Slide 1: Ciena Corporation Earnings Presentation
Ciena Corporation Earnings Presentation Period ended January 28, 2023 March 6, 2023 Copyright © Ciena Corporation 2023. All rights reserved. Proprietary information.
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: Table of Contents
Table of Contents 1 Overview & recent achievements 2 Market context and Ciena's portfolio 3 Fiscal first quarter 2023 financial performance 4 Fiscal second quarter and full year 2023 outlook 5 Appendix Copyright © Ciena Corporation 2023. All rights reserved. Proprietary information. 3
Slide 4: Overview & recent achievements
Overview & recent achievements Copyright © Ciena Corporation 2023. All rights reserved. Proprietary information. 4
Slide 5: Ciena: global networking systems, services and software company
Ciena is an industry-leading global networking systems, services, and software company ….. Leading technology Diversification and Leader in Optical and innovation scale of business markets and disruptor in emerging opportunities … with a strong track record of creating shareholder value Demonstrated
Slide 6: Recent key achievements
Recent key achievements We are driving the pace of We have a resilient business We are committed to our innovation and financial model people and communities ▪ Announced WaveLogic™ 6, our next ▪ Our large backlog provides visibility as ▪ Submitted new greenhouse gas generation of coherent optics and
Slide 7: Market context and our portfolio
Market context and our portfolio Copyright © Ciena Corporation 2023. All rights reserved. Proprietary information. 7
Slide 8: Six mega trends and the innovations that will enable them
Six mega trends and the innovations that will enable them IoT and Connected Cloud Data Center Objects AI, Digital Transformation & Virtual & Hybrid Mobility & 5G Automation Lifestyles Copyright © Ciena Corporation 2023. All rights reserved. Proprietary information. 8
Slide 9: Our vision for a new network end-state
Our vision for a new network end-state How it works Technical and professional services that help customers build, operate, and Federated inventory, open domain optimize their networks control, and multi-layer orchestration Predictive analytics and machine learning based on both big data and small d
Slide 10: Our market leadership
Our market leadership #1 GLOBALLY #1 GLOBALLY #1 GLOBALLY ◦ DATA CENTER INTERCONNECT ◦ PURPOSE-BUILT/COMPACT MODULAR DCI ◦ DATA CENTER INTERCONNECT ◦ DATA CENTER INTERCONNECT FOR ICP/CNPs ◦ OPTICAL FOR CLOUD & COLO ◦ OPTICAL FOR INTERNET CONTENT ◦ SLTE WDM ◦ SLTE WDM PROVIDER CUSTOMERS ◦ ACCESS SWIT
Slide 11: Q1 FY 2023 results
Q1 FY 2023 results Copyright © Ciena Corporation 2023. All rights reserved. Proprietary information. 11
Slide 12: Q1 FY 2023 key highlights
Q1 FY 2023 key highlights Prioritizing long term Achieving balanced growth Driving the pace of innovation shareholder value ▪ Non-telco represented 40% of total ▪ GAAP R&D investment was 17.2% of ▪ Total shareholder return five-year revenue in fiscal Q1 2023 total revenue in fiscal Q1 2023 CAGR of 1
Slide 13: Q1 FY 2023 comparative financial highlights
Q1 FY 2023 comparative financial highlights Q1 FY 2023 Q1 FY 2022 Revenue $1,056.5M $844.4M Adjusted Gross Margin* 43.7% 46.2% Adjusted Operating Expense* $329.3M $290.0M Adjusted Operating Margin* 12.6% 11.8% Adjusted EBITDA* $155.1M $123.7M Adjusted EPS* $0.64 $0.47 * A reconciliation of these non
Slide 14: Q1 FY 2023 comparative operating metrics
Q1 FY 2023 comparative operating metrics Q1 FY 2023 Q1 FY 2022 Cash and investments $1.16B $1.67B Cash used in operations $(266)M $(54)M DSO 103 97 Inventory Turns 1.7 3.3 Gross Leverage 3.05x 1.65x Net Cash $(471.3)M $523.3M Copyright © Ciena Corporation 2023. All rights reserved. Proprietary infor
Slide 15: Revenue by segment
Revenue by segment (Amounts in millions) Q1 FY 2023 Q1 FY 2022 Revenue %** Revenue %** Networking Platforms Converged Packet Optical $735.6 69.6 $540.9 64.1 Routing and Switching 119.5 11.3 85.7 10.1 Total Networking Platforms 855.1 80.9 626.6 74.2 Platform Software and Services 73.4 6.9 72.9 8.6 Bl
Slide 16: Continued revenue strength derived from non-telco customers
Continued revenue strength derived from non-telco customers Copyright © Ciena Corporation 2023. All rights reserved. Proprietary information. 16
Slide 17: Revenue by geographic region
Revenue by geographic region 13% 11% 12% 15% 12% 15% 15% 14% 18% 14% 70% 74% 71% 74% 72% Copyright © Ciena Corporation 2023. All rights reserved. Proprietary information. 17
Slide 18: Business outlook
Business outlook Copyright © Ciena Corporation 2023. All rights reserved. Proprietary information. 18
Slide 19: Economic considerations and assumptions in our fiscal 2023 outlook
Economic considerations and assumptions in our fiscal 2023 outlook Business Assumptions Revenue Assumptions Profitability Assumptions • Macro environment does not significantly • Supply chain conditions remain volatile, • Supply and logistics costs remain worsen and any adverse effects on our but co
Slide 20: Business outlook
Business outlook1 Q2 FY 2023 Revenue $1,035M to $1,115M Adjusted Gross Margin Low 40's% Adjusted Operating Expense Approximately $335M FY 2023 Revenue Growth 20% to 22% Adjusted Gross Margin 42% to 44% Adjusted Operating Expense Average of $330M for remainder of the year 1 Projections or outlook wit
Slide 21: Q1 FY 2023 appendix
Q1 FY 2023 appendix Copyright © Ciena Corporation 2023. All rights reserved. Proprietary information. 21
Slide 22: Gross Profit Reconciliation
Gross Profit Reconciliation (Amounts in thousands) Q1 FY 2023 Q4 FY 2022 Q3 FY 2022 Q2 FY 2022 Q1 FY 2022 GAAP gross profit $455,946 $433,597 $340,779 $401,781 $384,187 Share-based compensation-products 1,051 907 1,002 1,058 900 Share-based compensation-services 2,297 2,066 1,940 1,943 1,584 Amortiz
Slide 23: Operating Expense and Income from Operations Reconciliation
Operating Expense Reconciliation (Amounts in thousands) Q1 FY 2023 Q4 FY 2022 Q3 FY 2022 Q2 FY 2022 Q1 FY 2022 GAAP operating expense $370,730 $356,329 $313,672 $343,352 $324,183 Share-based compensation-research and development 9,234 8,507 8,233 8,309 6,830 Share-based compensation-sales and market
Slide 24: Net Income Reconciliation
Net Income Reconciliation (Amounts in thousands) Q1 FY 2023 Q4 FY 2022 Q3 FY 2022 Q2 FY 2022 Q1 FY 2022 GAAP net income $76,241 $57,645 $10,512 $38,922 $45,823 Exclude GAAP provision for income taxes 25,078 7,735 4,319 8,330 9,219 Income before income taxes 101,319 65,380 14,831 47,252 55,042 Total
Slide 25: 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 (EBITDA) Q1 FY 2023 Q4 FY 2022 Q3 FY 2022 Q2 FY 2022 Q1 FY 2022 Net income (GAAP) $76,241 $57,645 $10,512 $38,922 $45,823 Add: Interest expense 15
Slide 26: Thank You
Thank You Copyright © Ciena Corporation 2023. All rights reserved. Proprietary information.