Ciena (CIEN) 10-K risk factor changes: FY2022 vs FY2021

[removed: A] [added: In recent years, a] significant portion of our quarterly revenue [removed: is] [added: was] generated from customer orders received during that same quarter (which we refer to as “book to [removed: revenue”).][added: revenue”) and therefore less predictable and subject to fluctuation due to a quarterly shortfall in orders.]

Accordingly, our [removed: revenue] [added: results] for a particular quarter [removed: is] [added: can be] difficult to predict, and a [removed: shortfall in expected orders in any given quarter] [added: range of factors including those set forth below] can materially adversely affect [removed: our revenue and results of operations for that quarter or future] quarterly [removed: periods.][added: revenue, gross margin and operating results:]

- factors beyond our control such as natural disasters, climate change, acts of war or terrorism, and public health emergencies, [removed: including] [added: such as] the COVID-19 pandemic;

[removed: Due to increased] [added: In the face of extraordinary] demand across a range of industries, the global supply [removed: chain] [added: market] for certain raw materials and components, [removed: including the semiconductor] [added: including, in particular, semiconductor, integrated circuits and other electronic] components used in most of our products, has experienced significant [removed: strain] [added: constraint and disruption] in recent periods.

This constrained supply environment has adversely affected, and could further affect, [added: component] availability, lead times and [removed: cost] [added: cost, and could increase the likelihood] of [added: unexpected cancellations or delays of previously committed supply of key] components.

In an effort to mitigate these risks, [removed: in some cases,] we have incurred higher costs to secure available inventory, [removed: or have] extended [removed: or placed non-cancellable] [added: our] purchase commitments [added: and placed non-cancellable, advanced orders] with [removed: semiconductor] [added: or through] suppliers, [removed: which introduces inventory risk if our forecasts and assumptions prove inaccurate.][added: particularly for long lead time components.]

[removed: Despite our attempts to mitigate] [added: At] the [removed: impact on our business, these constrained] [added: same time, increased costs associated with] supply [removed: conditions are] [added: premiums, expediting fees and freight and logistics have impacted and can be] expected to [added: continue to] adversely impact our [removed: costs of goods sold, including our] [added: gross margin, profitability and] ability to [removed: continue to] reduce the cost to produce our products in a manner consistent with prior periods.

[removed: There] [added: The COVID-19 pandemic has also contributed to and exacerbated this strain, and there] can be no assurance that the impacts of the pandemic on [removed: the] [added: our] supply chain will not continue, or worsen, in the future.

[removed: These] [added: The current] supply chain [removed: constraints and their related] challenges could [added: also impact customer satisfaction or future business opportunities with customers, and] result in [removed: shortages,] increased [removed: material costs or] use of cash, engineering design changes, and delays in new product introductions, each of which could adversely impact our [removed: growth, gross margin,] [added: business] and financial results.

For example, our ten largest customers contributed [removed: 55.5%] [added: 56.3%] of our revenue for fiscal [removed: 2021] [added: 2022] and [removed: 54.5%] [added: 55.5%] of our [added: revenue for] fiscal [removed: 2020 revenue.][added: 2021.]

Historically, our largest customers by revenue [added: have] principally consisted of large communications service providers.

For example, AT&T accounted for approximately [removed: 12.4%] [added: 11.9%] of our revenue for fiscal [removed: 2021] [added: 2022] and [removed: 10.6%] [added: 12.4%] of our revenue for fiscal [removed: 2020.][added: 2021, while Verizon accounted for approximately 11.1% of our revenue for fiscal 2022.]

During fiscal [removed: 2021,] [added: 2022,] four Web-scale providers were among our top ten customers.

For example, communications service providers continue to face a rapidly shifting competitive landscape as cloud service operators, [removed: “over-the-top” (OTT)] [added: OTT] providers, and other content providers challenge their traditional business models and network infrastructures.

Certain of our customers are adopting procurement strategies that seek to purchase a broader set of networking solutions from [removed: a single] [added: two] or [removed: small number of] [added: more] vendors.

Due to the narrower focus of their efforts, these competitors may [removed: achieve commercial availability of their products more quickly or may] be more attractive to customers in a particular product [removed: niche.][added: niche or commercial opportunity.]

- software and network automation and analytics capabilities; [added: and]

As these changes occur, we expect that our business will compete more directly with additional networking [removed: solution suppliers, including IP router vendors, data center switch providers and other suppliers or integrators of networking technology.]

In fiscal [removed: 2021,] [added: 2022,] the COVID-19 pandemic continued to challenge our business operations and adversely impact our financial results, including due to restrictions on travel and [removed: gatherings,] [added: gatherings in certain countries and regions, including China,] significant supply chain disruptions, [removed: disruption in our ability to provide services to customers,] and a dynamic demand environment for our products and services.

See also the risk [removed: factor] [added: factors] above entitled “*Challenges relating to current supply chain constraints, including [removed: semiconductor components,] [added: with respect to semiconductors and integrated circuits,] could adversely impact our [removed: growth,] [added: revenue,] gross margins and financial [removed: results.*”][added: results*” and “*We have recently been experiencing unprecedented demand, and our backlog may not be an accurate indicator of our level and timing of future revenues*.”]

Investment of research and development resources in communications networking technologies for which there is not an adequate market demand, or failure to invest sufficiently or timely in technologies for which there is [added: high] market demand, would adversely affect our revenue and profitability.

Changes in market demand or investment priorities may also cause us to discontinue existing or planned development for new products or features, which can have a disruptive effect on our [added: relationships with customers.]

We have no guaranteed purchases and regularly [removed: have to] [added: must] re-win business for existing customers.

We believe that the potential for different approaches to the procurement of networking infrastructure will require network operators and vendors to evolve and broaden their existing solutions and commercial models [added: over time.]

Accordingly, we may encounter situations where we are competing for opportunities in the market directly against a system from one of our competitors that incorporates [removed: Ciena-designed modules or other component technologies.]

We have a number of significant assets on our balance sheet as of October [removed: 30, 2021 and] [added: 29, 2022,] the value of [removed: these assets] [added: which] can be adversely impacted by factors related to our business and operating performance, as well as factors outside of our control.

As of October [removed: 30, 2021,] [added: 29, 2022,] our balance sheet includes a [removed: $800.2] [added: $824.0] million net deferred tax asset.

The value of our net deferred tax assets can be significantly impacted by changes in tax [removed: policy] [added: policy, changes in future tax rates,] or [added: by] our tax planning strategy.

As of October [removed: 30, 2021,] [added: 29, 2022,] our balance sheet also includes [removed: $311.6] [added: $328.3] million of goodwill.

As of October [removed: 30, 2021,] [added: 29, 2022,] our balance sheet also includes [removed: $450.3] [added: $427.2] million in long-lived assets, which includes [removed: $65.3] [added: $69.5] million of intangible assets.

We have recently launched, or are in the process of launching, a number of new hardware and software offerings, including evolutions of our WaveLogic coherent optical modem [removed: technology,] [added: technology and] new Routing and Switching platforms and solutions targeting [added: edge,] access and [removed: metro networks, and 5G and data center interconnect applications.][added: aggregation networks.]

Our products are used in customer networks transmitting a range of sensitive information, and any actual or perceived exposure of our solutions to malicious software or cyber-attacks could [added: result in liability or regulatory action and] adversely affect our business and results of operations.

The current global macroeconomic environment is [removed: challenging,] [added: volatile] and continues to be significantly and adversely impacted by the COVID-19 pandemic, global supply chain [removed: constraints] [added: constraints, inflation,] and a dynamic demand environment.

- customer financial difficulty, including [added: order cancellations, delivery deferrals,] longer collection cycles and difficulties collecting accounts receivable or write-offs of receivables;

Each of our customers has a unique set of circumstances, and it is unclear how macroeconomic and market [removed: conditions, including those created or exacerbated by COVID-19,] [added: conditions] may continue to impact their purchasing volumes or behaviors.

- adverse social, political and economic [removed: conditions;][added: conditions, such as continued inflation and rising interest rates;]

- significant changes to free trade agreements, trade protection measures, tariffs, export compliance, domestic preference procurement requirements, qualification to transact business and additional regulatory requirements; [removed: and]

- natural disasters (including as a result of climate change), acts of war or terrorism, and public health emergencies, including the COVID-19 [removed: pandemic.][added: pandemic; and]

Physical, regulatory, technological, market, reputational, and legal risks related to climate change in these regions and globally are increasing in impact and diversity and the magnitude of any [removed: short term] [added: short-term] or [removed: long term] [added: long-term] adverse impact on our business or results of operations remains unknown.

In particular, recent years have seen a substantial increase in anti-bribery law enforcement activity by U.S. regulators, and we currently operate and seek to operate in many parts of the world that are recognized [added: or perceived] as having greater potential for corruption.

More recently, however, we have generated a significant backlog of customer orders, and our results can be more significantly impacted by availability of supply, as well as any order cancellations or delivery deferrals of existing backlog.

Our efforts to expand our manufacturing capacity and multi-source and pre-order components and finished goods inventory may fail to reduce the impact of these adverse supply chain conditions.

Despite our mitigation efforts, constrained supply conditions during fiscal 2022 adversely impacted and are expected to continue to adversely impact our revenue, results of operations and our ability to meet customer demand.

For example, fiscal 2022 revenue was adversely impacted by a range of disruptions in our supply chain, including later-than-expected deliveries, lower-than-expected quantities and third-party manufacturing disruptions that took production offline for periods of time.

During fiscal 2022, delays and lower-than-expected deliveries from a small group of our suppliers of integrated circuit components that are essential for delivering finished products had a disproportionate impact on our results of operations.

We have recently been experiencing unprecedented demand, and our backlog may not be an accurate indicator of our level and timing of future revenues.

As a result of order volumes growth in recent periods, our backlog has grown from $2.2 billion at the end of fiscal 2021 to $4.2 billion at the end of fiscal 2022.

Backlog may be fulfilled several quarters following receipt of a purchase order, either due to customer purchasing schedules or delays caused by supply chain constraints.

Backlog also includes certain service obligations that may relate to a multi-year support period.

Our ability to fulfill backlog is being adversely impacted by the current global supply constraints described above.

Generally, our customers may cancel, delay or change their orders with limited advance notice, or they may decide not to accept our products and services, although instances of both cancellation and non-acceptance have been rare historically.

As a result, backlog should not necessarily be viewed as an accurate indicator of future revenue for any particular period.

In addition, we believe that some portion of our increased order volumes in recent periods reflects customer acceleration of future orders due to the implementation of security of supply strategies, or spending that was delayed or deferred in prior years due to COVID-19-related impacts.

Our order growth relative to revenue has begun to moderate since the first half of fiscal 2022 and we do not expect the relative level of orders we experienced in fiscal 2022 to be sustainable in the long-term.

As these customers move to dual or multiple vendor strategies and add new vendors, we may lose our status as sole or primary vendor.

- ability to supply and product delivery lead times;

solution suppliers, including IP router vendors and other suppliers or integrators of networking technology.

Unprecedented actions were taken by governments and other institutions globally to try to mitigate the impact of the COVID-19 pandemic, some of which continued through fiscal 2022 in certain regions or to certain extents.

In accordance with relevant public health guidance and local conditions, we have conducted a phased return to our offices and facilities, implemented a hybrid remote/office working model, and resumed certain travel, but continue to closely monitor the COVID-19 pandemic to determine if additional actions or policy adjustments are required.

Ciena-designed modules or other component technologies.

Accurately matching necessary inventory levels to customer demand within the current environment is challenging, and we may incur additional costs or be required to write off significant inventory that would adversely impact our results of operations.

Since the second quarter of fiscal 2021, we have experienced unprecedented demand for our products and services, and matching necessary inventory to fulfill that demand within the current supply constrained environment is challenging.

We have and continue to take a number of steps to mitigate the current supply chain challenges, including extending our purchase commitments and placing non-cancellable, advanced orders with or through suppliers, particularly for long lead time components.

As of October 29, 2022 we had $2.6 billion in outstanding purchase order commitments to our contract manufacturers and component suppliers for inventory.

We have also been expanding our manufacturing capacity and have been accumulating raw materials inventory of components that are available, in some cases with expanded lead times, in an effort to prepare us to be able to produce finished goods more quickly when supply constraints ease for certain common components, including integrated circuit components, for which delivery continues to be delayed.

As a result of this strategy, our inventory has increased from $374.3 million at the end of fiscal 2021 to $946.7 million at the end of fiscal 2022.

These inventory practices, and their associated costs, have had, and can be expected to continue to have, an adverse impact on our cash from operations.

These inventory practices also further introduce obsolescence risk that can impact our results of operations and financial condition.

If our customers were to cancel orders as a result of increased lead times or otherwise, inventory could become obsolete and we could be required to write off or write down the inventory associated with those orders.

In addition, if customers were to cancel existing or forecasted orders for which we have significant outstanding commitments to our contract manufacturers or suppliers, we may be required to purchase inventory under these commitments that we are unable to sell.

Our inability to effectively manage the matching of inventory with customer demand within the current environment could adversely impact our results of operations and financial condition, and could result in loss of revenue, increased costs, or delays that could adversely impact customer satisfaction.

- failure to consummate or delay in consummating such transactions;

- uncertain economic, legal and political conditions in Europe, Asia and other regions where we do business, including, for example, as a result of the ongoing military conflict between Russia and Ukraine and changes in China-Taiwan and U.S.-China relations.

Our business, operations and financial results could also be adversely impacted by instability, disruption or destruction in a significant geographic region, including as a result of war, terrorism, riot, civil insurrection or social unrest; natural or man-made disasters; public health emergencies; or economic instability or weakness.

For example, in February 2022, armed conflict escalated between Russia and Ukraine.

The United States and certain other countries have imposed sanctions on Russia and could impose further sanctions, which could damage or disrupt international commerce and the global economy.

We are complying with a broad range of U.S. and international sanctions and export control requirements imposed on Russia and, in March 2022, we announced our decision to suspend our business operations in Russia immediately.

Although this decision did not materially impact our results of operations for fiscal 2022 due to the limited amount of business that we conducted in Russia historically, it is not possible to predict the broader or longer-term consequences of this conflict, which could include further sanctions, embargoes, regional instability, geopolitical shifts and adverse effects on macroeconomic conditions, security conditions, currency exchange rates and financial markets.

Such geopolitical instability and uncertainty could have a negative impact on our ability to sell to, ship products to, collect payments from, and support customers in certain countries and regions based on trade restrictions, sanctions, embargoes and export control law restrictions, and logistics restrictions including closures of air space, and could increase the costs, risks and adverse impacts from supply chain and logistics challenges.

- risks associated with data security breaches, interdiction or cyber-attacks targeting our third-party manufacturers, including manufacturing disruptions or unauthorized access to information;

Additional factors that contribute to fluctuations in our revenue, gross margin and operating results include:

The COVID-19 pandemic has also contributed to and exacerbated this strain.

These conditions have impacted lead times for our products, and could impact our ability to meet customer demand where we cannot timely secure supply of these components.

We have also multi-sourced and pre-ordered components and finished goods inventory in some cases in an effort to reduce the impact of the adverse supply chain conditions we have experienced.

In addition, some suppliers have indicated that as a result of current shortages they intend to cease manufacture of certain components used in our products.

Limits on manufacturing availability or capacity or delays in production or delivery of components or raw materials due to COVID-related restrictions could further delay or inhibit our ability to obtain supply of components and produce finished goods.

Because of their scale, resources, and a more diverse set of solution offerings, certain of our larger competitors may be perceived to be a better fit for the procurement or network operating and management strategies of these customers.

- manufacturing and lead-time capability; and

Unprecedented actions have been taken by governments and other institutions globally to try to contain the COVID-19 pandemic, such as travel bans and restrictions, business closures, social distancing measures, quarantines and shelter-in-place orders.

Different jurisdictions have imposed or retained varying restrictions and achieved varying success at managing the impact of the pandemic.

In addition, many jurisdictions have experienced resurgences in COVID-19 cases and have halted or reversed the loosening of restrictions in response.

For example, an outbreak of COVID-19 in India beginning in March 2021 led to increase employee absenteeism and resulting government restrictions limited in certain cases the movement of our employees.

If the COVID-19 pandemic or its adverse effects become more severe or prevalent or are prolonged in the locations where we, our customers, suppliers or

manufacturers conduct business, or we experience more pronounced disruptions in our business or operations, or in economic activity and demand for our products and services generally, our business and results of operations in future periods could be materially adversely affected.

*Employees*

As a result of the COVID-19 pandemic, we have kept most of our offices globally temporarily closed, implemented travel restrictions and withdrawn from certain industry events.

Restrictions on travel and gatherings due to COVID-19 have impacted, and are likely to continue to impact, our interaction with customers, the timing of certain field and lab trials, our ability to carry out certain sales and marketing activities, as well as our ability to secure new customers, to qualify and sell new products, and to grow sales with customers where we do not have longer-standing supply relationships, including within our Blue Planet Automation Software and Services segment and our Routing and Switching product line.

In addition, government requirements intended to mitigate the impact of the pandemic, including mandates that require employees to be vaccinated or be tested regularly, may lead to increased attrition, challenges in meeting labor needs, inefficiencies related to employee turnover, and costs associated with implementation and ongoing compliance.

*Services and Customer Fulfillment*

We have experienced some disruption in our ability to provide installation, professional and fulfillment services to customers during the COVID-19 pandemic.

These disruptions have resulted from site access limitations, limited customer availability, project delays or re-prioritization by customers, travel bans and restrictions on movement or gatherings.

We have also experienced transportation disruptions, such as reduced availability of air transport, port closures, and increased border controls or closures.

These conditions have also made it more challenging to execute and adversely impacted the timing of customer plans to operationalize newer projects and recent customer design wins, primarily in international markets.

Our customers have also experienced, and may continue to experience, disruptions in their operations, which can result in delayed, reduced, or canceled orders, and increased collection risks, and which may adversely affect our results of operations.

*Demand for Products and Services*

The demand environment for our products and services remains dynamic and continues to be impacted by the effects of the COVID-19 pandemic.

For example, we experienced a constrained spending environment during the second half of fiscal 2020 and the first quarter of fiscal 2021 that adversely impacted our revenue during that period.

During the remainder of fiscal 2021, we experienced significantly stronger order volumes for our products and services, particularly among a concentrated set of larger customers with which we have existing positions as a supplier.

We believe some portion of these orders reflects certain short-term customer purchasing behaviors, including network operators addressing capacity and network requirements following a period of constrained spending in previous quarters, and possible acceleration of future orders due to the implementation of security of supply strategies amidst global supply constraints for semiconductor components.

As our customers and their customers continue to evaluate the ways in which networks and working environments will change even after the pandemic subsides, there may be long-lasting changes in customer behaviors and needs, including the end users of our customers, which may impact the demand for our products and services in the long-term.

As a result of the COVID-19 pandemic, technology preferences, customer demand and the markets for our solutions may move in directions that we had not anticipated.

relationships with customers.

over time.

If we fail to predict demand accurately, we may be required to write off significant amounts of inventory as a result of our inventory purchase practices and could incur additional costs or experience manufacturing delays.

Accurately predicting demand and purchasing inventory and components within the current supply constrained and dynamic demand environment is challenging and could adversely impact our financial results and customer experience.

To avoid delays and meet customer delivery demands, we place orders with our contract manufacturers and component suppliers based on forecasts of customer demand.

In many cases these suppliers may require longer lead times for fulfillment than we have with our customers.

Thus, our practice of buying inventory based on forecasted demand exposes us to the risk that our customers ultimately may not order the products we have forecast or will purchase fewer products than forecast.

As a result, we may purchase inventory in anticipation of sales that ultimately do not occur.

We regularly incur, on a quarterly basis, expense provisions against excess or obsolete inventory and may have difficulty forecasting inventory and customer spending.

We provide hardware, software and services that [removed: enable] [added: support] the [removed: transport, routing, switching, aggregation, service] delivery [removed: and management] of video, data and voice traffic [removed: on] [added: over core, metro, aggregation and access] communications networks.

Our solutions are used [added: globally] by communications service providers, cable and multiservice operators, Web-scale providers, submarine network operators, governments, [removed: enterprises, research] and [removed: education institutions and emerging network operators.][added: enterprises across multiple industry verticals.]

Our portfolio is designed to enable [removed: what we refer to as] the Adaptive [removed: Network™,] [added: Network, which is] our vision for a network end state that [removed: emphasizes] [added: leverages] a programmable and scalable network infrastructure, [added: driven by] software control and automation capabilities, [removed: network] [added: that are informed by] analytics and [removed: intelligence, and related advanced services.][added: intelligence.]

By transforming network infrastructures into [removed: a] dynamic, programmable [removed: environment] [added: environments] driven by automation and analytics, network operators can realize greater business agility, dynamically adapt to changing end-user service demands and rapidly introduce new revenue-generating services.

They can also gain valuable real-time network insights, allowing them to optimize network [removed: operation] [added: performance] and maximize the return on their network infrastructure investment.

Our Converged Packet Optical portfolio includes products that support [removed: the connection of content to content, including in] long haul and [removed: regional,] [added: regional networks,] submarine and data center interconnect networks, and [removed: users to content, including in] metro and edge networks.

Our Routing and Switching portfolio includes products and solutions that enable efficient IP transport in next-generation metro edge, access and aggregation [removed: networks, connecting users to content in applications that include 5G and Internet of Things, mobile backhaul, optical access, virtualization and enterprise services.][added: networks.]

These include network transformation, consulting, implementation, systems integration, maintenance, [removed: network operations center (“NOC”)] [added: NOC] management, [added: learning,] and optimization services.

[removed: Due to increased] [added: In the face of extraordinary] demand across a range of industries, [removed: the] global supply [removed: market] for certain raw materials and components, including, in particular, [removed: the semiconductor] [added: semiconductor, integrated circuits and other electronic] components used in most of our products, has experienced [removed: significant] [added: substantial constraint and] disruption in recent periods.

We expect these constrained supply conditions to increase our costs of goods sold [added: in the near term] and to adversely impact our ability to continue to reduce the cost to produce our products in a manner consistent with prior periods.

See “Risk Factors” in Item 1A of Part I of this report for further discussion of risks related to our supply [removed: chain.][added: chain, inventory and our mitigation activities.]

Impact of [removed: the COVID-19 Pandemic] [added: Global Events] on our Business and Operations

See Note [removed: 3] [added: 4] to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for more [removed: information.][added: information regarding these transactions.]

[added: *COVID-19 Pandemic.*] The [added: impact of the] COVID-19 pandemic and [added: of] countermeasures taken to contain its spread [removed: have caused economic and financial disruptions globally.][added: remain dynamic.]

If [removed: the COVID-19 pandemic or its adverse effects become more severe or prevalent or are prolonged in the locations where we, our customers, suppliers or manufacturers conduct business, or] we experience more [removed: pronounced] [added: pronounced, COVID-19 related] disruptions in our business or operations, or in economic activity and demand for our products and services generally, our business and results of operations in future periods could be materially adversely affected.

The [removed: markets] [added: market] in which we sell our communications networking solutions [removed: are] [added: is] dynamic and [removed: are] characterized by a high rate of change, including rapid growth in bandwidth demand and network traffic, the proliferation of cloud-based services and new approaches, or “consumption models,” for designing and procuring networking solutions.

Emerging services and applications, including 5G mobile communications, [removed: Fiber Deep] [added: fiber-based access networks] and the Internet of Things, are further impacting or expected to impact wireline network infrastructures, particularly at the edge of networks, where increased [added: capacity,] computing power and automation are required to provide the quality of experience demanded by end users.

Our Adaptive Network vision and our business strategy to capitalize on these changing market dynamics include the initiatives set forth in the “Strategy” section of the description of our business in Item 1 of Part [removed: 1] [added: I] of this annual report.

[added: *Strategic Acquisitions.*] During [removed: the first quarter of] fiscal 2022, we acquired AT&T’s Vyatta virtual routing and switching technology, which is intended to expand and accelerate our Adaptive IP solutions and address the growing market opportunity to transform the [added: network] edge, including 5G networks and cloud environments.

See Note [removed: 28] [added: 4] to our Consolidated Financial Statements included in Item 8 of Part II of this report for more information on [removed: this acquisition] [added: these acquisitions] and the related accounting.

Backlog may be fulfilled several quarters following receipt of a purchase order, or in the case of certain service obligations, [removed: may relate to multi-year support period.]

Our backlog was [removed: $2.17] [added: $4.2] billion as of October [removed: 30, 2021] [added: 29, 2022,] as compared to [removed: $1.19] [added: $2.2] billion as of October [removed: 31, 2020.][added: 30, 2021.]

Backlog at October [removed: 30, 2021] [added: 29, 2022] includes approximately [removed: $241.7] [added: $251.8] million primarily related to orders for products and maintenance and support services that are not expected to be filled or performed within fiscal [removed: 2022.][added: 2023.]

A discussion regarding our financial condition and results of operations for fiscal [removed: 2021] [added: 2022] compared to fiscal [removed: 2020] [added: 2021] is presented below.

A discussion of fiscal [removed: 2020] [added: 2021] compared to fiscal [removed: 2019] [added: 2020] can be found under Item 7 of Part II of our Annual Report on Form 10-K for the fiscal year ended October [removed: 31, 2020,] [added: 30, 2021,] filed with the SEC on December [removed: 18, 2020 (our “2020 Annual Report”),] [added: 17, 2021,] which is available free of charge on the SEC’s website at www.sec.gov and our Investor Relations website at investor.ciena.com.

Fiscal [removed: 2021] [added: 2022] Compared to Fiscal [removed: 2020][added: 2021]

During fiscal [removed: 2021,] [added: 2022,] approximately [removed: 16.4%] [added: 13.7%] of our revenue was non-U.S. Dollar denominated, primarily including sales in Euros, Canadian [removed: Dollars, Brazilian Reais, British Pounds, Japanese Yen,] [added: Dollars] and [removed: Indian Rupee.][added: British Pounds.]

During fiscal [removed: 2021,] [added: 2022,] as compared to fiscal [removed: 2020,] [added: 2021,] the U.S. Dollar primarily [removed: weakened] [added: strengthened] against these and other currencies.

Consequently, our revenue reported in U.S. Dollars [removed: slightly increased] [added: was adversely impacted] by approximately [removed: $21.8] [added: $32.0] million, or [removed: 0.6%,] [added: 0.9%,] as compared to fiscal [removed: 2020.][added: 2021.]

| | | | [removed: 2021] [added: 2022] | | | | | | %* | | | | | | [removed: 2020] [added: 2021] | | | | | | %* | | | | | | Increase (decrease) | | | | | | % | | |

| Platform Software and Services | | | [removed: 229,588] [added: 277,191] | | | | | | [removed: *6.4*] [added: *7.6*] | | | | | | [removed: 197,809] [added: 229,588] | | | | | | [removed: *5.6*] [added: *6.4*] | | | | | | [removed: 31,779] [added: 47,603] | | | | | | [removed: *16.1*] [added: *20.7*] | | |

| Blue Planet Automation Software and Services | | | [removed: 77,247] [added: 76,567] | | | | | | *2.1* | | | | | | [removed: 62,632] [added: 77,247] | | | | | | [removed: *1.8*] [added: *2.1*] | | | | | | [removed: 14,615] [added: (680)] | | | | | | [removed: *23.3*] [added: *(0.9)*] | | |

| Maintenance Support and Training | | | [removed: 283,350] [added: 292,375] | | | | | | [removed: *7.8*] [added: *8.1*] | | | | | | [removed: 269,354] [added: 283,350] | | | | | | [removed: *7.6*] [added: *7.8*] | | | | | | [removed: 13,996] [added: 9,025] | | | | | | [removed: *5.2*] [added: *3.2*] | | |

| Installation and Deployment | | | [removed: 171,489] [added: 157,443] | | | | | | [removed: *4.7*] [added: *4.3*] | | | | | | [removed: 152,003] [added: 171,489] | | | | | | [removed: *4.3*] [added: *4.7*] | | | | | | [removed: 19,486] [added: (14,046)] | | | | | | [removed: *12.8*] [added: *(8.2)*] | | |

| Consulting and Network Design | | | [removed: 33,705] [added: 50,715] | | | | | | [removed: *1.0*] [added: *1.4*] | | | | | | [removed: 35,296] [added: 33,705] | | | | | | *1.0* | | | | | | [removed: (1,591)] [added: 17,010] | | | | | | [removed: *(4.5)*] [added: *50.5*] | | |

| | | | Denotes % change from [removed: 2020 to] 2021 [added: to 2022] | | |

- [removed: Networking] [added: Networking] Platforms segment revenue [removed: increased,] [added: decreased by $46.9 million,] reflecting product line sales [removed: increases] [added: decreases] of [removed: $5.9] [added: $173.6] million of our Converged Packet Optical [removed: products and $4.4] [added: products, offset by product line sales increases of $126.6] million of our Routing and Switching products.

[removed: ◦Converged] [added: Our Networking Platforms segment revenue increase reflects product line sales increases of $20.5 million of Converged] Packet Optical [removed: sales increased,] [added: products,] primarily reflecting sales increases of [removed: $88.4 million of our Waveserver® products and $45.6] [added: $26.4] million of our 6500 [removed: Reconfigurable Line System (RLS),] [added: Packet-Optical Platform,] primarily to [removed: communication] [added: enterprise customers and communications] service providers.

[removed: These sales increases were partially offset] [added: Our Converged Packet Optical revenue decrease] primarily [removed: by] [added: reflects] sales decreases of [removed: $75.7] [added: $89.9] million of our 6500 Packet-Optical [removed: Platform] [added: Platform,] primarily to [removed: enterprise customers and communication] [added: communications] service providers and [removed: $40.2] [added: Web-scale providers, and $25.5] million of our 5400 family of Packet-Optical Platforms [added: and $23.5 million of our Z-Series Packet-Optical Platform,] primarily to communications service providers.

[removed: ◦Routing] [added: Routing] and Switching [removed: sales increased, primarily reflecting] [added: product line] sales [removed: increases of $10.9] [added: reflect $86.1] million of our [removed: platform independent software] [added: Virtualization Edge software,] and [removed: $8.1] [added: a sales increase of $53.6] million of our 3000 and 5000 families of service delivery and aggregation [removed: switches] [added: switches, primarily] to [removed: communication] [added: communications] service providers.

To complement our Networking Platforms, we offer Platform Software, which includes our MCP applications that deliver advanced multi-layer domain control and operations.

Through our Blue Planet Software we also enable complete service lifecycle management automation with productized OSS and service assurance solutions that help our customers to achieve closed loop automation across multi-vendor and multi-domain environments.

Demand Environment

Since the second quarter of fiscal 2021, we have experienced unprecedented demand for our products and services.

Our quarterly order volumes during this period have significantly exceeded our revenue and historical order volumes, with some concentration of orders among certain existing Webscale and North America-based service provider customers.

We believe that we are benefiting from certain shifts in business and consumer behaviors, in part accelerated by the COVID-19 pandemic, that represent positive, long-term trends for our business.

These include 5G, enterprise and consumer cloud network adoption, increasing demands on the network edge, and network operator focus on resilience and automation.

We believe some portion of these orders also reflects customer acceleration of future orders due to lengthened lead times or the implementation of security of supply strategies to address the supply constraints described below.

As a result, our backlog has grown from $2.2 billion at the end of fiscal 2021 to $4.2 billion at the end of fiscal 2022.

However, our order growth relative to revenue has begun to moderate from the first half of fiscal 2022 and we expect it to continue to moderate over time.

As a result, our backlog should not necessarily be viewed as an accurate indicator of revenue for any particular period.

See “Risk Factors” in Item 1A of Part I of this report for further discussion of risks related to the demand environment.

As a result, we have experienced significant component shortages, extended lead times, increased costs, and unexpected cancellation or delay of previously committed supply of key components across our supplier base.

Beginning in the second half of fiscal 2021, we started placing significant, advanced

orders for supply of certain long lead time components to address our expected customer demand for fiscal 2022 and the then-emerging supply chain challenges.

Since that time, we have continued to extend the duration of our purchase commitments, or placed non-cancellable, advanced orders with or through suppliers, particularly for long lead time components.

As of October 29, 2022, we had $2.6 billion in outstanding purchase order commitments to our contract manufacturers and component suppliers for inventory.

During the second half of fiscal 2022, reliability of supply improved gradually, and the majority of our suppliers were able to deliver components by their promised, though in many cases, extended, lead times.

However, we continued to experience substantial delays and lower-than-expected component deliveries from a small group of our suppliers of integrated circuit components that represent a small fraction of our overall materials, but which are essential for delivering finished products.

Although we benefited from some favorable supply chain developments during the fourth quarter of fiscal 2022, including receiving more integrated circuits than expected, as well as our investment in expanded manufacturing capacity described below, ongoing supply constraints and the unpredictable performance of our supply chain adversely impacted our ability to meet customer demand and our level of revenue and growth in fiscal 2022, in particular for our Converged Packet Optical products.

At the same time, increased supply chain costs, including purchase price increases, supply premiums, expediting fees and freight and logistics, adversely impacted our gross margin and profitability in fiscal 2022.

We believe these supply chain challenges will continue at least through fiscal 2023 and expect that the extended lead times and elevated supply chain costs we have experienced will persist for the reasonably foreseeable future.

It is unclear when the supply environment will become less volatile and what impacts the supply environment will have on our business and results of operations in future periods.

To mitigate the impact of these supply conditions on our business and customers, in addition to placing advance orders for inventory, we have been expanding our manufacturing capacity and accumulating components that are in available supply, in some cases with expanded lead times.

We believe that this approach positions us to produce finished goods more quickly when supply constraints ease for those components for which delivery continues to be delayed.

As a result of this strategy, our inventory has increased from $374.3 million at the end of fiscal 2021 to $946.7 million at the end of fiscal 2022.

We have also implemented additional mitigation strategies, including multi-sourcing activities, qualifying alternative parts, and product redesign, and expect, over time, to realize certain benefits of these mitigation activities.

Together with increased costs of supply, these mitigation strategies have impacted, and can be expected to continue to impact, our result of operations and cash from operations.

For example, we gradually reopened a significant number of our offices globally during fiscal 2022.

We continue to take meaningful precautions in accordance with relevant guidelines to protect the health and safety of our employees.

The COVID-19 pandemic and related countermeasures have previously impacted our operations and disrupted the manufacturing operations of our supply chain business partners.

If the COVID-19 pandemic or its adverse effects, including the effects of extended government-mandated lockdowns in several cities in China, become more severe or prevalent or are prolonged in the locations where we, our customers, suppliers or manufacturers conduct business, our business and results of operations could be adversely impacted.

*Russia and Ukraine Conflict.* In February 2022, armed conflict escalated between Russia and Ukraine.

The United States and certain other countries have imposed sanctions on Russia and could impose further sanctions, which could damage or disrupt international commerce and the global economy.

We are complying with a broad range of United States and international sanctions and export control requirements imposed on Russia and, on March 7, 2022, we announced our decision to suspend our business operations in Russia immediately.

Due to the limited amount of business that we have conducted in Russia historically, this decision did not materially impact our results of operations for fiscal 2022 and we do not expect it to materially impact our results of operations going forward.

See Note 5 to our Consolidated Financial Statements included in Item 8 of Part II of this report for more information on the impact of suspending our business operations in Russia.

Strategic and Financial Initiatives

During fiscal 2022, we also acquired Xelic, a provider and developer of FPGA and ASIC technology and optical networking IP cores, to enhance development of our WaveLogic coherent modem technology.

During the first quarter of fiscal 2023, we acquired Benu and its portfolio of cloud-native software solutions, including a virtual Broadband Network Gateway ((v)BNG), which complement our existing portfolio of broadband access solutions.

To complement our Networking Platforms, we offer Platform Software, which includes a wide array of software solutions that deliver operations, administration, maintenance, and provisioning (“OAM&P”) functionality, as well as domain control, orchestration, operational support systems (“OSS”) and service assurance to achieve closed loop automation across multi-vendor and multi-domain network environments.

Through our Blue Planet® Software suite, we enable customers to accelerate the digital transformation of their networks through service lifecycle automation.

These conditions, which worsened during the second half of fiscal 2021, have been exacerbated in part by the COVID-19 pandemic.

As a result, we have experienced ongoing component shortages, longer lead times and increased cost of components, particularly relating to semiconductors.

Some of our suppliers have indicated that, as a result of current constraints, they intend to cease manufacturing of certain components used in our products.

These conditions have impacted the lead times for our products, and could adversely impact our ability to meet customer demand where we cannot timely secure supply of these components.

In response, we have implemented mitigation strategies and increased our purchases of inventory for certain components.

In some cases, we have incurred higher costs to secure available inventory, or have extended our purchase commitments or placed non-cancellable orders with suppliers, which introduces inventory risk if our forecasts and assumptions are inaccurate.

The current supply conditions can also be expected to adversely impact our gross margin as well as the level and timing of our revenue during fiscal 2022.

We believe these supply chain challenges and their adverse impact on our business and financial results will persist, at least through

the first half of calendar 2022, and may extend into periods thereafter.

In response to the COVID-19 pandemic, we have prioritized the safety of our employees and business partners, while continuing to support the needs of our customers and communities during this unprecedented period.

We have also implemented business continuity plans designed to minimize potential business disruption from the COVID-19 pandemic and to protect our supply chain and customer fulfillment and support operations.

During fiscal 2021, the COVID-19 pandemic continued to affect our business operations, including as set forth below.

*Demand for Products & Services*.

The demand environment for our products and services remains dynamic and continues to be impacted by the effects of the COVID-19 pandemic.

For example, we experienced a constrained spending environment during the second half of fiscal 2020 and the first quarter of fiscal 2021 that adversely impacted our revenue during that period.

During the remainder of fiscal 2021, we experienced significantly stronger order volumes for our products and services, particularly among a concentrated set of larger customers with which we have existing positions as a supplier.

This improved demand environment and growth in order volumes contributed to our increased revenue in the second half of fiscal 2021 compared to the first half of fiscal 2021.

We believe some portion of these orders reflects certain short-term customer purchasing behaviors, including network operators addressing capacity and network requirements following a period of constrained spending in previous quarters, and possible acceleration of future orders due to the implementation of security of supply strategies amidst global supply constraints for semiconductor components.

Over the longer term, we continue to believe that the increased demands placed on network infrastructures as a result of the COVID-19 pandemic, and the related increase in remote working worldwide, have accelerated certain trends, including cloud network adoption, networking resilience and flexibility, and enhanced network automation.

*Services and Customer Fulfillment.* During fiscal 2020 and fiscal 2021, we experienced some disruption in our ability to provide installation, professional and fulfillment services to customers due to site readiness and access limitations, limited customer availability, project delays or re-prioritization by customers, and travel bans or restrictions on movement or gatherings.

We have also experienced some disruption and delays in our supply chain operations and logistics, including shipping delays and higher transport costs.

The duration and severity of conditions in the future is uncertain and, as a result, may continue to adversely impact our revenue and results of operations.

*Sales & Marketing.* Restrictions on travel due to COVID-19 and limitations on interactions with customers, such as field and lab trials, have continued to negatively impact our ability to carry out certain sales and marketing activities, including our ability to secure new customers, to qualify and sell new products, and to grow sales with customers.

Customer delays in operationalizing new network projects during fiscal 2021 that we anticipated occurring on their original timelines adversely affected our revenue.

Conversely, our recent gross margin performance during fiscal 2021 benefited from these dynamics, with a larger percentage of our revenue comprised of existing business, as compared to new design wins and early in life projects, which tend to have lower margins.

*Canada Emergency Wage Subsidy (“CEWS”)*.

In April 2020, the government of Canada introduced the CEWS program to help employers offset a portion of their employee wages for a limited period in response to the COVID-19 outbreak, retroactive to March 15, 2020.

Amounts from the CEWS program positively impacted our operating expense and measures of profit for the fiscal year ended October 30, 2021.

For the fiscal year ended October 30, 2021, we recorded CEWS benefits of CAD$52.2 million ($41.3 million), net of certain fees, related to claim periods beginning March 15, 2020, including CAD$43.9 million ($35.4 million) related to employee wages from fiscal 2020.

The CEWS program has expired and we do not anticipate a similar impact on our financial results in future periods.

However, the COVID-19 pandemic and its impact remain dynamic.

Supply Chain and Distribution Structure; Recognition of Deferred Tax Asset in Fiscal 2021

To better accommodate the requirements of a global business, we are implementing a plan to reorganize our global supply chain and distribution structure more substantially, which includes a legal entity reorganization and related system upgrade.

We completed the first phase of this plan in fiscal 2021, and expect to continue to implement the plan during the first half of fiscal 2022.

As part of this reorganization, we completed an internal transfer of certain of our non-U.S. intangible assets, which created amortizable tax basis resulting in the discrete recognition of $119.3 million as a deferred tax asset with a corresponding tax benefit.

The impact of this transfer is reflected in our effective tax rate for the year ended October 30, 2021, and had a significant, one-time impact on our net income for the period.

Business Diversification

A key element of our strategy is to continue to diversify our solutions offerings, customer base and geographic reach to address fast-growing applications and markets.

The estimated impact on these investments of a 100 basis point (1.0%) increase in interest rates across the yield curve from rates in effect as of the balance sheet date would be a [removed: $2.0] [added: $1.2] million decline in value.

We have entered into interest rate swap arrangements (“interest rate swaps”) that fix the [removed: LIBOR] [added: floating] rate [removed: of approximately] [added: for] $350.0 million of the 2025 Term Loan [removed: principal amount] at 2.957% through September [removed: 2023.][added: 2023, and at 2.968% from October 2023 through September 2025.]

Because we sell globally, some of our sales transactions and revenue are non-U.S. Dollar denominated, with the Euro, Canadian Dollar and [removed: Brazilian Real] [added: British Pound] being our most significant foreign currency revenue exposures.

During fiscal [removed: 2021,] [added: 2022,] approximately [removed: 16.4%] [added: 13.7%] of revenue was non-U.S. Dollar denominated.

During fiscal [removed: 2021] [added: 2022] as compared to fiscal [removed: 2020,] [added: 2021,] the U.S. Dollar [removed: weakened] [added: strengthened] against a number of foreign currencies.

Consequently, our revenue reported in U.S. Dollars [removed: slightly increased] [added: was adversely impacted] by approximately [removed: $21.8] [added: $32.0] million or [removed: 0.6%.][added: 0.9%.]

With regard to operating expense, our primary exposure to foreign currency exchange risk relates to the [added: Euro,] Canadian [removed: Dollar, Indian Rupee, Brazilian Real, British Pound] [added: Dollar] and [removed: Euro.][added: Indian Rupee.]

During fiscal [removed: 2021,] [added: 2022,] approximately [removed: 49.4%] [added: 50.0%] of our operating expense was non-U.S. Dollar denominated.

During fiscal [removed: 2021] [added: 2022] as compared to fiscal [removed: 2020,] [added: 2021,] the U.S. Dollar primarily [removed: weakened] [added: strengthened] against these and other currencies.

Consequently, our operating expense reported in U.S. Dollars [removed: slightly increased] [added: decreased] by approximately [removed: $15.1] [added: $25.5] million, or [removed: 1.2%,] [added: 1.9%,] net of hedging.

The derivative’s net gain or loss is initially reported as a component of accumulated other comprehensive income (loss) and, upon the occurrence of the forecasted transaction, is subsequently reclassified to the line item in the Consolidated [removed: Statement] [added: Statements] of Operations to which the hedged transaction relates.

During fiscal [removed: 2021,] [added: 2022,] we recorded [removed: $14.6] [added: $2.5] million in foreign currency exchange [removed: losses,] [added: gains,] as a result of monetary assets and liabilities that were transacted in a currency other than the entity’s functional currency, and the re-measurement adjustments were recorded in interest and other income (loss), net on our Consolidated [removed: Statement] [added: Statements] of Operations.

During fiscal [removed: 2021,] [added: 2022,] we recorded [removed: a gain] [added: losses] on non-hedge designated foreign currency forward contracts of [removed: $11.2] [added: $4.0] million.

*Interest Rate Sensitivity*. We maintain an investment portfolio of various holdings, types, and maturities.

*Interest Rate Sensitivity*. We currently hold investments in U.S. government obligations with varying maturities.

The 2025 Term Loan bears interest at LIBOR plus a spread of 1.75%, subject to a minimum LIBOR rate of 0.00%.

We provide hardware, software and services that [removed: enable] [added: support] the [removed: transport, routing, switching, aggregation, service] delivery [removed: and management] of video, data and voice traffic [removed: on] [added: over core, metro, aggregation and access] communications networks.

Our solutions are used [added: globally] by communications service providers, cable and multiservice operators, Web-scale providers, submarine network operators, governments, [removed: enterprises, research] and [removed: education institutions and emerging network operators.][added: enterprises across multiple industry verticals.]

Our portfolio is designed to enable [removed: what we refer to as] the Adaptive Network™, [added: which is] our vision for a network end state that [removed: emphasizes] [added: leverages] a programmable and scalable network infrastructure, [added: driven by] software control and automation capabilities, [removed: network] [added: that are informed by] analytics and [removed: intelligence, and related advanced services.][added: intelligence.]

By transforming network infrastructures into [removed: a] dynamic, programmable [removed: environment] [added: environments] driven by automation and analytics, network operators can realize greater business agility, dynamically adapt to changing end-user service demands and rapidly introduce new revenue-generating services.

They can also gain valuable real-time network insights, allowing them to optimize network [removed: operation] [added: performance] and maximize the return on their network infrastructure investment.

Our Converged Packet Optical portfolio includes products that support [removed: the connection of content to content, including in] long haul and [removed: regional,] [added: regional networks,] submarine and data center interconnect networks, and [removed: users to content, including in] metro and edge networks.

Our Routing and Switching portfolio includes products and solutions that enable efficient internet protocol (“IP”) transport in next-generation metro edge, access and aggregation [removed: networks, connecting users to content in applications that include 5G and Internet of Things (“IoT”), mobile backhaul, optical access, virtualization and enterprise services.][added: networks.]

These include network transformation, consulting, implementation, systems integration, maintenance, network operations center (“NOC”) management, [added: learning,] and optimization services.

[removed: *Access] [added: Access] to SEC [removed: Reports*][added: Reports]

The [removed: markets] [added: market] in which we sell [removed: are] [added: is] dynamic and [removed: are] characterized by a high rate of change.

In addition, content is increasingly moving to the [removed: edge of the network,] [added: network edge,] creating new capacity and traffic demands closer to the user.

- *Residential Access Applications and Enterprise Applications.* In recent years [removed: we have seen] [added: there has been] a shift in bandwidth demands, traffic patterns and computing functions to the edge of networks.

This trend has been meaningfully accelerated by the COVID-19 pandemic, including due to an increase in remote and hybrid [removed: working] [added: working, distance learning,] and work from home arrangements.

With a higher percentage of data flows concentrating closer to the [removed: edge of the network,] [added: network edge,] more capacity and higher bandwidth to home and enterprise locations is required.

- [removed: *Fiber Deep and Fiber-Based] [added: *Fiber-Based] Access Networks*.

[removed: Similar to 5G, Fiber Deep is a network] [added: Network] densification [removed: initiative] [added: initiatives] by cable and multiservice operators [removed: that seeks] [added: seek] to push more digital fiber closer to the end user [removed: and] [added: in an effort] to increase potential bandwidth, computing capability and data speeds to homes and enterprises, while [removed: at the same time] decreasing power, space and operating costs.

Wireline service providers are responding to similar [removed: trends] [added: service and end customer demands] by [removed: pushing] [added: extending] fiber to the home and deeper into access networks.

- *Internet of [removed: Things*.][added: Things (“IoT”)*.]

[added: These connections allow sharing of data that can be] monitored and analyzed, including in smart grid applications, health care and safety monitoring, resource and inventory management, home entertainment, consumer appliances, connected transportation and other M2M data applications.

- [removed: *Ultra-High] [added: *Immersive Technologies and Ultra-High] Definition Video [removed: (“UHD”) and Virtual Reality (“VR”) and Augmented Reality (“AR”).* UHD video and the advent of immersive] [added: (“UHD”).* Immersive] technologies like [removed: VR, AR] [added: virtual reality (“VR”), augmented reality (“AR”), interactive experiences, gaming] and 360° [removed: video] [added: video, as well as UHD (4K and 8K) video,] are likely to place further capacity [removed: and capability] demands on networks as adoption of these technologies grows.

Consumer electronics [removed: industries] [added: and other technology companies] are rapidly advancing these [removed: technologies] [added: applications,which require high bandwidth] and [added: low latency, and] making [removed: them] [added: the associated devices] more widely available and affordable to consumers.

[removed: As broad foundational technologies that increase] [added: By increasing] network intelligence and [removed: improve] [added: improving] automation, ML and AI [added: can] enable improvements in network planning, operations, user experience and trouble resolution.

[removed: We believe that adoption] [added: Adoption] of these technologies [removed: will] [added: is expected to] continue to increase as the IoT expands and additional services are created, and [removed: therefore that] ML and AI will serve as drivers of further network traffic and solutions innovation.

We believe that increased adoption of these technologies, services, and applications and their performance requirements will further increase network traffic and place additional service challenges on network infrastructures, requiring network [removed: operator investment] [added: operators to invest] in their metro, access and aggregation networks, as well as their core networks.

- *Closed Loop Automation.* Network operators are seeking to reduce network operating costs and better leverage [removed: analytics, automation] [added: analytics] and control capabilities to automate end-to-end service creation and [removed: delivery.][added: operation.]

Closed loop automation is a continuous cycle of communications between the programmable network infrastructure and software control elements to analyze network conditions, traffic demands, and resource availability [removed: and] to determine the best placement of traffic [removed: for] [added: or network functions to deliver] optimal service quality and resource utilization.

- *Software-Defined Networking (“SDN”).* SDN seeks to simplify networks to create more open environments that ease management, support automation and quickly deliver [removed: customized] services to end [removed: users, by enabling individual network elements to be directly programmable by standards-based software control.][added: users.]

This results in end-to-end visibility of network flows, [removed: enabling] [added: and] the optimization of traffic paths and the control of data flows through a network.

[removed: Network] [added: To accelerate the introduction of new services, network] operators are increasingly using solutions like NFV, which enables network functions that traditionally would have run on specialized or dedicated hardware to be provided through software that runs on industry-standard servers and network and storage [removed: platforms, in order to reduce their dependence on single-purpose hardware and accelerate the time to market for new revenue-generating services.][added: platforms.]

We believe that adoption of these strategies, and the related evolution of core, [removed: metro] [added: metro, aggregation] and access network infrastructures, will require network operators and their network solutions vendors to increasingly look to utilize an ecosystem of both physical and virtual network resources, optimized through software.

We expect that these network architectural approaches, in turn, will [removed: drive increased openness and interoperability of multi-vendor, multi-domain network environments, requiring] [added: require] an increased degree of cooperation, collaboration and interoperability among networking solutions vendors.

Some network operators, including certain of our largest customers, [added: have adopted or] are [removed: also] pursuing [removed: the] development and use of published reference designs and open source specifications for the procurement of off-the-shelf or commoditized hardware (often referred to as “white box” hardware).

This commoditized hardware could be used with in-house developed data path and [removed: control software or third-party developed network operating software.]

Further, [removed: a number of] [added: some] network operators are pursuing network strategies that emphasize the deployment of smaller form factor, pluggable modem technology, [removed: typically] [added: that can be housed] in a switch or router platform, [removed: as an alternative to integrated optical platforms that combine purpose-built routers and] [added: or used in place of a modem in a traditional] optical [removed: systems.][added: system.]

[removed: Due to increased] [added: In the face of extraordinary] demand across a range of industries, [removed: the] global supply [removed: market] for certain raw materials and components, [removed: including in particular the semiconductor components used] [added: including,] in [removed: most of our products,] [added: particular, semiconductor, integrated circuits and other electronic components,] has experienced [removed: significant strain] [added: substantial constraint and disruption] in recent periods.

These conditions are impacting a wide range of [removed: industries, and] [added: industries and,] across the networking industry, participants are experiencing component shortages, [removed: longer] [added: extended] lead [removed: times and] [added: times,] increased [removed: cost] [added: costs, and unexpected cancellation or delay] of [removed: components.][added: previously committed supply.]

We believe these supply chain challenges and their adverse impact on our industry will [removed: persist] [added: continue] at least through [added: fiscal 2023 and expect that] the [removed: first half of calendar 2022,] [added: extended lead times] and [removed: may extend into periods thereafter.][added: elevated supply chain costs experienced by our industry will persist for the reasonably foreseeable future.]

*Product Development [removed: &] [added: and] Sustainability*

[removed: In the face of growing] [added: As] network traffic and service [removed: expansion,] [added: expansion continue to grow,] network operators are looking toward [removed: network] technology innovation as a means to [added: help] support their business [removed: model, to] [added: models and] prepare for a low carbon [removed: future and to meet the requirements of their stakeholders.][added: future.]

Network operators are increasingly looking to their technology vendor [removed: partners, who form part of their value and supply chain, as a key element of their overall sustainability strategy] [added: partners] to [added: help them] manage the [removed: lifecycle] [added: environmental] impact of their networks, including [removed: their related power consumption,] [added: energy use,] greenhouse gas [removed: emissions] [added: emissions,] and [removed: other resource] [added: equipment refurbishment] and [removed: environmental impacts.][added: recycling.]

To complement our Networking Platforms, we offer Platform Software, which includes our Manage, Control and Plan (“MCP”) applications that deliver advanced multi-layer domain control and operations.

Through our Blue Planet® Software we also enable complete service lifecycle management automation with productized operational support systems (“OSS”) and service assurance solutions that help our customers to achieve closed loop automation across multi-vendor and multi-domain environments.

Recent and Pending Acquisitions

In the first quarter of fiscal 2023, we entered into a definitive agreement to acquire Tibit Communications, Inc., a provider of passive optical network solutions, and we completed our acquisition of Benu Networks, Inc., a provider of broadband network gateway software.

See Note 28, “Subsequent Events” to to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for additional information.

To provide end user’s with the required experience for a growing set of immersive cloud services, network operators have increased, and are expected to continue to increase, the number and capabilities of edge computing locations to allow these latency-sensitive workloads to be processed closer to users.

These changes at the edge of networks may affect network topologies, demands and traffic patterns.

To create a more digital experience for their end users, reduce operational costs and introduce more service agility, network operators are investing in next-generation infrastructures that combine end-to-end service automation with the deployment of highly programmable infrastructures.

SDN enables individual network elements to be directly programmable by standards-based software control.

control software or third-party developed network operating software.

It is unclear when the supply environment will become less volatile and what impacts the supply environment will have on the industry in future periods.

To strengthen our optical leadership, during fiscal 2022, we acquired Xelic, Inc. (“Xelic”), a provider and developer of field-programmable gate array (“FPGA”) and application-specific integrated circuit (ASIC) technology and optical networking IP cores.

We also continue to innovate, increase the performance of, and enhance the capabilities for our leading WaveLogic® coherent modem technology in multiple form factors.

During the first quarter of fiscal 2023, we also acquired Benu Networks, Inc. (“Benu”) and its portfolio of cloud-native software solutions, including a virtual Broadband Network Gateway (“(v)BNG”), which complements and extends our existing portfolio of broadband access solutions.

During the first quarter of fiscal 2023, we also entered into a definitive agreement to acquire Tibit Communications, Inc., a provider of passive optical network solutions.

We also offer solutions that

SAOS provides automation-friendly intelligence and operational data to enable network-level programmability supported by open standards.

These products include a cloud-grade router and software for enterprise and cloud networks that enable hardware-like routing performance for enterprises across multi-cloud and virtualized edge networks.

This scalable and modular software can be deployed as a Virtual Machine (VM) application as well as in virtualized and disaggregated network environment.

Our Routing and Switching portfolio will also include cloud-native software solutions, including a virtual Broadband Network Gateway, which we acquired in our acquisition of Benu in the first quarter of fiscal 2023.

As we achieve further customer

With new 5G network implementations, it is often complex for network operators to offer automated, end-to-end services in this environment.

It also advances network operators towards their vision of self-healing and self-optimizing networks via closed loop automation.

- Developing products that enhance security and minimize the risk to our customers networks from cyberattacks; and

- Delivering products that minimize the lifecycle climate impacts of our customers’ networks and support their sustainability goals.

However, in the face of supply chain challenges experienced in recent periods, including extended lead times, we have placed advance commitments for inventory to mitigate the impact of these supply constraints on our and our customers’ businesses.

In fact, the effects of the dynamic supply and demand environment we have experienced in recent periods, together with our increased backlog, may impact the traditional seasonality in our business.

For a more detailed discussion of the current supply and demand environment and our backlog, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations- Overview” in Item 7 of Part II of this report.

- security of enterprise, product development, support processes, and products; and

- ability to offer solutions that help customers meet their business needs while achieving their climate sustainability goals.

Environment and Sustainability

Our products and product development efforts are designed to offer significant improvements in footprint and power savings, in order to help enable more efficient and sustainable networks for our customers.

are a member of the RBA.

In fiscal 2022, we also launched Vets at Ciena, our veterans’ employee resource group.

In fiscal 2022, we continued to run a targeted development program aimed at strengthening underrepresented individuals’ sense of belonging and enhancing communication, confidence, self-awareness and financial acumen.

We provide a broad and diverse suite of offerings that focus on physical, mental and emotional, financial and social wellbeing and, during fiscal 2022, we expanded our offerings to include a focus on key life events such as aging and retirement readiness.

Our wellbeing programs are deployed through a variety of means including expense reimbursement benefits, wellbeing challenges and rewards, 24x7 crisis support, employee assistance resources, mental health coaching, and a library of resources accessible to participants digitally and through hosted webinars.

We conduct an annual pay fairness assessment of

We deployed Syndio’s workplace equity platform beginning in fiscal 2020 to fine-tune our methodology and enable regular global pay fairness assessments.

We also recently launched a program to identify individuals throughout the organization who have been identified as having high potential for the future growth and development, so that this earlier in career talent can be nurtured for future leadership roles.

To complement our Networking Platforms, we offer Platform Software, which includes a wide array of software solutions that deliver operations, administration, maintenance, and provisioning (“OAM&P”) functionality, as well as domain control, orchestration, operational support systems (“OSS”) and service assurance to achieve closed loop automation across multi-vendor and multi-domain network environments.

Through our Blue Planet® Software suite, we enable customers to accelerate the digital transformation of their networks through service lifecycle automation.

These connections allow sharing of data that can be

Immersive cloud services and gaming using AR and VR technologies require a low latency environment to provide the required user experience.

We expect network operators to increase the number and capabilities of edge computing locations to allow these latency-sensitive workloads to be processed closer to users, which may affect network topologies and traffic patterns.

Network operators continue to invest in the modernization of their businesses, with an objective to create a more digital experience, reduce operational costs and introduce more agility.

To achieve this goal, they are adopting next generation infrastructures that combine end-to-end service automation with the deployment of highly programmable infrastructure.

These conditions, which became more acute during the second half of fiscal 2021, have been exacerbated in part by the COVID-19 pandemic, supply chain challenges, and the strong demand environment.

*Industry Consolidation*

Our industry has experienced significant consolidation in recent years among our competitors, customers and suppliers alike.

To drive scale and market share gains, and to meet the intense investment capacity required to keep pace with technology innovation, there has been increased acquisition activity among competing vendors of networking solutions.

Acquisition activity has also focused on adding complementary technologies, or accessing adjacent network domains or markets that increase addressable markets of networking vendors.

Among our customers, there have been significant horizontal and vertical consolidation activities by communications service providers and cable operators, with several such operators acquiring media and content companies.

Customer consolidation can increase their purchasing power and has in the past resulted in delays or reductions in network spending due to changes in strategy or leadership, the timing of regulatory approvals and debt burdens associated with such transactions.

Further, significant consolidation among component suppliers may reduce the number of independent suppliers and could create supply challenges affecting our pricing or supply volumes.

Consolidation activity across our industry can create opportunities and challenges for our business.

We expect this trend to continue, and it may have a significant impact on the entire industry, including our competitive landscape.

We also introduced innovative intelligent photonics platforms in our 6500 RLS and ELS and are advancing our Converged Packet Optical portfolio for applications in data center interconnection, submarine networks and edge networks.

Specifically, we are pursuing these two distinct product development paths for our next-generation coherent optical chipset to enable this range of solutions, and, in fiscal 2021 we introduced our WL5n 100G-400G coherent pluggable transceivers for next-generation access, metro, regional and data center interconnect network applications.

Consistent with industry practice, we sell our transceiver/modem technology in the form of an optical module or pluggable to a variety of market participants, including other original equipment manufacturers with whom we compete.

We expect this may require us to continue to broaden our existing product offering beyond traditional hardware systems and to expand our commercial models over time.

To expand our addressable market, we are pursuing opportunities for our Blue Planet Automation Software platform in enterprise-related applications.

We are also investing in Blue Planet-related services and seek to use insights from common business, operational and networking challenges to position our Blue Planet solutions as the means by which to achieve the digital network transformation sought by our customers.

Our research and education customers include research and education institutions around the world, as well as communities or consortia, including leaders in research, academia, industry and government.

It offers double fiber

As discussed above, in fiscal 2021 we brought to market our footprint-optimized WL5n 100G-400G coherent pluggable transceivers to address next-generation access, metro, regional and data center interconnect network applications.

As a result of the highly competitive environment in which we operate, winning new opportunities can often require that we agree to unfavorable commercial terms or pricing and other onerous contractual commitments.

In so doing, our expectation is that we can recover or improve the economics of such relationships over time.

However, these terms can adversely affect our results of operations in any period.

These terms can also lengthen our revenue recognition or cash collection cycles, add start-up costs to initial sales or deployment of our solutions, require financial commitments or performance bonds, and place a disproportionate allocation of risk upon us.

We launched our “People Promise” during fiscal 2020 and honor this promise by promoting a workplace environment where our employees are empowered, feel included and have an opportunity to make a difference through their work at Ciena.

employer of choice within our markets.

In fiscal 2021, we also ran an eight-month targeted development pilot with our Black & African Heritage group, aimed at strengthening individuals’ sense of belonging and enhancing communication and financial acumen.

- *Employees.* As of the end of fiscal 2021, most of our offices remain closed with limited exceptions or for certain geographies where conditions and local regulations permit, or for a small number of employees in certain key roles.

We have adopted a comprehensive set of global site reopening guidelines, which specify the requirements for and limited circumstances under which we will consider reopening one or more of our offices during the ongoing pandemic.

Since the onset of the pandemic, most of our employees have worked from home on a regular basis, using digital platforms and virtual collaboration tools to maintain productivity and to remain in contact with one another and our business partners.

To support and protect our employees, we have also: instituted travel bans and restrictions and taken meaningful precautions in accordance with relevant guidelines to protect the health and safety of the small number of employees who need to be in offices, laboratory environments or at customer or partner sites to perform their roles.

We have also hosted regular mental wellbeing sessions, internal communication and morale initiatives, and launched new wellbeing platforms that focus on the mental and emotional health needs of our employees during this time.

- *Community*.

In an unprecedented time, we and our global workforce have focused on service and compassion.

The information set forth under the heading “Litigation” in [removed: [Note](#i38c9f641bef046b689e2b01aa9b520e9_157) [27](#i38c9f641bef046b689e2b01aa9b520e9_157)] [added: [Note 27](#i6b71725194564f84a4b295286e037078_160)] to our Consolidated Financial Statements [added: included] in Item 8 of Part II of this report, is incorporated herein by reference.

| | | | | | | For the fiscal year ended | | | October [removed: 30, 2021] [added: 29, 2022] | | |

The aggregate market value of the registrant’s Common Stock held by non-affiliates of the registrant was approximately [removed: $7.8] [added: $8.3] billion based on the closing price of the Common Stock on the New York Stock Exchange on April [removed: 30, 2021.][added: 29, 2022.]

The number of shares of registrant’s Common Stock outstanding as of December [removed: 10, 2021] [added: 9, 2022] was [removed: 154,882,650.][added: 148,415,009.]

Part III of the Form 10-K incorporates by reference certain portions of the registrant’s definitive proxy statement for its [removed: 2022] [added: 2023] Annual Meeting of Stockholders to be filed with the Commission not later than 120 days after the end of the fiscal year covered by this report.

FOR FISCAL YEAR ENDED OCTOBER [removed: 30, 2021][added: 29, 2022]

| [Item 1. [removed: Business](#i38c9f641bef046b689e2b01aa9b520e9_13)] [added: Business](#i6b71725194564f84a4b295286e037078_13)] | | | [removed: [5](#i38c9f641bef046b689e2b01aa9b520e9_13)] [added: [5](#i6b71725194564f84a4b295286e037078_13)] | | |

| [Item 1A. Risk [removed: Factors](#i38c9f641bef046b689e2b01aa9b520e9_16)] [added: Factors](#i6b71725194564f84a4b295286e037078_16)] | | | [removed: [23](#i38c9f641bef046b689e2b01aa9b520e9_16)] [added: [23](#i6b71725194564f84a4b295286e037078_16)] | | |

| [Item 1B. Unresolved Staff [removed: Comments](#i38c9f641bef046b689e2b01aa9b520e9_19)] [added: Comments](#i6b71725194564f84a4b295286e037078_19)] | | | [removed: [42](#i38c9f641bef046b689e2b01aa9b520e9_19)] [added: [43](#i6b71725194564f84a4b295286e037078_19)] | | |

| [Item 2. [removed: Properties](#i38c9f641bef046b689e2b01aa9b520e9_22)] [added: Properties](#i6b71725194564f84a4b295286e037078_22)] | | | [removed: [42](#i38c9f641bef046b689e2b01aa9b520e9_22)] [added: [43](#i6b71725194564f84a4b295286e037078_22)] | | |

| [Item 3. Legal [removed: Proceedings](#i38c9f641bef046b689e2b01aa9b520e9_25)] [added: Proceedings](#i6b71725194564f84a4b295286e037078_25)] | | | [removed: [43](#i38c9f641bef046b689e2b01aa9b520e9_25)] [added: [44](#i6b71725194564f84a4b295286e037078_25)] | | |

| [Item 4. Mine Safety [removed: Disclosures](#i38c9f641bef046b689e2b01aa9b520e9_28)] [added: Disclosures](#i6b71725194564f84a4b295286e037078_28)] | | | [removed: [43](#i38c9f641bef046b689e2b01aa9b520e9_28)] [added: [44](#i6b71725194564f84a4b295286e037078_28)] | | |

| [Item 5. Market for Registrant’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i38c9f641bef046b689e2b01aa9b520e9_34)] [added: Securities](#i6b71725194564f84a4b295286e037078_34)] | | | [removed: [44](#i38c9f641bef046b689e2b01aa9b520e9_34)] [added: [45](#i6b71725194564f84a4b295286e037078_34)] | | |

| [Item 6. [removed: \[Reserved\]](#i38c9f641bef046b689e2b01aa9b520e9_37)] [added: \[Reserved\]](#i6b71725194564f84a4b295286e037078_37)] | | | [removed: [45](#i38c9f641bef046b689e2b01aa9b520e9_37)] [added: [46](#i6b71725194564f84a4b295286e037078_37)] | | |

| [Item 7. Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i38c9f641bef046b689e2b01aa9b520e9_40)] [added: Operations](#i6b71725194564f84a4b295286e037078_40)] | | | [removed: [46](#i38c9f641bef046b689e2b01aa9b520e9_40)] [added: [47](#i6b71725194564f84a4b295286e037078_40)] | | |

| [Item 7A. Quantitative and Qualitative Disclosures about Market [removed: Risk](#i38c9f641bef046b689e2b01aa9b520e9_52)] [added: Risk](#i6b71725194564f84a4b295286e037078_55)] | | | [removed: [64](#i38c9f641bef046b689e2b01aa9b520e9_52)] [added: [65](#i6b71725194564f84a4b295286e037078_55)] | | |

| [Item 8. Financial Statements and Supplementary [removed: Data](#i38c9f641bef046b689e2b01aa9b520e9_55)] [added: Data](#i6b71725194564f84a4b295286e037078_58)] | | | [removed: [65](#i38c9f641bef046b689e2b01aa9b520e9_55)] [added: [66](#i6b71725194564f84a4b295286e037078_58)] | | |

| [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i38c9f641bef046b689e2b01aa9b520e9_166)] [added: Disclosure](#i6b71725194564f84a4b295286e037078_172)] | | | [removed: [109](#i38c9f641bef046b689e2b01aa9b520e9_166)] [added: [112](#i6b71725194564f84a4b295286e037078_172)] | | |

| [Item 9A. Controls and [removed: Procedures](#i38c9f641bef046b689e2b01aa9b520e9_169)] [added: Procedures](#i6b71725194564f84a4b295286e037078_175)] | | | [removed: [110](#i38c9f641bef046b689e2b01aa9b520e9_169)] [added: [113](#i6b71725194564f84a4b295286e037078_175)] | | |

| [Item 9B. Other [removed: Information](#i38c9f641bef046b689e2b01aa9b520e9_172)] [added: Information](#i6b71725194564f84a4b295286e037078_178)] | | | [removed: [110](#i38c9f641bef046b689e2b01aa9b520e9_172)] [added: [113](#i6b71725194564f84a4b295286e037078_178)] | | |

| [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspection](#i38c9f641bef046b689e2b01aa9b520e9_1779)] [added: Inspection](#i6b71725194564f84a4b295286e037078_181)] | | | [removed: [110](#i38c9f641bef046b689e2b01aa9b520e9_1779)] [added: [113](#i6b71725194564f84a4b295286e037078_181)] | | |

| [Item 10. Directors, Executive Officers and Corporate [removed: Governance](#i38c9f641bef046b689e2b01aa9b520e9_178)] [added: Governance](#i6b71725194564f84a4b295286e037078_187)] | | | [removed: [112](#i38c9f641bef046b689e2b01aa9b520e9_178)] [added: [115](#i6b71725194564f84a4b295286e037078_187)] | | |

| [Item 11. Executive [removed: Compensation](#i38c9f641bef046b689e2b01aa9b520e9_181)] [added: Compensation](#i6b71725194564f84a4b295286e037078_190)] | | | [removed: [112](#i38c9f641bef046b689e2b01aa9b520e9_181)] [added: [115](#i6b71725194564f84a4b295286e037078_190)] | | |

| [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i38c9f641bef046b689e2b01aa9b520e9_184)] [added: Matters](#i6b71725194564f84a4b295286e037078_193)] | | | [removed: [112](#i38c9f641bef046b689e2b01aa9b520e9_184)] [added: [115](#i6b71725194564f84a4b295286e037078_193)] | | |

| [Item 13. Certain Relationships and Related Transactions, and Director [removed: Independence](#i38c9f641bef046b689e2b01aa9b520e9_187)] [added: Independence](#i6b71725194564f84a4b295286e037078_196)] | | | [removed: [112](#i38c9f641bef046b689e2b01aa9b520e9_187)] [added: [115](#i6b71725194564f84a4b295286e037078_196)] | | |

| [Item 14. Principal Accountant Fees and [removed: Services](#i38c9f641bef046b689e2b01aa9b520e9_190)] [added: Services](#i6b71725194564f84a4b295286e037078_199)] | | | [removed: [112](#i38c9f641bef046b689e2b01aa9b520e9_190)] [added: [115](#i6b71725194564f84a4b295286e037078_199)] | | |

| [Item 15. Exhibits and Financial Statement [removed: Schedules](#i38c9f641bef046b689e2b01aa9b520e9_196)] [added: Schedules](#i6b71725194564f84a4b295286e037078_205)] | | | [removed: [113](#i38c9f641bef046b689e2b01aa9b520e9_196)] [added: [116](#i6b71725194564f84a4b295286e037078_205)] | | |

| [Item 16. Form 10-K [removed: Summary](#i38c9f641bef046b689e2b01aa9b520e9_199)] [added: Summary](#i6b71725194564f84a4b295286e037078_208)] | | | [removed: [113](#i38c9f641bef046b689e2b01aa9b520e9_199)] [added: [116](#i6b71725194564f84a4b295286e037078_208)] | | |

In some cases, you can identify “forward-looking statements” by words like “may,” “will,” [added: “would,”] “can,” “should,” “could,” “expects,” “future,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “intends,” “potential,” “projects,” “targets,” or “continue” or the negative of those words and other comparable words.

These statements may relate to, among other things, [removed: the impact of COVID-19 on] our [removed: business, financial results and operations; our] competitive landscape; market conditions and growth opportunities; factors impacting our industry and markets, including global supply chain constraints; factors impacting the businesses of network operators and their network architectures; adoption of next-generation infrastructures that are more open, programmable and automated; our strategy, including our research and development, supply chain and go-to-market initiatives; efforts to increase application of our solutions in customer networks and to increase the reach of our business into new or growing customer and geographic markets; our backlog and seasonality in our business; expectations for our financial results, revenue, gross margin, operating expense and key operating measures in future periods; the adequacy of our sources of liquidity to satisfy our working capital needs, capital expenditures and other liquidity requirements; business initiatives including information technology (“IT”) transitions or initiatives; the impact of [removed: the Tax Cuts and Jobs Act (the “Tax Act”)] [added: COVID-19 on our business, financial results] and [added: operations; the impact of] changes in [added: tax law and] our effective tax rates; and market risks associated with financial instruments and foreign currency exchange rates.

The following is a summary of the principal factors that make an investment in our securities speculative or risky, [removed: all of which are] [added: as] more fully described below in the section titled “Risk Factors.” This summary should be read in conjunction with the “Risk Factors” section and should not be relied upon as an exhaustive summary of the material risks facing our business.

In addition to [removed: the following] [added: this] summary, you should consider the information set forth in the “Risk Factors” section and the other information contained in this annual report before investing in our securities.

- Investment of research and development resources in communications networking technologies for which there is not an adequate market demand, or failure to invest sufficiently or timely in technologies for which there is [added: high] market demand, would adversely affect our revenue and profitability.

- We have no guaranteed purchases and regularly [removed: have to] [added: must] re-win business for existing customers.

- If we are unable to attract and retain qualified personnel, [removed: or if our existing personnel are harmed by COVID-19,] we may be unable to manage our business effectively.

- Data security breaches and cyber-attacks could compromise our intellectual property or other sensitive information and cause significant damage to our [removed: business] [added: business, reputation] and [removed: reputation.][added: operational capacity.]

- Changes in trade policy, including the imposition of [removed: tariffs] [added: tariffs, increased export control] and [added: investment restrictions, and] efforts to withdraw from or materially modify international trade agreements, [added: as well as other regulatory efforts impacting the import and sale of foreign equipment,] may adversely affect our business, operations and financial condition.

- Outstanding indebtedness under our senior secured credit facilities [added: and senior unsecured notes] may adversely affect our liquidity and results of operations and could limit our business.

| [PART I](#i6b71725194564f84a4b295286e037078_10) | | | | | |

| [PART II](#i6b71725194564f84a4b295286e037078_31) | | | | | |

| [PART III](#i6b71725194564f84a4b295286e037078_184) | | | | | |

| [PART IV](#i6b71725194564f84a4b295286e037078_202) | | | | | |

| [Signatures](#i6b71725194564f84a4b295286e037078_211) | | | [117](#i6b71725194564f84a4b295286e037078_211) | | |

| [Index to Exhibits](#i6b71725194564f84a4b295286e037078_214) | | | [118](#i6b71725194564f84a4b295286e037078_214) | | |

- We have recently been experiencing unprecedented demand, and our backlog may not be an accurate indicator of our level and timing of future revenues.

- Accurately matching necessary inventory levels to customer demand within the current environment is challenging, and we may incur additional costs or be required to write off significant inventory that would adversely impact our results of operations.

| [PART I](#i38c9f641bef046b689e2b01aa9b520e9_10) | | | | | |

| [PART II](#i38c9f641bef046b689e2b01aa9b520e9_31) | | | | | |

| [PART III](#i38c9f641bef046b689e2b01aa9b520e9_175) | | | | | |

| [PART IV](#i38c9f641bef046b689e2b01aa9b520e9_193) | | | | | |

| [Signatures](#i38c9f641bef046b689e2b01aa9b520e9_202) | | | [114](#i38c9f641bef046b689e2b01aa9b520e9_202) | | |

| [Index to Exhibits](#i38c9f641bef046b689e2b01aa9b520e9_205) | | | [115](#i38c9f641bef046b689e2b01aa9b520e9_205) | | |

- If we fail to predict demand accurately, we may be required to write off significant amounts of inventory as a result of our inventory purchase practices and could incur additional costs or experience manufacturing delays.

As of October [removed: 30, 2021,] [added: 29, 2022,] all of our properties are leased, and we do not own any real property.

Our [removed: principal executive offices] [added: corporate headquarters] are located in one building in Hanover, Maryland.

As of December [removed: 10, 2021,] [added: 9, 2022,] there were approximately [removed: 757] [added: 712] holders of record of our common stock and [removed: 154,882,650] [added: 148,415,009] shares of common stock outstanding.

The following table provides a summary of repurchases of our common stock during the fourth quarter of fiscal [removed: 2021:][added: 2022:]

(1) On December [removed: 13, 2018,] [added: 9, 2021,] we announced that our Board of Directors [added: had] authorized a program to repurchase up to [removed: $500 million] [added: $1.0 billion] of our common [removed: stock.][added: stock, which replaced in its entirety our previous stock repurchase program.]

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations- Liquidity and Capital Resources [removed: -Stock] [added: - Stock] Repurchase Authorization” in Item 7 of Part II of this report and [removed: Note] [added: Notes] 22 [removed: and 28] to our Consolidated Financial Statements [added: included] in Item 8 of Part II of this report for information regarding the stock repurchase programs authorized by our Board of Directors.

The following graph shows a comparison of cumulative total returns for an investment in our common stock, the S&P North American Technology-Multimedia Networking Index and the Russell 1000 from October [removed: 31, 2016] [added: 28, 2017] to October [removed: 30, 2021.][added: 29, 2022.]

[removed: ][added: ]

Assumes $100 invested in Ciena Corporation, the [added: Russell 1000 and the] S&P North American Technology-Multimedia Networking [removed: Index and the Russell 1000,] [added: Index,] respectively, on October [removed: 31, 2016] [added: 28, 2017] with all dividends reinvested at month-end.

| July 31, 2022 to August 27, 2022 | | | | | | 154,247 | | | | | | $ | 51.91 | | | | | 154,247 | | | | | | $ | 500,000 | |

| August 28, 2022 to September 24, 2022 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 500,000 | |

| September 25, 2022 to October 29, 2022 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 500,000 | |

| Total | | | | | | 154,247 | | | | | | $ | 51.91 | | | | | 154,247 | | | | | | | | |

During the fourth quarter of fiscal 2022, we repurchased $8.0 million of our common stock under the stock repurchase program, and we had $500.0 million remaining under the current repurchase authorization as of October 29, 2022.

| August 1, 2021 to August 28, 2021 | | | | | | 141,838 | | | | | | $ | 56.42 | | | | | 141,838 | | | | | | $ | 202,031 | |

| August 29, 2021 to September 25, 2021 | | | | | | 147,640 | | | | | | $ | 54.20 | | | | | 147,640 | | | | | | $ | 194,028 | |

| September 26, 2021 to October 30, 2021 | | | | | | 204,032 | | | | | | $ | 52.58 | | | | | 204,032 | | | | | | $ | 183,301 | |

| Total | | | | | | 493,510 | | | | | | $ | 54.17 | | | | | 493,510 | | | | | | | | |

Shares reported in this table were repurchased under this program.

Subsequent to the end of fiscal 2021, on December 9, 2021, 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.

The amount and timing of repurchases are subject to a variety of factors, including liquidity, cash flow, stock price and general business and market conditions.

On December 13, 2021, in connection with this repurchase program, we entered into an accelerated share repurchase agreement for the repurchase of $250.0 million of our common stock.

| [Report of Independent Registered Public Accounting [removed: Firm](#i38c9f641bef046b689e2b01aa9b520e9_58)] [added: Firm](#i6b71725194564f84a4b295286e037078_61) (PCAOB ID 238)] | | | [removed: [66](#i38c9f641bef046b689e2b01aa9b520e9_58)] [added: [67](#i6b71725194564f84a4b295286e037078_61)] | | |

| [Consolidated Balance [removed: Sheets](#i38c9f641bef046b689e2b01aa9b520e9_61)] [added: Sheets](#i6b71725194564f84a4b295286e037078_64)] | | | [removed: [69](#i38c9f641bef046b689e2b01aa9b520e9_61)] [added: [69](#i6b71725194564f84a4b295286e037078_64)] | | |

| [Consolidated Statements of [removed: Operations](#i38c9f641bef046b689e2b01aa9b520e9_64)] [added: Operations](#i6b71725194564f84a4b295286e037078_67)] | | | [removed: [70](#i38c9f641bef046b689e2b01aa9b520e9_64)] [added: [70](#i6b71725194564f84a4b295286e037078_67)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#i38c9f641bef046b689e2b01aa9b520e9_67)] [added: Income](#i6b71725194564f84a4b295286e037078_70)] | | | [removed: [71](#i38c9f641bef046b689e2b01aa9b520e9_67)] [added: [71](#i6b71725194564f84a4b295286e037078_70)] | | |

| [Consolidated Statements of Changes in Stockholders’ [removed: Equity](#i38c9f641bef046b689e2b01aa9b520e9_70)] [added: Equity](#i6b71725194564f84a4b295286e037078_73)] | | | [removed: [72](#i38c9f641bef046b689e2b01aa9b520e9_70)] [added: [72](#i6b71725194564f84a4b295286e037078_73)] | | |

| [Consolidated Statements of Cash [removed: Flows](#i38c9f641bef046b689e2b01aa9b520e9_73)] [added: Flows](#i6b71725194564f84a4b295286e037078_76)] | | | [removed: [73](#i38c9f641bef046b689e2b01aa9b520e9_73)] [added: [73](#i6b71725194564f84a4b295286e037078_76)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i38c9f641bef046b689e2b01aa9b520e9_76)] [added: Statements](#i6b71725194564f84a4b295286e037078_79)] | | | [removed: [74](#i38c9f641bef046b689e2b01aa9b520e9_76)] [added: [74](#i6b71725194564f84a4b295286e037078_79)] | | |

| [Note 1: Ciena Corporation and Significant Accounting Policies and [removed: Estimates](#i38c9f641bef046b689e2b01aa9b520e9_79)] [added: Estimates](#i6b71725194564f84a4b295286e037078_82)] | | | [removed: [74](#i38c9f641bef046b689e2b01aa9b520e9_79)] [added: [74](#i6b71725194564f84a4b295286e037078_82)] | | |

| [Note 2: [removed: Revenue](#i38c9f641bef046b689e2b01aa9b520e9_82)] [added: Revenue](#i6b71725194564f84a4b295286e037078_85)] | | | [removed: [83](#i38c9f641bef046b689e2b01aa9b520e9_82)] [added: [83](#i6b71725194564f84a4b295286e037078_85)] | | |

| [Note 3: Canadian Emergency Wage [removed: Subsidy](#i38c9f641bef046b689e2b01aa9b520e9_85)] [added: Subsidy](#i6b71725194564f84a4b295286e037078_88)] | | | [removed: [87](#i38c9f641bef046b689e2b01aa9b520e9_85)] [added: [87](#i6b71725194564f84a4b295286e037078_88)] | | |

| [Note 4: Business [removed: Combinations](#i38c9f641bef046b689e2b01aa9b520e9_1660)] [added: Combinations](#i6b71725194564f84a4b295286e037078_91)] | | | [removed: [88](#i38c9f641bef046b689e2b01aa9b520e9_1660)] [added: [88](#i6b71725194564f84a4b295286e037078_91)] | | |

| [Note 6: Interest and Other [removed: Income](#i38c9f641bef046b689e2b01aa9b520e9_91)] [added: Income (Loss)](#i6b71725194564f84a4b295286e037078_97)] | | | [removed: [89](#i38c9f641bef046b689e2b01aa9b520e9_91)] [added: [90](#i6b71725194564f84a4b295286e037078_97)] | | |

[removed: | [Note 7: Short-Term and Long-Term Investments](#i38c9f641bef046b689e2b01aa9b520e9_94) | | | [90](#i38c9f641bef046b689e2b01aa9b520e9_94) | | |][added: (7) CASH EQUIVALENT, SHORT-TERM AND LONG-TERM INVESTMENTS]

| [Note 8: Fair Value [removed: Measurements](#i38c9f641bef046b689e2b01aa9b520e9_97)] [added: Measurements](#i6b71725194564f84a4b295286e037078_103)] | | | [removed: [90](#i38c9f641bef046b689e2b01aa9b520e9_97)] [added: [91](#i6b71725194564f84a4b295286e037078_103)] | | |

| [Note 9: Accounts [removed: Receivable](#i38c9f641bef046b689e2b01aa9b520e9_100)] [added: Receivable](#i6b71725194564f84a4b295286e037078_106)] | | | [removed: [92](#i38c9f641bef046b689e2b01aa9b520e9_100)] [added: [93](#i6b71725194564f84a4b295286e037078_106)] | | |

| [Note 11: Prepaid Expenses and [removed: Other](#i38c9f641bef046b689e2b01aa9b520e9_106)] [added: Other](#i6b71725194564f84a4b295286e037078_112)] | | | [removed: [93](#i38c9f641bef046b689e2b01aa9b520e9_106)] [added: [94](#i6b71725194564f84a4b295286e037078_112)] | | |

| [Note 12: Equipment, Building, Furniture and [removed: Fixtures](#i38c9f641bef046b689e2b01aa9b520e9_109)] [added: Fixtures](#i6b71725194564f84a4b295286e037078_115)] | | | [removed: [93](#i38c9f641bef046b689e2b01aa9b520e9_109)] [added: [95](#i6b71725194564f84a4b295286e037078_115)] | | |

| [Note 13: Intangible [removed: Assets](#i38c9f641bef046b689e2b01aa9b520e9_112)] [added: Assets](#i6b71725194564f84a4b295286e037078_118)] | | | [removed: [94](#i38c9f641bef046b689e2b01aa9b520e9_112)] [added: [95](#i6b71725194564f84a4b295286e037078_118)] | | |

| [Note 15: Other Balance Sheet [removed: Details](#i38c9f641bef046b689e2b01aa9b520e9_118)] [added: Details](#i6b71725194564f84a4b295286e037078_124)] | | | [removed: [94](#i38c9f641bef046b689e2b01aa9b520e9_118)] [added: [96](#i6b71725194564f84a4b295286e037078_124)] | | |

| [Note 16: Derivative [removed: Instruments](#i38c9f641bef046b689e2b01aa9b520e9_121)] [added: Instruments](#i6b71725194564f84a4b295286e037078_127)] | | | [removed: [96](#i38c9f641bef046b689e2b01aa9b520e9_121)] [added: [97](#i6b71725194564f84a4b295286e037078_127)] | | |

| [Note 17: Accumulated Other Comprehensive [removed: Income](#i38c9f641bef046b689e2b01aa9b520e9_124)] [added: Income](#i6b71725194564f84a4b295286e037078_130)] | | | [removed: [96](#i38c9f641bef046b689e2b01aa9b520e9_124)] [added: [98](#i6b71725194564f84a4b295286e037078_130)] | | |

| [Note 19: Short-Term and Long-Term [removed: Debt](#i38c9f641bef046b689e2b01aa9b520e9_133)] [added: Debt](#i6b71725194564f84a4b295286e037078_136)] | | | [removed: [98](#i38c9f641bef046b689e2b01aa9b520e9_133)] [added: [100](#i6b71725194564f84a4b295286e037078_136)] | | |

| [Note 20: ABL Credit [removed: Facility](#i38c9f641bef046b689e2b01aa9b520e9_136)] [added: Facility](#i6b71725194564f84a4b295286e037078_139)] | | | [removed: [99](#i38c9f641bef046b689e2b01aa9b520e9_136)] [added: [102](#i6b71725194564f84a4b295286e037078_139)] | | |

| [Note 21: Earnings per Share [removed: Calculation](#i38c9f641bef046b689e2b01aa9b520e9_139)] [added: Calculation](#i6b71725194564f84a4b295286e037078_142)] | | | [removed: [99](#i38c9f641bef046b689e2b01aa9b520e9_139)] [added: [102](#i6b71725194564f84a4b295286e037078_142)] | | |

| [Note 24: Share-Based Compensation [removed: Expense](#i38c9f641bef046b689e2b01aa9b520e9_148)] [added: Expense](#i6b71725194564f84a4b295286e037078_151)] | | | [removed: [102](#i38c9f641bef046b689e2b01aa9b520e9_148)] [added: [106](#i6b71725194564f84a4b295286e037078_151)] | | |

| [Note 25: Segment and Entity Wide [removed: Disclosures](#i38c9f641bef046b689e2b01aa9b520e9_151)] [added: Disclosures](#i6b71725194564f84a4b295286e037078_154)] | | | [removed: [105](#i38c9f641bef046b689e2b01aa9b520e9_151)] [added: [109](#i6b71725194564f84a4b295286e037078_154)] | | |

| [Note 26: Other Employee Benefit [removed: Plans](#i38c9f641bef046b689e2b01aa9b520e9_154)] [added: Plans](#i6b71725194564f84a4b295286e037078_157)] | | | [removed: [107](#i38c9f641bef046b689e2b01aa9b520e9_154)] [added: [110](#i6b71725194564f84a4b295286e037078_157)] | | |

| [Note 27: Commitments and [removed: Contingencies](#i38c9f641bef046b689e2b01aa9b520e9_157)] [added: Contingencies](#i6b71725194564f84a4b295286e037078_160)] | | | [removed: [107](#i38c9f641bef046b689e2b01aa9b520e9_157)] [added: [111](#i6b71725194564f84a4b295286e037078_160)] | | |

We have audited the accompanying consolidated balance sheets of Ciena Corporation and its subsidiaries (the “Company”) as of October [removed: 30, 2021] [added: 29, 2022] and October [removed: 31, 2020,] [added: 30, 2021,] and the related consolidated statements of operations, of comprehensive income, of changes in stockholders’ equity and of cash flows for each of the three years in the period ended October [removed: 30, 2021,] [added: 29, 2022,] including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of October [removed: 30, 2021,] [added: 29, 2022,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of October [removed: 30, 2021] [added: 29, 2022] and October [removed: 31, 2020,] [added: 30, 2021,] and the results of its operations and its cash flows for each of the three years in the period ended October [removed: 30, 2021] [added: 29, 2022] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October [removed: 30, 2021,] [added: 29, 2022,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

The critical audit [removed: matters] [added: matter] communicated below [removed: are matters] [added: is a matter] arising from the current period audit of the consolidated financial statements that [removed: were] [added: was] communicated or required to be communicated to the audit committee and that (i) [removed: relate] [added: relates] to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matters] [added: matter] below, providing [added: a] separate [removed: opinions] [added: opinion] on the critical audit [removed: matters] [added: matter] or on the accounts or disclosures to which [removed: they relate.][added: it relates.]

As described in Notes 1 and 10 to the consolidated financial statements, the Company’s consolidated inventory balance, net of the allowance for excess and obsolescence, was [removed: $374.3] [added: $946.7] million as of October [removed: 30, 2021.][added: 29, 2022.]

Management records a provision for excess and obsolete inventory when an impairment has been identified and has a reserve for excess and obsolete inventory of [removed: $37.0] [added: $36.1] million as of October [removed: 30, 2021.][added: 29, 2022.]

| | | | October [added: 29, 2022 | | | | | | October] 30, 2021 | | | | | | October 31, 2020 | | |

| Cash and cash equivalents | | | $ | [removed: 1,422,546] [added: 994,352] | | | | | $ | [removed: 1,088,624] [added: 1,422,546] | |

| Short-term investments | | | [removed: 181,483] [added: 153,989] | | | | | | [removed: 150,667] [added: 181,483] | | |

| Accounts receivable, net | | | [removed: 884,958] [added: 920,772] | | | | | | [removed: 719,405] [added: 884,958] | | |

| [Note 5: Significant Asset Impairment and Restructuring Costs](#i6b71725194564f84a4b295286e037078_94) | | | [89](#i6b71725194564f84a4b295286e037078_94) | | |

| [Note 10: Inventories](#i6b71725194564f84a4b295286e037078_109) | | | [94](#i6b71725194564f84a4b295286e037078_109) | | |

| [Note 14: Goodwill](#i6b71725194564f84a4b295286e037078_121) | | | [96](#i6b71725194564f84a4b295286e037078_121) | | |

| [Note 18: Leases](#i6b71725194564f84a4b295286e037078_133) | | | [98](#i6b71725194564f84a4b295286e037078_133) | | |

| [Note 22: Stockholders’ Equity](#i6b71725194564f84a4b295286e037078_145) | | | [102](#i6b71725194564f84a4b295286e037078_145) | | |

| [Note 23: Income Taxes](#i6b71725194564f84a4b295286e037078_148) | | | [103](#i6b71725194564f84a4b295286e037078_148) | | |

| [Note 28: Subsequent Events](#i6b71725194564f84a4b295286e037078_166) | | | [111](#i6b71725194564f84a4b295286e037078_166) | | |

December 16, 2022

| Net income | | | $ | 152,902 | | | | | $ | 500,196 | | | | | $ | 361,291 | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 152,902 | | | | | | 152,902 | | |

| Repurchases of common stock - repurchase program | | | (8,433,957) | | | | | | (84) | | | | | | (499,916) | | | | | | — | | | | | | — | | | | | | (500,000) | | |

| Balance at October 29, 2022 | | | 148,412,943 | | | | | | $ | 1,484 | | | | | $ | 6,390,252 | | | | | $ | (46,645) | | | | | $ | (3,632,230) | | | | | $ | 2,712,861 | |

| Net income | | | $ | 152,902 | | | | | $ | 500,196 | | | | | $ | 361,291 | |

| Proceeds from issuance of senior notes | | | 400,000 | | | | | | — | | | | | | — | | |

[Table of Conten](#i6b71725194564f84a4b295286e037078_7)[t](#i6b71725194564f84a4b295286e037078_7)[s](#i6b71725194564f84a4b295286e037078_7)

To complement its Networking Platforms, Ciena offers Platform Software, which includes its Manage, Control and Plan (“MCP”) applications that deliver advanced multi-layer domain control and operations.

Ciena, through its Blue Planet® Software, also enables complete service lifecycle management automation with productized operational support systems (“OSSs”) and service assurance solutions that help its customers to achieve closed loop automation across multi-vendor and multi-domain environments.

Significant assumptions and

[Table of Conten](#i6b71725194564f84a4b295286e037078_7)[t](#i6b71725194564f84a4b295286e037078_7)[s](#i6b71725194564f84a4b295286e037078_7)

[Table of Conten](#i6b71725194564f84a4b295286e037078_7)[t](#i6b71725194564f84a4b295286e037078_7)[s](#i6b71725194564f84a4b295286e037078_7)

[Table of Conten](#i6b71725194564f84a4b295286e037078_7)[t](#i6b71725194564f84a4b295286e037078_7)[s](#i6b71725194564f84a4b295286e037078_7)

Shipping and handling fees invoiced to

[Table of Conten](#i6b71725194564f84a4b295286e037078_7)[t](#i6b71725194564f84a4b295286e037078_7)[s](#i6b71725194564f84a4b295286e037078_7)

[Table of Conten](#i6b71725194564f84a4b295286e037078_7)[t](#i6b71725194564f84a4b295286e037078_7)[s](#i6b71725194564f84a4b295286e037078_7)

*Accounts Receivable Factoring*

Ciena has entered into factoring agreements to sell certain receivables to unrelated third-party financial institution on a non-recourse basis.

These transactions are accounted for in accordance with ASC Topic 860, “Transfers and Servicing” and result in a reduction in accounts receivable because the agreements transfer effective control over and risk related to the receivables to the buyers.

Ciena's factoring agreements do not allow for recourse in the event of uncollectability, and Ciena does not retain any interest in the underlying accounts receivable once sold.

Trade accounts receivables balances sold are removed from the consolidated balance sheets and cash received is reflected as cash provided by (used in) operating activities in the Consolidated Statements of Cash Flow.

Factoring related interest expense is recorded to interest and other income (loss), net on the Consolidated Statements of Operations.

See Note 9 below.

[Table of Conten](#i6b71725194564f84a4b295286e037078_7)[t](#i6b71725194564f84a4b295286e037078_7)[s](#i6b71725194564f84a4b295286e037078_7)

[Table of Conten](#i6b71725194564f84a4b295286e037078_7)[t](#i6b71725194564f84a4b295286e037078_7)[s](#i6b71725194564f84a4b295286e037078_7)

[Table of Conten](#i6b71725194564f84a4b295286e037078_7)[t](#i6b71725194564f84a4b295286e037078_7)[s](#i6b71725194564f84a4b295286e037078_7)

[Table of Conten](#i6b71725194564f84a4b295286e037078_7)[t](#i6b71725194564f84a4b295286e037078_7)[s](#i6b71725194564f84a4b295286e037078_7)

principles in ASC 740.

Ciena adopted ASU 2020-04 and ASU 2021-01 on a prospective basis in fiscal 2022.

The adoption of ASU 2020-04 and ASU 2021-01 did not have a material impact on Ciena’s consolidated financial statements and related disclosures.

Ciena early adopted ASU 2021-10 during fiscal 2022.

The adoption of ASU 2021-10 did not have a material impact on Ciena’s consolidated financial statements and related disclosures.

| [Note 5: Restructuring Costs](#i38c9f641bef046b689e2b01aa9b520e9_88) | | | [88](#i38c9f641bef046b689e2b01aa9b520e9_88) | | |

| [Note 10: Inventories](#i38c9f641bef046b689e2b01aa9b520e9_103) | | | [93](#i38c9f641bef046b689e2b01aa9b520e9_103) | | |

| [Note 14: Goodwill](#i38c9f641bef046b689e2b01aa9b520e9_115) | | | [94](#i38c9f641bef046b689e2b01aa9b520e9_115) | | |

| [Note 18: Leases](#i38c9f641bef046b689e2b01aa9b520e9_127) | | | [97](#i38c9f641bef046b689e2b01aa9b520e9_127) | | |

| [Note 22: Stockholders’ Equity](#i38c9f641bef046b689e2b01aa9b520e9_142) | | | [99](#i38c9f641bef046b689e2b01aa9b520e9_142) | | |

| [Note 23: Income Taxes](#i38c9f641bef046b689e2b01aa9b520e9_145) | | | [100](#i38c9f641bef046b689e2b01aa9b520e9_145) | | |

| [Note 28: Subsequent Events](#i38c9f641bef046b689e2b01aa9b520e9_163) | | | [107](#i38c9f641bef046b689e2b01aa9b520e9_163) | | |

*Changes in Accounting Principles*

As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2020, and the manner in which it accounts for revenue from contracts with customers in 2019.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

*Internal Transfer of Certain Non-U.S. Intangible Assets*

As described in Note 23 to the consolidated financial statements, the Company completed an internal transfer of certain of its non-U.S. intangible assets, which created amortizable tax basis resulting in the discrete recognition of a $119.3 million deferred tax asset with a corresponding tax benefit.

As disclosed by management, the recognition of the deferred tax asset from the internal transfer of the non-U.S. intangible assets requires management to make estimates and assumptions to determine the fair value of the intangible assets transferred and significant judgments in evaluating the application of tax laws in the applicable jurisdictions, including where the deferred tax asset will be recovered.

The principal considerations for our determination that performing procedures relating to the internal transfer of certain non-U.S. intangible assets is a critical audit matter are the significant judgment by management in evaluating the application of tax laws in the applicable jurisdictions, which in turn led to a high degree of auditor judgment, subjectivity, and effort to perform procedures and evaluate the audit evidence obtained relating to accounting for the internal transfer and recovery of certain non-U.S. intangible assets based on management’s application of tax laws in the applicable jurisdictions.

In addition, the audit effort involved the use of professionals with specialized skill and knowledge.

These procedures included testing the effectiveness of controls relating to the accounting for the internal transfer of the non-U.S. intangible assets, including controls over management’s review of the underlying agreements and management’s application of the tax laws to the transfer and recovery of the non-U.S. intangible assets.

These procedures also included, among others, (i) examining the underlying agreements, (ii) evaluating the tax laws applicable to the transfer and recovery of certain non-U.S. intangible assets, and (iii) testing the calculation of the deferred tax

asset, including testing the completeness and accuracy of the data used.

Professionals with specialized skill and knowledge were used to assist in the evaluation of management’s determination of the applicability of the relevant tax laws in the applicable jurisdictions.

December 17, 2021

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance at November 3, 2018 | | | 154,318,531 | | | | | | $ | 1,543 | | | | | $ | 6,881,223 | | | | | $ | (5,780) | | | | | $ | (4,947,652) | | | | | $ | 1,929,334 | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 253,434 | | | | | | 253,434 | | |

| Repurchases of common stock - repurchase program | | | (3,838,466) | | | | | | (38) | | | | | | (150,038) | | | | | | — | | | | | | — | | | | | | (150,076) | | |

| Settlement of debt conversion liability | | | 1,585,140 | | | | | | 16 | | | | | | 52,928 | | | | | | — | | | | | | — | | | | | | 52,944 | | |

| Effect of adoption of new accounting standard | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 49,805 | | | | | | 49,805 | | |

| Payment for debt conversion liability | | | — | | | | | | — | | | | | | (111,268) | | |

| Conversion of debt conversion liability into 1,585,140 shares of common stock | | | $ | — | | | | | $ | — | | | | | $ | 52,944 | |

To complement Networking Platforms, Ciena offers Platform Software, which includes a wide array of software solutions that deliver operations, administration, maintenance, and provisioning (“OAM&P”) functionality, as well as domain control, orchestration, operational support systems (“OSS”) and service assurance to achieve closed loop automation across multi-vendor and multi-domain network environments.

Through Ciena’s Blue Planet® Software suite, Ciena enables customers to accelerate the digital transformation of their networks through service lifecycle automation.

These

the lease liability recorded using the interest method.

Ciena’s other service offerings

rates and management’s industry experience.

*Stock Repurchase Program*

In February 2016, the FASB issued ASC 842, Leases, which requires an entity to recognize assets and liabilities on the balance sheet for the rights and obligations created by leased assets and to provide additional disclosures.

Effective November 3, 2019, Ciena adopted ASC 842, which requires right-of-use ("ROU") assets and lease liabilities to be recorded on the balance sheet, on a modified retrospective basis, such that related amounts in prior periods have not been restated.

Management of Ciena Corporation assessed the effectiveness of the Company’s internal control over financial reporting as of October [removed: 30, 2021.][added: 29, 2022.]

Based on this assessment, management determined that, as of October [removed: 30, 2021,] [added: 29, 2022,] Ciena Corporation maintained effective internal control over financial reporting.

PricewaterhouseCoopers LLP, independent registered public accounting firm, who audited and reported on the consolidated financial statements of Ciena Corporation included in this annual report, has also audited the effectiveness of Ciena Corporation’s internal control over financial reporting as of October [removed: 30, 2021,] [added: 29, 2022,] as stated in its report appearing in Item 8 of Part II of this annual report.

| December 16, 2022 | | | | | | December 16, 2022 | | | | | |

| December 17, 2021 | | | | | | December 17, 2021 | | | | | |

Additional information responsive to this item concerning our Audit Committee and regarding compliance with Section 16(a) of the Exchange Act is incorporated herein by reference from our definitive proxy statement with respect to our [removed: 2022] [added: 2023] Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10-K.

Information responsive to this item is incorporated herein by reference from our definitive proxy statement with respect to our [removed: 2022] [added: 2023] Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10-K.

Information responsive to this item is incorporated herein by reference from our definitive proxy statement with respect to our [removed: 2022] [added: 2023] Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10-K.

Information responsive to this item is incorporated herein by reference from our definitive proxy statement with respect to our [removed: 2022] [added: 2023] Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10-K.

Information responsive to this item is incorporated herein by reference from our definitive proxy statement with respect to our [removed: 2022] [added: 2023] Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10-K.

Pursuant to the requirements of Section 13 or 15(d) 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 on the [removed: 17th] [added: 16th] day of December [removed: 2021.][added: 2022.]

| /s/ Patrick H. Nettles, Ph.D. | | | | | | Executive Chairman of the Board of Directors | | | | | | December [removed: 17, 2021] [added: 16, 2022] | | |

| /s/ Gary B. Smith | | | | | | President, Chief Executive Officer and Director | | | | | | December [removed: 17, 2021] [added: 16, 2022] | | |

| /s/ James E. Moylan, Jr. | | | | | | Sr. Vice President, Finance and Chief Financial Officer | | | | | | December [removed: 17, 2021] [added: 16, 2022] | | |

| /s/ Andrew C. Petrik | | | | | | Vice President, Controller | | | | | | December [removed: 17, 2021] [added: 16, 2022] | | |

| /s/ Hassan M. Ahmed, Ph.D. | | | | | | Director | | | | | | December [removed: 17, 2021] [added: 16, 2022] | | |

| /s/ Bruce L. Claflin | | | | | | Director | | | | | | December [removed: 17, 2021] [added: 16, 2022] | | |

| /s/ Lawton W. Fitt | | | | | | Director | | | | | | December [removed: 17, 2021] [added: 16, 2022] | | |

| /s/ Patrick T. Gallagher | | | | | | Director | | | | | | December [removed: 17, 2021] [added: 16, 2022] | | |

| /s/ Devinder Kumar | | | | | | Director | | | | | | December [removed: 17, 2021] [added: 16, 2022] | | |

| /s/ T. Michael Nevens | | | | | | Director | | | | | | December [removed: 17, 2021] [added: 16, 2022] | | |

| /s/ Judith M. O’Brien | | | | | | Director | | | | | | December [removed: 17, 2021] [added: 16, 2022] | | |

| /s/ Joanne B. Olsen | | | | | | Director | | | | | | December [removed: 17, 2021] [added: 16, 2022] | | |

| [removed: 10.7] [added: 10.10] | | | | | | [Ciena Corporation 2008 Omnibus Incentive Plan*](http://www.sec.gov/Archives/edgar/data/936395/000095013308001294/w51425exv10w1.htm) | | | | | | 8-K (000-21969) | | | | | | 10.1 | | | | | | 3/27/2008 | | | | | | | | |

| [removed: 10.8] [added: 10.11] | | | | | | [Amendment (No. 1) to Ciena Corporation 2008 Omnibus Incentive Plan dated April 14, 2010*](http://www.sec.gov/Archives/edgar/data/936395/000095012310035220/w78099exv10w1.htm) | | | | | | 8-K (000-21969) | | | | | | 10.1 | | | | | | 4/15/2010 | | | | | | | | |

| [removed: 10.9] [added: 10.12] | | | | | | [Amendment (No. 2) to Ciena Corporation 2008 Omnibus Incentive Plan dated March 21, 2012*](http://www.sec.gov/Archives/edgar/data/936395/000093639512000034/a101-amendmentto2008omnibu.htm) | | | | | | 8-K (000-21969) | | | | | | 10.1 | | | | | | 3/23/2012 | | | | | | | | |

| [removed: 10.10] [added: 10.13] | | | | | | [Amendment (No. 3) to Ciena Corporation 2008 Omnibus Incentive Plan dated April 10, 2014*](http://www.sec.gov/Archives/edgar/data/936395/000093639514000040/a2014043010qex101.htm) | | | | | | 10-Q (001-36250) | | | | | | 10.1 | | | | | | 6/11/2014 | | | | | | | | |

| [removed: 10.11] [added: 10.14] | | | | | | [Amendment (No. 4) to Ciena Corporation 2008 Omnibus Incentive Plan dated March 24, 2016*](http://www.sec.gov/Archives/edgar/data/936395/000093639516000104/ex102-amendmentno4tocienac.htm) | | | | | | 10-Q (001-36250) | | | | | | 10.2 | | | | | | 6/8/2016 | | | | | | | | |

| [removed: 10.12] [added: 10.15] | | | | | | [Form of [added: Ciena Corporation] 2008 Omnibus Incentive Plan Restricted Stock Unit Agreement (Employee)*](http://www.sec.gov/Archives/edgar/data/936395/000093639511000009/exhibit1018formof2008omnib.htm) | | | | | | 10-K (000-21969) | | | | | | 10.18 | | | | | | 12/22/2011 | | | | | | | | |

| [removed: 10.13] [added: 10.16] | | | | | | [Form of [added: Ciena Corporation] 2008 Omnibus Incentive Plan Restricted Stock Unit Agreement (Director)*](http://www.sec.gov/Archives/edgar/data/936395/000095012309011397/w74336exv10w3.htm) | | | | | | 10-Q (000-21969) | | | | | | 10.3 | | | | | | 6/4/2009 | | | | | | | | |

| [removed: 10.14] [added: 10.17] | | | | | | [Amended and Restated Ciena Corporation Employee Stock Purchase Plan*](https://www.sec.gov/Archives/edgar/data/0000936395/000093639521000015/amendedandrestatedesppplan.htm) | | | | | | 8-K (001-36250) | | | | | | 10.1 | | | | | | 4/6/2021 | | | | | | | | |

| [removed: 10.15] [added: 10.18] | | | | | | [removed: [Employee] [added: [Ciena Corporation Amended and Restated Employee] Stock Purchase Plan Enrollment [removed: Agreement*](http://www.sec.gov/Archives/edgar/data/936395/000093639517000038/ex102-2017esppintlenrollme.htm)] [added: Form*](http://www.sec.gov/Archives/edgar/data/936395/000093639517000038/ex102-2017esppintlenrollme.htm)] | | | | | | 10-Q (001-36250) | | | | | | 10.2 | | | | | | 6/7/2017 | | | | | | | | |

| [removed: 10.16] [added: 10.19] | | | | | | [Cyan, Inc. 2006 Stock Plan*](http://www.sec.gov/Archives/edgar/data/1391636/000119312513142288/d439911dex1021.htm) | | | | | | S-1 (333-187732) | | | | | | 10.2.1 | | | | | | 4/4/2013 | | | | | | | | |

| [removed: 10.17] [added: 10.20] | | | | | | [Cyan, Inc. 2013 Equity Incentive Plan*](http://www.sec.gov/Archives/edgar/data/1391636/000119312513142288/d439911dex1031.htm) | | | | | | S-1 (333-187732) | | | | | | 10.3.1 | | | | | | 4/4/2013 | | | | | | | | |

| [removed: 10.18] [added: 10.21] | | | | | | [Ciena Corporation 2000 Equity Incentive Plan (Amended and Restated ONI Systems Corp. 2000 Equity Incentive Plan)*](http://www.sec.gov/Archives/edgar/data/936395/000095013303004259/w92366exv10w37.htm) | | | | | | 10-K (000-21969) | | | | | | 10.37 | | | | | | 12/11/2003 | | | | | | | | |

| [removed: 10.19] [added: 10.22] | | | | | | [Form of Restricted Stock Unit Award Agreement for directors under Ciena Corporation 2000 Equity Incentive Plan*](http://www.sec.gov/Archives/edgar/data/936395/000095013305004933/w14323exv10w5.htm) | | | | | | 8-K (000-21969) | | | | | | 10.5 | | | | | | 11/4/2005 | | | | | | | | |

| [removed: 10.20] [added: 10.23] | | | | | | [Ciena Corporation Amended and Restated Incentive Bonus Plan, as amended February 23, 2021*](https://www.sec.gov/Archives/edgar/data/936395/000093639521000010/ex101-210223incbonusplanam.htm) | | | | | | 10-Q (000-36250) | | | | | | 10.1 | | | | | | 3/10/2021 | | | | | | | | |

| [removed: 10.21] [added: 10.24] | | | | | | [Ciena Corporation U.S. Executive Severance Benefit Plan*](http://www.sec.gov/Archives/edgar/data/936395/000095012311057860/w82122exv10w1.htm) | | | | | | 10-Q (000-21969) | | | | | | 10.1 | | | | | | 6/9/2011 | | | | | | | | |

| [removed: 10.22] [added: 10.25] | | | | | | [Form of Indemnification Agreement with Directors and Executive Officers*](http://www.sec.gov/Archives/edgar/data/936395/000095013306001014/w18125exv10w1.htm) | | | | | | 10-Q (000-21969) | | | | | | 10.1 | | | | | | 3/3/2006 | | | | | | | | |

| [removed: 10.23] [added: 10.26] | | | | | | [Change in Control Severance Agreement dated November 30, 2019, between Ciena Corporation and Gary B. Smith*](https://www.sec.gov/Archives/edgar/data/936395/000093639519000056/ex10262019cicoagreegbs.htm) | | | | | | 10-K (000-36250) | | | | | | 10.23 | | | | | | 12/20/2019 | | | | | | | | |

| [removed: 10.24] [added: 10.27] | | | | | | [Change in Control Severance Agreement dated November 30, 2019, between Ciena Corporation and Executive Officers*](https://www.sec.gov/Archives/edgar/data/936395/000093639519000056/ex10272019cicoagreeexe.htm) | | | | | | 10-K (000-36250) | | | | | | 10.24 | | | | | | 12/20/2019 | | | | | | | | |

| [removed: 10.25] [added: 10.28] | | | | | | [Lease Agreement by and between Ciena Canada, Inc. and Innovation Blvd. II Limited dated as of October 23, 2014++](http://www.sec.gov/Archives/edgar/data/936395/000093639514000063/a2014103110kex1036leaseagr.htm) | | | | | | 10-K (001-36250) | | | | | | 10.36 | | | | | | 12/19/2014 | | | | | | | | |

| [removed: 10.26] [added: 10.29] | | | | | | [Amendment No. 1 to the Lease Agreement dated October 23, 2014, between Ciena Canada, Inc. and Innovations Blvd II Limited, dated April 15, 2015](http://www.sec.gov/Archives/edgar/data/936395/000093639515000032/ex103ciena5050innovationbl.htm) | | | | | | 8-K (001-36250) | | | | | | 10.3 | | | | | | 6/3/2015 | | | | | | | | |

| [removed: 10.27] [added: 10.30] | | | | | | [Lease Agreement between Ciena Canada, Inc. and Innovation Blvd. II Limited, dated April 15, 2015](http://www.sec.gov/Archives/edgar/data/936395/000093639515000032/ex10420150415ottawalease.htm) | | | | | | 8-K (001-36250) | | | | | | 10.4 | | | | | | 6/3/2015 | | | | | | | | |

| [removed: 10.28] [added: 10.31] | | | | | | [Lease Agreement dated November 3, 2011 between Ciena Corporation and W2007 RDG Realty, L.L.C.++](http://www.sec.gov/Archives/edgar/data/936395/000093639511000009/exhibit1034leaseagreement.htm) | | | | | | 10-K (000-21969) | | | | | | 10.34 | | | | | | 12/22/2011 | | | | | | | | |

| [removed: 10.29] [added: 10.32] | | | | | | [ABL Credit Agreement, dated October 28, 2019, by and among Ciena Corporation, Ciena Communications, Inc., Ciena Government Solutions, Inc., Ciena Canada, Inc., Bank of America, N.A., as administrative agent, and the lenders party thereto++](http://www.sec.gov/Archives/edgar/data/936395/000119312519280501/d826714dex101.htm) | | | | | | 8-K (001-36250) | | | | | | 10.1 | | | | | | 10/31/2019 | | | | | | | | |

| [removed: 10.30] [added: 10.33] | | | | | | [U.S. Guaranty, dated October 28, 2019, by and among Ciena Corporation, Ciena Communications, Inc., Ciena Government Solutions, Inc., Ciena Communications International, LLC, Blue Planet Software, Inc. and Bank of America, N.A., as administrative agent++](http://www.sec.gov/Archives/edgar/data/936395/000119312519280501/d826714dex102.htm) | | | | | | 8-K (001-36250) | | | | | | 10.2 | | | | | | 10/31/2019 | | | | | | | | |

| [removed: 10.31] [added: 10.34] | | | | | | [U.S. Security Agreement, dated October 28, 2019, by and among Ciena Corporation, Ciena Communications, Inc., Ciena Government Solutions, Inc., Ciena Communications International, LLC, Blue Planet Software, Inc. and Bank of America, N.A., as administrative agent++](http://www.sec.gov/Archives/edgar/data/936395/000119312519280501/d826714dex103.htm) | | | | | | 8-K (001-36250) | | | | | | 10.3 | | | | | | 10/31/2019 | | | | | | | | |

| [removed: 10.32] [added: 10.35] | | | | | | [U.S. Pledge Agreement, dated October 28, 2019, by and among Ciena Corporation, Ciena Communications, Inc., Ciena Government Solutions, Inc., Ciena Communications International, LLC, Blue Planet Software, Inc. and Bank of America, N.A., as administrative agent++](http://www.sec.gov/Archives/edgar/data/936395/000119312519280501/d826714dex104.htm) | | | | | | 8-K (001-36250) | | | | | | 10.4 | | | | | | 10/31/2019 | | | | | | | | |

| [removed: 10.33] [added: 10.36] | | | | | | [Canadian Guarantee, dated October 28, 2019, by Ciena Canada, Inc., in favor of Bank of America, N.A., as administrative agent++](http://www.sec.gov/Archives/edgar/data/936395/000119312519280501/d826714dex105.htm) | | | | | | 8-K (001-36250) | | | | | | 10.5 | | | | | | 10/31/2019 | | | | | | | | |

| 4.3 | | | | | | [Indenture, dated as of January 18, 2022, by and among Ciena Corporation, the subsidiary guarantors party thereto and U.S. Bank National Association, as trustee, including the Form of 4.00% Senior Notes due 2030 attached as Exhibit A thereto](https://www.sec.gov/Archives/edgar/data/936395/000119312522011373/d255608dex41.htm) | | | | | | 8-K (001-36250) | | | | | | 4.1 | | | | | | 1/18/2022 | | | | | | | | |

| 10.7 | | | | | | [Form of Employee Restricted Stock Unit Agreement for Ciena Corporation 2017 Omnibus Incentive Plan (revised 2022)*](https://www.sec.gov/Archives/edgar/data/936395/000093639522000065/ex107-2017planxrsuagreemen.htm) | | | | | | — | | | | | | — | | | | | | — | | | | | | X | | |

| 10.8 | | | | | | [Form of Performance Stock Unit Agreement for Ciena Corporation 2017 Omnibus Incentive Plan (revised 2022)*](https://www.sec.gov/Archives/edgar/data/936395/000093639522000065/ex108-2017planxpsuagreemen.htm) | | | | | | — | | | | | | — | | | | | | — | | | | | | X | | |

| 10.9 | | | | | | [Form of Market Stock Unit Agreement for Ciena Corporation 2017 Omnibus Incentive Plan (revised 2022)*](https://www.sec.gov/Archives/edgar/data/936395/000093639522000065/ex109-2017msuagreement2022.htm) | | | | | | — | | | | | | — | | | | | | — | | | | | | X | | |

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