10-QPeriod: Q2 FY2016

CIENA CORP Quarterly Report for Q2 Ended Apr 30, 2016

Filed June 8, 2016For Securities:CIEN

Summary

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 million, 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 million 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.

Financial Highlights

55 data points
Beta

Revenue

$640.72M

44.2% Gross Margin

Net Income

$14.00M

2.2% Net Margin

EPS (Diluted)

$0.10

Total Assets

$2.98B

Cash & Equivalents

$922.03M

Free Cash Flow

$36.52M

Financial Statements
Beta
Revenue$640.72M
Cost of Revenue$357.62M
Gross Profit$283.09M
R&D Expenses$114.60M
Operating Expenses$254.86M
Operating Income$28.23M
Interest Expense$12.61M
Net Income$14.00M
EPS (Basic)$0.10
EPS (Diluted)$0.10
Shares Outstanding (Basic)137.95M
Shares Outstanding (Diluted)138.89M

Key Highlights

  • 1Total revenue for the second quarter of fiscal 2016 was $640.7 million, up 3.1% year-over-year.
  • 2Net income for the second quarter was $14.0 million, or $0.10 per diluted share.
  • 3For the first six months of fiscal 2016, total revenue was $1.21 billion, a 5.5% increase year-over-year.
  • 4The company acquired high-speed photonics components assets from TeraXion Inc. for $32 million to enhance its optical chipsets.
  • 5Cash, cash equivalents, and investments totaled over $1.24 billion as of April 30, 2016.
  • 6Ciena secured a new $250 million term loan in April 2016.
  • 7The Networking Platforms segment showed revenue growth of 1.9% year-over-year for the quarter, driven by Converged Packet Optical and Packet Networking products.

Frequently Asked Questions

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.

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.

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.

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.