Ciena Corporation
Fiscal Q3 2024 Earnings Presentation
Period ended July 27, 2024

September 4, 2024

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Forward-looking statements and non-GAAP measures
You are encouraged to review the Investors section of our website, where we routinely post press releases, Securities and Exchange Commission (SEC) filings, recent news,
financial results, supplemental financial information, and other announcements. From time to time, we exclusively post material information to this website along with otherdisclosure You are encouraged to review the Investors section of our website, where we routinely post press releases, Securities and Exchange Commission ("SEC") filings,
recent news, financial results, supplemental financial information, and other announcements. From time to time we exclusively post material information to this website alongwith other disclosure channels that we use. This press release contains certain forward-looking statements that involve risks and uncertainties. These statements are based on
current expectations, forecasts, assumptions and other information available to the Company as of the date hereof. Forward-looking statements include statements regarding
Ciena's expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate,""expect," "intend," "may," "should," "will," and "would" or similar words.
Ciena's actual results, performance or events may differ materially from these forward-looking statements made or implied due to a number of risks and uncertainties relating
to Ciena's business, including: the effect of broader economic and market conditions on our customers, their spending and their businesses and markets; our ability to executeour business and growth strategies; the impact of macroeconomic conditions and global supply chain constraints or disruptions including increased supply costs and leadtimes; the impact of the introduction of new technologies by us or our competitors; seasonality and the timing and size of customer orders, their delivery dates and our ability torecognize revenue relating to such sales; the level of competitive pressure we encounter; the product, customer and geographic mix of sales within the period; changes inforeign currency exchange rates; factors beyond our control such as natural disasters, climate change, acts of war or terrorism, geopolitical tensions or events, including but
not limited to the ongoing conflicts between Ukraine and Russia, and Israel and Hamas, and public health emergencies or epidemics, including the COVID-19 pandemic;changes in tax or trade regulations, including the imposition of tariffs, duties or efforts to withdraw from or materially modify international trade agreements; cyberattacks, data
breaches or other security incidents involving our enterprise network environment or our products; regulatory changes, litigation involving our intellectual property orgovernment investigations; and the other risk factors disclosed in Ciena’s periodic reports filed with the Securities and Exchange Commission (SEC) including its Annual
Report on Form 10-K filed with the SEC on December 15, 2023 and included in its Quarterly Report on Form 10-Q for the third quarter of fiscal 2024 to be filed with the SEC.
All information, statements, and projections in this presentation and the related earnings call speak only as of the date of this presentation and related earnings call. Ciena
assumes no obligation to update any forward-looking or other information included in this presentation or related earnings calls, whether as a result of new information, future
events or otherwise.
In addition, this presentation includes historical, and may include prospective, non-GAAP measures of Ciena’s gross margin, operating expense, operating margin, EBITDA,
and net income per share. These measures are not intended to be a substitute for financial information presented in accordance with GAAP. A reconciliation of non-GAAP
measures used in this presentation to Ciena’s GAAP results for the relevant period can be found in the Appendix to this presentation. Additional information can also be foundin our press release filed this morning and in our reports on Form 10-Q and Form 10K filed with the Securities and Exchange Commission.
With respect to Ciena’s expectations under “Business Outlook", Ciena is not able to provide a quantitative reconciliation of the adjusted (non-GAAP) gross margin, operating
expense, operating margin and earnings per share guidance measures to the corresponding gross profit and gross profit percentage, and operating expense GAAP measures
without unreasonable efforts. Ciena cannot provide meaningful estimates of the non-recurring charges and credits excluded from these non-GAAP measures due to theforward-looking nature of these estimates and their inherent variability and uncertainty. For the same reasons, Ciena is unable to address the probable significance of theunavailable information.
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Table of Contents

3

1.

Overview & Ciena's portfolio

2.

Industry context & addressable market expansion

3.

Fiscal Q3 2024 financial performance4.

Fiscal Q4 2024 outlook

5.

Appendix© Ciena Corporation 2024. All rights reserved. Proprietary Information.

Overview &Ciena's portfolio© Ciena Corporation 2024. All rights reserved. Proprietary Information.

Ciena is an industry-leading global networking systems, services, andsoftware company

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Our vision for networking: How it works

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Industry context &addressable marketexpansion© Ciena Corporation 2024. All rights reserved. Proprietary Information.

Increasing bandwidth consumption as a driver of network expansion

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Our strategy leverages our Optical technology to create expanded
addressable market opportunities

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Our addressable market expansion strategy allows us to access higher
growth markets

1 Sources: LightCounting and Ciena internal analysis.

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Our market leadership#1 Globally#1 Globally• Purpose-built/compact modular DCI• SLTE WDM• Access switching

•
•
•
•

#1 N. America• Total optical networking• Purpose-built/compact modular DCI• Access switching#2 Globally• Total optical networking

Purpose-built/compact modular DCI
Optical for cloud and colo
SLTE WDM
Routing/Access#1 N. America••••

Total optical networking
Purpose-built/compact modular DCI
Optical for cloud and colo
Routing/Access#2 Globally• Total optical networking• Optical for enterprise and government

Optical Networking Report, 1Q24
Service Provider Switching & Routing Report, 2Q24

11

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Transport Hardware Report, 2Q24

#1 Globally• Data center interconnect• Purpose-built/compact modular DCI• Optical for internet content providercustomers#1 N. America• Data center interconnect• Total optical networking• Optical packet#2 Globally• Total optical networking• Optical packet• Optical for cable MSO customers

Optical Transport Report, 2Q24

Q3 FY 2024 results© Ciena Corporation 2024. All rights reserved. Proprietary Information.

Q3 FY 2024 key highlights
Achieving balanced growthDriving the pace of innovation

Non-telco represented 46% of totalrevenue•

Direct Cloud Provider revenue grew 9%
sequentially
India revenue grew 9% sequentiallyBlue Planet revenue nearly doubled
YoY

1 Based on closing share price between 8/27/2019 to 8/27/2024

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•Continued traction with cloud providers
with strong ramp in 400ZR deploymentsby 3 Cloud Providers, multiple line
system wins, and new MOFN awards
Surpassed 300 customers for
WaveLogic 5 Extreme with 12 newcustomers added
Surpassed 120 Routing and Switchingcustomers using our WL5n pluggable
technologyPrioritizing long termshareholder value•

Total shareholder return five-year
CAGR of 8%1•

Under our authorized $1 billion stock
repurchase program, repurchased~0.6 million shares for $29 million, andare targeting $250 million for FY 2024 tocomplete the plan

Q3 FY 2024 comparative financial highlights
Q3 FY 2024

Q3 FY 2023

Revenue$942.3M$1,067.9M

Adjusted Gross Margin*

43.7%

42.7%

Adjusted Operating Expense*$336.0M$327.9M

Adjusted Operating Margin*

8.0%

12.0%

Adjusted EBITDA*$98.5M$151.3M

Adjusted EPS*$0.35$0.59* Reconciliations of these non-GAAP measures to our GAAP results are included in the Appendix and in the press release for the relative period.

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Q3 FY 2024 comparative operating metrics

15

Q3 FY 2024

Q3 FY 2023

Cash and investments$1.21B$1.28B

Cash provided by (used in)operations$(159)M

$9M

DSO

100.0

96.0

Inventory Turns

1.8

1.7

Gross Leverage

3.08x

2.54x

Net Debt

$401M

$344M

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Revenue by segment(Amounts in millions)
Q3 FY 2024

Q3 FY 2023

Revenue%**

Revenue%**$606.864.4$719.0

67.3

92.7

9.8

127.6

11.9

699.5

74.2

846.6

79.2

83.2

8.9

78.9

7.4

25.8

2.7

13.1

1.3

74.4

7.9

72.9

6.8

46.5

4.9

46.8

4.4

12.9

1.4

9.6

0.9

133.8

14.2

129.3

12.1

$942.3100.0$1,067.9

100.0

Networking Platforms
Optical Networking
Routing and Switching
Total Networking Platforms
Platform Software and Services
Blue Planet Automation Softwareand Services
Global Services
Maintenance Support and TrainingInstallation and Deployment
Consulting and Network DesignTotal Global Services
Total* A reconciliation of these non-GAAP measures to GAAP results is included in the appendix to this presentation.
** Denotes % of total revenue
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Revenue derived from non-telco customers

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Revenue by geographic region

15.5%

14.5%
14.5%

14.4%

70.1%

18

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10.8%
20.0%

10.1%
17.1%

71.0%

69.2%

72.8%

9.4%
14.3%

76.3%

Business outlook© Ciena Corporation 2024. All rights reserved. Proprietary Information.

Economic considerations and assumptions in our fiscal 2024 outlook

20Business Assumptions

Revenue Assumptions

Profitability Assumptions• Macro environment does not significantly
worsen or result in any adverse effects on
our business, including with respect to ourcustomers' capex priorities or spending in
our major geographies• We secure increased orders, particularly
from our Service Providers, as they absorb
their existing high inventory levels andreturn to more typical order levels overtime• Longer-term fundamental industry demand
drivers – including increasing demand forbandwidth, adoption of cloudarchitectures, network automation
requirements, and AI-related expansions –will drive customers to prioritize network
capex to address this demand• We do not experience significant deferrals
of delivery of our existing backlog and ourService Provider customers are able toabsorb existing equipment orders• Operating expense increases moderately
to fund strategic investments as we
continue to innovate and expand ouraddressable market to captureopportunities that advance our position in
key growth areas• Huawei displacement opportunities andgovernment infrastructure spending
provide growth tailwinds over time

• Given our distinct competitive andtechnology advantages, we continue tobenefit disproportionately as order flow
dynamics return to more typical levels© Ciena Corporation 2024. All rights reserved. Proprietary Information.

• We are able to deliver new products
according to our roadmap and customer
adoption of these products continues to beconsistent with our expectations• We expect quarterly variability in margins
due to revenue mix

Business outlook1
Q4 FY 2024
Revenue$1,060M to $1,140M

Adjusted Gross Margin

low to mid 40s%

Adjusted Operating Expense

Approximately $350M

1 Projections or outlook with respect to future operating results are only as of September 4, 2024, the date presented on the related earnings call. Actual results may differ materiallyfrom these forward-looking statements. Ciena assumes no obligation to update this information, whether as a result of new information, future events or otherwise.

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Q3 FY 2024appendix© Ciena Corporation 2024. All rights reserved. Proprietary Information.

Gross Profit Reconciliation(Amounts in thousands)
Q3 FY 2024
GAAP gross profit

Q1 FY 2024

Q4 FY 2023

Q3 FY 2023

$403,945$388,661$466,962$486,281$448,941

Share-based compensation-products

1,660

1,760

1,318

1,194

1,118

Share-based compensation-services

3,122

3,344

3,020

2,827

2,687

Amortization of intangible assets

2,764

2,763

2,764

2,763

3,187

Total adjustments related to gross profit

7,546

7,867

7,102

6,784

6,992

$411,491$396,528$474,064$493,065$455,933

43.7 %

43.5 %

45.7 %

43.7 %

42.7 %

Adjusted (non-GAAP) gross profit
Adjusted (non-GAAP) gross profit percentage

23

Q2 FY 2024

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Operating Expense Reconciliation(Amounts in thousands)
Q3 FY 2024
GAAP operating expense
Share-based compensation-research and development
Share-based compensation-sales and marketing
Share-based compensation-general and administrative
Significant asset impairments and restructuring costs
Amortization of intangible assets
Acquisition and integration costs
Legal Settlement
Total adjustments related to operating expense
Adjusted (non-GAAP) operating expense$377,202
13,118
10,315
9,257
1,361
7,185
—
—
41,236$335,966

Q2 FY 2024
$392,626
14,066
11,166
9,875
15,655
7,947——
58,709$333,917

Q1 FY 2024
$382,333
12,88010,305
10,079
4,971
7,252
—
—
45,487$336,846

Q4 FY 2023
$394,979
11,412
9,187
10,274
7,209
10,578—8,750
57,410$337,569

Q3 FY 2023
$370,727
10,954
8,770
9,377
4,174
9,487
59
—
42,821$327,906

Income (Loss) from Operations Reconciliation(Amounts in thousands)
Q3 FY 2024

24

Q2 FY 2024

Q1 FY 2024

Q4 FY 2023

Q3 FY 2023

GAAP income (loss) from operations$26,743$(3,965)$84,629$91,302$78,214

Total adjustments related to gross profit

7,546

7,867

7,102

6,784

6,992

Total adjustments related to operating expense

41,23658,70945,48757,41042,821

Total adjustments related to income from operations

48,782

66,57652,58964,194

49,813Adjusted (non-GAAP) income from operations
Adjusted (non-GAAP) operating margin percentage$75,525
8.0 %$62,6116.8 %$137,218
13.2 %$155,496
13.8 %$128,027
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Net Income (Loss) Reconciliation(Amounts in thousands)
Q3 FY 2024
GAAP net income (loss)

Q2 FY 2024

Q1 FY 2024

Q4 FY 2023

Q3 FY 2023

$14,230$(16,849)$49,547$91,199$29,733

Exclude GAAP provision (benefit) for income taxes

2,125820

21,956(20,681)

34,608

Income (loss) before income taxes

16,355(16,029)71,50370,51864,341

Total adjustments related to income from operations

48,782

66,57652,58964,194

49,813

Loss on extinguishment and modification of debt

—

—

—

7,874

—

Loss on equity investment

—

—

—

—

87

Adjusted income before income taxes

65,13750,547124,092

142,586

114,241

Non-GAAP tax provision on adjusted income before income taxes

14,33011,12027,30031,36925,133Adjusted (non-GAAP) net income$50,807$39,427$96,792$111,217$89,108

Weighted average basic common shares outstanding

144,394

144,914145,291

147,437

149,690

Weighted average diluted potential common shares outstanding(1)145,361

146,268

145,848

147,891

149,977

Net Income (Loss) per Common Share
Q3 FY 2024
GAAP diluted net income (loss) per potential common share
Adjusted (non-GAAP) diluted net income per potential commonshare
1.

25

Q2 FY 2024

Q1 FY 2024

Q4 FY 2023$

0.10 $(0.12) $0.34 $

0.62 $

0.20$

0.35 $

0.27 $

0.66 $

0.75 $

0.59

Weighted average dilutive potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share for the third
quarter of fiscal 2024 includes 1.0 million shares underlying certain stock option and stock unit awards.

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Q3 FY 2023

Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)(Amounts in thousands)
Earnings Before Interest, Tax, Depreciation and Amortization(EBITDA)Q2 FY 2024

Q1 FY 2024

Q4 FY 2023

Q3 FY 2023

Net income (loss) (GAAP)$14,230$(16,849)$49,547$91,199$29,733

Add: Interest expense

24,401

23,861

23,77624,20724,060Less: Interest and other income, net

14,013

11,797

10,65011,297

10,187

—

——

7,874

—

Add: Provision (benefit) for income taxes

2,125

820

21,956(20,681)

34,608Add: Depreciation of equipment, building, furniture and fixtures, andamortization of leasehold improvements

22,981

23,20822,80823,351

23,310Add: Amortization of intangible assets

9,949

10,71010,016

13,342

12,674

EBITDA$59,673$29,953$117,453$127,995$114,198

Add: Share-based compensation expense

37,472

40,21137,602

34,89432,906

Add: Significant asset impairments and restructuring expense

1,361

15,655

4,971

7,209

4,174

Add: Acquisition and integration costs

—

—

—

—

59

Add: Legal settlement

—

—

—

8,750

—

$98,506$85,819$160,026$178,848$151,337

Add: Loss on extinguishment and modification of debt

Adjusted EBITDA

26

Q3 FY 2024

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