Slide 1: Fiscal Q4 and 2023 Earnings Presentation
Ciena Corporation Fiscal Q4 and 2023 Earnings Presentation Period ended October 28, 2023 December 7, 2023 © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 2: Forward-looking statements and non-GAAP measures
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. F
Slide 3: Table of Contents
Table of Contents 1. Overview and recent achievements 2. Market context and Ciena's portfolio 3. Fiscal year 2023 financial performance 4. Fiscal Q4 2023 financial performance 5. Fiscal Q1 and full year 2024 outlook and long-term targets 6. Appendix 3 © Ciena Corporation 2023. All rights reserved. P
Slide 4: Overview and Recent Achievements
Overview and Recent Achievements © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 5: Ciena is an industry-leading global networking systems, services, and software company
Ciena is an industry-leading global networking systems, services, and software company ….. Leader in Optical Leading technology Diversification and markets and disruptor and innovation scale of business in emerging opportunities … with a strong track record of creating shareholder value Demonstrated
Slide 6: FY 2023 key achievements
FY 2023 key achievements We are committed to our We are driving the pace of We have a resilient business people, communities, and the innovation and financial model environment • Announced WaveLogic™ 6, our next • Delivered revenue growth of 21% over • Released our updated Sustainability generation
Slide 7: Market context and Ciena's portfolio
Market context and Ciena's portfolio © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 8: Mega-trends driving strong network traffic growth
Mega-trends driving strong network traffic growth IoT and Connected AI & Cloud Data Center Objects Digital Transformation & Virtual & Hybrid Mobility & 5G Automation Lifestyles 8 © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 9: The Adaptive Network enables customers to create flexible, open, and sustainable networks
The Adaptive Network enables customers to create flexible, open, and sustainable networks 9 © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 10: Our market leadership
Our market leadership #1 Globally #1 Globally #1 Globally • Purpose-built/compact modular DCI • Purpose-built/compact modular DCI • Data center interconnect • SLTE WDM • Optical for cloud & COLO • Optical for internet content provider • Access switching • SLTE WDM customers • Optical for cable MSO c
Slide 11: Next-Gen Metro and Edge is a strategic growth segment
Next-Gen Metro and Edge is a strategic growth segment Fiber Broadband Access is a key driver in this space 11 © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 12: Fiscal full year 2023 results
Fiscal full year 2023 results © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 13: Fiscal FY 2023 comparative financial highlights
Fiscal FY 2023 comparative financial highlights FY 2023 FY 2022 Revenue $4,386.5M $3,632.7M Adjusted Gross Margin* 43.5% 43.6% Adjusted Operating Expense* $1,332.8M $1,177.0M Adjusted Operating Margin* 13.1% 11.2% Adjusted EBITDA* $665.8M $502.4M Adjusted EPS* $2.72 $1.90 * Reconciliations of these
Slide 14: Q4 FY 2023 results
Q4 FY 2023 results © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 15: Q4 FY 2023 key highlights
Q4 FY 2023 key highlights Prioritizing long term Achieving balanced growth Driving the pace of innovation shareholder value ▪ Non-telco represented a record high ▪ Record quarter for both WL5e and 6500 • Total shareholder return five-year 52% of total revenue RLS shipments driven by Cloud CAGR of 8%
Slide 16: Q4 FY 2023 comparative financial highlights
Q4 FY 2023 comparative financial highlights Q4 FY 2023 Q4 FY 2022 Revenue $1,129.5M $971.0M Adjusted Gross Margin* 43.7% 45.2% Adjusted Operating Expense* $337.6M $312.8M Adjusted Operating Margin* 13.8% 13.0% Adjusted EBITDA* $178.8M $153.5M Adjusted EPS* $0.75 $0.61 * Reconciliations of these non-
Slide 17: Q4 FY 2023 comparative operating metrics
Q4 FY 2023 comparative operating metrics Q4 FY 2023 Q4 FY 2022 Cash and investments $1.25B $1.18B Cash from (used in) $196M $(15)M operations DSO 92.0 100.0 Inventory Turns 2.0 1.9 Gross Leverage 2.44x 2.25x Net Cash (Debt) $(373)M $51M 17 © Ciena Corporation 2023. All rights reserved. Proprietary I
Slide 18: Revenue by segment
Revenue by segment (Amounts in millions) Q4 FY 2023 Q4 FY 2022 Revenue %** Revenue %** Networking Platforms Optical Networking $748.0 66.2 $649.9 66.9 Routing and Switching 128.9 11.4 102.8 10.6 Total Networking Platforms 876.9 77.6 752.7 77.5 Platform Software and Services 82.1 7.3 71.6 7.4 Blue Pl
Slide 19: Record revenue derived from non-telco customers
Record revenue derived from non-telco customers 19 © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 20: Revenue by geographic region
Revenue by geographic region 15% 16% 14% 13% 12% 15% 15% 15% 14% 14% 74% 72% 70% 70% 71% 20 © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 21: Business outlook
Business outlook © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 22: Economic considerations and assumptions in our fiscal 2024 outlook
Economic considerations and assumptions in our fiscal 2024 outlook Business Assumptions Revenue Assumptions Profitability Assumptions • Macro environment does not significantly • As lead times have shortened and • Operating expense increases to fund worsen and any adverse effects on our customer adv
Slide 23: Business outlook
Business outlook1 Q1 FY 2024 Revenue $980M to $1.06B Adjusted Gross Margin Mid 40s% Adjusted Operating Expense Approximately $350M Fiscal full year 2024 Revenue growth 1% to 4% Adjusted Gross Margin Mid 40s% Adjusted Operating Expense Approximately $355M average per quarter 1 Projections or outlook
Slide 24: Business outlook: Long-Term Targets
Business outlook1 Long-Term Targets Revenue growth through 2026 Average annual three-year growth of 6% to 8% Adjusted Operating Margin 15% to 17% 1 Projections or outlook with respect to future operating results are only as of December 7, 2023, the date presented on the related earnings call. Actual
Slide 25: Q4 FY 2023 appendix
Q4 FY 2023 appendix © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 26: Gross Profit Reconciliation
Gross Profit Reconciliation (Amounts in thousands) Q4 FY 2023 Q3 FY 2023 Q2 FY 2023 Q1 FY 2023 Q4 FY 2022 GAAP gross profit $486,281 $448,941 $487,683 $455,946 $433,597 Share-based compensation-products 1,194 1,118 1,155 1,051 907 Share-based compensation-services 2,827 2,687 2,659 2,297 2,066 Amort
Slide 27: Operating Expense Reconciliation
Operating Expense Reconciliation (Amounts in thousands) Q4 FY 2023 Q3 FY 2023 Q2 FY 2023 Q1 FY 2023 Q4 FY 2022 GAAP operating expense $394,979 $370,727 $384,870 $370,730 $356,329 Share-based compensation-research and development 11,412 10,954 10,731 9,234 8,507 Share-based compensation-sales and mar
Slide 28: Net Income Reconciliation
Net Income Reconciliation (Amounts in thousands) Q4 FY 2023 Q3 FY 2023 Q2 FY 2023 Q1 FY 2023 Q4 FY 2022 GAAP net income $91,199 $29,733 $57,654 $76,241 $57,645 Exclude GAAP provision (benefit) for income taxes (20,681) 34,608 29,821 25,078 7,735 Income before income taxes 70,518 64,341 87,475 101,31
Slide 29: Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) (Amounts in thousands) Earnings Before Interest, Tax, Depreciation and Amortization Q4 FY 2023 Q3 FY 2023 Q2 FY 2023 Q1 FY 2023 Q4 FY 2022 (EBITDA) Net income (GAAP) $91,199 $29,733 $57,654 $76,241 $57,645 Add: Interest expense 24
Slide 30: Thank You
Thank You © Ciena Corporation 2023. All rights reserved. Proprietary Information.