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REVENUE | 3 Months Ended
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Jan. 27, 2024
Revenue from Contract with Customer [Abstract] |
REVENUE | REVENUE Disaggregation of Revenue Ciena’s disaggregated revenue as presented below depicts the nature, amount, and timing of revenue and cash flows for similar groupings of Ciena’s various offerings. The sales cycle, contractual obligations, customer requirements, and go-to-market strategies may differ for each of its product categories, resulting in different economic risk profiles for each category. The tables below set forth Ciena’s disaggregated revenue for the respective periods (in thousands):
| Quarter Ended January 27, 2024
| Networking Platforms |  | Platform Software and Services |  | Blue Planet Automation Software and Services |  | Global Services |  | Total
Product lines: |  |  |  |  |  |  |  |  |
Optical Networking | $ | 695,849 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 695,849 |
Routing and Switching | 111,387 |  |  | — |  |  | — |  |  | — |  |  | 111,387 |
Platform Software and Services | — |  |  | 89,745 |  |  | — |  |  | — |  |  | 89,745 |
Blue Planet Automation Software and Services | — |  |  | — |  |  | 13,942 |  |  | — |  |  | 13,942 |
Maintenance Support and Training | — |  |  | — |  |  | — |  |  | 74,115 |  |  | 74,115 |
Installation and Deployment | — |  |  | — |  |  | — |  |  | 42,723 |  |  | 42,723 |
Consulting and Network Design | — |  |  | — |  |  | — |  |  | 9,948 |  |  | 9,948 |
Total revenue by product line | $ | 807,236 |  |  | $ | 89,745 |  |  | $ | 13,942 |  |  | $ | 126,786 |  |  | $ | 1,037,709 |
Timing of revenue recognition: |  |  |  |  |  |  |  |  |
Products and services at a point in time | $ | 807,236 |  |  | $ | 27,694 |  |  | $ | 1,069 |  |  | $ | 9,638 |  |  | $ | 845,637 |
Services transferred over time | — |  |  | 62,051 |  |  | 12,873 |  |  | 117,148 |  |  | 192,072 |
Total revenue by timing of revenue recognition | $ | 807,236 |  |  | $ | 89,745 |  |  | $ | 13,942 |  |  | $ | 126,786 |  |  | $ | 1,037,709 |
| Quarter Ended January 28, 2023
| Networking Platforms |  | Platform Software and Services |  | Blue Planet Automation Software and Services |  | Global Services |  | Total
Product lines: |  |  |  |  |  |  |  |  |
Optical Networking | $ | 735,634 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 735,634 |
Routing and Switching | 119,505 |  |  | — |  |  | — |  |  | — |  |  | 119,505 |
Platform Software and Services | — |  |  | 73,445 |  |  | — |  |  | — |  |  | 73,445 |
Blue Planet Automation Software and Services | — |  |  | — |  |  | 15,405 |  |  | — |  |  | 15,405 |
Maintenance Support and Training | — |  |  | — |  |  | — |  |  | 67,891 |  |  | 67,891 |
Installation and Deployment | — |  |  | — |  |  | — |  |  | 34,575 |  |  | 34,575 |
Consulting and Network Design | — |  |  | — |  |  | — |  |  | 10,066 |  |  | 10,066 |
Total revenue by product line | $ | 855,139 |  |  | $ | 73,445 |  |  | $ | 15,405 |  |  | $ | 112,532 |  |  | $ | 1,056,521 |
Timing of revenue recognition: |  |  |  |  |  |  |  |  |
Products and services at a point in time | $ | 855,139 |  |  | $ | 18,864 |  |  | $ | 3,982 |  |  | $ | 9,255 |  |  | $ | 887,240 |
Services transferred over time | — |  |  | 54,581 |  |  | 11,423 |  |  | 103,277 |  |  | 169,281 |
Total revenue by timing of revenue recognition | $ | 855,139 |  |  | $ | 73,445 |  |  | $ | 15,405 |  |  | $ | 112,532 |  |  | $ | 1,056,521 |
Ciena reports its sales geographically using the following markets: (i) the United States, Canada, the Caribbean and Latin America (“Americas”); (ii) Europe, Middle East and Africa (“EMEA”); and (iii) Asia Pacific, Japan and India (“APAC”). Within each geographic area, Ciena maintains specific teams or personnel that focus on a particular region, country, customer, or market vertical. These teams include sales management, account salespersons, and sales engineers, as well as services professionals and commercial management personnel. The following table reflects Ciena’s geographic distribution of revenue based principally on the relevant location for Ciena’s delivery of products and performance of services. For the periods below, Ciena’s geographic distribution of revenue was as follows (in thousands):
|  | Quarter Ended |  |
|  | January 27, |  | January 28, |  |  |  |
|  | 2024 |  | 2023 |  |  |  |
Geographic distribution: |  |  |  |  |  |  |  |
Americas |  | $ | 718,198 |  |  | $ | 765,096 |  |  |  |  |
EMEA |  | 207,413 |  |  | 152,804 |  |  |  |  |
APAC |  | 112,098 |  |  | 138,621 |  |  |  |  |
Total revenue by geographic distribution |  | $ | 1,037,709 |  |  | $ | 1,056,521 |  |  |  |  |
Ciena’s revenue includes $677.6 million and $693.6 million of United States revenue for the first quarter of fiscal 2024 and 2023, respectively. No other country accounted for 10% or more of total revenue for the periods presented above. For the periods below, the only customers that accounted for at least 10% of Ciena’s revenue were as follows (in thousands):
| Quarter Ended |  |
| January 27, |  | January 28, |  |  |  |
| 2024 |  | 2023 |  |  |  |
Cloud provider A | $ | 166,008 |  |  | n/a |  |  |  |
Cloud provider B | 109,098 |  |  | 121,327 |  |  |  |  |
AT&T | n/a |  | 149,981 |  |  |  |  |
Total | $ | 275,106 |  |  | $ | 271,308 |  |  |  |  |
_____________________________________ n/a Denotes revenue representing less than 10% of total revenue for the period The cloud providers noted in the above table purchased products from each of Ciena’s operating segments excluding Blue Planet® Automation Software and Services. AT&T purchased products and services from each of Ciena’s operating segments for the period presented. •Networking Platforms revenue reflects sales of Ciena’s Optical Networking and Routing and Switching product lines. •Optical Networking - includes the 6500 Packet-Optical Platform, the Waveserver® modular interconnect system, the 6500 Reconfigurable Line System (RLS), the 5400 family of Packet-Optical Platforms, and the Coherent ELS open line system (OLS). This product line also includes the WaveLogic 5 Nano (WL5n) 100G-400G coherent pluggable transceivers. •Routing and Switching - includes the 3000 family of service delivery platforms and the 5000 family of service aggregation. This product line also includes the 6500 Packet Transport System (PTS), which combines packet switching, control plane operation, and integrated optics, the 8100 Coherent IP networking platforms, the 8700 Packetwave Platform, and virtualization software. This product line also includes SD-Edge software and our microplug Optical Line Terminal (OLT) transceiver. This product line also includes Ciena’s WaveRouter TM product, which was introduced during fiscal 2023, for which there have been no material sales to date. The Networking Platforms segment also includes sales of operating system software and enhanced software features embedded in each of the product lines above. Revenue from this segment is included in product revenue on the Condensed Consolidated Statements of Operations. Operating system software and enhanced software features embedded in Ciena hardware are each considered distinct performance obligations for which the revenue is generally recognized upfront at a point in time upon transfer of control. •Platform Software and Services offerings provide domain control management, analytics, data and planning tools and applications to assist customers in managing their networks, including by creating more efficient operations and providing more proactive visibility into their networks. Ciena’s platform software includes its Navigator Network Control Suite TM (“Navigator NCS”) domain controller solution, its suite of Navigator NCS applications, which was previously referred to as “Manage, Control and Plan (MCP),” and its OneControl Unified Management System, as well as planning tools and legacy software solutions that support Ciena’s installed base of network solutions. Platform software-related services revenue includes sales of subscription, installation, support, and consulting services related to Ciena’s software platforms, operating system software and enhanced software features embedded in each of the Networking Platforms product lines above. Revenue from the software portion of this segment is included in product revenue on the Condensed Consolidated Statements of Operations. Revenue from services portions of this segment is included in services revenue on the Condensed Consolidated Statements of Operations. •Blue Planet Automation Software and Services is a comprehensive, cloud native, and standards-based software portfolio, together with related services, that enables customers to realize digital transformation through the automation of the services lifecycle. Ciena’s Blue Planet Automation Platform includes multi-domain service orchestration (MDSO), inventory management (BPI), route optimization and analysis (ROA), multi-cloud orchestration (MCO), and unified assurance and analytics (UAA). Services revenue includes sales of subscription, installation, support, consulting and design services related to Ciena’s Blue Planet Automation Platform. Revenue from the software portion of this segment is included in product revenue on the Condensed Consolidated Statements of Operations. Revenue from services portions of this segment is included in services revenue on the Condensed Consolidated Statements of Operations. Ciena’s software platform revenue typically reflects either perpetual or term-based software licenses, and these sales are considered distinct performance obligations where revenue is generally recognized upfront at a point in time upon transfer of control. Revenue from software subscription and support is recognized ratably over the period during which the services are performed. Revenue from professional services for solution customization, software and solution support services, consulting and design, and build-operate-transfer services relating to Ciena’s software offerings is recognized over time with Ciena applying the input method to determine the amount of revenue to be recognized in a given period. •Global Services revenue reflects sales of a broad range of Ciena’s services for maintenance support and training, installation and deployment, and consulting and network design activities. Revenue from this segment is included in services revenue on the Condensed Consolidated Statements of Operations. Ciena’s Global Services are considered a distinct performance obligation where revenue is generally recognized over time. Revenue from maintenance support is recognized ratably over the period during which the services are performed. Revenue from installation and deployment services and consulting and network design services is recognized over time with Ciena applying the input method to determine the amount of revenue to be recognized in a given period. Revenue from training services is generally recognized at a point in time upon completion of the service. Contract Balances The following table provides information about receivables, contract assets, and contract liabilities (deferred revenue) from contracts with customers (in thousands):
|  | Balance at January 27, 2024 |  | Balance at October 28, 2023
Accounts receivable, net |  | $ | 865,239 |  |  | $ | 1,003,876 |
Contract assets for unbilled accounts receivable, net |  | $ | 151,572 |  |  | $ | 150,312 |
Deferred revenue |  | $ | 243,270 |  |  | $ | 228,460 |
Ciena’s contract assets represent unbilled accounts receivable, net where transfer of a product or service has occurred but invoicing is conditional upon completion of future performance obligations. These amounts are primarily related to installation and deployment and professional services arrangements where transfer of control has occurred, but Ciena has not yet invoiced the customer. Contract assets are included in prepaid expenses and other on the Condensed Consolidated Balance Sheets. See Note 10 below. Contract liabilities consist of deferred revenue and represent advanced payments against non-cancelable customer orders received prior to revenue recognition. Ciena recognized approximately $70.6 million and $67.9 million of revenue during the first three months of fiscal 2024 and 2023, respectively, that was included in the deferred revenue balance at October 28, 2023 and October 29, 2022, respectively. Revenue recognized due to changes in transaction price from performance obligations satisfied or partially satisfied in previous periods was immaterial during the three months ended January 27, 2024 and January 28, 2023. Capitalized Contract Acquisition Costs Capitalized contract acquisition costs consist of deferred sales commissions, and were $27.8 million and $30.2 million as of January 27, 2024 and October 28, 2023, respectively. Capitalized contract acquisition costs were included in (i) prepaid expenses and other and (ii) other long-term assets on the Condensed Consolidated Balance Sheets. The amortization expense associated with these costs was $7.7 million and $7.2 million during the first three months of fiscal 2024 and 2023, respectively, and was included in selling and marketing expense on the Condensed Consolidated Statements of Operations. Remaining Performance Obligations Remaining performance obligations (“RPO”) are comprised of non-cancelable customer purchase orders for products and services that are awaiting transfer of control for revenue recognition under the applicable contract terms. As of January 27, 2024, the aggregate amount of RPO was $1.7 billion. As of January 27, 2024, Ciena expects approximately 83% of the RPO to be recognized as revenue within the next 12 months.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-9 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-10 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-15 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-13 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org//606/tableOfContent + Details
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