Ciena(CIEN) - 2024 Q3 - Quarterly Report

Revenue Performance - Revenue declined by 11.8% in Q3 fiscal 2024 compared to Q3 fiscal 2023, and 11.2% in the first nine months of fiscal 2024 compared to the same period in fiscal 2023[95]. - Total revenue for the quarter ended July 27, 2024, was $942.3 million, a decrease of 11.8$1,067.9 million for the same quarter in 2023[107]. - Total revenue for the nine months ended July 27, 2024, was $2.89 billion, down 11.2$3.26 billion in the prior year[107]. - Product revenue for the quarter ended July 27, 2024, was $729.5 million, a decrease of 15.7$865.2 million for the same quarter in 2023[108]. - Services revenue for the quarter ended July 27, 2024, was $212.8 million, an increase of 5.0$202.7 million for the same quarter in 2023[109]. Segment Performance - Networking Platforms segment revenue decreased by $147.0 million in Q3 fiscal 2024, with Optical Networking products down$112.1 million and Routing and Switching products down $34.9 million[97]. - Platform Software and Services revenue increased by 5.5$433.5 million over nine months, with Optical Networking products down $376.2 million and Routing and Switching products down$57.3 million[100]. - Networking Platforms segment profit decreased by $201.1 million for the nine months ended July 27, 2024, primarily due to lower product sales volume and increased research and development costs[119]. - Platform Software and Services segment profit increased by$29.1 million for the nine months ended July 27, 2024, primarily due to higher sales volume[119]. Backlog and Orders - Backlog decreased to $2.1 billion as of the end of Q3 fiscal 2024, down from$4.2 billion at the end of fiscal 2022[90]. - Order levels relative to revenue increased in Q3 fiscal 2024, attributed to rising bandwidth demand related to generative AI[89]. - The timing and pace of backlog fulfillment will significantly impact revenue, with potential volatility in results due to customer readiness and capital expenditure constraints[91]. - The company expects gradual improvements in order volumes and dynamics, influenced by macroeconomic factors and customer inventory levels[89]. Geographic Revenue Performance - Americas revenue decreased by $30.9 million for the quarter, driven by a$41.8 million decline in Networking Platforms segment sales[103]. - EMEA revenue decreased by $17.8 million for the quarter, primarily due to a$27.0 million decrease in Networking Platforms segment sales[103]. - APAC revenue decreased by $76.9 million for the quarter, mainly reflecting a$78.3 million decline in Networking Platforms segment sales[103]. Cost and Profitability - Total cost of goods sold for the quarter was $538.4 million, down 13.0$618.9 million in the prior year[107]. - Gross profit for the quarter was $403.9 million, a decrease of 10.0$448.9 million in the same quarter last year, with a gross margin of 42.9%[107]. - Gross profit for products decreased by $52.3 million, while gross margin slightly increased by 30 basis points due to product cost reductions[109]. - Gross profit for services increased by$7.3 million, with gross margin rising by 100 basis points, primarily due to improved margins on Blue Planet software services[109]. - Total operating expenses for the quarter ended July 27, 2024, were $377.2 million, an increase of 1.7$370.7 million for the same quarter in 2023[112]. Expenses and Income - Research and development expenses for the quarter decreased by $0.5 million, reflecting decreases in professional services[112]. - General and administrative expenses increased by$8.9 million, primarily due to an increase in legal fees[113]. - Interest and other income, net increased by $3.8 million, primarily from higher interest income on investments[116]. - Provision for income taxes decreased by 93.9$2.1 million for the quarter ended July 27, 2024, compared to $34.6 million for the same quarter in 2023[116]. - Significant asset impairments and restructuring costs decreased by 67.4$1.4 million for the quarter ended July 27, 2024, compared to $4.2 million for the same quarter in 2023[112]. Cash Flow and Investments - Cash from operations generated$165.2 million for the nine months ended July 27, 2024, exceeding working capital requirements of approximately $139.0 million[121]. - Cash, cash equivalents, and investments decreased by$36.6 million during the first nine months of fiscal 2024, with cash used for stock repurchases totaling $125.8 million[122]. - Total cash, cash equivalents, and investments in marketable debt securities amounted to$1.2 billion as of July 27, 2024[123]. - The company repurchased an additional $118.0 million of common stock under its stock repurchase program during the first nine months of fiscal 2024[124]. - Days sales outstanding (DSOs) increased from 94 to 97 for the first nine months of fiscal 2024[128]. Tax and Accounting - Provision for income taxes decreased by$64.6 million for the first nine months of fiscal 2024, primarily due to a decrease in pre-tax book income[118]. - The effective tax rate for the first nine months of fiscal 2024 was lower than the effective tax rate for the first nine months of fiscal 2023 due to a reduction in capitalized research and development expenses[118]. - There have been no material changes to the company's critical accounting policies and estimates since October 28, 2023[131]. - The company is exposed to market risks related to changes in interest rates and foreign currency exchange rates[133]. - For detailed information on recent accounting pronouncements, refer to Note 2 in the Condensed Consolidated Financial Statements[132].