filings.toolsItem 1. Financial Statements
94K characters. Original on sec.gov · Markdown
Item 1. Financial Statements
CIENA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| Quarter Ended | |||||||||||||||||||||||
| January 31, | February 1, | ||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Products | $ | 1,179,870 | $ | 854,785 | |||||||||||||||||||
| Services | 247,172 | 217,475 | |||||||||||||||||||||
| Total revenue | 1,427,042 | 1,072,260 | |||||||||||||||||||||
| Cost of goods sold: | |||||||||||||||||||||||
| Products | 666,574 | 490,804 | |||||||||||||||||||||
| Services | 134,948 | 109,635 | |||||||||||||||||||||
| Total cost of goods sold | 801,522 | 600,439 | |||||||||||||||||||||
| Gross profit | 625,520 | 471,821 | |||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | 221,458 | 192,663 | |||||||||||||||||||||
| Selling and marketing | 148,867 | 136,504 | |||||||||||||||||||||
| General and administrative | 59,243 | 53,902 | |||||||||||||||||||||
| Significant asset impairments and restructuring costs | 1,498 | 1,544 | |||||||||||||||||||||
| Amortization of intangible assets | 4,736 | 6,545 | |||||||||||||||||||||
| Acquisition and integration costs | 306 | — | |||||||||||||||||||||
| Total operating expenses | 436,108 | 391,158 | |||||||||||||||||||||
| Income from operations | 189,412 | 80,663 | |||||||||||||||||||||
| Interest and other income, net | 12,957 | 11,578 | |||||||||||||||||||||
| Interest expense | (21,254) | (22,918) | |||||||||||||||||||||
| Loss on extinguishment and modification of debt | — | (729) | |||||||||||||||||||||
| Income before income taxes | 181,115 | 68,594 | |||||||||||||||||||||
| Provision for income taxes | 30,832 | 24,022 | |||||||||||||||||||||
| Net income | $ | 150,283 | $ | 44,572 | |||||||||||||||||||
| Basic net income per common share | $ | 1.06 | $ | 0.31 | |||||||||||||||||||
| Diluted net income per potential common share | $ | 1.03 | $ | 0.31 | |||||||||||||||||||
| Weighted average basic common shares outstanding | 141,676 | 142,880 | |||||||||||||||||||||
| Weighted average dilutive potential common shares outstanding | 145,799 | 145,944 |
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
CIENA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
| Quarter Ended | |||||||||||||||||||||||
| January 31, | February 1, | ||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Net income | $ | 150,283 | $ | 44,572 | |||||||||||||||||||
| Unrealized loss on available-for-sale securities, net of tax | (37) | (345) | |||||||||||||||||||||
| Unrealized gain (loss) on foreign currency forward contracts, net of tax | 5,628 | (4,484) | |||||||||||||||||||||
| Unrealized gain on interest rate swaps, net of tax | 556 | 1,953 | |||||||||||||||||||||
| Change in cumulative translation adjustments | 10,165 | (17,702) | |||||||||||||||||||||
| Other comprehensive income (loss) | 16,312 | (20,578) | |||||||||||||||||||||
| Total comprehensive income | $ | 166,595 | $ | 23,994 |
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
CIENA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
| January 31, 2026 | November 1, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 1,123,413 | $ | 1,091,952 | |||||||
| Short-term investments | 176,315 | 216,148 | |||||||||
| Accounts receivable, net of allowance for credit losses of $11.2 million as of both January 31, 2026 and November 1, 2025 | 967,408 | 975,856 | |||||||||
| Inventories, net | 845,823 | 826,235 | |||||||||
| Prepaid expenses and other | 427,918 | 455,316 | |||||||||
| Total current assets | 3,540,877 | 3,565,507 | |||||||||
| Long-term investments | 69,876 | 57,142 | |||||||||
| Equipment, building, furniture and fixtures, net | 437,838 | 386,779 | |||||||||
| Operating right-of-use assets | 40,484 | 38,613 | |||||||||
| Goodwill | 521,712 | 521,204 | |||||||||
| Other intangible assets, net | 212,689 | 224,210 | |||||||||
| Deferred tax asset, net | 877,995 | 884,889 | |||||||||
| Other long-term assets | 190,888 | 186,323 | |||||||||
| Total assets | $ | 5,892,359 | $ | 5,864,667 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 547,221 | $ | 542,841 | |||||||
| Accrued liabilities and other short-term obligations | 395,881 | 531,081 | |||||||||
| Deferred revenue | 290,418 | 208,936 | |||||||||
| Operating lease liabilities | 13,273 | 13,956 | |||||||||
| Current portion of long-term debt | 11,580 | 11,580 | |||||||||
| Total current liabilities | 1,258,373 | 1,308,394 | |||||||||
| Long-term deferred revenue | 100,455 | 94,850 | |||||||||
| Other long-term obligations | 182,329 | 175,426 | |||||||||
| Long-term operating lease liabilities | 34,100 | 32,516 | |||||||||
| Long-term debt, net | 1,524,744 | 1,524,158 | |||||||||
| Total liabilities | 3,100,001 | 3,135,344 | |||||||||
| Commitments and contingencies (Note 18) | |||||||||||
| Stockholders’ equity: | |||||||||||
| Preferred stock – par value $0.01; 20,000,000 shares authorized; zero shares issued and outstanding | — | — | |||||||||
| Common stock – par value $0.01; 290,000,000 shares authorized; 141,452,656 and 141,016,300 shares issued and outstanding | 1,415 | 1,410 | |||||||||
| Additional paid-in capital | 5,849,492 | 5,953,057 | |||||||||
| Accumulated other comprehensive loss | (38,723) | (55,035) | |||||||||
| Accumulated deficit | (3,019,826) | (3,170,109) | |||||||||
| Total stockholders’ equity | 2,792,358 | 2,729,323 | |||||||||
| Total liabilities and stockholders’ equity | $ | 5,892,359 | $ | 5,864,667 |
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
CIENA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
| Three Months Ended | |||||||||||
| January 31, | February 1, | ||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows provided by operating activities: | |||||||||||
| Net income | $ | 150,283 | $ | 44,572 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements | 32,309 | 24,679 | |||||||||
| Share-based compensation expense | 49,827 | 40,806 | |||||||||
| Amortization of intangible assets | 11,521 | 8,778 | |||||||||
| Deferred taxes | (7,043) | (17,085) | |||||||||
| Provision for inventory excess and obsolescence | 21,832 | 10,918 | |||||||||
| Provision for warranty | 8,185 | 5,697 | |||||||||
| Other | (1,545) | (6,655) | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable | 9,406 | (33,454) | |||||||||
| Inventories | (41,228) | (35,844) | |||||||||
| Prepaid expenses and other | 40,024 | 92,036 | |||||||||
| Operating lease right-of-use assets | 2,879 | 2,902 | |||||||||
| Accounts payable, accruals and other obligations | (130,907) | (49,577) | |||||||||
| Deferred revenue | 86,013 | 20,311 | |||||||||
| Short- and long-term operating lease liabilities | (3,911) | (4,361) | |||||||||
| Net cash provided by operating activities | 227,645 | 103,723 | |||||||||
| Cash flows used in investing activities: | |||||||||||
| Payments for equipment, furniture and fixtures | (73,885) | (26,884) | |||||||||
| Purchases of investments | (39,919) | (97,024) | |||||||||
| Proceeds from sales and maturities of investments | 68,882 | 55,061 | |||||||||
| Settlement of foreign currency forward contracts, net | 1,036 | 1,757 | |||||||||
| Net cash used in investing activities | (43,886) | (67,090) | |||||||||
| Cash flows used in financing activities: | |||||||||||
| Proceeds from modification of debt, net | — | 19,175 | |||||||||
| Cash paid for extinguishment of debt | — | (19,175) | |||||||||
| Payment of long-term debt | — | (2,895) | |||||||||
| Payment of debt issuance costs | — | (10) | |||||||||
| Payment of finance lease obligations | (1,158) | (1,020) | |||||||||
| Shares repurchased for tax withholdings on vesting of stock unit awards | (90,100) | (25,489) | |||||||||
| Repurchases of common stock - repurchase program, net | (80,513) | (81,176) | |||||||||
| Proceeds from issuance of common stock | 17,226 | 17,133 | |||||||||
| Net cash used in financing activities | (154,545) | (93,457) | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 2,247 | (3,289) | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 31,461 | (60,113) | |||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 1,092,197 | 935,026 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 1,123,658 | $ | 874,913 | |||||||
| Supplemental disclosure of cash flow information | |||||||||||
| Cash paid during the period for interest, net | $ | 16,879 | $ | 25,559 | |||||||
| Cash paid during the period for income taxes, net | $ | 10,718 | $ | 10,426 | |||||||
| Operating lease payments | $ | 4,516 | $ | 4,762 | |||||||
| Non-cash investing and financing activities | |||||||||||
| Purchase of equipment in accounts payable | $ | 14,910 | $ | 4,735 | |||||||
| Repurchase of common stock in accrued liabilities from repurchase program, net | $ | 2,579 | $ | 4,198 | |||||||
| Operating right-of-use assets subject to lease liability | $ | 4,894 | $ | 1,056 | |||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
CIENA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands, except share data)
(unaudited)
| Common Stock Shares | Par Value | Additional Paid-in-Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
| Balance at November 1, 2025 | 141,016,300 | $ | 1,410 | $ | 5,953,057 | $ | (55,035) | $ | (3,170,109) | $ | 2,729,323 | ||||||||||||||||||||||||
| Net income | — | — | — | — | 150,283 | 150,283 | |||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | 16,312 | — | 16,312 | |||||||||||||||||||||||||||||
| Repurchase of common stock - repurchase program, net | (371,997) | (4) | (80,509) | — | — | (80,513) | |||||||||||||||||||||||||||||
| Issuance of shares from employee equity plans | 1,206,781 | 13 | 17,213 | — | — | 17,226 | |||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | 49,827 | — | — | 49,827 | |||||||||||||||||||||||||||||
| Shares repurchased for tax withholdings on vesting of stock unit awards | (398,428) | (4) | (90,096) | — | — | (90,100) | |||||||||||||||||||||||||||||
| Balance at January 31, 2026 | 141,452,656 | $ | 1,415 | $ | 5,849,492 | $ | (38,723) | $ | (3,019,826) | $ | 2,792,358 |
| Common Stock Shares | Par Value | Additional Paid-in-Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
| Balance at November 2, 2024 | 142,656,116 | $ | 1,427 | $ | 6,154,869 | $ | (46,711) | $ | (3,293,447) | $ | 2,816,138 | ||||||||||||||||||||||||
| Net income | — | — | — | — | 44,572 | 44,572 | |||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | (20,578) | — | (20,578) | |||||||||||||||||||||||||||||
| Repurchase of common stock - repurchase program, net | (1,016,970) | (10) | (79,193) | — | — | (79,203) | |||||||||||||||||||||||||||||
| Issuance of shares from employee equity plans | 1,186,963 | 11 | 17,122 | — | — | 17,133 | |||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | 40,806 | — | — | 40,806 | |||||||||||||||||||||||||||||
| Shares repurchased for tax withholdings on vesting of stock unit awards | (297,599) | (3) | (25,486) | — | — | (25,489) | |||||||||||||||||||||||||||||
| Balance at February 1, 2025 | 142,528,510 | $ | 1,425 | $ | 6,108,118 | $ | (67,289) | $ | (3,248,875) | $ | 2,793,379 |
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
CIENA CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(1) INTERIM FINANCIAL STATEMENTS
The interim financial statements for Ciena Corporation and its wholly owned subsidiaries (“Ciena”) included herein have been prepared by Ciena, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”).
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States (“GAAP”) requires Ciena to make judgments, assumptions, and estimates that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Among other things, these estimates form the basis for judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions. To the extent that there are material differences between Ciena’s estimates and actual results, Ciena’s consolidated financial statements will be affected.
In the opinion of management, the financial statements included in this report reflect all normal recurring adjustments that Ciena considers necessary for the fair statement of the results of operations of Ciena for the interim periods covered and of the financial position of Ciena at the date of the interim balance sheets. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to SEC rules and regulations. The Condensed Consolidated Balance Sheet as of November 1, 2025 was derived from audited financial statements but does not include all disclosures required by GAAP. However, Ciena believes that the disclosures are adequate to understand the information presented herein. The operating results for interim periods are not necessarily indicative of the operating results for the entire year. These financial statements should be read in conjunction with Ciena’s audited consolidated financial statements and the notes thereto included in Ciena’s Annual Report on Form 10-K for the fiscal year ended November 1, 2025 (the “2025 Annual Report”).
Ciena has a 52 or 53-week fiscal year, with quarters ending on the Saturday nearest to the last day of January, April, July, and October, respectively, of each year. Fiscal 2026 and Fiscal 2025 are each 52-week fiscal years.
**(2)**SIGNIFICANT ACCOUNTING POLICIES
There have been no material changes to Ciena’s significant accounting policies, compared to the accounting policies described in Note 1, Ciena Corporation and Significant Accounting Policies and Estimates, in “Notes to Consolidated Financial Statements” in Item 8 of Part II of the 2025 Annual Report.
Accounting Standards - Not Yet Effective
In December 2023, the FASB issued ASU No. 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740): Improvement to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures to decision makers. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, and will result in changes to certain income tax disclosures including substantially more information on a disaggregated basis, but it does not affect recognition or measurement of income taxes and therefore is not expected to have a material effect on our consolidated financial statements. The amendments are applied on a prospective basis; however, retrospective application is permitted.
In November 2024, the FASB issued ASU No. 2024-03 (“ASU 2024-03”), Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027; however, early adoption is permitted. ASU 2024-03 allows for adoption using either a prospective or retrospective method. Ciena is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.
In July 2025, the FASB issued ASU No. 2025-05 (“ASU 2025-05”), Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, to introduce a practical expedient for all entities, which simplifies the calculation required for estimating credit losses and assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods; however, early adoption is permitted. ASU 2025-25 allows for adoption using a prospective method. Ciena is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU No. 2025-06 (“ASU 2025-06”), Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) to modernize the accounting for software costs that are accounted for under Subtopic 350-40 by shifting away from prescriptive and sequential software development stages to an incremental and iterative method when capitalizing software costs. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. Ciena is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU No. 2025-11 (“ASU 2025-11”), Interim Reporting (Topic 270): Narrow-Scope Improvements, to improve the navigability of required interim disclosures, clarify when that guidance applies, and provide additional guidance on what disclosures should be provided in interim reporting periods. ASU 2025-11 is effective for interim reporting periods with annual reporting periods beginning after December 15, 2027, early adoption is permitted. ASU 2025-11 allows for adoption using the prospective or retrospective method. Ciena is currently evaluating the impact of this ASU on its interim financial statements and related disclosures.
(3) REVENUE
Segment and Product Line Disaggregation of Revenue
Ciena’s disaggregated segment and product line revenue as presented below depicts the nature, amount, and timing of revenue and cash flows for similar groupings of Ciena’s various offerings. The sales cycle, contractual obligations, customer requirements, and go-to-market strategies may differ for each of its product categories, resulting in different economic risk profiles for each category. Ciena has the following operating segments for reporting purposes: (i) Networking Platforms; (ii) Platform Software and Services; (iii) Blue Planet Automation Software and Services; and (iv) Global Services. See Note 17 below.
The tables below set forth Ciena’s disaggregated revenue for the respective periods (in thousands):
| Quarter Ended January 31, 2026 | |||||||||||||||||||||||||||||
| Segment | Total | ||||||||||||||||||||||||||||
| Networking Platforms | Platform Software and Services | Blue Planet Automation Software and Services | Global Services | ||||||||||||||||||||||||||
| Product lines: | |||||||||||||||||||||||||||||
| Optical Networking | $ | 1,023,162 | $ | — | $ | — | $ | — | $ | 1,023,162 | |||||||||||||||||||
| Routing and Switching | 126,006 | — | — | — | 126,006 | ||||||||||||||||||||||||
| Platform Software and Services | — | 93,384 | — | — | 93,384 | ||||||||||||||||||||||||
| Blue Planet Automation Software and Services | — | — | 20,420 | — | 20,420 | ||||||||||||||||||||||||
| Maintenance, Support, and Learning | — | — | — | 87,551 | 87,551 | ||||||||||||||||||||||||
| Implementation | — | — | — | 67,949 | 67,949 | ||||||||||||||||||||||||
| Advisory and Enablement | — | — | — | 8,570 | 8,570 | ||||||||||||||||||||||||
| Total revenue by product line | $ | 1,149,168 | $ | 93,384 | $ | 20,420 | $ | 164,070 | $ | 1,427,042 | |||||||||||||||||||
| Timing of revenue recognition: | |||||||||||||||||||||||||||||
| Products and services at a point in time | $ | 1,149,168 | $ | 29,183 | $ | 1,894 | $ | 16,887 | $ | 1,197,132 | |||||||||||||||||||
| Products and services transferred over time | — | 64,201 | 18,526 | 147,183 | 229,910 | ||||||||||||||||||||||||
| Total revenue by timing of revenue recognition | $ | 1,149,168 | $ | 93,384 | $ | 20,420 | $ | 164,070 | $ | 1,427,042 |
| Quarter Ended February 1, 2025 | |||||||||||||||||||||||||||||
| Segment | Total | ||||||||||||||||||||||||||||
| Networking Platforms | Platform Software and Services | Blue Planet Automation Software and Services | Global Services | ||||||||||||||||||||||||||
| Product lines: | |||||||||||||||||||||||||||||
| Optical Networking | $ | 727,973 | $ | — | $ | — | $ | — | $ | 727,973 | |||||||||||||||||||
| Routing and Switching | 93,169 | — | — | — | 93,169 | ||||||||||||||||||||||||
| Platform Software and Services | — | 95,067 | — | — | 95,067 | ||||||||||||||||||||||||
| Blue Planet Automation Software and Services | — | — | 26,032 | — | 26,032 | ||||||||||||||||||||||||
| Maintenance, Support, and Learning | — | — | — | 74,573 | 74,573 | ||||||||||||||||||||||||
| Implementation | — | — | — | 47,682 | 47,682 | ||||||||||||||||||||||||
| Advisory and Enablement | — | — | — | 7,764 | 7,764 | ||||||||||||||||||||||||
| Total revenue by product line | $ | 821,142 | $ | 95,067 | $ | 26,032 | $ | 130,019 | $ | 1,072,260 | |||||||||||||||||||
| Timing of revenue recognition: | |||||||||||||||||||||||||||||
| Products and services at a point in time | $ | 821,142 | $ | 28,931 | $ | 10,427 | $ | 6,133 | $ | 866,633 | |||||||||||||||||||
| Products and services transferred over time | — | 66,136 | 15,605 | 123,886 | 205,627 | ||||||||||||||||||||||||
| Total revenue by timing of revenue recognition | $ | 821,142 | $ | 95,067 | $ | 26,032 | $ | 130,019 | $ | 1,072,260 |
-
Networking Platforms revenue reflects sales of Ciena’s Optical Networking and Routing and Switching product lines.
-
Optical Networking - includes the 6500 Packet-Optical Platform, the Waveserver® system, the 6500 Reconfigurable Line System (RLS), coherent pluggable transceivers, and other optical networking products. These products are often combined and sold as solutions that address network applications including cloud and AI networking, datacenter interconnect, long haul, metro, submarine connectivity, and managed optical fiber networks (MOFN).
-
Routing and Switching - includes the 3000 family of service delivery platforms and 5000 family of service aggregation platforms, the 8100 Coherent IP networking platforms, virtualization software, and other routing and switching portfolio products. Ciena also uses certain of these products to create its out-of-band data center management (DCOM) solutions.
Revenue from this segment is included in product revenue on the Condensed Consolidated Statements of Operations.
-
Platform Software and Services revenue reflects sales of Ciena’s Platform Software and Platform Services.
-
Platform Software - includes Ciena’s Navigator Network Control SuiteTM domain controller solution and its applications, and legacy software solutions.
-
Platform Services - includes subscription, support, and consulting services related to Ciena’s software platforms, operating system software and enhanced software features embedded in each of the Networking Platforms product lines above.
Revenue from the software portion of this segment is included in product revenue on the Condensed Consolidated Statements of Operations. Revenue from services portion of this segment is included in services revenue on the Condensed Consolidated Statements of Operations.
-
Blue Planet Automation Software and Services revenue reflects sales of Blue Planet Automation Software and Blue Planet Services.
-
Blue Planet Automation Software - includes inventory management, orchestration, route optimization and analysis, and unified assurance and analytics software.
-
Blue Planet Services - includes subscription, installation, support, consulting and design services related to the Blue Planet Automation Platform.
Revenue from the software portion of this segment is included in product revenue on the Condensed Consolidated Statements of Operations. Revenue from the services portion of this segment is included in services revenue on the Condensed Consolidated Statements of Operations.
- Global Services revenue reflects sales of a broad range of Ciena’s services for advisory and enablement, implementation, and maintenance, support, and learning activities.
Revenue from this segment is included in services revenue on the Condensed Consolidated Statements of Operations.
Revenue Recognition
-
Revenue from the Networking Platforms segment includes, in addition to the products described above, sales of operating system software and enhanced software features embedded therein, which are each considered distinct performance obligations for which the revenue is generally recognized upfront at a point in time upon transfer of control.
-
Revenue from software platforms typically reflects either perpetual or term-based software licenses, and these sales are considered distinct performance obligations where revenue is generally recognized upfront at a point in time upon transfer of control.
-
Revenue from software subscription and support is recognized ratably over the period during which the services are performed.
-
Revenue from professional services for customization, consulting, and design services relating to Ciena’s software offerings is recognized over time with Ciena applying the input method to determine the amount of revenue to be recognized in a given period.
-
Revenue from maintenance and support is recognized ratably over the period during which the services are performed.
-
Revenue from implementation services and advisory and enablement services is generally recognized over time with Ciena applying the input method to determine the amount of revenue to be recognized in a given period.
-
Revenue from learning services is generally recognized at a point in time upon completion of the service.
For additional information on Ciena’s revenue recognition policy, see “Notes to Consolidated Financial Statements” in Item 8 of Part II of the 2025 Annual Report.
Geographic Disaggregation of Revenue
Ciena reports its sales geographically in the following markets: (i) the United States, Canada, the Caribbean and Latin America (“Americas”); (ii) Europe, Middle East and Africa (“EMEA”); and (iii) Asia Pacific, Japan and India (“APAC”). Within each geographic area, Ciena maintains specific teams or personnel that focus on a particular region, country, customer, or market vertical. These teams include sales management, account salespersons, and sales engineers, as well as services professionals and commercial management personnel. The following table reflects Ciena’s geographic distribution of revenue principally based on the relevant location for Ciena’s delivery of products and performance of services.
For the periods indicated, Ciena’s geographic distribution of revenue was as follows (in thousands):
| Quarter Ended | ||||||||||||||||||||||||||
| January 31, | February 1, | |||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Geographic distribution: | ||||||||||||||||||||||||||
| Americas | $ | 1,118,223 | $ | 795,632 | ||||||||||||||||||||||
| EMEA | 200,587 | 157,916 | ||||||||||||||||||||||||
| APAC | 108,232 | 118,712 | ||||||||||||||||||||||||
| Total revenue by geographic distribution | $ | 1,427,042 | $ | 1,072,260 |
Ciena’s revenue includes $1.08 billion and $752.5 million from the United States for the first quarter of fiscal 2026 and 2025, respectively. No other country accounted for 10% or more of total revenue for the periods indicated in the above table.
For the periods indicated, the only customers that accounted for 10% or more of total revenue were as follows (in thousands):
| Quarter Ended | |||||||||||
| January 31, | February 1, | ||||||||||
| 2026 | 2025 | ||||||||||
| Cloud provider A | $ | 330,981 | $ | 168,896 | |||||||
| Cloud provider B | 160,206 | n/a* | |||||||||
| Service provider A | 185,804 | n/a* | |||||||||
| Service provider B | n/a* | 111,024 | |||||||||
| Total | $ | 676,991 | $ | 279,920 |
*Denotes revenue representing less than 10% of total revenue for the indicated period
Service provider A purchased products from each of Ciena’s operating segments for the periods presented. The other 10% customers included in the table above purchased products from Ciena’s Networking Platforms, Platform Software and Services, and Global Services operating segments for each of the periods presented.
Contract Balances
The following table provides information about receivables, contract assets, and contract liabilities (deferred revenue) from contracts with customers (in thousands):
| Balance at | Balance at | |||||||||||||
| January 31, 2026 | November 01, 2025 | |||||||||||||
| Accounts receivable, net | $ | 967,408 | $ | 975,856 | ||||||||||
| Long-term accounts receivable | $ | 27,359 | $ | 28,610 | ||||||||||
| Deferred revenue | $ | 390,873 | $ | 303,786 | ||||||||||
| Contract assets for unbilled accounts receivable, net | $ | 146,208 | $ | 157,868 |
Ciena’s contract assets represent unbilled accounts receivable, net where transfer of a product or service has occurred but invoicing is conditional upon completion of future performance obligations. These amounts are primarily related to implementation and professional services arrangements where transfer of control has occurred, but Ciena has not yet invoiced the customer. Contract assets are included in prepaid expenses and other on the Condensed Consolidated Balance Sheets.
Contract liabilities consist of deferred revenue and represent advanced payments against non-cancelable customer orders received prior to revenue recognition. Ciena recognized approximately $88.2 million and $74.5 million of revenue during the first three months of fiscal 2026 and 2025, respectively, that was included in the deferred revenue balance at November 1, 2025 and November 2, 2024, respectively. Revenue recognized due to changes in transaction price from performance obligations satisfied or partially satisfied in previous periods was immaterial during the three months ended January 31, 2026 and February 1, 2025.
As of the dates indicated, deferred revenue is comprised of the following (in thousands):
| January 31, 2026 | November 1, 2025 | ||||||||||
| Products | $ | 97,509 | $ | 65,382 | |||||||
| Services | 293,364 | 238,404 | |||||||||
| Total deferred revenue | 390,873 | 303,786 | |||||||||
| Less current portion | (290,418) | (208,936) | |||||||||
| Long-term deferred revenue | $ | 100,455 | $ | 94,850 |
Capitalized Contract Acquisition Costs
Capitalized contract acquisition costs consist of deferred sales commissions, and were $32.9 million and $37.4 million as of January 31, 2026 and November 1, 2025, respectively. Capitalized contract acquisition costs were included in (i) prepaid expenses and other and (ii) other long-term assets on the Condensed Consolidated Balance Sheets. The amortization expense associated with these costs was $10.8 million and $8.5 million during the first three months of fiscal 2026 and 2025, respectively, and was included in selling and marketing expense on the Condensed Consolidated Statements of Operations.
Remaining Performance Obligations
Remaining performance obligations (“RPO”) are comprised of non-cancelable customer purchase orders for products and services that are awaiting transfer of control for revenue recognition under the applicable contract terms. As of January 31, 2026, the aggregate amount of RPO was $2.3 billion. As of January 31, 2026, Ciena expects approximately 85% of the RPO to be recognized as revenue within the next 12 months.
**(4)**SIGNIFICANT ASSET IMPAIRMENT AND RESTRUCTURING COSTS
Restructuring Costs
Ciena regularly monitors its spending to optimize operating expenses and to ensure that its strategic investments are aligned with its highest-growth demand opportunities. The following table sets forth the restructuring activity and balance of the restructuring liability accounts, which are included in accrued liabilities and other short-term obligations on the Condensed Consolidated Balance Sheets for the three months ended January 31, 2026 (in thousands):
| Workforce restructuring | Other restructuring activities | Total | |||||||||||||||
| Balance at November 1, 2025 | $ | 8,436 | $ | — | $ | 8,436 | |||||||||||
| Charges | 1,010 | 488 | (1) | 1,498 | |||||||||||||
| Cash payments | (7,840) | (488) | (8,328) | ||||||||||||||
| Balance at January 31, 2026 | $ | 1,606 | $ | — | $ | 1,606 | |||||||||||
| Current restructuring liabilities | $ | 1,606 | $ | — | $ | 1,606 | |||||||||||
(1) Primarily represents costs related to restructured real estate facilities.
The following table sets forth the restructuring activity and balance of the restructuring liability accounts, which are included in accrued liabilities and other short-term obligations on the Condensed Consolidated Balance Sheets for the three months ended February 1, 2025 (in thousands):
| Workforce restructuring | Other restructuring activities | Total | |||||||||||||||
| Balance at November 2, 2024 | $ | 1,927 | $ | — | $ | 1,927 | |||||||||||
| Charges | 278 | 1,266 | (1) | 1,544 | |||||||||||||
| Cash payments | (1,762) | (1,266) | (3,028) | ||||||||||||||
| Balance at February 1, 2025 | $ | 443 | $ | — | $ | 443 | |||||||||||
| Current restructuring liabilities | $ | 443 | $ | — | $ | 443 | |||||||||||
(1) Primarily represents costs related to restructured real estate facilities.
**(5)**INTEREST AND OTHER INCOME, NET
The components of interest and other income, net, are as follows for the periods indicated (in thousands):
| Quarter Ended | |||||||||||||||||||||||
| January 31, | February 1, | ||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Interest income | $ | 14,391 | $ | 13,710 | |||||||||||||||||||
| Gains (losses) on non-hedge designated foreign currency forward contracts (1) | 942 | (2,873) | |||||||||||||||||||||
| Foreign currency exchange gains (losses) (2) | (4,644) | 1,240 | |||||||||||||||||||||
| Other | 2,268 | (499) | |||||||||||||||||||||
| Interest and other income, net | $ | 12,957 | $ | 11,578 |
(1) Ciena has forward contracts in place to hedge its foreign exchange exposure in order to reduce the variability in various currencies of certain balance sheet items. These forwards are not designated as hedges for accounting purposes, and any net gain or loss associated with these derivatives is reported in interest and other income, net, on the Condensed Consolidated Statements of Operations.
(2) Ciena Corporation, as the U.S. parent entity, uses the U.S. Dollar as its functional currency; however, some of its foreign branch offices and subsidiaries use local currencies as their functional currencies. The related remeasurement adjustments were recorded in interest and other income, net, on the Condensed Consolidated Statements of Operations.
(6) INCOME TAXES
The effective tax rate for the first quarter of fiscal 2026 was lower than the effective tax rate for the first quarter of fiscal 2025. The decrease was primarily due to an income tax benefit for share-based compensation expense and change in mix of earnings in jurisdictions with lower tax rates.
The Organization for Economic Co-operation and Development (OECD) has introduced a framework to implement a global minimum tax of 15% for certain highly profitable multinational companies, referred to as Pillar Two or the minimum tax directive. While the Unites States has not enacted legislation to adopt Pillar Two, certain countries in which Ciena operates have enacted legislation and many aspects of Pillar Two were effective for Ciena beginning in fiscal 2025. Pillar Two taxes are considered an alternative minimum tax accounted for as a period cost that could impact the effective tax rate in the year the Pillar Two tax obligation arises. Therefore, deferred taxes will not be recognized for the estimated effects of future minimum taxes. Pillar Two does not have a material effect on Ciena’s effective tax rate, financial results or cash flows for fiscal 2026.
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law in the United States. The OBBBA includes provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions such as bonus depreciation and expensing of domestic research and experimental expenditures. The legislation has multiple effective dates, with certain provisions taking effect in fiscal 2025 and fiscal 2026 and others to be implemented through fiscal 2027. Ciena expects future cash tax savings, but does not expect a material impact on its future effective tax rate. The legislation will not have a material impact on Ciena’s consolidated financial statements in fiscal 2026.
**(7)**CASH EQUIVALENT, SHORT-TERM AND LONG-TERM INVESTMENTS
As of the dates indicated, investments classified as available-for-sale are comprised of the following (in thousands):
| January 31, 2026 | |||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||
| U.S. government obligations | $ | 119,105 | $ | 244 | $ | — | $ | 119,349 | |||||||||||||||
| Corporate debt securities | 123,152 | 273 | — | 123,425 | |||||||||||||||||||
| Time deposits | 81,920 | 5 | — | 81,925 | |||||||||||||||||||
| $ | 324,177 | $ | 522 | $ | — | $ | 324,699 | ||||||||||||||||
| Included in cash equivalents | $ | 78,508 | $ | — | $ | — | $ | 78,508 | |||||||||||||||
| Included in short-term investments | 175,988 | 327 | — | 176,315 | |||||||||||||||||||
| Included in long-term investments | 69,681 | 195 | — | 69,876 | |||||||||||||||||||
| $ | 324,177 | $ | 522 | $ | — | $ | 324,699 |
| November 1, 2025 | |||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||
| U.S. government obligations | $ | 147,466 | $ | 304 | $ | — | $ | 147,770 | |||||||||||||||
| Corporate debt securities | 119,808 | 260 | — | 120,068 | |||||||||||||||||||
| Time deposits | 74,984 | 6 | — | 74,990 | |||||||||||||||||||
| $ | 342,258 | $ | 570 | $ | — | $ | 342,828 | ||||||||||||||||
| Included in cash equivalents | $ | 69,538 | $ | — | $ | — | $ | 69,538 | |||||||||||||||
| Included in short-term investments | 215,786 | 362 | — | 216,148 | |||||||||||||||||||
| Included in long-term investments | 56,934 | 208 | — | 57,142 | |||||||||||||||||||
| $ | 342,258 | $ | 570 | $ | — | $ | 342,828 |
The following table summarizes the legal maturities of debt investments as of January 31, 2026 (in thousands):
| Amortized Cost | Estimated Fair Value | ||||||||||
| Less than one year | $ | 254,496 | $ | 254,823 | |||||||
| Due in 1-2 years | 69,681 | 69,876 | |||||||||
| $ | 324,177 | $ | 324,699 |
**(8)**FAIR VALUE MEASUREMENTS
As of the dates indicated, the following tables summarize the assets and liabilities that were recorded at fair value on a recurring basis (in thousands):
| January 31, 2026 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Money market funds | $ | 665,777 | $ | — | $ | — | $ | 665,777 | |||||||||||||||
| Bond mutual fund | 119,119 | — | — | 119,119 | |||||||||||||||||||
| Time deposits | 81,925 | — | — | 81,925 | |||||||||||||||||||
| Deferred compensation plan assets | 24,823 | — | — | 24,823 | |||||||||||||||||||
| U.S. government obligations | — | 119,349 | — | 119,349 | |||||||||||||||||||
| Corporate debt securities | — | 123,425 | — | 123,425 | |||||||||||||||||||
| Foreign currency forward contracts | — | 9,888 | — | 9,888 | |||||||||||||||||||
| Interest rate swaps | — | 435 | — | 435 | |||||||||||||||||||
| Total assets measured at fair value | $ | 891,644 | $ | 253,097 | $ | — | $ | 1,144,741 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Foreign currency forward contracts | $ | — | $ | 5,060 | $ | — | $ | 5,060 | |||||||||||||||
| Interest rate swaps | — | 1,054 | — | 1,054 | |||||||||||||||||||
| Deferred compensation plan liabilities | 24,812 | — | — | 24,812 | |||||||||||||||||||
| Total liabilities measured at fair value | $ | 24,812 | $ | 6,114 | $ | — | $ | 30,926 |
| November 1, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Money market funds | $ | 713,707 | $ | — | $ | — | $ | 713,707 | |||||||||||||||
| Bond mutual fund | 117,931 | — | — | 117,931 | |||||||||||||||||||
| Time deposits | 74,990 | — | — | 74,990 | |||||||||||||||||||
| Deferred compensation plan assets | 21,179 | — | — | 21,179 | |||||||||||||||||||
| U.S. government obligations | — | 147,770 | — | 147,770 | |||||||||||||||||||
| Corporate debt securities | — | 120,068 | — | 120,068 | |||||||||||||||||||
| Foreign currency forward contracts | — | 3,236 | — | 3,236 | |||||||||||||||||||
| Total assets measured at fair value | $ | 927,807 | $ | 271,074 | $ | — | $ | 1,198,881 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Foreign currency forward contracts | $ | — | $ | 6,314 | $ | — | $ | 6,314 | |||||||||||||||
| Forward starting interest rate swaps | — | 1,345 | — | 1,345 | |||||||||||||||||||
| Total liabilities measured at fair value | $ | — | $ | 7,659 | $ | — | $ | 7,659 |
As of the dates indicated, the assets and liabilities above were presented on Ciena’s Condensed Consolidated Balance Sheets as follows (in thousands):
| January 31, 2026 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Cash equivalents | $ | 862,052 | $ | 1,352 | $ | — | $ | 863,404 | |||||||||||||||
| Short-term investments | 4,769 | 171,546 | — | 176,315 | |||||||||||||||||||
| Prepaid expenses and other | — | 9,888 | — | 9,888 | |||||||||||||||||||
| Long-term investments | — | 69,876 | — | 69,876 | |||||||||||||||||||
| Other long-term assets | 24,823 | 435 | — | 25,258 | |||||||||||||||||||
| Total assets measured at fair value | $ | 891,644 | $ | 253,097 | $ | — | $ | 1,144,741 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Accrued liabilities and other short-term obligations | $ | — | $ | 5,060 | $ | — | $ | 5,060 | |||||||||||||||
| Other long-term obligations | 24,812 | 1,054 | — | 25,866 | |||||||||||||||||||
| Total liabilities measured at fair value | $ | 24,812 | $ | 6,114 | $ | — | $ | 30,926 |
| November 1, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Cash equivalents | $ | 901,077 | $ | 99 | $ | — | $ | 901,176 | |||||||||||||||
| Short-term investments | 5,551 | 210,597 | — | 216,148 | |||||||||||||||||||
| Prepaid expenses and other | — | 3,236 | — | 3,236 | |||||||||||||||||||
| Long-term investments | — | 57,142 | — | 57,142 | |||||||||||||||||||
| Other long-term assets | 21,179 | — | — | 21,179 | |||||||||||||||||||
| Total assets measured at fair value | $ | 927,807 | $ | 271,074 | $ | — | $ | 1,198,881 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Accrued liabilities and other short-term obligations | $ | — | $ | 6,314 | $ | — | $ | 6,314 | |||||||||||||||
| Other long-term obligations | — | 1,345 | — | 1,345 | |||||||||||||||||||
| Total liabilities measured at fair value | $ | — | $ | 7,659 | $ | — | $ | 7,659 |
Ciena did not have any transfers between Level 1 and Level 2 fair value measurements during the periods presented.
(9) INVENTORIES
As of the dates indicated, inventories are comprised of the following (in thousands):
| January 31, 2026 | November 1, 2025 | ||||||||||
| Raw materials | $ | 596,008 | $ | 593,783 | |||||||
| Work-in-process | 33,998 | 35,051 | |||||||||
| Finished goods | 318,547 | 286,050 | |||||||||
| Deferred cost of goods sold | 43,213 | 40,759 | |||||||||
| Gross inventories | 991,766 | 955,643 | |||||||||
| Reserve for inventory excess and obsolescence | (145,943) | (129,408) | |||||||||
| Inventories, net | $ | 845,823 | $ | 826,235 |
During the first three months of fiscal 2026, Ciena recorded a provision for inventory excess and obsolescence of $21.8 million, primarily related to a decrease in the forecasted demand for certain products. Deductions from the reserve for excess and obsolete inventory relate primarily to sales and disposal activities.
(10) OTHER BALANCE SHEET DETAILS
As of the dates indicated, accrued liabilities and other short-term obligations are comprised of the following (in thousands):
| January 31, 2026 | November 1, 2025 | ||||||||||
| Compensation, payroll related tax and benefits (1) | $ | 152,223 | $ | 281,542 | |||||||
| Warranty | 58,084 | 55,533 | |||||||||
| Vacation | 33,176 | 33,708 | |||||||||
| Interest payable | 9,833 | 6,101 | |||||||||
| Income taxes payable | 8,529 | 10,729 | |||||||||
| Foreign currency forward contracts | 5,059 | 6,314 | |||||||||
| Finance lease liabilities | 4,968 | 4,741 | |||||||||
| Other | 124,009 | 132,413 | |||||||||
| $ | 395,881 | $ | 531,081 |
(1) Reduction is primarily due to the timing of payments related to incentive compensation.
The following table summarizes the activity in Ciena’s accrued warranty for the periods indicated (in thousands):
| Beginning Balance | Current Period Provisions | Settlements | Ending Balance | |||||||||||||||||||||||||||||
| Three Months Ended February 1, 2025 | $ | 55,267 | 5,697 | (5,495) | $ | 55,469 | ||||||||||||||||||||||||||
| Three Months Ended January 31, 2026 | $ | 55,533 | 8,185 | (5,634) | $ | 58,084 |
(11) DERIVATIVE INSTRUMENTS
Foreign Currency Derivatives
Ciena conducts business globally and is exposed to foreign currency exchange rate changes. To limit this exposure, Ciena enters into foreign currency contracts. Ciena does not enter into such contracts for speculative purposes.
As of January 31, 2026 and November 1, 2025, Ciena had forward contracts to hedge its foreign exchange exposure in order to reduce variability in certain currencies for expenses principally related to research and development activities. The notional amount of these contracts was approximately $455.2 million and $431.4 million as of January 31, 2026 and November 1, 2025, respectively. These foreign exchange contracts have maturities of 24 months or less and have been designated as cash flow hedges.
As of January 31, 2026 and November 1, 2025, Ciena had forward contracts designated as net investment hedges to minimize the effect of foreign exchange rate movements on its net investments in foreign operations. The notional amount of these contracts was approximately $60.0 million and $62.0 million as of January 31, 2026 and November 1, 2025, respectively. These foreign exchange contracts have maturities of 36 months or less and have been designated as net investment hedges.
As of January 31, 2026 and November 1, 2025, Ciena had forward contracts in place to hedge its foreign exchange exposure in order to reduce the variability in various currencies of certain balance sheet items. The notional amount of these contracts was approximately $48.0 million and $175.7 million as of January 31, 2026 and November 1, 2025, respectively. These foreign exchange contracts have maturities of 12 months or less and have not been designated as hedges for accounting purposes.
Interest Rate Derivatives
Ciena is exposed to floating rates of interest on its term loan borrowings (see Note 12 below) and has hedged such risk by entering into floating-to-fixed interest rate swap arrangements (“interest rate swaps”).
In January 2023, Ciena entered into interest rate swaps to fix the Secured Overnight Financing Rate (“SOFR”) for $350.0 million of its floating rate debt at 3.47% through January 2028. The total notional amount of such swaps in effect was $350.0 million as of January 31, 2026 and November 1, 2025.
In December 2023, Ciena entered into forward starting interest rate swaps to fix SOFR for an additional $350.0 million of its floating rate debt at 3.287% from September 2025 through December 2028. The total notional amount of such swaps in effect was $350.0 million as of January 31, 2026 and November 1, 2025.
Ciena expects the variable rate payments to be received under the terms of these interest rate swaps to offset exactly the forecasted variable rate payments on the equivalent notional amount of the Refinanced 2030 Term Loan (as defined in Note 12 below). These derivative contracts have been designated as cash flow hedges.
Other information regarding Ciena’s derivatives is immaterial for separate financial statement presentation. See Note 5 and Note 8 above.
(12) SHORT-TERM AND LONG-TERM DEBT
Outstanding Term Loan Payable
Refinanced 2030 Term Loan
On January 17, 2025, Ciena entered into a Refinancing Amendment to its Credit Agreement under which Ciena incurred a new single tranche of senior secured term loans in an aggregate principal amount of approximately $1.16 billion (the “Refinanced 2030 Term Loan”). The Refinanced 2030 Term Loan requires Ciena to make installment payments of $2.9 million quarterly, or $11.6 million annually, with the remaining balance payable at maturity.
The net carrying value of Ciena’s term loan was comprised of the following as of the date indicated (in thousands):
| January 31, 2026 | November 1, 2025 | |||||||||||||||||||||||||||||||
| Principal Balance | Unamortized Discount | Deferred Debt Issuance Costs | Net Carrying Value | Net Carrying Value | ||||||||||||||||||||||||||||
| Refinanced 2030 Term Loan | $ | 1,146,720 | $ | (3,375) | $ | (4,313) | $ | 1,139,032 | $ | 1,138,619 | ||||||||||||||||||||||
Deferred debt issuance costs are amortized using the straight-line method, which approximates the effect of the effective interest rate, through the maturity of the term loans. The amortization of deferred debt issuance costs for the term loans is included in interest expense and was minimal during both the first three months of fiscal 2026 and fiscal 2025.
As of January 31, 2026, the estimated fair value of the Refinanced 2030 Term Loan was $1.15 billion. Ciena’s term loan is categorized as Level 2 in the fair value hierarchy. Ciena estimated the fair value of its term loan using a market approach based on observable inputs, such as current market transactions involving comparable securities.
Outstanding Senior Notes Payable
2030 Notes
On January 18, 2022, Ciena entered into an Indenture among Ciena, as issuer, certain domestic subsidiaries of Ciena, as guarantors, and U.S. Bank National Association, as trustee, pursuant to which Ciena issued $400.0 million in aggregate principal amount of 4.00% fixed-rate senior notes due 2030 (the “2030 Notes”).
The net carrying value of the 2030 Notes was comprised of the following as of the dates indicated (in thousands):
| January 31, 2026 | November 1, 2025 | |||||||||||||||||||||||||||||||
| Principal Balance | Deferred Debt Issuance Costs | Net Carrying Value | Net Carrying Value | |||||||||||||||||||||||||||||
| 2030 Notes | $ | 400,000 | $ | (2,708) | $ | 397,292 | $ | 397,119 | ||||||||||||||||||||||||
Deferred debt issuance costs are amortized using the straight-line method, which approximates the effect of the effective interest rate, through the maturity of the 2030 Notes. The amortization of deferred debt issuance costs for the 2030 Notes is included in interest expense and was minimal during both the first three months of fiscal 2026 and fiscal 2025.
As of January 31, 2026, the estimated fair value of the 2030 Notes was $384.0 million. The 2030 Notes are categorized as Level 2 in the fair value hierarchy. Ciena estimated the fair value of its 2030 Notes using a market approach based on observable inputs, such as current market transactions involving comparable securities.
(13) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following table summarizes the changes in accumulated balances of other comprehensive income (“AOCI”), net of tax, for the three months ended January 31, 2026 (in thousands):
| Unrealized Gain (Loss) on | |||||||||||||||||||||||||||||||||||
| Available-for-sale Securities | Foreign Currency Forward Contracts | Interest Rate Swaps | Cumulative Translation Adjustment | Total | |||||||||||||||||||||||||||||||
| Balance at November 1, 2025 | $ | 422 | $ | (3,803) | $ | (1,054) | $ | (50,600) | $ | (55,035) | |||||||||||||||||||||||||
| Other comprehensive gain (loss) before reclassifications | (37) | 5,733 | 1,511 | 10,165 | 17,372 | ||||||||||||||||||||||||||||||
| Amounts reclassified from AOCI | — | (105) | (955) | — | (1,060) | ||||||||||||||||||||||||||||||
| Balance at January 31, 2026 | $ | 385 | $ | 1,825 | $ | (498) | $ | (40,435) | $ | (38,723) |
The following table summarizes the changes in AOCI, net of tax, for the three months ended February 1, 2025 (in thousands):
| Unrealized Gain (Loss) on | |||||||||||||||||||||||||||||
| Available-for-sale Securities | Foreign Currency Forward Contracts | Interest Rate Swaps | Cumulative Translation Adjustment | Total | |||||||||||||||||||||||||
| Balance at November 2, 2024 | $ | 798 | $ | (4,880) | $ | 8,668 | $ | (51,297) | $ | (46,711) | |||||||||||||||||||
| Other comprehensive gain (loss) before reclassifications | (345) | (6,841) | 4,377 | (17,702) | (20,511) | ||||||||||||||||||||||||
| Amounts reclassified from AOCI | — | 2,357 | (2,424) | — | (67) | ||||||||||||||||||||||||
| Balance at February 1, 2025 | $ | 453 | $ | (9,364) | $ | 10,621 | $ | (68,999) | $ | (67,289) |
All amounts reclassified from AOCI related to settlements on foreign currency forward contracts designated as cash flow hedges, impacted research and development expense on the Condensed Consolidated Statements of Operations. All amounts reclassified from AOCI related to settlements on interest rate swaps designated as cash flow hedges, impacted interest and other income, net, on the Condensed Consolidated Statements of Operations.
(14) EARNINGS PER SHARE CALCULATION
Basic net income per common share (“Basic EPS”) is computed using the weighted average number of common shares outstanding. Diluted net income per potential common share (“Diluted EPS”) is computed using the weighted average number of the following unless the impact of the item is anti-dilutive: (i) common shares outstanding, (ii) shares issuable upon vesting of stock unit awards; and (iii) shares issuable under Ciena’s employee stock purchase plan and upon exercise of outstanding stock options, using the treasury stock method.
The following table presents the calculation of Basic and Diluted EPS for the periods indicated (in thousands, except per share amounts):
| Quarter Ended | |||||||||||||||||||||||
| January 31, | February 1, | ||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Net income | $ | 150,283 | $ | 44,572 | |||||||||||||||||||
| Basic weighted average shares outstanding | 141,676 | 142,880 | |||||||||||||||||||||
| Effect of dilutive potential common shares | 4,123 | 3,064 | |||||||||||||||||||||
| Diluted weighted average shares outstanding | 145,799 | 145,944 | |||||||||||||||||||||
| Basic EPS | $ | 1.06 | $ | 0.31 | |||||||||||||||||||
| Diluted EPS | $ | 1.03 | $ | 0.31 | |||||||||||||||||||
| Anti-dilutive stock unit awards, excluded | 22 | 989 |
(15) STOCKHOLDERS’ EQUITY
Stock Repurchase Program
On October 2, 2024, Ciena announced that its Board of Directors authorized a three-year program to repurchase up to $1.0 billion of its common stock, commencing in fiscal 2025 and continuing through the end of fiscal 2027.
During the first three months of fiscal 2026, Ciena repurchased approximately 0.4 million shares of its common stock for an aggregate purchase price of approximately $80.5 million, which equates to an average price of $216.43 per share. As of January 31, 2026, Ciena has (i) repurchased 4.3 million shares for an aggregate purchase price of $410.2 million at an average price of $94.83 per share and (ii) has an aggregate of $589.8 million authorized and remaining under its stock repurchase program. Ciena is required to allocate the purchase price for the shares of Ciena’s stock repurchased as a reduction of common stock and additional paid-in capital.
Stock Repurchases Related to Stock Unit Tax Withholdings
Ciena repurchases shares of its common stock to satisfy employee tax withholding obligations due upon vesting of stock unit awards. The related purchase price of $90.1 million for the shares of Ciena’s stock repurchased during the first three months of fiscal 2026 is reflected as a reduction to stockholders’ equity. Ciena is required to allocate the purchase price of the repurchased shares as a reduction of common stock and additional paid-in capital.
(16) SHARE-BASED COMPENSATION EXPENSE
The following table summarizes share-based compensation expense for the periods indicated (in thousands):
| Quarter Ended | |||||||||||||||||||||||
| January 31, | February 1, | ||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Products | $ | 1,822 | $ | 1,750 | |||||||||||||||||||
| Services | 4,025 | 3,405 | |||||||||||||||||||||
| Share-based compensation expense included in cost of goods sold | 5,847 | 5,155 | |||||||||||||||||||||
| Research and development | 16,594 | 14,237 | |||||||||||||||||||||
| Selling and marketing | 14,754 | 11,597 | |||||||||||||||||||||
| General and administrative | 12,632 | 9,827 | |||||||||||||||||||||
| Share-based compensation expense included in operating expense | 43,980 | 35,661 | |||||||||||||||||||||
| Share-based compensation expense capitalized in inventory, net (1) | — | (10) | |||||||||||||||||||||
| Total share-based compensation expense | $ | 49,827 | $ | 40,806 |
(1) Effective the beginning of fiscal 2026, Ciena will no longer be calculating share-based compensation capitalized in inventory due to immateriality.
As of January 31, 2026, total unrecognized share-based compensation expense was $443.7 million, which relates to unvested stock unit awards and is expected to be recognized over a weighted-average period of 1.6 years.
(17) SEGMENTS AND ENTITY-WIDE DISCLOSURES
Operating segments are defined as components of an enterprise that engage in business activities that earn revenue and incur expense for which discrete financial information is available, and for which such information is evaluated regularly by the chief operating decision maker (“CODM”) for purposes of allocating resources and assessing performance. Ciena has the following operating segments for reporting purposes: (i) Networking Platforms; (ii) Platform Software and Services; (iii) Blue Planet Automation Software and Services; and (iv) Global Services. Ciena’s CODM is its Chief Executive Officer, Gary Smith, who evaluates Ciena’s performance and allocates resources based on segment profit (loss) as compared to annual targets for these four operating segments.
Segment Profit (Loss)
The table below sets forth Ciena’s segment profit (loss) and the reconciliations to consolidated net income for the respective periods indicated (in thousands). The CODM excludes the following items in his assessment of performance of the operating segments: selling and marketing costs; general and administrative costs, significant asset impairments and restructuring costs; share-based compensations expense, amortization of intangible assets; acquisition and integration costs; interest and other income, net; interest expense; loss on extinguishment and modification of debt; and provision for income taxes.
| Quarter Ended | |||||||||||||||||||||||
| January 31, | February 1, | ||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Networking Platforms | $ | 1,149,168 | $ | 821,142 | |||||||||||||||||||
| Platform Software and Services | 93,384 | 95,067 | |||||||||||||||||||||
| Blue Planet Automation Software and Services | 20,420 | 26,032 | |||||||||||||||||||||
| Global Services | 164,070 | 130,019 | |||||||||||||||||||||
| Total revenue | $ | 1,427,042 | $ | 1,072,260 | |||||||||||||||||||
| Segment gross profit: | |||||||||||||||||||||||
| Networking Platforms | $ | 491,681 | $ | 334,982 | |||||||||||||||||||
| Platform Software and Services | 80,979 | 81,753 | |||||||||||||||||||||
| Blue Planet Automation Software and Services | 5,577 | 14,789 | |||||||||||||||||||||
| Global Services | 59,916 | 47,682 | |||||||||||||||||||||
| Total segment gross profit | $ | 638,153 | $ | 479,206 | |||||||||||||||||||
| Research and development expense: | |||||||||||||||||||||||
| Networking Platforms | $ | 175,050 | $ | 152,820 | |||||||||||||||||||
| Platform Software and Services | 19,261 | 16,330 | |||||||||||||||||||||
| Blue Planet Automation Software and Services | 9,391 | 8,289 | |||||||||||||||||||||
| Global Services | 1,162 | 985 | |||||||||||||||||||||
| Total segment research and development expense | $ | 204,864 | $ | 178,424 | |||||||||||||||||||
| Segment profit (loss): | |||||||||||||||||||||||
| Networking Platforms | $ | 316,631 | $ | 182,162 | |||||||||||||||||||
| Platform Software and Services | 61,718 | 65,423 | |||||||||||||||||||||
| Blue Planet Automation Software and Services | (3,814) | 6,500 | |||||||||||||||||||||
| Global Services | 58,754 | 46,697 | |||||||||||||||||||||
| Total segment profit | $ | 433,289 | $ | 300,782 | |||||||||||||||||||
| Less: Unallocated cost of goods sold | $ | 12,633 | $ | 7,385 | |||||||||||||||||||
| Less: Unallocated operating and non-operating expenses | 270,373 | 248,825 | |||||||||||||||||||||
| Consolidated net income | $ | 150,283 | $ | 44,572 |
Entity-Wide Reporting
Ciena's long-lived assets, including equipment, building, furniture and fixtures, operating right-of-use (“ROU”) assets, finite-lived intangible assets, goodwill, and maintenance spares, are not reviewed by Ciena's CODM for purposes of evaluating performance and allocating resources. As of January 31, 2026, equipment, building, furniture and fixtures, net, totaled $437.8 million, and operating ROU assets totaled $40.5 million, both of which support asset groups within Ciena’s four operating segments and unallocated selling and general and administrative activities. The following table shows Ciena’s finite-lived intangible assets, goodwill, and maintenance spares allocated by segment and reconciled to total assets (in thousands):
| January 31, 2026 | |||||||||||||||||||||||||||||
| Networking Platforms | Platform Software and Services | Blue Planet Automation Software and Services | Global Services | Total | |||||||||||||||||||||||||
| Other intangible assets, net | $ | 212,689 | — | — | — | $ | 212,689 | ||||||||||||||||||||||
| Goodwill | $ | 276,472 | 156,191 | 89,049 | — | $ | 521,712 | ||||||||||||||||||||||
| Maintenance spares, net | $ | — | — | — | 96,973 | $ | 96,973 | ||||||||||||||||||||||
| Total assets assigned to segments | $ | 831,374 | |||||||||||||||||||||||||||
| Other unallocated assets | 5,060,985 | ||||||||||||||||||||||||||||
| Total assets | $ | 5,892,359 |
| November 1, 2025 | |||||||||||||||||||||||||||||
| Networking Platforms | Platform Software and Services | Blue Planet Automation Software and Services | Global Services | Total | |||||||||||||||||||||||||
| Other intangible assets, net | $ | 224,210 | — | — | — | $ | 224,210 | ||||||||||||||||||||||
| Goodwill | $ | 275,964 | 156,191 | 89,049 | — | $ | 521,204 | ||||||||||||||||||||||
| Maintenance spares, net | $ | — | — | — | 92,392 | $ | 92,392 | ||||||||||||||||||||||
| Total assets assigned to segments | $ | 837,806 | |||||||||||||||||||||||||||
| Other unallocated assets | 5,026,861 | ||||||||||||||||||||||||||||
| Total assets | $ | 5,864,667 |
The following table shows Ciena’s geographic distribution of equipment, building, furniture and fixtures, net and operating ROU assets (in thousands):
| January 31, 2026 | November 1, 2025 | ||||||||||
| Canada | $ | 379,882 | $ | 325,584 | |||||||
| United States | 41,042 | 44,634 | |||||||||
| Other International (1) | 57,398 | 55,174 | |||||||||
| Total | $ | 478,322 | $ | 425,392 |
(1) Any country representing less than 10% of total is reflected in aggregate as “Other International.”
(18) COMMITMENTS AND CONTINGENCIES
Tax Contingencies
Ciena is subject to various tax contingencies arising in the ordinary course of business. Ciena does not expect that the ultimate settlement of these contingencies will have a material effect on its financial position or cash flows.
Litigation
Ciena is subject to various legal proceedings, claims, and other matters arising in the ordinary course of business, including those that relate to employment, commercial, tax, and other regulatory matters. Ciena is also subject to intellectual property
related claims, including claims against third parties that may involve contractual indemnification obligations on the part of Ciena. Ciena does not expect that the ultimate costs to resolve such matters will have a material effect on its results of operations, financial position, or cash flows.
Purchase Order Obligations
Ciena has certain advanced orders for supply of certain long lead time components. As of January 31, 2026, Ciena had $1.9 billion in outstanding purchase order commitments to contract manufacturers and component suppliers for inventory. In certain instances, Ciena is permitted to cancel, reschedule or adjust a portion of these orders.
(19) SUBSEQUENT EVENTS
Stock Repurchase Program
From the end of the first quarter of fiscal 2026 through February 27, 2026, Ciena repurchased 83,510 shares of its common stock for an aggregate purchase price of $25.1 million at an average price of $300.29 per share, inclusive of repurchases pending settlement under its current stock repurchase program. As of February 27, 2026, Ciena has an aggregate of $564.7 million of authorized funds remaining under this repurchase program.
U.S. Supreme Court Ruling on Tariffs
On February 20, 2026, the U.S. Supreme Court ruled that a portion of the tariffs that Ciena has been subject to were invalid. Following this ruling, the U.S. Administration issued an executive order imposing a new global tariff. The ruling and the subsequent response by the U.S. Administration leave open a number of complex questions regarding the timing, mechanics and administration of tariff refunds by the U.S. government, if any. Ciena is evaluating the impact these events may have, if any, on its consolidated financial statements and related disclosures.
Previous: Cover and table of contents · Next: Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations