Ciena Reports Fiscal Second Quarter 2024 Financial Results
Ciena (NYSE: CIEN) reported its fiscal second quarter 2024 financial results with a revenue of $910.8 million, a 19.6% decline from Q2 2023's $1.13 billion. The GAAP net loss for Q2 2024 was $16.8 million, or $(0.12) per share, compared to a net income of $57.7 million, or $0.38 per share, in Q2 2023. Adjusted net income was $39.4 million, or $0.27 per share, down from $110.4 million, or $0.74 per share, in Q2 2023. The gross margin slightly decreased to 42.7%, and operating margin dropped from 9.1% to (0.4)%. The company repurchased 1.1 million shares for $57.0 million.
- Revenue from Platform Software and Services increased to $85.4 million, up from $69.4 million in Q2 2023.
- Global Services revenue rose to $134.7 million from $127.8 million in Q2 2023.
- Ciena repurchased approximately 1.1 million shares of common stock for $57.0 million.
- Cash flow from operations totaled $58.5 million.
- Cash and investments totaled $1.42 billion.
- Total revenue declined by 19.6% year-over-year, from $1.13 billion in Q2 2023 to $910.8 million in Q2 2024.
- GAAP net loss of $16.8 million, or $(0.12) per share, compared to a net income of $57.7 million in Q2 2023.
- Adjusted net income decreased to $39.4 million, or $0.27 per share, from $110.4 million, or $0.74 per share, in Q2 2023.
- Gross margin slightly decreased from 43.1% to 42.7%.
- Operating margin dropped significantly from 9.1% to negative (0.4)%.
- Adjusted EBITDA fell by 52.5%, from $180.6 million in Q2 2023 to $85.8 million in Q2 2024.
- Significant decline in Optical Networking revenue from $784.5 million in Q2 2023 to $560.2 million in Q2 2024.
- Revenue from Asia Pacific dropped from $164.9 million to $92.1 million.
Insights
Analyzing Ciena Corporation's fiscal second quarter 2024 financial results, it's evident that the company is facing a challenging period. The revenue drop from
The drop in adjusted operating margin from
In the short term, the significant drop in revenue and net income is likely to exert downward pressure on the stock price. However, the company’s strategic focus on bandwidth demand and leadership in optical networking could provide long-term growth potential if they can navigate the current challenges effectively.
From a market perspective, Ciena's performance reflects broader industry trends where networking hardware and services are experiencing fluctuations due to inventory adjustments by service providers. The revenue decline across major segments, particularly in optical networking, which saw a revenue decrease from
Geographically, the revenue decline was notable in all regions, particularly in the Asia Pacific where revenue dropped from
Investors should be mindful of the customer concentration risk, with one customer representing
In the short term, market sentiment might be negative owing to the notable revenue drops. However, long-term stability could be bolstered by Ciena's focus on expanding its market through new technologies and services.
The share repurchase program, where Ciena repurchased 1.1 million shares for
However, the cash flow from operations totaling
The company's commitment to leadership in optical networking and bandwidth demand focus suggests a strategic direction that could yield benefits in the long run. Nonetheless, investors should be cautious of short-term volatility and monitor upcoming quarters for signs of recovery or further declines.
-
Q2 Revenue:
$910.8 million -
Q2 Net Income (Loss) per Share:
$(0.12) $0.27 -
Share Repurchases: Repurchased approximately 1.1 million shares of common stock for an aggregate price of
$57.0 million
"Our fiscal second quarter performance underscores the strength in our business amid a challenging near-term environment as service providers continue to work through existing inventory," said Gary Smith, president and CEO, Ciena. “With continued robust growth in bandwidth demand, we remain focused on extending our leadership in optical as a foundation for expanding our addressable market.”
For the fiscal second quarter 2024, Ciena reported revenue of
Ciena's GAAP net loss for the fiscal second quarter 2024 was
Ciena's adjusted (non-GAAP) net income for the fiscal second quarter 2024 was
Fiscal Second Quarter 2024 Performance Summary
The tables below (in millions, except percentage data) provide comparisons of certain quarterly results to the prior year. Appendices A and B set forth reconciliations between the GAAP and adjusted (non-GAAP) measures contained in this release.
|
|
GAAP Results (unaudited) |
|||||||||
|
|
Q2 |
|
Q2 |
|
Period Change |
|||||
|
|
FY 2024 |
|
FY 2023 |
|
Y-T-Y* |
|||||
Revenue |
|
$ |
910.8 |
|
|
$ |
1,132.7 |
|
|
(19.6 |
)% |
Gross margin |
|
|
42.7 |
% |
|
|
43.1 |
% |
|
(0.4 |
)% |
Operating expense |
|
$ |
392.6 |
|
|
$ |
384.9 |
|
|
2.0 |
% |
Operating margin |
|
|
(0.4 |
)% |
|
|
9.1 |
% |
|
(9.5 |
)% |
|
|
Non-GAAP Results (unaudited) |
|||||||||
|
|
Q2 |
|
Q2 |
|
Period Change |
|||||
|
|
FY 2024 |
|
FY 2023 |
|
Y-T-Y* |
|||||
Revenue |
|
$ |
910.8 |
|
|
$ |
1,132.7 |
|
|
(19.6 |
)% |
Adj. gross margin |
|
|
43.5 |
% |
|
|
43.7 |
% |
|
(0.2 |
)% |
Adj. operating expense |
|
$ |
333.9 |
|
|
$ |
338.1 |
|
|
(1.2 |
)% |
Adj. operating margin |
|
|
6.8 |
% |
|
|
13.8 |
% |
|
(7.0 |
)% |
Adj. EBITDA |
|
$ |
85.8 |
|
|
$ |
180.6 |
|
|
(52.5 |
)% |
* Denotes % change, or in the case of margin, absolute change |
|||||||||||
|
|
Revenue by Segment (unaudited) |
||||||||
|
|
Q2 FY 2024 |
|
Q2 FY 2023 |
||||||
|
|
Revenue |
|
%** |
|
Revenue |
|
%** |
||
Networking Platforms |
|
|
|
|
|
|
|
|
||
Optical Networking |
|
$ |
560.2 |
|
61.5 |
|
$ |
784.5 |
|
69.3 |
Routing and Switching |
|
|
116.1 |
|
12.7 |
|
|
130.4 |
|
11.5 |
Total Networking Platforms |
|
|
676.3 |
|
74.2 |
|
|
914.9 |
|
80.8 |
|
|
|
|
|
|
|
|
|
||
Platform Software and Services |
|
|
85.4 |
|
9.4 |
|
|
69.4 |
|
6.1 |
|
|
|
|
|
|
|
|
|
||
Blue Planet Automation Software and Services |
|
|
14.4 |
|
1.6 |
|
|
20.6 |
|
1.8 |
|
|
|
|
|
|
|
|
|
||
Global Services |
|
|
|
|
|
|
|
|
||
Maintenance Support and Training |
|
|
77.4 |
|
8.5 |
|
|
73.2 |
|
6.5 |
Installation and Deployment |
|
|
43.8 |
|
4.8 |
|
|
39.5 |
|
3.5 |
Consulting and Network Design |
|
|
13.5 |
|
1.5 |
|
|
15.1 |
|
1.3 |
Total Global Services |
|
|
134.7 |
|
14.8 |
|
|
127.8 |
|
11.3 |
|
|
|
|
|
|
|
|
|
||
Total |
|
$ |
910.8 |
|
100.0 |
|
$ |
1,132.7 |
|
100.0 |
** Denotes % of total revenue |
||||||||||
Additional Performance Metrics for Fiscal Second Quarter 2024
|
|
Revenue by Geographic Region (unaudited) |
||||||||
|
|
Q2 FY 2024 |
|
Q2 FY 2023 |
||||||
|
|
Revenue |
|
% ** |
|
Revenue |
|
% ** |
||
|
|
$ |
662.9 |
|
72.8 |
|
$ |
794.4 |
|
70.1 |
|
|
|
155.8 |
|
17.1 |
|
|
173.4 |
|
15.3 |
|
|
|
92.1 |
|
10.1 |
|
|
164.9 |
|
14.6 |
Total |
|
$ |
910.8 |
|
100.0 |
|
$ |
1,132.7 |
|
100.0 |
** Denotes % of total revenue |
||||||||||
-
One
10% -plus customer represented a total13.8% of revenue -
Cash and investments totaled
$1.42 billion -
Cash flow from operations totaled
$58.5 million - Average days' sales outstanding (DSOs) were 98
-
Accounts receivable, net balance was
$840.1 million -
Unbilled contract asset, net balance was
$151.9 million -
Inventories totaled
$1.02 billion -
Raw materials:
$638.9 million -
Work in process:
$68.2 million -
Finished goods:
$331.3 million -
Deferred cost of sales:
$43.7 million -
Reserve for excess and obsolescence:
$(59.5) million
-
Raw materials:
- Product inventory turns were 1.6
- Headcount totaled 8,627
Supplemental Materials and Live Web Broadcast of Unaudited Fiscal Second Quarter 2024 Results
Today, Thursday, June 6, 2024, in conjunction with this announcement, Ciena has posted to the Quarterly Results page of the Investor Relations section of its website certain related supporting materials for its unaudited fiscal second quarter 2024 results.
Ciena's management will also host a discussion today with investors and financial analysts that will include the Company's outlook. The live audio web broadcast beginning at 8:30 a.m. Eastern will be accessible via www.ciena.com. An archived replay of the live broadcast will be available shortly following its conclusion on the Investor Relations page of Ciena's website.
Notes to Investors
Forward-Looking Statements. You are encouraged to review the Investors section of our website, where we routinely post press releases, Securities and Exchange Commission ("SEC") filings, recent news, financial results, supplemental financial information, and other announcements. From time to time we exclusively post material information to this website along with other disclosure channels that we use. This press release contains certain forward-looking statements that involve risks and uncertainties. These statements are based on current expectations, forecasts, assumptions and other information available to the Company as of the date hereof. Forward-looking statements include statements regarding Ciena's expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. Forward-looking statements in this release include: "Our fiscal second quarter performance underscores the strength in our business amid a challenging near-term environment as service providers continue to work through existing inventory. With continued robust growth in bandwidth demand, we remain focused on extending our leadership in optical as a foundation for expanding our addressable market.”
Ciena's actual results, performance or events may differ materially from these forward-looking statements made or implied due to a number of risks and uncertainties relating to Ciena's business, including: the effect of broader economic and market conditions on our customers, their spending and their businesses and markets; our ability to execute our business and growth strategies; the impact of macroeconomic conditions and global supply chain constraints or disruptions including increased supply costs and lead times; the impact of the introduction of new technologies by us or our competitors; seasonality and the timing and size of customer orders, their delivery dates and our ability to recognize revenue relating to such sales; the level of competitive pressure we encounter; the product, customer and geographic mix of sales within the period; changes in foreign currency exchange rates; factors beyond our control such as natural disasters, climate change, acts of war or terrorism, geopolitical tensions or events, including but not limited to the ongoing conflicts between
Non-GAAP Presentation of Quarterly and Annual Results. This release includes non-GAAP measures of Ciena's gross profit, operating expense, income from operations, earnings before interest, tax, depreciation and amortization (EBITDA), Adjusted EBITDA, and measures of net income and net income per share. In evaluating the operating performance of Ciena's business, management excludes certain charges and credits that are required by GAAP. These items share one or more of the following characteristics: they are unusual and Ciena does not expect them to recur in the ordinary course of its business; they do not involve the expenditure of cash; they are unrelated to the ongoing operation of the business in the ordinary course; or their magnitude and timing is largely outside of Ciena's control. Management believes that the non-GAAP measures below provide management and investors useful information and meaningful insight to the operating performance of the business. The presentation of these non-GAAP financial measures should be considered in addition to Ciena's GAAP results and these measures are not intended to be a substitute for the financial information prepared and presented in accordance with GAAP. Ciena's non-GAAP measures and the related adjustments may differ from non-GAAP measures used by other companies and should only be used to evaluate Ciena's results of operations in conjunction with our corresponding GAAP results. To the extent not previously disclosed in a prior Ciena financial results press release, Appendices A and B to this press release set forth a complete GAAP to non-GAAP reconciliation of the non-GAAP measures contained in this release.
About Ciena. Ciena (NYSE: CIEN) is a global leader in networking systems, services, and software. We build the most adaptive networks in the industry, enabling customers to anticipate and meet ever-increasing digital demands. For three-plus decades, Ciena has brought our humanity to our relentless pursuit of innovation. Prioritizing collaborative relationships with our customers, partners, and communities, we create flexible, open, and sustainable networks that better serve all users—today and into the future. For updates on Ciena, follow us on LinkedIn, X, the Ciena Insights blog, or visit www.ciena.com.
CIENA CORPORATION |
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
(in thousands, except per share data) |
|||||||||||||||
(unaudited) |
|||||||||||||||
|
Quarter Ended |
|
Year Ended |
||||||||||||
|
April 27, |
|
April 29, |
|
April 27, |
|
April 29, |
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||
Products |
$ |
701,316 |
|
|
$ |
935,330 |
|
|
$ |
1,537,093 |
|
|
$ |
1,813,045 |
|
Services |
|
209,510 |
|
|
|
197,325 |
|
|
|
411,442 |
|
|
|
376,131 |
|
Total revenue |
|
910,826 |
|
|
|
1,132,655 |
|
|
|
1,948,535 |
|
|
|
2,189,176 |
|
Cost of goods sold: |
|
|
|
|
|
|
|
||||||||
Products |
|
415,732 |
|
|
|
541,883 |
|
|
|
882,204 |
|
|
|
1,042,220 |
|
Services |
|
106,433 |
|
|
|
103,089 |
|
|
|
210,708 |
|
|
|
203,327 |
|
Total cost of goods sold |
|
522,165 |
|
|
|
644,972 |
|
|
|
1,092,912 |
|
|
|
1,245,547 |
|
Gross profit |
|
388,661 |
|
|
|
487,683 |
|
|
|
855,623 |
|
|
|
943,629 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Research and development |
|
195,380 |
|
|
|
189,993 |
|
|
|
382,649 |
|
|
|
371,723 |
|
Selling and marketing |
|
124,071 |
|
|
|
125,083 |
|
|
|
252,229 |
|
|
|
248,890 |
|
General and administrative |
|
49,573 |
|
|
|
50,939 |
|
|
|
104,256 |
|
|
|
101,835 |
|
Significant asset impairments and restructuring costs |
|
15,655 |
|
|
|
8,153 |
|
|
|
20,626 |
|
|
|
12,451 |
|
Amortization of intangible assets |
|
7,947 |
|
|
|
9,845 |
|
|
|
15,199 |
|
|
|
17,286 |
|
Acquisition and integration costs |
|
— |
|
|
|
857 |
|
|
|
— |
|
|
|
3,415 |
|
Total operating expenses |
|
392,626 |
|
|
|
384,870 |
|
|
|
774,959 |
|
|
|
755,600 |
|
Income (loss) from operations |
|
(3,965 |
) |
|
|
102,813 |
|
|
|
80,664 |
|
|
|
188,029 |
|
Interest and other income, net |
|
11,797 |
|
|
|
8,551 |
|
|
|
22,447 |
|
|
|
40,524 |
|
Interest expense |
|
(23,861 |
) |
|
|
(23,889 |
) |
|
|
(47,637 |
) |
|
|
(39,759 |
) |
Income (loss) before income taxes |
|
(16,029 |
) |
|
|
87,475 |
|
|
|
55,474 |
|
|
|
188,794 |
|
Provision for income taxes |
|
820 |
|
|
|
29,821 |
|
|
|
22,776 |
|
|
|
54,899 |
|
Net income (loss) |
$ |
(16,849 |
) |
|
$ |
57,654 |
|
|
$ |
32,698 |
|
|
$ |
133,895 |
|
|
|
|
|
|
|
|
|
||||||||
Net Income (Loss) per Common Share |
|
|
|
|
|
|
|
||||||||
Basic net income (loss) per common share |
$ |
(0.12 |
) |
|
$ |
0.39 |
|
|
$ |
0.23 |
|
|
$ |
0.90 |
|
Diluted net income (loss) per potential common share |
$ |
(0.12 |
) |
|
$ |
0.38 |
|
|
$ |
0.22 |
|
|
$ |
0.89 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average basic common shares outstanding |
|
144,914 |
|
|
|
149,616 |
|
|
|
145,104 |
|
|
|
149,351 |
|
Weighted average dilutive potential common shares outstanding 1 |
|
144,914 |
|
|
|
150,147 |
|
|
|
146,059 |
|
|
|
149,852 |
|
1 Weighted average dilutive potential common shares outstanding used in calculating GAAP diluted net income per potential common share includes the following number of shares underlying certain stock option and stock unit awards: (i) 1.0 million for the first six months of fiscal 2024, and (ii) 0.5 million for both the second quarter and first six months of fiscal 2023. |
CIENA CORPORATION |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(in thousands, except share data) |
|||||||
(unaudited) |
|||||||
|
April 27,
|
|
October 28,
|
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
1,091,289 |
|
|
$ |
1,010,618 |
|
Short-term investments |
|
165,620 |
|
|
|
104,753 |
|
Accounts receivable, net |
|
840,131 |
|
|
|
1,003,876 |
|
Inventories, net |
|
1,022,615 |
|
|
|
1,050,838 |
|
Prepaid expenses and other |
|
421,692 |
|
|
|
405,694 |
|
Total current assets |
|
3,541,347 |
|
|
|
3,575,779 |
|
Long-term investments |
|
165,960 |
|
|
|
134,278 |
|
Equipment, building, furniture and fixtures, net |
|
274,353 |
|
|
|
280,147 |
|
Operating lease right-of-use assets |
|
30,210 |
|
|
|
35,140 |
|
Goodwill |
|
444,917 |
|
|
|
444,765 |
|
Other intangible assets, net |
|
184,941 |
|
|
|
205,627 |
|
Deferred tax asset, net |
|
821,879 |
|
|
|
809,306 |
|
Other long-term assets |
|
151,196 |
|
|
|
116,453 |
|
Total assets |
$ |
5,614,803 |
|
|
$ |
5,601,495 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
332,106 |
|
|
$ |
317,828 |
|
Accrued liabilities and other short-term obligations |
|
355,258 |
|
|
|
431,419 |
|
Deferred revenue |
|
196,989 |
|
|
|
154,419 |
|
Operating lease liabilities |
|
16,138 |
|
|
|
16,655 |
|
Current portion of long-term debt |
|
11,700 |
|
|
|
11,700 |
|
Total current liabilities |
|
912,191 |
|
|
|
932,021 |
|
Long-term deferred revenue |
|
80,365 |
|
|
|
74,041 |
|
Other long-term obligations |
|
172,839 |
|
|
|
170,407 |
|
Long-term operating lease liabilities |
|
28,513 |
|
|
|
33,259 |
|
Long-term debt, net |
|
1,540,639 |
|
|
|
1,543,406 |
|
Total liabilities |
|
2,734,547 |
|
|
|
2,753,134 |
|
Stockholders’ equity: |
|
|
|
||||
Preferred stock – par value |
|
— |
|
|
|
— |
|
Common stock – par value |
|
1,442 |
|
|
|
1,448 |
|
Additional paid-in capital |
|
6,245,248 |
|
|
|
6,262,083 |
|
Accumulated other comprehensive loss |
|
(21,729 |
) |
|
|
(37,767 |
) |
Accumulated deficit |
|
(3,344,705 |
) |
|
|
(3,377,403 |
) |
Total stockholders’ equity |
|
2,880,256 |
|
|
|
2,848,361 |
|
Total liabilities and stockholders’ equity |
$ |
5,614,803 |
|
|
$ |
5,601,495 |
|
|
|
|
|
||||
CIENA CORPORATION |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(in thousands) (unaudited) |
|||||||
|
Six Months Ended |
||||||
|
April 27, |
|
April 29, |
||||
|
2024 |
|
2023 |
||||
Cash flows provided by (used in) operating activities: |
|
|
|
||||
Net income |
$ |
32,698 |
|
|
$ |
133,895 |
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
|
|
|
||||
Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements |
|
46,016 |
|
|
|
45,903 |
|
Share-based compensation expense |
|
78,075 |
|
|
|
62,372 |
|
Amortization of intangible assets |
|
20,726 |
|
|
|
23,600 |
|
Deferred taxes |
|
(8,946 |
) |
|
|
(2,134 |
) |
Provision for inventory excess and obsolescence |
|
23,152 |
|
|
|
12,691 |
|
Provision for warranty |
|
8,629 |
|
|
|
13,577 |
|
Gain on equity investments, net |
|
— |
|
|
|
(26,455 |
) |
Other |
|
11,509 |
|
|
|
11,331 |
|
Changes in assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
155,107 |
|
|
|
(116,914 |
) |
Inventories |
|
5,346 |
|
|
|
(162,143 |
) |
Prepaid expenses and other |
|
(37,441 |
) |
|
|
(41,511 |
) |
Operating lease right-of-use assets |
|
6,111 |
|
|
|
7,644 |
|
Accounts payable, accruals and other obligations |
|
(56,064 |
) |
|
|
(55,754 |
) |
Deferred revenue |
|
48,641 |
|
|
|
68,818 |
|
Short and long-term operating lease liabilities |
|
(9,010 |
) |
|
|
(10,748 |
) |
Net cash provided by (used in) operating activities |
|
324,549 |
|
|
|
(35,828 |
) |
Cash flows used in investing activities: |
|
|
|
||||
Payments for equipment, furniture, fixtures and intellectual property |
|
(33,500 |
) |
|
|
(58,034 |
) |
Purchases of investments |
|
(171,131 |
) |
|
|
(106,245 |
) |
Proceeds from sales and maturities of investments |
|
83,013 |
|
|
|
123,251 |
|
Settlement of foreign currency forward contracts, net |
|
(828 |
) |
|
|
(6,194 |
) |
Purchase of equity investments |
|
(16,256 |
) |
|
|
— |
|
Acquisition of business, net of cash acquired |
|
— |
|
|
|
(230,048 |
) |
Net cash used in investing activities |
|
(138,702 |
) |
|
|
(277,270 |
) |
Cash flows provided by (used in) financing activities: |
|
|
|
||||
Proceeds from issuance of term loan, net |
|
— |
|
|
|
497,500 |
|
Payment of long term debt |
|
(2,925 |
) |
|
|
(3,465 |
) |
Payment of debt issuance costs |
|
(2,554 |
) |
|
|
(5,230 |
) |
Payment of finance lease obligations |
|
(1,989 |
) |
|
|
(1,864 |
) |
Shares repurchased for tax withholdings on vesting of stock unit awards |
|
(22,428 |
) |
|
|
(22,022 |
) |
Repurchases of common stock - repurchase program, net |
|
(94,817 |
) |
|
|
— |
|
Proceeds from issuance of common stock |
|
16,876 |
|
|
|
14,656 |
|
Net cash provided by (used in) financing activities |
|
(107,837 |
) |
|
|
479,575 |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
2,659 |
|
|
|
6,867 |
|
Net increase in cash, cash equivalents and restricted cash |
|
80,669 |
|
|
|
173,344 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
1,010,786 |
|
|
|
994,378 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
1,091,455 |
|
|
$ |
1,167,722 |
|
Supplemental disclosure of cash flow information |
|
|
|
||||
Cash paid during the period for interest, net |
$ |
45,782 |
|
|
$ |
37,514 |
|
Cash paid during the period for income taxes, net |
$ |
29,193 |
|
|
$ |
24,218 |
|
Operating lease payments |
$ |
9,964 |
|
|
$ |
11,689 |
|
Non-cash investing and financing activities |
|
|
|
||||
Purchase of equipment in accounts payable |
$ |
6,365 |
|
|
$ |
4,618 |
|
Repurchase of common stock in accrued liabilities from repurchase program |
$ |
3,859 |
|
|
$ |
— |
|
Operating right-of-use assets subject to lease liability |
$ |
3,639 |
|
|
$ |
6,177 |
|
Gain on equity investments, net |
$ |
— |
|
|
$ |
26,455 |
|
APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Measurements |
||||||||
(in thousands, except per share data) (unaudited) |
||||||||
|
|
|
|
|
||||
|
|
Quarter Ended |
||||||
|
|
April 27, |
|
April 29, |
||||
|
|
2024 |
|
2023 |
||||
Gross Profit Reconciliation (GAAP/non-GAAP) |
|
|
|
|
||||
GAAP gross profit |
|
$ |
388,661 |
|
|
$ |
487,683 |
|
Share-based compensation-products |
|
|
1,760 |
|
|
|
1,155 |
|
Share-based compensation-services |
|
|
3,344 |
|
|
|
2,659 |
|
Amortization of intangible assets |
|
|
2,763 |
|
|
|
3,431 |
|
Total adjustments related to gross profit |
|
|
7,867 |
|
|
|
7,245 |
|
Adjusted (non-GAAP) gross profit |
|
$ |
396,528 |
|
|
$ |
494,928 |
|
Adjusted (non-GAAP) gross profit percentage |
|
|
43.5 |
% |
|
|
43.7 |
% |
|
|
|
|
|
||||
Operating Expense Reconciliation (GAAP/non-GAAP) |
|
|
|
|
||||
GAAP operating expense |
|
$ |
392,626 |
|
|
$ |
384,870 |
|
Share-based compensation-research and development |
|
|
14,066 |
|
|
|
10,731 |
|
Share-based compensation-sales and marketing |
|
|
11,166 |
|
|
|
8,755 |
|
Share-based compensation-general and administrative |
|
|
9,875 |
|
|
|
8,468 |
|
Significant asset impairments and restructuring costs |
|
|
15,655 |
|
|
|
8,153 |
|
Amortization of intangible assets |
|
|
7,947 |
|
|
|
9,845 |
|
Acquisition and integration costs |
|
|
— |
|
|
|
857 |
|
Total adjustments related to operating expense |
|
|
58,709 |
|
|
|
46,809 |
|
Adjusted (non-GAAP) operating expense |
|
$ |
333,917 |
|
|
$ |
338,061 |
|
|
|
|
|
|
||||
Income (Loss) from Operations Reconciliation (GAAP/non-GAAP) |
|
|
|
|
||||
GAAP income (loss) from operations |
|
$ |
(3,965 |
) |
|
$ |
102,813 |
|
Total adjustments related to gross profit |
|
|
7,867 |
|
|
|
7,245 |
|
Total adjustments related to operating expense |
|
|
58,709 |
|
|
|
46,809 |
|
Total adjustments related to income (loss) from operations |
|
|
66,576 |
|
|
|
54,054 |
|
Adjusted (non-GAAP) income from operations |
|
$ |
62,611 |
|
|
$ |
156,867 |
|
Adjusted (non-GAAP) operating margin percentage |
|
|
6.8 |
% |
|
|
13.8 |
% |
|
|
|
|
|
||||
Net Income (Loss) Reconciliation (GAAP/non-GAAP) |
|
|
|
|
||||
GAAP net income (loss) |
|
$ |
(16,849 |
) |
|
$ |
57,654 |
|
Exclude GAAP provision for income taxes |
|
|
820 |
|
|
|
29,821 |
|
Income (loss) before income taxes |
|
|
(16,029 |
) |
|
|
87,475 |
|
Total adjustments related to income from operations |
|
|
66,576 |
|
|
|
54,054 |
|
Adjusted income before income taxes |
|
|
50,547 |
|
|
|
141,529 |
|
Non-GAAP tax provision on adjusted income before income taxes |
|
|
11,120 |
|
|
|
31,136 |
|
Adjusted (non-GAAP) net income |
|
$ |
39,427 |
|
|
$ |
110,393 |
|
|
|
|
|
|
||||
Weighted average basic common shares outstanding |
|
|
144,914 |
|
|
|
149,616 |
|
Weighted average dilutive potential common shares outstanding 1 |
|
|
146,268 |
|
|
|
150,147 |
|
|
|
|
|
|
||||
|
|
|
|
|
||||
|
|
|
|
|
||||
Net Income (Loss) per Common Share |
|
|
|
|
||||
GAAP diluted net income (loss) per potential common share |
|
$ |
(0.12 |
) |
|
$ |
0.38 |
|
Adjusted (non-GAAP) diluted net income per potential common share |
|
$ |
0.27 |
|
|
$ |
0.74 |
|
1 Weighted average dilutive potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share includes the following number of shares underlying certain stock option and stock unit awards: (i) 1.4 million and 1.0 million for the second quarter and first six months of fiscal 2024, respectively; and (ii) 0.5 million for both the second quarter and first six months of fiscal 2023. |
APPENDIX B - Calculation of EBITDA and Adjusted EBITDA |
|||||||
(in thousands) (unaudited) |
|||||||
|
|
|
|
|
|||
|
|
Quarter Ended |
|||||
|
|
April 27, |
|
April 29, |
|||
|
|
2024 |
|
2023 |
|||
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) |
|
|
|
|
|||
Net income (loss) (GAAP) |
|
$ |
(16,849 |
) |
|
$ |
57,654 |
Add: Interest expense |
|
|
23,861 |
|
|
|
23,889 |
Less: Interest and other income, net |
|
|
11,797 |
|
|
|
8,551 |
Add: Provision for income taxes |
|
|
820 |
|
|
|
29,821 |
Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements |
|
|
23,208 |
|
|
|
23,695 |
Add: Amortization of intangible assets |
|
|
10,710 |
|
|
|
13,275 |
EBITDA |
|
$ |
29,953 |
|
|
$ |
139,783 |
Add: Share-based compensation expense |
|
|
40,211 |
|
|
|
31,768 |
Add: Significant asset impairments and restructuring costs |
|
|
15,655 |
|
|
|
8,153 |
Add: Acquisition and integration costs |
|
|
— |
|
|
|
857 |
Adjusted EBITDA |
|
$ |
85,819 |
|
|
$ |
180,561 |
* * *
The adjusted (non-GAAP) measures above and their reconciliation to Ciena's GAAP results for the periods presented reflect adjustments relating to the following items:
- Share-based compensation - a non-cash expense incurred in accordance with share-based compensation accounting guidance.
- Significant asset impairments and restructuring costs - costs incurred as a result of restructuring activities taken to align resources with perceived market opportunities, the redesign of business processes and restructuring certain real estate facilities.
- Amortization of intangible assets - a non-cash expense arising from the acquisition of intangible assets, principally developed technologies and customer-related intangibles, that Ciena is required to amortize over an expected useful life.
- Acquisition and integration costs - primarily consist of financial, legal and accounting advisors' costs and employment-related costs related to Ciena's acquisitions in fiscal 2023.
-
Non-GAAP tax provision - consists of current and deferred income tax expense commensurate with the level of adjusted income before income taxes and utilizes a current, blended
U.S. and foreign statutory annual tax rate of22.0% for both the fiscal second quarter 2024 and the fiscal second quarter 2023. This rate may be subject to change in the future, including as a result of changes in tax policy or tax strategy.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240605221851/en/
Press Contact:
Jamie Moody
Ciena Corporation
+1 (410) 694-5761
pr@ciena.com
Investor Contact:
Gregg Lampf
Ciena Corporation
+1 (410) 694-5700
ir@ciena.com
Source: Ciena Corporation
FAQ
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