01—Abstract
Summary
Summary of the 10-Q filed March 9, 2016. Cited figures are marked; the original filing is the authoritative source.
Ciena Corporation reported revenue of $573.1 milliona for the quarter ended January 31, 2016, an increase of 8.3% compared to the same period last year.
The company reported a net loss of $11.5 millionb, or $0.08 per diluted share, which is an improvement from the net loss of $18.8 million, or $0.17 per diluted share, in the prior year's quarter. The company's revenue growth was primarily driven by its Networking Platforms segment, which saw an 8.6% increase year-over-year, supported by strong demand for its Converged Packet Optical products. Despite the revenue growth and improved net loss, operating expenses increased due to higher research and development, amortization of intangible assets, and acquisition/integration costs, partially offset by reduced restructuring costs.
Key financial highlights include a gross profit margin of 43.9%, an increase from 43.5% in the prior year's quarter, driven by stronger service gross margins. The company maintained a healthy cash position, with $660.3 millionc in cash and cash equivalents and $210.0 million in short-term investments as of January 31, 2016. Ciena also noted continued investment in R&D, an expansion of its software and software-related services segment, and progress in its global services offerings.
02—Key points
Key Highlights
- Total revenue for the quarter increased by 8.3% year-over-year to $573.1 million.
- Net loss improved to $11.5 million ($0.08/share) from $18.8 million ($0.17/share) in the prior year period.
- Gross profit margin improved to 43.9% from 43.5% year-over-year, driven by better service margins.
- Networking Platforms segment revenue grew by 8.6%, supported by strong demand for Converged Packet Optical products.
- Operating expenses increased by 6.2% to $240.2 million, primarily due to higher R&D and amortization costs.
- The company ended the quarter with a strong liquidity position, holding $660.3 million in cash and cash equivalents.
- Acquisition and integration costs related to the Cyan acquisition were $1.3 million for the quarter.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q1 FY2016, Ciena Corp lost $0.02.
- Revenue$573.1M100.0%
- Cost of revenue−$321.7M56.1%
- Gross profit$251.4M43.9%
- Operating costs−$240.2M41.9%
- Operating income$11.2M2.0%
- Interest, other & tax−$22.8M4.0%
- Net income−$11.5M2.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2016filed March 9, 2016Financial Statements
Q1 FY2016 against Q1 FY2015
| Line item | Q1 FY2016Q1 FY2015 | Change |
|---|---|---|
| Revenue | $573.12M$529.16M | +8.3% |
| Cost of Revenue | $321.67M$298.87M | +7.6% |
| Gross Profit | $251.45M$230.29M | +9.2% |
| R&D Expenses | $108.05M$100.76M | +7.2% |
| Operating Expenses | $240.21M$226.13M | +6.2% |
| Operating Income | $11.24M$4.17M | +169.8% |
| Interest Expense | $12.71M$13.66M | −7.0% |
| Net Income | -$11.55M-$18.78M | +38.5% |
| EPS (Basic) | $-0.08$-0.17 | +52.9% |
| EPS (Diluted) | $-0.08$-0.17 | +52.9% |
| Shares Outstanding (Basic) | 136.68M107.77M | +26.8% |
| Shares Outstanding (Diluted) | 136.68M107.77M | +26.8% |
05—Questions
Frequently Asked Questions
What was Ciena's revenue performance in the quarter ended January 31, 2016?
Ciena reported total revenue of $573.1 million for the quarter ended January 31, 2016, an increase of 8.3% compared to $529.2 million in the same quarter of the prior year. This growth was primarily driven by the Networking Platforms segment, which saw an 8.6% increase in revenue.
How did Ciena's profitability change year-over-year?
Ciena improved its profitability, reporting a net loss of $11.5 million ($0.08 per diluted share) for the quarter ended January 31, 2016, compared to a net loss of $18.8 million ($0.17 per diluted share) in the corresponding quarter of the prior year. This represents a significant reduction in net loss.
What is the company's outlook or any significant risks highlighted in the filing?
The company's outlook is subject to various risks including fluctuations in revenue and operating results, intense competition, customer concentration, changes in macroeconomic conditions, and reliance on third-party suppliers. Management expects operating expenses to increase in fiscal 2016 due to the Cyan acquisition and ongoing R&D investments.
What is the status of Ciena's cash and investments?
As of January 31, 2016, Ciena maintained a strong liquidity position with $660.3 million in cash and cash equivalents and $210.0 million in short-term investments. This provides ample resources for working capital, capital expenditures, and other liquidity requirements.
06—Continue