UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 2, 2025 (Mark one) OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36250 Ciena Corporation (Exact name of registrant as specified in its charter) Delaware 23-2725311 (I.R.S. Employer Identificatio ...

Core Insights - Ciena Corporation's stock has more than doubled in a year, suggesting that significant price movements may still be possible despite prior gains [1] Group 1: Company Analysis - Ciena Corporation is experiencing notable stock performance, indicating strong market interest and potential for further growth [1] - The company operates in sectors such as AI, fintech, and technology, which are currently attracting significant investment [1] Group 2: Market Trends - The overall market sentiment appears to be optimistic, with investors looking for opportunities in high-growth sectors [1]

Group 1 - Ciena Corporation (NYSE: CIEN) reported its fiscal Q3 results, which were positively received by investors [1] - The company focuses on long-term investment strategies, typically with a 5-10 year horizon, emphasizing a portfolio mix of growth, value, and dividend-paying stocks [1]

Core Insights - Ciena reported $1.22 billion in revenue for the quarter ended July 2025, marking a year-over-year increase of 29.4% and exceeding the Zacks Consensus Estimate of $1.17 billion by 4% [1] - The company achieved an EPS of $0.67, up from $0.35 a year ago, resulting in an EPS surprise of 28.85% compared to the consensus estimate of $0.52 [1] Revenue Breakdown - Total Networking Platforms revenue was $941.4 million, surpassing the estimated $895.05 million, reflecting a 34.6% year-over-year increase [4] - Total Global Services revenue reached $160.2 million, exceeding the $151.98 million estimate, with a year-over-year change of 19.7% [4] - Software and Services revenue totaled $117.8 million, below the $126.04 million estimate, but still showing an 8.1% year-over-year increase [4] - Networking Platforms revenue from Routing and Switching was $125.9 million, exceeding the $100.57 million estimate, with a 35.8% year-over-year increase [4] - Optical Networking revenue was $815.5 million, surpassing the $793.3 million estimate, reflecting a 34.4% year-over-year increase [4] - Products revenue was $976.8 million, exceeding the $938.51 million estimate, with a 33.9% year-over-year increase [4] - Blue Planet Automation Software and Services revenue was $27.8 million, below the $34.49 million estimate, but showing a 7.8% year-over-year increase [4] - Platform Software and Services revenue was $90 million, slightly below the $93.94 million estimate, with an 8.2% year-over-year increase [4] - Services revenue reached $242.58 million, exceeding the $238.91 million estimate, reflecting a 14% year-over-year increase [4] Profitability Metrics - Gross profit from Products was $396.77 million, surpassing the estimated $371.31 million [4] - Gross profit from Services was $106.31 million, slightly below the estimated $112.15 million [4] Stock Performance - Ciena's shares returned +0.5% over the past month, compared to the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Q3 2025 revenue was $1,220 million, exceeding guidance and up 8% sequentially and nearly 30% year over year [9][20] - Adjusted EPS for the quarter was $0.67, up 60% sequentially and 91% year over year, indicating expanded operating leverage [9][21] - Adjusted gross margin in Q3 was 41.9%, 90 basis points above guidance, driven by sales of previously reserved material and lower net tariff impacts [21] - Adjusted operating margin was 10.7%, up 270 basis points year on year [21] - Cash from operations was $174 million, with a free cash flow margin of 11% [22] Business Line Data and Key Metrics Changes - Strong demand was noted across both cloud provider and service provider segments, with two customers contributing over 10% of revenue [9][10] - The interconnects portfolio is expected to double revenue year over year in 2025, with significant orders already in place [14] - The RLS optical products and routers and switches showed strong performance, contributing to overall revenue growth [20] Market Data and Key Metrics Changes - Cloud providers are investing in AI at an unprecedented pace, with many increasing their expected spend on AI [12] - Service providers are seeing steady and sustainable investment patterns, particularly in North America and internationally [17] - The emergence of Neo scalers, including AI compute specialists and smaller data center providers, is creating new market opportunities [16] Company Strategy and Development Direction - The company is redirecting R&D investments towards coherent optical systems, interconnects, and innovative solutions like DCOM, while limiting investments in residential broadband access [18][25] - A reduction in headcount impacting approximately 4% to 5% of the workforce is being implemented to drive operational efficiencies [26] - The company expects to achieve approximately 17% year-on-year growth in fiscal 2026, with improving gross margins and a focus on AI-driven network investments [27] Management's Comments on Operating Environment and Future Outlook - Management believes the network is critical for the growth and monetization of AI, with a multiyear investment effort required for high-speed connectivity [10][29] - The company is positioned to capitalize on the growing demand for AI workloads and the associated network infrastructure [28] - Management expressed confidence in the durability of demand over the midterm horizon, supported by a strong order backlog [26][27] Other Important Information - The company repurchased 1 million shares for $81.8 million in Q3, with plans to repurchase an additional $85 million in Q4 [22][23] - A non-cash charge of approximately $90 million is expected in Q4 due to the redirection of R&D investments [25] Q&A Session Summary Question: Industry structure and gross margin outlook - Management noted that the industry structure has improved, allowing for better pricing power and expectations of gross margin improvement over time [32][33] Question: Neoscaler opportunity and growth composition - Management indicated that Neoscalers represent a net incremental opportunity that will scale over time, contributing to overall growth [41][43] Question: Gross margin drivers and tariff impacts - Management highlighted that gross margin improvements were driven by product mix and better tariff management, with expectations for continued improvements [52][55] Question: DCOM opportunity and backlog contribution - Management confirmed that the DCOM opportunity is expected to contribute hundreds of millions in revenue, with a strong backlog supporting future growth [116][117]

Financial Data and Key Metrics Changes - Q3 2025 revenue was $1,220 million, exceeding guidance and up 8% sequentially and nearly 30% year over year [7][18] - Adjusted EPS for the quarter was $0.67, up 60% sequentially and 91% year over year, indicating expanded operating leverage [7][19] - Adjusted gross margin in Q3 was 41.9%, 90 basis points above guidance, driven by sales of previously reserved material and lower net tariff impacts [19] - Adjusted operating margin was 10.7%, up 270 basis points year on year [19] - Cash from operations was $174 million, with a free cash flow margin of 11% [20] Business Line Data and Key Metrics Changes - Strong demand was noted across both cloud provider and service provider segments, with two customers contributing over 10% of revenue [7][8] - The interconnects portfolio is expected to double revenue year over year in 2025 and likely again in FY 2026 [13] - Significant orders were received for the DCOM application, co-developed with a hyperscaler, indicating strong partnerships and demand [12][13] Market Data and Key Metrics Changes - Cloud providers are investing in AI at an unprecedented pace, with many increasing their expected spend on AI [11] - Service providers are seeing steady and sustainable investment patterns, with three of the top five customers in Q3 being service providers [15] - The emergence of Neo scalers, including AI compute specialists and smaller data center providers, is creating new market opportunities [14] Company Strategy and Development Direction - The company is redirecting R&D investments towards coherent optical systems, interconnects, and innovative solutions like DCOM, while limiting future investments in residential broadband access [16][23] - A reduction in headcount impacting approximately 4% to 5% of the workforce is being implemented to drive operational efficiencies [24] - The company expects to achieve approximately 17% year-on-year growth in fiscal 2026, with improving gross margins [25] Management's Comments on Operating Environment and Future Outlook - Management believes the network is critical for AI growth and monetization, with a multiyear investment effort required for high-speed connectivity [10][26] - The company anticipates durable demand over the midterm horizon, supported by a strong order backlog [24][25] - Management expressed confidence in achieving a 15% to 16% operating margin by 2026, accelerated by increased operating leverage and improving gross margins [25] Other Important Information - The company ended Q3 with approximately $1,400 million in cash and investments, including share repurchases totaling $245 million year to date [20] - A non-cash charge of approximately $90 million is expected in Q4 due to the redirection of R&D investments [23] Q&A Session Summary Question: Industry structure impact on gross margin - Management noted that the industry structure has improved, allowing for better pricing power and expectations for gross margin expansion [30][32] Question: Neoscaler opportunity and its contribution - Management indicated that Neoscalers represent a net incremental opportunity that will scale over time, contributing to growth in fiscal 2026 [41][42] Question: Contribution from DCOM opportunity - The DCOM application is expected to generate hundreds of millions in revenue, with initial orders already in place [118] Question: Customer additions for WaveLogic six - The company added 11 new customers for WaveLogic six, bringing the total to 60, with significant ramp-up in port shipments [98] Question: Supply chain constraints - Management acknowledged ongoing supply chain challenges but emphasized investments made to mitigate these issues and support growth [100] Question: Confidence in fiscal 2026 outlook - Confidence in fiscal 2026 is largely based on a strong backlog and sustained order growth, with expectations for continued strength in demand [121]

Group 1 - Ciena reported quarterly earnings of $0.67 per share, exceeding the Zacks Consensus Estimate of $0.52 per share, and showing an increase from $0.35 per share a year ago, resulting in an earnings surprise of +28.85% [1] - The company achieved revenues of $1.22 billion for the quarter ended July 2025, surpassing the Zacks Consensus Estimate by 4.00%, compared to $942.31 million in the same quarter last year [2] - Ciena's stock has increased approximately 11.8% since the beginning of the year, outperforming the S&P 500's gain of 9.6% [3] Group 2 - The future performance of Ciena's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4][5] - The current consensus EPS estimate for the upcoming quarter is $0.66 on revenues of $1.21 billion, and for the current fiscal year, it is $2.26 on revenues of $4.58 billion [7] - The Communication - Components industry, to which Ciena belongs, is currently ranked in the bottom 33% of over 250 Zacks industries, indicating potential challenges ahead [8]

Financial Performance - Ciena's Q3 FY2025 revenue reached $1.2194 billion, a 29.4% increase compared to $942.3 million in Q3 FY2024[50] - The adjusted gross margin for Q3 FY2025 was 41.9%, slightly lower than the 43.7% in Q3 FY2024[50] - Adjusted operating expenses for Q3 FY2025 were $380.2 million, compared to $336.0 million in Q3 FY2024[50] - Adjusted EBITDA for Q3 FY2025 was $158.0 million, significantly higher than the $98.5 million in Q3 FY2024[50] - Adjusted EPS for Q3 FY2025 was $0.67, a substantial increase from $0.35 in Q3 FY2024[50] Segment and Geographic Revenue - Optical Networking revenue was $815.5 million, representing 66.9% of total revenue in Q3 FY2025, compared to $606.8 million (64.4%) in Q3 FY2024[54] - Routing and Switching revenue was $125.9 million, accounting for 10.3% of total revenue in Q3 FY2025, versus $92.7 million (9.8%) in Q3 FY2024[54] - Non-telco customers represented 53% of total revenue in Q3 FY2025[48] - Direct Cloud Provider revenue grew 94% year-over-year and represented 40% of total revenue[48] - EMEA revenue grew 38% year-over-year, and APAC revenue grew 24% year-over-year[48] Q4 FY2025 Outlook - Ciena projects revenue between $1.24 billion and $1.32 billion for Q4 FY2025[71] - The company anticipates an adjusted gross margin of 42% to 43% for Q4 FY2025[71] - Adjusted operating expenses are expected to be in the range of $390 million to $400 million for Q4 FY2025[71]

[Fiscal Third Quarter 2025 Highlights](index=1&type=section&id=FOR%20IMMEDIATE%20RELEASE) Ciena reported strong Q3 FY2025 financial results with significant revenue and net income growth, alongside share repurchases [Key Financial Performance](index=1&type=section&id=Key%20Financial%20Performance) Ciena reported strong Q3 FY2025 financial results with significant year-over-year growth in revenue and net income, both GAAP and non-GAAP, and repurchased 1.0 million shares Q3 FY2025 Key Financials vs. Q3 FY2024 | Metric | Q3 FY2025 | Q3 FY2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $1.22 billion | $942.3 million | +29.5% | | GAAP Net Income per Share | $0.35 | $0.10 | +250% | | Adjusted (non-GAAP) Net Income per Share | $0.67 | $0.35 | +91.4% | - Repurchased approximately **1.0 million shares** of common stock for an aggregate price of **$81.8 million** during the quarter[4](index=4&type=chunk) [CEO Statement](index=1&type=section&id=CEO%20Statement) CEO Gary Smith attributed strong quarterly performance to high-speed connectivity leadership and AI-driven demand, expressing confidence in continued momentum and operating leverage expansion into FY2026 - CEO Gary Smith noted strong quarterly performance reflecting leadership in high-speed connectivity and accelerated customer demand, driven by AI's foundational role in network growth and monetization[2](index=2&type=chunk) - Confidence in continued business momentum and focus on expanding operating leverage, with visibility well into fiscal year 2026[2](index=2&type=chunk) [Fiscal Third Quarter 2025 Performance Summary](index=2&type=section&id=Fiscal%20Third%20Quarter%202025%20Performance%20Summary) This section details Ciena's Q3 FY2025 GAAP and non-GAAP financial results, revenue breakdown by segment and region, and other key operational metrics [GAAP Financial Results](index=2&type=section&id=GAAP%20Results%20(unaudited)) Ciena's Q3 FY2025 GAAP results showed significant revenue growth of **29.4%** to **$1.219 billion**, with a slight gross margin decrease but substantial operating margin increase Q3 FY2025 GAAP Financial Results (unaudited) | Metric | Q3 FY2025 (in millions) | Q3 FY2024 (in millions) | Period Change Y-T-Y (%) | | :--- | :--- | :--- | :--- | | Revenue | $1,219.4 | $942.3 | 29.4 | | Gross margin | 41.3 % | 42.9 % | (1.6) | | Operating expense | $429.5 | $377.2 | 13.9 | | Operating margin | 6.1 % | 2.9 % | 3.2 | [Non-GAAP Financial Results](index=2&type=section&id=Non-GAAP%20Results%20(unaudited)) Ciena's Q3 FY2025 non-GAAP results showed robust performance with revenue matching GAAP, a slight adjusted gross margin decline, but strong growth in adjusted operating margin and Adjusted EBITDA Q3 FY2025 Non-GAAP Financial Results (unaudited) | Metric | Q3 FY2025 (in millions) | Q3 FY2024 (in millions) | Period Change Y-T-Y (%) | | :--- | :--- | :--- | :--- | | Revenue | $1,219.4 | $942.3 | 29.4 | | Adj. gross margin | 41.9 % | 43.7 % | (1.8) | | Adj. operating expense | $380.2 | $336.0 | 13.2 | | Adj. operating margin | 10.7 % | 8.0 % | 2.7 | | Adj. EBITDA | $158.0 | $98.5 | 60.4 | [Revenue by Segment](index=2&type=section&id=Revenue%20by%20Segment%20(unaudited)) Networking Platforms remained the largest revenue contributor in Q3 FY2025, growing to **77.2%** of total revenue, driven by strong Optical Networking and Routing and Switching performance Q3 FY2025 Revenue by Segment (unaudited) | Segment | Q3 FY2025 Revenue (in millions) | % of Total | Q3 FY2024 Revenue (in millions) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Optical Networking | $815.5 | 66.9 % | $606.8 | 64.4 % | | Routing and Switching | $125.9 | 10.3 % | $92.7 | 9.8 % | | Total Networking Platforms | $941.4 | 77.2 % | $699.5 | 74.2 % | | Platform Software and Services | $90.0 | 7.4 % | $83.2 | 8.9 % | | Blue Planet Automation Software and Services | $27.8 | 2.3 % | $25.8 | 2.7 % | | Total Global Services | $160.2 | 13.1 % | $133.8 | 14.2 % | | Total | $1,219.4 | 100.0 % | $942.3 | 100.0 % | [Revenue by Geographic Region](index=3&type=section&id=Revenue%20by%20Geographic%20Region%20(unaudited)) The Americas remained Ciena's largest market in Q3 FY2025, contributing **75.7%** of total revenue, with EMEA and Asia Pacific also showing growth Q3 FY2025 Revenue by Geographic Region (unaudited) | Region | Q3 FY2025 Revenue (in millions) | % of Total | Q3 FY2024 Revenue (in millions) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Americas | $923.6 | 75.7 % | $718.6 | 76.3 % | | Europe, Middle East and Africa | $186.0 | 15.3 % | $135.0 | 14.3 % | | Asia Pacific | $109.8 | 9.0 % | $88.7 | 9.4 % | | Total | $1,219.4 | 100.0 % | $942.3 | 100.0 % | [Other Key Operational Metrics](index=3&type=section&id=Additional%20Performance%20Metrics%20for%20Fiscal%20Third%20Quarter%202025) Ciena reported strong liquidity with **$1.39 billion** in cash and investments and positive cash flow from operations, noting **28.8%** revenue concentration from two customers and a headcount of **9,213** - Two customers represented **10%-plus of revenue**, combining for a total of **28.8% of revenue**[11](index=11&type=chunk) Q3 FY2025 Key Operational Metrics | Metric | Value | | :--- | :--- | | Cash and investments | $1.39 billion | | Cash flow from operations | $174.3 million | | Average days' sales outstanding (DSOs) | 88 | | Accounts receivable, net balance | $1.03 billion | | Unbilled contract asset, net balance | $164.3 million | | Inventories | $860.4 million | | Product inventory turns | 2.7 | | Headcount | 9,213 | [Business Outlook and Investor Information](index=3&type=section&id=Business%20Outlook%20for%20Fiscal%20Fourth%20Quarter%202025) This section provides Ciena's financial guidance for Q4 FY2025 and details on supplemental materials and investor webcast availability [Q4 FY2025 Financial Guidance](index=3&type=section&id=Q4%20FY2025%20Financial%20Guidance) Ciena provided Q4 FY2025 guidance, projecting revenue between **$1.24 billion** and **$1.32 billion**, with adjusted gross margin of **42% to 43%** and adjusted operating expense of **$390 million to $400 million** Fiscal Fourth Quarter 2025 Financial Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $1.24 billion to $1.32 billion | | Adjusted (non-GAAP) gross margin | 42% to 43% | | Adjusted (non-GAAP) operating expense | $390 million to $400 million | [Supplemental Materials and Investor Webcast](index=3&type=section&id=Supplemental%20Materials%20and%20Live%20Web%20Broadcast%20of%20Unaudited%20Fiscal%20Third%20Quarter%202025%20Results) Ciena provided supplemental Q3 FY2025 materials on its investor relations website and hosted a live audio webcast with management to discuss results and outlook - Related supporting materials for unaudited fiscal third quarter 2025 results posted to the Quarterly Results page of the Investor Relations section of Ciena's website[9](index=9&type=chunk) - Management hosted a live audio web broadcast at 8:30 a.m. Eastern on September 4, 2025, accessible via www.ciena.com, with an archived replay available[10](index=10&type=chunk) [Notes to Investors](index=4&type=section&id=Notes%20to%20Investors) This section provides important disclosures regarding forward-looking statements and the use of non-GAAP financial measures for investors [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section advises investors to review Ciena's website and SEC filings for material information, highlighting forward-looking statements and outlining risks like economic conditions, supply chain, competition, and geopolitical events - Forward-looking statements are based on current expectations and involve risks and uncertainties, including broader economic conditions, supply chain disruptions, new technologies, customer order timing, competitive pressure, foreign currency rates, and geopolitical tensions[13](index=13&type=chunk) - Investors are encouraged to review the Investors section of Ciena's website and SEC filings (e.g., Form 10-K, 10-Q) for routine disclosures and risk factors[13](index=13&type=chunk) [Non-GAAP Financial Measures Presentation](index=4&type=section&id=Non-GAAP%20Presentation%20of%20Quarterly%20and%20Annual%20Results) Ciena uses non-GAAP measures to provide insight into operating performance by excluding unusual, non-cash, or non-ordinary course items, noting that quantitative reconciliation for certain forward-looking guidance is not feasible - Non-GAAP measures (gross profit, operating expense, income from operations, EBITDA, net income, EPS) exclude unusual, non-cash, or non-ordinary course charges and credits to provide useful insight into operating performance[14](index=14&type=chunk) - A quantitative reconciliation of adjusted (non-GAAP) gross margin and operating expense guidance to GAAP measures is not provided due to the forward-looking nature, inherent variability, and uncertainty of estimates[15](index=15&type=chunk)[16](index=16&type=chunk) [Condensed Consolidated Financial Statements (Unaudited)](index=6&type=section&id=CIENA%20CORPORATION%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) This section presents Ciena's unaudited condensed consolidated statements of operations, balance sheets, and cash flows for the reported periods [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Ciena's Q3 FY2025 consolidated statements of operations show total revenue of **$1.219 billion** and net income of **$50.3 million** (**$0.35** diluted EPS), significantly up from Q3 FY2024 Condensed Consolidated Statements of Operations (Q3 FY2025 vs. Q3 FY2024) | Metric | Q3 FY2025 (in thousands) | Q3 FY2024 (in thousands) | | :--- | :--- | :--- | | Total revenue | $1,219,385 | $942,308 | | Gross profit | $503,079 | $403,945 | | Total operating expenses | $429,544 | $377,202 | | Income from operations | $73,535 | $26,743 | | Net income | $50,308 | $14,230 | | Diluted net income per potential common share | $0.35 | $0.10 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=CIENA%20CORPORATION%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of August 2, 2025, Ciena's total assets increased to **$5.749 billion**, driven by higher cash and accounts receivable, with total liabilities also increasing to **$2.961 billion** Condensed Consolidated Balance Sheets (August 2, 2025 vs. November 2, 2024) | Metric | August 2, 2025 (in thousands) | November 2, 2024 (in thousands) | | :--- | :--- | :--- | | Total assets | $5,748,778 | $5,641,337 | | Cash and cash equivalents | $1,055,976 | $934,863 | | Accounts receivable, net | $1,025,563 | $908,597 | | Inventories, net | $860,403 | $820,430 | | Total current assets | $3,686,223 | $3,544,416 | | Total liabilities | $2,961,477 | $2,825,199 | | Total stockholders' equity | $2,787,301 | $2,816,138 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=CIENA%20CORPORATION%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the nine months ended August 2, 2025, Ciena generated **$435.0 million** in net cash from operating activities, with **$27.7 million** used in investing and **$286.1 million** in financing, primarily for stock repurchases Condensed Consolidated Statements of Cash Flows (Nine Months Ended August 2, 2025 vs. July 27, 2024) | Metric | Nine Months Ended August 2, 2025 (in thousands) | Nine Months Ended July 27, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $435,016 | $165,172 | | Net cash used in investing activities | $(27,732) | $(157,546) | | Net cash used in financing activities | $(286,145) | $(136,382) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $121,199 | $(127,257) | | Cash, cash equivalents and restricted cash at end of period | $1,056,225 | $883,529 | [Appendices - GAAP to Non-GAAP Reconciliations](index=9&type=section&id=APPENDIX%20A%20-%20Reconciliation%20of%20Adjusted%20(Non-%20GAAP)%20Measurements) This appendix provides detailed reconciliations of GAAP to non-GAAP financial measures, including gross profit, operating expense, income from operations, net income, and EBITDA [Gross Profit Reconciliation](index=9&type=section&id=Gross%20Profit%20Reconciliation%20(GAAP/non-GAAP)) Adjusted (non-GAAP) gross profit for Q3 FY2025 was **$511.3 million**, exceeding GAAP gross profit of **$503.1 million**, primarily due to excluding share-based compensation and intangible asset amortization Q3 FY2025 Gross Profit Reconciliation (in thousands) | Metric | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | GAAP gross profit | $503,079 | $403,945 | | Total adjustments related to gross profit | $8,201 | $7,546 | | Adjusted (non-GAAP) gross profit | $511,280 | $411,491 | | Adjusted (non-GAAP) gross profit percentage | 41.9 % | 43.7 % | [Operating Expense Reconciliation](index=9&type=section&id=Operating%20Expense%20Reconciliation%20(GAAP/non-GAAP)) Adjusted (non-GAAP) operating expense for Q3 FY2025 was **$380.2 million**, lower than GAAP's **$429.5 million**, after excluding share-based compensation, impairments, restructuring, and intangible amortization Q3 FY2025 Operating Expense Reconciliation (in thousands) | Metric | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | GAAP operating expense | $429,544 | $377,202 | | Total adjustments related to operating expense | $49,360 | $41,236 | | Adjusted (non-GAAP) operating expense | $380,184 | $335,966 | [Income from Operations Reconciliation](index=9&type=section&id=Income%20from%20Operations%20Reconciliation%20(GAAP/non-GAAP)) Adjusted (non-GAAP) income from operations for Q3 FY2025 significantly increased to **$131.1 million** from GAAP's **$73.5 million**, resulting in an adjusted operating margin of **10.7%** Q3 FY2025 Income from Operations Reconciliation (in thousands) | Metric | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | GAAP income from operations | $73,535 | $26,743 | | Total adjustments related to income from operations | $57,561 | $48,782 | | Adjusted (non-GAAP) income from operations | $131,096 | $75,525 | | Adjusted (non-GAAP) operating margin percentage | 10.7 % | 8.0 % | [Net Income Reconciliation](index=9&type=section&id=Net%20Income%20Reconciliation%20(GAAP/non-GAAP)) Adjusted (non-GAAP) net income for Q3 FY2025 was **$96.2 million** (**$0.67** diluted EPS), substantially higher than GAAP's **$50.3 million** (**$0.35** diluted EPS), after adjustments Q3 FY2025 Net Income Reconciliation (in thousands, except per share data) | Metric | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | GAAP net income | $50,308 | $14,230 | | Adjusted (non-GAAP) net income | $96,236 | $50,807 | | GAAP diluted net income per potential common share | $0.35 | $0.10 | | Adjusted (non-GAAP) diluted net income per potential common share | $0.67 | $0.35 | [EBITDA and Adjusted EBITDA Calculation](index=10&type=section&id=Calculation%20of%20EBITDA%20and%20Adjusted%20EBITDA) Ciena's Q3 FY2025 EBITDA was **$109.2 million**, and Adjusted EBITDA reached **$158.0 million**, reflecting adjustments for share-based compensation and restructuring costs Q3 FY2025 EBITDA and Adjusted EBITDA (in thousands) | Metric | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | Net income (GAAP) | $50,308 | $14,230 | | EBITDA | $109,189 | $59,673 | | Adjusted EBITDA | $157,962 | $98,506 | [Explanation of Non-GAAP Adjustments](index=10&type=section&id=Explanation%20of%20Non-GAAP%20Adjustments) This section details non-GAAP adjustments, including share-based compensation, asset impairments, restructuring costs, intangible asset amortization, and a **22.0%** blended non-GAAP tax provision - Share-based compensation is a non-cash expense incurred per accounting guidance[29](index=29&type=chunk) - Significant asset impairments and restructuring costs are incurred to align resources with market opportunities, redesign business processes, and restructure real estate facilities[29](index=29&type=chunk) - Amortization of intangible assets is a non-cash expense from acquired intangible assets (developed technologies, customer-related intangibles) amortized over their useful life[29](index=29&type=chunk) - Non-GAAP tax provision uses a current, blended U.S. and foreign statutory annual tax rate of **22.0%** for both fiscal 2025 and 2024 Q3[29](index=29&type=chunk) [About Ciena](index=5&type=section&id=About%20Ciena) This section provides an overview of Ciena Corporation, highlighting its role as a global leader in networking systems, services, and software [Company Overview](index=5&type=section&id=Company%20Overview) Ciena Corporation is a global leader in networking systems, services, and software, focused on building adaptive, flexible, open, and sustainable networks to meet increasing digital demands - Ciena (NYSE: CIEN) is a global leader in networking systems, services, and software, building adaptive networks to anticipate and meet digital demands[17](index=17&type=chunk) - The company prioritizes collaborative relationships with customers, partners, and communities to create flexible, open, and sustainable networks[17](index=17&type=chunk)

Group 1 - Ciena Corporation is set to release its third-quarter earnings results on September 4, with analysts expecting earnings of 53 cents per share, an increase from 35 cents per share in the same period last year [1] - The anticipated quarterly revenue for Ciena is $1.17 billion, compared to $942.31 million a year earlier [1] - Marc Graff has been appointed as the Senior Vice President and Chief Financial Officer of Ciena as of June 18 [1] Group 2 - Ciena shares increased by 1.3%, closing at $94.82 on Wednesday [2] - Analysts have provided various ratings and price targets for Ciena, with Stifel maintaining a Buy rating and raising the price target from $90 to $100 [7] - Rosenblatt maintained a Neutral rating and increased the price target from $78 to $100, while JP Morgan raised its Overweight rating price target from $83 to $105 [7] - Morgan Stanley downgraded the stock from Equal-Weight to Underweight, reducing the price target from $73 to $70 [7] - Wolfe Research initiated coverage with an Outperform rating [7]