Ciena (NYSE: CIEN) posts strong Q1 2026 growth on cloud and AI demand
Filing Impact
Filing Sentiment
Form Type
10-Q
Rhea-AI Filing Summary
Ciena Corporation delivered strong first-quarter fiscal 2026 results, with revenue rising to
Net income jumped to
Positive
- Revenue and earnings surge: Quarterly revenue grew
33.1% year over year to$1.43 billion , while net income rose to$150.3 million from$44.6 million , and diluted EPS increased to$1.03 from$0.31 , reflecting strong operating leverage. - Robust cash generation and balance sheet: Operating cash flow more than doubled to
$227.6 million , and cash, cash equivalents and investments totaled about$1.37 billion , providing support for ongoing R&D investment and share repurchases. - Strength in core Networking Platforms: Networking Platforms revenue increased
39.9% to$1.15 billion , with Optical Networking up40.5% , underscoring strong demand from cloud providers and service providers.
Negative
- None.
Insights
Ciena posted strong growth and profitability, led by cloud and AI demand.
Ciena grew revenue
Net income more than tripled to
Cash from operations increased to
Stronger cash generation supports debt load and ongoing buybacks.
Ciena ended the quarter with
The company generated
Ciena also invested
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended January 31, 2026
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
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization)
(Address of principal executive offices)
(I.R.S. Employer Identification No.)
(Zip Code)
(410 ) 694-5700
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
| Emerging growth company | |||||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
| Class | Outstanding as of February 27, 2026 | |||||||
| Common Stock, par value $0.01 per share | ||||||||
CIENA CORPORATION
INDEX
FORM 10-Q
| PAGE NUMBER | |||||
PART I — FINANCIAL INFORMATION | |||||
Item 1. Financial Statements (unaudited) | 3 | ||||
Condensed Consolidated Statements of Operations for the Quarter Ended January 31, 2026 and February 1, 2025 | 3 | ||||
Condensed Consolidated Statements of Comprehensive Income for the Quarter Ended January 31, 2026 and February 1, 2025 | 4 | ||||
Condensed Consolidated Balance Sheets at January 31, 2026 and November 1, 2025 | 5 | ||||
Condensed Consolidated Statements of Cash Flows for the Three Months Ended January 31, 2026 and February 1, 2025 | 6 | ||||
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended January 31, 2026 and February 1, 2025 | 7 | ||||
Notes to Condensed Consolidated Financial Statements | 8 | ||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 24 | ||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 33 | ||||
Item 4. Controls and Procedures | 33 | ||||
PART II — OTHER INFORMATION | |||||
Item 1. Legal Proceedings | 34 | ||||
Item 1A. Risk Factors | 34 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 34 | ||||
Item 3. Defaults Upon Senior Securities | 34 | ||||
Item 4. Mine Safety Disclosures | 34 | ||||
Item 5. Other Information | 34 | ||||
Item 6. Exhibits | 36 | ||||
Signatures | 37 | ||||
2
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
CIENA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| Quarter Ended | |||||||||||
| January 31, | February 1, | ||||||||||
| 2026 | 2025 | ||||||||||
| Revenue: | |||||||||||
| Products | $ | $ | |||||||||
| Services | |||||||||||
| Total revenue | |||||||||||
| Cost of goods sold: | |||||||||||
| Products | |||||||||||
| Services | |||||||||||
| Total cost of goods sold | |||||||||||
| Gross profit | |||||||||||
| Operating expenses: | |||||||||||
| Research and development | |||||||||||
| Selling and marketing | |||||||||||
| General and administrative | |||||||||||
| Significant asset impairments and restructuring costs | |||||||||||
| Amortization of intangible assets | |||||||||||
| Acquisition and integration costs | |||||||||||
| Total operating expenses | |||||||||||
| Income from operations | |||||||||||
| Interest and other income, net | |||||||||||
| Interest expense | ( | ( | |||||||||
| Loss on extinguishment and modification of debt | ( | ||||||||||
| Income before income taxes | |||||||||||
| Provision for income taxes | |||||||||||
| Net income | $ | $ | |||||||||
| Basic net income per common share | $ | $ | |||||||||
| Diluted net income per potential common share | $ | $ | |||||||||
| Weighted average basic common shares outstanding | |||||||||||
| Weighted average dilutive potential common shares outstanding | |||||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
3
CIENA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
| Quarter Ended | |||||||||||
| January 31, | February 1, | ||||||||||
| 2026 | 2025 | ||||||||||
| Net income | $ | $ | |||||||||
| Unrealized loss on available-for-sale securities, net of tax | ( | ( | |||||||||
| Unrealized gain (loss) on foreign currency forward contracts, net of tax | ( | ||||||||||
| Unrealized gain on interest rate swaps, net of tax | |||||||||||
| Change in cumulative translation adjustments | ( | ||||||||||
| Other comprehensive income (loss) | ( | ||||||||||
| Total comprehensive income | $ | $ | |||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
4
CIENA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
| January 31, 2026 | November 1, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Short-term investments | |||||||||||
Accounts receivable, net of allowance for credit losses of $ | |||||||||||
| Inventories, net | |||||||||||
| Prepaid expenses and other | |||||||||||
| Total current assets | |||||||||||
| Long-term investments | |||||||||||
| Equipment, building, furniture and fixtures, net | |||||||||||
| Operating right-of-use assets | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Deferred tax asset, net | |||||||||||
| Other long-term assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued liabilities and other short-term obligations | |||||||||||
| Deferred revenue | |||||||||||
| Operating lease liabilities | |||||||||||
| Current portion of long-term debt | |||||||||||
| Total current liabilities | |||||||||||
| Long-term deferred revenue | |||||||||||
| Other long-term obligations | |||||||||||
| Long-term operating lease liabilities | |||||||||||
| Long-term debt, net | |||||||||||
| Total liabilities | |||||||||||
Commitments and contingencies (Note 18) | |||||||||||
| Stockholders’ equity: | |||||||||||
Preferred stock – par value $ | |||||||||||
Common stock – par value $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
5
CIENA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
| Three Months Ended | |||||||||||
| January 31, | February 1, | ||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows provided by operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements | |||||||||||
| Share-based compensation expense | |||||||||||
| Amortization of intangible assets | |||||||||||
| Deferred taxes | ( | ( | |||||||||
| Provision for inventory excess and obsolescence | |||||||||||
| Provision for warranty | |||||||||||
| Other | ( | ( | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Inventories | ( | ( | |||||||||
| Prepaid expenses and other | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Accounts payable, accruals and other obligations | ( | ( | |||||||||
| Deferred revenue | |||||||||||
| Short- and long-term operating lease liabilities | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows used in investing activities: | |||||||||||
| Payments for equipment, furniture and fixtures | ( | ( | |||||||||
| Purchases of investments | ( | ( | |||||||||
| Proceeds from sales and maturities of investments | |||||||||||
| Settlement of foreign currency forward contracts, net | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows used in financing activities: | |||||||||||
| Proceeds from modification of debt, net | |||||||||||
| Cash paid for extinguishment of debt | ( | ||||||||||
| Payment of long-term debt | ( | ||||||||||
| Payment of debt issuance costs | ( | ||||||||||
| Payment of finance lease obligations | ( | ( | |||||||||
| Shares repurchased for tax withholdings on vesting of stock unit awards | ( | ( | |||||||||
| Repurchases of common stock - repurchase program, net | ( | ( | |||||||||
| Proceeds from issuance of common stock | |||||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | ( | ||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
| Supplemental disclosure of cash flow information | |||||||||||
| Cash paid during the period for interest, net | $ | $ | |||||||||
| Cash paid during the period for income taxes, net | $ | $ | |||||||||
| Operating lease payments | $ | $ | |||||||||
| Non-cash investing and financing activities | |||||||||||
| Purchase of equipment in accounts payable | $ | $ | |||||||||
| Repurchase of common stock in accrued liabilities from repurchase program, net | $ | $ | |||||||||
| Operating right-of-use assets subject to lease liability | $ | $ | |||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
6
CIENA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands, except share data)
(unaudited)
| Common Stock Shares | Par Value | Additional Paid-in-Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
| Balance at November 1, 2025 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
| Repurchase of common stock - repurchase program, net | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
| Issuance of shares from employee equity plans | — | — | |||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
| Shares repurchased for tax withholdings on vesting of stock unit awards | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
| Balance at January 31, 2026 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Common Stock Shares | Par Value | Additional Paid-in-Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
| Balance at November 2, 2024 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Repurchase of common stock - repurchase program, net | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
| Issuance of shares from employee equity plans | — | — | |||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
| Shares repurchased for tax withholdings on vesting of stock unit awards | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
| Balance at February 1, 2025 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
7
CIENA CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(1) INTERIM FINANCIAL STATEMENTS
The interim financial statements for Ciena Corporation and its wholly owned subsidiaries (“Ciena”) included herein have been prepared by Ciena, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”).
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States (“GAAP”) requires Ciena to make judgments, assumptions, and estimates that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Among other things, these estimates form the basis for judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions. To the extent that there are material differences between Ciena’s estimates and actual results, Ciena’s consolidated financial statements will be affected.
In the opinion of management, the financial statements included in this report reflect all normal recurring adjustments that Ciena considers necessary for the fair statement of the results of operations of Ciena for the interim periods covered and of the financial position of Ciena at the date of the interim balance sheets. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to SEC rules and regulations. The Condensed Consolidated Balance Sheet as of November 1, 2025 was derived from audited financial statements but does not include all disclosures required by GAAP. However, Ciena believes that the disclosures are adequate to understand the information presented herein. The operating results for interim periods are not necessarily indicative of the operating results for the entire year. These financial statements should be read in conjunction with Ciena’s audited consolidated financial statements and the notes thereto included in Ciena’s Annual Report on Form 10-K for the fiscal year ended November 1, 2025 (the “2025 Annual Report”).
Ciena has a 52 or 53-week fiscal year, with quarters ending on the Saturday nearest to the last day of January, April, July, and October, respectively, of each year. Fiscal 2026 and Fiscal 2025 are each 52-week fiscal years.
(2)SIGNIFICANT ACCOUNTING POLICIES
There have been no material changes to Ciena’s significant accounting policies, compared to the accounting policies described in Note 1, Ciena Corporation and Significant Accounting Policies and Estimates, in “Notes to Consolidated Financial Statements” in Item 8 of Part II of the 2025 Annual Report.
Accounting Standards - Not Yet Effective
In December 2023, the FASB issued ASU No. 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740): Improvement to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures to decision makers. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, and will result in changes to certain income tax disclosures including substantially more information on a disaggregated basis, but it does not affect recognition or measurement of income taxes and therefore is not expected to have a material effect on our consolidated financial statements. The amendments are applied on a prospective basis; however, retrospective application is permitted.
In November 2024, the FASB issued ASU No. 2024-03 (“ASU 2024-03”), Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027; however, early adoption is permitted. ASU 2024-03 allows for adoption using either a prospective or retrospective method. Ciena is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.
8
In July 2025, the FASB issued ASU No. 2025-05 (“ASU 2025-05”), Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, to introduce a practical expedient for all entities, which simplifies the calculation required for estimating credit losses and assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods; however, early adoption is permitted. ASU 2025-25 allows for adoption using a prospective method. Ciena is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU No. 2025-06 (“ASU 2025-06”), Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) to modernize the accounting for software costs that are accounted for under Subtopic 350-40 by shifting away from prescriptive and sequential software development stages to an incremental and iterative method when capitalizing software costs. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. Ciena is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU No. 2025-11 (“ASU 2025-11”), Interim Reporting (Topic 270): Narrow-Scope Improvements, to improve the navigability of required interim disclosures, clarify when that guidance applies, and provide additional guidance on what disclosures should be provided in interim reporting periods. ASU 2025-11 is effective for interim reporting periods with annual reporting periods beginning after December 15, 2027, early adoption is permitted. ASU 2025-11 allows for adoption using the prospective or retrospective method. Ciena is currently evaluating the impact of this ASU on its interim financial statements and related disclosures.
(3) REVENUE
Segment and Product Line Disaggregation of Revenue
Ciena’s disaggregated segment and product line revenue as presented below depicts the nature, amount, and timing of revenue and cash flows for similar groupings of Ciena’s various offerings. The sales cycle, contractual obligations, customer requirements, and go-to-market strategies may differ for each of its product categories, resulting in different economic risk profiles for each category. Ciena has the following operating segments for reporting purposes: (i) Networking Platforms; (ii) Platform Software and Services; (iii) Blue Planet Automation Software and Services; and (iv) Global Services. See Note 17 below.
The tables below set forth Ciena’s disaggregated revenue for the respective periods (in thousands):
| Quarter Ended January 31, 2026 | |||||||||||||||||||||||||||||
| Segment | Total | ||||||||||||||||||||||||||||
| Networking Platforms | Platform Software and Services | Blue Planet Automation Software and Services | Global Services | ||||||||||||||||||||||||||
| Product lines: | |||||||||||||||||||||||||||||
| Optical Networking | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Routing and Switching | |||||||||||||||||||||||||||||
Platform Software and Services | |||||||||||||||||||||||||||||
Blue Planet Automation Software and Services | |||||||||||||||||||||||||||||
| Maintenance, Support, and Learning | |||||||||||||||||||||||||||||
| Implementation | |||||||||||||||||||||||||||||
| Advisory and Enablement | |||||||||||||||||||||||||||||
Total revenue by product line | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Timing of revenue recognition: | |||||||||||||||||||||||||||||
Products and services at a point in time | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Products and services transferred over time | |||||||||||||||||||||||||||||
Total revenue by timing of revenue recognition | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
9
| Quarter Ended February 1, 2025 | |||||||||||||||||||||||||||||
| Segment | Total | ||||||||||||||||||||||||||||
| Networking Platforms | Platform Software and Services | Blue Planet Automation Software and Services | Global Services | ||||||||||||||||||||||||||
| Product lines: | |||||||||||||||||||||||||||||
| Optical Networking | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Routing and Switching | |||||||||||||||||||||||||||||
Platform Software and Services | |||||||||||||||||||||||||||||
Blue Planet Automation Software and Services | |||||||||||||||||||||||||||||
| Maintenance, Support, and Learning | |||||||||||||||||||||||||||||
| Implementation | |||||||||||||||||||||||||||||
| Advisory and Enablement | |||||||||||||||||||||||||||||
Total revenue by product line | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Timing of revenue recognition: | |||||||||||||||||||||||||||||
Products and services at a point in time | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Products and services transferred over time | |||||||||||||||||||||||||||||
Total revenue by timing of revenue recognition | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
•Networking Platforms revenue reflects sales of Ciena’s Optical Networking and Routing and Switching product lines.
•Optical Networking - includes the 6500 Packet-Optical Platform, the Waveserver® system, the 6500 Reconfigurable Line System (RLS), coherent pluggable transceivers, and other optical networking products. These products are often combined and sold as solutions that address network applications including cloud and AI networking, datacenter interconnect, long haul, metro, submarine connectivity, and managed optical fiber networks (MOFN).
•Routing and Switching - includes the 3000 family of service delivery platforms and 5000 family of service aggregation platforms, the 8100 Coherent IP networking platforms, virtualization software, and other routing and switching portfolio products. Ciena also uses certain of these products to create its out-of-band data center management (DCOM) solutions.
Revenue from this segment is included in product revenue on the Condensed Consolidated Statements of Operations.
•Platform Software and Services revenue reflects sales of Ciena’s Platform Software and Platform Services.
•Platform Software - includes Ciena’s Navigator Network Control SuiteTM domain controller solution and its applications, and legacy software solutions.
•Platform Services - includes subscription, support, and consulting services related to Ciena’s software platforms, operating system software and enhanced software features embedded in each of the Networking Platforms product lines above.
Revenue from the software portion of this segment is included in product revenue on the Condensed Consolidated Statements of Operations. Revenue from services portion of this segment is included in services revenue on the Condensed Consolidated Statements of Operations.
•Blue Planet Automation Software and Services revenue reflects sales of Blue Planet Automation Software and Blue Planet Services.
•Blue Planet Automation Software - includes inventory management, orchestration, route optimization and analysis, and unified assurance and analytics software.
10
•Blue Planet Services - includes subscription, installation, support, consulting and design services related to the Blue Planet Automation Platform.
Revenue from the software portion of this segment is included in product revenue on the Condensed Consolidated Statements of Operations. Revenue from the services portion of this segment is included in services revenue on the Condensed Consolidated Statements of Operations.
•Global Services revenue reflects sales of a broad range of Ciena’s services for advisory and enablement, implementation, and maintenance, support, and learning activities.
Revenue from this segment is included in services revenue on the Condensed Consolidated Statements of Operations.
Revenue Recognition
•Revenue from the Networking Platforms segment includes, in addition to the products described above, sales of operating system software and enhanced software features embedded therein, which are each considered distinct performance obligations for which the revenue is generally recognized upfront at a point in time upon transfer of control.
•Revenue from software platforms typically reflects either perpetual or term-based software licenses, and these sales are considered distinct performance obligations where revenue is generally recognized upfront at a point in time upon transfer of control.
•Revenue from software subscription and support is recognized ratably over the period during which the services are performed.
•Revenue from professional services for customization, consulting, and design services relating to Ciena’s software offerings is recognized over time with Ciena applying the input method to determine the amount of revenue to be recognized in a given period.
•Revenue from maintenance and support is recognized ratably over the period during which the services are performed.
•Revenue from implementation services and advisory and enablement services is generally recognized over time with Ciena applying the input method to determine the amount of revenue to be recognized in a given period.
•Revenue from learning services is generally recognized at a point in time upon completion of the service.
For additional information on Ciena’s revenue recognition policy, see “Notes to Consolidated Financial Statements” in Item 8 of Part II of the 2025 Annual Report.
Geographic Disaggregation of Revenue
Ciena reports its sales geographically in the following markets: (i) the United States, Canada, the Caribbean and Latin America (“Americas”); (ii) Europe, Middle East and Africa (“EMEA”); and (iii) Asia Pacific, Japan and India (“APAC”). Within each geographic area, Ciena maintains specific teams or personnel that focus on a particular region, country, customer, or market vertical. These teams include sales management, account salespersons, and sales engineers, as well as services professionals and commercial management personnel. The following table reflects Ciena’s geographic distribution of revenue principally based on the relevant location for Ciena’s delivery of products and performance of services.
For the periods indicated, Ciena’s geographic distribution of revenue was as follows (in thousands):
| Quarter Ended | ||||||||||||||
| January 31, | February 1, | |||||||||||||
| 2026 | 2025 | |||||||||||||
| Geographic distribution: | ||||||||||||||
Americas | $ | $ | ||||||||||||
EMEA | ||||||||||||||
| APAC | ||||||||||||||
Total revenue by geographic distribution | $ | $ | ||||||||||||
11
Ciena’s revenue includes $1.08 billion and $752.5 million from the United States for the first quarter of fiscal 2026 and 2025, respectively. No other country accounted for 10% or more of total revenue for the periods indicated in the above table.
For the periods indicated, the only customers that accounted for 10% or more of total revenue were as follows (in thousands):
| Quarter Ended | |||||||||||
| January 31, | February 1, | ||||||||||
| 2026 | 2025 | ||||||||||
| Cloud provider A | $ | $ | |||||||||
| Cloud provider B | n/a* | ||||||||||
| Service provider A | n/a* | ||||||||||
| Service provider B | n/a* | ||||||||||
| Total | $ | $ | |||||||||
*Denotes revenue representing less than 10% of total revenue for the indicated period
Service provider A purchased products from each of Ciena’s operating segments for the periods presented. The other 10% customers included in the table above purchased products from Ciena’s Networking Platforms, Platform Software and Services, and Global Services operating segments for each of the periods presented.
Contract Balances
The following table provides information about receivables, contract assets, and contract liabilities (deferred revenue) from contracts with customers (in thousands):
| Balance at | Balance at | |||||||||||||
| January 31, 2026 | November 01, 2025 | |||||||||||||
| Accounts receivable, net | $ | $ | ||||||||||||
| Long-term accounts receivable | $ | $ | ||||||||||||
| Deferred revenue | $ | $ | ||||||||||||
| Contract assets for unbilled accounts receivable, net | $ | $ | ||||||||||||
Ciena’s contract assets represent unbilled accounts receivable, net where transfer of a product or service has occurred but invoicing is conditional upon completion of future performance obligations. These amounts are primarily related to implementation and professional services arrangements where transfer of control has occurred, but Ciena has not yet invoiced the customer. Contract assets are included in prepaid expenses and other on the Condensed Consolidated Balance Sheets.
Contract liabilities consist of deferred revenue and represent advanced payments against non-cancelable customer orders received prior to revenue recognition. Ciena recognized approximately $88.2 million and $74.5 million of revenue during the first three months of fiscal 2026 and 2025, respectively, that was included in the deferred revenue balance at November 1, 2025 and November 2, 2024, respectively. Revenue recognized due to changes in transaction price from performance obligations satisfied or partially satisfied in previous periods was immaterial during the three months ended January 31, 2026 and February 1, 2025.
As of the dates indicated, deferred revenue is comprised of the following (in thousands):
12
| January 31, 2026 | November 1, 2025 | ||||||||||
| Products | $ | $ | |||||||||
| Services | |||||||||||
| Total deferred revenue | |||||||||||
| Less current portion | ( | ( | |||||||||
| Long-term deferred revenue | $ | $ | |||||||||
Capitalized Contract Acquisition Costs
Capitalized contract acquisition costs consist of deferred sales commissions, and were $32.9 million and $37.4 million as of January 31, 2026 and November 1, 2025, respectively. Capitalized contract acquisition costs were included in (i) prepaid expenses and other and (ii) other long-term assets on the Condensed Consolidated Balance Sheets. The amortization expense associated with these costs was $10.8 million and $8.5 million during the first three months of fiscal 2026 and 2025, respectively, and was included in selling and marketing expense on the Condensed Consolidated Statements of Operations.
Remaining Performance Obligations
Remaining performance obligations (“RPO”) are comprised of non-cancelable customer purchase orders for products and services that are awaiting transfer of control for revenue recognition under the applicable contract terms. As of January 31, 2026, the aggregate amount of RPO was $2.3 billion. As of January 31, 2026, Ciena expects approximately 85 % of the RPO to be recognized as revenue within the next 12 months.
(4)SIGNIFICANT ASSET IMPAIRMENT AND RESTRUCTURING COSTS
Restructuring Costs
Ciena regularly monitors its spending to optimize operating expenses and to ensure that its strategic investments are aligned with its highest-growth demand opportunities. The following table sets forth the restructuring activity and balance of the restructuring liability accounts, which are included in accrued liabilities and other short-term obligations on the Condensed Consolidated Balance Sheets for the three months ended January 31, 2026 (in thousands):
| Workforce restructuring | Other restructuring activities | Total | |||||||||||||||
| Balance at November 1, 2025 | $ | $ | $ | ||||||||||||||
| Charges | (1) | ||||||||||||||||
| Cash payments | ( | ( | ( | ||||||||||||||
| Balance at January 31, 2026 | $ | $ | $ | ||||||||||||||
| Current restructuring liabilities | $ | $ | $ | ||||||||||||||
(1) Primarily represents costs related to restructured real estate facilities.
The following table sets forth the restructuring activity and balance of the restructuring liability accounts, which are included in accrued liabilities and other short-term obligations on the Condensed Consolidated Balance Sheets for the three months ended February 1, 2025 (in thousands):
| Workforce restructuring | Other restructuring activities | Total | |||||||||||||||
| Balance at November 2, 2024 | $ | $ | $ | ||||||||||||||
| Charges | (1) | ||||||||||||||||
| Cash payments | ( | ( | ( | ||||||||||||||
| Balance at February 1, 2025 | $ | $ | $ | ||||||||||||||
| Current restructuring liabilities | $ | $ | $ | ||||||||||||||
13
(1) Primarily represents costs related to restructured real estate facilities.
(5)INTEREST AND OTHER INCOME, NET
The components of interest and other income, net, are as follows for the periods indicated (in thousands):
| Quarter Ended | |||||||||||
| January 31, | February 1, | ||||||||||
| 2026 | 2025 | ||||||||||
| Interest income | $ | $ | |||||||||
Gains (losses) on non-hedge designated foreign currency forward contracts (1) | ( | ||||||||||
Foreign currency exchange gains (losses) (2) | ( | ||||||||||
| Other | ( | ||||||||||
| Interest and other income, net | $ | $ | |||||||||
(1) Ciena has forward contracts in place to hedge its foreign exchange exposure in order to reduce the variability in various currencies of certain balance sheet items. These forwards are not designated as hedges for accounting purposes, and any net gain or loss associated with these derivatives is reported in interest and other income, net, on the Condensed Consolidated Statements of Operations.
(2) Ciena Corporation, as the U.S. parent entity, uses the U.S. Dollar as its functional currency; however, some of its foreign branch offices and subsidiaries use local currencies as their functional currencies. The related remeasurement adjustments were recorded in interest and other income, net, on the Condensed Consolidated Statements of Operations.
(6) INCOME TAXES
The effective tax rate for the first quarter of fiscal 2026 was lower than the effective tax rate for the first quarter of fiscal 2025. The decrease was primarily due to an income tax benefit for share-based compensation expense and change in mix of earnings in jurisdictions with lower tax rates.
The Organization for Economic Co-operation and Development (OECD) has introduced a framework to implement a global minimum tax of 15% for certain highly profitable multinational companies, referred to as Pillar Two or the minimum tax directive. While the Unites States has not enacted legislation to adopt Pillar Two, certain countries in which Ciena operates have enacted legislation and many aspects of Pillar Two were effective for Ciena beginning in fiscal 2025. Pillar Two taxes are considered an alternative minimum tax accounted for as a period cost that could impact the effective tax rate in the year the Pillar Two tax obligation arises. Therefore, deferred taxes will not be recognized for the estimated effects of future minimum taxes. Pillar Two does not have a material effect on Ciena’s effective tax rate, financial results or cash flows for fiscal 2026.
(7)CASH EQUIVALENT, SHORT-TERM AND LONG-TERM INVESTMENTS
As of the dates indicated, investments classified as available-for-sale are comprised of the following (in thousands):
14
| January 31, 2026 | |||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||
| U.S. government obligations | $ | $ | $ | $ | |||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||
| Time deposits | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
| Included in cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Included in short-term investments | |||||||||||||||||||||||
| Included in long-term investments | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
| November 1, 2025 | |||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||
| U.S. government obligations | $ | $ | $ | $ | |||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||
| Time deposits | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
| Included in cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Included in short-term investments | |||||||||||||||||||||||
| Included in long-term investments | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
The following table summarizes the legal maturities of debt investments as of January 31, 2026 (in thousands):
| Amortized Cost | Estimated Fair Value | ||||||||||
| Less than one year | $ | $ | |||||||||
| Due in 1-2 years | |||||||||||
| $ | $ | ||||||||||
(8)FAIR VALUE MEASUREMENTS
15
| January 31, 2026 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Money market funds | $ | $ | $ | $ | |||||||||||||||||||
| Bond mutual fund | |||||||||||||||||||||||
| Time deposits | |||||||||||||||||||||||
| Deferred compensation plan assets | |||||||||||||||||||||||
| U.S. government obligations | |||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||
| Foreign currency forward contracts | |||||||||||||||||||||||
| Interest rate swaps | |||||||||||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Foreign currency forward contracts | $ | $ | $ | $ | |||||||||||||||||||
| Interest rate swaps | |||||||||||||||||||||||
| Deferred compensation plan liabilities | |||||||||||||||||||||||
| Total liabilities measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
| November 1, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Money market funds | $ | $ | $ | $ | |||||||||||||||||||
| Bond mutual fund | |||||||||||||||||||||||
| Time deposits | |||||||||||||||||||||||
| Deferred compensation plan assets | |||||||||||||||||||||||
| U.S. government obligations | |||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||
| Foreign currency forward contracts | |||||||||||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Foreign currency forward contracts | $ | $ | $ | $ | |||||||||||||||||||
| Forward starting interest rate swaps | |||||||||||||||||||||||
| Total liabilities measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
16
As of the dates indicated, the assets and liabilities above were presented on Ciena’s Condensed Consolidated Balance Sheets as follows (in thousands):
| January 31, 2026 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Short-term investments | |||||||||||||||||||||||
| Prepaid expenses and other | |||||||||||||||||||||||
| Long-term investments | |||||||||||||||||||||||
| Other long-term assets | |||||||||||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Accrued liabilities and other short-term obligations | $ | $ | $ | $ | |||||||||||||||||||
| Other long-term obligations | |||||||||||||||||||||||
| Total liabilities measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
| November 1, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Short-term investments | |||||||||||||||||||||||
| Prepaid expenses and other | |||||||||||||||||||||||
| Long-term investments | |||||||||||||||||||||||
| Other long-term assets | |||||||||||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Accrued liabilities and other short-term obligations | $ | $ | $ | $ | |||||||||||||||||||
| Other long-term obligations | |||||||||||||||||||||||
| Total liabilities measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
Ciena did not have any transfers between Level 1 and Level 2 fair value measurements during the periods presented.
(9) INVENTORIES
As of the dates indicated, inventories are comprised of the following (in thousands):
| January 31, 2026 | November 1, 2025 | ||||||||||
| Raw materials | $ | $ | |||||||||
| Work-in-process | |||||||||||
| Finished goods | |||||||||||
| Deferred cost of goods sold | |||||||||||
| Gross inventories | |||||||||||
| Reserve for inventory excess and obsolescence | ( | ( | |||||||||
| Inventories, net | $ | $ | |||||||||
17
During the first three months of fiscal 2026, Ciena recorded a provision for inventory excess and obsolescence of $21.8 million, primarily related to a decrease in the forecasted demand for certain products. Deductions from the reserve for excess and obsolete inventory relate primarily to sales and disposal activities.
(10) OTHER BALANCE SHEET DETAILS
As of the dates indicated, accrued liabilities and other short-term obligations are comprised of the following (in thousands):
| January 31, 2026 | November 1, 2025 | ||||||||||
Compensation, payroll related tax and benefits (1) | $ | $ | |||||||||
| Warranty | |||||||||||
| Vacation | |||||||||||
| Interest payable | |||||||||||
| Income taxes payable | |||||||||||
| Foreign currency forward contracts | |||||||||||
| Other | |||||||||||
| $ | $ | ||||||||||
(1) Reduction is primarily due to the timing of payments related to incentive compensation.
The following table summarizes the activity in Ciena’s accrued warranty for the periods indicated (in thousands):
| Beginning Balance | Current Period Provisions | Settlements | Ending Balance | |||||||||||||||||||||||
Three Months Ended February 1, 2025 | $ | ( | $ | |||||||||||||||||||||||
Three Months Ended January 31, 2026 | $ | ( | $ | |||||||||||||||||||||||
(11) DERIVATIVE INSTRUMENTS
Foreign Currency Derivatives
Ciena conducts business globally and is exposed to foreign currency exchange rate changes. To limit this exposure, Ciena enters into foreign currency contracts. Ciena does not enter into such contracts for speculative purposes.
As of January 31, 2026 and November 1, 2025, Ciena had forward contracts to hedge its foreign exchange exposure in order to reduce variability in certain currencies for expenses principally related to research and development activities. The notional amount of these contracts was approximately $455.2 million and $431.4 million as of January 31, 2026 and November 1, 2025, respectively. These foreign exchange contracts have maturities of 24 months or less and have been designated as cash flow hedges.
As of January 31, 2026 and November 1, 2025, Ciena had forward contracts designated as net investment hedges to minimize the effect of foreign exchange rate movements on its net investments in foreign operations. The notional amount of these contracts was approximately $60.0 million and $62.0 million as of January 31, 2026 and November 1, 2025, respectively. These foreign exchange contracts have maturities of 36 months or less and have been designated as net investment hedges.
As of January 31, 2026 and November 1, 2025, Ciena had forward contracts in place to hedge its foreign exchange exposure in order to reduce the variability in various currencies of certain balance sheet items. The notional amount of these contracts was approximately $48.0 million and $175.7 million as of January 31, 2026 and November 1, 2025, respectively. These foreign exchange contracts have maturities of 12 months or less and have not been designated as hedges for accounting purposes.
Interest Rate Derivatives
18
Ciena is exposed to floating rates of interest on its term loan borrowings (see Note 12 below) and has hedged such risk by entering into floating-to-fixed interest rate swap arrangements (“interest rate swaps”).
In January 2023, Ciena entered into interest rate swaps to fix the Secured Overnight Financing Rate (“SOFR”) for $350.0 million of its floating rate debt at 3.47 % through January 2028. The total notional amount of such swaps in effect was $350.0
In December 2023, Ciena entered into forward starting interest rate swaps to fix SOFR for an additional $350.0 million of its floating rate debt at 3.287 % from September 2025 through December 2028. The total notional amount of such swaps in effect was $350.0
Ciena expects the variable rate payments to be received under the terms of these interest rate swaps to offset exactly the forecasted variable rate payments on the equivalent notional amount of the Refinanced 2030 Term Loan (as defined in Note 12 below). These derivative contracts have been designated as cash flow hedges.
Other information regarding Ciena’s derivatives is immaterial for separate financial statement presentation. See Note 5 and Note 8 above.
(12) SHORT-TERM AND LONG-TERM DEBT
Outstanding Term Loan Payable
Refinanced 2030 Term Loan
On January 17, 2025, Ciena entered into a Refinancing Amendment to its Credit Agreement under which Ciena incurred a new single tranche of senior secured term loans in an aggregate principal amount of approximately $1.16 billion (the “Refinanced 2030 Term Loan”). The Refinanced 2030 Term Loan requires Ciena to make installment payments of $2.9 million quarterly, or $11.6 million annually, with the remaining balance payable at maturity.
The net carrying value of Ciena’s term loan was comprised of the following as of the date indicated (in thousands):
| January 31, 2026 | November 1, 2025 | |||||||||||||||||||||||||||||||
| Principal Balance | Unamortized Discount | Deferred Debt Issuance Costs | Net Carrying Value | Net Carrying Value | ||||||||||||||||||||||||||||
| Refinanced 2030 Term Loan | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||
Deferred debt issuance costs are amortized using the straight-line method, which approximates the effect of the effective interest rate, through the maturity of the term loans. The amortization of deferred debt issuance costs for the term loans is included in interest expense and was minimal during both the first three months of fiscal 2026 and fiscal 2025.
As of January 31, 2026, the estimated fair value of the Refinanced 2030 Term Loan was $1.15 billion. Ciena’s term loan is categorized as Level 2 in the fair value hierarchy. Ciena estimated the fair value of its term loan using a market approach based on observable inputs, such as current market transactions involving comparable securities.
Outstanding Senior Notes Payable
2030 Notes
On January 18, 2022, Ciena entered into an Indenture among Ciena, as issuer, certain domestic subsidiaries of Ciena, as guarantors, and U.S. Bank National Association, as trustee, pursuant to which Ciena issued $400.0 million in aggregate principal amount of 4.00 % fixed-rate senior notes due 2030 (the “2030 Notes”).
The net carrying value of the 2030 Notes was comprised of the following as of the dates indicated (in thousands):
| January 31, 2026 | November 1, 2025 | |||||||||||||||||||||||||
| Principal Balance | Deferred Debt Issuance Costs | Net Carrying Value | Net Carrying Value | |||||||||||||||||||||||
| 2030 Notes | $ | $ | ( | $ | $ | |||||||||||||||||||||
19
Deferred debt issuance costs are amortized using the straight-line method, which approximates the effect of the effective interest rate, through the maturity of the 2030 Notes. The amortization of deferred debt issuance costs for the 2030 Notes is included in interest expense and was minimal during both the first three months of fiscal 2026 and fiscal 2025.
As of January 31, 2026, the estimated fair value of the 2030 Notes was $384.0 million. The 2030 Notes are categorized as Level 2 in the fair value hierarchy. Ciena estimated the fair value of its 2030 Notes using a market approach based on observable inputs, such as current market transactions involving comparable securities.
(13) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following table summarizes the changes in accumulated balances of other comprehensive income (“AOCI”), net of tax, for the three months ended January 31, 2026 (in thousands):
| Unrealized Gain (Loss) on | |||||||||||||||||||||||||||||
| Available-for-sale Securities | Foreign Currency Forward Contracts | Interest Rate Swaps | Cumulative Translation Adjustment | Total | |||||||||||||||||||||||||
| Balance at November 1, 2025 | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||
| Other comprehensive gain (loss) before reclassifications | ( | ||||||||||||||||||||||||||||
| Amounts reclassified from AOCI | ( | ( | ( | ||||||||||||||||||||||||||
| Balance at January 31, 2026 | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
The following table summarizes the changes in AOCI, net of tax, for the three months ended February 1, 2025 (in thousands):
| Unrealized Gain (Loss) on | |||||||||||||||||||||||||||||
| Available-for-sale Securities | Foreign Currency Forward Contracts | Interest Rate Swaps | Cumulative Translation Adjustment | Total | |||||||||||||||||||||||||
| Balance at November 2, 2024 | $ | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||
| Other comprehensive gain (loss) before reclassifications | ( | ( | ( | ( | |||||||||||||||||||||||||
| Amounts reclassified from AOCI | ( | ( | |||||||||||||||||||||||||||
| Balance at February 1, 2025 | $ | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||
All amounts reclassified from AOCI related to settlements on foreign currency forward contracts designated as cash flow hedges, impacted research and development expense on the Condensed Consolidated Statements of Operations. All amounts reclassified from AOCI related to settlements on interest rate swaps designated as cash flow hedges, impacted interest and other income, net, on the Condensed Consolidated Statements of Operations.
(14) EARNINGS PER SHARE CALCULATION
Basic net income per common share (“Basic EPS”) is computed using the weighted average number of common shares outstanding. Diluted net income per potential common share (“Diluted EPS”) is computed using the weighted average number of the following unless the impact of the item is anti-dilutive: (i) common shares outstanding, (ii) shares issuable upon vesting of stock unit awards; and (iii) shares issuable under Ciena’s employee stock purchase plan and upon exercise of outstanding stock options, using the treasury stock method.
The following table presents the calculation of Basic and Diluted EPS for the periods indicated (in thousands, except per share amounts):
20
| Quarter Ended | |||||||||||
| January 31, | February 1, | ||||||||||
| 2026 | 2025 | ||||||||||
| Net income | $ | $ | |||||||||
| Basic weighted average shares outstanding | |||||||||||
| Effect of dilutive potential common shares | |||||||||||
| Diluted weighted average shares outstanding | |||||||||||
| Basic EPS | $ | $ | |||||||||
| Diluted EPS | $ | $ | |||||||||
| Anti-dilutive stock unit awards, excluded | |||||||||||
(15) STOCKHOLDERS’ EQUITY
Stock Repurchase Program
On October 2, 2024, Ciena announced that its Board of Directors authorized a three-year program to repurchase up to $1.0 billion of its common stock, commencing in fiscal 2025 and continuing through the end of fiscal 2027.
During the first three months of fiscal 2026, Ciena repurchased approximately 0.4 million shares of its common stock for an aggregate purchase price of approximately $80.5 million, which equates to an average price of $216.43 per share. As of January 31, 2026, Ciena has (i) repurchased 4.3 million shares for an aggregate purchase price of $410.2 million at an average price of $94.83 per share and (ii) has an aggregate of $589.8 million authorized and remaining under its stock repurchase program. Ciena is required to allocate the purchase price for the shares of Ciena’s stock repurchased as a reduction of common stock and additional paid-in capital.
Stock Repurchases Related to Stock Unit Tax Withholdings
Ciena repurchases shares of its common stock to satisfy employee tax withholding obligations due upon vesting of stock unit awards. The related purchase price of $90.1 million for the shares of Ciena’s stock repurchased during the first three months of fiscal 2026 is reflected as a reduction to stockholders’ equity. Ciena is required to allocate the purchase price of the repurchased shares as a reduction of common stock and additional paid-in capital.
(16) SHARE-BASED COMPENSATION EXPENSE
The following table summarizes share-based compensation expense for the periods indicated (in thousands):
| Quarter Ended | |||||||||||
| January 31, | February 1, | ||||||||||
| 2026 | 2025 | ||||||||||
| Products | $ | $ | |||||||||
| Services | |||||||||||
| Share-based compensation expense included in cost of goods sold | |||||||||||
| Research and development | |||||||||||
| Selling and marketing | |||||||||||
| General and administrative | |||||||||||
| Share-based compensation expense included in operating expense | |||||||||||
Share-based compensation expense capitalized in inventory, net (1) | ( | ||||||||||
| Total share-based compensation expense | $ | $ | |||||||||
As of January 31, 2026, total unrecognized share-based compensation expense was $443.7 million, which relates to unvested stock unit awards and is expected to be recognized over a weighted-average period of 1.6 years.
21
(17) SEGMENTS AND ENTITY-WIDE DISCLOSURES
Segment Profit (Loss)
The table below sets forth Ciena’s segment profit (loss) and the reconciliations to consolidated net income for the respective periods indicated (in thousands). The CODM excludes the following items in his assessment of performance of the operating segments: selling and marketing costs; general and administrative costs, significant asset impairments and restructuring costs; share-based compensations expense, amortization of intangible assets; acquisition and integration costs; interest and other income, net; interest expense; loss on extinguishment and modification of debt; and provision for income taxes.
| Quarter Ended | |||||||||||
| January 31, | February 1, | ||||||||||
| 2026 | 2025 | ||||||||||
| Revenue: | |||||||||||
| Networking Platforms | $ | $ | |||||||||
| Platform Software and Services | |||||||||||
| Blue Planet Automation Software and Services | |||||||||||
| Global Services | |||||||||||
| Total revenue | $ | $ | |||||||||
| Segment gross profit: | |||||||||||
| Networking Platforms | $ | $ | |||||||||
| Platform Software and Services | |||||||||||
| Blue Planet Automation Software and Services | |||||||||||
| Global Services | |||||||||||
| Total segment gross profit | $ | $ | |||||||||
| Research and development expense: | |||||||||||
| Networking Platforms | $ | $ | |||||||||
| Platform Software and Services | |||||||||||
| Blue Planet Automation Software and Services | |||||||||||
| Global Services | |||||||||||
| Total segment research and development expense | $ | $ | |||||||||
| Segment profit (loss): | |||||||||||
| Networking Platforms | $ | $ | |||||||||
| Platform Software and Services | |||||||||||
| Blue Planet Automation Software and Services | ( | ||||||||||
| Global Services | |||||||||||
| Total segment profit | $ | $ | |||||||||
| Less: Unallocated cost of goods sold | $ | $ | |||||||||
| Less: Unallocated operating and non-operating expenses | |||||||||||
| Consolidated net income | $ | $ | |||||||||
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Entity-Wide Reporting
Ciena's long-lived assets, including equipment, building, furniture and fixtures, operating right-of-use (“ROU”) assets, finite-lived intangible assets, goodwill, and maintenance spares, are not reviewed by Ciena's CODM for purposes of evaluating performance and allocating resources. As of January 31, 2026, equipment, building, furniture and fixtures, net, totaled $437.8 million, and operating ROU assets totaled $40.5 million, both of which support asset groups within Ciena’s four
| January 31, 2026 | |||||||||||||||||||||||||||||
| Networking Platforms | Platform Software and Services | Blue Planet Automation Software and Services | Global Services | Total | |||||||||||||||||||||||||
| Other intangible assets, net | $ | $ | |||||||||||||||||||||||||||
| Goodwill | $ | $ | |||||||||||||||||||||||||||
| Maintenance spares, net | $ | $ | |||||||||||||||||||||||||||
| Total assets assigned to segments | $ | ||||||||||||||||||||||||||||
| Other unallocated assets | |||||||||||||||||||||||||||||
| Total assets | $ | ||||||||||||||||||||||||||||
| November 1, 2025 | |||||||||||||||||||||||||||||
| Networking Platforms | Platform Software and Services | Blue Planet Automation Software and Services | Global Services | Total | |||||||||||||||||||||||||
| Other intangible assets, net | $ | $ | |||||||||||||||||||||||||||
| Goodwill | $ | $ | |||||||||||||||||||||||||||
| Maintenance spares, net | $ | $ | |||||||||||||||||||||||||||
| Total assets assigned to segments | $ | ||||||||||||||||||||||||||||
| Other unallocated assets | |||||||||||||||||||||||||||||
| Total assets | $ | ||||||||||||||||||||||||||||
| January 31, 2026 | November 1, 2025 | ||||||||||
| Canada | $ | $ | |||||||||
| United States | |||||||||||
Other International (1) | |||||||||||
| Total | $ | $ | |||||||||
(1) Any country representing less than 10% of total is reflected in aggregate as “Other International.”
(18) COMMITMENTS AND CONTINGENCIES
Tax Contingencies
Ciena is subject to various tax contingencies arising in the ordinary course of business. Ciena does not expect that the ultimate settlement of these contingencies will have a material effect on its financial position or cash flows.
Litigation
Ciena is subject to various legal proceedings, claims, and other matters arising in the ordinary course of business, including those that relate to employment, commercial, tax, and other regulatory matters. Ciena is also subject to intellectual property
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related claims, including claims against third parties that may involve contractual indemnification obligations on the part of Ciena. Ciena does not expect that the ultimate costs to resolve such matters will have a material effect on its results of operations, financial position, or cash flows.
Purchase Order Obligations
(19) SUBSEQUENT EVENTS
Stock Repurchase Program
From the end of the first quarter of fiscal 2026 through February 27, 2026, Ciena repurchased 83,510 shares of its common stock for an aggregate purchase price of $25.1 million at an average price of $300.29 per share, inclusive of repurchases pending settlement under its current stock repurchase program. As of February 27, 2026, Ciena has an aggregate of $564.7 million of authorized funds remaining under this repurchase program.
U.S. Supreme Court Ruling on Tariffs
On February 20, 2026, the U.S. Supreme Court ruled that a portion of the tariffs that Ciena has been subject to were invalid. Following this ruling, the U.S. Administration issued an executive order imposing a new global tariff. The ruling and the subsequent response by the U.S. Administration leave open a number of complex questions regarding the timing, mechanics and administration of tariff refunds by the U.S. government, if any. Ciena is evaluating the impact these events may have, if any, on its consolidated financial statements and related disclosures.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Note Regarding Forward-Looking Statements
This report contains statements that discuss future events or expectations, projections of results of operations or financial condition, changes in the markets for our products and services, trends in our business, operational matters including the expansion of manufacturing capacity and accumulation of inventory, business prospects and strategies and other “forward-looking” information. Forward-looking statements may appear throughout this report, including in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.” In some cases, you can identify “forward-looking statements” by words like “may,” “will,” “would,” “can,” “should,” “could,” “expects,” “future,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “intends,” “potential,” “projects,” “targets,” “prepare,” or “continue” or the negative of those words and other comparable words. You should be aware that the forward-looking statements contained in this report are based on our current views and assumptions, and are subject to known and unknown risks, uncertainties, and other factors that may cause actual events or results to differ materially.
For a discussion identifying some of the important factors that could cause actual results to vary materially from those anticipated in the forward-looking statements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in this report. For a more complete understanding of the risks associated with an investment in our securities, you should review these factors and the rest of this report in combination with the more detailed description of our business and management’s discussion and analysis of financial condition and risk factors described in our Annual Report on Form 10-K for the fiscal year ended November 1, 2025, which we filed with the Securities and Exchange Commission (the “SEC”) on December 12, 2025 (our “2025 Annual Report”). However, we operate in a very competitive and dynamic environment and new risks and uncertainties emerge, are identified, or become apparent from time to time, and therefore may not be identified in this report. We cannot predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this report. You should be aware that the forward-looking statements contained in this report are based on our current views and assumptions. We undertake no obligation to revise or to update any forward-looking statements made in this report to reflect events or circumstances after the date hereof or to reflect new information or the occurrence of unanticipated events, except as required by law. The forward-looking statements in this report are intended to be subject to protection afforded by the safe harbor for forward-looking statements contained in the Private Securities Litigation
24
Reform Act of 1995. Unless the context requires otherwise, references in this report to “Ciena,” the “Company,” “we,” “us,” and “our” refer to Ciena Corporation and its consolidated subsidiaries.
Overview
We are a network technology company, providing hardware, software, and services to a wide range of network operators and enabling enhanced network capacity, service delivery, and automation. Our solutions support network traffic across a wide range of applications, including cloud, voice, video, data, and artificial intelligence (“AI”). Our network solutions are used globally by cloud providers, service providers, and other network operators across multiple industry verticals.
The markets into which we sell are dynamic and characterized by a high rate of change. Networks continue to experience strong demand for increased bandwidth due to traffic growth, which is being driven by a diverse set of services, technologies, and customer needs.
Business Momentum
Our industry has been experiencing unprecedented increases in demand, in particular due to capital expenditures related to AI and other cloud-based applications. As a result, we experienced strong momentum and growth in fiscal 2025 that continued in the first quarter of fiscal 2026. As we grow disproportionately with cloud providers, we are seeing a small number of those customers become a larger portion of our business across multiple revenue segments. Our revenue increased by 33.1% to $1.4 billion in the first quarter of fiscal 2026 as compared to $1.1 billion in the first quarter of fiscal 2025, with orders for our products and services significantly exceeding our revenue. This dynamic, together with an industry-wide constrained supply environment, has resulted in historically high backlog.
Gross Margin Dynamics
Our gross margin decreased to 43.8% in the first quarter of fiscal 2026, compared to 44.0% in the first quarter of fiscal 2025, primarily due to lower services gross margin.
Operating Expense and Investment in Technology Innovation
Our operating expense grew from $391.2 million in the first quarter of fiscal 2025 to $436.1 million in the first quarter of fiscal 2026. During the first quarter of fiscal 2026, we invested $221.5 million in research and development activities, an increase of 15% compared to the first quarter of fiscal 2025. We believe that our investment capacity and our efforts to push the pace of innovation are important competitive differentiators in our markets, which requires considerable investment capacity and expenditures. In particular, in an effort to capture certain market opportunities created by the impact of AI on networks, we continued to increase the performance of, and enhance the capabilities for our leading WaveLogicTM coherent modem technology, through which we seek to extend our leadership in optical networking, and leverage it to expand our addressable market, including inside and around the data center.
Capital Allocation Strategy
Our capital allocation strategy is focused on maintaining our significant innovation investment, investing in select transactions, and returning value to stockholders, while preserving our strategic and operational flexibility. We continuously work to improve our cash cycle and evaluate alternatives to manage our capital structure in order to enhance our liquidity. We ended the first quarter of fiscal 2026 with $1.4 billion of cash, cash equivalents, and investments. As of the end of the first quarter of fiscal 2026, cash generated from operations increased to $227.6 million as compared to $103.7 million as of the end of the first quarter of fiscal 2025. Consistent with our capital allocation priorities, during the first quarter of fiscal 2026, we invested $73.9 million in capital purchases, primarily for supply chain equipment and research and development , and $170.6 million to repurchase shares through our share buyback program and for tax withholding purposes associated with employee stock awards.
For additional information regarding our business, industry, market opportunity, competitive landscape, and strategy, see our 2025 Annual Report.
Consolidated Results of Operations
Operating Segments
25
Our results of operations are presented based on our operating segments: (i) Networking Platforms; (ii) Platform Software and Services; (iii) Blue Planet Automation Software and Services; and (iv) Global Services. See Note 3 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.
Revenue
As a result of the increased demand described above, our revenue increased by 33.1%, or $354.8 million, in the first quarter of fiscal 2026 as compared to the first quarter of fiscal 2025.
Operating Segment Revenue
The table below sets forth the changes in our operating segment revenue for the periods indicated (in thousands, except percentage data):
| Quarter Ended | |||||||||||||||||
| January 31, 2026 | February 1, 2025 | %* | |||||||||||||||
| Revenue: | |||||||||||||||||
| Networking Platforms | |||||||||||||||||
| Optical Networking | $ | 1,023,162 | $ | 727,973 | 40.5 | % | |||||||||||
| %** | 71.7 | % | 67.9 | % | |||||||||||||
| Routing and Switching | 126,006 | 93,169 | 35.2 | % | |||||||||||||
| %** | 8.8 | % | 8.7 | % | |||||||||||||
| Total Networking Platforms | 1,149,168 | 821,142 | 39.9 | % | |||||||||||||
| %** | 80.5 | % | 76.6 | % | |||||||||||||
| Platform Software and Services | 93,384 | 95,067 | (1.8) | % | |||||||||||||
| %** | 6.5 | % | 8.9 | % | |||||||||||||
| Blue Planet Automation Software and Services | 20,420 | 26,032 | (21.6) | % | |||||||||||||
| %** | 1.5 | % | 2.4 | % | |||||||||||||
| Global Services | |||||||||||||||||
| Maintenance, Support, and Learning | 87,551 | 74,573 | 17.4 | % | |||||||||||||
| %** | 6.1 | % | 7.0 | % | |||||||||||||
| Implementation | 67,949 | 47,682 | 42.5 | % | |||||||||||||
| %** | 4.8 | % | 4.4 | % | |||||||||||||
| Advisory and Enablement | 8,570 | 7,764 | 10.4 | % | |||||||||||||
| %** | 0.6 | % | 0.7 | % | |||||||||||||
| Total Global Services | 164,070 | 130,019 | 26.2 | % | |||||||||||||
| %** | 11.5 | % | 12.1 | % | |||||||||||||
| Total revenue | $ | 1,427,042 | $ | 1,072,260 | 33.1 | % | |||||||||||
_____________________________
* Denotes % change from fiscal 2025 to fiscal 2026
** Denotes % of total revenue
Quarter ended January 31, 2026 as compared to the quarter ended February 1, 2025
•Networking Platforms segment revenue increased by $328.0 million.
•Optical Networking products revenue increased by $295.2 million, primarily driven by increases in sales of our Waveserver® system to service provider and cloud provider customers, and our 6500 Reconfigurable Line Systems (RLS) to cloud provider customers.
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•Routing and Switching products revenue increased by $32.8 million, primarily driven by an increase in sales of our 3000 and 5000 series of service delivery and aggregation platforms, including our out-of-band data center management (DCOM) solution, to cloud provider and service provider customers.
•Platform Software and Services segment revenue decreased by $1.7 million, primarily reflecting a sales decrease of our software consulting services, partially offset by an increase in sales of our Navigator NCS software solution.
•Blue Planet Automation Software and Services segment revenue decreased by $5.6 million, primarily reflecting a sales decrease in our unified assurance and analytics software, partially offset by a sales increase in our inventory management software services.
•Global Services segment revenue increased by $34.1 million, primarily reflecting sales increases in our implementation services and maintenance, support, and learning services.
Revenue by Geographic Region
Our operating segments engage in business and operations across three geographic regions: the United States, Canada, the Caribbean and Latin America (“Americas”); Europe, Middle East and Africa (“EMEA”); and Asia Pacific, Japan and India (“APAC”). The geographic distribution of our revenue can fluctuate significantly from period to period, and the timing of revenue recognition for large network projects, particularly outside of the United States, can result in variations in geographic revenue results in any particular period.
The following table reflects our geographic distribution of revenue, principally based on the relevant location for our delivery of products and performance of services. The table sets forth the changes in geographic distribution of revenue for the periods indicated (in thousands, except percentage data):
| Quarter Ended | |||||||||||||||||
| January 31, 2026 | February 1, 2025 | %* | |||||||||||||||
| Americas | $ | 1,118,223 | $ | 795,632 | 40.5 | % | |||||||||||
| %** | 78.4 | % | 74.2 | % | |||||||||||||
| EMEA | 200,587 | 157,916 | 27.0 | % | |||||||||||||
| %** | 14.0 | % | 14.7 | % | |||||||||||||
| APAC | 108,232 | 118,712 | (8.8) | % | |||||||||||||
| %** | 7.6 | % | 11.1 | % | |||||||||||||
| Total | $ | 1,427,042 | $ | 1,072,260 | 33.1 | % | |||||||||||
_____________________________________
* Denotes % change from fiscal 2025 to fiscal 2026
** Denotes % of total revenue
Quarter ended January 31, 2026 as compared to the quarter ended February 1, 2025
•Americas revenue increased by $322.6 million, primarily driven by increased sales to cloud providers and service providers in the United States.
•EMEA revenue increased by $42.7 million, primarily driven by increased sales to cloud providers in the Netherlands.
•APAC revenue decreased by $10.5 million, primarily driven by decreased sales in India, primarily to service providers, partially offset by increased sales in Singapore, primarily to cloud providers.
Currency Fluctuations
During the first quarter of fiscal 2026, approximately 8.3% of our revenue was non-U.S. Dollar-denominated. During the first quarter of fiscal 2026 as compared to the first quarter of fiscal 2025, the U.S. Dollar generally weakened against other currencies. These currency fluctuations had a positive effect on our revenue reported in U.S. Dollars of approximately $5.0 million, or 0.4%, as compared to the first quarter of fiscal 2025.
Gross Margin
27
Gross margin is calculated as revenue less cost of goods sold, divided by revenue.
•Product cost of goods sold consists primarily of amounts paid to third-party contract manufacturers, component costs, employee-related costs, shipping, logistics, and tariff costs associated with manufacturing-related operations, warranty and other contractual obligations, royalties, license fees, amortization of intangible assets, cost of excess and obsolete inventory and, any estimated losses on committed customer contracts.
•Service cost of goods sold consists primarily of direct and third-party costs associated with our provision of services, including implementation, maintenance, support, learning, advisory and enablement activities, and any estimated losses on committed customer contracts. The majority of these costs relate to personnel, including employee and third-party contractor-related costs.
Gross margin can fluctuate due to a number of factors, including technology-based price compression, product and service mix, the lifecycle stage of our products and cost reductions.
The tables below set forth the changes in revenue and gross margin for the periods indicated (in thousands, except percentage data):
| Quarter Ended | |||||||||||||||||||||||||||||||||||
| January 31, 2026 | February 1, 2025 | ||||||||||||||||||||||||||||||||||
| Revenue | Gross Margin (%) | Revenue | Gross Margin (%) | Revenue Change (%) | Gross Margin Change | ||||||||||||||||||||||||||||||
| Total | $ | 1,427,042 | 43.8 | % | $ | 1,072,260 | 44.0 | % | 33.1 | % | (0.2) | % | |||||||||||||||||||||||
| Products | $ | 1,179,870 | 43.5 | % | $ | 854,785 | 42.6 | % | 38.0 | % | 0.9 | % | |||||||||||||||||||||||
| Services | $ | 247,172 | 45.4 | % | $ | 217,475 | 49.6 | % | 13.7 | % | (4.2) | % | |||||||||||||||||||||||
_____________________________________
Quarter ended January 31, 2026 as compared to the quarter ended February 1, 2025
•Gross margin decreased by 20 basis points from the first quarter of fiscal 2025 to the first quarter of fiscal 2026, primarily reflecting decreased services margin.
•Product gross margin increased by 90 basis points from the first quarter of fiscal 2025 to the first quarter of fiscal 2026. The increase was primarily due to product cost reductions and a more favorable product mix, partially offset by a one-time manufacturing efficiency benefit recognized in the first quarter of fiscal 2025, and increased inventory writedowns.
•Services gross margin decreased by 420 basis points from the first quarter of fiscal 2025 to the first quarter of fiscal 2026, primarily due to a less favorable services mix, partially offset by improved margins on deployment services.
Operating Expense
The component elements that comprise each of our operating expense categories in the table below are set forth in the “Consolidated Results of Operations - Operating Expense” in Item 7 of Part II of our 2025 Annual Report. The table below sets forth the changes in operating expense for the periods indicated (in thousands, except percentage data):
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| Quarter Ended | |||||||||||||||||
| January 31, 2026 | February 1, 2025 | %* | |||||||||||||||
| Research and development | $ | 221,458 | $ | 192,663 | 14.9 | % | |||||||||||
| %** | 15.5 | % | 18.0 | % | |||||||||||||
| Selling and marketing | 148,867 | 136,504 | 9.1 | % | |||||||||||||
| %** | 10.4 | % | 12.7 | % | |||||||||||||
| General and administrative | 59,243 | 53,902 | 9.9 | % | |||||||||||||
| %** | 4.2 | % | 5.0 | % | |||||||||||||
| Significant asset impairments and restructuring costs | 1,498 | 1,544 | (3.0) | % | |||||||||||||
| %** | 0.1 | % | 0.1 | % | |||||||||||||
| Amortization of intangible assets | 4,736 | 6,545 | (27.6) | % | |||||||||||||
| %** | 0.3 | % | 0.6 | % | |||||||||||||
| Acquisition and integration costs | 306 | — | 100.0 | % | |||||||||||||
| %** | — | % | — | % | |||||||||||||
| Total operating expenses | $ | 436,108 | $ | 391,158 | 11.5 | % | |||||||||||
| %** | 30.6 | % | 36.5 | % | |||||||||||||
_____________________________________
* Denotes % change from fiscal 2025 to fiscal 2026
** Denotes % of total revenue
Quarter ended January 31, 2026 as compared to the quarter ended February 1, 2025
•Research and development expense increased by $28.8 million. Net of hedging, this primarily reflects higher employee headcount and related compensation costs, including our acquisition of Nubis Communications, and professional services expense.
•Selling and marketing expense increased by $12.4 million, which primarily reflects increases in employee-related compensation costs.
•General and administrative expense increased by $5.3 million, which primarily reflects increases in employee-related compensation costs.
•Significant asset impairments and restructuring costs remained relatively unchanged.
•Amortization of intangible assets decreased by $1.8 million, primarily reflecting certain intangible assets having reached the end of their economic lives.
•Acquisition and integration costs reflect financial, legal, and accounting advisory costs and certain employee-related costs related to our acquisition of Nubis Communications.
Currency Fluctuations
During the first quarter of fiscal 2026, approximately 50.6% of our operating expense was non-U.S. Dollar-denominated. During the first quarter of fiscal 2026, as compared to the first quarter of fiscal 2025, the U.S. Dollar generally weakened against other currencies. These currency fluctuations, net of hedging, had the effect of increasing our operating expense by approximately $4.8 million, or 1.1%, as compared to the first quarter of fiscal 2025.
Segment Profit (Loss)
The table below sets forth the changes in our segment profit (loss) for the periods indicated (in thousands, except percentage data):
29
| Quarter Ended | |||||||||||||||||
| January 31, 2026 | February 1, 2025 | %* | |||||||||||||||
| Segment profit (loss): | |||||||||||||||||
| Networking Platforms | $ | 316,631 | $ | 182,162 | 73.8 | % | |||||||||||
| Platform Software and Services | $ | 61,718 | $ | 65,423 | (5.7) | % | |||||||||||
| Blue Planet Automation Software and Services | $ | (3,814) | $ | 6,500 | (158.7) | % | |||||||||||
| Global Services | $ | 58,754 | $ | 46,697 | 25.8 | % | |||||||||||
_____________________________________
* Denotes % change from fiscal 2025 to fiscal 2026
Quarter ended January 31, 2026 as compared to the quarter ended February 1, 2025
•Networking Platforms segment profit increased by $134.5 million, primarily due to higher sales volume and improved gross margin as described above, partially offset by higher research and development costs.
•Platform Software and Services segment profit decreased by $3.7 million, primarily due to lower services sales volume as described above, and increased research and development costs.
•Blue Planet Automation Software and Services segment primarily reflects lower software sales volume as described above, reduced gross margins and increased research and development costs.
•Global Services segment profit increased by $12.1 million, primarily due to increased sales volume as described above.
Other Items
The table below sets forth the changes in other items for the periods indicated (in thousands, except percentage data):
| Quarter Ended | |||||||||||||||||
| January 31, 2026 | February 1, 2025 | %* | |||||||||||||||
| Interest and other income, net | $ | 12,957 | $ | 11,578 | 11.9 | % | |||||||||||
| %** | 0.9 | % | 1.1 | % | |||||||||||||
| Interest expense | $ | 21,254 | $ | 22,918 | (7.3) | % | |||||||||||
| %** | 1.5 | % | 2.1 | % | |||||||||||||
| Loss on extinguishment and modification of debt | $ | — | $ | 729 | (100.0) | % | |||||||||||
| %** | — | % | 0.1 | % | |||||||||||||
| Provision for income taxes | $ | 30,832 | $ | 24,022 | 28.3 | % | |||||||||||
| %** | 2.2 | % | 2.2 | % | |||||||||||||
_____________________________________
* Denotes % change from fiscal 2025 to fiscal 2026
** Denotes % of total revenue
Quarter ended January 31, 2026 as compared to the quarter ended February 1, 2025
•Interest and other income, net increased by $1.4 million, primarily reflecting the impact of foreign exchange rates on assets and liabilities denominated in a currency other than the relevant functional currency, net of hedging activity.
•Interest expense decreased by $1.7 million, primarily due to lower interest rates on our floating rate debt, net of hedging activity.
•Loss on extinguishment and modification of debt reflects the refinancing of our 2030 Term Loan in the first quarter of fiscal 2025.
•Provision for income taxes increased by $6.8 million, primarily due to the increase in pre-tax book income.
Liquidity and Capital Resources
30
We regularly evaluate our capital structure, liquidity position, debt obligations, and anticipated cash needs to fund our operating or investment plans, and we will continue to consider capital raising and other market opportunities that may be available to us.
Principal Sources of Liquidity. Our principal sources of liquidity on hand include our cash, cash equivalents, and investments, which, as of January 31, 2026, totaled $1.4 billion, as well as our credit facility (the “Revolving Credit Facility”), to which we and certain of our subsidiaries are parties. The Revolving Credit Facility provides for a total commitment of $300.0 million with a maturity date of October 24, 2028. We principally use the Revolving Credit Facility to support the issuance of letters of credit that arise in the ordinary course of our business and for general corporate purposes. As of January 31, 2026, letters of credit totaling $41.1 million were issued under the Revolving Credit Facility. There were no borrowings outstanding under the Revolving Credit Facility as of January 31, 2026.
Foreign Liquidity. The amount of cash, cash equivalents and short-term investments held by our foreign subsidiaries was $351.7 million as of January 31, 2026. Approximately $92.3 million of undistributed earnings from these foreign subsidiaries is expected to be repatriated, with any remaining amount continuing to be indefinitely reinvested. A deferred tax liability related to the expected repatriation amount was accrued in fiscal 2023. There are no other significant temporary differences related to our investment in the foreign subsidiaries for which a deferred tax liability has not been recognized.
Stock Repurchases. On October 2, 2024, we announced that our Board of Directors authorized a program to repurchase up to $1.0 billion of our common stock, which replaced in its entirety the previous stock repurchase program authorized in fiscal 2022. During the first three months of fiscal 2026, we repurchased $80.5 million of our common stock under the stock repurchase program, and $589.8 million remained under the current repurchase authorization as of January 31, 2026. The amount and timing of any further repurchases under our stock repurchase program are subject to a variety of factors including liquidity, cash flow, stock price, and general business and market conditions. The program may be modified, suspended, or discontinued at any time. During the first quarter of fiscal 2026, we also repurchased $90.1 million of our common stock in settlement of employee tax withholding obligations due upon the vesting of stock unit awards. See Note 15 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report as well as “Issuer Purchases of Equity Securities” in Item 2 of Part II of this report.
Cash Flows
The following table sets forth changes in our cash, cash equivalents, and investments in marketable debt securities for the periods indicated (in thousands):
| January 31, 2026 | November 1, 2025 | Increase (Decrease) | |||||||||||||||
| Cash and cash equivalents | $ | 1,123,413 | $ | 1,091,952 | $ | 31,461 | |||||||||||
| Short-term investments in marketable debt securities | 176,315 | 216,148 | (39,833) | ||||||||||||||
| Long-term investments in marketable debt securities | 69,876 | 57,142 | 12,734 | ||||||||||||||
| Total cash, cash equivalents, and investments in marketable debt securities | $ | 1,369,604 | $ | 1,365,242 | $ | 4,362 | |||||||||||
Cash, cash equivalents and investments increased by $4.4 million during the first three months of fiscal 2026. Cash from operating activities generated $227.6 million, which was partially offset by the following: (i) stock repurchases on vesting of our stock unit awards to employees relating to tax withholding of $90.1 million; (ii) cash used for stock repurchases under our stock repurchase program of $80.5 million; and (iii) cash used to fund our investing activities for capital expenditures totaling $73.9 million. In addition to cash provided by operating activities, proceeds from the issuance of equity under our employee stock purchase plan provided $17.2 million in cash during the three months ended January 31, 2026.
Cash Provided By Operating Activities
The following sections set forth the components of our $227.6 million of cash provided by operating activities during the first three months of fiscal 2026. Net income (adjusted for non-cash charges) provided cash of $265.3 million, offset by cash used in operating assets and liabilities of $37.7 million.
Net income (adjusted for non-cash charges)
The following table sets forth our net income (adjusted for non-cash charges) during the period (in thousands):
31
| Three Months Ended | |||||
| January 31, 2026 | |||||
| Net income | $ | 150,283 | |||
| Adjustments for non-cash charges: | |||||
| Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements | 32,309 | ||||
| Share-based compensation expense | 49,827 | ||||
| Amortization of intangible assets | 11,521 | ||||
| Deferred taxes | (7,043) | ||||
| Provision for inventory excess and obsolescence | 21,832 | ||||
| Provision for warranty | 8,185 | ||||
| Other | (1,545) | ||||
| Net income (adjusted for non-cash charges) | $ | 265,369 | |||
Operating Assets and Liabilities
Operating asset and liability requirements increased by $37.7 million during the period. The following table sets forth the major components of the cash changes in operating assets and liabilities (in thousands):
| Three Months Ended | |||||
| January 31, 2026 | |||||
| Accounts receivable | $ | 9,406 | |||
| Inventories | (41,228) | ||||
| Prepaid expenses and other | 40,024 | ||||
| Accounts payable, accruals, and other obligations | (130,907) | ||||
| Deferred revenue | 86,013 | ||||
| Operating lease assets and liabilities, net | (1,032) | ||||
| Total cash consumed by operating assets and liabilities | $ | (37,724) | |||
As compared to the end of fiscal 2025, for the first three months of fiscal 2026:
•The change in accounts receivable primarily reflects improved cash collections partially offset by increased sales volume;
•The change in inventories primarily reflects our strategy to mitigate supply chain volatility and ensure uninterrupted fulfillment of orders;
•The change in prepaid expenses and other primarily reflects lower prepaid value-added tax (VAT), lower contract assets for unbilled accounts receivable, and reduced refundable cash advances to a third-party contract manufacturer;
•The change in accounts payable, accruals, and other obligations primarily reflects the timing of payments associated with our annual incentive compensation plan partially offset by the timing of payments for payroll and higher payroll related costs;
•The change in deferred revenue primarily represents an increase in advanced payments received on multi-year maintenance contracts from customers prior to revenue recognition; and
•The change in operating lease assets and liabilities, net, represents cash paid for operating lease payments in excess of operating lease costs.
Cash Paid for Interest, Net
The following table sets forth the cash paid for interest, net, during the period (in thousands):
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| Three Months Ended | |||||
| January 31, 2026 | |||||
Refinanced 2030 Term Loan due October 28, 2030(1) | 16,600 | ||||
2030 Senior Notes due January 31, 2030(2) | — | ||||
Interest rate swaps(3) | (955) | ||||
Revolving Credit Facility(4) | 428 | ||||
| Finance leases | 806 | ||||
| Cash paid during period | $ | 16,879 | |||
(1) Interest on the Refinanced 2030 Term Loan is payable periodically based on the interest period selected for borrowing. The Refinanced 2030 Term Loan bears interest at SOFR for the chosen borrowing period plus a spread of 1.75% subject to a minimum SOFR rate of 0.00%. At the end of the first quarter of fiscal 2026, the interest rate on the Refinanced 2030 Term Loan was 5.43%.
(2) The 2030 Notes bear interest at a rate of 4.00% per annum. Interest is payable on the 2030 Notes in arrears on January 31 and July 31 of each year.
(3) Our interest rate swaps fix the SOFR rate for $350.0 million of our Term Loan at 3.47% through January 2028 and another $350.0 million of our Term Loan at 3.287% through December 2028.
(4) During the first three months of fiscal 2026, we utilized the Revolving Credit Facility to issue certain standby letters of credit and paid nominal commitment fees, interest expense and other administrative charges primarily relating to the Revolving Credit Facility.
For additional information about our debt and interest rate swaps, see Notes 11 and 12 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.
Contractual Obligations
Our contractual obligations have not changed materially since November 1, 2025. For a summary of our contractual obligations, see “Liquidity and Capital Resources – Contractual Obligations” in Item 7 of Part II of our 2025 Annual Report.
Critical Accounting Policies and Estimates
Our critical accounting policies and estimates have not changed materially since November 1, 2025. For a discussion of our critical accounting policies and estimates, see “Critical Accounting Policies and Estimates” in Item 7 of Part II of our 2025 Annual Report.
Effects of Recent Accounting Pronouncements
See Note 2 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report for information relating to our discussion of the effects of recent accounting pronouncements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk related to changes in interest rates and foreign currency exchange rates. For a discussion of quantitative and qualitative disclosures about market risk, see Item 7A of Part II of our 2025 Annual Report.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
As of the end of the period covered by this report, we carried out an evaluation under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.
Changes in Internal Control over Financial Reporting
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There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
The information set forth under the heading “Commitments and Contingencies - Litigation” in Note 18 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report, is incorporated herein by reference.
Item 1A. Risk Factors
There has been no material change to our Risk Factors from those presented in our 2025 Annual Report. Investing in our securities involves a high degree of risk. Before investing in our securities, you should consider carefully the information contained in this report and in our 2025 Annual Report, including the information under Item 1A of Part I thereof. This report contains forward-looking statements that involve risks and uncertainties. See “Management’s Discussion and Analysis of Financial Conditions and Results of Operations – Cautionary Note Regarding Forward-Looking Statements” in this report. Our actual results could differ materially from those contained in the forward-looking statements. Any of the risks discussed in our 2025 Annual Report, in this report, in other reports we file with the SEC, and other risks we have not anticipated or discussed, could have a material adverse impact on our business, financial condition, or results of operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
The following table provides a summary of repurchases of our common stock during the first quarter of fiscal 2026:
| Period | Total Number of Shares Purchased (1) | Average Price Paid per Share(1) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands)(1) | ||||||||||||||||||||||
| November 2, 2025 to November 29, 2025 | 128,961 | $ | 194.46 | 128,961 | $ | 645,266 | ||||||||||||||||||||
| November 30, 2025 to December 27, 2025 | 116,215 | $ | 215.78 | 116,215 | $ | 620,188 | ||||||||||||||||||||
| December 28, 2025 to January 31, 2026 | 126,821 | $ | 239.37 | 126,821 | $ | 589,831 | ||||||||||||||||||||
| 371,997 | $ | 216.43 | 371,997 | |||||||||||||||||||||||
(1) On October 2, 2024, we announced that our Board of Directors authorized a program to repurchase up to $1.0 billion of our common stock, which replaced in its entirety the previous stock repurchase program. The program may be modified, suspended, or discontinued at any time. During the first quarter of fiscal 2026, we repurchased $80.5 million of our common stock under the stock repurchase program, and we had $589.8 million remaining under the current repurchase authorization as of January 31, 2026. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Stock Repurchase Authorization” in Item 2 of Part I of this report and Note 15 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report for information regarding the stock repurchase program authorized by our Board of Directors.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Arrangements
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The following table describes, for the first quarter of fiscal 2026, each trading arrangement for the sale or purchase of our securities adopted , terminated or for which the amount, pricing or timing provisions were modified by our directors and officers (as defined in Rule 16a-1(f) of the Exchange Act) that is either (1) a contract, instruction or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) (a “Rule 10b5-1 trading arrangement”) or (2) a “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of Regulation S-K):
| Name (Title) | Action Taken (Date of Action) | Type of Trading Arrangement | Nature of Trading Arrangement | Duration of Trading Arrangement | Aggregate Number of Securities to be Purchased or Sold | ||||||||||||
( | Modification (December 23, 2025) (1) | Rule 10b5-1 trading arrangement | Sales | Until | Up to | ||||||||||||
(1) On December 23, 2025
(2) The Gage Modified Arrangement changed the trading schedule and awards sold but not the duration of the arrangement. Sales under the Gage Modified Arrangement will not begin until March 24, 2026.
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Item 6. Exhibits
| 10.1 | Form of Employee Restricted Stock Unit Agreement for Ciena Corporation 2017 Omnibus Incentive Plan (revised 2025) (incorporated by reference to Exhibit 10.5 to the Company’s Annual Report on Form 10-K (Commission File No. 001-36250) filed with the Securities and Exchange Commission on December 12, 2025).* | |||||||
| 10.2 | Change in Control Severance Agreement dated November 30, 2025, between Ciena Corporation and Gary B. Smith (incorporated by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10-K (Commission File No. 001-36250) filed with the Securities and Exchange Commission on December 12, 2025).* | |||||||
| 10.3 | Form of Change in Control Severance Agreement dated November 30, 2025, between Ciena Corporation and Executive Officers (incorporated by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-K (Commission File No. 001-36250) filed with the Securities and Exchange Commission on December 12, 2025).* | |||||||
| 31.1 | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||
| 31.2 | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||
| 32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||||
| 32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||||
| 101.INS | Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
| * | Represents management contract or compensatory plan or arrangement | |||||||
36
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Ciena Corporation | ||||||||||||||
| Date: | March 5, 2026 | By: | /s/ Gary B. Smith | |||||||||||
| Gary B. Smith | ||||||||||||||
| President, Chief Executive Officer and Director (Duly Authorized Officer) | ||||||||||||||
| Date: | March 5, 2026 | By: | /s/ Marc D. Graff | |||||||||||
| Marc D. Graff | ||||||||||||||
| Senior Vice President, Finance and Chief Financial Officer (Principal Financial Officer) | ||||||||||||||
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FAQ
How did Ciena (CIEN) perform financially in Q1 fiscal 2026?
Ciena reported strong Q1 fiscal 2026 results, with revenue of $1.43 billion and net income of $150.3 million. Revenue grew 33.1% year over year, while diluted EPS increased to $1.03 from $0.31, reflecting higher sales and improved profitability in Networking Platforms.
What drove Ciena (CIEN) revenue growth in the first quarter of 2026?
Revenue growth was led by the Networking Platforms segment, particularly Optical Networking products. Optical Networking revenue rose to $1.02 billion, helped by increased sales of Waveserver systems and 6500 Reconfigurable Line Systems to cloud and service provider customers, alongside higher Routing and Switching demand.
How did Ciena’s gross margin and operating expenses change in Q1 2026?
Gross margin was 43.8%, slightly below 44.0% a year earlier, while operating expenses increased. Product margins improved by 90 basis points, but services margins declined. Total operating expenses rose 11.5% to $436.1 million, mainly from higher research and development and employee-related costs.
What was Ciena (CIEN) cash flow and liquidity position as of January 31, 2026?
Ciena generated $227.6 million in operating cash and held $1.37 billion in cash, cash equivalents and investments. Cash flows funded $73.9 million of capital expenditures and $170.6 million of share repurchases and tax-withholding settlements, while maintaining access to a $300 million revolving credit facility.
How significant are large cloud and service provider customers for Ciena’s Q1 2026 results?
Large cloud and service provider customers represented a substantial share of Q1 2026 revenue. Notably, Cloud provider A, Cloud provider B and Service provider A together accounted for $677.0 million, reflecting Ciena’s disproportionate growth with major cloud and network operators across multiple segments.
What stock repurchase activity did Ciena (CIEN) undertake during Q1 fiscal 2026?
Ciena repurchased approximately 0.4 million shares for $80.5 million under its stock repurchase program. It also repurchased $90.1 million of stock to cover employee tax withholdings. As of January 31, 2026, $589.8 million remained authorized under the three-year, $1.0 billion repurchase program.
How is Ciena investing in technology and AI-related network opportunities?
Ciena invested $221.5 million in research and development during Q1 fiscal 2026. Spending focused on enhancing coherent modem technology and optical networking capabilities to address AI and cloud-driven network demand, including use cases inside and around data centers and high-capacity cloud interconnects.
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