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Ciena Reports Fiscal First Quarter 2021 Financial Results

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Ciena® Corporation (NYSE: CIEN), a networking systems, services and software company, today announced unaudited financial results for its fiscal first quarter ended January 30, 2021.

  • Q1 Revenue: $757.1 million
  • Q1 Net Income per Share: $0.35 GAAP; $0.52 adjusted (non-GAAP)
  • Share Repurchases: Repurchased approximately 0.3 million shares of common stock for an aggregate price of $13.2 million during the quarter

"We delivered solid revenue and profitability in the first fiscal quarter in the face of continued challenging market conditions and a dynamic industry environment," said Gary Smith, president and CEO of Ciena. "Our strong market position has enabled us to start the year largely as expected, and we are leveraging our innovation leadership and competitive advantage to deliver on our long-term growth opportunities."

For the fiscal first quarter 2021, Ciena reported revenue of $757.1 million as compared to $832.9 million for the fiscal first quarter 2020.

Ciena's GAAP net income for the fiscal first quarter 2021 was $55.3 million, or $0.35 per diluted common share, which compares to a GAAP net income of $62.3 million, or $0.40 per diluted common share, for the fiscal first quarter 2020.

Ciena's adjusted (non-GAAP) net income for the fiscal first quarter 2021 was $81.3 million, or $0.52 per diluted common share, which compares to an adjusted (non-GAAP) net income of $81.7 million, or $0.52 per diluted common share, for the fiscal first quarter 2020.

Fiscal First Quarter 2021 Performance Summary

The tables below (in millions, except percentage data) provide comparisons of certain quarterly results to the prior year. Appendices A and B set forth reconciliations between the GAAP and adjusted (non-GAAP) measures contained in this release.

 

GAAP Results

 

Q1

 

Q1

 

 

 

FY 2021

 

FY 2020

 

Y-T-Y*

Revenue

$

757.1

 

$

832.9

 

(9.1

)%

Gross margin

 

47.3

%

 

44.5

%

2.8

%

Operating expense

$

282.1

 

$

292.6

 

(3.6

)%

Operating margin

 

10.0

%

 

9.4

%

0.6

%

 

 

Non-GAAP Results

 

Q1

 

Q1

 

 

 

FY 2021

 

FY 2020

 

Y-T-Y*

Revenue

$

757.1

 

$

832.9

 

(9.1

)%

Adj. gross margin

 

48.0

%

 

45.1

%

2.9

%

Adj. operating expense

$

253.0

 

$

266.4

 

(5.0

)%

Adj. operating margin

 

14.6

%

 

13.1

%

1.5

%

Adj. EBITDA

$

133.8

 

$

135.3

 

(1.1

)%

 

* Denotes % change, or in the case of margin, absolute change

 

 

Revenue by Segment

 

 

Q1 FY 2021

 

Q1 FY 2020

 

 

Revenue

 

%**

 

Revenue

 

%**

Networking Platforms

 

 

 

 

 

 

 

 

Converged Packet Optical

 

$

512.3

 

 

67.7

 

 

$

591.5

 

 

71.0

 

Routing and Switching (1)

 

64.3

 

 

8.5

 

 

67.5

 

 

8.1

 

Total Networking Platforms

 

576.6

 

 

76.2

 

 

659.0

 

 

79.1

 

 

 

 

 

 

 

 

 

 

Platform Software and Services

 

49.9

 

 

6.6

 

 

51.9

 

 

6.2

 

 

 

 

 

 

 

 

 

 

Blue Planet Automation Software and Services

 

16.9

 

 

2.2

 

 

15.5

 

 

1.9

 

 

 

 

 

 

 

 

 

 

Global Services

 

 

 

 

 

 

 

 

Maintenance Support and Training

 

67.6

 

 

8.9

 

 

61.8

 

 

7.4

 

Installation and Deployment

 

39.6

 

 

5.2

 

 

34.9

 

 

4.2

 

Consulting and Network Design

 

6.5

 

 

0.9

 

 

9.8

 

 

1.2

 

Total Global Services

 

113.7

 

 

15.0

 

 

106.5

 

 

12.8

 

 

 

 

 

 

 

 

 

 

Total

 

$

757.1

 

 

100.0

 

 

$

832.9

 

 

100.0

 

**

Denotes % of total revenue 

 

(1)

 

Ciena renamed its former “Packet Networking” product line as “Routing and Switching” effective as of the beginning of fiscal 2021. This change, affecting only the presentation of such information, was made on a prospective basis and does not impact comparability of previous financial results or the composition of this product category.

Additional Performance Metrics for Fiscal First Quarter 2021

 

 

Revenue by Geographic Region

 

 

Q1 FY 2021

 

Q1 FY 2020

 

 

Revenue

 

% **

 

Revenue

 

% **

Americas

 

$

496.6

 

 

65.6

 

 

$

574.0

 

 

68.9

 

Europe, Middle East and Africa

 

155.4

 

 

20.5

 

 

130.0

 

 

15.6

 

Asia Pacific

 

105.1

 

 

13.9

 

 

128.9

 

 

15.5

 

Total

 

$

757.1

 

 

100.0

 

 

$

832.9

 

 

100.0

 

 

** Denotes % of total revenue

  • No customer represented more than 10% of revenue for the fiscal quarter
  • Cash and investments totaled $1.3 billion
  • Cash flow used in operations totaled $7.3 million
  • Average days' sales outstanding (DSOs) were 93
  • Accounts receivable, net balance was $700.0 million
  • Unbilled contract asset, net balance was $85.5 million
  • Inventories totaled $389.7 million, including:
    • Raw materials: $123.4 million
    • Work in process: $11.4 million
    • Finished goods: $257.0 million
    • Deferred cost of sales: $38.9 million
    • Reserve for excess and obsolescence: $(41.0) million
  • Product inventory turns were 3.2
  • Headcount totaled 7,042

Supplemental Materials and Live Web Broadcast of Unaudited Fiscal First Quarter 2021 Results

Today, Thursday, March 4, 2021, in conjunction with this announcement, Ciena has posted to the Quarterly Results page of the Investor Relations section of its website an accompanying investor presentation for its unaudited fiscal first quarter 2021 results.

Ciena's management will also host a discussion today with investors and financial analysts that will include the Company's outlook. The live audio web broadcast beginning at 8:30 a.m. Eastern will be accessible via www.ciena.com. An archived replay of the live broadcast will be available shortly following its conclusion on the Investor Relations page of Ciena's website.

Notes to Investors

Forward-Looking Statements. You are encouraged to review the Investors section of our website, where we routinely post press releases, Securities and Exchange Commission ("SEC") filings, recent news, financial results, supplemental financial information, and other announcements. From time to time we exclusively post material information to this website along with other disclosure channels that we use. This press release contains certain forward-looking statements that involve risks and uncertainties. These statements are based on current expectations, forecasts, assumptions and other information available to the Company as of the date hereof. Forward-looking statements include statements regarding Ciena's expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. Forward-looking statements in this release include: "We delivered solid revenue and profitability in the first fiscal quarter in the face of continued challenging market conditions and a dynamic industry environment," and "Our strong market position has enabled us to start the year largely as expected, and we are leveraging our innovation leadership and competitive advantage to deliver on our long-term growth opportunities."

Ciena's actual results, performance or events may differ materially from these forward-looking statements made or implied due to a number of risks and uncertainties relating to Ciena's business, including: the effect of broader economic and market conditions on our customers and their business; our ability to execute successfully our business and growth strategies; the duration and severity of the COVID-19 pandemic and its impact on macroeconomic conditions, economic activity, demand for our technology solutions, short- and long-term changes in customer or end user needs, continuity of supply chain, our business operations, liquidity, and financial results; changes in network spending or network strategy by customers; seasonality and the timing and size of customer orders, including our ability to recognize revenue relating to such sales; the level of competitive pressure we encounter; the product, customer and geographic mix of sales within the period; supply chain disruptions and the level of success relating to efforts to optimize Ciena's operations; changes in foreign currency exchange rates affecting revenue and operating expense; factors beyond our control such as natural disasters, acts of war or terrorism, and public health emergencies, including the COVID-19 pandemic; the impact of the Tax Cuts and Jobs Act; changes in tax or trade regulations, including the imposition of tariffs, duties or efforts to withdraw from or materially modify international trade agreements; changes in estimates of prospective income tax rates and any adjustments to Ciena's provisional estimates whether related to further guidance, analysis or otherwise; and the other risk factors disclosed in its Annual Report on Form 10-K filed with the SEC on December 18, 2020 and included in its Quarterly Report on Form 10-Q for the first quarter of fiscal 2021 to be filed with the SEC. Ciena assumes no obligation to update any forward-looking information included in this press release.

Non-GAAP Presentation of Quarterly and Annual Results. This release includes non-GAAP measures of Ciena's gross profit, operating expense, income from operations, earnings before interest, tax, depreciation and amortization (EBITDA), Adjusted EBITDA, and measures of net income and net income per share. In evaluating the operating performance of Ciena's business, management excludes certain charges and credits that are required by GAAP. These items share one or more of the following characteristics: they are unusual and Ciena does not expect them to recur in the ordinary course of its business; they do not involve the expenditure of cash; they are unrelated to the ongoing operation of the business in the ordinary course; or their magnitude and timing is largely outside of Ciena's control. Management believes that the non-GAAP measures below provide management and investors useful information and meaningful insight to the operating performance of the business. The presentation of these non-GAAP financial measures should be considered in addition to Ciena's GAAP results and these measures are not intended to be a substitute for the financial information prepared and presented in accordance with GAAP. Ciena's non-GAAP measures and the related adjustments may differ from non-GAAP measures used by other companies and should only be used to evaluate Ciena's results of operations in conjunction with our corresponding GAAP results. To the extent not previously disclosed in a prior Ciena financial results press release, Appendices A and B to this press release set forth a complete GAAP to non-GAAP reconciliation of the non-GAAP measures contained in this release.

About Ciena. Ciena (NYSE: CIEN) is a networking systems, services and software company. We provide solutions that help our customers create the Adaptive Network™ in response to the constantly changing demands of their users. By delivering best-in-class networking technology through high-touch consultative relationships, we build the world’s most agile networks with automation, openness and scale. For updates on Ciena, follow us on Twitter @Ciena, LinkedIn, the Ciena Insights blog, or visit www.ciena.com.

CIENA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

 

 

Quarter Ended

 

 

January 30,

 

February 1,

 

 

2021

 

2020

Revenue:

 

 

 

 

Products

 

$

597,220

 

 

$

687,215

 

Services

 

159,910

 

 

145,697

 

Total revenue

 

757,130

 

 

832,912

 

Cost of goods sold:

 

 

 

 

Products

 

315,098

 

 

389,013

 

Services

 

84,141

 

 

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Telephone Apparatus Manufacturing
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About CIEN

ciena corporation is a global manufacturer of communications network equipment and solutions, with expertise in packet-optical transport, packet-optical switching, carrier ethernet, and network support services. many of the world’s largest carriers and service providers have deployed ciena solutions in their network; including at&t, bt, cable & wireless, centurylink, comcast, france telecom, korea telecom, sprint, reliance, southern cross, tata communications, telecom argentina, telmex, virgin media and verizon. ciena also counts numerous national research and education networks as customers, as well as enterprises in the healthcare, finance, transportation and retail industries for real-time, latency sensitive applications such as disaster recovery/business continuity, san/lan extension, data center consolidation and grid computing. we specialize in helping customers transition to service driven networks that fundamentally change the way they compete. with expertise in optical a