Ciena Corporation
CIEN Technology Q2 2025
Document 1
FOR IMMEDIATE RELEASE
Ciena Reports Fiscal Second Quarter 2025 Financial Results
HANOVER, Md. - June 5, 2025 - Ciena® Corporation (NYSE: CIEN), a networking systems, services and software company, today announced unaudited financial results for its fiscal second quarter ended May 3, 2025.
•Q2 Revenue: $1.13 billion
•Q2 Net Income per Share: $0.06 GAAP; $0.42 adjusted (non-GAAP)
•Share Repurchases: Repurchased approximately 1.2 million shares of common stock for an aggregate price of $84.3 million during the quarter
"Our strong fiscal second quarter results demonstrate our continued global leadership in high-speed connectivity with growing momentum across all of our business segments,” said Gary Smith, president and CEO, Ciena. “With accelerating demand driven by cloud and AI, our performance is validating the durability of a positive network infrastructure spending environment. As a result, we have strong visibility and are very confident in both our continued growth and our ability to drive additional operating leverage over time."
For the fiscal second quarter 2025, Ciena reported revenue of $1.13 billion as compared to $910.8 million for the fiscal second quarter 2024.
Ciena's GAAP net income for the fiscal second quarter 2025 was $9.0 million, or $0.06 per diluted common share, which compares to a GAAP net loss of $(16.8) million, or $(0.12) per diluted common share, for the fiscal second quarter 2024.
Ciena's adjusted (non-GAAP) net income for the fiscal second quarter 2025 was $60.7 million, or $0.42 per diluted common share, which compares to an adjusted (non-GAAP) net income of $39.4 million, or $0.27 per diluted common share, for the fiscal second quarter 2024.
1
Fiscal Second 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.
| GAAP Results (unaudited) | ||||||||||||||||||||
| Q2 | Q2 | Period Change | ||||||||||||||||||
| FY 2025 | FY 2024 | Y-T-Y* | ||||||||||||||||||
| Revenue | $ | 1,125.9 | $ | 910.8 | 23.6 | % | ||||||||||||||
| Gross margin | 40.2 | % | 42.7 | % | (2.5) | % | ||||||||||||||
| Operating expense | $ | 420.0 | $ | 392.6 | 7.0 | % | ||||||||||||||
| Operating margin | 2.9 | % | (0.4) | % | 3.3 | % | ||||||||||||||
| Non-GAAP Results (unaudited) | ||||||||||||||||||||
| Q2 | Q2 | Period Change | ||||||||||||||||||
| FY 2025 | FY 2024 | Y-T-Y* | ||||||||||||||||||
| Revenue | $ | 1,125.9 | $ | 910.8 | 23.6 | % | ||||||||||||||
| Adj. gross margin | 41.0 | % | 43.5 | % | (2.5) | % | ||||||||||||||
| Adj. operating expense | $ | 369.5 | $ | 333.9 | 10.7 | % | ||||||||||||||
| Adj. operating margin | 8.2 | % | 6.8 | % | 1.4 | % | ||||||||||||||
| Adj. EBITDA | $ | 116.7 | $ | 85.8 | 36.0 | % | ||||||||||||||
* Denotes % change, or in the case of margin, absolute change
| Revenue by Segment (unaudited) | ||||||||||||||||||||||||||
| Q2 FY 2025 | Q2 FY 2024 | |||||||||||||||||||||||||
| Revenue | %** | Revenue | %** | |||||||||||||||||||||||
| Networking Platforms | ||||||||||||||||||||||||||
| Optical Networking | $ | 773.6 | 68.7 | $ | 560.2 | 61.5 | ||||||||||||||||||||
| Routing and Switching | 92.7 | 8.2 | 116.1 | 12.7 | ||||||||||||||||||||||
| Total Networking Platforms | 866.3 | 76.9 | 676.3 | 74.2 | ||||||||||||||||||||||
| Platform Software and Services | 85.4 | 7.5 | 85.4 | 9.4 | ||||||||||||||||||||||
| Blue Planet Automation Software and Services | 28.0 | 2.5 | 14.4 | 1.6 | ||||||||||||||||||||||
| Global Services | ||||||||||||||||||||||||||
| Maintenance Support and Training | 79.4 | 7.1 | 77.4 | 8.5 | ||||||||||||||||||||||
| Installation and Deployment | 58.2 | 5.2 | 43.8 | 4.8 | ||||||||||||||||||||||
| Consulting and Network Design | 8.6 | 0.8 | 13.5 | 1.5 | ||||||||||||||||||||||
| Total Global Services | 146.2 | 13.1 | 134.7 | 14.8 | ||||||||||||||||||||||
| Total | $ | 1,125.9 | 100.0 | $ | 910.8 | 100.0 | ||||||||||||||||||||
** Denotes % of total revenue
2
Additional Performance Metrics for Fiscal Second Quarter 2025
| Revenue by Geographic Region (unaudited) | ||||||||||||||||||||||||||
| Q2 FY 2025 | Q2 FY 2024 | |||||||||||||||||||||||||
| Revenue | % ** | Revenue | % ** | |||||||||||||||||||||||
| Americas | $ | 833.8 | 74.1 | $ | 662.9 | 72.8 | ||||||||||||||||||||
| Europe, Middle East and Africa | 191.6 | 17.0 | 155.8 | 17.1 | ||||||||||||||||||||||
| Asia Pacific | 100.5 | 8.9 | 92.1 | 10.1 | ||||||||||||||||||||||
| Total | $ | 1,125.9 | 100.0 | $ | 910.8 | 100.0 | ||||||||||||||||||||
** Denotes % of total revenue
•Two customer represented 10%-plus of revenue combining for a total of 23.9% of revenue
•Cash and investments totaled $1.35 billion
•Cash flow from operations totaled $156.9 million
•Average days' sales outstanding (DSOs) were 87
•Accounts receivable, net balance was $929.8 million
•Unbilled contract asset, net balance was $151.8 million
•Inventories totaled $874.3 million, including:
◦Raw materials: $647.0 million
◦Work in process: $35.3 million
◦Finished goods: $273.4 million
◦Deferred cost of sales: $36.6 million
◦Reserve for excess and obsolescence: $(118.0) million
•Product inventory turns were 2.5
•Headcount totaled 8,819
Supplemental Materials and Live Web Broadcast of Unaudited Fiscal Second Quarter 2025 Results
Today, Thursday, June 5, 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 second 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.
3
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 strong fiscal second quarter results demonstrate our continued global leadership in high-speed connectivity with growing momentum across all of our business segments. With accelerating demand driven by cloud and AI, our performance is validating the durability of a positive network infrastructure spending environment. As a result, we have strong visibility and are very confident in both our continued growth and our ability to drive additional operating leverage over time."
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 and pandemics; 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 second 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.
4
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.
5
CIENA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| Quarter Ended | Six Months Ended | ||||||||||||||||||||||
| May 3, | April 27, | May 3, | April 27, | ||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Products | $ | 898,581 | $ | 701,316 | $ | 1,753,366 | $ | 1,537,093 | |||||||||||||||
| Services | 227,297 | 209,510 | 444,772 | 411,442 | |||||||||||||||||||
| Total revenue | 1,125,878 | 910,826 | 2,198,138 | 1,948,535 | |||||||||||||||||||
| Cost of goods sold: | |||||||||||||||||||||||
| Products | 549,984 | 415,732 | 1,040,788 | 882,204 | |||||||||||||||||||
| Services | 123,056 | 106,433 | 232,691 | 210,708 | |||||||||||||||||||
| Total cost of goods sold | 673,040 | 522,165 | 1,273,479 | 1,092,912 | |||||||||||||||||||
| Gross profit | 452,838 | 388,661 | 924,659 | 855,623 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | 214,868 | 195,380 | 407,531 | 382,649 | |||||||||||||||||||
| Selling and marketing | 139,683 | 124,071 | 276,187 | 252,229 | |||||||||||||||||||
| General and administrative | 56,952 | 49,573 | 110,854 | 104,256 | |||||||||||||||||||
| Significant asset impairments and restructuring costs | 1,948 | 15,655 | 3,492 | 20,626 | |||||||||||||||||||
| Amortization of intangible assets | 6,545 | 7,947 | 13,090 | 15,199 | |||||||||||||||||||
| Total operating expenses | 419,996 | 392,626 | 811,154 | 774,959 | |||||||||||||||||||
| Income (loss) from operations | 32,842 | (3,965) | 113,505 | 80,664 | |||||||||||||||||||
| Interest and other income, net | 7,871 | 11,797 | 19,449 | 22,447 | |||||||||||||||||||
| Interest expense | (21,697) | (23,861) | (44,615) | (47,637) | |||||||||||||||||||
| Loss on extinguishment and modification of debt | — | — | (729) | — | |||||||||||||||||||
| Income (loss) before income taxes | 19,016 | (16,029) | 87,610 | 55,474 | |||||||||||||||||||
Provision for income taxes | 10,047 | 820 | 34,069 | 22,776 | |||||||||||||||||||
| Net income (loss) | $ | 8,969 | $ | (16,849) | $ | 53,541 | $ | 32,698 | |||||||||||||||
| Net Income (Loss) per Common Share | |||||||||||||||||||||||
| Basic net income (loss) per common share | $ | 0.06 | $ | (0.12) | $ | 0.38 | $ | 0.23 | |||||||||||||||
| Diluted net income (loss) per potential common share | $ | 0.06 | $ | (0.12) | $ | 0.37 | $ | 0.22 | |||||||||||||||
| Weighted average basic common shares outstanding | 142,503 | 144,914 | 142,704 | 145,104 | |||||||||||||||||||
Weighted average dilutive potential common shares outstanding1 | 144,972 | 144,914 | 145,470 | 146,059 | |||||||||||||||||||
1 Weighted average dilutive potential common shares outstanding used in calculating GAAP diluted net income (loss) per potential common share includes the following number of shares underlying certain stock option and stock unit awards: (i) 2.5 million and 2.8 million for the second quarter and first six months of fiscal 2025, respectively; and (ii) 1.0 million for the first six months of fiscal 2024.
6
CIENA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
| May 3, 2025 | November 2, 2024 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 949,771 | $ | 934,863 | |||||||
| Short-term investments | 304,177 | 316,343 | |||||||||
| Accounts receivable, net | 929,799 | 908,597 | |||||||||
| Inventories, net | 874,326 | 820,430 | |||||||||
| Prepaid expenses and other | 506,252 | 564,183 | |||||||||
| Total current assets | 3,564,325 | 3,544,416 | |||||||||
| Long-term investments | 92,121 | 80,920 | |||||||||
| Equipment, building, furniture and fixtures, net | 349,349 | 337,722 | |||||||||
| Operating lease right-of-use assets | 38,655 | 27,417 | |||||||||
| Goodwill | 444,805 | 444,707 | |||||||||
| Other intangible assets, net | 147,459 | 165,020 | |||||||||
| Deferred tax asset, net | 863,571 | 886,441 | |||||||||
| Other long-term assets | 159,081 | 154,694 | |||||||||
| Total assets | $ | 5,659,366 | $ | 5,641,337 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 419,077 | $ | 423,401 | |||||||
| Accrued liabilities and other short-term obligations | 381,398 | 393,905 | |||||||||
| Deferred revenue | 221,835 | 156,379 | |||||||||
| Operating lease liabilities | 13,170 | 14,455 | |||||||||
| Current portion of long-term debt | 11,580 | 11,700 | |||||||||
| Total current liabilities | 1,047,060 | 999,840 | |||||||||
| Long-term deferred revenue | 83,239 | 81,240 | |||||||||
| Other long-term obligations | 188,809 | 185,938 | |||||||||
| Long-term operating lease liabilities | 35,103 | 25,107 | |||||||||
| Long-term debt, net | 1,528,776 | 1,533,074 | |||||||||
| Total liabilities | 2,882,987 | 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; 141,686,082 and 142,656,116 shares issued and outstanding | 1,417 | 1,427 | |||||||||
| Additional paid-in capital | 6,054,464 | 6,154,869 | |||||||||
| Accumulated other comprehensive loss | (39,596) | (46,711) | |||||||||
| Accumulated deficit | (3,239,906) | (3,293,447) | |||||||||
| Total stockholders’ equity | 2,776,379 | 2,816,138 | |||||||||
| Total liabilities and stockholders’ equity | $ | 5,659,366 | $ | 5,641,337 | |||||||
7
CIENA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Six Months Ended | |||||||||||
| May 3, | April 27, | ||||||||||
| 2025 | 2024 | ||||||||||
| Cash flows provided by operating activities: | |||||||||||
| Net income | $ | 53,541 | $ | 32,698 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements | 49,771 | 46,016 | |||||||||
| Share-based compensation expense | 88,767 | 78,075 | |||||||||
| Amortization of intangible assets | 17,555 | 20,726 | |||||||||
| Deferred taxes | (10,470) | (8,946) | |||||||||
| Provision for inventory excess and obsolescence | 23,431 | 23,152 | |||||||||
| Provision for warranty | 10,714 | 8,629 | |||||||||
| Other | (6,355) | 11,509 | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable | (20,857) | 155,107 | |||||||||
| Inventories | (76,904) | 5,346 | |||||||||
| Prepaid expenses and other | 84,144 | (37,441) | |||||||||
| Operating lease right-of-use assets | 5,580 | 6,111 | |||||||||
| Accounts payable, accruals and other obligations | (16,755) | (56,064) | |||||||||
| Deferred revenue | 66,493 | 48,641 | |||||||||
| Short and long-term operating lease liabilities | (7,986) | (9,010) | |||||||||
| Net cash provided by operating activities | 260,669 | 324,549 | |||||||||
| Cash flows used in investing activities: | |||||||||||
| Payments for equipment, furniture, fixtures and intellectual property | (55,622) | (33,500) | |||||||||
| Purchases of investments | (159,102) | (171,131) | |||||||||
| Proceeds from sales and maturities of investments | 164,837 | 83,013 | |||||||||
| Settlement of foreign currency forward contracts, net | 2,441 | (828) | |||||||||
| Purchase of equity investments | — | (16,256) | |||||||||
| Net cash used in investing activities | (47,446) | (138,702) | |||||||||
| 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 | (5,790) | (2,925) | |||||||||
| Payment of debt issuance costs | (12) | (2,554) | |||||||||
| Payment of finance lease obligations | (2,110) | (1,989) | |||||||||
| Shares repurchased for tax withholdings on vesting of stock unit awards | (42,266) | (22,428) | |||||||||
| Repurchases of common stock - repurchase program, net | (168,197) | (94,817) | |||||||||
| Proceeds from issuance of common stock | 17,132 | 16,876 | |||||||||
| Net cash used in financing activities | (201,243) | (107,837) | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 2,937 | 2,659 | |||||||||
| Net increase in cash, cash equivalents and restricted cash | 14,917 | 80,669 | |||||||||
| 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 | $ | 949,943 | $ | 1,091,455 | |||||||
| Supplemental disclosure of cash flow information | |||||||||||
| Cash paid during the period for interest, net | $ | 43,200 | $ | 45,782 | |||||||
| Cash paid during the period for income taxes, net | $ | 55,466 | $ | 29,193 | |||||||
| Operating lease payments | $ | 8,812 | $ | 9,964 | |||||||
| Non-cash investing and financing activities | |||||||||||
| Purchase of equipment in accounts payable | $ | 12,545 | $ | 6,365 | |||||||
| Repurchase of common stock in accrued liabilities from repurchase program, net | $ | 2,023 | $ | 3,859 | |||||||
| Operating right-of-use assets subject to lease liability | $ | 16,351 | $ | 3,639 | |||||||
8
| APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Measurements | ||||||||||||||
| (in thousands, except per share data) (unaudited) | ||||||||||||||
| Quarter Ended | ||||||||||||||
| May 3, | April 27, | |||||||||||||
| 2025 | 2024 | |||||||||||||
| Gross Profit Reconciliation (GAAP/non-GAAP) | ||||||||||||||
| GAAP gross profit | $ | 452,838 | $ | 388,661 | ||||||||||
| Share-based compensation-products | 2,033 | 1,760 | ||||||||||||
| Share-based compensation-services | 3,980 | 3,344 | ||||||||||||
| Amortization of intangible assets | 2,232 | 2,763 | ||||||||||||
| Total adjustments related to gross profit | 8,245 | 7,867 | ||||||||||||
| Adjusted (non-GAAP) gross profit | $ | 461,083 | $ | 396,528 | ||||||||||
| Adjusted (non-GAAP) gross profit percentage | 41.0 | % | 43.5 | % | ||||||||||
| Operating Expense Reconciliation (GAAP/non-GAAP) | ||||||||||||||
| GAAP operating expense | $ | 419,996 | $ | 392,626 | ||||||||||
| Share-based compensation-research and development | 17,021 | 14,066 | ||||||||||||
| Share-based compensation-sales and marketing | 13,649 | 11,166 | ||||||||||||
| Share-based compensation-general and administrative | 11,341 | 9,875 | ||||||||||||
| Significant asset impairments and restructuring costs | 1,948 | 15,655 | ||||||||||||
| Amortization of intangible assets | 6,545 | 7,947 | ||||||||||||
| Total adjustments related to operating expense | 50,504 | 58,709 | ||||||||||||
| Adjusted (non-GAAP) operating expense | $ | 369,492 | $ | 333,917 | ||||||||||
| Income (Loss) from Operations Reconciliation (GAAP/non-GAAP) | ||||||||||||||
| GAAP income (loss) from operations | $ | 32,842 | $ | (3,965) | ||||||||||
| Total adjustments related to gross profit | 8,245 | 7,867 | ||||||||||||
| Total adjustments related to operating expense | 50,504 | 58,709 | ||||||||||||
| Total adjustments related to income (loss) from operations | 58,749 | 66,576 | ||||||||||||
| Adjusted (non-GAAP) income from operations | $ | 91,591 | $ | 62,611 | ||||||||||
| Adjusted (non-GAAP) operating margin percentage | 8.2 | % | 6.8 | % | ||||||||||
| Net Income (Loss) Reconciliation (GAAP/non-GAAP) | ||||||||||||||
| GAAP net income (loss) | $ | 8,969 | $ | (16,849) | ||||||||||
| Exclude GAAP provision for income taxes | 10,047 | 820 | ||||||||||||
| Income (loss) before income taxes | 19,016 | (16,029) | ||||||||||||
| Total adjustments related to income (loss) from operations | 58,749 | 66,576 | ||||||||||||
| Adjusted income before income taxes | 77,765 | 50,547 | ||||||||||||
| Non-GAAP tax provision on adjusted income before income taxes | 17,108 | 11,120 | ||||||||||||
| Adjusted (non-GAAP) net income | $ | 60,657 | $ | 39,427 | ||||||||||
| Weighted average basic common shares outstanding | 142,503 | 144,914 | ||||||||||||
Weighted average dilutive potential common shares outstanding 1 | 144,972 | 146,268 | ||||||||||||
| Net Income (Loss) per Common Share | ||||||||||||||
| GAAP diluted net income (loss) per potential common share | $ | 0.06 | $ | (0.12) | ||||||||||
| Adjusted (non-GAAP) diluted net income per potential common share | $ | 0.42 | $ | 0.27 | ||||||||||
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) 2.5 million for the second quarter of fiscal 2025; and (ii) 1.4 million for the second quarter of fiscal 2024.
9
| APPENDIX B - Calculation of EBITDA and Adjusted EBITDA | ||||||||||||||
| (in thousands) (unaudited) | ||||||||||||||
| Quarter Ended | ||||||||||||||
| May 3, | April 27, | |||||||||||||
| 2025 | 2024 | |||||||||||||
| Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) | ||||||||||||||
| Net income (loss) (GAAP) | $ | 8,969 | $ | (16,849) | ||||||||||
| Add: Interest expense | 21,697 | 23,861 | ||||||||||||
| Less: Interest and other income, net | 7,871 | 11,797 | ||||||||||||
| Add: Provision for income taxes | 10,047 | 820 | ||||||||||||
| Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements | 25,092 | 23,208 | ||||||||||||
| Add: Amortization of intangible assets | 8,777 | 10,710 | ||||||||||||
| EBITDA | $ | 66,711 | $ | 29,953 | ||||||||||
| Add: Share-based compensation expense | 48,024 | 40,211 | ||||||||||||
| Add: Significant asset impairments and restructuring costs | 1,948 | 15,655 | ||||||||||||
| Adjusted EBITDA | $ | 116,683 | $ | 85,819 | ||||||||||
* * *
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.
•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 second quarter of fiscal 2025 and fiscal 2024. This rate may be subject to change in the future, including as a result of changes in tax policy or tax strategy.
10
Document 1
© Ciena Corporation 2025. All rights reserved. Proprietary Information. Ciena Corporation Fiscal Q2 2025 Earnings Presentation Period ended May 3, 2025 June 5, 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; 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 second 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 Q2 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’ businesses 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
© Ciena Corporation 2025. All rights reserved. Proprietary Information.11 An industry leader #1 Globally • Data center interconnect • Optical for internet content provider customers • Purpose-built #1 N. America • Data center interconnect • Total optical networking • Optical packet Optical Transport Report, 1Q25 #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, 4Q24 Service Provider Switching & Routing Report, 4Q24 #1 Globally • Purpose-built/compact modular DCI • Optical for cloud and colo • SLTE WDM • Routing/Access #1 N. America • Total optical networking • Optical for cloud and colo • Routing/Access Transport Hardware Report, 1Q25
© 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 opportunities 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. Q2 FY 2025 results
© Ciena Corporation 2025. All rights reserved. Proprietary Information.17 Q2 FY 2025 key highlights ▪ Non-telco represented 54% of total revenue ▪ Direct Cloud Provider revenue grew 85% YoY and represented 38% of total revenue ▪ EMEA revenue grew 23% YoY ▪ Blue Planet revenue nearly doubled YoY • Added another Cloud Provider for our WaveLogic 5 Nano coherent pluggable transceivers • Added 24 new WaveLogic 6 Extreme customers in Q2, bringing the total to 49 within just two quarters of availability • Record RLS quarter for both revenue and shipments • Added 8 additional broadband customers during the quarter for a total 87 customers • Expanded the breath of portfolio with the 8192 Coherent Router to our 8000 family, our first 800GbE router • Added WaveLogic 6 Extreme capabilities to the WaveRouter family to become the industry’s first generally available 1.6T coherent router • Total shareholder return five-year CAGR of 10%1 • Repurchased ~1.2 million shares for $84.3 million under our three-year program (FY25-27) 1 Based on closing share price between 5/16/2020 to 5/16/2025 Achieving balanced growth Prioritizing long term shareholder value Driving the pace of innovation
© Ciena Corporation 2025. All rights reserved. Proprietary Information.18 Q2 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. Q2 FY 2025 Q2 FY 2024 Revenue $1,125.9M $910.8M Adjusted Gross Margin* 41.0% 43.5% Adjusted Operating Expense* $369.5M $333.9M Adjusted Operating Margin* 8.2% 6.8% Adjusted EBITDA* $116.7M $85.8M Adjusted EPS* $0.42 $0.27
© Ciena Corporation 2025. All rights reserved. Proprietary Information.19 Q2 FY 2025 comparative operating metrics Q2 FY 2025 Q2 FY 2024 Cash and investments $1.35B $1.42B Cash provided by operations $157M $59M DSO 87.0 98.0 Inventory Turns 2.5 1.6 Gross Leverage 3.15x 2.81x Net Debt $253M $195M
© Ciena Corporation 2025. All rights reserved. Proprietary Information.20 Revenue by segment (Amounts in millions) Q2 FY 2025 Q2 FY 2024 Revenue %** Revenue %** Networking Platforms Optical Networking $773.6 68.7 $560.2 61.5 Routing and Switching 92.7 8.2 116.1 12.7 Total Networking Platforms 866.3 76.9 676.3 74.2 Platform Software and Services 85.4 7.5 85.4 9.4 Blue Planet Automation Software and Services 28.0 2.5 14.4 1.6 Global Services Maintenance Support and Training 79.4 7.1 77.4 8.5 Installation and Deployment 58.2 5.2 43.8 4.8 Consulting and Network Design 8.6 0.8 13.5 1.5 Total Global Services 146.2 13.1 134.7 14.8 Total $1,125.9 100.0 $910.8 100.0 * 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 10.1% 9.4% 11.1% 17.1% 14.3% 14.7% 72.8% 76.3% 75.8% 74.2% 13.4% 10.8% 8.9% 17.0% 74.1%
© Ciena Corporation 2025. All rights reserved. Proprietary Information. Q2 FY 2025 appendix
© Ciena Corporation 2025. All rights reserved. Proprietary Information.24 Q2 FY 2025 Q1 FY 2025 Q4 FY 2024 Q3 FY 2024 Q2 FY 2024 GAAP gross profit $452,838 $471,821 $460,022 $403,945 $388,661 Share-based compensation-products 2,033 1,750 1,736 1,660 1,760 Share-based compensation-services 3,980 3,405 3,257 3,122 3,344 Amortization of intangible assets 2,232 2,233 2,764 2,764 2,763 Total adjustments related to gross profit 8,245 7,388 7,757 7,546 7,867 Adjusted (non-GAAP) gross profit $461,083 $479,209 $467,779 $411,491 $396,528 Adjusted (non-GAAP) gross profit percentage 41.0 % 44.7 % 41.6 % 43.7 % 43.5 % Gross Profit Reconciliation (Amounts in thousands)
© Ciena Corporation 2025. All rights reserved. Proprietary Information.25 Q2 FY 2025 Q1 FY 2025 Q4 FY 2024 Q3 FY 2024 Q2 FY 2024 GAAP operating expense $419,996 $391,158 $400,812 $377,202 $392,626 Share-based compensation-research and development 17,021 14,237 14,065 13,118 14,066 Share-based compensation-sales and marketing 13,649 11,597 11,168 10,315 11,166 Share-based compensation-general and administrative 11,341 9,827 10,842 9,257 9,875 Significant asset impairments and restructuring costs 1,948 1,544 2,605 1,361 15,655 Amortization of intangible assets 6,545 6,545 7,185 7,185 7,947 Total adjustments related to operating expense 50,504 43,750 45,865 41,236 58,709 Adjusted (non-GAAP) operating expense $369,492 $347,408 $354,947 $335,966 $333,917 Q2 FY 2025 Q1 FY 2025 Q4 FY 2024 Q3 FY 2024 Q2 FY 2024 GAAP income (loss) from operations $32,842 $80,663 $59,210 $26,743 $(3,965) Total adjustments related to gross profit 8,245 7,388 7,757 7,546 7,867 Total adjustments related to operating expense 50,504 43,750 45,865 41,236 58,709 Total adjustments related to income (loss) from operations 58,749 51,138 53,622 48,782 66,576 Adjusted (non-GAAP) income from operations $91,591 $131,801 $112,832 $75,525 $62,611 Adjusted (non-GAAP) operating margin percentage 8.2 % 12.3 % 10.0 % 8.0 % 6.8 % Operating Expense Reconciliation (Amounts in thousands) Income (Loss) from Operations Reconciliation (Amounts in thousands)
© Ciena Corporation 2025. All rights reserved. Proprietary Information.26 Q2 FY 2025 Q1 FY 2025 Q4 FY 2024 Q3 FY 2024 Q2 FY 2024 GAAP net income (loss) $8,969 $44,572 $37,028 $14,230 $(16,849) Exclude GAAP provision for income taxes 10,047 24,022 10,993 2,125 820 Income (loss) before income taxes 19,016 68,594 48,021 16,355 (16,029) Total adjustments related to income from operations 58,749 51,138 53,622 48,782 66,576 Loss on extinguishment and modification of debt — 729 — — — Adjusted income before income taxes 77,765 120,461 101,643 65,137 50,547 Non-GAAP tax provision on adjusted income before income taxes 17,108 26,501 22,361 14,330 11,120 Adjusted (non-GAAP) net income $60,657 $93,960 $79,282 $50,807 $39,427 Weighted average basic common shares outstanding 142,503 142,880 144,240 144,394 144,914 Weighted average diluted potential common shares outstanding(1) 144,972 145,944 146,487 145,361 146,268 Q2 FY 2025 Q1 FY 2025 Q4 FY 2024 Q3 FY 2024 Q2 FY 2024 GAAP diluted net income (loss) per potential common share $ 0.06 $ 0.31 $ 0.25 $ 0.10 $ (0.12) Adjusted (non-GAAP) diluted net income per potential common share $ 0.42 $ 0.64 $ 0.54 $ 0.35 $ 0.27 1. Weighted average dilutive potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share for the second quarter of fiscal 2025 includes 2.5 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) Q2 FY 2025 Q1 FY 2025 Q4 FY 2024 Q3 FY 2024 Q2 FY 2024 Net income (loss) (GAAP) $8,969 $44,572 $37,028 $14,230 $(16,849) Add: Interest expense 21,697 22,918 24,990 24,401 23,861 Less: Interest and other income, net 7,871 11,578 13,801 14,013 11,797 Add: Loss on extinguishment and modification of debt — 729 — — — Add: Provision for income taxes 10,047 24,022 10,993 2,125 820 Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements 25,092 24,679 23,849 22,981 23,208 Add: Amortization of intangible assets 8,777 8,778 9,949 9,949 10,710 EBITDA $66,711 $114,120 $93,008 $59,673 $29,953 Add: Share-based compensation expense 48,024 40,816 41,068 37,472 40,211 Add: Significant asset impairments and restructuring expense 1,948 1,544 2,605 1,361 15,655 Adjusted EBITDA $116,683 $156,480 $136,681 $98,506 $85,819 Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) (Amounts in thousands)