Ciena (CIEN) Q2 Earnings Top Estimates, Revenues Decline Y/Y

Core Insights - Ciena Corporation reported adjusted earnings per share (EPS) of 27 cents for Q2 fiscal 2024, exceeding the Zacks Consensus Estimate of 15 cents, but reflecting a 63.5% decline year over year [1][2] Financial Performance - Total revenues decreased by 19.6% year over year to $910.8 million, although this figure surpassed the Zacks Consensus Estimate by 1.6% [12] - Adjusted gross margin was reported at 43.5%, slightly down from 43.7% a year ago [8] - Adjusted operating expenses were $333.9 million, a decrease of 1.2% from the previous year [8] - Net cash generated from operating activities was $58.5 million, down from $230 million in the prior-year quarter [9] Segment Results - Platform Software and Services revenues increased by 23.1% year over year to $85.4 million [4] - Global Services revenues rose by 5.4% year over year to $134.7 million [5] - Networking Platforms, which account for 74.2% of total revenues, saw a 26% decline year over year to $676.3 million [15] - Blue Planet Automation Software and Services revenues decreased by 30% to $14.4 million [16] Customer and Market Dynamics - Non-telco customer revenues represented 46% of total revenues, with a significant customer contributing 13.8% to the top line [6] - Ciena added 20 new customers for WaveLogic 5 Extreme, bringing the total to 290 [18] - Demand for bandwidth remains strong due to increased cloud adoption and AI technology proliferation, driving network traffic growth [14] Guidance and Future Outlook - For fiscal 2024, Ciena anticipates revenues of $4 billion, down from the previous projection of $4-$4.3 billion [13] - For Q3 fiscal 2024, management expects revenues between $880 million and $960 million, with adjusted gross margin in the low to mid 40% range [27] Cash Flow and Share Repurchase - In the reported quarter, Ciena repurchased approximately 1.1 million shares for $57 million [20] - The company plans to repurchase shares worth $250 million in fiscal 2024 [21] Financial Position - As of April 27, Ciena had $1.42 billion in cash and investments and $1.54 billion in net long-term debt [26]