (non-GAAP) gross profit $ 396,528 $ 494,928 Adjusted (non-GAAP) gross profit percentage 43.5 % 43.7 % Operating Expense Reconciliation (GAAP/non-GAAP) GAAP operating expense $ 392,626 $ 384,870 Share-based compensation-research and development 14,066 10,731 Share-based compensation-sales and marketing 11,166 8,755 Share-based compensation-general and administrative 9,875 8,468 Significant asset impairments and restructuring costs 15,655 8,153 Amortization of intangible assets 7,947 9,845 Acquisition and integration costs — 857 Total adjustments related to operating expense 58,709 46,809 Adjusted (non-GAAP) operating expense $ 333,917 $ 338,061 Income (Loss) from Operations Reconciliation (GAAP/non-GAAP) GAAP income (loss) from operations $ (3,965 ) $ 102,813 Total adjustments related to gross profit 7,867 7,245 Total adjustments related to operating expense 58,709 46,809 Total adjustments related to income (loss) from operations 66,576 54,054 Adjusted (non-GAAP) income from operations $ 62,611 $ 156,867 Adjusted (non-GAAP) operating margin percentage 6.8 % 13.8 % Net Income (Loss) Reconciliation (GAAP/non-GAAP) GAAP net income (loss) $ (16,849 ) $ 57,654 Exclude GAAP provision for income taxes 820 29,821 Income (loss) before income taxes (16,029 ) 87,475 Total adjustments related to income from operations 66,576 54,054 Adjusted income before income taxes 50,547 141,529 Non-GAAP tax provision on adjusted income before income taxes 11,120 31,136 Adjusted (non-GAAP) net income $ 39,427 $ 110,393 Weighted average basic common shares outstanding 144,914 149,616 Weighted average dilutive potential common shares outstanding 1 146,268 150,147 Net Income (Loss) per Common Share GAAP diluted net income (loss) per potential common share $ (0.12 ) $ 0.38 Adjusted (non-GAAP) diluted net income per potential common share $ 0.27 $ 0.74 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) 1.4 million and 1.0 million for the second quarter and first six months of fiscal 2024, respectively; and (ii) 0.5 million for both the second quarter and first six months of fiscal 2023. APPENDIX B - Calculation of EBITDA and Adjusted EBITDA (in thousands) (unaudited) Quarter Ended April 27, April 29, 2024 2023 Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) Net income (loss) (GAAP) $ (16,849 ) $ 57,654 Add: Interest expense 23,861 23,889 Less: Interest and other income, net 11,797 8,551 Add: Provision for income taxes 820 29,821 Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements 23,208 23,695 Add: Amortization of intangible assets 10,710 13,275 EBITDA $ 29,953 $ 139,783 Add: Share-based compensation expense 40,211 31,768 Add: Significant asset impairments and restructuring costs 15,655 8,153 Add: Acquisition and integration costs — 857 Adjusted EBITDA $ 85,819 $ 180,561 * * * 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. 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 second quarter 2024 and the fiscal second 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/20240605221851/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
