CIEN 10-K & 10-Q changes, risk factors and insider trading
Ciena Corp. · NYSE · Telephone & Telegraph Apparatus · CIK 936395 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our revenue, gross margin, and operating results can be adversely impacted by a number of factors that would cause our results to fluctuate.”
New heading “Our growth is dependent on executing our strategy and expanding our addressable market, and we may not be successful.”
New heading “We operate in an intense and evolving competitive landscape and the level of competitive pressure we face may adversely impact our results of operations.”
New heading “Acquisitions and other strategic transactions could disrupt our operations and expose us to increased costs and unexpected liabilities.”
New heading “Risks Related to Technology Development and Intellectual Property”
New heading “Misaligned or delayed technology investments may adversely impact our return on innovation, impair our strategy and weaken our competitive position.”
New heading “We may experience difficulties in the development and production of our products that may negatively affect our competitive position and results of operations.”
New heading “We may incur significant costs in response to claims that we infringe upon the intellectual property rights of others.”
New heading “Risks Related to Operations”
New heading “Our failure to effectively align our supply chain capacity and inventory levels with customer demand can adversely impact our results of operations and customer relationships.”
New heading “Our business may be adversely affected by risks associated with our third-party contract manufacturers’ businesses, financial condition, and the geographies in which they operate.”
New heading “Our dependence upon third-party suppliers and limited sources of supply could adversely impact our business and results of operations.”
New heading “We depend on the effective functioning and scalability of our internal business processes, information systems and internal controls to support key business functions and manage growth.”
New heading “If we fail to effectively manage the third-party resellers and service partners we use to support our sales and operations, our business, financial results and relationships with customers could be adversely affected.”
New heading “If we are unable to attract and retain qualified personnel, we may be unable to manage our business and execute our strategy effectively.”
New heading “Restructuring activities could be costly or disrupt our business and affect our results of operations.”
New heading “Risks Related to the Macroeconomic and Geopolitical Environment”
New heading “Unfavorable changes in macroeconomic conditions could adversely impact our business and results of operations.”
New heading “Unfavorable changes in geopolitical conditions could adversely impact our business and results of operations.”
New heading “Risks Related to Cybersecurity, Legal, and Regulatory Matters”
New heading “Cyber-attacks could compromise our technology and information, damaging our business and reputation and disrupting our operations.”
New heading “Increased regulation of product security, cybersecurity and data practices could adversely affect our business and results of operations”
New heading “Tariffs and other import measures imposed by the United States or other countries may adversely affect our business and results of operations.”
New heading “Outstanding indebtedness may adversely affect our liquidity and results of operations and could limit our business.”
New heading “Certain assets on our balance sheet are subject to impairment or write-down.”
Removed heading “Our revenue, gross margin, and operating results can fluctuate significantly from quarter to quarter and, if we are not able to secure order growth, our revenue may not reach the levels we anticipate.”
Removed heading “We face intense competition that could impact our sales and results of operations. We expect our competitive landscape to continue to broaden as we seek to expand our addressable market and solutions portfolio.”
Removed heading “Our failure to invest in the right technologies or to get an adequate return on such research and development investment could adversely affect our revenue and profitability.”
Removed heading “We have no guaranteed purchases and regularly must re-win business with existing customers.”
Removed heading “Network equipment sales often involve lengthy sales cycles and protracted contract negotiations that may require us to agree to commercial terms or conditions that negatively affect pricing, risk allocation, payment and the timing of revenue recognition.”
Removed heading “Accurately matching necessary inventory levels to customer demand within the current environment is challenging, and we may incur additional costs or be required to write off significant inventory that would adversely impact our results of operations.”
Removed heading “If we are unable to adapt our business and solutions offerings to the evolving consumption models of our customers, our competitive position and results of operations could be adversely affected.”
Removed heading “As we introduce technologies that enable us to enter into new markets, we may experience difficulty monetizing these new solutions and be exposed to increased or new forms of competition.”
Removed heading “Our go-to-market activities and the distribution of our WaveLogic coherent modem technology within the market for high-performance transceivers/modems could expose us to increased competition and poses other risks that could adversely affect our existing systems business or results of operations.”
Removed heading “Supply chain challenges and constraints, including for semiconductor components, could adversely impact our growth, gross margins and financial results.”
Removed heading “Our exposure to the credit risks of our customers and resellers may make it difficult to collect receivables and could adversely affect our revenue and operating results.”
Removed heading “We may be required to write down the value of certain significant assets, which would adversely affect our operating results.”
Removed heading “Strategic acquisitions and investments could disrupt our operations and may expose us to increased costs and unexpected liabilities.”
Removed heading “Risks Relating to the Macroeconomic Environment and our Global Presence”
Removed heading “Our business and operating results could be adversely affected by unfavorable changes in macroeconomic and market conditions and any reduction in the level of customer spending in response.”
Removed heading “The international scale of our sales and operations exposes us to additional risk and expense that could adversely affect our results of operations.”
Removed heading “Efforts to increase our sales and capture market share in targeted international markets may be unsuccessful.”
Removed heading “We may be adversely affected by fluctuations in currency exchange rates.”
Removed heading “Risks Related to Our Operations and Reliance on Third Parties”
Removed heading “We may experience delays in the development and production of our products that may negatively affect our competitive position and business.”
Removed heading “We rely on third-party contract manufacturers, and our business and results of operations may be adversely affected by risks associated with their businesses, financial condition, and the geographies in which they operate.”
Removed heading “Our reliance on third-party component suppliers, including sole and limited source suppliers, exposes our business to additional risk, including risk relating to our suppliers’ businesses and financial position and risks arising as a result of geopolitical events, and could limit our sales, increase our costs and harm our customer relationships.”
Removed heading “We rely on third-party resellers, distributors and service partners, and our failure to manage these relationships effectively could adversely affect our business, results of operations, and relationships with our customers.”
Removed heading “We may be exposed to unanticipated risks and additional obligations in connection with our resale of complementary products or technology of other companies.”
Removed heading “Growth of our business is dependent on the proper functioning and scalability of our internal business processes and information systems. Adoption of new systems, modifications or interruptions of services may disrupt our business, processes and internal controls.”
Removed heading “Restructuring activities could disrupt our business and affect our results of operations.”
Removed heading “If we are unable to attract and retain qualified personnel, we may be unable to manage our business effectively.”
Removed heading “Risks Related to Intellectual Property, Litigation, Regulation and Government Policy”
Removed heading “We may incur significant costs in response to claims by others that we infringe upon their intellectual property rights.”
Removed heading “Our products incorporate software and other technology under license from third parties, and our business would be adversely affected if this technology were no longer available to us on commercially reasonable terms.”
Removed heading “Data security breaches and cyber-attacks targeting our enterprise technology environment and assets could compromise our intellectual property, technology or other sensitive information and could cause significant damage to our business, reputation and operational capacity.”
Removed heading “Changes in trade policy, including the imposition of tariffs and other import measures, increased export control, sanctions and investment restrictions, and efforts to withdraw from or materially modify international trade agreements, as well as other regulatory efforts impacting the import and sale of foreign equipment, may adversely affect our business, operations and financial condition.”
Removed heading “Changes in government regulations affecting the communications and technology industries and the businesses of our customers could harm our prospects and operating results.”
Removed heading “Investor and other stakeholder scrutiny related to our environmental, social and governance practices, and our disclosed performance and aspirations for these practices, may increase costs and expose us to numerous risks.”
Removed heading “Outstanding indebtedness under our senior secured credit facilities and senior unsecured notes may adversely affect our liquidity and results of operations and could limit our business.”
Largest changes
“We utilize a sourcing strategy that emphasizes global procurement of materials, and that has direct or indirect dependencies upon a number of vendors with operations in the Asia-Pacific region. Our international operations are subject to complex foreign and U.S. laws and regulations, including trade regulations, anti-bribery and corruption laws, antitrust or competition laws, and data privacy laws, such as the GDPR, among others. In particular, recent years have seen a substantial increase in anti-bribery law enforcement activity by U.S. …”see in full comparison
“For example, our supply chain includes certain direct and indirect suppliers based in China who supply goods to us, our manufacturers, or our third-party suppliers. Recently, there have been a number of significant geopolitical events, including trade tensions and regulatory actions, involving the governments of the United States and China. The U.S. government has raised tariffs, and imposed new tariffs, on a wide range of imports of Chinese products, including component elements of our solutions and certain finished goods products that we sell. For example, U.S. …”see in full comparison
“In the ordinary course of our business, our network environment and assets, and the networks and assets of our third-party business partners, including our supply chain and other vendors, maintain certain information that is confidential, regulated, proprietary or otherwise sensitive in nature to our business. This information may include intellectual property and product information, personal data, financial information and other confidential business information relating to us and our employees, customers, suppliers and other business partners. …”see in full comparison
“Our business, operations and financial results could also be adversely impacted by instability, disruption or destruction in a significant geographic region, including as a result of war, terrorism, riot, civil insurrection or social unrest; natural or man-made disasters; severe weather events; public health emergencies; or economic instability or weakness. For example, in February 2022, armed conflict escalated between Russia and Ukraine. …”see in full comparison
“In the course of our business, we are, and in the future may be, a party to legal proceedings, investigations and other claims or disputes, which have related and may relate to subjects including commercial transactions, intellectual property, securities, employee relations, or compliance with applicable laws and regulations. Legal proceedings and investigations are inherently uncertain, and we cannot predict their duration, scope, outcome or consequences. …”see in full comparison
“Changes in trade policy, including the imposition of tariffs and other import measures, increased export control, sanctions and investment restrictions, and efforts to withdraw from or materially modify international trade agreements, as well as other regulatory efforts impacting the import and sale of foreign equipment, may adversely affect our business, operations and financial condition.”see in full comparison
Full comparison: every changed paragraph (317)
Investing in our securities involves a high degree of risk. Before investing in our securities, you should consider carefully the information contained in this report, including the information in this “Risk Factors” section.
Investing in our securities involves a high degree of risk. In addition to the other information contained in this annual report, you should consider the following risk factors before investing in our securities.
Risks Related to OurFinancial BusinessPerformance and IndustryStrategy
Our revenue, gross margin, and operating results can be adversely impacted by a number of factors that would cause our results to fluctuate.
Our results of operations are subject to significant, and often difficult to predict, quarterly fluctuations due to a variety of factors. A portion of our quarterly revenue is generated from customer orders received during that same quarter (which we refer to as “book to revenue”) and therefore may be less certain. Additionally, our customer contracts generally do not include minimum or guaranteed purchases and may allow customers to modify or cancel purchase orders. We must regularly compete for business with existing customers and there is no assurance that we will maintain our incumbency or revenue level with any particular customer in future periods. Our results can be materially adversely affected by factors set forth in this “Risk Factors” section including:
Our revenue, gross margin, and operating results can fluctuate significantly from quarter to quarter and, if we are not able to secure order growth, our revenue may not reach the levels we anticipate.
Our revenue, gross margin, and results of operations can fluctuate significantly from quarter to quarter. Our budgeted expense levels are based on our intent to invest to maintain or increase our technology advantage, our visibility into customer spending plans, and our projections of future revenue and gross margin. Visibility into customer spending levels can be uncertain, spending patterns are subject to change, and reductions in our expense levels can take significant time to implement. Historically, a significant portion of our quarterly revenue was generated from customer orders received during that same quarter (which we refer to as “book to revenue”) and was therefore less predictable and subject to fluctuation due to a quarterly shortfall in orders from expectations. During fiscal 2022, however, we generated a significant backlog of customer orders as a result of supply chain constraints and, during fiscal 2023, our revenue grew as we consumed a significant portion of this backlog. Customer order volumes began to moderate in the fourth quarter of fiscal 2022, and we experienced order levels below revenue during fiscal 2023 and the first half of fiscal 2024 and, as a result, our backlog decreased. We expect our backlog to continue to reduce in fiscal 2025. As that happens, we expect our reliance upon securing quarterly book to revenue orders to grow and those orders to represent a more typical composition of our quarterly revenue over time. Our future revenue growth will depend, in part, on securing increased orders, particularly book to revenue orders.
Within these dynamics, our results for a particular period can be difficult to predict and a range of factors, including those set forth below, can materially adversely affect quarterly revenue, gross margin, and operating results:
•changes in spending levels or network deployment plans by customers, particularly with respect to our service provider and cloud provider customers;
•order timing and volume, including book to revenue ordersand backlog levels;
•changes in spending or deployment plans by customers;
•the timing of revenue recognition on sales, particularly relating to large orders;
•availability of components and manufacturing capacity;
•shipment and delivery timing, including any deferral of delivery;
•backlog levels;
•the level of competition we face and pricingthe pressureimpact inof ourunfavorable industrytransactions or commercial terms;
•customer, product and geographic mix;
•supply chain performance and costs;
•the pace and impact of price erosion that we regularly encounter in our markets;
•the impact of commercial concessions or unfavorable commercial terms required to maintain incumbency or secure new opportunities with key customers;
•the mix of revenue by product segment, geography, and customer in any particular quarter;
•our level of success in achieving targeted cost reductions and improved efficiencies in our supply chain;
•our incurrence of start-up costs, including lower margin phases of projects required to support initial deployments, to gain new customers, or to enter new markets;
•our level of success in accessing new markets and obtaining new customers;
•long- and short-term changing behaviors or customer needs that impact demand for our products and services, or the products and services of our customers;
•technology-based price compression and our introduction of new platforms with improved price for performance;
•changing market, economic, and political conditions, including the impact of tariffs and other trade restrictions or efforts to withdraw from or materially modify international trade agreements;
•factors beyond our control such as natural disasters, climate change, acts of war or terrorism, and public health emergencies, such as epidemics and pandemics like the COVID-19 pandemic;
•the financial stability of our customers; and suppliers;
•consolidation activity amonginvolving us, our customers, suppliers, and competitors;competitors.
•installation service availability and readiness of customer sites;
•adverse impact of foreign exchange; and
•any potential seasonal effects in our business.
As a result of these factors and other conditions affectingresult, our businesshistorical and operating results, we believe that quarterly comparisons of our operatingfinancial results aremay not necessarilybe a good indicationindicative of future performance. Quarterly fluctuations from the above and other factors may causein our revenue, gross margin, and results of operations tocould underperformcause in relationus to fail to meet our guidance, long-term financial targetsguidance or the expectations of financial analysts or investors, which may cause volatility or decreases in our stock price.
AOur revenue is concentrated among a small number of customers accountand for a significant portion of our revenue. The loss of one or more of these customers, or a significant reductionreductions in their spending,spending could havematerially aadversely material adverse effect onimpact our business and results of operations.
A significant portion of our revenue is concentrated among a small number of customers. For example, in fiscal 2025, our five largest customers contributed approximately 50% of our revenue, a cloud provider customer accounted for approximately 18% of our revenue, and a service provider accounted for approximately 11% of our revenue. Consequently, our results of operations could be materially adversely impacted by the loss of or a significant reduction in spending of a large customer. Moreover, our revenue is concentrated within the cloud provider and service provider customer segments. Adverse economic, business or regulatory dynamics within these industries or market segments affecting spending levels could materially adversely impact our results of operations.
Our growth is dependent on executing our strategy and expanding our addressable market, and we may not be successful.
Our growth depends on the successful execution of our business strategy and our ability to grow our addressable market, or to expand into new markets, technologies, or customer segments. A key part of this strategy is to leverage our optical technology leadership and expand our addressable market into complementary and adjacent markets by investing in new technologies, including for applications inside and around the data center, and specifically for AI-driven use cases. Many of these markets are nascent or dynamic, and it is difficult to predict trends of these markets, including any potential growth. Moreover, we have a more limited history in commercializing and selling solutions into these markets. This expansion strategy may require a significant investment of capital and human resources, may disrupt our operations, and could impose substantial demands on management time. If the markets relating to these solutions do not develop as we anticipate, or if we are unable to commercialize, increase market awareness of, or gain adoption of our solutions within those markets, our business, financial performance, and long-term growth prospects could be adversely affected.
We operate in an intense and evolving competitive landscape and the level of competitive pressure we face may adversely impact our results of operations.
A significant portion of our revenue is concentrated among a small number of communications service provider and cloud provider customers. For example, our ten largest customers contributed 57.9% of our revenue for fiscal 2024 and 53.7% of our revenue for fiscal 2023. A cloud provider customer accounted for approximately 13.3% of our total revenue for fiscal 2024 and 12.8% of our total revenue for fiscal 2023, and AT&T accounted for approximately 11.8% of our total revenue for fiscal 2024 and 10.6% of our total revenue for fiscal 2023. As a result of efforts in recent years to diversify our business, the customer segments and geographies that comprise our customer base and top customers by revenue have changed. During fiscal 2024, four cloud providers were among our top ten customers. Cloud provider customers have been important contributors to our revenue through both our direct sales to them, including for data center interconnection, and their indirect impact on purchases by other network operators.
Because of our concentration of revenue with communications service providers and cloud providers, our business and results of operations can be significantly affected by market, industry, regulatory, consolidation or competitive dynamics adversely affecting these customer segments. These dynamics have in the past had an adverse effect on network spending levels by certain of our largest customers and they could materially adversely affect our business and results of operations. Consequently, our financial results and our ability to grow our business are closely correlated with the spending of a relatively small number of customers. Our business and results of operations could be materially adversely impacted by the loss of a large customer within or outside of these customer segments as well as by reductions in spending or capital expenditure budgets, changes in network deployment plans, or changes in consumption models for acquiring networking solutions by our largest customers.
We face intense competition that could impact our sales and results of operations. We expect our competitive landscape to continue to broaden as we seek to expand our addressable market and solutions portfolio.
We faceoperate intense global competition onin a globalhighly basis,competitive asenvironment, where we and our competitors aggressively seek to capture market share and displace incumbent equipment vendors. Our industry has historically been dominated by a small numberMany of verythese large vendors, some of whichcompetitors have substantially greater financial, marketing and research and development resources, broader product offerings and more established relationships with service providers and other customer segmentsrelationships than we do.have. Moreover,Because acquisitionof activitytheir among our competitorsscale and peersresources, hasthey increased.may Forbe example,perceived into 2024be Nokiaa announcedbetter itsfit proposedfor acquisitionthe procurement or network strategies of Infinera.larger Consolidationnetwork in our industry may result in competitors with greater resources, pricing flexibility, or other competitive benefits.operators. We also competeface withcompetition afrom number ofcertain smaller companies that provide significant competition for specific products, applications, customer segmentssegments, or geographic markets.markets Due to the narrower focus of their efforts, these competitorsthat may be more attractive to customers in a particular product niche or commercial opportunity.
Generally, competition in our marketsindustry is based on anyvarious onefactors, or a combination of the following factorsincluding:
•functionality, speed, capacity, scalability and performance of network solutions;
•the ability to meet business needs and drive successful outcomes, including meeting customer delivery time requirements;
•price for performance, cost per bit and total cost of ownership of network solutions;
•product features and functionality;
•technology roadmap;
•technology roadmap and forward innovation capacity, including the ability to invest significant sums in research and development;
•time-to-market in delivering products and features;
•companyfinancial stability and financialinvestment healthcapacity;
•ability to offer comprehensive networking solutions, consisting of hardware, software and services;
•flexibility and openness of platforms, including ease of integration, interoperability and integrated management;
•ability to offeraddress solutionspreferred that accommodate a range of differentcustomer consumption models;
•delivery lead-times; and
•operating costs and total cost of ownership;
•software and network automation capabilities;
•ability to manage challenging supply chain environments, including manufacturing and lead-time capability;
•services and support capabilities;capabilities.
Management's Discussion & Analysis (MD&A)
New heading “Business Momentum”
New heading “Gross Margin Dynamics”
New heading “Operating Expense Management”
New heading “Capital Allocation Strategy”
New heading “Revenue Concentration”
New heading “Currency Fluctuations”
New heading “Operating Assets and Liabilities”
Removed heading “Fluctuation in Order Volumes and Impact on Fiscal 2024 Revenue”
Removed heading “Fiscal Year-End Backlog”
Removed heading “Stock Repurchase Program”
Removed heading “Operating Segments”
Removed heading “Fiscal 2024 Compared to Fiscal 2023”
Removed heading “Revenue and Currency Fluctuations”
Removed heading “Cost of Goods Sold and Gross Profit”
Removed heading “Working Capital”
Removed heading “Business Combinations”
Removed heading “Share-Based Compensation”
Removed heading “Allowance for Credit Losses for Accounts Receivable and Contract Assets”
Removed heading “Effects of Recent Accounting Pronouncements”
Largest changes
“The preparation of our consolidated financial statements requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense, and related disclosure of contingent assets and liabilities. Note 1 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty. …”see in full comparison
“Probability of default rates is published by third-party credit rating agencies. Adjustments to our exposure probability may take into account a number of factors, including, but not limited to, various customer-specific factors, the potential sovereign risk of the geographic locations in which the customer is operating and macroeconomic conditions. These factors are updated regularly or when facts and circumstances indicate that an update is deemed necessary.”see in full comparison
“We test goodwill for impairment on an annual basis, which we have determined to be as of the last business day of fiscal September each year, or if an event occurs or circumstances change that would, more likely than not, reduce the fair value of the reporting unit below its carrying value. In evaluating goodwill for impairment, we first decide whether to solely perform a qualitative test, which considers whether events and circumstances exist that indicate it is more likely than not that goodwill for a reporting unit is impaired. …”see in full comparison
“Principal Sources of Liquidity. Our principal sources of liquidity include our cash, cash equivalents and investments, which as of November 2, 2024 totaled $1.3 billion, as well as the unused portion of the Revolving Credit Facility (as defined in Note 19 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report). …”see in full comparison
“We test goodwill impairment by comparing the fair value of the reporting unit with the unit’s carrying amount, including goodwill. Goodwill is allocated to reporting units based on relative fair value using a discounted cash flow model. If this test indicates that the fair value is less than the carrying value, an impairment loss is recognized limited to the total amount of goodwill allocated to that reporting unit. A non-cash goodwill impairment charge would have the effect of decreasing earnings or increasing losses in such period. …”see in full comparison
“Our goodwill was generated from the acquisitions of (i) Cyan, Inc. during fiscal 2015, (ii) the high-speed photonics components assets of TeraXion, Inc. during fiscal 2016, (iii) Packet Design, LLC and DonRiver Holdings, LLC during fiscal 2019, (iv) Centina Systems, Inc. during fiscal 2020, (v) Vyatta and Xelic during fiscal 2022 and (vi) Benu and Tibit during fiscal 2023. The goodwill from these acquisitions is primarily related to expected economic synergies. Goodwill is the excess of the purchase price over the fair values assigned to the net assets acquired in a business combination. …”see in full comparison
Full comparison: every changed paragraph (168)
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, voice, video, data, and AI. Our network solutions are used globally by cloud providers, service providers, and other network operators across multiple industry verticals.
The markets into which we sell are dynamic and characterized by a high rate of change. Networks continue to experience strong demand for increased bandwidth due to traffic growth, which is being driven by a diverse set of services, technologies, and customer needs.
Business Momentum
Our industry has been experiencing unprecedented increases in demand, in particular as a result of expenditures related to AI and other cloud-based applications. As a result, we experienced broad-based business momentum in fiscal 2025, including significant year-over-year order growth in both of our major customer segments, cloud providers and service providers. Our revenue increased by 19% to $4.8 billion in fiscal 2025 as compared to $4.0 billion in fiscal 2024, with orders for our products and services significantly exceeding our revenue. We also significantly grew our backlog, which includes both products and services, to $5.0 billion, as compared to $2.1 billion at the end of fiscal 2024. While we believe much of this backlog growth reflects the increased demand for connectivity to address AI workloads, a portion is related to an industry-wide constrained supply environment. Our ability to scale our operational and manufacturing capacity is critical to our success within this environment. As such, we and many of our suppliers have sought to increase capacity to ensure availability of key inputs for our products and reduce extended lead times.
Within this environment, we have experienced increased customer concentration in both orders and revenue, particularly with cloud providers, with a single cloud provider customer continuing to provide a significant volume of orders and two cloud providers in our top five customers by revenue for fiscal 2025. Our growing sales to cloud providers has resulted in a changing mix in our product sales.
Gross Margin Dynamics
Our gross margin decreased to 42.0% in fiscal 2025, compared to 42.8% in fiscal 2024, primarily due to lower services margin driven by increased incentive compensation and shifts in services mix. In fiscal 2025, our growing sales to cloud providers contributed to a changing product mix and an increase in sales of interconnect products, impacting our product gross margin. Through our continued focus on a range of initiatives to maintain and enhance our gross margin, including cost reductions, manufacturing efficiencies and lower inventory provisions, we were able to offset the impact of this dynamic and our product margin was unchanged from fiscal 2024 to fiscal 2025.
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, 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, increase transmission speeds, allocate traffic efficiently, and adapt dynamically to changing end-user service demands. To complement our Networking Platforms, we offer Platform Software, which includes our Navigator 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 OSS, including inventory, orchestration and assurance solutions that help our customers to achieve closed loop automation across multi-vendor and multi-domain environments.
Market Opportunity and Investment in Technology Innovation
The market into which we sell our communications networking solutions is dynamic and characterized by a high rate of change, including rapid growth in bandwidth demand and network traffic, the proliferation of cloud-based services and new approaches, or “consumption models,” for designing and procuring networking solutions. Drivers of increased bandwidth demand include enterprise and consumer cloud network adoption, generative AI, 5G, high-definition video, and network operator focus on resilience and automation. To address these growing service demands and manage network cost, many network operators are looking to adopt next-generation infrastructures that are more programmable and better capable of leveraging data for network insight, analytics and automation.
During fiscal 2025, we invested $848.3 million in research and development activities, an increase of 11% compared to fiscal 2024. We believe that our investment capacity and our efforts to push the pace of innovation are important competitive differentiators in our markets.markets, Keeping pace with the market’s demand for technology innovationwhich requires considerable research and development investment capacity and expenditures, and research and development spending represented 19.1% of our operating expenses in fiscal 2024. During fiscal 2024, we invested $767.5 million in research and development activities, an increase of 2.3% compared to fiscal 2023.expenditures. In particular, in an effort to capture certain market opportunities created by the impact of AI on networks, in fiscal 2024 we continued to innovate, increase the performance of, and enhance the capabilities for our leading WaveLogicWaveLogicTM coherent modem technologytechnology, inthrough multiple form factors. Through this innovationwhich we seek to extend our leadership in ouroptical core businessnetworking, and leverage thisit to expand our addressable market into complementary and adjacent network applications,market, including inside and around the data center.
In an effort to expand our addressable market, during the fourth quarter of fiscal 2025, we acquired privately-held Nubis, which specializes in high-performance, ultra-compact, low-power optical and electrical interconnects tailored to support AI workloads. Nubis’s portfolio, including technologies for co-packaged optics, near packaged optics and electrical active copper cables, will complement our existing optical networking portfolio of high-speed interconnects. See Note 3 to our Consolidated Financial Statements included in Item 8 of Part II of this report for more information on this acquisition.
Operating Expense Management
Our operating expense grew from $1.6 billion in fiscal 2024 to $1.8 billion in fiscal 2025. As a result of our strong financial performance and order levels in fiscal 2025, our expense associated with our incentive compensation programs, including our annual bonus plan and sales compensation, increased year over year.
We regularly monitor our spending to optimize our operating expenses and to ensure that our strategic investments are aligned with our highest-growth demand opportunities. During the fourth quarter of fiscal 2025, we began implementing a plan intended to deliver increased operating efficiencies through a reduction in headcount of 4% to 5% of our global workforce and a decision to cease forward investment in certain broadband development initiatives, primarily 25G PON.
Capital Allocation Strategy
Our capital allocation strategy is focused on maintaining our significant innovation investment, investing in select transactions, and returning value to stockholders, while preserving our strategic and operational flexibility. We continuously work to improve our cash cycle and evaluate alternatives to manage our capital structure in order to enhance our liquidity. We ended fiscal 2025 with $1.4 billion of cash, cash equivalents, and investments. Cash generated from operations increased to $806.1 million in fiscal 2025 as compared to $514.5 million in fiscal 2024. Consistent with our capital allocation priorities, we invested $140.8 million in capital purchases, primarily for supply chain equipment, and research and development, $231.1 million for the acquisition of Nubis and $334.5 million on our share buyback program.
Our business strategy to capitalize on these market dynamics and investment opportunities also include the initiatives set forth in the “Strategy” section of the description of our business in Item 1 of Part I of this annual report.
Fluctuation in Order Volumes and Impact on Fiscal 2024 Revenue
During fiscal 2021 and fiscal 2022, we received an unprecedented volume of orders for our products and services. We believe some portion of these orders reflected customer acceleration of future orders due to long lead times during the constrained supply environment of that period, as well as orders that were delayed due to the dynamics of the COVID-19 pandemic. These order volumes resulted in significant revenue growth in fiscal 2023. Our order volumes began to moderate in the fourth quarter of fiscal 2022, and we experienced order levels below revenue during fiscal 2023 and the first half of fiscal 2024, particularly from our communications service provider customers. We believe this was, in part, due to communications service providers in North America working through relatively high levels of inventory previously acquired, which was made more difficult due to challenges installing and deploying equipment. In addition, in certain international geographies, we believe that caution driven by macroeconomic concerns and market-specific issues contributed to lower-than-expected order volumes from communications service providers during fiscal 2024. As a result of these dynamics, our revenue for fiscal 2024 was lower than our revenue in fiscal 2023. Notwithstanding these recent dynamics and their impact on fiscal 2024 revenue, we continue to believe that certain trends and shifts in business and consumer behaviors and the drivers of bandwidth demand described above under “Market Opportunity and Investment in Technology Innovation” represent long-term opportunities for our business.
Fiscal Year-End Backlog
Generally, we make sales pursuant to purchase orders placed by customers under framework agreements that govern the general commercial terms and conditions of the sale of our products and services. These agreements do not obligate customers to purchase any minimum or guaranteed order quantities. In calculating backlog, we only include (i) customer purchase orders for products that have not been shipped and for services that have not yet been performed; and (ii) customer orders relating to products that have been delivered and services that have been performed, but are awaiting customer acceptance under the applicable contract terms. Backlog may be fulfilled several quarters following receipt of a purchase order, or in the case of certain service obligations, may relate to multi-year support periods.
Our backlog was $2.1 billion as of November 2, 2024, as compared to $2.6 billion as of October 28, 2023. Backlog includes product and service orders from commercial and government customers combined. Backlog at November 2, 2024 includes approximately $352.5 million primarily related to orders for products and services that are not expected to be filled or performed within fiscal 2025. Because backlog can be defined in different ways by different companies, our presentation of backlog may not be comparable with figures presented by other companies in our industry. In addition, our customers may cancel, delay or change their orders with limited advance notice, or they may decide not to accept our products and services. The timing of our fulfillment of backlog could cause some volatility in our results of operations.
Stock Repurchase Program
On October 2, 2024, we announced that our Board of Directors authorized a program to repurchase up to $1.0 billion of our common stock, commencing in fiscal 2025 and continuing through the end of fiscal 2027. Authorized purchases contemplated under our prior stock repurchase program, which was authorized in fiscal 2022, were completed in fiscal 2024. The amount and timing of any further repurchases under our stock repurchase program are subject to a variety of factors including liquidity, cash flow, stock price and general business and market conditions. The program may be modified, suspended, or discontinued at any time. See Notes 21 and 27 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report.
A discussion regarding our financial condition and results of operations for fiscal 20242025 compared to fiscal 20232024 is presented below. A discussion of fiscal 20232024 compared to fiscal 20222023 can be found under Item 7 of Part II of our Annual Report on Form 10-K for the fiscal year ended OctoberNovember 28,2, 2023,2024, filed with the SEC on December 15,20, 2023,2024, which is available free of charge on the SEC’s website at www.sec.gov and our Investor Relations website at investor.ciena.com.
Operating Segments
Our results of operations are presented based on the followingour operating segments: (i) Networking Platforms; (ii) Platform Software and Services; (iii) Blue Planet Automation Software and Services; and (iv) Global Services. Effective as of the fourth quarter of fiscal 2025, we renamed (i) our “Maintenance Support and Training” product line to “Maintenance, Support, and Learning”, (ii) our “Installation and Deployment” product line to “Implementation”, and (iii) our “Consulting and Network Design” product line to “Advisory and Enablement.” These changes, affecting only the presentation of such information, were made on a prospective basis and do not impact comparability of previous financial results. However, references to the prior reported product lines have been changed herein to the new names described above. See Notes 2 and 24 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for more information on our segment reporting.
Fiscal 2024 Compared to Fiscal 2023
As a result of the increased demand described above, our revenue increased by 18.8% in fiscal 2025 as compared to fiscal 2024.
Revenue and Currency Fluctuations
As a result of the factors impacting order volumes described under “Overview” above, our revenue declined by 8.5% in fiscal 2024 as compared to fiscal 2023. In addition, during fiscal 2024, approximately 14.3% of our revenue was non-U.S. Dollar denominated, primarily including sales in Euros, Indian Rupees and Canadian Dollars. During fiscal 2024, as compared to fiscal 2023, the U.S. Dollar fluctuated against these and other currencies with minimal impact as compared to fiscal 2023.
See Notes 2 and 24 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for more information on our segment reporting. The table below sets forth the changes in our operating segment revenue for the periods indicated (in thousands, except percentage data):
•Networking Platforms segment revenue increased by $634.3 million.
◦Optical Networking revenue increased by $603.7 million, primarily driven by increases in sales of our RLS to cloud providers. Revenue also benefited from increased sales of our coherent pluggable transceivers to cloud providers, 6500 Packet-Optical Platforms to service provider customers, and Waveserver® systems.
◦Routing and Switching revenue increased by $30.6 million, primarily driven by an increase in sales of our 3000 and 5000 series of service delivery and aggregation platforms to a cloud provider customer for DCOM solutions.
•Networking Platforms segment revenue decreased by $451.4 million, reflecting product line sales decreases of $344.7 million of our Optical Networking products and $106.7 million of our Routing and Switching products.
◦Optical Networking sales decreased, primarily reflecting sales decreases of $470.3 million of our 6500 Packet-Optical Platform primarily to communications service providers, enterprise customers, cable and multiservice operators, and cloud providers, and $17.2 million of our 5400 family of Packet-Optical Platforms primarily to communications service providers. These sales decreases were partially offset by sales increases of $63.1 million primarily of our coherent pluggable transceivers, primarily to cloud providers, $45.2 million of our 6500 RLS products primarily to communications service providers, cable and multiservice operators and cloud providers, and $35.8 million of our Waveserver® products primarily to communications service providers, partially offset by sales decreases to enterprise customers and cloud providers.
◦Routing and Switching sales decreased, primarily reflecting sales decreases of $103.8 million of our 3000 and 5000 families of service delivery and aggregation switches primarily to communications service providers, cable and multiservice operators, and enterprise customers, $8.9 million of our 8700 Packetwave Platform, primarily to communications service providers and enterprise customers, $5.4 million of our virtualization software, primarily to communications service providers partially offset by increased sales to enterprise customers, and $4.3 million of our passive optical network (PON) products, primarily to communications service providers. These sales decreases were partially offset by sales increases of $8.7 million of our platform independent software, primarily to communications service providers and cloud providers, $4.8 million of our WaveRouter products, primarily to communications service providers, and $3.6 million of our 8100 Coherent IP networking platforms, primarily to enterprise customers and cloud providers.
•Platform Software and Services segment revenue increased by $54.2 million, reflecting sales increases of $32.3 million in sales of software platforms and $21.9 million in sales of our software maintenance services, both primarily for our Navigator NCS software platform.
•Blue Planet Automation Software and Services segment revenue increased by $8.4 million, primarily reflecting a sales increase of $11.4 million in professional software services primarily for our BPI and ROA platforms partially offset by a sales decrease of $2.9 million in software platforms.
•GlobalPlatform Software and Services segment revenue increased by $17.2$5.8 million, primarily reflecting sales increases of $14.8 million of our maintenancesoftware support and training and $3.4 million of our installation and deploymentconsulting services.
•Blue Planet Automation Software and Services segment revenue increased by $37.9 million, primarily reflecting sales increases in our orchestration software, unified assurance and analytics software, and our inventory management software services.
•Global Services segment revenue increased by $76.5 million, primarily reflecting sales increases of $61.7 million of our implementation services and $14.2 million of our maintenance, support, and learning.
Our operating segments engage in business and operations across three geographic regions: the United States, Canada, the Caribbean and Latin America (“Americas”); Europe, Middle East and Africa (“EMEA”); and Asia Pacific, Japan and India (“APAC”). The following table reflects our geographic distribution of revenue, principally based on the relevant location for our delivery of products and performance of services (in thousands, except percentage data):
•Americas revenue increased by $654.5 million, primarily driven by increased sales to cloud providers as well as increased sales to service providers, each primarily in the United States.
Our operating segments engage in business and operations across three geographic regions: Americas, EMEA, and APAC. The geographic distribution of our revenue can fluctuate significantly from period to period, and the timing of revenue recognition for large network projects, particularly outside of the United States, can result in large variations in geographic revenue results in any particular period. The decrease in our Americas region revenue for fiscal 2024 was primarily driven by decreased sales in Canada and the United States. The decrease in our APAC region revenue for fiscal 2024 was primarily driven by decreased sales in Australia, India, Singapore and South Korea. The increase in our EMEA region revenue for fiscal 2024 was partially offset by sales decreases in Great Britain and the Netherlands. The following table reflects our geographic distribution of revenue, which is principally based on the relevant location for the delivery of our products and performance of services. The table below sets forth the changes in geographic distribution of revenue for the periods indicated (in thousands, except percentage data):
•Americas revenue decreased by $158.4 million, reflecting a sales decrease of $207.3 million within our Networking Platforms segment. This sales decrease was offset by sales increases of $40.4 million within our Platform Software and Services segment, $5.4 million within our Global Services segment, and $3.1 million within our Blue Planet Automation Software and Services segment. Our Networking Platforms segment revenue decrease reflects product line sales decreases of $126.9 million of Optical Networking products and $80.4 million of Routing and Switching products. Our Optical Networking revenue primarily reflects a sales decrease of $248.7 million of our 6500 Packet-Optical Platform, primarily to communications service providers, enterprise customers, cable and multiservice operators, and cloud providers. This sales decrease was partially offset by sales increases of $57.1 million primarily of our coherent pluggable transceivers primarily to cloud providers, $55.4 million of our 6500 RLS products primarily to cloud providers and cable and multiservice operators, and $19.5 million of our Waveserver® modular interconnect system, primarily to communications service providers partially offset by decreased sales to cloud providers. Routing and Switching product line sales primarily reflect a sales decrease of $83.9 million of our 3000 and 5000 families of service delivery and aggregation switches to communications service providers, cable and multiservice operators, and enterprise customers.
•EMEA revenue increased by $5.7$83.0 million, primarily reflectingdriven by increased sales increasesto ofcloud $12.2providers millionin withinthe our Global Services segmentNetherlands and $5.5service millionproviders withinin ourthe PlatformUnited Software and Services segment. These sales increases wereKingdom, partially offset by adecreased sales decreaseto ofsubmarine $10.9network million within our Networking Platforms segment.operators.
•APAC revenue increased by $17.0 million, primarily driven by increased sales in Japan and Singapore, partially offset by decreased sales to Hong Kong and India.
Revenue Concentration
Sales to our five largest customers contributed 49.7% of our revenue in fiscal 2025 and 43.8% of our revenue in fiscal 2024. Sales to one cloud provider were $851.6 million, or 17.9% of total revenue in fiscal 2025 and $532.3 million or 13.3% of total revenue in fiscal 2024. Sales to AT&T were $500.7 million, or 10.5% of total revenue, in fiscal 2025, and $475.3 million, or 11.8% of total revenue, in fiscal 2024. No other customer accounted for greater than 10% of our revenue in fiscal 2025 or fiscal 2024.
During fiscal 2025, 9.9% of our revenue was non-U.S. Dollar denominated, primarily including sales in Euros, Indian Rupees and Canadian Dollars. During fiscal 2025, as compared to fiscal 2024, the U.S. Dollar fluctuated against these and other currencies, with minimal impact as compared to fiscal 2024.
Gross Margin
Gross margin is calculated as revenue less cost of goods sold, divided by revenue.
•APAC revenue decreased by $218.9 million, primarily reflecting a sales decrease of $233.2 million within our Networking Platforms segment. This sales decrease was partially offset by sales increases of $8.3 million within our Platform Software and Services segment and $6.4 million within our Blue Planet Automation Software and Services segment. Our Networking Platforms segment revenue decrease primarily reflects a product line sales decrease of $237.0 million of Optical Networking products, including a sales decrease of $198.3 million of our 6500 Packet-Optical Platform, primarily to communications service providers and enterprise customers.
In fiscal 2024 and fiscal 2023, our top ten customers contributed 57.9% and 53.7% of our revenue, respectively. Consequently, our financial results are closely correlated with the spending of a relatively small number of customers and can be significantly affected by market, industry or competitive dynamics affecting the businesses of those customers. Our reliance on a relatively small number of customers increases our exposure to changes in their spending levels, network priorities and purchasing strategies. The loss of a significant customer could have a material adverse effect on our business and results of operations, and our results of operations can fluctuate quarterly depending on sales volumes and purchasing priorities with these large customers. Sales to one of our cloud provider customers were $532.3 million, or 13.3% of total revenue, in fiscal 2024 and $561.4 million or 12.8% of total revenue, in fiscal 2023. Sales to AT&T were $475.3 million, or 11.8% of total revenue, in fiscal 2024, and $464.7 million, or 10.6% of total revenue, in fiscal 2023. No other customer accounted for greater than 10% of our revenue in fiscal 2024 or fiscal 2023.
While drivers of bandwidth growth and network evolution remain strong, many of our service provider customers are under pressure to constrain their capital expenditure budgets, and their businesses cannot grow their network spending at the rate of bandwidth growth. As a result, as we innovate and introduce new and more robust solutions that increase capacity or add features, there is a market expectation for solutions that are more cost-effective than existing or competing solutions and that new products consistently deliver lower price per bit performance. The combination of this regular technology-driven price compression, price competition in our markets, and ongoing customer efforts to manage network costs can impact our growth rates and requires that we increase our volume of product shipments to maintain and grow revenue.
Cost of Goods Sold and Gross Profit
Product cost of goods sold consists primarily of amounts paid to third-party contract manufacturers, component costs, employee-related costscosts, shipping, logistics, and overhead, shipping and logisticstariff costs associated with manufacturing-related operations, warranty and other contractual obligations, royalties, license fees, amortization of intangible assets, cost of excess and obsolete inventory and, when applicable,any estimated losses on committed customer contracts.
What changed in the latest 10-Q
Risk Factors
There has been no material change to our Risk Factors from those presented in our 2025 Annual Report. Investing in our securities involves a high degree of risk. Before investing in our securities, you should consider carefully the information contained in this report and in our 2025 Annual Report, including the information under Item 1A of Part I thereof. This report contains forward-looking statements that involve risks and uncertainties. See “Management’s Discussion and Analysis of Financial Conditions and Results of Operations – Cautionary Note Regarding Forward-Looking Statements” in Item 2 of Part I of this report. Our actual results could differ materially from those contained in the forward-looking statements. Any of the risks discussed in our 2025 Annual Report, in this report, in other reports we file with the SEC, and other risks we have not anticipated or discussed, could have a material adverse impact on our business, financial condition, or results of operations.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Largest changes
“•Product gross margin increased by 350 basis points, primarily due to pricing optimization, product mix, cost reductions, and tariff recoveries, partially offset by lower manufacturing efficiencies and increased provision for excess and obsolete inventory.”see in full comparison
•Product gross margin increased bysee in full comparison310410 basis points, primarily due to costreduction,reductions, pricing optimization,andproduct mix, and tariff recoveries, partially offset by lower manufacturingefficiencies.efficiencies and an increased provision for excess and obsolete inventory.
Our gross margin increased tosee in full comparison44.0%45.4% in thesecondthird quarter of fiscal 2026, compared to40.2%41.3% in thesecondthird quarter of fiscal 2025, primarily due to higher product gross margin associated with cost reduction, pricing optimization, product mix, andproducttariffmix.refunds.
•Significant asset impairments and restructuring costssee in full comparisonremaineddecreasedrelativelybyunchanged.$2.1 million primarily related to higher facilities restructuring costs in fiscal 2025.
(1)see in full comparisonInterest on the Refinanced 2030 Term Loan is payable periodically based on the interest period selected for borrowing.The Refinanced 2030 Term Loanbearsbore interest at SOFR for the chosen borrowing period plus a spread of 1.75% subject to a minimum SOFR rate of 0.00%.At the end of the second quarter of fiscal 2026, the interest rate on theThe Refinanced 2030 Term Loanwasterminated5.41%.on June 11, 2026.
“•Interest expense decreased by $17.0 million primarily due to refinancing of debt at a 0% interest rate, net of the effect of a related termination of interest rate swaps, see notes 12 and 13.”see in full comparison
Full comparison: every changed paragraph (84)
Our industry has been experiencing unprecedented increases in demand, in particular due to capital expenditures related to AI and other cloud-based applications. As a result, we experienced strong momentum and growth in fiscal 2025 that continued in the first halfthree quarters of fiscal 2026. As our sales to cloud providers grow, we are seeing a small number of those customers become a larger portion of our business across multiple revenue segments. Our revenue increased by 40%37% to $1.6$1.7 billion in the secondthird quarter of fiscal 2026 as compared to $1.1$1.2 billion in the secondthird quarter of fiscal 2025, with orders for our products and services significantly exceeding our revenue. This dynamic, together with an industry-wide constrained supply environment, has resulted in historically high backlog. As part of our efforts to secure both long-term supply and demand, we have, and are seeking to continue to, enter into multi-year supply agreements with certain of our suppliers, some of which involve firm purchase commitments and prepayment arrangements, and long-term purchase arrangements with customers.
Our gross margin increased to 44.0%45.4% in the secondthird quarter of fiscal 2026, compared to 40.2%41.3% in the secondthird quarter of fiscal 2025, primarily due to higher product gross margin associated with cost reduction, pricing optimization, product mix, and producttariff mix.refunds.
Our operating expense grew from $420$430 million in the secondthird quarter of fiscal 2025 to $454$458 million in the secondthird quarter of fiscal 2026. During the secondthird quarter of fiscal 2026, we invested $238$237 million in research and development activities, an increase of 11%12% compared to the secondthird quarter of fiscal 2025. We believe that our investment capacity and our efforts to push the pace of innovation are important competitive differentiators in our markets, which requires both investment capacity and expenditures. In particular, in an effort to capture certain market opportunities created by the impact of AI on networks, we continued to increase the performance of and enhance the capabilities for our leading WaveLogicTM coherent modem technology, through which we seek to extend our leadership in optical networking, and leverage it to expand our addressable market, including inside and around the data center.
During the third quarter of fiscal 2026, we completed a convertible note offering of $2.9 billion and immediately used the proceeds to repay our term loan as described in Note 13 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.
Our capital allocation strategy is focused on maintaining our significant innovation investment, investing in select transactions, and returning value to stockholders, while preserving our strategic and operational flexibility. We continuously work to improve our cash cycle and evaluate alternatives to manage our capital structure in order to enhance our liquidity. We ended the first halfnine months of fiscal 2026 with $1.4$2.8 billion of cash, cash equivalents, and investments. As of the end of the first halfnine months of fiscal 2026, cash generated from operations increased to $487$684 million as compared to $261$435 million as of the end of the first halfnine months of fiscal 2025. Consistent with our capital allocation priorities, during the first halfnine months of fiscal 2026, we invested $115$195 million in capital purchases, primarily for supply chain equipment and research and development, and $344$338 million and $278 million to repurchase shares through our share buyback program and for tax withholding purposes associated with employee stock awards.awards, respectively.
As a result of the increased demand described above, our revenue increased by approximately 40%, or $444.9 million,37% in the secondthird quarter and first nine months of fiscal 2026 as compared to the secondthird quarter and first nine months of fiscal 2025, or $451.7 million and approximately$1.3 36%billion, or $799.6 million, in the six months ended May 2, 2026 as compared to the six months ended May 3, 2025.respectively.
•Optical Networking products revenue increased by $326.3$375.8 million, primarily driven by increases in sales of our Waveserver® system and our 6500 Reconfigurable Line Systems (RLS)., Waveserver® systems, and coherent pluggable transceivers.
•Routing and Switching products revenue increased by $81.5 million, primarily driven by increases in sales of our 3000 and 5000 series of service delivery and aggregation platforms, and our 8100 Coherent IP networking platforms in our out-of-band data center management (DCOM) solution.
•Platform Software and Services segment revenue increased by $8.4 million, primarily reflecting a sales increase in our Navigator Network Control Suite (NCS) software solution.
•Blue Planet Automation Software and Services segment revenue decreased by $4.6 million, primarily reflecting a sales decrease in our unified assurance and analytics software.
•Global Services segment revenue increased by $33.3 million, primarily reflecting sales increases in our implementation services and maintenance, support, and learning services.
•Networking Platforms segment revenue increased by $735.7 million.
•Optical Networking revenue increased by $621.4 million, primarily driven by increases in sales of our Waveserver® system and our 6500 RLS.
•Routing and Switching products revenue increased by $114.3$38.5 million, primarily driven by increasesan increase in sales of our 3000 and 5000 series of service delivery and aggregation platforms, and our 8100 Coherent IP networking platforms in our DCOM solution.solution, partially offset by a sales decrease in our virtualization software.
•Platform Software and Services segment revenue increased by $6.8$8.7 million, primarily reflecting a sales increase in our Navigator Network Control Suite (“NCS”) software solution, partially offset by sales decreases of our software consulting services.solution.
•Blue Planet Automation Software and Services segment revenue decreased by $10.2$4.6 million, primarily reflecting a sales decrease in our unified assurance and analyticsorchestration software.
•Global Services segment revenue increased by $67.3$33.3 million, primarily reflecting sales increases in our implementation services and maintenance support and learning services.
•Networking Platforms segment revenue increased by $1.2 billion.
•Optical Networking revenue increased by $997.3 million, primarily driven by increases in sales of our 6500 Reconfigurable Line Systems (RLS), Waveserver® systems, and coherent pluggable transceivers.
•Routing and Switching revenue increased by $152.9 million, primarily driven by increases in sales of our 3000 and 5000 series of service delivery and aggregation platforms, and 8100 Coherent IP networking platforms in our DCOM solution, partially offset by a sales decrease in our virtualization software.
•Platform Software and Services segment revenue increased by $15.5 million, primarily reflecting a sales increase in our Navigator NCS software solution, partially offset by decreases in sales of our software consulting services.
•Blue Planet Automation Software and Services segment revenue decreased by $14.8 million, primarily reflecting sales decreases in our unified assurance and analytics software and orchestration software.
•Global Services segment revenue increased by $100.6 million, primarily reflecting sales increases in our implementation services and maintenance support and learning services.
•Americas revenue increased by $368.4 million, primarily driven by increased sales to cloud provider customers as well as service provider customers in the United States.
•EMEA revenue increased by $4.5 million, primarily driven by increased sales in France, partially offset by decreased sales to cloud provider customers in the Netherlands.
•APAC revenue increased by $72.0 million, primarily driven by increased sales to service provider customers in India and enterprise customers in Australia.
•Americas revenue increased by $691.0$393.2 million, primarily driven by increased sales to cloud provider customers and service provider customers in the United States.
•EMEA revenue increaseddecreased by $47.1$5.5 million, primarily driven by increaseddecreased sales to cloud provider customers in the Netherlands and increased sales in France.Netherlands.
•APAC revenue increased by $61.5$64.0 million, primarily driven by increased sales to service provider customers in India, cloud provider customers in Singapore, and enterprise customers in Australia.
•Americas revenue increased by $1.1 billion, primarily driven by increased sales to cloud provider customers and service provider customers in the United States.
•EMEA revenue increased by $41.7 million, primarily driven by increased sales to cloud provider customers in the Netherlands and service provider customers in Great Britain.
•APAC revenue increased by $125.6 million, primarily driven by increased sales in India, Singapore, and Australia.
During both the secondthird quarter and first sixnine months of fiscal 2026, approximately 10% and 9% of our revenue was non-U.S. Dollar-denominated.Dollar-denominated, respectively. During the secondthird quarter of fiscal 2026 as compared to the third quarter of fiscal 2025, and the first sixnine months of fiscal 2026 as compared to the second quarter and first sixnine months of fiscal 2025, the U.S. Dollar generally weakenedfluctuated against other currencies with minimal impact.
•Gross margin increased by 380 basis points, primarily reflecting increased product margin offset by decreased services margin.
•Product gross margin increased by 510 basis points, primarily due to cost reduction, pricing optimization, and product mix, partially offset by lower manufacturing efficiencies.
•Services gross margin decreased by 110 basis points, primarily due to a less favorable services mix, partially offset by improved margins on implementation services.
•Gross margin increased by 180410 basis points, primarily reflecting increased product margin offset by decreasedand services margin.
•Product gross margin increased by 310410 basis points, primarily due to cost reduction,reductions, pricing optimization, and product mix, and tariff recoveries, partially offset by lower manufacturing efficiencies.efficiencies and an increased provision for excess and obsolete inventory.
•Services gross margin decreasedincreased by 260520 basis points, primarily due to aincreased lessvolume favorableof serviceshigher mix, partially offset by improved margins onmargin implementation services.
•Gross margin increased by 270 basis points, primarily reflecting increased product margin.
•Product gross margin increased by 350 basis points, primarily due to pricing optimization, product mix, cost reductions, and tariff recoveries, partially offset by lower manufacturing efficiencies and increased provision for excess and obsolete inventory.
•Services gross margin remained relatively unchanged.
•Research and development expense increased by $23.0$24.8 million. Net of hedging, this primarily reflects higher employee headcount and related costs, including from our acquisition of Nubis Communications, technology related costsCommunications and engineering design and development costs, prototype costs and technology-related costs.
•General and administrative expense increased by $4.3$2.2 million, which primarily reflects increases in employee-relatedprofessional compensation costs.services.
•Research and development expense increased by $51.8$76.6 million. Net of hedging, this primarily reflects higher employee headcount and related costs, including from our acquisition of Nubis Communications, technology related costs and engineering design and development costs and technology-related costs.
•Significant asset impairments and restructuring costs remaineddecreased relativelyby unchanged.$2.1 million primarily related to higher facilities restructuring costs in fiscal 2025.
•Acquisition and integration costs reflect financial, legal, and accounting advisory costs and certain employee-related costs related to our acquisition of Nubis Communications.Communications in the fourth quarter of fiscal 2025.
During both the secondthird quarter and first sixnine months of fiscal 2026, approximately 50%51% of our operating expense was non-U.S. Dollar-denominated. During the secondthird quarter and first sixnine months of fiscal 2026, as compared to the secondthird quarter and first sixnine months of fiscal 2025, the U.S. Dollar generally weakenedfluctuated against other currencies. These currency fluctuations, net of hedging, had minimal impact.
•Platform Software and Services segment profit increased by $9.4$9.6 million, primarily due to higher product sales volume, as described above, and improved services gross margin.
•Blue Planet Automation Software and Services segment decreased by $5.9 million, primarily reflectsdue to lower software sales volume as described above,above and reduced product gross margins and increased research and development costs.margin.
•Global Services segment profit increased by $12.0$25.9 million, primarily due to increased implementation sales volumeand improved services gross margin as described above.
•Platform Software and Services segment profit increased by $5.7$15.4 million, primarily due to higher product sales and slightly higher gross margin, partially offset by lower services sales volume and increased research and development costs.
•Blue Planet Automation Software and Services segment primarily reflects lower software sales volume as described above,above and reduced gross margins and increased research and development costs.
•Global Services segment profit increased by $24.1$50.0 million, primarily due to increased implementation sales volumeand improved services gross margin as described above.
•Interest and other income, net increased by $6.2 million, primarily reflecting the impact of foreign exchange rates on assets and liabilities denominated in a currency other than the relevant functional currency, net of hedging activity.
•Interest expense remained relatively unchanged.
•Provision for income taxes increased by $2.8 million, primarily due to the increase in pre-tax book income.
•Interest and other income, net increased by $7.6 million, primarily reflecting the impact of foreign exchange rates on assets and liabilities denominated in a currency other than the relevant functional currency, net of hedging activity.
•Interest expenseand decreasedother income, net increased by $2.4$7.3 million, primarily dueresulting tofrom lowerhigher interest ratesincome on our floating rate debt, net of hedging activity.investments.
•Interest expense decreased by $17.0 million primarily due to refinancing of debt at a 0% interest rate, net of the effect of a related termination of interest rate swaps, see notes 12 and 13.
CIEN insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 38 filings (10 insiders, 19 trade dates, 83,264 shares, about $36.4M; 36 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -83,264 (purchases minus sales); net value about -$36.4M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-10-01 | Graff Marc D. |
Open-market sale |
97 | $355.19 | $34.5K |
| 2026-10-01 | Kosaraju Sheela |
Open-market sale |
2,101 | $355.19 | $746.3K |
| 2026-10-01 | Phipps Jason |
Open-market sale |
2,629 | $355.19 | $933.8K |
| 2026-09-25 | Cumello Joseph |
Open-market sale |
1,586 | $358.52 | $568.6K |
| 2026-09-24 | Claflin Bruce L. |
Open-market sale | 2,857 | $355.91 | $1.0M |
| 2026-09-24 | Nevens Thomas Michael |
Gift | 2,797 | — | — |
| 2026-09-23 | Nevens Thomas Michael |
Open-market sale | 3,738 | $359.04 | $1.3M |
| 2026-09-20 | Cumello Joseph |
Shares withheld for tax | 180 | $348.80 | $62.8K |
| 2026-09-20 | Cumello Joseph |
Shares withheld for tax | 331 | $348.80 | $115.5K |
| 2026-09-20 | Cumello Joseph |
Shares withheld for tax | 582 | $348.80 | $203.0K |
| 2026-09-20 | Cumello Joseph |
Shares withheld for tax | 182 | $348.80 | $63.5K |
| 2026-09-20 | Cumello Joseph |
Shares withheld for tax | 441 | $348.80 | $153.8K |
| 2026-09-20 | Diperna Dino |
Shares withheld for tax | 428 | $348.80 | $149.3K |
| 2026-09-20 | Diperna Dino |
Shares withheld for tax | 247 | $348.80 | $86.2K |
| 2026-09-20 | Diperna Dino |
Shares withheld for tax | 730 | $348.80 | $254.6K |
| 2026-09-20 | Diperna Dino |
Shares withheld for tax | 444 | $348.80 | $154.9K |
| 2026-09-20 | Diperna Dino |
Shares withheld for tax | 204 | $348.80 | $71.2K |
| 2026-09-20 | Hoffman Grant |
Shares withheld for tax | 170 | $348.80 | $59.3K |
| 2026-09-20 | Gage Brodie |
Shares withheld for tax | 442 | $348.80 | $154.2K |
| 2026-09-20 | Gage Brodie |
Shares withheld for tax | 669 | $348.80 | $233.3K |
| 2026-09-20 | Gage Brodie |
Shares withheld for tax | 388 | $348.80 | $135.3K |
| 2026-09-20 | Gage Brodie |
Shares withheld for tax | 204 | $348.80 | $71.2K |
| 2026-09-20 | Gage Brodie |
Shares withheld for tax | 231 | $348.80 | $80.6K |
| 2026-09-20 | Smith Gary B |
Shares withheld for tax | 3,102 | $348.80 | $1.1M |
| 2026-09-20 | Smith Gary B |
Shares withheld for tax | 2,985 | $348.80 | $1.0M |
| 2026-09-20 | Smith Gary B |
Shares withheld for tax | 937 | $348.80 | $326.8K |
| 2026-09-20 | Smith Gary B |
Shares withheld for tax | 1,743 | $348.80 | $608.0K |
| 2026-09-20 | Rothenstein David M |
Shares withheld for tax | 436 | $348.80 | $152.1K |
| 2026-09-20 | Rothenstein David M |
Shares withheld for tax | 811 | $348.80 | $282.9K |
| 2026-09-20 | Rothenstein David M |
Shares withheld for tax | 204 | $348.80 | $71.2K |
| 2026-09-20 | Rothenstein David M |
Shares withheld for tax | 679 | $348.80 | $236.8K |
| 2026-09-20 | Rothenstein David M |
Shares withheld for tax | 220 | $348.80 | $76.7K |
| 2026-09-20 | Phipps Jason |
Shares withheld for tax | 268 | $348.80 | $93.5K |
| 2026-09-20 | Phipps Jason |
Shares withheld for tax | 503 | $348.80 | $175.4K |
| 2026-09-20 | Phipps Jason |
Shares withheld for tax | 735 | $348.80 | $256.4K |
| 2026-09-20 | Phipps Jason |
Shares withheld for tax | 859 | $348.80 | $299.6K |
| 2026-09-20 | Kosaraju Sheela |
Shares withheld for tax | 189 | $348.80 | $65.9K |
| 2026-09-20 | Kosaraju Sheela |
Shares withheld for tax | 330 | $348.80 | $115.1K |
| 2026-09-20 | Kosaraju Sheela |
Shares withheld for tax | 549 | $348.80 | $191.5K |
| 2026-09-20 | Kosaraju Sheela |
Shares withheld for tax | 691 | $348.80 | $241.0K |
| 2026-09-20 | Kosaraju Sheela |
Shares withheld for tax | 156 | $348.80 | $54.4K |
| 2026-09-20 | Graff Marc D. |
Shares withheld for tax | 286 | $348.80 | $99.8K |
| 2026-09-16 | Diperna Dino |
Open-market sale |
249 | $350.00 | $87.2K |
| 2026-09-15 | Smith Gary B |
Open-market sale |
2,952 | $330.18 | $974.7K |
| 2026-09-15 | Rothenstein David M |
Open-market sale |
2,500 | $330.48 | $826.2K |
| 2026-09-15 | Gage Brodie |
Open-market sale |
1,200 | $324.86 | $389.8K |
| 2026-09-15 | Diperna Dino |
Open-market sale |
249 | $324.86 | $80.9K |
| 2026-09-01 | Smith Gary B |
Open-market sale |
2,952 | $362.90 | $1.1M |
| 2026-08-17 | Smith Gary B |
Open-market sale |
2,952 | $447.78 | $1.3M |
| 2026-08-17 | Gage Brodie |
Open-market sale |
1,200 | $439.24 | $527.1K |
| 2026-08-14 | Graff Marc D. |
Open-market sale |
4,995 | $430.72 | $2.2M |
| 2026-08-14 | Rothenstein David M |
Open-market sale |
2,500 | $438.10 | $1.1M |
| 2026-08-03 | Smith Gary B |
Open-market sale |
2,952 | $379.81 | $1.1M |
| 2026-08-01 | Graff Marc D. |
Shares withheld for tax | 14,441 | $377.05 | $5.4M |
| 2026-07-15 | Smith Gary B |
Open-market sale |
2,952 | $421.10 | $1.2M |
| 2026-07-15 | Rothenstein David M |
Open-market sale |
2,500 | $420.91 | $1.1M |
| 2026-07-15 | Gage Brodie |
Open-market sale |
1,200 | $449.15 | $539.0K |
| 2026-07-15 | Diperna Dino |
Open-market sale |
391 | $449.15 | $175.6K |
| 2026-07-15 | Diperna Dino |
Open-market sale |
391 | $449.15 | $175.6K |
| 2026-07-01 | Kosaraju Sheela |
Open-market sale |
2,013 | $466.20 | $938.5K |
Well-known investors holding CIEN (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 1,052,165 | $507.2M | 0.18% | Added 8% |
| Lone Pine Capital (Stephen Mandel) | 2026-06-30 | 809,522 | $314.3M | — | Sold out |
| PRIMECAP Management | 2026-06-30 | 308,050 | $151.1M | 0.09% | Reduced 30% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 214,064 | $105.0M | 0.06% | Added 52% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 210,516 | $103.3M | 0.16% | Reduced 61% |
| Renaissance Technologies | 2026-06-30 | 184,774 | $90.6M | 0.12% | Added 89% |
| Whale Rock Capital Management | 2026-06-30 | 231,267 | $89.8M | — | Sold out |
| Millennium Management (Israel Englander) | 2026-06-30 | 166,420 | $81.6M | 0.06% | Added 83% |
| D. E. Shaw & Co. | 2026-06-30 | 133,195 | $65.3M | 0.04% | Added 1395% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 113,019 | $55.4M | 0.13% | Reduced 7% |
| Bridgewater Associates | 2026-06-30 | 101,038 | $49.6M | 0.2% | Reduced 30% |
| Two Sigma Investments | 2026-06-30 | 9,500 | $4.7M | 0.0% | Added 173% |
| First Eagle Investment Management | 2026-06-30 | 2,000 | $981.1K | 0.0% | Reduced 23% |