Ciena(CIEN) - 2023 Q1 - Quarterly Report

Revenue Growth - Total revenue for the quarter ended January 28, 2023, was $1,056,521, an increase from$844,443 for the same period in 2022, representing a growth of approximately 25%[37]. - Revenue for the Americas region increased by 28.6% to $765.1 million for the quarter ended January 28, 2023, compared to$595.1 million for the same period in 2022[23]. - The APAC region revenue increased by 40.7% to $138.6 million for the quarter ended January 28, 2023, compared to$98.5 million for the same period in 2022[23]. - Ciena's revenue from services transferred over time was $169.3 million, which includes$103.3 million from services recognized over time[51]. - Revenue from Networking Platforms was $855,139, up 36.5$626,646 year-over-year, with Converged Packet Optical revenue increasing by 36.0% to $735,634[169]. Profitability - Net income for the quarter was$76,241, compared to $45,823 in the prior year, reflecting a year-over-year increase of about 66$71.8 million, but gross margin decreased by 230 basis points due to lower service margins and increased component costs from global supply chain shortages[16]. - Segment profit for Networking Platforms reached $202.1 million in Q1 2023, compared to$134.1 million in Q1 2022, reflecting a year-over-year increase of 50.7%[139]. - The total segment profit for all segments combined was $274.2 million in Q1 2023, compared to$235.8 million in Q1 2022, reflecting an increase of 16.3%[139]. Expenses - Research and development expenses rose by 22.5% to $181.7 million for the quarter ended January 28, 2023, compared to$148.4 million for the same period in 2022[27]. - Total operating expenses increased by 14.4% to $370.7 million for the quarter ended January 28, 2023, compared to$324.2 million for the same period in 2022[27]. - Operating expenses increased due to higher employee-related costs and professional services, reflecting the impact of acquisitions[200]. Cash Flow and Liquidity - Cash and cash equivalents increased to $1,054,549 as of January 28, 2023, up from$994,352 as of October 29, 2022, indicating a growth of approximately 6.5%[29]. - Cash flows used in operating activities for the quarter were $(265,639), compared to$(54,411) in the same quarter last year, indicating a significant increase in cash outflow[32]. - Total cash used for working capital was $392.3 million, with significant cash outflows in accounts receivable and inventories[206]. - Cash, cash equivalents, and investments decreased by$25.5 million during the first three months of fiscal 2023, totaling $1.2 billion as of January 28, 2023[205]. Acquisitions - Ciena acquired Benu and Tibit for a total of approximately$291.7 million, with $244.7 million paid in cash, enhancing its portfolio of broadband access solutions[91]. - The company incurred approximately$2.5 million in acquisition-related costs associated with the acquisitions of Benu and Tibit[91]. - The company made an acquisition that resulted in a cash outflow of $(230,048) during the quarter, compared to$(56,036) in the same period last year[32]. Inventory and Assets - The company’s inventory increased from $946.7 million at the end of fiscal 2022 to$1.2 billion at the end of the first quarter of fiscal 2023 due to supply chain constraints[164]. - Total current assets rose to $3,762,569 from$3,385,896, marking an increase of about 11%[29]. - Total liabilities increased to $2,834,202 from$2,356,771, which is an increase of approximately 20%[29]. - The reserve for inventory excess and obsolescence was $38,900 thousand as of January 28, 2023, slightly up from$36,086 thousand on October 29, 2022[84]. Market Conditions - The company expects order growth relative to revenue to continue to moderate after experiencing unprecedented order volumes from Q2 2021 to Q3 2022[10]. - Global supply chain challenges are expected to persist, impacting costs and lead times through fiscal 2023[180]. Tax and Compliance - The effective tax rate for the quarter ended January 28, 2023, was higher than the previous year due to mandatory capitalization of research and development expenses[79]. - Provision for income taxes rose to $25,078, an increase of 172.0$9,219 in the prior year[201]. Shareholder Actions - The company has repurchased an aggregate of 8.4 million shares for $500.0 million at an average price of$59.28 per share, with $500.0 million remaining under its stock repurchase program[172]. - Ciena repurchased shares worth$13.0 million during the first three months of fiscal 2023 to satisfy employee tax withholding obligations[135].