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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): September 4, 2024
Ciena Corporation
(Exact name of registrant as specified in its charter)
Commission File Number: 001-36250



Delaware
(State or other jurisdiction of incorporation)
7035 Ridge Road, Hanover, MD
(Address of principal executive offices)


23-2725311
(IRS Employer Identification No.)
21076
(Zip Code)
Registrant's telephone number, including area code: (410) 694-5700

Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common stock, $0.01 par value
CIEN
New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



ITEM 2.02 – RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On September 4, 2024, Ciena Corporation ("Ciena") issued a press release announcing its financial results for its fiscal third quarter ended July 27, 2024. The text of the press release is furnished as Exhibit 99.1 to this Report. As discussed in this press release, Ciena will be hosting an investor call to discuss its results of operations for its fiscal third quarter ended July 27, 2024.

In conjunction with the issuance of this press release, Ciena posted to the quarterly results page of the Investors section of www.ciena.com an accompanying investor presentation. The investor presentation is furnished as Exhibit 99.2 to this Report.

The information in Exhibits 99.1 and 99.2, as well as Item 2.02 of this Report, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement pursuant to the Securities Act of 1933, as amended. Investors are encouraged to review the “Investors” page of our website at www.ciena.com because, as with the other disclosure channels that we use, from time to time we may post material information exclusively on that site.

ITEM 5.02 - DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
On August 28, 2024, James E. Moylan, Jr., (age 73), Senior Vice President and Chief Financial Officer, notified Ciena of his decision to retire in twelve months, effective August 28, 2025 (the “Effective Date”), following more than 16 years of dedicated and distinguished service in such role.

Ciena is commencing a search process to identify Mr. Moylan's successor. Mr. Moylan and Ciena expect that he will continue in his role until such time as his successor is in place and responsibilities have been transitioned, and that he will remain an employee and continue to provide support until the Effective Date.

In connection with this announcement, Ciena issued a press release, which is furnished as Exhibit 99.3 to this Report.

ITEM 9.01 – FINANCIAL STATEMENTS AND EXHIBITS
Exhibit Number
Description of Document
Exhibit 99.1

Exhibit 99.2

Exhibit 99.3
Exhibit 104
 Cover Page Interactive Data File (embedded within the Inline XBRL document).



SIGNATURES

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



Ciena Corporation
Date: September 4, 2024
By:
 /s/ Sheela Kosaraju
Sheela Kosaraju
Senior Vice President, General Counsel and Assistant Secretary


EX-99.1 2 ex9912024q3earningspressre.htm EX-99.1 Document

FOR IMMEDIATE RELEASE

Ciena Reports Fiscal Third Quarter 2024 Financial Results


HANOVER, Md. - September 4, 2024 - Ciena® Corporation (NYSE: CIEN), a networking systems, services and software company, today announced unaudited financial results for its fiscal third quarter ended July 27, 2024.

•Q3 Revenue: $942.3 million

•Q3 Net Income per Share: $0.10 GAAP; $0.35 adjusted (non-GAAP)

•Share Repurchases: Repurchased approximately 0.6 million shares of common stock for an aggregate price of $29.0 million during the quarter


"We delivered strong results for the fiscal third quarter that reflect growing momentum with cloud providers and continued gradual recovery with service providers," said Gary Smith, president and CEO, Ciena. "With leading innovation that is well-aligned with our customers' focus on building cloud and AI-capable infrastructures, we are well-positioned to continue to gain share and deliver profitable growth.”

For the fiscal third quarter 2024, Ciena reported revenue of $942.3 million as compared to $1.07 billion for the fiscal third quarter 2023.

Ciena's GAAP net income for the fiscal third quarter 2024 was $14.2 million, or $0.10 per diluted common share, which compares to a GAAP net income of $29.7 million, or $0.20 per diluted common share, for the fiscal third quarter 2023.

Ciena's adjusted (non-GAAP) net income for the fiscal third quarter 2024 was $50.8 million, or $0.35 per diluted common share, which compares to an adjusted (non-GAAP) net income of $89.1 million, or $0.59 per diluted common share, for the fiscal third quarter 2023.

Fiscal Third 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)
Q3 Q3 Period Change
FY 2024 FY 2023 Y-T-Y*
Revenue $ 942.3  $ 1,067.9  (11.8) %
Gross margin 42.9  % 42.0  % 0.9  %
Operating expense $ 377.2  $ 370.7  1.7  %
Operating margin 2.9  % 7.3  % (4.4) %
1

Non-GAAP Results (unaudited)
Q3 Q3 Period Change
FY 2024 FY 2023 Y-T-Y*
Revenue $ 942.3  $ 1,067.9  (11.8) %
Adj. gross margin 43.7  % 42.7  % 1.0  %
Adj. operating expense $ 336.0  $ 327.9  2.5  %
Adj. operating margin 8.0  % 12.0  % (4.0) %
Adj. EBITDA $ 98.5  $ 151.3  (34.9) %
* Denotes % change, or in the case of margin, absolute change
Revenue by Segment (unaudited)
Q3 FY 2024 Q3 FY 2023
Revenue %** Revenue %**
Networking Platforms
Optical Networking $ 606.8  64.4  $ 719.0  67.3 
Routing and Switching 92.7  9.8  127.6  11.9 
Total Networking Platforms 699.5  74.2  846.6  79.2 
Platform Software and Services 83.2  8.9  78.9  7.4 
Blue Planet Automation Software and Services 25.8  2.7  13.1  1.3 
Global Services
Maintenance Support and Training 74.4  7.9  72.9  6.8 
Installation and Deployment 46.5  4.9  46.8  4.4 
Consulting and Network Design 12.9  1.4  9.6  0.9 
Total Global Services 133.8  14.2  129.3  12.1 
Total $ 942.3  100.0  $ 1,067.9  100.0 
** Denotes % of total revenue

Additional Performance Metrics for Fiscal Third Quarter 2024
Revenue by Geographic Region (unaudited)
Q3 FY 2024 Q3 FY 2023
Revenue % ** Revenue % **
Americas $ 718.6  76.3  $ 749.5  70.2 
Europe, Middle East and Africa 135.0  14.3  152.8  14.3 
Asia Pacific 88.7  9.4  165.6  15.5 
Total $ 942.3  100.0  $ 1,067.9  100.0 

** Denotes % of total revenue
•Two 10%-plus customers represented a total 26.6% of revenue
•Cash and investments totaled $1.2 billion
•Cash flow used in operations totaled $159.4 million
•Average days' sales outstanding (DSOs) were 100
2

•Accounts receivable, net balance was $899.9 million
•Unbilled contract asset, net balance was $142.8 million
•Inventories totaled $937.4 million, including:
◦Raw materials: $612.7 million
◦Work in process: $44.4 million
◦Finished goods: $314.0 million
◦Deferred cost of sales: $36.0 million
◦Reserve for excess and obsolescence: $(69.7) million
•Product inventory turns were 1.8
•Headcount totaled 8,781

Supplemental Materials and Live Web Broadcast of Unaudited Fiscal Third Quarter 2024 Results
Today, Wednesday, September 4, 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 third 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 strong results for the fiscal third quarter that reflect growing momentum with cloud providers and continued gradual recovery with service providers. With leading innovation that is well-aligned with our customers' focus on building cloud and AI-capable infrastructures, we are well-positioned to continue to gain share and deliver profitable growth.”

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 third 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.
3


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.
 

4

CIENA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Quarter Ended Nine Months Ended
  July 27, July 29, July 27, July 29,
  2024 2023 2024 2023
Revenue:    
Products $ 729,503  $ 865,197  $ 2,266,596  $ 2,678,242 
Services 212,805  202,689  624,247  578,820 
Total revenue 942,308  1,067,886  2,890,843  3,257,062 
Cost of goods sold:    
Products 433,533  516,900  1,315,737  1,559,120 
Services 104,830  102,045  315,538  305,372 
Total cost of goods sold 538,363  618,945  1,631,275  1,864,492 
Gross profit 403,945  448,941  1,259,568  1,392,570 
Operating expenses:    
Research and development 188,888  189,392  571,537  561,115 
Selling and marketing 121,520  118,266  373,749  367,156 
General and administrative 58,248  49,349  162,504  151,184 
Significant asset impairments and restructuring costs 1,361  4,174  21,987  16,625 
Amortization of intangible assets 7,185  9,487  22,384  26,773 
Acquisition and integration costs —  59  —  3,474 
Total operating expenses 377,202  370,727  1,152,161  1,126,327 
Income from operations 26,743  78,214  107,407  266,243 
Interest and other income, net 14,013  10,187  36,460  50,711 
Interest expense (24,401) (24,060) (72,038) (63,819)
Income before income taxes 16,355  64,341  71,829  253,135 
Provision for income taxes 2,125  34,608  24,901  89,507 
Net income $ 14,230  $ 29,733  $ 46,928  $ 163,628 
Net Income per Common Share
Basic net income per common share $ 0.10  $ 0.20  $ 0.32  $ 1.09 
Diluted net income per potential common share $ 0.10  $ 0.20  $ 0.32  $ 1.09 
Weighted average basic common shares outstanding 144,394  149,690  144,876  149,472 
Weighted average dilutive potential common shares outstanding 1
 145,361  149,977  145,795  149,867 

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 and 0.9 million for the third quarter and first nine months of fiscal 2024, respectively, and (ii) 0.3 million and 0.4 million for the third quarter and first nine months of fiscal 2023, respectively.

5

CIENA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
July 27,
2024		 October 28,
2023
ASSETS  
Current assets:  
Cash and cash equivalents $ 883,365  $ 1,010,618 
Short-term investments 217,810  104,753 
Accounts receivable, net 899,877  1,003,876 
Inventories, net 937,399  1,050,838 
Prepaid expenses and other 600,008  405,694 
Total current assets 3,538,459  3,575,779 
Long-term investments 111,833  134,278 
Equipment, building, furniture and fixtures, net 299,161  280,147 
Operating lease right-of-use assets 28,717  35,140 
Goodwill 444,791  444,765 
Other intangible assets, net 174,974  205,627 
Deferred tax asset, net 831,682  809,306 
Other long-term assets 145,513  116,453 
Total assets $ 5,575,130  $ 5,601,495 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Current liabilities:  
Accounts payable $ 316,599  $ 317,828 
Accrued liabilities and other short-term obligations 347,238  431,419 
Deferred revenue 179,457  154,419 
Operating lease liabilities 15,565  16,655 
Current portion of long-term debt 11,700  11,700 
Total current liabilities 870,559  932,021 
Long-term deferred revenue 77,628  74,041 
Other long-term obligations 171,014  170,407 
Long-term operating lease liabilities 26,742  33,259 
Long-term debt, net 1,538,315  1,543,406 
Total liabilities 2,684,258  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; 144,426,873 and 144,829,938 shares issued and outstanding
 1,444  1,448 
Additional paid-in capital 6,260,095  6,262,083 
Accumulated other comprehensive loss (40,192) (37,767)
Accumulated deficit (3,330,475) (3,377,403)
Total stockholders’ equity 2,890,872  2,848,361 
Total liabilities and stockholders’ equity $ 5,575,130  $ 5,601,495 
6

CIENA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
Nine Months Ended
  July 27, July 29,
  2024 2023
Cash flows provided by (used in) operating activities:  
Net income $ 46,928  $ 163,628 
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 68,997  69,213 
Share-based compensation expense 115,433  95,405 
Amortization of intangible assets 30,675  36,274 
Deferred taxes (19,909) (64,005)
Provision for inventory excess and obsolescence 35,400  18,767 
Provision for warranty 14,708  18,860 
Gain on equity investments, net —  (26,368)
Other 11,968  13,694 
Changes in assets and liabilities:  
Accounts receivable 92,421  (80,399)
Inventories 78,220  (262,345)
Prepaid expenses and other (221,823) 72,062 
Operating lease right-of-use assets 8,963  11,003 
Accounts payable, accruals and other obligations (112,352) (133,880)
Deferred revenue 28,833  57,547 
Short and long-term operating lease liabilities (13,290) (16,596)
Net cash provided by (used in) operating activities 165,172  (27,140)
Cash flows used in investing activities:  
Payments for equipment, furniture, fixtures and intellectual property (53,098) (83,422)
Purchases of investments (197,303) (119,240)
Proceeds from sales and maturities of investments 114,899  150,646 
Settlement of foreign currency forward contracts, net (362) (3,272)
Purchase of equity investments (21,682) — 
Acquisition of business, net of cash acquired —  (230,048)
Net cash used in investing activities (157,546) (285,336)
Cash flows provided by (used in) financing activities:  
Proceeds from issuance of term loan, net —  497,500 
Payment of long term debt (5,850) (6,448)
Payment of debt issuance costs (2,554) (5,422)
Payment of finance lease obligations (3,004) (2,830)
Shares repurchased for tax withholdings on vesting of stock unit awards (33,450) (29,794)
Repurchases of common stock - repurchase program, net (125,816) (57,736)
Proceeds from issuance of common stock 34,292  31,276 
Net cash provided by (used in) financing activities (136,382) 426,546 
Effect of exchange rate changes on cash, cash equivalents and restricted cash 1,499  9,501 
Net increase (decrease) in cash, cash equivalents and restricted cash (127,257) 123,571 
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 $ 883,529  $ 1,117,949 
Supplemental disclosure of cash flow information  
Cash paid during the period for interest, net $ 64,999  $ 56,709 
Cash paid during the period for income taxes, net $ 41,736  $ 68,058 
Operating lease payments $ 14,672  $ 18,038 
Non-cash investing and financing activities
Purchase of equipment in accounts payable $ 35,316  $ 4,579 
Repurchase of common stock in accrued liabilities from repurchase program, net $ 1,762  $ 3,500 
Operating right-of-use assets subject to lease liability $ 5,326  $ 9,771 
Gain on equity investments, net $ —  $ 26,368 
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APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Measurements
(in thousands, except per share data) (unaudited)
Quarter Ended
July 27, July 29,
2024 2023
Gross Profit Reconciliation (GAAP/non-GAAP)
GAAP gross profit $ 403,945  $ 448,941 
Share-based compensation-products 1,660  1,118 
Share-based compensation-services 3,122  2,687 
Amortization of intangible assets 2,764  3,187 
Total adjustments related to gross profit 7,546  6,992 
Adjusted (non-GAAP) gross profit $ 411,491  $ 455,933 
Adjusted (non-GAAP) gross profit percentage 43.7  % 42.7  %
Operating Expense Reconciliation (GAAP/non-GAAP)
GAAP operating expense $ 377,202  $ 370,727 
Share-based compensation-research and development 13,118  10,954 
Share-based compensation-sales and marketing 10,315  8,770 
Share-based compensation-general and administrative 9,257  9,377 
Significant asset impairments and restructuring costs 1,361  4,174 
Amortization of intangible assets 7,185  9,487 
Acquisition and integration costs —  59 
Total adjustments related to operating expense 41,236  42,821 
Adjusted (non-GAAP) operating expense $ 335,966  $ 327,906 
Income from Operations Reconciliation (GAAP/non-GAAP)
GAAP income from operations $ 26,743  $ 78,214 
Total adjustments related to gross profit 7,546  6,992 
Total adjustments related to operating expense 41,236  42,821 
Total adjustments related to income from operations 48,782  49,813 
Adjusted (non-GAAP) income from operations $ 75,525  $ 128,027 
Adjusted (non-GAAP) operating margin percentage 8.0  % 12.0  %
Net Income Reconciliation (GAAP/non-GAAP)
GAAP net income $ 14,230  $ 29,733 
Exclude GAAP provision for income taxes 2,125  34,608 
Income before income taxes 16,355  64,341 
Total adjustments related to income from operations 48,782  49,813 
Loss on equity investment —  87 
Adjusted income before income taxes 65,137  114,241 
Non-GAAP tax provision on adjusted income before income taxes 14,330  25,133 
Adjusted (non-GAAP) net income $ 50,807  $ 89,108 
Weighted average basic common shares outstanding 144,394 149,690
Weighted average dilutive potential common shares outstanding 1
 145,361 149,977
8

APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Measurements
(in thousands, except per share data) (unaudited)
Quarter Ended
July 27, July 29,
2024 2023
Net Income per Common Share
GAAP diluted net income per potential common share $ 0.10  $ 0.20 
Adjusted (non-GAAP) diluted net income per potential common share $ 0.35  $ 0.59 

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) 1.0 million for the third quarter of fiscal 2024; and (ii) 0.3 million for the third quarter of fiscal 2023.
9

APPENDIX B - Calculation of EBITDA and Adjusted EBITDA
(in thousands) (unaudited)
Quarter Ended
July 27, July 29,
2024 2023
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
Net income (GAAP) $ 14,230  $ 29,733 
Add: Interest expense 24,401  24,060 
Less: Interest and other income, net 14,013  10,187 
Add: Provision for income taxes 2,125  34,608 
Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements 22,981  23,310 
Add: Amortization of intangible assets 9,949  12,674 
EBITDA $ 59,673  $ 114,198 
Add: Share-based compensation expense 37,472  32,906 
Add: Significant asset impairments and restructuring costs 1,361  4,174 
Add: Acquisition and integration costs —  59 
Adjusted EBITDA $ 98,506  $ 151,337 
* * *
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.
•Loss on equity investment - reflects changes in the carrying value of a certain equity investment 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 third quarter 2024 and the fiscal third quarter 2023. This rate may be subject to change in the future, including as a result of changes in tax policy or tax strategy.
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EX-99.2 3 ex9922024q3earningsprese.htm EX-99.2 ex9922024q3earningsprese
© Ciena Corporation 2024. All rights reserved. Proprietary Information. Ciena Corporation Fiscal Q3 2024 Earnings Presentation Period ended July 27, 2024 September 4, 2024

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information.2 Forward-looking statements and non-GAAP measures 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. 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 third quarter of fiscal 2024 to be filed with the SEC. All information, statements, and projections in this presentation and the related earnings call speak only as of the date of this presentation and related earnings call. Ciena assumes no obligation to update any forward-looking or other information included in this presentation or related earnings calls, whether as a result of new information, future events or otherwise. In addition, this presentation includes historical, and may include prospective, non-GAAP measures of Ciena’s gross margin, operating expense, operating margin, EBITDA, and net income per share. These measures are not intended to be a substitute for financial information presented in accordance with GAAP. A reconciliation of non-GAAP measures used in this presentation to Ciena’s GAAP results for the relevant period can be found in the Appendix to this presentation. Additional information can also be found in our press release filed this morning and in our reports on Form 10-Q and Form 10K filed with the Securities and Exchange Commission.

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information.3 Table of Contents 1. Overview & Ciena's portfolio 2. Industry context & addressable market expansion 3. Fiscal Q3 2024 financial performance 4. Appendix

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information. Overview & Ciena's portfolio

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information.5 Ciena is an industry-leading global networking systems, services, and software company

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information.6 Our vision for networking: How it works

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information. Industry context & addressable market expansion

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information.8 Increasing bandwidth consumption as a driver of network expansion

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information.9 Our strategy leverages our Optical technology to create expanded addressable market opportunities

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information.10 Our addressable market expansion strategy allows us to access higher growth markets 1Sources: LightCounting and Ciena internal analysis.

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information.11 Our market leadership Optical Transport Report, 2Q24Optical Networking Report, 1Q24 Service Provider Switching & Routing Report, 2Q24 Transport Hardware Report, 2Q24 #1 Globally • Data center interconnect • Purpose-built/compact modular DCI • Optical for internet content provider customers #1 N. America • Data center interconnect • Total optical networking • Optical packet #2 Globally • Total optical networking • Optical packet • Optical for cable MSO customers #1 Globally • Purpose-built/compact modular DCI • SLTE WDM • Access switching #1 N. America • Total optical networking • Purpose-built/compact modular DCI • Access switching #2 Globally • Total optical networking #1 Globally • Purpose-built/compact modular DCI • Optical for cloud and colo • SLTE WDM • Routing/Access #1 N. America • Total optical networking • Purpose-built/compact modular DCI • Optical for cloud and colo • Routing/Access #2 Globally • Total optical networking • Optical for enterprise and government

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information. Q3 FY 2024 results

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information.13 Q3 FY 2024 key highlights ▪ Non-telco represented 46% of total revenue ▪ Direct Cloud Provider revenue grew 9% sequentially ▪ India revenue grew 9% sequentially ▪ Blue Planet revenue nearly doubled YoY • Continued traction with cloud providers with strong ramp in 400ZR deployments by 3 Cloud Providers, multiple line system wins, and new MOFN awards • Surpassed 300 customers for WaveLogic 5 Extreme with 12 new customers added ▪ Surpassed 120 Routing and Switching customers using our WL5n pluggable technology • Total shareholder return five-year CAGR of 8%1 • Under our authorized $1 billion stock repurchase program, repurchased ~0.6 million shares for $29 million, and are targeting $250 million for FY 2024 to complete the plan 1 Based on closing share price between 8/27/2019 to 8/27/2024 Achieving balanced growth Prioritizing long term shareholder value Driving the pace of innovation

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information.14 Q3 FY 2024 comparative financial highlights * Reconciliations of these non-GAAP measures to our GAAP results are included in the Appendix and in the press release for the relative period. Q3 FY 2024 Q3 FY 2023 Revenue $942.3M $1,067.9M Adjusted Gross Margin* 43.7% 42.7% Adjusted Operating Expense* $336.0M $327.9M Adjusted Operating Margin* 8.0% 12.0% Adjusted EBITDA* $98.5M $151.3M Adjusted EPS* $0.35 $0.59

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information.15 Q3 FY 2024 comparative operating metrics Q3 FY 2024 Q3 FY 2023 Cash and investments $1.21B $1.28B Cash provided by (used in) operations $(159)M $9M DSO 100.0 96.0 Inventory Turns 1.8 1.7 Gross Leverage 3.08x 2.54x Net Debt $401M $344M

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information.16 Revenue by segment (Amounts in millions) Q3 FY 2024 Q3 FY 2023 Revenue %** Revenue %** Networking Platforms Optical Networking $606.8 64.4 $719.0 67.3 Routing and Switching 92.7 9.8 127.6 11.9 Total Networking Platforms 699.5 74.2 846.6 79.2 Platform Software and Services 83.2 8.9 78.9 7.4 Blue Planet Automation Software and Services 25.8 2.7 13.1 1.3 Global Services Maintenance Support and Training 74.4 7.9 72.9 6.8 Installation and Deployment 46.5 4.9 46.8 4.4 Consulting and Network Design 12.9 1.4 9.6 0.9 Total Global Services 133.8 14.2 129.3 12.1 Total $942.3 100.0 $1,067.9 100.0 * A reconciliation of these non-GAAP measures to GAAP results is included in the appendix to this presentation. ** Denotes % of total revenue

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information.17 Revenue derived from non-telco customers

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information.18 Revenue by geographic region 15.5% 14.5% 10.1% 14.4% 14.5% 17.1% 70.1% 71.0% 69.2% 72.8% 20.0% 10.8% 9.4% 14.3% 76.3%

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information. Q3 FY 2024 appendix

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information.20 Q3 FY 2024 Q2 FY 2024 Q1 FY 2024 Q4 FY 2023 Q3 FY 2023 GAAP gross profit $403,945 $388,661 $466,962 $486,281 $448,941 Share-based compensation-products 1,660 1,760 1,318 1,194 1,118 Share-based compensation-services 3,122 3,344 3,020 2,827 2,687 Amortization of intangible assets 2,764 2,763 2,764 2,763 3,187 Total adjustments related to gross profit 7,546 7,867 7,102 6,784 6,992 Adjusted (non-GAAP) gross profit $411,491 $396,528 $474,064 $493,065 $455,933 Adjusted (non-GAAP) gross profit percentage 43.7 % 43.5 % 45.7 % 43.7 % 42.7 % Gross Profit Reconciliation (Amounts in thousands)

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information.21 Q3 FY 2024 Q2 FY 2024 Q1 FY 2024 Q4 FY 2023 Q3 FY 2023 GAAP operating expense $377,202 $392,626 $382,333 $394,979 $370,727 Share-based compensation-research and development 13,118 14,066 12,880 11,412 10,954 Share-based compensation-sales and marketing 10,315 11,166 10,305 9,187 8,770 Share-based compensation-general and administrative 9,257 9,875 10,079 10,274 9,377 Significant asset impairments and restructuring costs 1,361 15,655 4,971 7,209 4,174 Amortization of intangible assets 7,185 7,947 7,252 10,578 9,487 Acquisition and integration costs — — — — 59 Legal Settlement — — — 8,750 — Total adjustments related to operating expense 41,236 58,709 45,487 57,410 42,821 Adjusted (non-GAAP) operating expense $335,966 $333,917 $336,846 $337,569 $327,906 Q3 FY 2024 Q2 FY 2024 Q1 FY 2024 Q4 FY 2023 Q3 FY 2023 GAAP income (loss) from operations $26,743 $(3,965) $84,629 $91,302 $78,214 Total adjustments related to gross profit 7,546 7,867 7,102 6,784 6,992 Total adjustments related to operating expense 41,236 58,709 45,487 57,410 42,821 Total adjustments related to income from operations 48,782 66,576 52,589 64,194 49,813 Adjusted (non-GAAP) income from operations $75,525 $62,611 $137,218 $155,496 $128,027 Adjusted (non-GAAP) operating margin percentage 8.0 % 6.8 % 13.2 % 13.8 % 12.0 % Operating Expense Reconciliation (Amounts in thousands) Income (Loss) from Operations Reconciliation (Amounts in thousands)

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information.22 Q3 FY 2024 Q2 FY 2024 Q1 FY 2024 Q4 FY 2023 Q3 FY 2023 GAAP net income (loss) $14,230 $(16,849) $49,547 $91,199 $29,733 Exclude GAAP provision (benefit) for income taxes 2,125 820 21,956 (20,681) 34,608 Income (loss) before income taxes 16,355 (16,029) 71,503 70,518 64,341 Total adjustments related to income from operations 48,782 66,576 52,589 64,194 49,813 Loss on extinguishment and modification of debt — — — 7,874 — Loss on equity investment — — — — 87 Adjusted income before income taxes 65,137 50,547 124,092 142,586 114,241 Non-GAAP tax provision on adjusted income before income taxes 14,330 11,120 27,300 31,369 25,133 Adjusted (non-GAAP) net income $50,807 $39,427 $96,792 $111,217 $89,108 Weighted average basic common shares outstanding 144,394 144,914 145,291 147,437 149,690 Weighted average diluted potential common shares outstanding(1) 145,361 146,268 145,848 147,891 149,977 Q3 FY 2024 Q2 FY 2024 Q1 FY 2024 Q4 FY 2023 Q3 FY 2023 GAAP diluted net income (loss) per potential common share $ 0.10 $ (0.12) $ 0.34 $ 0.62 $ 0.20 Adjusted (non-GAAP) diluted net income per potential common share $ 0.35 $ 0.27 $ 0.66 $ 0.75 $ 0.59 1. Weighted average dilutive potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share for the third quarter of fiscal 2024 includes 1.0 million shares underlying certain stock option and stock unit awards. Net Income (Loss) Reconciliation (Amounts in thousands) Net Income (Loss) per Common Share

 
© Ciena Corporation 2024. All rights reserved. Proprietary Information.23 Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) Q3 FY 2024 Q2 FY 2024 Q1 FY 2024 Q4 FY 2023 Q3 FY 2023 Net income (loss) (GAAP) $14,230 $(16,849) $49,547 $91,199 $29,733 Add: Interest expense 24,401 23,861 23,776 24,207 24,060 Less: Interest and other income, net 14,013 11,797 10,650 11,297 10,187 Add: Loss on extinguishment and modification of debt — — — 7,874 — Add: Provision (benefit) for income taxes 2,125 820 21,956 (20,681) 34,608 Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements 22,981 23,208 22,808 23,351 23,310 Add: Amortization of intangible assets 9,949 10,710 10,016 13,342 12,674 EBITDA $59,673 $29,953 $117,453 $127,995 $114,198 Add: Share-based compensation expense 37,472 40,211 37,602 34,894 32,906 Add: Significant asset impairments and restructuring expense 1,361 15,655 4,971 7,209 4,174 Add: Acquisition and integration costs — — — — 59 Add: Legal settlement — — — 8,750 — Adjusted EBITDA $98,506 $85,819 $160,026 $178,848 $151,337 Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) (Amounts in thousands)

 
EX-99.3 4 ex993pressrelease240904.htm EX-99.3 Document

FOR IMMEDIATE RELEASE

Ciena CFO James E. Moylan to Retire in August 2025

September 4, 2024 – Ciena® Corporation (NYSE: CIEN) today announced that James E. Moylan, Jr., Senior Vice President and Chief Financial Officer (CFO), plans to retire in twelve months, effective August 28, 2025. Ciena intends to commence a search process to identify a successor. Mr. Moylan will continue to serve as CFO until a successor is in place and he will assist in the transition of his responsibilities.

“Jim has given more than 16 years of dedicated and distinguished service to Ciena. He has been a key member of our executive team and has played a significant role in the growth of our business and the strength of our operating model,” said Gary Smith, president and CEO, Ciena. “Jim has been an incredible leader across all of Ciena and has built outstanding relationships with our key stakeholders, including the financial community. When the time comes next year, we will wish him the best in his well-deserved retirement.”

“Being a part of Ciena has truly been the highlight of my career. It has been tremendously rewarding to help build and grow a business with a solid foundation that will drive continued growth and success,” said James E. Moylan, Jr., CFO of Ciena. “I look forward to continuing in a leadership role for the next year and watching Ciena on its journey into the future.”

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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, Twitter, the Ciena Insights blog, or visit www.ciena.com.

Note to Ciena Investors You are encouraged to review the Investors section of our website, where we routinely post press releases, SEC filings, recent news, financial results, 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 are based on our current expectations, forecasts, information and assumptions. These statements involve inherent risks and uncertainties. Actual results or outcomes may differ materially from those stated or implied, because of risks and uncertainties, including those detailed in our most recent annual and quarterly reports filed with the SEC. Forward-looking statements include statements regarding our expectations, beliefs, intentions or strategies and can be identified by words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. Ciena assumes no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise.