Slide 1: Ciena Corporation Earnings Presentation
Ciena Corporation Earnings Presentation Period ended July 29, 2023 August 31, 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 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 Q3 FY 2023 financial performance 4 Q4 FY 2023 outlook 5 Appendix © Ciena Corporation 2023. All rights reserved. Proprietary information. 3
Slide 4: Overview & recent achievements
Overview & recent achievements © Ciena Corporation 2023. All rights reserved. Proprietary information. 4
Slide 5: Industry-leading networking company with a strong track record
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 ▪ Released our 2022 Sustainability generation of coherent optics
Slide 7: Market context and Ciena's portfolio
Market context and Ciena's portfolio © 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 © 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 ◦ PURPOSE-BUILT/COMPACT MODULAR DCI ◦ PURPOSE-BUILT/COMPACT MODULAR DCI ◦ DATA CENTER INTERCONNECT ◦ SLTE WDM ◦ OPTICAL FOR CLOUD & COLO ◦ PURPOSE-BUILT/COMPACT MODULAR DCI ◦ ACCESS SWITCHING ◦ SLTE WDM ◦ OPTICAL FOR INTERNET CONTENT ◦ PACKET
Slide 11: Q3 FY 2023 results
Q3 FY 2023 results © Ciena Corporation 2023. All rights reserved. Proprietary information. 11
Slide 12: Q3 FY 2023 key highlights
Q3 FY 2023 key highlights Prioritizing long term Achieving balanced growth Driving the pace of innovation shareholder value ▪ Non-telco represented a record high ▪ GAAP R&D investment was 18% of ▪ Total shareholder return five-year 46% of total revenue in fiscal Q3 2023 total revenue in fiscal Q3 20
Slide 13: Q3 FY 2023 comparative financial highlights
Q3 FY 2023 comparative financial highlights Q3 FY 2023 Q3 FY 2022 Revenue $1,067.9M $868.0M Adjusted Gross Margin* 42.7% 40.0% Adjusted Operating Expense* $327.9M $273.1M Adjusted Operating Margin* 12.0% 8.5% Adjusted EBITDA* $151.3M $96.0M Adjusted EPS* $0.59 $0.33 * Reconciliations of these non-GA
Slide 14: Q3 FY 2023 comparative operating metrics
Q3 FY 2023 comparative operating metrics Q3 FY 2023 Q3 FY 2022 Cash and investments $1.28B $1.26B Cash from (used in) operations $9M $(205)M DSO 96.0 100.0 Inventory Turns 1.7 2.1 Gross Leverage 2.54x 2.07x Net Cash (Debt) $(344)M $122M © Ciena Corporation 2023. All rights reserved. Proprietary info
Slide 15: Revenue by segment
Revenue by segment (Amounts in millions) Q3 FY 2023 Q3 FY 2022 Revenue %** Revenue %** Networking Platforms Converged Packet Optical $719.0 67.3 $563.9 65.0 Routing and Switching 127.6 11.9 100.7 11.6 Total Networking Platforms 846.6 79.2 664.6 76.6 Platform Software and Services 78.9 7.4 63.5 7.3 B
Slide 16: Continued revenue strength derived from non-telco customers
Continued revenue strength derived from non-telco customers © Ciena Corporation 2023. All rights reserved. Proprietary information. 16
Slide 17: Revenue by geographic region
Revenue by geographic region 15% 13% 16% 12% 15% 15% 14% 15% 14% 14% 71% 74% 72% 70% 70% © Ciena Corporation 2023. All rights reserved. Proprietary information. 17
Slide 18: Business outlook
Business outlook © 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 continue to • Supply and logistics costs remain worsen and any adverse effects on our improve thr
Slide 20: Business outlook
Business outlook1 Q4 FY 2023 Revenue $1.06B to $1.14B Adjusted Gross Margin Low to mid 40s% Adjusted Operating Expense Approximately $335M 1 Projections or outlook with respect to future operating results are only as of August 31, 2023, the date presented on the related earnings call. Actual results
Slide 21: Q3 FY 2023 appendix
Q3 FY 2023 appendix © Ciena Corporation 2023. All rights reserved. Proprietary information. 21
Slide 22: Gross Profit Reconciliation
Gross Profit Reconciliation (Amounts in thousands) Q3 FY 2023 Q2 FY 2023 Q1 FY 2023 Q4 FY 2022 Q3 FY 2022 GAAP gross profit $448,941 $487,683 $455,946 $433,597 $340,779 Share-based compensation-products 1,118 1,155 1,051 907 1,002 Share-based compensation-services 2,687 2,659 2,297 2,066 1,940 Amort
Slide 23: Operating Expense and Income from Operations Reconciliation
Operating Expense Reconciliation (Amounts in thousands) Q3 FY 2023 Q2 FY 2023 Q1 FY 2023 Q4 FY 2022 Q3 FY 2022 GAAP operating expense $370,727 $384,870 $370,730 $356,329 $313,672 Share-based compensation-research and development 10,954 10,731 9,234 8,507 8,233 Share-based compensation-sales and mark
Slide 24: Net Income Reconciliation and Net Income per Share
Net Income Reconciliation (Amounts in thousands) Q3 FY 2023 Q2 FY 2023 Q1 FY 2023 Q4 FY 2022 Q3 FY 2022 GAAP net income $29,733 $57,654 $76,241 $57,645 $10,512 Exclude GAAP provision for income taxes 34,608 29,821 25,078 7,735 4,319 Income before income taxes 64,341 87,475 101,319 65,380 14,831 Tota
Slide 25: EBITDA Reconciliation
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) (Amounts in thousands) Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) Q3 FY 2023 Q2 FY 2023 Q1 FY 2023 Q4 FY 2022 Q3 FY 2022 Net income (GAAP) $29,733 $57,654 $76,241 $57,645 $10,512 Add: Interest expense 24
Slide 26: Thank You
Thank You © Ciena Corporation 2023. All rights reserved. Proprietary information.