Slide 1: Ciena Corporation Q1 FY 2019 Investor Presentation
Ciena Corporation Q1 FY 2019 Investor Presentation Quarterly Period ended January 31, 2019 March 5, 2019 Copyright © Ciena Corporation 2019. All rights reserved. Confidential & Proprietary.
Slide 2: Forward-looking statements and non-GAAP measures
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 expectations, forecasts, assumptions and other information available to the Company as of the dat
Slide 3: Q1 highlights: market share gains, innovation, shareholder value
Diversifying and growing through market share gains . Non-telco represented over 35% of total revenue . Direct webscale was a record 22% of total revenue; one >10% webscale customer . EMEA up 32% YoY . APAC up 20% YoY Forcing the pace of innovation with next generation solutions . Announced WaveLogi
Slide 4: Q1 Fiscal 2019 Financial Highlights
Q1 Fiscal 2019 Financial Highlights * A reconciliation of these non-GAAP measures to our GAAP results is included in the appendix to this presentation. Copyright © Ciena Corporation 2019. All rights reserved. Confidential & Proprietary. 4
Slide 5: Q1 Fiscal 2019 Comparisons (Year-over-Year)
Q1 Fiscal 2019 Comparisons (Year-over-Year) Revenue Adj. Gross Margin* Adj. Operating Margin* (in millions) Q1'18 Q1'19 Q1'18 Q1'19 Q1'18 Q1'19 9.6% 42.6% $778.5 42.2% 6.3% $646.1 Adj. EPS* Adj. EBITDA* Q1'18 Q1'19 (in millions) $0.33 Q1'18 Q1'19 $96.2 $61.8 $0.15 Copyright © Ciena Corporation 2019.
Slide 6: Revenue by Segment
Revenue by Segment (Amounts in millions) Q1 FY 2019 Q1 FY 2018 $1,000.0 50.0% Revenue %** Revenue %** 44.7% 43.4% Networking Platforms $900.0 42.6% 42.2% 45.0% 40.7% Converged Packet Optical $548.9 70.5 $427.4 66.1 $800.0 40.0% Packet Networking 71.6 9.2 68.6 10.6 $700.0 35.0% Total Networking Platf
Slide 7: Revenue by Geographic Region
Revenue by Geographic Region Q1 2019 $900.0 $800.0 18.7% 21.0% $700.0 5.9% 17.1% 20.8% 3.4% 4.0% $600.0 13.7% North America 17.1% 3.4% 14.9% 16.6% 17.1% 5.4% 4.0% $500.0 16.7% Europe, Middle East 15.1% and Africa $400.0 Caribbean and Latin (In millions) 16.6% 62.3% America $300.0 61.7% Asia Pacific
Slide 8: Q1 Fiscal 2019 Balance Sheet and Operating Metrics
Q1 Fiscal 2019 Balance Sheet and Operating Metrics DSO Copyright © Ciena Corporation 2019. All rights reserved. Confidential & Proprietary. 8
Slide 9: Strengthening balance sheet
Strengthening balance sheet Leverage Trend Net Debt (Cash) Position (in millions) * Gross debt-to-Adj. EBITDA leverage ratio Cash** Debt Net Debt 8.0x 7.1x 7.2x $1,700 $1,451 7.0x $1,500 $1,264 $1,254 $1,300 $1,198 6.0x $1,143 $1,021 $1,100 $969 $953 5.0x $936 $900 $777 $788 4.0x $712 3.6x $674 $692
Slide 10: Delivering consistent and differentiated financial performance
Delivering consistent and differentiated financial performance Normalized Revenue Normalized Adjusted OM Ciena1 Industry Avg 2,3 Ciena1 Industry Avg2,3 1.60 3.00 2.50 1.40 2.00 1.20 1.50 1.00 1.00 0.50 0.80 0.00 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 *Industry Average: ACIA, ADTN, ADVA, C
Slide 11: Delivering profitability and stock outperformance
Delivering profitability and stock outperformance Adj. EPS* Total Shareholder Return 22.3% CAGR 11/1/18-1/31/19 $1.39 25.0% 22.7% 17.5% $1.14 15.0% $0.93 7.4% 5.1% 5.0% 3.2% -5.0% -7.7% -15.0% -11.2% -25.0% -21.9% CIEN ACIA NOK CSCO ADTN ADV JNPR INFN FY2016 FY2017 FY2018 *A reconciliation of these
Slide 12: Long-Term Targets
Long-Term Targets Copyright © Ciena Corporation 2019. All rights reserved. Confidential & Proprietary. 12
Slide 13: New long-term financial targets
New long-term financial targets* Execution of our strategy will drive top-line growth, profitability and cash generation *Projections or outlook with respect to future operating results are only as of December 13, 2018, the date presented on the related earnings call. Actual results may differ mater
Slide 14: New long-term financial targets by business
New long-term financial targets* Optical Systems Attached Services Packet Networking Blue Planet *Projections or outlook with respect to future operating results are only as of December 13, 2018, the date presented on the related earnings call. Actual results may differ materially from these forward
Slide 15: Q1 Fiscal 2019 Appendix
Q1 Fiscal 2019 Appendix Copyright © Ciena Corporation 2019. All rights reserved. Confidential & Proprietary. 15
Slide 16: Adjusted gross profit reconciliation
Q1 FY 2019 Q4 FY 2018 Q3 FY 2018 Q2 FY 2018 Q1 FY 2018 GAAP gross profit $323,341 $398,075 $351,543 $293,307 $271,765 Share-based compensation-products 637 705 783 824 672 Share-based compensation-services 770 651 618 722 625 Amortization of intangible assets 3,418 2,957 2,534 2,289 2,289 Total adju
Slide 17: Adjusted operating expense and income reconciliation
Q1 FY 2019 Q4 FY 2018 Q3 FY 2018 Q2 FY 2018 Q1 FY 2018 GAAP operating expense $275,398 $302,205 $266,269 $261,241 $255,029 Share-based compensation-research and development 3,391 3,385 3,082 3,796 3,255 Share-based compensation-sales and marketing 3,785 3,741 3,417 3,760 3,328 Share-based compensati
Slide 18: Adjusted net income reconciliation
Q1 FY 2019 Q4 FY 2018 Q3 FY 2018 Q2 FY 2018 Q1 FY 2018 GAAP net income (loss) $33,616 $63,977 $50,840 $13,856 ($473,363) Exclude GAAP provision (benefit) for income taxes 9,139 (10,224) 19,280 6,475 477,940 Income before income taxes 42,755 53,753 70,120 20,331 4,577 Total adjustments related to inc
Slide 19: EBITDA reconciliation
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) Q1 FY 2019 Q4 FY 2018 Q3 FY 2018 Q2 FY 2018 Q1 FY 2018 Net income (loss) (GAAP) $ 33,616 $ 63,977 $ 50,840 $ 13,856 $ (473,363) Add: Interest expense 9,441 14,873 13,611 13,031 13,734 Less: Interest and other income (loss), net 4,