01—Abstract
Summary
Summary of the 10-Q filed June 8, 2016. Cited figures are marked; the original filing is the authoritative source.
Ciena Corporation reported its financial results for the second quarter and first six months of fiscal year 2016.
For the second quarter, total revenue was $640.7 milliona, an increase of 3.1% year-over-year, with net income of $14.0 million, or $0.10 per diluted share. For the first six months, revenue increased by 5.5% to $1.21 billion, while net income was $2.5 million, or $0.02 per diluted share. The company saw growth in its Networking Platforms and Global Services segments, while the Software and Software-Related Services segment experienced a decrease in profit.
Ciena also strengthened its liquidity position by securing a new $250 millionb term loan, bringing its total cash, cash equivalents, and investments to over $1.24 billion as of April 30, 2016. Operationally, Ciena acquired high-speed photonics components assets from TeraXion Inc. for $32 million, enhancing its WaveLogic coherent optical chipsets.
The company continues to navigate a challenging market with pricing pressures and customer spending constraints, particularly in the EMEA region. Despite these headwinds, Ciena's management remains focused on executing its strategy to promote its OPn Architecture, expand technology leadership, and optimize its business for operating leverage.
02—Key points
Key Highlights
- Total revenue for the second quarter of fiscal 2016 was $640.7 million, up 3.1% year-over-year.
- Net income for the second quarter was $14.0 million, or $0.10 per diluted share.
- For the first six months of fiscal 2016, total revenue was $1.21 billion, a 5.5% increase year-over-year.
- The company acquired high-speed photonics components assets from TeraXion Inc. for $32 million to enhance its optical chipsets.
- Cash, cash equivalents, and investments totaled over $1.24 billion as of April 30, 2016.
- Ciena secured a new $250 million term loan in April 2016.
- The Networking Platforms segment showed revenue growth of 1.9% year-over-year for the quarter, driven by Converged Packet Optical and Packet Networking products.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2016, Ciena Corp kept $0.02.
- Revenue$640.7M100.0%
- Cost of revenue−$357.6M55.8%
- Gross profit$283.1M44.2%
- Operating costs−$254.9M39.8%
- Operating income$28.2M4.4%
- Interest, other & tax−$14.2M2.2%
- Net income$14.0M2.2%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2016filed June 8, 2016Financial Statements
Q2 FY2016 against Q2 FY2015
| Line item | Q2 FY2016Q2 FY2015 | Change |
|---|---|---|
| Revenue | $640.72M$621.60M | +3.1% |
| Cost of Revenue | $357.62M$349.19M | +2.4% |
| Gross Profit | $283.09M$272.41M | +3.9% |
| R&D Expenses | $114.60M$105.20M | +8.9% |
| Operating Expenses | $254.86M$230.00M | +10.8% |
| Operating Income | $28.23M$42.41M | −33.4% |
| Interest Expense | $12.61M$12.95M | −2.6% |
| Net Income | $14.00M$20.65M | −32.2% |
| EPS (Basic) | $0.10$0.18 | −44.4% |
| EPS (Diluted) | $0.10$0.17 | −41.2% |
| Shares Outstanding (Basic) | 137.95M113.56M | +21.5% |
| Shares Outstanding (Diluted) | 138.89M128.02M | +8.5% |
05—Questions
Frequently Asked Questions
What was Ciena's revenue and net income performance in Q2 FY16?
In the second quarter of fiscal year 2016, Ciena reported total revenue of $640.7 million, a 3.1% increase compared to the same period in the prior year. Net income for the quarter was $14.0 million, or $0.10 per diluted share.
How did the acquisition of TeraXion's assets impact Ciena?
Ciena acquired high-speed photonics components assets from TeraXion Inc. for $32 million on February 1, 2016. This acquisition is expected to enhance Ciena's WaveLogic coherent optical chipsets and provides them with key photonics technologies and personnel.
What is Ciena's current liquidity position?
As of April 30, 2016, Ciena's total cash, cash equivalents, and investments in marketable debt securities amounted to $1.24 billion. Additionally, the company secured a new $250 million term loan in April 2016, strengthening its liquidity.
Which segments performed well, and which faced challenges?
The Networking Platforms segment showed positive revenue growth, primarily driven by Converged Packet Optical and Packet Networking products. The Global Services segment also saw an increase in revenue. However, the Software and Software-Related Services segment's profit decreased due to higher research and development costs and lower gross margins. Ciena also noted continued sales declines in its Optical Transport products as customers transition to newer technologies, and observed customer spending constraints in the EMEA region.
06—Continue