UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark one)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 27, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                    

Commission File Number: 001-36250

Ciena Corporation

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation or organization)

7035 Ridge Road, Hanover, MD

(Address of principal executive offices)

23-2725311

(I.R.S. Employer Identification No.)

21076

(Zip Code)

(410) 694-5700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	CIEN	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐
						Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class	Outstanding as of August 30, 2024
Common Stock, par value $0.01 per share	144,427,200

CIENA CORPORATION

INDEX

FORM 10-Q

	PAGE NUMBER
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)	3
Condensed Consolidated Statements of Operations for the Quarters and Nine Months Ended July 27, 2024 and July 29, 2023	3
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Quarters and Nine Months Ended July 27, 2024 and July 29, 2023	4
Condensed Consolidated Balance Sheets at July 27, 2024 and October 28, 2023	5
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended July 27, 2024 and July 29, 2023	6
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Nine Months Ended July 27, 2024 and July 29, 2023	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3. Quantitative and Qualitative Disclosures About Market Risk	40
Item 4. Controls and Procedures	40
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	40
Item 1A. Risk Factors	40
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3. Defaults Upon Senior Securities	42
Item 4. Mine Safety Disclosures	42
Item 5. Other Information	42
Item 6. Exhibits	44
Signatures	45

2

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

CIENA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

	Quarter Ended				Nine Months Ended
	July 27,		July 29,		July 27,		July 29,
	2024		2023		2024		2023
Revenue:
Products	$	729,503	$	865,197	$	2,266,596	$	2,678,242
Services	212,805		202,689		624,247		578,820
Total revenue	942,308		1,067,886		2,890,843		3,257,062
Cost of goods sold:
Products	433,533		516,900		1,315,737		1,559,120
Services	104,830		102,045		315,538		305,372
Total cost of goods sold	538,363		618,945		1,631,275		1,864,492
Gross profit	403,945		448,941		1,259,568		1,392,570
Operating expenses:
Research and development	188,888		189,392		571,537		561,115
Selling and marketing	121,520		118,266		373,749		367,156
General and administrative	58,248		49,349		162,504		151,184
Significant asset impairments and restructuring costs	1,361		4,174		21,987		16,625
Amortization of intangible assets	7,185		9,487		22,384		26,773
Acquisition and integration costs	—		59		—		3,474
Total operating expenses	377,202		370,727		1,152,161		1,126,327
Income from operations	26,743		78,214		107,407		266,243
Interest and other income, net	14,013		10,187		36,460		50,711
Interest expense	(24,401)		(24,060)		(72,038)		(63,819)
Income before income taxes	16,355		64,341		71,829		253,135
Provision for income taxes	2,125		34,608		24,901		89,507
Net income	$	14,230	$	29,733	$	46,928	$	163,628
Basic net income per common share	$	0.10	$	0.20	$	0.32	$	1.09
Diluted net income per potential common share	$	0.10	$	0.20	$	0.32	$	1.09
Weighted average basic common shares outstanding	144,394		149,690		144,876		149,472
Weighted average dilutive potential common shares outstanding	145,361		149,977		145,795		149,867

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

3

CIENA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)

	Quarter Ended				Nine Months Ended
	July 27,		July 29,		July 27,		July 29,
	2024		2023		2024		2023
Net income	$	14,230	$	29,733	$	46,928	$	163,628
Unrealized gain on available-for-sale securities, net of tax	775		378		493		2,075
Unrealized gain (loss) on foreign currency forward contracts, net of tax	(872)		5,124		3,736		9,314
Unrealized gain (loss) on interest rate swaps, net of tax	(13,680)		12,324		(9,615)		5,497
Change in cumulative translation adjustments	(4,686)		10,151		2,961		17,981
Other comprehensive income (loss)	(18,463)		27,977		(2,425)		34,867
Total comprehensive income (loss)	$	(4,233)	$	57,710	$	44,503	$	198,495

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

4

CIENA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

	July 27, 2024		October 28, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	883,365	$	1,010,618
Short-term investments	217,810		104,753
Accounts receivable, net of allowance for credit losses of $9.2 million and $11.7 million as of July 27, 2024 and October 28, 2023, respectively.	899,877		1,003,876
Inventories, net	937,399		1,050,838
Prepaid expenses and other	600,008		405,694
Total current assets	3,538,459		3,575,779
Long-term investments	111,833		134,278
Equipment, building, furniture and fixtures, net	299,161		280,147
Operating right-of-use assets	28,717		35,140
Goodwill	444,791		444,765
Other intangible assets, net	174,974		205,627
Deferred tax asset, net	831,682		809,306
Other long-term assets	145,513		116,453
Total assets	$	5,575,130	$	5,601,495
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	316,599	$	317,828
Accrued liabilities and other short-term obligations	347,238		431,419
Deferred revenue	179,457		154,419
Operating lease liabilities	15,565		16,655
Current portion of long-term debt	11,700		11,700
Total current liabilities	870,559		932,021
Long-term deferred revenue	77,628		74,041
Other long-term obligations	171,014		170,407
Long-term operating lease liabilities	26,742		33,259
Long-term debt, net	1,538,315		1,543,406
Total liabilities	2,684,258		2,753,134
Commitments and contingencies (Note 19)
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; 144,426,873 and 144,829,938 shares issued and outstanding	1,444		1,448
Additional paid-in capital	6,260,095		6,262,083
Accumulated other comprehensive loss	(40,192)		(37,767)
Accumulated deficit	(3,330,475)		(3,377,403)
Total stockholders’ equity	2,890,872		2,848,361
Total liabilities and stockholders’ equity	$	5,575,130	$	5,601,495

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

5

CIENA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) (unaudited)

	Nine Months Ended
	July 27,		July 29,
	2024		2023
Cash flows provided by (used in) operating activities:
Net income	$	46,928	$	163,628
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements	68,997		69,213
Share-based compensation expense	115,433		95,405
Amortization of intangible assets	30,675		36,274
Deferred taxes	(19,909)		(64,005)
Provision for inventory excess and obsolescence	35,400		18,767
Provision for warranty	14,708		18,860
Gain on equity investments, net	—		(26,368)
Other	11,968		13,694
Changes in assets and liabilities:
Accounts receivable	92,421		(80,399)
Inventories	78,220		(262,345)
Prepaid expenses and other	(221,823)		72,062
Operating lease right-of-use assets	8,963		11,003
Accounts payable, accruals and other obligations	(112,352)		(133,880)
Deferred revenue	28,833		57,547
Short- and long-term operating lease liabilities	(13,290)		(16,596)
Net cash provided by (used in) operating activities	165,172		(27,140)
Cash flows used in investing activities:
Payments for equipment, furniture, fixtures and intellectual property	(53,098)		(83,422)
Purchases of investments	(197,303)		(119,240)
Proceeds from sales and maturities of investments	114,899		150,646
Settlement of foreign currency forward contracts, net	(362)		(3,272)
Purchase of equity investment	(21,682)		—
Acquisition of business, net of cash acquired	—		(230,048)
Net cash used in investing activities	(157,546)		(285,336)
Cash flows provided by (used in) financing activities:
Proceeds from issuance of term loan, net	—		497,500
Payment of long-term debt	(5,850)		(6,448)
Payment of debt issuance costs	(2,554)		(5,422)
Payment of finance lease obligations	(3,004)		(2,830)
Shares repurchased for tax withholdings on vesting of stock unit awards	(33,450)		(29,794)
Repurchases of common stock - repurchase program, net	(125,816)		(57,736)
Proceeds from issuance of common stock	34,292		31,276
Net cash provided by (used in) financing activities	(136,382)		426,546
Effect of exchange rate changes on cash, cash equivalents and restricted cash	1,499		9,501
Net increase (decrease) in cash, cash equivalents and restricted cash	(127,257)		123,571
Cash, cash equivalents and restricted cash at beginning of period	1,010,786		994,378
Cash, cash equivalents and restricted cash at end of period	$	883,529	$	1,117,949
Supplemental disclosure of cash flow information
Cash paid during the period for interest, net	$	64,999	$	56,709
Cash paid during the period for income taxes, net	$	41,736	$	68,058
Operating lease payments	$	14,672	$	18,038
Non-cash investing and financing activities
Purchase of equipment in accounts payable	$	35,316	$	4,579
Repurchase of common stock in accrued liabilities from repurchase program, net	$	1,762	$	3,500
Operating right-of-use assets subject to lease liability	$	5,326	$	9,771
Gain on equity investments, net	$	—	$	26,368

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

6

CIENA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands, except share data)

(unaudited)

	Common Stock Shares	Par Value		Additional Paid-in-Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
Balance at October 28, 2023	144,829,938	$	1,448	$	6,262,083	$	(37,767)	$	(3,377,403)	$	2,848,361
Net income	—	—		—		—		46,928		46,928
Other comprehensive loss	—	—		—		(2,425)		—		(2,425)
Repurchase of common stock - repurchase program, net	(2,415,438)	(24)		(118,243)		—		—		(118,267)
Issuance of shares from employee equity plans	2,730,328	27		34,265		—		—		34,292
Share-based compensation expense	—	—		115,433		—		—		115,433
Shares repurchased for tax withholdings on vesting of stock unit awards	(717,955)	(7)		(33,443)		—		—		(33,450)
Balance at July 27, 2024	144,426,873	$	1,444	$	6,260,095	$	(40,192)	$	(3,330,475)	$	2,890,872

	Common Stock Shares	Par Value		Additional Paid-in-Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ Equity
Balance at October 29, 2022	148,412,943	$	1,484	$	6,390,252	$	(46,645)	$	(3,632,230)	$	2,712,861
Net income	—	—		—		—		163,628		163,628
Other comprehensive income	—	—		—		34,867		—		34,867
Repurchase of common stock - repurchase program, net	(1,441,435)	(14)		(61,222)		—		—		(61,236)
Issuance of shares from employee equity plans	2,429,069	24		31,252		—		—		31,276
Share-based compensation expense	—	—		95,405		—		—		95,405
Shares repurchased for tax withholdings on vesting of stock unit awards	(628,064)	(6)		(29,788)		—		—		(29,794)
Balance at July 29, 2023	148,772,513	$	1,488	$	6,425,899	$	(11,778)	$	(3,468,602)	$	2,947,007

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

7

CIENA CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(1) INTERIM FINANCIAL STATEMENTS

The interim financial statements included herein for Ciena Corporation and its wholly owned subsidiaries (“Ciena”) have been prepared by Ciena, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”).

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires Ciena to make judgments, assumptions, and estimates that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Among other things, these estimates form the basis for judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions. To the extent that there are material differences between Ciena’s estimates and actual results, Ciena’s consolidated financial statements will be affected.

In the opinion of management, the financial statements included in this report reflect all normal recurring adjustments that Ciena considers necessary for the fair statement of the results of operations of Ciena for the interim periods covered and of the financial position of Ciena at the date of the interim balance sheets. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to SEC rules and regulations. The Condensed Consolidated Balance Sheet as of October 28, 2023 was derived from audited financial statements, but does not include all disclosures required by GAAP. However, Ciena believes that the disclosures are adequate to understand the information presented herein. The operating results for interim periods are not necessarily indicative of the operating results for the entire year. These financial statements should be read in conjunction with Ciena’s audited consolidated financial statements and the notes thereto included in Ciena’s Annual Report on Form 10-K for the fiscal year ended October 28, 2023 (the “2023 Annual Report”).

Ciena has a 52 or 53-week fiscal year, with quarters ending on the Saturday nearest to the last day of January, April, July, and October, respectively, of each year. Fiscal 2024 is a 53-week fiscal year with the additional week occurring in the fourth quarter. Fiscal 2023 was a 52-week fiscal year.

(2) SIGNIFICANT ACCOUNTING POLICIES

Except for the changes in certain policies described below, there have been no material changes to Ciena’s significant accounting policies, compared to the accounting policies described in Note 1, Ciena Corporation and Significant Accounting Policies and Estimates, in Notes to Consolidated Financial Statements in Item 8 of Part II of the 2023 Annual Report.

Newly Issued Accounting Standards - Effective

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-08 (“ASU 2021-08”), Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers to improve the accounting for acquired revenue contracts with customers in a business combination to address recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. ASU 2021-08 was effective for Ciena beginning in the first quarter of fiscal 2024 without any material impact on its consolidated financial position, results of operations and related disclosures.

Newly Issued Accounting Standards - Not Yet Effective

In November 2023, the FASB issued ASU No. 2023-07 (“ASU 2023-07”), Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 on a retrospective basis. Early adoption is permitted. Ciena is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.

8

In December 2023, the FASB issued ASU No. 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740): Improvement to Income Tax Disclosures to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024; however, early adoption is permitted. ASU 2023-09 allows for adoption using either a prospective or retrospective method. Ciena is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.

In March 2024, the SEC adopted final rules under SEC Release No. 33-11275, The Enhancement and Standardization of Climate Related Disclosures for Investors, which will require registrants to provide certain climate-related information in their registration statements and annual reports. The rules will require information about a registrant's climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition. The required information about climate-related risks will also include disclosure of a registrant's greenhouse gas emissions. In addition, the rules will require registrants to present certain climate-related financial metrics in their audited financial statements. Disclosures will be required prospectively, with information for prior periods required only to the extent it was previously disclosed in an SEC filing. Ciena is currently evaluating the impact of these final rules on its consolidated financial statements and related disclosures. On April 12, 2024, the final rules were indefinitely delayed pending the completion of judicial review in consolidated proceedings in the U.S. Court of Appeals, Eighth Circuit.

(3)REVENUE

Disaggregation of Revenue

Ciena’s disaggregated revenue as presented below depicts the nature, amount, and timing of revenue for similar groupings of Ciena’s products and services. The sales cycle, contractual obligations, customer requirements, and go-to-market strategies may differ across Ciena’s product lines, resulting in different economic risk profiles for each line.

The tables below set forth Ciena’s disaggregated revenue for the periods indicated (in thousands):

	Quarter Ended July 27, 2024
	Networking Platforms		Platform Software and Services		Blue Planet Automation Software and Services		Global Services		Total
Product lines:
Optical Networking	$	606,845	$	—	$	—	$	—	$	606,845
Routing and Switching	92,692		—		—		—		92,692
Platform Software and Services	—		83,212		—		—		83,212
Blue Planet Automation Software and Services	—		—		25,791		—		25,791
Maintenance Support and Training	—		—		—		74,344		74,344
Installation and Deployment	—		—		—		46,484		46,484
Consulting and Network Design	—		—		—		12,940		12,940
Total revenue by product line	$	699,537	$	83,212	$	25,791	$	133,768	$	942,308
Timing of revenue recognition:
Products and services at a point in time	$	699,537	$	18,766	$	11,614	$	9,833	$	739,750
Services transferred over time	—		64,446		14,177		123,935		202,558
Total revenue by timing of revenue recognition	$	699,537	$	83,212	$	25,791	$	133,768	$	942,308

9

	Quarter Ended July 29, 2023
	Networking Platforms		Platform Software and Services		Blue Planet Automation Software and Services		Global Services		Total
Product lines:
Optical Networking	$	718,997	$	—	$	—	$	—	$	718,997
Routing and Switching	127,563		—		—		—		127,563
Platform Software and Services	—		78,880		—		—		78,880
Blue Planet Automation Software and Services	—		—		13,167		—		13,167
Maintenance Support and Training	—		—		—		72,887		72,887
Installation and Deployment	—		—		—		46,840		46,840
Consulting and Network Design	—		—		—		9,552		9,552
Total revenue by product line	$	846,560	$	78,880	$	13,167	$	129,279	$	1,067,886
Timing of revenue recognition:
Products and services at a point in time	$	846,560	$	15,980	$	2,832	$	11,886	$	877,258
Services transferred over time	—		62,900		10,335		117,393		190,628
Total revenue by timing of revenue recognition	$	846,560	$	78,880	$	13,167	$	129,279	$	1,067,886

	Nine Months Ended July 27, 2024
	Networking Platforms		Platform Software and Services		Blue Planet Automation Software and Services		Global Services		Total
Product lines:
Optical Networking	$	1,862,917	$	—	$	—	$	—	$	1,862,917
Routing and Switching	320,113		—		—		—		320,113
Platform Software and Services	—		258,402		—		—		258,402
Blue Planet Automation Software and Services	—		—		54,167		—		54,167
Maintenance Support and Training	—		—		—		225,869		225,869
Installation and Deployment	—		—		—		132,993		132,993
Consulting and Network Design	—		—		—		36,382		36,382
Total revenue by product line	$	2,183,030	$	258,402	$	54,167	$	395,244	$	2,890,843
Timing of revenue recognition:
Products and services at a point in time	$	2,183,030	$	69,149	$	15,530	$	29,904	$	2,297,613
Services transferred over time	—		189,253		38,637		365,340		593,230
Total revenue by timing of revenue recognition	$	2,183,030	$	258,402	$	54,167	$	395,244	$	2,890,843

10

	Nine months ended July 29, 2023
	Networking Platforms		Platform Software and Services		Blue Planet Automation Software and Services		Global Services		Total
Product lines:
Optical Networking	$	2,239,180	$	—	$	—	$	—	$	2,239,180
Routing and Switching	377,378		—		—		—		377,378
Platform Software and Services	—		221,768		—		—		221,768
Blue Planet Automation Software and Services	—		—		49,139		—		49,139
Maintenance Support and Training	—		—		—		213,938		213,938
Installation and Deployment	—		—		—		120,901		120,901
Consulting and Network Design	—		—		—		34,758		34,758
Total revenue by product line	$	2,616,558	$	221,768	$	49,139	$	369,597	$	3,257,062
Timing of revenue recognition:
Products and services at a point in time	$	2,616,558	$	48,290	$	14,143	$	36,553	$	2,715,544
Services transferred over time	—		173,478		34,996		333,044		541,518
Total revenue by timing of revenue recognition	$	2,616,558	$	221,768	$	49,139	$	369,597	$	3,257,062

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 indicated, Ciena’s geographic distribution of revenue was as follows (in thousands):

	Quarter Ended				Nine Months Ended
	July 27,		July 29,		July 27,		July 29,
	2024		2023		2024		2023
Geographic distribution:
Americas	$	718,605	$	749,479	$	2,099,680	$	2,308,934
EMEA	135,009		152,834		498,212		479,053
APAC	88,694		165,573		292,951		469,075
Total revenue by geographic distribution	$	942,308	$	1,067,886	$	2,890,843	$	3,257,062

Ciena’s revenue includes $676.0 million and $685.8 million of United States revenue for the third quarter of fiscal 2024 and 2023, respectively. For the nine months ended July 27, 2024 and July 29, 2023, United States revenue was $2.0 billion and $2.1 billion, respectively. No other country accounted for 10% or more of total revenue for the periods indicated in the above table.

For the periods indicated, the only customers that accounted for at least 10% of Ciena’s revenue were as follows (in thousands):

	Quarter Ended				Nine Months Ended
	July 27,		July 29,		July 27,		July 29,
	2024		2023		2024		2023
Cloud Provider	$	137,184	$	124,897	$	331,631	$	369,678
AT&T	113,082		n/a		324,787		357,382
Total	$	250,266	$	124,897	$	656,418	$	727,060

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n/a    Denotes revenue representing less than 10% of total revenue for the period

AT&T purchased products and services from each of Ciena’s operating segments for each of the periods presented. The cloud provider noted in the above table purchased products from each of Ciena’s operating segments excluding Blue Planet® Automation Software and Services for each of the periods presented.

A description of each of Ciena’s operating segments is set forth below:

•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. 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, virtualization software and Ciena’s WaveRouter® product. This product line also includes SD-Edge software and passive optical network (PON) routing and switching portfolio products.

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 visibility into their networks. Ciena’s platform software includes its Navigator Network Control SuiteTM (“Navigator NCS”) domain controller solution, its suite of Navigator NCS applications, previously referred to as “Manage, Control and Plan (MCP),” its OneControl Unified Management System, and 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.

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•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 as of the dates indicated (in thousands):

	Balance at July 27, 2024		Balance at October 28, 2023
Accounts receivable, net	$	899,877	$	1,003,876
Contract assets for unbilled accounts receivable, net	$	142,769	$	150,312
Deferred revenue	$	257,085	$	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 in the Condensed Consolidated Balance Sheets. See Note 10 below.

Deferred revenue represents contract liabilities and consists of advanced payments against non-cancelable customer orders received prior to revenue recognition. Ciena recognized approximately $130.5 million and $119.8 million of revenue during the first nine months of fiscal 2024 and 2023, respectively, that was included in the deferred revenue balance as of 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 nine months ended July 27, 2024 and July 29, 2023.

Capitalized Contract Acquisition Costs

Capitalized contract acquisition costs consist of deferred sales commissions, and were $25.5 million and $30.2 million as of July 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. The amortization expense associated with these costs was $22.9 million and $26.0 million during the first nine 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 July 27, 2024, the aggregate amount of RPO was $1.6 billion. As of July 27, 2024, Ciena expects approximately 78% of the RPO balance to be recognized as revenue within the next 12 months.

(4)SIGNIFICANT ASSET IMPAIRMENT AND RESTRUCTURING COSTS

Restructuring Costs

Ciena has undertaken a number of restructuring activities intended to reduce expense and to align its workforce and costs with market opportunities, product development, and business strategies. The following table sets forth the restructuring activity and balance of the restructuring liability accounts, which are included in accrued liabilities and other short-term obligations on the Condensed Consolidated Balance Sheets, for the nine months ended July 27, 2024 (in thousands):

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	Workforce reduction			Other restructuring activities			Total
Balance at October 28, 2023	$	1,913		$	—		$	1,913
Charges	13,708		(1)	8,279		(2)	21,987
Cash payments	(14,379)			(8,279)			(22,658)
Balance at July 27, 2024	$	1,242		$	—		$	1,242
Current restructuring liabilities	$	1,242		$	—		$	1,242

(1) Reflects a global workforce reduction of approximately 390 employees during the nine months ended July 27, 2024 as part of a business optimization strategy to improve gross margin, constrain operating expense and redesign certain business processes.

(2) Primarily represents costs related to restructured real estate facilities and the redesign of certain business processes associated with Ciena’s supply chain and distribution structure reorganization.

The following table sets forth the restructuring activity and balance of the restructuring liability accounts, which are included in accrued liabilities and other short-term obligations on the Condensed Consolidated Balance Sheets for the nine months ended July 29, 2023 (in thousands):

	Workforce reduction			Other restructuring activities			Total
Balance at October 29, 2022	$	1,215		$	4,620		$	5,835
Charges	4,509		(1)	12,116		(2)	16,625
Cash payments	(4,920)			(16,736)			(21,656)
Balance at July 29, 2023	$	804		$	—		$	804
Current restructuring liabilities	$	804		$	—		$	804

(1) Reflects employee costs associated with workforce reductions during the nine months ended July 29, 2023 as part of a business optimization strategy to improve gross margin, constrain operating expense, and redesign certain business processes.

(2) Primarily represents costs related to restructured real estate facilities and the redesign of certain business processes associated with Ciena’s supply chain and distribution structure reorganization.

(5)INTEREST AND OTHER INCOME, NET

The components of interest and other income, net, are as follows for the periods indicated (in thousands):

	Quarter Ended				Nine Months Ended
	July 27,		July 29,		July 27,		July 29,
	2024		2023		2024		2023
Interest income	$	15,876	$	12,835	$	46,309	$	30,365
Gains (losses) on non-hedge designated foreign currency forward contracts	519		1,679		2,517		(2,885)
Foreign currency exchange losses	(1,611)		(4,031)		(11,215)		(2,927)
Gain (loss) on equity investments, net	—		(87)		—		26,368
Other	(771)		(209)		(1,151)		(210)
Interest and other income, net	$	14,013	$	10,187	$	36,460	$	50,711

During the first quarter of fiscal 2023, the acquisition of Tibit Communications, Inc. (“Tibit”) by Ciena triggered the remeasurement of Ciena’s previously held investment in Tibit to fair value, which resulted in Ciena recognizing a gain on its equity investment of $26.5 million.

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Ciena Corporation, as the U.S. parent entity, uses the U.S. Dollar as its functional currency; however, some of its foreign branch offices and subsidiaries use local currencies as their functional currencies. During the first nine months of fiscal 2024 and fiscal 2023, Ciena recorded $11.2 million and $2.9 million, respectively, in foreign currency exchange rate losses as a result of monetary assets and liabilities that were transacted in a currency other than Ciena’s functional currency. The related remeasurement adjustments were recorded in interest and other income, net, on the Condensed Consolidated Statements of Operations. From time to time, Ciena uses foreign currency forwards to hedge this type of balance sheet exposure. These forwards are not designated as hedges for accounting purposes, and any net gain or loss associated with these derivatives is reported in interest and other income, net, on the Condensed Consolidated Statements of Operations. During the first nine months of fiscal 2024, Ciena recorded gains of $2.5 million from non-hedge designated foreign currency forward contracts. During the first nine months of fiscal 2023, Ciena recorded losses of $2.9 million from non-hedge designated foreign currency forward contracts.

(6) INCOME TAXES

The effective tax rate for the third quarter and nine months ended July 27, 2024 was lower than the effective tax rate for the third quarter and nine months ended July 29, 2023, primarily due to the reduction in the amount of research and development expenses capitalized with respect to foreign subsidiaries.

(7)CASH EQUIVALENT, SHORT-TERM AND LONG-TERM INVESTMENTS

As of the dates indicated, investments classified as available-for-sale are comprised of the following (in thousands):

	July 27, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
U.S. government obligations	$	260,879	$	250	$	(119)	$	261,010
Corporate debt securities	57,791		64		(19)		57,836
Time deposits	96,127		7		—		96,134
	$	414,797	$	321	$	(138)	$	414,980
Included in cash equivalents	$	85,337	$	—	$	—	$	85,337
Included in short-term investments	217,761		158		(109)		217,810
Included in long-term investments	111,699		163		(29)		111,833
	$	414,797	$	321	$	(138)	$	414,980

	October 28, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
U.S. government obligations	$	170,260	$	28	$	(379)	$	169,909
Corporate debt securities	59,683		1		(115)		59,569
Time deposits	138,830		4		(5)		138,829
	$	368,773	$	33	$	(499)	$	368,307
Included in cash equivalents	$	129,276	$	—	$	—	$	129,276
Included in short-term investments	105,042		4		(293)		104,753
Included in long-term investments	134,455		29		(206)		134,278
	$	368,773	$	33	$	(499)	$	368,307

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The following table summarizes the final legal maturities of debt investments as of July 27, 2024 (in thousands):

	Amortized Cost		Estimated Fair Value
Less than one year	$	303,098	$	303,147
Due in 1-2 years	111,699		111,833
	$	414,797	$	414,980

(8)FAIR VALUE MEASUREMENTS

    As of the dates indicated, the following tables summarize the assets and liabilities that are recorded at fair value on a recurring basis (in thousands):

	July 27, 2024
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	427,818	$	—	$	—	$	427,818
Bond mutual fund	160,513		—		—		160,513
Time deposits	96,134		—		—		96,134
Deferred compensation plan assets	15,590		—		—		15,590
U.S. government obligations	—		261,010		—		261,010
Corporate debt securities	—		57,836		—		57,836
Foreign currency forward contracts	—		1,232		—		1,232
Interest rate swaps	—		12,316		—		12,316
Total assets measured at fair value	$