EX-99.2 4 ex9922024q4earningsprese.htm EX-99.2
© Ciena Corporation 2024. All rights reserved. Proprietary Information. Ciena Corporation Fiscal Q4 2024 Earnings Presentation Period ended November 2, 2024 December 12, 2024

© Ciena Corporation 2024. All rights reserved. Proprietary Information.2 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. From time to time, we exclusively post material information to this website along with other disclosure channels that we use. 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. Information in this presentation and related comments of presenters 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. 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, their spending and their businesses and markets; our ability to execute our business and growth strategies; the impact of macroeconomic conditions; the impact of the introduction of new technologies by us or our competitors; seasonality and the timing and size of customer orders, their delivery dates and 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 tensions or events, including but not limited to the ongoing conflicts between Ukraine and Russia, and Israel and groups based in the surrounding region, and public health emergencies, epidemics, or pandemics, such as the COVID-19 pandemic; changes in tax or trade regulations, including the imposition of tariffs, duties or efforts to withdraw from or materially modify international trade agreements; cyberattacks, data breaches or other security incidents involving our enterprise network environment or our products; regulatory changes, litigation involving our intellectual property or government investigations; and the other risk factors disclosed in Ciena’s periodic reports filed with the Securities and Exchange Commission (SEC) including Ciena's Quarterly Report on Form 10-Q filed with the SEC on September 4, 2024 and its Annual Report on Form 10-K to be filed with the SEC. All information, statements, and projections in this presentation and the related earnings call speak only as of the date of this presentation and related earnings call. Ciena assumes no obligation to update any forward-looking or other information included in this presentation or related earnings calls, whether as a result of new information, future events or otherwise. In addition, this presentation includes historical, and may include prospective, non-GAAP measures of Ciena’s gross margin, operating expense, operating margin, EBITDA, and net income per share. These measures are not intended to be a substitute for financial information presented in accordance with GAAP. A reconciliation of non-GAAP measures used in this presentation to Ciena’s GAAP results for the relevant period can be found in the Appendix to this presentation. Additional information can also be found in our press release filed this morning and in our reports on Form 10-Q and Form 10K filed with the Securities and Exchange Commission.

© Ciena Corporation 2024. All rights reserved. Proprietary Information.3 Table of Contents 1. Overview and Ciena's portfolio 2. Industry context and addressable market expansion 3. Ciena is positioned for accelerated growth 4. Fiscal year 2024 financial performance 5. Fiscal Q4 2024 financial performance 6. Appendix

© Ciena Corporation 2024. All rights reserved. Proprietary Information. Overview and Ciena's portfolio

© Ciena Corporation 2024. All rights reserved. Proprietary Information.5 Ciena is an industry-leading global networking systems, services, and software company

© Ciena Corporation 2024. All rights reserved. Proprietary Information.6 Our vision for networking: How it works

© Ciena Corporation 2024. All rights reserved. Proprietary Information.7 Our strategy leverages our Optical technology to create expanded addressable market opportunities

© Ciena Corporation 2024. All rights reserved. Proprietary Information. Industry context and addressable market expansion

© Ciena Corporation 2024. All rights reserved. Proprietary Information.9 Increasing bandwidth consumption as a driver of network expansion

© Ciena Corporation 2024. All rights reserved. Proprietary Information.10 Our addressable market expansion strategy allows us to access higher growth markets 1Sources: Dell'Oro, CignalAI, LightCounting, and Ciena internal analysis.

© Ciena Corporation 2024. All rights reserved. Proprietary Information.11 Our market leadership Optical Transport Report, 3Q24Optical Networking Report, 3Q24 Service Provider Switching & Routing Report, 3Q24 Transport Hardware Report, 3Q24 #1 Globally • Data center interconnect • Purpose-built/compact modular DCI • Optical for internet content provider customers • Optical for cable MSO customers #1 N. America • Data center interconnect • Total optical networking • Optical packet #2 Globally • Total optical networking • Optical packet #1 Globally • Purpose-built/compact modular DCI • SLTE WDM • Access switching #1 N. America • Total optical networking • Purpose-built/compact modular DCI • Access switching #2 Globally • Total optical networking #1 Globally • Purpose-built/compact modular DCI • Optical for cloud and colo • SLTE WDM #1 N. America • Total optical networking • Purpose-built/compact modular DCI • Optical for cloud and colo • Routing/Access #2 Globally • Total optical networking • Optical for service provider • Optical for enterprise and government • Routing/Access

© Ciena Corporation 2024. All rights reserved. Proprietary Information. Ciena is positioned for accelerated growth

© Ciena Corporation 2024. All rights reserved. Proprietary Information.13 Our future growth Long-term growth in core business plus new addressable markets result in opportunity to outpace our traditional revenue CAGR over time

© Ciena Corporation 2024. All rights reserved. Proprietary Information.14 Our portfolio addresses all key applications

© Ciena Corporation 2024. All rights reserved. Proprietary Information.15 We expect coherent technology will have growing applications in the AI era

© Ciena Corporation 2024. All rights reserved. Proprietary Information. Fiscal full-year 2024 results

© Ciena Corporation 2024. All rights reserved. Proprietary Information.17 Fiscal FY 2024 key highlights ▪ Introduced WaveLogic 6 Extreme the industry’s first 1.6T coherent solution ▪ Added 60 new customers for WaveLogic 5 Extreme 800G and surpassed 150,000 WL5e modems shipped ▪ Continued momentum with coherent pluggable portfolio, shipping WL5n 400G plugs to three Cloud providers and securing a large design win for WL6n 800G plugs with one Cloud provider ▪ Expanded our WaveRouter coherent routing family with WaveRouter 2 and WaveRouter 7, expanding Ciena's comprehensive portfolio of coherent routers to 16 total • Ended the fiscal quarter with approximately $1.33 billion in cash and investments • Generated $378 million in free cash flow • Repurchased approximately ~4.5 million shares for $250 million, completing our $1 billion three-year stock repurchase program (FY22-24) • Announced a new $1billion three -year stock repurchase program (FY25-27) • Released our annual Sustainability Report, detailing our progress and performance across environmental, social, and governance programs • Continued to work towards our science- based greenhouse gas emissions targets and used 100% renewable energy in our facilities • Volunteered 37,000 hours and raised $3.9 million for community organizations from employee donations, matched giving, and volunteer rewards through our Ciena Cares program We are driving the pace of innovation We are committed to our people, communities, and the environment We have a strong business and financial model

© Ciena Corporation 2024. All rights reserved. Proprietary Information.18 Fiscal full-year 2024 comparative financial highlights * Reconciliations of these non-GAAP measures to our GAAP results are included in the Appendix and in the press release for the relative period. FY 2024 FY 2023 Revenue $4,014.9M $4,386.5M Adjusted Gross Margin* 43.6% 43.5% Adjusted Operating Expense* $1,361.7M $1,332.8M Adjusted Operating Margin* 9.7% 13.1% Adjusted EBITDA* $481.0M $665.8M Adjusted EPS* $1.82 $2.72

© Ciena Corporation 2024. All rights reserved. Proprietary Information. Q4 FY 2024 results

© Ciena Corporation 2024. All rights reserved. Proprietary Information.20 Q4 FY 2024 key highlights ▪ Non-telco represented 48% of total revenue ▪ Direct Cloud Provider revenue grew 53% sequentially ▪ India revenue grew 49% sequentially ▪ Blue Planet revenue grew 17% YoY • Achieved commercial availability of WaveLogic 6 Extreme, industry’s first 1.6T coherent solution, with shipments for revenue to five customers • Surpassed 150 customers for WaveLogic 5 Nano 400G coherent pluggables with 29 new customers • Continued strong momentum in WaveLogic 5 Extreme with 18 new customers • Announced WaveLogic 6 Nano 1.6T Coherent-Lite pluggable, designed to optimize performance and efficiency of data center and campus networks ▪ Achieved a total of 137 Coherent Routing solutions customers using our WL5n pluggable technology ▪ Enhanced our Broadband solution functionality, with Navigator Network Control Suite, support for both PON and broadband network gateway BNG • Total shareholder return five-year CAGR of 14%1 • Repurchased ~2.1 million shares for $132 million, achieving our $250 million target for FY 2024 and completing our three-year program (FY22-24) • Authorized a new $1 billion, three-year stock repurchase program (FY25-27) 1 Based on closing share price between 12/2/2019 to 12/2/2024 Achieving balanced growth Prioritizing long term shareholder value Driving the pace of innovation

© Ciena Corporation 2024. All rights reserved. Proprietary Information.21 Q4 FY 2024 comparative financial highlights * Reconciliations of these non-GAAP measures to our GAAP results are included in the Appendix and in the press release for the relative period. Q4 FY 2024 Q4 FY 2023 Revenue $1,124.1M $1,129.5M Adjusted Gross Margin* 41.6% 43.7% Adjusted Operating Expense* $354.9M $337.6M Adjusted Operating Margin* 10.0% 13.8% Adjusted EBITDA* $136.7M $178.8M Adjusted EPS* $0.54 $0.75

© Ciena Corporation 2024. All rights reserved. Proprietary Information.22 Q4 FY 2024 comparative operating metrics Q4 FY 2024 Q4 FY 2023 Cash and investments $1.33B $1.25B Cash provided by operations $349M $196M DSO 89.0 92.0 Inventory Turns 2.7 2.0 Gross Leverage 3.34x 2.44x Net Debt $274M $373M

© Ciena Corporation 2024. All rights reserved. Proprietary Information.23 Revenue by segment (Amounts in millions) Q4 FY 2024 Q4 FY 2023 Revenue %** Revenue %** Networking Platforms Optical Networking $779.6 69.4 $748.0 66.2 Routing and Switching 79.4 7.0 128.9 11.4 Total Networking Platforms 859.0 76.4 876.9 77.6 Platform Software and Services 99.6 8.9 82.1 7.3 Blue Planet Automation Software and Services 23.5 2.1 20.0 1.8 Global Services Maintenance Support and Training 77.2 6.9 74.4 6.6 Installation and Deployment 51.4 4.5 60.1 5.3 Consulting and Network Design 13.4 1.2 16.0 1.4 Total Global Services 142.0 12.6 150.5 13.3 Total $1,124.1 100.0 $1,129.5 100.0 * A reconciliation of these non-GAAP measures to GAAP results is included in the appendix to this presentation. ** Denotes % of total revenue

© Ciena Corporation 2024. All rights reserved. Proprietary Information.24 Revenue derived from non-telco customers

© Ciena Corporation 2024. All rights reserved. Proprietary Information.25 Revenue by geographic region 14.5% 10.8% 9.4%14.5% 20.0% 14.3% 71.0% 69.2% 72.8% 76.3% 17.1% 10.1% 10.8% 13.4% 75.8%

© Ciena Corporation 2024. All rights reserved. Proprietary Information. Q4 FY 2024 appendix

© Ciena Corporation 2024. All rights reserved. Proprietary Information.27 Q4 FY 2024 Q3 FY 2024 Q2 FY 2024 Q1 FY 2024 Q4 FY 2023 GAAP gross profit $460,022 $403,945 $388,661 $466,962 $486,281 Share-based compensation-products 1,736 1,660 1,760 1,318 1,194 Share-based compensation-services 3,257 3,122 3,344 3,020 2,827 Amortization of intangible assets 2,764 2,764 2,763 2,764 2,763 Total adjustments related to gross profit 7,757 7,546 7,867 7,102 6,784 Adjusted (non-GAAP) gross profit $467,779 $411,491 $396,528 $474,064 $493,065 Adjusted (non-GAAP) gross profit percentage 41.6 % 43.7 % 43.5 % 45.7 % 43.7 % Gross Profit Reconciliation (Amounts in thousands)

© Ciena Corporation 2024. All rights reserved. Proprietary Information.28 Q4 FY 2024 Q3 FY 2024 Q2 FY 2024 Q1 FY 2024 Q4 FY 2023 GAAP operating expense $400,812 $377,202 $392,626 $382,333 $394,979 Share-based compensation-research and development 14,065 13,118 14,066 12,880 11,412 Share-based compensation-sales and marketing 11,168 10,315 11,166 10,305 9,187 Share-based compensation-general and administrative 10,842 9,257 9,875 10,079 10,274 Significant asset impairments and restructuring costs 2,605 1,361 15,655 4,971 7,209 Amortization of intangible assets 7,185 7,185 7,947 7,252 10,578 Legal Settlement — — — — 8,750 Total adjustments related to operating expense 45,865 41,236 58,709 45,487 57,410 Adjusted (non-GAAP) operating expense $354,947 $335,966 $333,917 $336,846 $337,569 Q4 FY 2024 Q3 FY 2024 Q2 FY 2024 Q1 FY 2024 Q4 FY 2023 GAAP income (loss) from operations $59,210 $26,743 $(3,965) $84,629 $91,302 Total adjustments related to gross profit 7,757 7,546 7,867 7,102 6,784 Total adjustments related to operating expense 45,865 41,236 58,709 45,487 57,410 Total adjustments related to income from operations 53,622 48,782 66,576 52,589 64,194 Adjusted (non-GAAP) income from operations $112,832 $75,525 $62,611 $137,218 $155,496 Adjusted (non-GAAP) operating margin percentage 10.0 % 8.0 % 6.8 % 13.2 % 13.8 % Operating Expense Reconciliation (Amounts in thousands) Income (Loss) from Operations Reconciliation (Amounts in thousands)

© Ciena Corporation 2024. All rights reserved. Proprietary Information.29 Q4 FY 2024 Q3 FY 2024 Q2 FY 2024 Q1 FY 2024 Q4 FY 2023 GAAP net income (loss) $37,028 $14,230 $(16,849) $49,547 $91,199 Exclude GAAP provision (benefit) for income taxes 10,993 2,125 820 21,956 (20,681) Income (loss) before income taxes 48,021 16,355 (16,029) 71,503 70,518 Total adjustments related to income from operations 53,622 48,782 66,576 52,589 64,194 Loss on extinguishment and modification of debt — — — — 7,874 Adjusted income before income taxes 101,643 65,137 50,547 124,092 142,586 Non-GAAP tax provision on adjusted income before income taxes 22,361 14,330 11,120 27,300 31,369 Adjusted (non-GAAP) net income $79,282 $50,807 $39,427 $96,792 $111,217 Weighted average basic common shares outstanding 144,240 144,394 144,914 145,291 147,437 Weighted average diluted potential common shares outstanding(1) 146,487 145,361 146,268 145,848 147,891 Q4 FY 2024 Q3 FY 2024 Q2 FY 2024 Q1 FY 2024 Q4 FY 2023 GAAP diluted net income (loss) per potential common share $ 0.25 $ 0.10 $ (0.12) $ 0.34 $ 0.62 Adjusted (non-GAAP) diluted net income per potential common share $ 0.54 $ 0.35 $ 0.27 $ 0.66 $ 0.75 1. Weighted average dilutive potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share for the fourth quarter of fiscal 2024 includes 2.2 million shares underlying certain stock option and stock unit awards. Net Income (Loss) Reconciliation (Amounts in thousands) Net Income (Loss) per Common Share

© Ciena Corporation 2024. All rights reserved. Proprietary Information.30 Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) Q4 FY 2024 Q3 FY 2024 Q2 FY 2024 Q1 FY 2024 Q4 FY 2023 Net income (loss) (GAAP) $37,028 $14,230 $(16,849) $49,547 $91,199 Add: Interest expense 24,990 24,401 23,861 23,776 24,207 Less: Interest and other income, net 13,801 14,013 11,797 10,650 11,297 Add: Loss on extinguishment and modification of debt — — — — 7,874 Add: Provision (benefit) for income taxes 10,993 2,125 820 21,956 (20,681) Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements 23,849 22,981 23,208 22,808 23,351 Add: Amortization of intangible assets 9,949 9,949 10,710 10,016 13,342 EBITDA $93,008 $59,673 $29,953 $117,453 $127,995 Add: Share-based compensation expense 41,068 37,472 40,211 37,602 34,894 Add: Significant asset impairments and restructuring expense 2,605 1,361 15,655 4,971 7,209 Add: Legal settlement — — — — 8,750 Adjusted EBITDA $136,681 $98,506 $85,819 $160,026 $178,848 Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) (Amounts in thousands)