Slide 1: Fiscal Q2 2024 Earnings Presentation
Ciena Corporation Fiscal Q2 2024 Earnings Presentation Period ended April 27, 2024 June 6, 2024 © 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 & Ciena's portfolio 2. Industry context & addressable market expansion 3. Fiscal Q2 2024 financial performance 4. Fiscal Q3 and full year 2024 outlook 5. Appendix 3 © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 4: Overview & Ciena's portfolio
Overview & Ciena's portfolio © 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 5 © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 6: Our vision for networking: How it works
Our vision for networking: How it works 6 © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 7: Our strategic objectives
Our strategic objectives Grow Addressable Expand Optical Market in Drive Software-led Leadership Broadband Access and Transformation Converged Metro • Increase optical revenues and • Expand adoption of Routing and • Address digital transformation address high-growth opportunities Switching portfolio
Slide 8: Industry context & addressable market expansion
Industry context & addressable market expansion © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 9: Increasing bandwidth consumption as a driver of network expansion
Increasing bandwidth consumption as a driver of network expansion 9 © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 10: Our strategy leverages our Optical technology to create expanded addressable market opportunities
Our strategy leverages our Optical technology to create expanded addressable market opportunities 10 © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 11: Our addressable market expansion strategy allows us to access higher growth markets
Our addressable market expansion strategy allows us to access higher growth markets 1Sources: LightCounting and Ciena internal analysis. 11 © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 12: 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 and colo • Purpose-built/compact modular DCI • Access switching • SLTE WDM • Optical for internet content provid
Slide 13: Q2 FY 2024 results
Q2 FY 2024 results © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 14: Q2 FY 2024 key highlights
Q2 FY 2024 key highlights Prioritizing long term Achieving balanced growth Driving the pace of innovation shareholder value Non-telco represented a 46% of total • Customer traction continues with WL5e • Total shareholder return five-year revenue 800G technology, reaching 290 CAGR of 8%1 Reconfigurab
Slide 15: Q2 FY 2024 comparative financial highlights
Q2 FY 2024 comparative financial highlights Q2 FY 2024 Q2 FY 2023 Revenue $910.8M $1,132.7M Adjusted Gross Margin* 43.5% 43.7% Adjusted Operating Expense* $333.9M $338.1M Adjusted Operating Margin* 6.8% 13.8% Adjusted EBITDA* $85.8M $180.6M Adjusted EPS* $0.27 $0.74 * Reconciliations of these non-GA
Slide 16: Q2 FY 2024 comparative operating metrics
Q2 FY 2024 comparative operating metrics Q2 FY 2024 Q2 FY 2023 Cash and investments $1.42B $1.34B Cash provided by operations $59M $230M DSO 98.0 96.7 Inventory Turns 1.6 2.0 Gross Leverage 2.81x 2.78x Net Debt $195M $284M 16 © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 17: Revenue by segment
Revenue by segment (Amounts in millions) Q2 FY 2024 Q2 FY 2023 Revenue %** Revenue %** Networking Platforms Optical Networking $560.2 61.5 $784.5 69.3 Routing and Switching 116.1 12.7 130.4 11.5 Total Networking Platforms 676.3 74.2 914.9 80.8 Platform Software and Services 85.4 9.4 69.4 6.1 Blue Pl
Slide 18: Revenue derived from non-telco customers
Revenue derived from non-telco customers 18 © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 19: Revenue by geographic region
Revenue by geographic region 15% 14% 16% 11% 15% 15% 10% 14% 20% 17% 70% 70% 71% 69% 73% 19 © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 20: Business outlook
Business outlook © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 21: 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 • We secure increased orders, particularly • Operating expense increases moderately worsen or result in any adverse effects
Slide 22: Business outlook
Business outlook1 Q3 FY 2024 Revenue $880M to $960M Adjusted Gross Margin Low to mid 40s% Adjusted Operating Expense Approximately $345M Fiscal full year 2024 Revenue Approximately $4.0B Adjusted Gross Margin Mid 40s% Adjusted Operating Expense Average $340M to $345M per quarter 1 Projections or out
Slide 23: Q2 FY 2024 appendix
Q2 FY 2024 appendix © Ciena Corporation 2023. All rights reserved. Proprietary Information.
Slide 24: Gross Profit Reconciliation
Gross Profit Reconciliation (Amounts in thousands) Q2 FY 2024 Q1 FY 2024 Q4 FY 2023 Q3 FY 2023 Q2 FY 2023 GAAP gross profit $388,661 $466,962 $486,281 $448,941 $487,683 Share-based compensation-products 1,760 1,318 1,194 1,118 1,155 Share-based compensation-services 3,344 3,020 2,827 2,687 2,659 Amo
Slide 25: Operating Expense Reconciliation
Operating Expense Reconciliation (Amounts in thousands) Q2 FY 2024 Q1 FY 2024 Q4 FY 2023 Q3 FY 2023 Q2 FY 2023 GAAP operating expense $392,626 $382,333 $394,979 $370,727 $384,870 Share-based compensation-research and development 14,066 12,880 11,412 10,954 10,731 Share-based compensation-sales and m
Slide 26: Net Income (Loss) Reconciliation
Net Income (Loss) Reconciliation (Amounts in thousands) Q2 FY 2024 Q1 FY 2024 Q4 FY 2023 Q3 FY 2023 Q2 FY 2023 GAAP net income (loss) $(16,849) $49,547 $91,199 $29,733 $57,654 Exclude GAAP provision (benefit) for income taxes 820 21,956 (20,681) 34,608 29,821 Income (loss) before income taxes (16,02
Slide 27: 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 Q2 FY 2024 Q1 FY 2024 Q4 FY 2023 Q3 FY 2023 Q2 FY 2023 (EBITDA) Net income (loss) (GAAP) $(16,849) $49,547 $91,199 $29,733 $57,654 Add: Interest e
Slide 28: Thank You
Thank You © Ciena Corporation 2023. All rights reserved. Proprietary Information.