Slide 1: Earnings Presentation
Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Ciena Corporation Period ended October 31, 2020 December 10, 2020 Earnings Presentation
Slide 2: Forward-looking statements and non-GAAP measures
2Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Forward-looking statements and non-GAAP measures Information in this presentation and related comments of presenters contain a number of forward-looking statements. These statements are based on current expectation
Slide 3: COVID-19 response
3Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. COVID-19 response • Prioritizing health of employees and following CDC guidance for employers • The vast majority of our employees working remotely • Instituted pandemic employee benefits • Tripled our corporate ch
Slide 4: Fiscal 2020 results
4Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Fiscal 2020 results
Slide 5: FY 2020 key achievements
5Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. FY 2020 key achievements ▪ WL5 Extreme became the first GA 800g product, and we have 65 customers ▪ Blue Planet added new customers and expanded relationships with existing customers ▪ Significant architectural win
Slide 6: FY 2020 comparative financial highlights
6Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. FY 2020 comparative financial highlights Revenue Adjusted Gross Margin* Adjusted Operating Expense* Adjusted Operating Margin* FY 2020 Adjusted EBITDA* Adjusted EPS* FY 2019 $3.53B 47.4% $1.1B 29.9% / total revenue
Slide 7: FY 2020 comparative operating metrics
7Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. FY 2020 comparative operating metrics Cash and Investments Cash Flow from Operations DSO FY 2020 Inventory Turns FY 2019 $1.3B $494M 82 4.6 $1.0B $413M 82 5.0
Slide 8: Market context
8Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Market context
Slide 9: Market leadership rankings
9Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. #1 GLOBALLY ◦ DATA CENTER INTERCONNECT ◦ DATA CENTER INTERCONNECT FOR ICPs ◦ PURPOSE-BUILT/COMPACT MODULAR DCI #1 N. AMERICA ◦ TOTAL OPTICAL NETWORKING ◦ DATA CENTER INTERCONNECT ◦ PACKET OPTICAL ◦ LH WDM ◦ METRO W
Slide 10: Several mega trends and the innovations that will enable them
10Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Several mega trends and the innovations that will enable them Fiber Deep (Cable/MSO) Cloud Data Center Mobility & 5G IoT & Connected Objects
Slide 11: Q4 Fiscal 2020 results
11Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Q4 Fiscal 2020 results
Slide 12: Q4 key highlights
12Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Q4 FY 2020 key highlights ▪ Non-telco represented 39% of total revenue ▪ Direct web-scale contributed 22% of total revenue ▪ APAC contributed 17% of total revenue ▪ Blue Planet was up 26% YoY Achieving balanced gr
Slide 13: Financial highlights
13Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Q4 FY 2020 financial highlights* * A reconciliation of these non-GAAP measures to our GAAP results is included in the appendix to this presentation. Revenue $828M Adjusted Gross Margin* 49.5% Adjusted Operating Ex
Slide 14: Comparisons (year-over-year)
14Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Q4 FY 2020 comparisons (year-over-year) * A reconciliation of these non-GAAP measures to our GAAP results is included in the appendix to this presentation. $968.0 $828.5 Q4 FY 2019 Q4 FY 2020 Revenue (in millions)
Slide 15: Revenue by segment
15Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Revenue by segment (Amounts in millions) Q4 FY 2020 Q4 FY 2019 Revenue %** Revenue %** Networking Platforms Converged Packet Optical 579.3 69.9 665.8 68.8 Packet Networking 56.0 6.8 131.9 13.6 Total Networking Pla
Slide 16: Continued strength derived from non-telco revenue
16Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Continued strength derived from non-telco revenue* *represents 39.1% of total revenue in Q4 FY 2020 Q4 FY 2020 21.6%5.2% 7.7% Direct Webscale Cable Gov't, R&E, Enterprise 20% 15% 24% 25% 22% 9% 9% 10% 9% 5% 11% 11
Slide 17: Revenue by geographic region
17Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Revenue by geographic region Q4 FY 2020 64.2% 19.0% 16.8% Americas Europe, Middle East and Africa Asia Pacific (in m ill io ns ) Americas Europe, Middle East and Africa Asia Pacific Q4 FY 2019 Q1 FY 2020 Q2 FY 202
Slide 18: Balance sheet and operating metrics
18Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Q4 FY 2020 balance sheet and operating metrics Cash and Investments $1.3B Cash Flow From Operations $187M Free Cash Flow $166M Inventory Turns 4.0 Leverage 1.1x Net Debt $569M
Slide 19: Delivering consistent financial performance
19Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Source: Company filings Industry Average: ACIA, ADTN, ADVA, CSCO, INFN1, JNPR and NOKIA Networks segment Delivering consistent financial performance 1. INFN represents INFN+Coriant from the time the acquisition cl
Slide 20: Delivering profitability and total shareholder return
20Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Adj. EPS $0.93 $1.14 $1.39 $2.11 $2.95 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 $— $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 Delivering profitability and total shareholder return 33.5% CAGR YTD Total Share Return Ciena A
Slide 21: Q4 fiscal 2020 appendix
21Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Q4 fiscal 2020 appendix
Slide 22: Gross Profit Reconciliation
22Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Q4 FY 2020 Q3 FY 2020 Q2 FY 2020 Q1 FY 2020 Q4 FY 2019 GAAP gross profit $404,349 $464,681 $413,326 $370,535 $419,696 Share-based compensation-products 724 960 827 671 748 Share-based compensation-services 968 1,0
Slide 23: Operating expense and income from operations reconciliation
23Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Q4 FY 2020 Q3 FY 2020 Q2 FY 2020 Q1 FY 2020 Q4 FY 2019 GAAP operating expense $310,866 $276,645 $285,838 $292,578 $326,494 Share-based compensation-research and development 4,030 4,286 4,822 3,849 3,287 Share-base
Slide 24: Net income and EPS reconciliation
24Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Q4 FY 2020 Q3 FY 2020 Q2 FY 2020 Q1 FY 2020 Q4 FY 2019 GAAP net income $65,041 $142,267 $91,655 $62,328 $80,331 Exclude GAAP provision for income taxes 20,798 38,750 25,308 9,814 2,552 Income before income taxes 8
Slide 25: EBITDA reconciliation
25Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) Q4 FY 2020 Q3 FY 2020 Q2 FY 2020 Q1 FY 2020 Q4 FY 2019 Net income (GAAP) $65,041 $142,267 $91,655 $62,328 $80,331 Add: Interest expense 7,395 7
Slide 26: Thank You
Copyright © Ciena Corporation 2020. All rights reserved. Confidential & Proprietary. Thank You