CIENA CORP

Previous wording

We are a network technology company, providing hardware, software, and services to a wide range of network operators and enabling enhanced network capacity, service delivery, and automation. Our solutions support network traffic across a wide range of applications, including cloud, video, data, artificial intelligence (“AI”), and voice. Our network solutions are used globally by communications service providers, cable and multiservice operators, cloud providers, submarine network operators, governments, and enterprises across multiple industry verticals. Our portfolio is designed to enable the Adaptive Network™, which is our vision for a network end state that leverages a programmable and scalable network infrastructure, driven by software control and automation capabilities, that is informed by network analytics and intelligence. Our solutions include Networking Platforms, including our Optical Networking portfolio and our Routing and Switching portfolio, which can be applied from the network core to end-user access points, and which allow network operators to scale capacity, to increase transmission speeds, to allocate traffic efficiently, and to adapt dynamically to changing end-user service demands. To complement our Networking Platforms, we offer Platform Software, which includes our Navigator Network Control Software (NCS) and advanced applications that deliver multi-layer domain control and operations for network operators. Through our Blue Planet Automation Software, we also enable complete service lifecycle management automation with productized operational support systems, including inventory, orchestration and assurance solutions that help our customers to achieve closed loop automation across multi-vendor and multi-domain environments.

Current wording

We are a network technology company, providing hardware, software, and services to a wide range of network operators and enabling enhanced network capacity, service delivery, and automation. Our solutions support network traffic across a wide range of applications, including cloud, video, data, artificial intelligence (“AI”), and voice. Our network solutions are used globally by communications service providers, cable and multiservice operators, cloud providers, submarine network operators, governments, and enterprises across multiple industry verticals. Our portfolio is designed to enable the Adaptive Network™, which is our vision for a network end state that leverages a programmable and scalable network infrastructure, driven by software control and automation capabilities, that is informed by network analytics and intelligence. Our solutions include Networking Platforms, including our Optical Networking portfolio and our Routing and Switching portfolio, which can be applied from the network core to end-user access points, and which allow network operators to scale capacity, to increase transmission speeds, to allocate traffic efficiently, and to adapt dynamically to changing end-user service demands. To complement our Networking Platforms, we offer Platform Software, which includes our Navigator Network Control Software (NCS) and advanced applications that deliver multi-layer domain control and operations for network operators. Through our Blue Planet Automation Software, we also enable complete service lifecycle management automation with productized operational support systems, including inventory, orchestration and assurance solutions that help our customers to achieve closed loop automation across multi-vendor and multi-domain environments. In addition to our systems and software, we also offer a broad range of services that help our customers build, operate, and improve their networks and associated operational environments. These include network transformation, consulting, implementation, systems integration, maintenance, network operations center (NOC) management, learning, and optimization services.

Previous wording

We believe that our investment capacity and our efforts to push the pace of innovation are important competitive differentiators in our markets. Keeping pace with the market’s demand for technology innovation requires considerable research and development investment capacity and expenditures, and research and development spending represented 18.5% of our revenue in the first half of fiscal 2025. During the first half of fiscal 2025, we invested $407.5 million in research and development activities, an increase of 6.5% compared to the first half of fiscal 2024. In particular, in an effort to capture certain market opportunities created by the impact of AI on networks, we have continued to innovate, increase the performance of, and enhance the capabilities for our leading WaveLogic TM coherent modem technology in multiple form factors. Through this innovation, we seek to extend our leadership in our core business and leverage this to expand our addressable market into complementary and adjacent network applications, including inside and around the data center.

Current wording

We believe that our investment capacity and our efforts to push the pace of innovation are important competitive differentiators in our markets. Keeping pace with the market’s demand for technology innovation requires considerable research and development investment capacity and expenditures, and research and development spending represented 18.1% of our revenue in the first nine months of fiscal 2025. During the first nine months of fiscal 2025, we invested $619.4 million in research and development activities, an increase of 8.4% compared to the first nine months of fiscal 2024. In particular, in an effort to capture certain market opportunities created by the impact of AI on networks, we have continued to innovate, increase the performance of, and enhance the capabilities for our leading WaveLogic TM coherent modem technology in multiple form factors. Through this innovation, we seek to extend our leadership in our core business and leverage this to expand our addressable market into complementary and adjacent network applications, including inside and around the data center.

Previous wording

During the second quarter of fiscal 2025, we continued to experience broad-based business momentum, with orders for our products and services exceeding our revenue, resulting in increased backlog. We experienced year-over-year order growth in our major customer segments, particularly with large communications service provider customers and cloud provider customers, with one cloud provider customer continuing to provide a significant volume of orders. As a result, our revenue increased by 23.6% to $1.1 billion in the second quarter of fiscal 2025 as compared to $910.8 million in the second quarter of fiscal 2024. Three of our top five customers by revenue for the second quarter of fiscal 2025 were cloud providers. Although our business remains subject to quarterly fluctuations due to customer purchasing patterns and supply chain dynamics, we continue to believe that certain trends and shifts in business and consumer behaviors and the drivers of bandwidth demand described above under the heading “Overview - Market Opportunity and Investment in Technology Innovation” in this Item 2 represent long-term opportunities for our business.

Current wording

During the third quarter of fiscal 2025, we continued to experience broad-based business momentum, with orders for our products and services significantly exceeding our revenue, resulting in increased backlog. We believe some portion of this order growth was impacted by the industry dynamics described above. We experienced year-over-year order growth in our major customer segments, particularly with cloud provider customers and large communications service provider customers, with a single cloud provider customer continuing to provide a significant volume of orders. As a result, our revenue increased by 29.4% to $1.2 billion in the third quarter of fiscal 2025 as compared to $942.3 million in the third quarter of fiscal 2024. Two of our top five customers by revenue for the third quarter of fiscal 2025 were cloud providers. Although our business remains subject to quarterly fluctuations due to customer purchasing patterns and supply chain dynamics, we continue to believe that certain trends and shifts in business and consumer behaviors and the drivers of bandwidth demand described above under the heading “Overview - Market Opportunity and Investment in Technology Innovation” in this Item 2 represent long-term opportunities for our business.

Previous wording

Our revenue increased by 23.6%, or $215.1 million in the second quarter of fiscal 2025 as compared to the second quarter of fiscal 2024, and 12.8%, or $249.6 million in the first six months of fiscal 2025 as compared to the first six months of fiscal 2024.

Current wording

Our revenue increased by 29.4%, or $277.1 million in the third quarter of fiscal 2025 as compared to the third quarter of fiscal 2024, and 18.2%, or $526.7 million in the first nine months of fiscal 2025 as compared to the first nine months of fiscal 2024.

Previous wording

•Optical Networking products revenue increased by $213.4 million, primarily driven by increases in sales of our 6500 Reconfigurable Line Systems (“RLS”), our Waveserver® system, and our coherent pluggables, each primarily to cloud provider customers, and our 6500 Packet-Optical Platform primarily to communications service providers.

Current wording

•Optical Networking products revenue increased by $208.7 million, primarily driven by increases in sales of our 6500 Reconfigurable Line Systems (“RLS”), as well as increases in sales of our Waveserver® system and our coherent pluggables, in each case primarily to cloud provider customers. These sales were partially offset by a sales decrease of our 6500 Packet-Optical Platform, primarily to enterprise customers.

Previous wording

•Routing and Switching sales decreased by $41.5 million, primarily driven by decreases in sales of our 3000 and 5000 series of service delivery and aggregation platforms, partially offset by an increase in sales of our virtualization software.

Current wording

•Routing and Switching products revenue increased by $33.2 million, primarily driven by an increase in sales of our 3000 and 5000 series of service delivery and aggregation platforms to communications service providers and cloud provider customers, partially offset by a decrease in sales of our virtualization software to communications service providers.

Previous wording

•Blue Planet Automation Software and Services segment revenue increased by $25.6 million, primarily reflecting sales increases in our unified assurance and analytics software and software services and inventory management software services.

Current wording

•Blue Planet Automation Software and Services segment revenue increased by $2.0 million, primarily reflecting sales increases in our orchestration software and inventory management software services, partially offset by sales decreases of our inventory management software.

Previous wording

•Global Services segment revenue increased by $14.7 million, primarily reflecting a sales increase in our installation and deployment and support services, partially offset by a sales decrease in our consulting and network design services.

Current wording

•Global Services segment revenue increased by $26.5 million, primarily reflecting a sales increase in our installation and deployment and maintenance support and training services.

Previous wording

•Optical Networking sales increased by $245.5 million, primarily driven by increases in sales of our 6500 RLS and our coherent pluggables, both primarily to cloud provider customers, and our 6500 Packet-Optical Platforms, primarily to service provider customers. These increases were partially offset by a reduction in Waveserver revenue, primarily related to decreased sales to cloud provider customers.

Current wording

•Optical Networking sales increased by $454.1 million, primarily driven by increases in sales of our RLS as well as increases in sales of our coherent pluggables, both primarily to cloud provider customers, and our 6500 Packet-Optical Platforms, primarily to communications service provider customers.

Previous wording

•Platform Software and Services segment revenue increased by $5.3 million, primarily reflecting sales increases of our software consulting services and our software maintenance services, partially offset by sales decreases of our software platforms.

Current wording

•Platform Software and Services segment revenue increased by $12.1 million, primarily reflecting sales increases of our software consulting services and our software maintenance services.

Previous wording

•Blue Planet Automation Software and Services segment revenue increased by $13.5 million, primarily reflecting sales increases in our unified assurance and analytics software and software services and inventory management software services.

Current wording

•Blue Planet Automation Software and Services segment revenue increased by $27.6 million, primarily reflecting sales increases in our unified assurance and analytics software, orchestration software, and our inventory management software services.

Previous wording

•Global Services segment revenue increased by $11.5 million, primarily reflecting a sales increase in our installation and deployment and support services, partially offset by a sales decrease in our consulting and network design services.

Current wording

•Global Services segment revenue increased by $41.2 million, primarily reflecting sales increases in our installation and deployment and maintenance support and training services, partially offset by a sales decrease in our consulting and network design services.

Previous wording

•Americas revenue increased by $171.0 million, primarily driven by increased sales to cloud providers, partially offset by decreased sales to government customers, each primarily in the United States.

Current wording

•Americas revenue increased by $205.0 million, primarily driven by increased sales to cloud providers in the United States.

Previous wording

•EMEA revenue increased by $35.8 million, primarily driven by increased sales to cloud providers in the Netherlands.

Current wording

•EMEA revenue increased by $51.0 million, primarily driven by increased sales to cloud providers in the Netherlands.

Previous wording

•Americas revenue increased by $248.4 million, primarily driven by increased sales to cloud providers and communications service providers, partially offset by decreased sales to government customers and cable and multiservice operators, each primarily in the United States.

Current wording

•Americas revenue increased by $453.4 million, primarily driven by increased sales to cloud providers as well as increased sales to communications service providers, each primarily in the United States.

Previous wording

•EMEA revenue decreased by $13.7 million, primarily driven by decreased sales to submarine network operators.

Current wording

•EMEA revenue increased by $37.3 million, primarily driven by increased sales to cloud providers and communications service providers partially offset by decreased sales to submarine network operators.

Previous wording

•APAC revenue increased by $14.9 million, primarily driven by increased sales to communications service providers in India and Japan.

Current wording

•APAC revenue increased by $36.0 million, primarily driven by increased sales to communications service providers in India and Japan, partially offset by decreased sales to enterprise customers in Australia and Vietnam.

Previous wording

During the second quarter and first six months of fiscal 2025, approximately 13.1% and 14.2% of our revenue was non-U.S. Dollar-denominated, respectively. During the second quarter and first six months of fiscal 2025 as compared to the second quarter and first six months of fiscal 2024, the U.S. Dollar generally strengthened against other currencies. These currency fluctuations had an adverse effect on our revenue reported in U.S. Dollars of approximately $3.0 million, or 0.3%, as compared to the second quarter of fiscal 2024, and $9.5 million, or 0.4%, as compared to the first six months of fiscal 2024.

Current wording

During the third quarter and first nine months of fiscal 2025, approximately 13.3% and 13.8% of our revenue was non-U.S. Dollar-denominated, respectively. During the third quarter of fiscal 2025 as compared to the third quarter of fiscal 2024, the U.S. Dollar generally weakened against other currencies, and during the first nine months of fiscal 2025 as compared to the first nine months of fiscal 2024, the U.S. Dollar generally strengthened against other currencies. These currency fluctuations had a positive effect on our revenue reported in U.S. Dollars of approximately $3.6 million, or 0.3%, as compared to the third quarter of fiscal 2024, and had an adverse effect on our revenue reported in U.S Dollars of approximately $5.6 million, or 0.2%, as compared to the first nine months of fiscal 2024.

Previous wording

•Gross profit increased by $64.2 million. Gross margin decreased by 250 basis points, primarily reflecting decreased product and services margins.

Current wording

•Gross profit increased by $99.1 million. Gross margin decreased by 160 basis points, primarily reflecting decreased services margins.

Previous wording

•Gross profit on services increased by $1.2 million from $103.1 million for the second quarter of fiscal 2024 to $104.2 million for the second quarter of fiscal 2025. Services gross margin decreased by 330 basis points, from 49.2% for the second quarter of fiscal 2024 to 45.9% for the second quarter of fiscal 2025, primarily due to increased costs related to delivering maintenance arrangements.

Current wording

•Gross profit on services decreased by $1.7 million from $108.0 million for the third quarter of fiscal 2024 to $106.3 million for the third quarter of fiscal 2025. Services gross margin decreased by 690 basis points, from 50.7% for the third quarter of fiscal 2024 to 43.8% for the third quarter of fiscal 2025, primarily due to increased costs related to delivering maintenance arrangements.

Previous wording

•Gross profit increased by $69.0 million. Gross margin decreased by 180 basis points, primarily reflecting decreased product and services margin.

Current wording

•Gross profit increased by $168.2 million. Gross margin decreased by 180 basis points, reflecting decreased products and services margin.

Previous wording

•Gross profit on products increased by $57.7 million from $654.9 million for the first six months of fiscal 2024 to $712.6 million for the first six months of fiscal 2025. Product gross margin decreased by 200 basis points, from 42.6% for the first six months of fiscal 2024 to 40.6% for the first six months of fiscal 2025, primarily due to product mix, partially offset by manufacturing efficiencies.

Current wording

•Gross profit on products increased by $158.5 million from $950.9 million for the first nine months of fiscal 2024 to $1.11 billion for the first nine months of fiscal 2025. Product gross margin decreased by 140 basis points, from 42.0% for the first nine months of fiscal 2024 to 40.6% for the first nine months of fiscal 2025, primarily due to unfavorable product mix, partially offset by manufacturing efficiencies.

Previous wording

•Gross profit on services increased by $11.3 million from $200.7 million for the first six months of fiscal 2024 to $212.1 million for the first six months of fiscal 2025. Services gross margin decreased by 110 basis points, from 48.8% for the first six months of fiscal 2024 to 47.7% for the first six months of fiscal 2025, primarily due increased costs related to delivering maintenance arrangements.

Current wording

•Gross profit on services increased by $9.7 million from $308.7 million for the first nine months of fiscal 2024 to $318.4 million for the first nine months of fiscal 2025. Services gross margin decreased by 320 basis points, from 49.5% for the first nine months of fiscal 2024 to 46.3% for the first nine months of fiscal 2025, primarily due to increased costs related to delivering maintenance arrangements.

Previous wording

•Research and development expense increased by $19.5 million. Net of hedging, this increase primarily reflects increases in employee-related compensation costs primarily due to increases in incentive compensation, share-based compensation expense and headcount; and professional services related to design engineering, fabrication and production of application-specific integrated circuit (“ASIC”) chips.

Current wording

•Research and development expense increased by $23.0 million. Net of hedging, this increase primarily reflects increases in employee-related compensation costs primarily due to increases in incentive compensation, partially offset by lower prototype expense.

Previous wording

•Selling and marketing expense increased by $15.6 million. This increase primarily reflects increases in employee-related compensation costs primarily due to increases in incentive compensation.

Current wording

•Selling and marketing expense increased by $27.2 million. This increase primarily reflects increases in employee-related compensation costs primarily due to increases in incentive compensation.

Previous wording

•General and administrative expense increased by $7.4 million. This increase primarily reflects increases in employee-related compensation costs primarily due to increases in incentive compensation and share-based compensation expense; and professional services.

Current wording

•General and administrative expense increased by $2.3 million. This increase primarily reflects increases in employee-related compensation costs primarily due to increases in incentive compensation, partially offset by lower legal fees.

Previous wording

•Research and development expense increased by $24.9 million. Net of hedging, this increase primarily reflects increases in employee-related compensation costs primarily due to increases in incentive compensation, share-based compensation expense and headcount; and professional services related to design engineering, fabrication and production of ASIC chips.

Current wording

•Research and development expense increased by $47.9 million. Net of hedging, this increase primarily reflects increases in employee-related compensation costs primarily due to increases in incentive compensation, and professional services related to design engineering, fabrication and production of ASIC chips, partially offset by lower prototype expense.

Previous wording

•Selling and marketing expense increased by $24.0 million. This increase primarily reflects increases in employee-related compensation costs primarily due to increases in incentive compensation.

Current wording

•Selling and marketing expense increased by $51.2 million. This increase primarily reflects increases in employee-related compensation costs primarily due to increases in incentive compensation, and increases in travel and entertainment costs.

Previous wording

•General and administrative expense increased by $6.6 million. This increase primarily reflects increases in employee-related compensation costs primarily due to increases in incentive compensation and share-based compensation expense; and professional services, partially offset by lower bad debt expense.

Current wording

•General and administrative expense increased by $8.9 million. This increase primarily reflects increases in employee-related compensation costs primarily due to increases in incentive compensation, partially offset by lower legal fees and bad debt expense.

Previous wording

•Significant asset impairments and restructuring costs decreased by $13.7 million, primarily due to a reduction in restructuring activities. For more information on our restructuring costs, see Note 4 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.

Current wording

•Significant asset impairments and restructuring costs decreased by $16.7 million primarily due to a reduction in restructuring activities. For more information on our restructuring costs, see Note 4 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.

Previous wording

•Amortization of intangible assets decreased by $1.4 million, primarily reflecting certain intangible assets having reached the end of their economic lives.

Current wording

•Amortization of intangible assets decreased by $2.7 million, primarily reflecting certain intangible assets having reached the end of their economic lives.

Previous wording

During the second quarter and firstsix months of fiscal 2025, approximately 49.5% and 48.5% of our operating expense was non-U.S. Dollar-denominated, respectively. During the second quarter and first six months of fiscal 2025, as compared to the second quarter and first six months of fiscal 2024, the U.S. Dollar generally strengthened against other currencies. These currency fluctuations, net of hedging, had the effect of reducing our operating expense by approximately $6.4 million, or 1.5%, as compared to the second quarter of fiscal 2024, and $11.9 million, or 1.5% as compared to the first six months of fiscal 2024.

Current wording

During the third quarter and first nine months of fiscal 2025, approximately 47.7% and 48.2% of our operating expense was non-U.S. Dollar-denominated, respectively. During the third quarter and first nine months of fiscal 2025, as compared to the third quarter and first nine months of fiscal 2024, the U.S. Dollar fluctuated against other currencies. These currency fluctuations, net of hedging, had the effect of reducing our operating expense by a negligible amount as compared to the third quarter of fiscal 2024, and $12.3 million, or 1.0% as compared to the first nine months of fiscal 2024.

Previous wording

•Networking Platforms segment profit increased by $20.5 million, primarily due to higher sales volume, partially offset by lower product margin as described above, and higher research and development costs.

Current wording

•Networking Platforms segment profit increased by $75.1 million, primarily due to higher sales volume as described above, partially offset by higher research and development costs.

Previous wording

•Platform Software and Services segment profit decreased by $3.6 million, primarily due to lower services margin, and increased research and development costs.

Current wording

•Platform Software and Services segment profit increased by $1.4 million, primarily due to higher sales volume as described above, partially offset by reduced services margin as described above, and increased research and development costs.

Previous wording

•Global Services segment profit slightly decreased, primarily due to reduced services margin as described above, partially offset by increased sales volume also described above.

Current wording

•Blue Planet Automation Software and Services segment profit slightly decreased, primarily due to reduced services margin, partially offset by higher sales volume as described above.

Previous wording

•Networking Platforms segment profit increased by $37.1 million, primarily due to higher sales volume, partially offset by lower product margin as described above, and higher research and development costs.

Current wording

•Networking Platforms segment profit increased by $95.6 million, primarily due to higher sales volume, partially offset by reduced product margin as described above, and higher research and development costs.

Previous wording

•Platform Software and Services segment profit slightly increased by $1.5 million, primarily due to higher services sales volume, partially offset by lower software sales volume and increased research and development costs.

Current wording

•Platform Software and Services segment profit increased by $2.9 million, primarily due to higher services sales volume, partially offset by increased research and development costs and reduced margins as described above.

Previous wording

•Global Services segment profit slightly decreased by $1.5 million, primarily due to reduced services margins as described above, partially offset by increased sales volume also described above.

Current wording

•Global Services segment profit slightly decreased by $1.4 million, primarily due to reduced services margins as described above, partially offset by increased sales volume also described above.

Previous wording

•Interest expense decreased by $2.2 million, primarily due to lower interest rates on our floating rate debt, net of hedging activity. For more information on our short-term and long-term debt, see Note 12 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.

Current wording

•Interest expense decreased by $1.6 million, primarily due to lower interest rates on our floating rate debt, net of hedging activity. For more information on our short-term and long-term debt, see Note 12 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.

Previous wording

•Provision for income taxes increased by $9.2 million, primarily due to the increase in pre-tax book income.

Current wording

•Provision for income taxes increased by $13.4 million, primarily due to the increase in income before income taxes.