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Ciena Reports Fiscal Third Quarter 2023 Financial Results

Revenue increased 23% year-over-year

Ciena® Corporation (NYSE: CIEN), a networking systems, services and software company, today announced unaudited financial results for its fiscal third quarter ended July 29, 2023.

  • Q3 Revenue: $1.07 billion
  • Q3 Net Income per Share: $0.20 GAAP; $0.59 adjusted (non-GAAP)
  • Share Repurchases: Repurchased approximately 1.4 million shares of common stock for an aggregate price of $61.2 million during the quarter.

"We delivered excellent results for the fiscal third quarter with strength across all regions," said Gary Smith, president and CEO of Ciena. "We are encouraged by increased customer activity that, when combined with our elevated backlog, market leadership and expanding addressable market, we believe will drive growth and market share gains going forward."

For fiscal third quarter 2023, Ciena reported revenue of $1.07 billion as compared to $868.0 million for the fiscal third quarter 2022.

Ciena's GAAP net income for the fiscal third quarter 2023 was $29.7 million, or $0.20 per diluted common share, which compares to a GAAP net income of $10.5 million, or $0.07 per diluted common share, for the fiscal third quarter 2022.

Ciena's adjusted (non-GAAP) net income for the fiscal third quarter 2023 was $89.1 million, or $0.59 per diluted common share, which compares to an adjusted (non-GAAP) net income of $49.0 million, or $0.33 per diluted common share, for the fiscal third quarter 2022.

Fiscal Third Quarter 2023 Performance Summary

The tables below (in millions, except percentage data) provide comparisons of certain quarterly results to the prior year. Appendices A and B set forth reconciliations between the GAAP and adjusted (non-GAAP) measures contained in this release.

 

 

GAAP Results (unaudited)

 

 

Q3

 

Q3

 

Period Change

 

 

FY 2023

 

FY 2022

 

Y-T-Y*

Revenue

 

$

1,067.9

 

 

$

868.0

 

 

23.0

%

Gross margin

 

 

42.0

%

 

 

39.3

%

 

2.7

%

Operating expense

 

$

370.7

 

 

$

313.7

 

 

18.2

%

Operating margin

 

 

7.3

%

 

 

3.1

%

 

4.2

%

 

 

Non-GAAP Results (unaudited)

 

 

Q3

 

Q3

 

Period Change

 

 

FY 2023

 

FY 2022

 

Y-T-Y*

Revenue

 

$

1,067.9

 

 

$

868.0

 

 

23.0

%

Adj. gross margin

 

 

42.7

%

 

 

40.0

%

 

2.7

%

Adj. operating expense

 

$

327.9

 

 

$

273.1

 

 

20.1

%

Adj. operating margin

 

 

12.0

%

 

 

8.5

%

 

3.5

%

Adj. EBITDA

 

$

151.3

 

 

$

96.0

 

 

57.6

%

 

* Denotes % change, or in the case of margin, absolute change

 

 

Revenue by Segment (unaudited)

 

 

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

 

 

 

 

 

 

 

 

 

Blue Planet Automation Software and Services

 

 

13.1

 

1.3

 

 

17.3

 

2.0

 

 

 

 

 

 

 

 

 

Global Services

 

 

 

 

 

 

 

 

Maintenance Support and Training

 

 

72.9

 

6.8

 

 

72.8

 

8.4

Installation and Deployment

 

 

46.8

 

4.4

 

 

38.7

 

4.4

Consulting and Network Design

 

 

9.6

 

0.9

 

 

11.1

 

1.3

Total Global Services

 

 

129.3

 

12.1

 

 

122.6

 

14.1

 

 

 

 

 

 

 

 

 

Total

 

$

1,067.9

 

100.0

 

$

868.0

 

100.0

 

** Denotes % of total revenue

Additional Performance Metrics for Fiscal Third Quarter 2023

 

 

Revenue by Geographic Region (unaudited)

 

 

Q3 FY 2023

 

Q3 FY 2022

 

 

Revenue

 

% **

 

Revenue

 

% **

Americas

 

$

749.5

 

70.2

 

$

617.4

 

71.1

Europe, Middle East and Africa

 

 

152.8

 

14.3

 

 

124.2

 

14.3

Asia Pacific

 

 

165.6

 

15.5

 

 

126.4

 

14.6

Total

 

$

1,067.9

 

100.0

 

$

868.0

 

100.0

 

** Denotes % of total revenue

  • One customer represented 10%-plus of revenue for a total of 11.7% of revenue
  • Cash and investments totaled $1.28 billion
  • Cash flow from operations totaled $8.7 million
  • Average days' sales outstanding (DSOs) were 96
  • Accounts receivable, net balance was $997.4 million
  • Unbilled contract assets, net balance was $142.3 million
  • Inventories totaled $1.19 billion, including:
    • Raw materials: $772.0 million
    • Work in process: $51.8 million
    • Finished goods: $333.5 million
    • Deferred cost of sales: $77.5 million
    • Reserve for excess and obsolescence: $(42.3) million
  • Product inventory turns were 1.7
  • Headcount totaled 8,623

Supplemental Materials and Live Web Broadcast of Unaudited Fiscal Third Quarter 2023 Results

Today, Thursday, August 31, 2023, in conjunction with this announcement, Ciena has posted to the Quarterly Results page of the Investor Relations section of its website certain related supporting materials for its unaudited fiscal third quarter 2023 results.

Ciena's management will also host a discussion today with investors and financial analysts that will include the Company's outlook. The live audio web broadcast beginning at 8:30 a.m. Eastern will be accessible via www.ciena.com. An archived replay of the live broadcast will be available shortly following its conclusion on the Investor Relations page of Ciena's website.

Notes to Investors

Forward-Looking Statements. 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. From time to time we exclusively post material information to this website along with other disclosure channels that we use. This press release contains certain forward-looking statements that involve risks and uncertainties. These statements are based on current expectations, forecasts, assumptions and other information available to the Company as of the date hereof. Forward-looking statements include statements regarding Ciena's expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. Forward-looking statements in this release include: "We delivered excellent results for the fiscal third quarter with strength across all regions. We are encouraged by increased customer activity that, when combined with our elevated backlog, market leadership and expanding addressable market, we believe will drive growth and market share gains going forward."

Ciena's actual results, performance or events may differ materially from these forward-looking statements made or implied due to a number of risks and uncertainties relating to Ciena's business, including: the effect of broader economic and market conditions on our customers and their business; our ability to execute our business and growth strategies; the impact of supply chain constraints or disruptions; the duration and severity of the COVID-19 pandemic and the impact of countermeasures taken to mitigate its spread on macroeconomic conditions, economic activity, demand for our technology solutions, short- and long-term changes in customer or end user needs, continuity of supply chain, our business operations, liquidity and financial results; changes in network spending or network strategy by our customers; seasonality and the timing and size of customer orders, including our ability to recognize revenue relating to such sales; the level of competitive pressure we encounter; the product, customer and geographic mix of sales within the period; changes in foreign currency exchange rates; factors beyond our control such as natural disasters, climate change, acts of war or terrorism, geopolitical events, including but not limited to the ongoing conflict between Ukraine and Russia, and public health emergencies; changes in tax or trade regulations, including the imposition of tariffs, duties or efforts to withdraw from or materially modify international trade agreements; and the other risk factors disclosed in Ciena’s periodic reports filed with the Securities and Exchange Commission (SEC) including Ciena’s Annual Report on Form 10-K filed with the SEC on December 16, 2022 and included in its Quarterly Report on Form 10-Q for the third quarter of fiscal 2023 to be filed with the SEC. Ciena assumes no obligation to update any forward-looking information included in this press release.

Non-GAAP Presentation of Quarterly and Annual Results. This release includes non-GAAP measures of Ciena's gross profit, operating expense, income from operations, earnings before interest, tax, depreciation and amortization (EBITDA), Adjusted EBITDA, and measures of net income and net income per share. In evaluating the operating performance of Ciena's business, management excludes certain charges and credits that are required by GAAP. These items share one or more of the following characteristics: they are unusual and Ciena does not expect them to recur in the ordinary course of its business; they do not involve the expenditure of cash; they are unrelated to the ongoing operation of the business in the ordinary course; or their magnitude and timing is largely outside of Ciena's control. Management believes that the non-GAAP measures below provide management and investors useful information and meaningful insight to the operating performance of the business. The presentation of these non-GAAP financial measures should be considered in addition to Ciena's GAAP results and these measures are not intended to be a substitute for the financial information prepared and presented in accordance with GAAP. Ciena's non-GAAP measures and the related adjustments may differ from non-GAAP measures used by other companies and should only be used to evaluate Ciena's results of operations in conjunction with our corresponding GAAP results. To the extent not previously disclosed in a prior Ciena financial results press release, Appendices A and B to this press release set forth a complete GAAP to non-GAAP reconciliation of the non-GAAP measures contained in this release.

About Ciena. Ciena (NYSE: CIEN) is a global leader in networking systems, services, and software. We build the most adaptive networks in the industry, enabling customers to anticipate and meet ever-increasing digital demands. For three-plus decades, Ciena has brought our humanity to our relentless pursuit of innovation. Prioritizing collaborative relationships with our customers, partners, and communities, we create flexible, open, and sustainable networks that better serve all users—today and into the future. For updates on Ciena, follow us on Twitter @Ciena, LinkedIn, the Ciena Insights blog, or visit www.ciena.com.

CIENA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

 

Quarter Ended

 

Nine Months Ended

 

July 29,

 

July 30,

 

July 29,

 

July 30,

 

2023

 

2022

 

2023

 

2022

Revenue:

 

 

 

 

 

 

 

Products

$

865,197

 

 

$

684,284

 

 

$

2,678,242

 

 

$

2,109,239

 

Services

 

202,689

 

 

 

183,697

 

 

 

578,820

 

 

 

552,412

 

Total revenue

 

1,067,886

 

 

 

867,981

 

 

 

3,257,062

 

 

 

2,661,651

 

Cost of goods sold:

 

 

 

 

 

 

 

Products

 

516,900

 

 

 

434,756

 

 

 

1,559,120

 

 

 

1,259,378

 

Services

 

102,045

 

 

 

92,446

 

 

 

305,372

 

 

 

275,526

 

Total cost of goods sold

 

618,945

 

 

 

527,202

 

 

 

1,864,492

 

 

 

1,534,904

 

Gross profit

 

448,941

 

 

 

340,779

 

 

 

1,392,570

 

 

 

1,126,747

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

189,392

 

 

 

150,025

 

 

 

561,115

 

 

 

457,758

 

Selling and marketing

 

118,266

 

 

 

105,880

 

 

 

367,156

 

 

 

344,700

 

General and administrative

 

49,349

 

 

 

41,121

 

 

 

151,184

 

 

 

131,191

 

Significant asset impairments and restructuring costs

 

4,174

 

 

 

7,692

 

 

 

16,625

 

 

 

20,203

 

Amortization of intangible assets

 

9,487

 

 

 

8,919

 

 

 

26,773

 

 

 

26,757

 

Acquisition and integration costs

 

59

 

 

 

35

 

 

 

3,474

 

 

 

598

 

Total operating expenses

 

370,727

 

 

 

313,672

 

 

 

1,126,327

 

 

 

981,207

 

Income from operations

 

78,214

 

 

 

27,107

 

 

 

266,243

 

 

 

145,540

 

Interest and other income, net

 

10,187

 

 

 

366

 

 

 

50,711

 

 

 

4,860

 

Interest expense

 

(24,060

)

 

 

(12,642

)

 

 

(63,819

)

 

 

(33,275

)

Income before income taxes

 

64,341

 

 

 

14,831

 

 

 

253,135

 

 

 

117,125

 

Provision for income taxes

 

34,608

 

 

 

4,319

 

 

 

89,507

 

 

 

21,868

 

Net income

$

29,733

 

 

$

10,512

 

 

$

163,628

 

 

$

95,257

 

 

 

 

 

 

 

 

 

Net Income per Common Share

 

 

 

 

 

 

 

Basic net income per common share

$

0.20

 

 

$

0.07

 

 

$

1.09

 

 

$

0.63

 

Diluted net income per potential common share

$

0.20

 

 

$

0.07

 

 

$

1.09

 

 

$

0.62

 

 

 

 

 

 

 

 

 

Weighted average basic common shares outstanding

 

149,690

 

 

 

149,862

 

 

 

149,472

 

 

 

152,083

 

Weighted average dilutive potential common shares outstanding 1

 

149,977

 

 

 

150,463

 

 

 

149,867

 

 

 

153,209

 

1 Weighted average dilutive potential common shares outstanding used in calculating GAAP diluted net income per potential common share includes the following number of shares underlying certain stock option and stock unit awards: (i) 0.3 million and 0.4 million shares for the third quarter and first nine months of fiscal 2023, respectively; and (ii) 0.6 million and 1.1 million shares for the third quarter and first nine months of fiscal 2022, respectively.

CIENA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

 

 

July 29,

2023

 

October 29,

2022

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

1,117,922

 

 

$

994,352

 

Short-term investments

 

141,843

 

 

 

153,989

 

Accounts receivable, net

 

997,373

 

 

 

920,772

 

Inventories

 

1,192,522

 

 

 

946,730

 

Prepaid expenses and other

 

361,692

 

 

 

370,053

 

Total current assets

 

3,811,352

 

 

 

3,385,896

 

Long-term investments

 

21,098

 

 

 

35,385

 

Equipment, building, furniture and fixtures, net

 

287,455

 

 

 

267,779

 

Operating lease right-of-use assets

 

40,482

 

 

 

45,108

 

Goodwill

 

446,596

 

 

 

328,322

 

Other intangible assets, net

 

219,085

 

 

 

69,517

 

Deferred tax asset, net

 

792,299

 

 

 

824,008

 

Other long-term assets

 

104,847

 

 

 

113,617

 

Total assets

$

5,723,214

 

 

$

5,069,632

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

393,144

 

 

$

516,047

 

Accrued liabilities and other short-term obligations

 

355,622

 

 

 

360,782

 

Deferred revenue

 

188,104

 

 

 

137,899

 

Operating lease liabilities

 

16,941

 

 

 

18,925

 

Current portion of long-term debt

 

11,930

 

 

 

6,930

 

Total current liabilities

 

965,741

 

 

 

1,040,583

 

Long-term deferred revenue

 

71,873

 

 

 

62,336

 

Other long-term obligations

 

156,893

 

 

 

150,335

 

Long-term operating lease liabilities

 

37,800

 

 

 

42,392

 

Long-term debt, net

 

1,543,900

 

 

 

1,061,125

 

Total liabilities

 

2,776,207

 

 

 

2,356,771

 

Stockholders’ equity:

 

 

 

Preferred stock – par value $0.01; 20,000,000 shares authorized; zero shares issued and outstanding

 

 

 

 

 

Common stock – par value $0.01; 290,000,000 shares authorized; 148,772,513 and 148,412,943 shares issued and outstanding

 

1,488

 

 

 

1,484

 

Additional paid-in capital

 

6,425,899

 

 

 

6,390,252

 

Accumulated other comprehensive loss

 

(11,778

)

 

 

(46,645

)

Accumulated deficit

 

(3,468,602

)

 

 

(3,632,230

)

Total stockholders’ equity

 

2,947,007

 

 

 

2,712,861

 

Total liabilities and stockholders’ equity

$

5,723,214

 

 

$

5,069,632

 

 

 

 

 

CIENA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) (unaudited)

 

 

Nine Months Ended

 

July 29,

 

July 30,

 

2023

 

2022

Cash flows used in operating activities:

 

 

 

Net income

$

163,628

 

 

$

95,257

 

Adjustments to reconcile net income to net cash used in operating activities:

 

 

 

Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements

 

69,213

 

 

 

68,280

 

Share-based compensation expense

 

95,405

 

 

 

77,827

 

Amortization of intangible assets

 

36,274

 

 

 

36,521

 

Deferred taxes

 

(64,005

)

 

 

(19,824

)

Provision for inventory excess and obsolescence

 

18,767

 

 

 

12,038

 

Provision for warranty

 

18,860

 

 

 

12,416

 

Gain on cost method equity investments, net

 

(26,368

)

 

 

(4,120

)

Other

 

13,694

 

 

 

3,678

 

Changes in assets and liabilities:

 

 

 

Accounts receivable

 

(80,399

)

 

 

74,478

 

Inventories

 

(262,345

)

 

 

(464,664

)

Prepaid expenses and other

 

72,062

 

 

 

(39,805

)

Operating lease right-of-use assets

 

11,003

 

 

 

12,504

 

Accounts payable, accruals and other obligations

 

(133,880

)

 

 

(37,587

)

Deferred revenue

 

57,547

 

 

 

34,949

 

Short and long-term operating lease liabilities

 

(16,596

)

 

 

(15,197

)

Net cash used in operating activities

 

(27,140

)

 

 

(153,249

)

Cash flows used in investing activities:

 

 

 

Payments for equipment, furniture, fixtures and intellectual property

 

(83,422

)

 

 

(66,908

)

Purchases of investments

 

(119,240

)

 

 

(614,333

)

Proceeds from sales and maturities of investments

 

150,646

 

 

 

460,000

 

Settlement of foreign currency forward contracts, net

 

(3,272

)

 

 

4,450

 

Purchase of cost method equity investments

 

 

 

 

(8,000

)

Acquisition of business, net of cash acquired

 

(230,048

)

 

 

(62,043

)

Net cash used in investing activities

 

(285,336

)

 

 

(286,834

)

Cash flows provided by (used in) financing activities:

 

 

 

Proceeds from issuance of senior notes

 

 

 

 

400,000

 

Proceeds from issuance of term loan, net

 

497,500

 

 

 

 

Payment of long term debt

 

(6,448

)

 

 

(3,465

)

Payment of debt issuance costs

 

(5,422

)

 

 

(5,159

)

Payment of finance lease obligations

 

(2,830

)

 

 

(2,555

)

Shares repurchased for tax withholdings on vesting of stock unit awards

 

(29,794

)

 

 

(41,280

)

Repurchases of common stock - repurchase program

 

(57,736

)

 

 

(487,792

)

Proceeds from issuance of common stock

 

31,276

 

 

 

30,224

 

Net cash provided by (used in) financing activities

 

426,546

 

 

 

(110,027

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

9,501

 

 

 

(12,780

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

123,571

 

 

 

(562,890

)

Cash, cash equivalents and restricted cash at beginning of period

 

994,378

 

 

 

1,422,604

 

Cash, cash equivalents and restricted cash at end of period

$

1,117,949

 

 

$

859,714

 

Supplemental disclosure of cash flow information

 

 

 

Cash paid during the period for interest

$

56,709

 

 

$

24,823

 

Cash paid during the period for income taxes, net

$

68,058

 

 

$

28,593

 

Operating lease payments

$

18,038

 

 

$

16,342

 

Non-cash investing and financing activities

 

 

 

Purchase of equipment in accounts payable

$

4,579

 

 

$

9,320

 

Repurchase of common stock in accrued liabilities from repurchase program

$

3,500

 

 

$

5,000

 

Operating right-of-use assets subject to lease liability

$

9,771

 

 

$

8,226

 

Gain on cost method equity investments, net

$

26,368

 

 

$

4,120

 

APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Measurements

(in thousands, except per share data) (unaudited)

 

 

 

 

 

 

 

Quarter Ended

 

 

July 29,

 

July 30,

 

 

2023

 

2022

Gross Profit Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP gross profit

 

$

448,941

 

 

$

340,779

 

Share-based compensation-products

 

 

1,118

 

 

 

1,002

 

Share-based compensation-services

 

 

2,687

 

 

 

1,940

 

Amortization of intangible assets

 

 

3,187

 

 

 

3,140

 

Total adjustments related to gross profit

 

 

6,992

 

 

 

6,082

 

Adjusted (non-GAAP) gross profit

 

$

455,933

 

 

$

346,861

 

Adjusted (non-GAAP) gross profit percentage

 

 

42.7

%

 

 

40.0

%

 

 

 

 

 

Operating Expense Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP operating expense

 

$

370,727

 

 

$

313,672

 

Share-based compensation-research and development

 

 

10,954

 

 

 

8,233

 

Share-based compensation-sales and marketing

 

 

8,770

 

 

 

8,075

 

Share-based compensation-general and administrative

 

 

9,377

 

 

 

7,579

 

Significant asset impairments and restructuring costs

 

 

4,174

 

 

 

7,692

 

Amortization of intangible assets

 

 

9,487

 

 

 

8,919

 

Acquisition and integration costs

 

 

59

 

 

 

35

 

Total adjustments related to operating expense

 

 

42,821

 

 

 

40,533

 

Adjusted (non-GAAP) operating expense

 

$

327,906

 

 

$

273,139

 

 

 

 

 

 

Income from Operations Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP income from operations

 

$

78,214

 

 

$

27,107

 

Total adjustments related to gross profit

 

 

6,992

 

 

 

6,082

 

Total adjustments related to operating expense

 

 

42,821

 

 

 

40,533

 

Total adjustments related to income from operations

 

 

49,813

 

 

 

46,615

 

Adjusted (non-GAAP) income from operations

 

$

128,027

 

 

$

73,722

 

Adjusted (non-GAAP) operating margin percentage

 

 

12.0

%

 

 

8.5

%

 

 

 

 

 

Net Income Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP net income

 

$

29,733

 

 

$

10,512

 

Exclude GAAP provision for income taxes

 

 

34,608

 

 

 

4,319

 

Income before income taxes

 

 

64,341

 

 

 

14,831

 

Total adjustments related to income from operations

 

 

49,813

 

 

 

46,615

 

Loss on cost method equity investment

 

 

87

 

 

 

 

Adjusted income before income taxes

 

 

114,241

 

 

 

61,446

 

Non-GAAP tax provision on adjusted income before income taxes

 

 

25,133

 

 

 

12,412

 

Adjusted (non-GAAP) net income

 

$

89,108

 

 

$

49,034

 

 

 

 

 

 

Weighted average basic common shares outstanding

 

 

149,690

 

 

 

149,862

 

Weighted average dilutive potential common shares outstanding 1

 

 

149,977

 

 

 

150,463

 

 

 

 

 

 

Net Income per Common Share

 

 

 

 

GAAP diluted net income per potential common share

 

$

0.20

 

 

$

0.07

 

Adjusted (non-GAAP) diluted net income per potential common share

 

$

0.59

 

 

$

0.33

 

1 Weighted average dilutive potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share includes the following number of shares underlying certain stock option and stock unit awards: (i) 0.3 million for the third quarter of fiscal 2023; and (ii) 0.6 million for the third quarter of fiscal 2022.

APPENDIX B - Calculation of EBITDA and Adjusted EBITDA (unaudited)

(in thousands) (unaudited)

 

 

 

 

 

 

 

Quarter Ended

 

 

July 29,

 

July 30,

 

 

2023

 

2022

Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)

 

 

 

 

Net income (GAAP)

 

$

29,733

 

$

10,512

Add: Interest expense

 

 

24,060

 

 

12,642

Less: Interest and other income, net

 

 

10,187

 

 

366

Add: Provision for income taxes

 

 

34,608

 

 

4,319

Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements

 

 

23,310

 

 

22,250

Add: Amortization of intangible assets

 

 

12,674

 

 

12,059

EBITDA

 

$

114,198

 

$

61,416

Add: Share-based compensation cost

 

 

32,906

 

 

26,857

Add: Significant asset impairments and restructuring costs

 

 

4,174

 

 

7,692

Add: Acquisition and integration costs

 

 

59

 

 

35

Adjusted EBITDA

 

$

151,337

 

$

96,000

* * *

The adjusted (non-GAAP) measures above and their reconciliation to Ciena's GAAP results for the periods presented reflect adjustments relating to the following items:

  • Share-based compensation - a non-cash expense incurred in accordance with share-based compensation accounting guidance.
  • Significant asset impairments and restructuring costs - costs incurred as a result of restructuring activities taken to align resources with perceived market opportunities, and the redesign of business processes including restructuring certain real estate facilities.
  • Amortization of intangible assets - a non-cash expense arising from the acquisition of intangible assets, principally developed technologies and customer-related intangibles, that Ciena is required to amortize over its expected useful life.
  • Acquisition and integration costs - primarily consist of financial, legal and accounting advisors' costs and employment-related costs related to Ciena's acquisitions in fiscal 2022 and fiscal 2023.
  • Loss on cost method equity investment - reflects changes in the carrying value of a certain cost method equity investment due to triggering events.
  • Non-GAAP tax provision - consists of current and deferred income tax expense commensurate with the level of adjusted income before income taxes and utilizes a current, blended U.S. and foreign statutory annual tax rate of 22.0% for the third fiscal quarter of 2023 and 20.2% for the third fiscal quarter of 2022. This rate may be subject to change in the future, including as a result of changes in tax policy or tax strategy.

 

Contacts

Press Contact:

Jamie Moody

Ciena Corporation

+1 (410) 694-5761

pr@ciena.com

Investor Contact:

Gregg Lampf

Ciena Corporation

+1 (877) 243-6273

ir@ciena.com

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