Ciena Corporation
CIEN Technology Q1 2025
Document 1
FOR IMMEDIATE RELEASE
Ciena Reports Fiscal First Quarter 2025 Financial Results
HANOVER, Md. - March 11, 2025 - Ciena® Corporation (NYSE: CIEN), a networking systems, services and software company, today announced unaudited financial results for its fiscal first quarter ended February 1, 2025.
•Q1 Revenue: $1.07 billion
•Q1 Net Income per Share: $0.31 GAAP; $0.64 adjusted (non-GAAP)
•Share Repurchases: Repurchased approximately 1.0 million shares of common stock for an aggregate price of $79.2 million during the quarter
"We delivered strong fiscal first quarter results that reflect balanced growth and strong momentum across our customer segments and reinforce the continuation of positive demand dynamics," said Gary Smith, president and CEO, Ciena. "As the global leader in high-speed connectivity, we are incredibly well positioned to benefit from the global investment in networks to scale for cloud and AI. As a result, we are very confident in our ability to deliver in fiscal year 2025 and beyond."
For the fiscal first quarter 2025, Ciena reported revenue of $1.07 billion as compared to $1.04 billion for the fiscal first quarter 2024.
Ciena's GAAP net income for the fiscal first quarter 2025 was $44.6 million, or $0.31 per diluted common share, which compares to a GAAP net income of $49.5 million, or $0.34 per diluted common share, for the fiscal first quarter 2024.
Ciena's adjusted (non-GAAP) net income for the fiscal first quarter 2025 was $94.0 million, or $0.64 per diluted common share, which compares to an adjusted (non-GAAP) net income of $96.8 million, or $0.66 per diluted common share, for the fiscal first quarter 2024.
Fiscal First Quarter 2025 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.
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| GAAP Results (unaudited) | ||||||||||||||||||||
| Q1 | Q1 | Period Change | ||||||||||||||||||
| FY 2025 | FY 2024 | Y-T-Y* | ||||||||||||||||||
| Revenue | $ | 1,072.3 | $ | 1,037.7 | 3.3 | % | ||||||||||||||
| Gross margin | 44.0 | % | 45.0 | % | (1.0) | % | ||||||||||||||
| Operating expense | $ | 391.2 | $ | 382.3 | 2.3 | % | ||||||||||||||
| Operating margin | 7.5 | % | 8.2 | % | (0.7) | % | ||||||||||||||
| Non-GAAP Results (unaudited) | ||||||||||||||||||||
| Q1 | Q1 | Period Change | ||||||||||||||||||
| FY 2025 | FY 2024 | Y-T-Y* | ||||||||||||||||||
| Revenue | $ | 1,072.3 | $ | 1,037.7 | 3.3 | % | ||||||||||||||
| Adj. gross margin | 44.7 | % | 45.7 | % | (1.0) | % | ||||||||||||||
| Adj. operating expense | $ | 347.4 | $ | 336.8 | 3.1 | % | ||||||||||||||
| Adj. operating margin | 12.3 | % | 13.2 | % | (0.9) | % | ||||||||||||||
| Adj. EBITDA | $ | 156.5 | $ | 160.0 | (2.2) | % | ||||||||||||||
* Denotes % change, or in the case of margin, absolute change
| Revenue by Segment (unaudited) | ||||||||||||||||||||||||||
| Q1 FY 2025 | Q1 FY 2024 | |||||||||||||||||||||||||
| Revenue | %** | Revenue | %** | |||||||||||||||||||||||
| Networking Platforms | ||||||||||||||||||||||||||
| Optical Networking | $ | 728.0 | 67.9 | $ | 695.8 | 67.1 | ||||||||||||||||||||
| Routing and Switching | 93.2 | 8.7 | 111.4 | 10.7 | ||||||||||||||||||||||
| Total Networking Platforms | 821.2 | 76.6 | 807.2 | 77.8 | ||||||||||||||||||||||
| Platform Software and Services | 95.1 | 8.9 | 89.7 | 8.6 | ||||||||||||||||||||||
| Blue Planet Automation Software and Services | 26.0 | 2.4 | 14.0 | 1.4 | ||||||||||||||||||||||
| Global Services | ||||||||||||||||||||||||||
| Maintenance Support and Training | 74.6 | 7.0 | 74.1 | 7.1 | ||||||||||||||||||||||
| Installation and Deployment | 47.7 | 4.4 | 42.7 | 4.1 | ||||||||||||||||||||||
| Consulting and Network Design | 7.7 | 0.7 | 10.0 | 1.0 | ||||||||||||||||||||||
| Total Global Services | 130.0 | 12.1 | 126.8 | 12.2 | ||||||||||||||||||||||
| Total | $ | 1,072.3 | 100.0 | $ | 1,037.7 | 100.0 | ||||||||||||||||||||
** Denotes % of total revenue
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Additional Performance Metrics for Fiscal First Quarter 2025
| Revenue by Geographic Region (unaudited) | ||||||||||||||||||||||||||
| Q1 FY 2025 | Q1 FY 2024 | |||||||||||||||||||||||||
| Revenue | % ** | Revenue | % ** | |||||||||||||||||||||||
| Americas | $ | 795.7 | 74.2 | $ | 718.2 | 69.2 | ||||||||||||||||||||
| Europe, Middle East and Africa | 157.9 | 14.7 | 207.4 | 20.0 | ||||||||||||||||||||||
| Asia Pacific | 118.7 | 11.1 | 112.1 | 10.8 | ||||||||||||||||||||||
| Total | $ | 1,072.3 | 100.0 | $ | 1,037.7 | 100.0 | ||||||||||||||||||||
** Denotes % of total revenue
•Two customers represented 10%-plus of revenue combining for a total of 26.1% of revenue
•Cash and investments totaled $1.32 billion
•Cash flow from operations totaled $103.7 million
•Average days' sales outstanding (DSOs) were 90
•Accounts receivable, net balance was $938.7 million
•Unbilled contract asset, net balance was $138.7 million
•Inventories totaled $845.1 million, including:
◦Raw materials: $601.9 million
◦Work in process: $32.7 million
◦Finished goods: $289.2 million
◦Deferred cost of sales: $30.1 million
◦Reserve for excess and obsolescence: $(108.8) million
•Product inventory turns were 2.3
•Headcount totaled 8,795
Supplemental Materials and Live Web Broadcast of Unaudited Fiscal First Quarter 2025 Results
Today, Tuesday, March 11, 2025, in conjunction with this announcement, Ciena has posted to the Quarterly Results page of the Investor Relations section of its website certain related supporting materials for its unaudited fiscal first quarter 2025 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
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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 fiscal first quarter results that reflect balanced growth and strong momentum across our customer segments and reinforce the continuation of positive demand dynamics. As the global leader in high-speed connectivity, we are incredibly well positioned to benefit from the global investment in networks to scale for cloud and AI. As a result, we are very confident in our ability to deliver in fiscal year 2025 and beyond."
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 20, 2024 and included in its Quarterly Report on Form 10-Q for the first quarter of fiscal 2025 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.
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CIENA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| Quarter Ended | |||||||||||
| February 1, | January 27, | ||||||||||
| 2025 | 2024 | ||||||||||
| Revenue: | |||||||||||
| Products | $ | 854,785 | $ | 835,777 | |||||||
| Services | 217,475 | 201,932 | |||||||||
| Total revenue | 1,072,260 | 1,037,709 | |||||||||
| Cost of goods sold: | |||||||||||
| Products | 490,804 | 466,472 | |||||||||
| Services | 109,635 | 104,275 | |||||||||
| Total cost of goods sold | 600,439 | 570,747 | |||||||||
| Gross profit | 471,821 | 466,962 | |||||||||
| Operating expenses: | |||||||||||
| Research and development | 192,663 | 187,269 | |||||||||
| Selling and marketing | 136,504 | 128,158 | |||||||||
| General and administrative | 53,902 | 54,683 | |||||||||
| Significant asset impairments and restructuring costs | 1,544 | 4,971 | |||||||||
| Amortization of intangible assets | 6,545 | 7,252 | |||||||||
| Total operating expenses | 391,158 | 382,333 | |||||||||
| Income from operations | 80,663 | 84,629 | |||||||||
| Interest and other income, net | 11,578 | 10,650 | |||||||||
| Interest expense | (22,918) | (23,776) | |||||||||
| Loss on extinguishment and modification of debt | (729) | — | |||||||||
| Income before income taxes | 68,594 | 71,503 | |||||||||
Provision for income taxes | 24,022 | 21,956 | |||||||||
| Net income | $ | 44,572 | $ | 49,547 | |||||||
| Net Income per Common Share | |||||||||||
| Basic net income per common share | $ | 0.31 | $ | 0.34 | |||||||
| Diluted net income per potential common share | $ | 0.31 | $ | 0.34 | |||||||
| Weighted average basic common shares outstanding | 142,880 | 145,291 | |||||||||
Weighted average dilutive potential common shares outstanding1 | 145,944 | 145,848 | |||||||||
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) 3.1 million for the first quarter of fiscal 2025, and (ii) 0.6 million for the first quarter of fiscal 2024.
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CIENA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
| February 1, 2025 | November 2, 2024 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 874,749 | $ | 934,863 | |||||||
| Short-term investments | 337,320 | 316,343 | |||||||||
| Accounts receivable, net | 938,703 | 908,597 | |||||||||
| Inventories, net | 845,132 | 820,430 | |||||||||
| Prepaid expenses and other | 495,807 | 564,183 | |||||||||
| Total current assets | 3,491,711 | 3,544,416 | |||||||||
| Long-term investments | 105,035 | 80,920 | |||||||||
| Equipment, building, furniture and fixtures, net | 320,382 | 337,722 | |||||||||
| Operating lease right-of-use assets | 25,113 | 27,417 | |||||||||
| Goodwill | 444,306 | 444,707 | |||||||||
| Other intangible assets, net | 156,205 | 165,020 | |||||||||
| Deferred tax asset, net | 868,432 | 886,441 | |||||||||
| Other long-term assets | 161,718 | 154,694 | |||||||||
| Total assets | $ | 5,572,902 | $ | 5,641,337 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 395,770 | $ | 423,401 | |||||||
| Accrued liabilities and other short-term obligations | 362,021 | 393,905 | |||||||||
| Deferred revenue | 174,151 | 156,379 | |||||||||
| Operating lease liabilities | 12,995 | 14,455 | |||||||||
| Current portion of long-term debt | 11,580 | 11,700 | |||||||||
| Total current liabilities | 956,517 | 999,840 | |||||||||
| Long-term deferred revenue | 83,126 | 81,240 | |||||||||
| Other long-term obligations | 186,027 | 185,938 | |||||||||
| Long-term operating lease liabilities | 22,769 | 25,107 | |||||||||
| Long-term debt, net | 1,531,084 | 1,533,074 | |||||||||
| Total liabilities | 2,779,523 | 2,825,199 | |||||||||
| 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; 142,528,510 and 142,656,116 shares issued and outstanding | 1,425 | 1,427 | |||||||||
| Additional paid-in capital | 6,108,118 | 6,154,869 | |||||||||
| Accumulated other comprehensive loss | (67,289) | (46,711) | |||||||||
| Accumulated deficit | (3,248,875) | (3,293,447) | |||||||||
| Total stockholders’ equity | 2,793,379 | 2,816,138 | |||||||||
| Total liabilities and stockholders’ equity | $ | 5,572,902 | $ | 5,641,337 | |||||||
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CIENA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
| Quarter Ended | |||||||||||
| February 1, | January 27, | ||||||||||
| 2025 | 2024 | ||||||||||
| Cash flows provided by operating activities: | |||||||||||
| Net income | $ | 44,572 | $ | 49,547 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements | 24,679 | 22,808 | |||||||||
| Share-based compensation expense | 40,806 | 37,827 | |||||||||
| Amortization of intangible assets | 8,778 | 10,016 | |||||||||
| Deferred taxes | (17,085) | (4,368) | |||||||||
| Provision for inventory excess and obsolescence | 10,918 | 10,350 | |||||||||
| Provision for warranty | 5,697 | 4,841 | |||||||||
| Other | (6,655) | 5,051 | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable | (33,454) | 135,160 | |||||||||
| Inventories | (35,844) | 56,157 | |||||||||
| Prepaid expenses and other | 92,036 | 17,116 | |||||||||
| Operating lease right-of-use assets | 2,902 | 3,084 | |||||||||
| Accounts payable, accruals and other obligations | (49,577) | (90,915) | |||||||||
| Deferred revenue | 20,311 | 14,022 | |||||||||
| Short and long-term operating lease liabilities | (4,361) | (4,620) | |||||||||
| Net cash provided by operating activities | 103,723 | 266,076 | |||||||||
| Cash flows provided by (used in) investing activities: | |||||||||||
| Payments for equipment, furniture, fixtures and intellectual property | (26,884) | (16,599) | |||||||||
| Purchases of investments | (97,024) | (21,213) | |||||||||
| Proceeds from sales and maturities of investments | 55,061 | 53,674 | |||||||||
| Settlement of foreign currency forward contracts, net | 1,757 | 2,271 | |||||||||
| Net cash provided by (used in) investing activities | (67,090) | 18,133 | |||||||||
| Cash flows used in financing activities: | |||||||||||
| Proceeds for modification of debt, net | 19,175 | — | |||||||||
| Cash paid for extinguishment of debt | (19,175) | — | |||||||||
| Payment of long term debt | (2,895) | — | |||||||||
| Payment of debt issuance costs | (10) | (2,402) | |||||||||
| Payment of finance lease obligations | (1,020) | (981) | |||||||||
| Shares repurchased for tax withholdings on vesting of stock unit awards | (25,489) | (10,076) | |||||||||
| Repurchases of common stock - repurchase program, net | (81,176) | (38,195) | |||||||||
| Proceeds from issuance of common stock | 17,133 | 16,934 | |||||||||
| Net cash used in financing activities | (93,457) | (34,720) | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (3,289) | 4,646 | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (60,113) | 254,135 | |||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 935,026 | 1,010,786 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 874,913 | $ | 1,264,921 | |||||||
| Supplemental disclosure of cash flow information | |||||||||||
| Cash paid during the period for interest, net | $ | 25,559 | $ | 18,582 | |||||||
| Cash paid during the period for income taxes, net | $ | 10,426 | $ | 8,260 | |||||||
| Operating lease payments | $ | 4,762 | $ | 5,080 | |||||||
| Non-cash investing and financing activities | |||||||||||
| Purchase of equipment in accounts payable | $ | 4,735 | $ | 4,225 | |||||||
| Repurchase of common stock in accrued liabilities from repurchase program, net | $ | 4,198 | $ | 3,110 | |||||||
| Operating right-of-use assets subject to lease liability | $ | 1,056 | $ | 3,498 | |||||||
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| APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Measurements | ||||||||||||||
| (in thousands, except per share data) (unaudited) | ||||||||||||||
| Quarter Ended | ||||||||||||||
| February 1, | January 27, | |||||||||||||
| 2025 | 2024 | |||||||||||||
| Gross Profit Reconciliation (GAAP/non-GAAP) | ||||||||||||||
| GAAP gross profit | $ | 471,821 | $ | 466,962 | ||||||||||
| Share-based compensation-products | 1,750 | 1,318 | ||||||||||||
| Share-based compensation-services | 3,405 | 3,020 | ||||||||||||
| Amortization of intangible assets | 2,233 | 2,764 | ||||||||||||
| Total adjustments related to gross profit | 7,388 | 7,102 | ||||||||||||
| Adjusted (non-GAAP) gross profit | $ | 479,209 | $ | 474,064 | ||||||||||
| Adjusted (non-GAAP) gross profit percentage | 44.7 | % | 45.7 | % | ||||||||||
| Operating Expense Reconciliation (GAAP/non-GAAP) | ||||||||||||||
| GAAP operating expense | $ | 391,158 | $ | 382,333 | ||||||||||
| Share-based compensation-research and development | 14,237 | 12,880 | ||||||||||||
| Share-based compensation-sales and marketing | 11,597 | 10,305 | ||||||||||||
| Share-based compensation-general and administrative | 9,827 | 10,079 | ||||||||||||
| Significant asset impairments and restructuring costs | 1,544 | 4,971 | ||||||||||||
| Amortization of intangible assets | 6,545 | 7,252 | ||||||||||||
| Total adjustments related to operating expense | 43,750 | 45,487 | ||||||||||||
| Adjusted (non-GAAP) operating expense | $ | 347,408 | $ | 336,846 | ||||||||||
| Income from Operations Reconciliation (GAAP/non-GAAP) | ||||||||||||||
| GAAP income from operations | $ | 80,663 | $ | 84,629 | ||||||||||
| Total adjustments related to gross profit | 7,388 | 7,102 | ||||||||||||
| Total adjustments related to operating expense | 43,750 | 45,487 | ||||||||||||
| Total adjustments related to income from operations | 51,138 | 52,589 | ||||||||||||
| Adjusted (non-GAAP) income from operations | $ | 131,801 | $ | 137,218 | ||||||||||
| Adjusted (non-GAAP) operating margin percentage | 12.3 | % | 13.2 | % | ||||||||||
| Net Income Reconciliation (GAAP/non-GAAP) | ||||||||||||||
| GAAP net income | $ | 44,572 | $ | 49,547 | ||||||||||
| Exclude GAAP provision for income taxes | 24,022 | 21,956 | ||||||||||||
| Income before income taxes | 68,594 | 71,503 | ||||||||||||
| Total adjustments related to income from operations | 51,138 | 52,589 | ||||||||||||
| Loss on extinguishment and modification of debt | 729 | — | ||||||||||||
| Adjusted income before income taxes | 120,461 | 124,092 | ||||||||||||
| Non-GAAP tax provision on adjusted income before income taxes | 26,501 | 27,300 | ||||||||||||
| Adjusted (non-GAAP) net income | $ | 93,960 | $ | 96,792 | ||||||||||
| Weighted average basic common shares outstanding | 142,880 | 145,291 | ||||||||||||
Weighted average dilutive potential common shares outstanding 1 | 145,944 | 145,848 | ||||||||||||
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| APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Measurements | ||||||||||||||
| (in thousands, except per share data) (unaudited) | ||||||||||||||
| Quarter Ended | ||||||||||||||
| February 1, | January 27, | |||||||||||||
| 2025 | 2024 | |||||||||||||
| Net Income per Common Share | ||||||||||||||
| GAAP diluted net income per potential common share | $ | 0.31 | $ | 0.34 | ||||||||||
| Adjusted (non-GAAP) diluted net income per potential common share | $ | 0.64 | $ | 0.66 | ||||||||||
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) 3.1 million for the first quarter of fiscal 2025; and (ii) 0.6 million for the first quarter of fiscal 2024.
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| APPENDIX B - Calculation of EBITDA and Adjusted EBITDA | ||||||||||||||
| (in thousands) (unaudited) | ||||||||||||||
| Quarter Ended | ||||||||||||||
| February 1, | January 27, | |||||||||||||
| 2025 | 2024 | |||||||||||||
| Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) | ||||||||||||||
| Net income (GAAP) | $ | 44,572 | $ | 49,547 | ||||||||||
| Add: Interest expense | 22,918 | 23,776 | ||||||||||||
| Less: Interest and other income, net | 11,578 | 10,650 | ||||||||||||
| Add: Loss on extinguishment and modification of debt | 729 | — | ||||||||||||
| Add: Provision for income taxes | 24,022 | 21,956 | ||||||||||||
| Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements | 24,679 | 22,808 | ||||||||||||
| Add: Amortization of intangible assets | 8,778 | 10,016 | ||||||||||||
| EBITDA | $ | 114,120 | $ | 117,453 | ||||||||||
| Add: Share-based compensation expense | 40,816 | 37,602 | ||||||||||||
| Add: Significant asset impairments and restructuring costs | 1,544 | 4,971 | ||||||||||||
| Adjusted EBITDA | $ | 156,480 | $ | 160,026 | ||||||||||
* * *
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.
•Loss on extinguishment and modification of debt - reflects extinguishment and debt modification expenses related to refinancing our term loan during the first quarter of fiscal 2025.
•Non-GAAP tax provision - consists of current and deferred income tax expense commensurate with the level of adjusted income before income taxes and utilizes a current, blended U.S. and foreign statutory annual tax rate of 22.0% for both the fiscal first quarter of fiscal 2025 and the fiscal first quarter of 2024. 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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© Ciena Corporation 2025. All rights reserved. Proprietary Information. Ciena Corporation Fiscal Q1 2025 Earnings Presentation Period ended February 1, 2025 March 11, 2025
© Ciena Corporation 2025. 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. 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. Information in this presentation and related comments of presenters 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; 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 groups based in the surrounding region, and public health emergencies, epidemics, or pandemics, such as 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 20, 2024 and included in its Quarterly Report on Form 10-Q for the first quarter of fiscal 2025 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 2025. All rights reserved. Proprietary Information.3 Table of Contents 1. Overview and Ciena's portfolio 2. Industry context and addressable market expansion 3. Ciena is positioned for accelerated growth 4. Fiscal Q1 2025 financial performance 5. Appendix
© Ciena Corporation 2025. All rights reserved. Proprietary Information. Overview and Ciena's portfolio
© Ciena Corporation 2025. All rights reserved. Proprietary Information.5 Ciena is the global leader in high-speed connectivity Ciena provides networking systems, services, and software We build the most adaptive networks in the industry, enabling customers to anticipate and meet ever-increasing digital demands. 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.
© Ciena Corporation 2025. All rights reserved. Proprietary Information.6 Evolving our customers’ business with the Adaptive Network
© Ciena Corporation 2025. All rights reserved. Proprietary Information.7 Our strategy leverages our Optical technology to create expanded addressable market opportunities
© Ciena Corporation 2025. All rights reserved. Proprietary Information. Industry context and addressable market expansion
© Ciena Corporation 2025. All rights reserved. Proprietary Information.9 Increasing bandwidth consumption as a driver of network expansion
© Ciena Corporation 2025. All rights reserved. Proprietary Information.10 Our core business is enabling investment in higher-growth markets 1Sources: Dell'Oro, CignalAI, LightCounting, and Ciena internal analysis.
© Ciena Corporation 2025. All rights reserved. Proprietary Information.11 An industry leader #1 Globally • Data center interconnect • Optical for internet content provider customers #1 N. America • Data center interconnect • Total optical networking • Optical packet Optical Transport Report, 4Q24 #1 Globally • Purpose-built/compact modular DCI • SLTE WDM • Access switching #1 N. America • Total optical networking • Purpose-built/compact modular DCI • Access switching Optical Networking Report, 3Q24 Service Provider Switching & Routing Report, 3Q24 #1 Globally • Purpose-built/compact modular DCI • Optical for cloud and colo • SLTE WDM #1 N. America • Total optical networking • Optical for cloud and colo • Routing/Access Transport Hardware Report, 4Q24
© Ciena Corporation 2025. All rights reserved. Proprietary Information. Ciena is positioned for accelerated growth
© Ciena Corporation 2025. All rights reserved. Proprietary Information.13 Our future growth opportunity Long-term growth in core business plus new addressable markets provide an opportunity to outpace our traditional revenue CAGR over time
© Ciena Corporation 2025. All rights reserved. Proprietary Information.14 Our portfolio addresses key network applications
© Ciena Corporation 2025. All rights reserved. Proprietary Information.15 We expect coherent technology will have growing application in the AI era
© Ciena Corporation 2025. All rights reserved. Proprietary Information. Q1 FY 2025 results
© Ciena Corporation 2025. All rights reserved. Proprietary Information.17 Q1 FY 2025 key highlights ▪ Service Provider revenue grew 14% YoY ▪ Non-telco represented 49% of total revenue ▪ Government, R&E, and Enterprise revenue grew 10% YoY ▪ APAC revenue grew 6% YoY ▪ Blue Planet revenue grew 87% YoY • Added 20 new WL6e customers in the quarter bringing total customers shipped to 25 • Awarded half a dozen new submarine wins in the quarter, including large 100Tb subsea upgrade • Awarded numerous MOFN opportunities globally, strengthening our position as leading optical vendor for AI networks. • Released two new SAOS 10 based weatherproof routers to expand and deliver applications in the most challenging outdoor environments ▪ Expanded the breath of our Broadband portfolio by introducing the two new XGS- PON optical network units (ONUs) • Total shareholder return five-year CAGR of 16%1 • Repurchased ~1.0 million shares for $79.2 million under our three-year program (FY25-27) 1 Based on closing share price between 2/17/2020 to 2/17/2025 Achieving balanced growth Prioritizing long term shareholder value Driving the pace of innovation
© Ciena Corporation 2025. All rights reserved. Proprietary Information.18 Q1 FY 2025 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. Q1 FY 2025 Q1 FY 2024 Revenue $1,072.3M $1,037.7M Adjusted Gross Margin* 44.7% 45.7% Adjusted Operating Expense* $347.4M $336.8M Adjusted Operating Margin* 12.3% 13.2% Adjusted EBITDA* $156.5M $160.0M Adjusted EPS* $0.64 $0.66
© Ciena Corporation 2025. All rights reserved. Proprietary Information.19 Q1 FY 2025 comparative operating metrics Q1 FY 2025 Q1 FY 2024 Cash and investments $1.32B $1.48B Cash provided by operations $104M $266M DSO 90.0 88.0 Inventory Turns 2.3 1.9 Gross Leverage 3.35x 2.42x Net Debt $283M $148M
© Ciena Corporation 2025. All rights reserved. Proprietary Information.20 Revenue by segment (Amounts in millions) Q1 FY 2025 Q1 FY 2024 Revenue %** Revenue %** Networking Platforms Optical Networking $728.0 67.9 $695.8 67.1 Routing and Switching 93.2 8.7 111.4 10.7 Total Networking Platforms 821.2 76.6 807.2 77.8 Platform Software and Services 95.1 8.9 89.7 8.6 Blue Planet Automation Software and Services 26.0 2.4 14.0 1.4 Global Services Maintenance Support and Training 74.6 7.0 74.1 7.1 Installation and Deployment 47.7 4.4 42.7 4.1 Consulting and Network Design 7.7 0.7 10.0 1.0 Total Global Services 130.0 12.1 126.8 12.2 Total $1,072.3 100.0 $1,037.7 100.0 * Reconciliations of these non-GAAP measures to GAAP results are included in the appendix to this presentation. ** Denotes % of total revenue
© Ciena Corporation 2025. All rights reserved. Proprietary Information.21 Revenue derived from non-telco customers
© Ciena Corporation 2025. All rights reserved. Proprietary Information.22 Revenue by geographic region 10.8% 10.1% 10.8% 20.0% 17.1% 13.4% 69.2% 72.8% 76.3% 75.8% 14.3% 9.4% 11.1% 14.7% 74.2%
© Ciena Corporation 2025. All rights reserved. Proprietary Information. Q1 FY 2025 appendix
© Ciena Corporation 2025. All rights reserved. Proprietary Information.24 Q1 FY 2025 Q4 FY 2024 Q3 FY 2024 Q2 FY 2024 Q1 FY 2024 GAAP gross profit $471,821 $460,022 $403,945 $388,661 $466,962 Share-based compensation-products 1,750 1,736 1,660 1,760 1,318 Share-based compensation-services 3,405 3,257 3,122 3,344 3,020 Amortization of intangible assets 2,233 2,764 2,764 2,763 2,764 Total adjustments related to gross profit 7,388 7,757 7,546 7,867 7,102 Adjusted (non-GAAP) gross profit $479,209 $467,779 $411,491 $396,528 $474,064 Adjusted (non-GAAP) gross profit percentage 44.7 % 41.6 % 43.7 % 43.5 % 45.7 % Gross Profit Reconciliation (Amounts in thousands)
© Ciena Corporation 2025. All rights reserved. Proprietary Information.25 Q1 FY 2025 Q4 FY 2024 Q3 FY 2024 Q2 FY 2024 Q1 FY 2024 GAAP operating expense $391,158 $400,812 $377,202 $392,626 $382,333 Share-based compensation-research and development 14,237 14,065 13,118 14,066 12,880 Share-based compensation-sales and marketing 11,597 11,168 10,315 11,166 10,305 Share-based compensation-general and administrative 9,827 10,842 9,257 9,875 10,079 Significant asset impairments and restructuring costs 1,544 2,605 1,361 15,655 4,971 Amortization of intangible assets 6,545 7,185 7,185 7,947 7,252 Total adjustments related to operating expense 43,750 45,865 41,236 58,709 45,487 Adjusted (non-GAAP) operating expense $347,408 $354,947 $335,966 $333,917 $336,846 Q1 FY 2025 Q4 FY 2024 Q3 FY 2024 Q2 FY 2024 Q1 FY 2024 GAAP income (loss) from operations $80,663 $59,210 $26,743 $(3,965) $84,629 Total adjustments related to gross profit 7,388 7,757 7,546 7,867 7,102 Total adjustments related to operating expense 43,750 45,865 41,236 58,709 45,487 Total adjustments related to income from operations 51,138 53,622 48,782 66,576 52,589 Adjusted (non-GAAP) income from operations $131,801 $112,832 $75,525 $62,611 $137,218 Adjusted (non-GAAP) operating margin percentage 12.3 % 10.0 % 8.0 % 6.8 % 13.2 % Operating Expense Reconciliation (Amounts in thousands) Income (Loss) from Operations Reconciliation (Amounts in thousands)
© Ciena Corporation 2025. All rights reserved. Proprietary Information.26 Q1 FY 2025 Q4 FY 2024 Q3 FY 2024 Q2 FY 2024 Q1 FY 2024 GAAP net income (loss) $44,572 $37,028 $14,230 $(16,849) $49,547 Exclude GAAP provision for income taxes 24,022 10,993 2,125 820 21,956 Income (loss) before income taxes 68,594 48,021 16,355 (16,029) 71,503 Total adjustments related to income from operations 51,138 53,622 48,782 66,576 52,589 Loss on extinguishment and modification of debt 729 — — — — Adjusted income before income taxes 120,461 101,643 65,137 50,547 124,092 Non-GAAP tax provision on adjusted income before income taxes 26,501 22,361 14,330 11,120 27,300 Adjusted (non-GAAP) net income $93,960 $79,282 $50,807 $39,427 $96,792 Weighted average basic common shares outstanding 142,880 144,240 144,394 144,914 145,291 Weighted average diluted potential common shares outstanding(1) 145,944 146,487 145,361 146,268 145,848 Q1 FY 2025 Q4 FY 2024 Q3 FY 2024 Q2 FY 2024 Q1 FY 2024 GAAP diluted net income (loss) per potential common share $ 0.31 $ 0.25 $ 0.10 $ (0.12) $ 0.34 Adjusted (non-GAAP) diluted net income per potential common share $ 0.64 $ 0.54 $ 0.35 $ 0.27 $ 0.66 1. Weighted average dilutive potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share for the first quarter of fiscal 2025 includes 3.1 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 2025. All rights reserved. Proprietary Information.27 Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) Q1 FY 2025 Q4 FY 2024 Q3 FY 2024 Q2 FY 2024 Q1 FY 2024 Net income (loss) (GAAP) $44,572 $37,028 $14,230 $(16,849) $49,547 Add: Interest expense 22,918 24,990 24,401 23,861 23,776 Less: Interest and other income, net 11,578 13,801 14,013 11,797 10,650 Add: Loss on extinguishment and modification of debt 729 — — — — Add: Provision for income taxes 24,022 10,993 2,125 820 21,956 Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements 24,679 23,849 22,981 23,208 22,808 Add: Amortization of intangible assets 8,778 9,949 9,949 10,710 10,016 EBITDA $114,120 $93,008 $59,673 $29,953 $117,453 Add: Share-based compensation expense 40,816 41,068 37,472 40,211 37,602 Add: Significant asset impairments and restructuring expense 1,544 2,605 1,361 15,655 4,971 Adjusted EBITDA $156,480 $136,681 $98,506 $85,819 $160,026 Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) (Amounts in thousands)