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Ciena Reports Fiscal Second Quarter 2024 Financial Results

Ciena® Corporation (NYSE: CIEN), a networking systems, services and software company, today announced unaudited financial results for its fiscal second quarter ended April 27, 2024. Q2 Revenue: $910...

Business Wire

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

  • Q2 Revenue: $910.8 million
  • Q2 Net Income (Loss) per Share: $(0.12) GAAP; $0.27 adjusted (non-GAAP)
  • Share Repurchases: Repurchased approximately 1.1 million shares of common stock for an aggregate price of $57.0 million during the quarter

"Our fiscal second quarter performance underscores the strength in our business amid a challenging near-term environment as service providers continue to work through existing inventory," said Gary Smith, president and CEO, Ciena. “With continued robust growth in bandwidth demand, we remain focused on extending our leadership in optical as a foundation for expanding our addressable market.”

For the fiscal second quarter 2024, Ciena reported revenue of $910.8 million as compared to $1.13 billion for the fiscal second quarter 2023.

Ciena's GAAP net loss for the fiscal second quarter 2024 was $(16.8) million, or $(0.12) per diluted common share, which compares to a GAAP net income of $57.7 million, or $0.38 per diluted common share, for the fiscal second quarter 2023.

Ciena's adjusted (non-GAAP) net income for the fiscal second quarter 2024 was $39.4 million, or $0.27 per diluted common share, which compares to an adjusted (non-GAAP) net income of $110.4 million, or $0.74 per diluted common share, for the fiscal second quarter 2023.

Fiscal Second Quarter 2024 Performance Summary

The tables below (in millions, except percentage data) provide comparisons of certain quarterly results to the prior year. Appendices A and B set forth reconciliations between the GAAP and adjusted (non-GAAP) measures contained in this release.

 

 

GAAP Results (unaudited)

 

 

Q2

 

Q2

 

Period Change

 

 

FY 2024

 

FY 2023

 

Y-T-Y*

Revenue

 

$

910.8

 

 

$

1,132.7

 

 

(19.6

)%

Gross margin

 

 

42.7

%

 

 

43.1

%

 

(0.4

)%

Operating expense

 

$

392.6

 

 

$

384.9

 

 

2.0

%

Operating margin

 

 

(0.4

)%

 

 

9.1

%

 

(9.5

)%

 

 

Non-GAAP Results (unaudited)

 

 

Q2

 

Q2

 

Period Change

 

 

FY 2024

 

FY 2023

 

Y-T-Y*

Revenue

 

$

910.8

 

 

$

1,132.7

 

 

(19.6

)%

Adj. gross margin

 

 

43.5

%

 

 

43.7

%

 

(0.2

)%

Adj. operating expense

 

$

333.9

 

 

$

338.1

 

 

(1.2

)%

Adj. operating margin

 

 

6.8

%

 

 

13.8

%

 

(7.0

)%

Adj. EBITDA

 

$

85.8

 

 

$

180.6

 

 

(52.5

)%

 

* Denotes % change, or in the case of margin, absolute change

 

 

Revenue by Segment (unaudited)

 

 

Q2 FY 2024

 

Q2 FY 2023

 

 

Revenue

 

%**

 

Revenue

 

%**

Networking Platforms

 

 

 

 

 

 

 

 

Optical Networking

 

$

560.2

 

61.5

 

$

784.5

 

69.3

Routing and Switching

 

 

116.1

 

12.7

 

 

130.4

 

11.5

Total Networking Platforms

 

 

676.3

 

74.2

 

 

914.9

 

80.8

 

 

 

 

 

 

 

 

 

Platform Software and Services

 

 

85.4

 

9.4

 

 

69.4

 

6.1

 

 

 

 

 

 

 

 

 

Blue Planet Automation Software and Services

 

 

14.4

 

1.6

 

 

20.6

 

1.8

 

 

 

 

 

 

 

 

 

Global Services

 

 

 

 

 

 

 

 

Maintenance Support and Training

 

 

77.4

 

8.5

 

 

73.2

 

6.5

Installation and Deployment

 

 

43.8

 

4.8

 

 

39.5

 

3.5

Consulting and Network Design

 

 

13.5

 

1.5

 

 

15.1

 

1.3

Total Global Services

 

 

134.7

 

14.8

 

 

127.8

 

11.3

 

 

 

 

 

 

 

 

 

Total

 

$

910.8

 

100.0

 

$

1,132.7

 

100.0

 

** Denotes % of total revenue

Additional Performance Metrics for Fiscal Second Quarter 2024

 

 

Revenue by Geographic Region (unaudited)

 

 

Q2 FY 2024

 

Q2 FY 2023

 

 

Revenue

 

% **

 

Revenue

 

% **

Americas

 

$

662.9

 

72.8

 

$

794.4

 

70.1

Europe, Middle East and Africa

 

 

155.8

 

17.1

 

 

173.4

 

15.3

Asia Pacific

 

 

92.1

 

10.1

 

 

164.9

 

14.6

Total

 

$

910.8

 

100.0

 

$

1,132.7

 

100.0

 

** Denotes % of total revenue

  • One 10%-plus customer represented a total 13.8% of revenue
  • Cash and investments totaled $1.42 billion
  • Cash flow from operations totaled $58.5 million
  • Average days' sales outstanding (DSOs) were 98
  • Accounts receivable, net balance was $840.1 million
  • Unbilled contract asset, net balance was $151.9 million
  • Inventories totaled $1.02 billion, including:
    • Raw materials: $638.9 million
    • Work in process: $68.2 million
    • Finished goods: $331.3 million
    • Deferred cost of sales: $43.7 million
    • Reserve for excess and obsolescence: $(59.5) million
  • Product inventory turns were 1.6
  • Headcount totaled 8,627

Supplemental Materials and Live Web Broadcast of Unaudited Fiscal Second Quarter 2024 Results

Today, Thursday, June 6, 2024, in conjunction with this announcement, Ciena has posted to the Quarterly Results page of the Investor Relations section of its website certain related supporting materials for its unaudited fiscal second quarter 2024 results.

Ciena's management will also host a discussion today with investors and financial analysts that will include the Company's outlook. The live audio web broadcast beginning at 8:30 a.m. Eastern will be accessible via www.ciena.com. An archived replay of the live broadcast will be available shortly following its conclusion on the Investor Relations page of Ciena's website.

Notes to Investors

Forward-Looking Statements. You are encouraged to review the Investors section of our website, where we routinely post press releases, Securities and Exchange Commission ("SEC") filings, recent news, financial results, supplemental financial information, and other announcements. From time to time we exclusively post material information to this website along with other disclosure channels that we use. This press release contains certain forward-looking statements that involve risks and uncertainties. These statements are based on current expectations, forecasts, assumptions and other information available to the Company as of the date hereof. Forward-looking statements include statements regarding Ciena's expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. Forward-looking statements in this release include: "Our fiscal second quarter performance underscores the strength in our business amid a challenging near-term environment as service providers continue to work through existing inventory. With continued robust growth in bandwidth demand, we remain focused on extending our leadership in optical as a foundation for expanding our addressable market.”

Ciena's actual results, performance or events may differ materially from these forward-looking statements made or implied due to a number of risks and uncertainties relating to Ciena's business, including: the effect of broader economic and market conditions on our customers, their spending and their businesses and markets; our ability to execute our business and growth strategies; the impact of macroeconomic conditions and global supply chain constraints or disruptions including increased supply costs and lead times; the impact of the introduction of new technologies by us or our competitors; seasonality and the timing and size of customer orders, their delivery dates and our ability to recognize revenue relating to such sales; the level of competitive pressure we encounter; the product, customer and geographic mix of sales within the period; changes in foreign currency exchange rates; factors beyond our control such as natural disasters, climate change, acts of war or terrorism, geopolitical tensions or events, including but not limited to the ongoing conflicts between Ukraine and Russia, and Israel and Hamas, and public health emergencies or epidemics, including the COVID-19 pandemic; changes in tax or trade regulations, including the imposition of tariffs, duties or efforts to withdraw from or materially modify international trade agreements; cyberattacks, data breaches or other security incidents involving our enterprise network environment or our products; regulatory changes, litigation involving our intellectual property or government investigations; and the other risk factors disclosed in Ciena’s periodic reports filed with the Securities and Exchange Commission (SEC) including its Annual Report on Form 10-K filed with the SEC on December 15, 2023 and included in its Quarterly Report on Form 10-Q for the second quarter of fiscal 2024 to be filed with the SEC. Ciena assumes no obligation to update any forward-looking information included in this press release.

Non-GAAP Presentation of Quarterly and Annual Results. This release includes non-GAAP measures of Ciena's gross profit, operating expense, income from operations, earnings before interest, tax, depreciation and amortization (EBITDA), Adjusted EBITDA, and measures of net income and net income per share. In evaluating the operating performance of Ciena's business, management excludes certain charges and credits that are required by GAAP. These items share one or more of the following characteristics: they are unusual and Ciena does not expect them to recur in the ordinary course of its business; they do not involve the expenditure of cash; they are unrelated to the ongoing operation of the business in the ordinary course; or their magnitude and timing is largely outside of Ciena's control. Management believes that the non-GAAP measures below provide management and investors useful information and meaningful insight to the operating performance of the business. The presentation of these non-GAAP financial measures should be considered in addition to Ciena's GAAP results and these measures are not intended to be a substitute for the financial information prepared and presented in accordance with GAAP. Ciena's non-GAAP measures and the related adjustments may differ from non-GAAP measures used by other companies and should only be used to evaluate Ciena's results of operations in conjunction with our corresponding GAAP results. To the extent not previously disclosed in a prior Ciena financial results press release, Appendices A and B to this press release set forth a complete GAAP to non-GAAP reconciliation of the non-GAAP measures contained in this release.

About Ciena. Ciena (NYSE: CIEN) is a global leader in networking systems, services, and software. We build the most adaptive networks in the industry, enabling customers to anticipate and meet ever-increasing digital demands. For three-plus decades, Ciena has brought our humanity to our relentless pursuit of innovation. Prioritizing collaborative relationships with our customers, partners, and communities, we create flexible, open, and sustainable networks that better serve all users—today and into the future. For updates on Ciena, follow us on LinkedIn, X, the Ciena Insights blog, or visit www.ciena.com.

CIENA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

 

Quarter Ended

 

Year Ended

 

April 27,

 

April 29,

 

April 27,

 

April 29,

 

2024

 

2023

 

2024

 

2023

Revenue:

 

 

 

 

 

 

 

Products

$

701,316

 

 

$

935,330

 

 

$

1,537,093

 

 

$

1,813,045

 

Services

 

209,510

 

 

 

197,325

 

 

 

411,442

 

 

 

376,131

 

Total revenue

 

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