Ciena CIEN Form 10-Q filing Q3 FY2025

FORM 10-Q

PAGE NUMBER

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited) 3

Condensed Consolidated Statements of Operations for the Quarters and Nine Months Ended August 2, 2025 and July 27, 2024 3

Condensed Consolidated Statements of Comprehensive Income for the Quarters and Nine Months Ended August 2, 2025 and July 27, 2024 4

Condensed Consolidated Balance Sheets at August 2, 2025 and November 2, 2024 5

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended August 2, 2025 and July 27, 2024 6

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Nine Months Ended August 2, 2025 and July 27, 2024 7

Notes to Condensed Consolidated Financial Statements 8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 25

Item 3. Quantitative and Qualitative Disclosures About Market Risk 36

Item 4. Controls and Procedures 37

PART II — OTHER INFORMATION

Item 1. Legal Proceedings 37

Item 1A. Risk Factors 37

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 38

Item 3. Defaults Upon Senior Securities 38

Item 4. Mine Safety Disclosures 38

Item 5. Other Information 38

Item 6. Exhibits 40

Signatures 41

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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 2, 2024 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 2, 2024 (the “2024 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 2025 is a 52-week fiscal year. Fiscal 2024 was a 53-week fiscal year with the additional week occurring in the fourth quarter.

(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 2024 Annual Report.

Accounting Standards - Not Yet Effective

In November 2023, the FASB issued ASU No. 2023-07 (“ASU 2023-07”), Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for Ciena’s fiscal 2025 Annual Report on Form 10-K on a retrospective basis. Ciena is currently evaluating the impact of this ASU on its segment disclosures.

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. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. ASU 2023-09 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 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.

(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 periods indicated (in thousands):

• 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.
• Routing and Switching - includes the 3000 and 5000 series of service delivery and aggregation platforms, the 8100 Coherent IP networking platforms, virtualization software, and passive optical network and other routing and switching portfolio products.

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 sales of 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 portions 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 sales of 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 portions 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 maintenance support and training, installation and deployment, and consulting and network design 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 solution customization, software and solution support services, consulting and design, and build-operate-transfer 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. Global Services are considered a distinct performance obligation where revenue is generally recognized over time.
• Revenue from maintenance support is recognized ratably over the period during which the services are performed.
• Revenue from installation and deployment services and consulting and network design 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 training 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 2024 Annual Report.

Geographic Disaggregation of Revenue

Ciena reports its sales geographically using 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 based principally 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):

Ciena’s revenue includes $882.8 million and $676.0 million of U.S. revenue for the third quarter of fiscal 2025 and 2024, respectively. For the nine months ended August 2, 2025 and July 27, 2024, U.S. revenue was $2.4 billion and $2.0 billion, respectively. No other country accounted for 10% or more of total revenue for the periods indicated in the above table.

Ciena’s revenue from a cloud provider includes $218.0 million and $538.2 million for the third quarter and nine months ended August 2, 2025, respectively, and $137.2 million and $331.6 million for the third quarter and nine months ended July 27, 2024, respectively. Revenue also includes $133.0 million and $361.4 million from AT&T for the third quarter and nine months ended August 2, 2025, respectively, and $113.1 million and $324.8 million for the third quarter and nine months ended July 27, 2024, respectively. These customers purchased products from the Networking Platforms, Platform Software and Services, and Global Services operating segments for the periods presented. No other customer accounted for 10% or more of total revenue for the periods presented.

Contract Balances

The following table provides information about receivables, contract assets and contract liabilities (deferred revenue) from contracts with customers as of the dates indicated (in thousands):

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 installation and deployment 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 in 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 $134.6 million and $130.5 million of revenue during the first nine months of fiscal 2025 and 2024, respectively, that was included in the deferred revenue balance as of November 2, 2024 and October 28, 2023, respectively. Revenue recognized due to changes in transaction price from performance obligations satisfied or partially satisfied in previous periods was immaterial during the nine months ended August 2, 2025 and July 27, 2024.

As of the dates indicated, deferred revenue is comprised of the following (in thousands):

Capitalized Contract Acquisition Costs

Capitalized contract acquisition costs consist of deferred sales commissions and were $33.4 million and $28.4 million as of August 2, 2025 and November 2, 2024, respectively. Capitalized contract acquisition costs were included in (i) prepaid expenses and other, and (ii) other long-term assets. The amortization expense associated with these costs was $26.0 million and $22.9 million during the first nine months of fiscal 2025 and 2024, 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 August 2, 2025, the aggregate amount of RPO was $2.0 billion. As of August 2, 2025, Ciena expects approximately 82% of the RPO balance to be recognized as revenue within the next 12 months.

(4) SIGNIFICANT ASSET IMPAIRMENT AND RESTRUCTURING COSTS

Restructuring Costs

Ciena has undertaken a number of restructuring activities intended to reduce expense and to align its workforce and costs with market opportunities, product development, and business strategies. 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 nine months ended August 2, 2025 (in thousands):

(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 nine months ended July 27, 2024 (in thousands):

(1) Reflects a global workforce reduction of approximately 390 employees during the nine months ended July 27, 2024 as part of a business optimization strategy to improve gross margin, constrain operating expense and redesign certain business processes.

(2) Primarily represents costs related to restructured real estate facilities and the redesign of certain business processes associated with Ciena’s supply chain and distribution structure reorganization.

(5) INTEREST AND OTHER INCOME, NET

The components of interest and other income, net, are as follows for the periods indicated (in thousands):

(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 third quarter of fiscal 2025 was higher than the effective tax rate for the third quarter of fiscal 2024, primarily due to the settlement of uncertain tax positions in the prior year.

The effective tax rate for the first nine months of fiscal 2025 was lower than the effective tax rate for the first nine months of fiscal 2024, primarily due to an income tax benefit for share-based compensation expense.

For the nine months ended August 2, 2025, the impact of the 15% global minimum tax, referred to as Pillar Two, was not material to Ciena’s consolidated financial statements.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law in the United States. The OBBBA includes significant 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. The legislation has multiple effective dates, with certain provisions taking effect in fiscal 2025 and others to be implemented through fiscal 2027. The legislation will not have a material impact on Ciena’s consolidated financial statements in fiscal 2025.

(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):

The following table summarizes the final legal maturities of debt investments as of August 2, 2025 (in thousands):

(8) FAIR VALUE MEASUREMENTS

As of the dates indicated, the following tables summarize the assets and liabilities that are recorded at fair value on a recurring basis (in thousands):

As of the dates indicated, the assets and liabilities above are presented on Ciena’s Condensed Consolidated Balance Sheets as follows (in thousands):

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):

During the first nine months of fiscal 2025, Ciena recorded a provision for inventory excess and obsolescence of $34.2 million, primarily related to a decrease in the forecasted demand for certain Networking Platforms products. Deductions from the reserve for excess and obsolete inventory relate primarily to sales and disposal activities.

(10) DERIVATIVE INSTRUMENTS

Foreign Currency Derivatives

Ciena conducts business globally in many currencies, and thus 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 August 2, 2025 and November 2, 2024, 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 $325.3 million and $257.0 million as of August 2, 2025 and November 2, 2024, respectively. These foreign exchange contracts have maturities of 24 months or less and have been designated as cash flow hedges.

As of August 2, 2025 and November 2, 2024, 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 $63.0 million and $65.4 million as of August 2, 2025 and November 2, 2024, respectively. These foreign exchange contracts have maturities of 36 months or less and have been designated as net investment hedges.

As of August 2, 2025 and November 2, 2024, 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 $138.5 million and $201.2 million as of August 2, 2025 and November 2, 2024, 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 April 2022, Ciena entered into forward starting interest rate swaps to fix the Secured Overnight Financing Rate (“SOFR”) for the first $350.0 million of its floating rate debt at 2.968% from September 2023 through September 2025 (“2025 interest rate swaps”). The total notional amount of the 2025 interest rate swaps was $350.0 million as of August 2, 2025 and November 2, 2024.

In January 2023, Ciena entered into interest rate swaps to fix SOFR for an additional $350.0 million of its floating rate debt at 3.47% through January 2028. The total notional amount of these interest rate swaps was $350.0 million as of August 2, 2025 and November 2, 2024.

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 (“2028 forward starting interest rate swaps”). The total notional amount of the 2028 forward starting interest rate swaps effective September 2025 was $350.0 million as of August 2, 2025 and November 2, 2024.

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.

(11) LEASES

Operating leases included on the Condensed Consolidated Balance Sheets for the fiscal periods indicated were as follows (in thousands):

Ciena added two new 10-year operating leases to its portfolio in the second quarter of fiscal 2025. The addition of these operating leases increased both operating right-of-use (“ROU”) assets and lease liabilities for fiscal 2025.

(12) SHORT-TERM AND LONG-TERM DEBT

Outstanding Term Loan Payable

Refinanced 2030 Term Loan

Pursuant to a Credit Agreement, dated July 15, 2014, as amended (the “Credit Agreement”), by and among Ciena Corporation, the lenders party thereto and Bank of America, N.A., as administrative agent (the “Administrative Agent”), Ciena maintained a senior secured term loan with an outstanding aggregate principal amount, as of January 17, 2025, of approximately $1.16 billion and maturing on October 24, 2030 (the “2030 Term Loan”).

On January 17, 2025, Ciena Corporation, as borrower, and Ciena Communications, Inc., Ciena Government Solutions, Inc., Ciena Communications International, LLC and Blue Planet Software, Inc., as guarantors, entered into a Refinancing

Amendment to Credit Agreement with the lenders party thereto and the Administrative Agent (the “Amendment”), pursuant to 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 proceeds of the Refinanced 2030 Term Loan, together with cash on hand, were used to refinance in full the 2030 Term Loan, including accrued interest, and pay transaction fees and expenses. The Amendment amends the Credit Agreement and provides that the Refinanced 2030 Term Loan will, among other things:

• mature on October 24, 2030;
• amortize in equal quarterly installments in aggregate amounts equal to approximately 0.25% of the principal amount of the Refinanced 2030 Term Loan as of the Closing Date, with the balance payable at maturity;
• be subject to mandatory prepayment upon the occurrence of certain specified events substantially similar to the 2030 Term Loan, including upon the occurrence of certain specified events such as asset sales, debt issuances, and receipt of annual Excess Cash Flow (as defined in the Credit Agreement);
• bear interest, at Ciena’s election, at a per annum rate equal to (a) SOFR (subject to a floor of 0.00%) plus an applicable margin of 1.75%, or (b) a base rate (subject to a floor of 1.00%) plus an applicable margin of 0.75%;
• be repayable at any time at Ciena’s election; and
• except as described above or otherwise set forth in the Amendment, have substantially identical terms as the 2030 Term Loan.

Except as amended by the Amendment, the remaining terms of the Credit Agreement remain in full force and effect.

The net carrying value of the Ciena’s term loans were comprised of the following as of the date indicated (in thousands):

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 approximately $0.7 million during both the first nine months of fiscal 2025 and fiscal 2024.

As of August 2, 2025, 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):

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 approximately $0.5 million during both the first nine months of fiscal 2025 and fiscal 2024.

As of August 2, 2025, the estimated fair value of the 2030 Notes was $376.5 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 nine months ended August 2, 2025 (in thousands):

The following table summarizes the changes in AOCI, net of tax, for the nine months ended July 27, 2024 (in thousands):

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, in each case, to the extent that the effect is not 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, using the treasury stock method.

The following table presents the calculation of Basic EPS and Diluted EPS for the periods indicated (in thousands, except per share amounts):

(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 nine months of fiscal 2025, Ciena repurchased approximately 3.3 million shares of its common stock for an aggregate purchase price of approximately $245.2 million, which equates to an average price of $75.02 per share. As of August 2, 2025, Ciena has an aggregate of $754.8 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 Award Tax Withholdings

Ciena repurchases shares of its common stock to satisfy employee tax withholding obligations due on vesting of stock unit awards. The related purchase price of $60.0 million for the shares of Ciena’s stock repurchased during the first nine months of fiscal 2025 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):

As of August 2, 2025, total unrecognized share-based compensation expense was approximately $284.0 million, which relates to unvested stock unit awards and is expected to be recognized over a weighted-average period of 1.4 years.

(17) SEGMENTS AND ENTITY-WIDE DISCLOSURES

Segment Reporting

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.

Segment Profit (Loss)

Segment profit (loss) is determined based on internal performance measures used by Ciena’s chief executive officer to assess the performance of each operating segment in a given period. In connection with that assessment, the chief executive officer excludes the following items: selling and marketing costs; general and administrative costs; significant asset impairments and restructuring costs; amortization of intangible assets; interest and other income, net; interest expense; loss on extinguishment and modification of debt; and provision for income taxes.

The table below sets forth Ciena’s segment profit (loss) and the reconciliation to net income for the periods presented (in thousands):

Entity-Wide Reporting

Ciena's long-lived assets, including equipment, building, furniture and fixtures, operating ROU assets, finite-lived intangible assets, and maintenance spares, are not reviewed by Ciena's chief operating decision maker for purposes of evaluating performance and allocating resources. As of August 2, 2025, equipment, building, furniture and fixtures, net, totaled $368.3 million, and operating ROU assets totaled $40.3 million both of which support asset groups within Ciena’s four operating segments and unallocated selling and general and administrative activities. As of August 2, 2025, finite-lived intangible assets, goodwill, and maintenance spares are assigned to asset groups within the following segments (in thousands):

The following table represents Ciena’s geographic distribution of equipment, building, furniture and fixtures, net and operating ROU assets, specifically identifying any country that accounts for at least 10% of the total of these assets. Assets attributable to geographic regions not identified are reflected as “Other International.” For the periods indicated, Ciena’s geographic distribution of equipment, building, furniture and fixtures, net, and operating ROU assets was as follows (in thousands):

(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 Obligations

Ciena has certain advanced commitments for supply of certain long lead time components. As of August 2, 2025, Ciena had $1.8 billion in outstanding purchase commitments to contract manufacturers and component suppliers for inventory. In certain instances, Ciena is permitted to cancel, reschedule or adjust these commitments. Consequently, only a portion of this amount relates to firm, non-cancelable and unconditional obligations.

(19) SUBSEQUENT EVENTS

Stock Repurchase Program

From the end of the third quarter of fiscal 2025 through August 29, 2025, Ciena repurchased 286,619 shares of its common stock for an aggregate purchase price of $26.4 million at an average price of $92.10 per share, inclusive of repurchases pending settlement under its current stock repurchase program. As of August 29, 2025, Ciena has an aggregate of $728.4 million of authorized funds remaining under this repurchase program.

Reallocation of Innovation Investment and Fiscal 2025 Restructuring Plan

On August 26, 2025, in order to align Ciena’s strategic investments with our highest-growth demand opportunities, its executive team determined to cease forward investment in certain broadband development initiatives, primarily 25G PON, within the routing and switching product line of the Network Platforms operating segment. Ciena intends to continue support and development of its 10G PON-based products.

Ciena’s executive team also approved a restructuring plan intended to deliver increased operating efficiencies and, as a result, commencing during the fourth quarter of fiscal 2025, Ciena is implementing a workforce reduction of approximately 4%

to 5% of its global headcount, which includes employees associated with the broadband development initiatives discussed above.

The estimated cash cost related to these actions is approximately $20.0 million and represents employee severance and related costs. As such, we expect an expense of approximately $20.0 million to be incurred in the fourth quarter of fiscal 2025. In addition, Ciena anticipates that its decision to cease future investment in 25G PON will result in a non-cash charge in the fourth quarter of fiscal 2025 related to the abandonment of its in-process R&D intangible asset, which has a carrying value of $89.1 million as of August 2, 2025. During the fourth quarter of fiscal 2025, Ciena will also evaluate the impact of these actions on other assets including, but not limited to, inventory and fixed assets.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

| Revenue: | | | | | | | | Networking Platforms | | | | | | |

Optical Networking $815,497 $606,845 34.4% $2,317,062 $1,862,917 24.4% %** 66.9% 64.4% 67.8% 64.4% Routing and Switching 125,857 92,692 35.8% 311,749 320,113 (2.6)% %** 10.3% 9.8% 9.1% 11.1% Total Networking Platforms 941,354 699,537 34.6% 2,628,811 2,183,030 20.4% %** 77.2% 74.2% 76.9% 75.5% Platform Software and Services 89,961 83,212 8.1% 270,469 258,402 4.7% %** 7.4% 8.9% 7.9% 8.9% Blue Planet Automation Software and Services 27,805 25,791 7.8% 81,787 54,167 51.0% %** 2.3% 2.7% 2.4% 1.9% | Global Services | | | | | | | Maintenance Support and Training 80,743 74,344 8.6% 234,758 225,869 3.9% %** 6.6% 7.9% 6.9% 7.8% Installation and Deployment 65,878 46,484 41.7% 171,735 132,993 29.1% %** 5.4% 4.9% 5.0% 4.6% Consulting and Network Design 13,644 12,940 5.4% 29,963 36,382 (17.6)% %** 1.1% 1.4% 0.9% 1.3% Total Global Services 160,265 133,768 19.8% 436,456 395,244 10.4% %** 13.1% 14.2% 12.8% 13.7% Total revenue $1,219,385 $942,308 29.4% $3,417,523 $2,890,843 18.2%

• Denotes % change from fiscal 2024 to fiscal 2025

** Denotes % of total revenue

Quarter ended August 2, 2025 as compared to the quarter ended July 27, 2024

• Networking Platforms segment revenue increased by $241.9 million.
• Optical Networking products revenue increased by $208.7 million, primarily driven by increases in sales of our 6500 Reconfigurable Line Systems (“RLS”), as well as increases in sales of our Waveserver® system and our coherent pluggables, in each case primarily to cloud provider customers. These sales were partially offset by a sales decrease of our 6500 Packet-Optical Platform, primarily to enterprise customers.
• Routing and Switching products revenue increased by $33.2 million, primarily driven by an increase in sales of our 3000 and 5000 series of service delivery and aggregation platforms to communications service providers and cloud provider customers, partially offset by a decrease in sales of our virtualization software to communications service providers.
• Platform Software and Services segment revenue increased by $6.7 million, primarily reflecting sales increases of our Navigator Network Control SuiteTM domain controller solution.
• Blue Planet Automation Software and Services segment revenue increased by $2.0 million, primarily reflecting sales increases in our orchestration software and inventory management software services, partially offset by sales decreases of our inventory management software.
• Global Services segment revenue increased by $26.5 million, primarily reflecting a sales increase in our installation and deployment and maintenance support and training services.

Nine months ended August 2, 2025 as compared to the nine months ended July 27, 2024

• Networking Platforms segment revenue increased by $445.8 million.
• Optical Networking sales increased by $454.1 million, primarily driven by increases in sales of our RLS as well as increases in sales of our coherent pluggables, both primarily to cloud provider customers, and our 6500 Packet-Optical Platforms, primarily to communications service provider customers.
• Routing and Switching sales decreased by $8.3 million, primarily driven by decreases in sales of other software.
• Platform Software and Services segment revenue increased by $12.1 million, primarily reflecting sales increases of our software consulting services and our software maintenance services.
• Blue Planet Automation Software and Services segment revenue increased by $27.6 million, primarily reflecting sales increases in our unified assurance and analytics software, orchestration software, and our inventory management software services.
• Global Services segment revenue increased by $41.2 million, primarily reflecting sales increases in our installation and deployment and maintenance support and training services, partially offset by a sales decrease in our consulting and network design services.

Revenue by Geographic Region

Our operating segments engage in business and operations across three geographic regions: the United States, Canada, the Caribbean and Latin America (“Americas”); Europe, Middle East and Africa (“EMEA”); and Asia Pacific, Japan and India (“APAC”). The geographic distribution of our revenue can fluctuate significantly from period to period, and the timing of revenue recognition for large network projects, particularly outside of the United States, can result in variations in geographic revenue results in any particular period.

The following table reflects our geographic distribution of revenue, principally based on the relevant location for our delivery of products and performance of services. The table sets forth the changes in geographic distribution of revenue for the periods indicated (in thousands, except percentage data):

• Denotes % change from fiscal 2024 to fiscal 2025

** Denotes % of total revenue

Quarter ended August 2, 2025 as compared to the quarter ended July 27, 2024

• Americas revenue increased by $205.0 million, primarily driven by increased sales to cloud providers in the United States.
• EMEA revenue increased by $51.0 million, primarily driven by increased sales to cloud providers in the Netherlands.
• APAC revenue increased by $21.1 million, primarily driven by increased sales to communications service providers and cloud providers, partially offset by decreased sales to enterprise customers.

Nine months ended August 2, 2025 as compared to the nine months ended July 27, 2024

• Americas revenue increased by $453.4 million, primarily driven by increased sales to cloud providers as well as increased sales to communications service providers, each primarily in the United States.
• EMEA revenue increased by $37.3 million, primarily driven by increased sales to cloud providers and communications service providers partially offset by decreased sales to submarine network operators.
• APAC revenue increased by $36.0 million, primarily driven by increased sales to communications service providers in India and Japan, partially offset by decreased sales to enterprise customers in Australia and Vietnam.

Currency Fluctuations

During the third quarter and first nine months of fiscal 2025, approximately 13.3% and 13.8% of our revenue was non-U.S. Dollar-denominated, respectively. During the third quarter of fiscal 2025 as compared to the third quarter of fiscal 2024, the U.S. Dollar generally weakened against other currencies, and during the first nine months of fiscal 2025 as compared to the first nine months of fiscal 2024, the U.S. Dollar generally strengthened against other currencies. These currency fluctuations had a positive effect on our revenue reported in U.S. Dollars of approximately $3.6 million, or 0.3%, as compared to the third quarter of fiscal 2024, and had an adverse effect on our revenue reported in U.S Dollars of approximately $5.6 million, or 0.2%, as compared to the first nine months of fiscal 2024.

Cost of Goods Sold and Gross Profit

There are a number of important factors or conditions that can adversely affect or cause our gross profit as a percentage of product or service revenue, or “gross margin,” to fluctuate on a quarterly basis. For example, early stages of new network builds also often include an increased concentration of lower margin “common” equipment, photonic line systems, and installation services, with the intent to improve margin as we sell channel cards, advanced software, and maintenance services to customers as they add capacity. In addition, products that are in early or introductory phases may carry lower margins. The component elements that comprise our product cost of goods sold and services cost of goods sold, and certain factors that can cause gross margin to fluctuate, are described in detail in the “Consolidated Results of Operations - Cost of Goods Sold and Gross Profit” in Item 7 of Part II and “Risk Factors” in Item 1A of Part I of our 2024 Annual Report.

The tables below set forth the changes in revenue, cost of goods sold and gross profit for the periods indicated (in thousands, except percentage data):

• Denotes % change from fiscal 2024 to fiscal 2025

** Denotes % of total revenue

Quarter ended August 2, 2025 as compared to the quarter ended July 27, 2024

• Gross profit increased by $99.1 million. Gross margin decreased by 160 basis points, primarily reflecting decreased services margins.
• Gross profit on products increased by $100.8 million from $296.0 million for the third quarter of fiscal 2024 to $396.8 million for the third quarter of fiscal 2025. Product gross margin of 40.6% did not change for the third quarter of fiscal 2025 as compared to the third quarter of fiscal 2024. However, in the third quarter of fiscal 2025, we experienced unfavorable product mix partially offset by improved manufacturing efficiencies and product cost reductions, as compared to the third quarter of fiscal 2024.
• Gross profit on services decreased by $1.7 million from $108.0 million for the third quarter of fiscal 2024 to $106.3 million for the third quarter of fiscal 2025. Services gross margin decreased by 690 basis points, from 50.7% for the third quarter of fiscal 2024 to 43.8% for the third quarter of fiscal 2025, primarily due to increased costs related to delivering maintenance arrangements.

Nine months ended August 2, 2025 as compared to the nine months ended July 27, 2024

• Gross profit increased by $168.2 million. Gross margin decreased by 180 basis points, reflecting decreased products and services margin.
• Gross profit on products increased by $158.5 million from $950.9 million for the first nine months of fiscal 2024 to $1.11 billion for the first nine months of fiscal 2025. Product gross margin decreased by 140 basis points, from 42.0% for the first nine months of fiscal 2024 to 40.6% for the first nine months of fiscal 2025, primarily due to unfavorable product mix, partially offset by manufacturing efficiencies.
• Gross profit on services increased by $9.7 million from $308.7 million for the first nine months of fiscal 2024 to $318.4 million for the first nine months of fiscal 2025. Services gross margin decreased by 320 basis points, from 49.5% for the first nine months of fiscal 2024 to 46.3% for the first nine months of fiscal 2025, primarily due to increased costs related to delivering maintenance arrangements.

Operating Expense

The component elements that comprise each of our operating expense categories in the table below are set forth in the “Consolidated Results of Operations - Operating Expense” in Item 7 of Part II of our 2024 Annual Report. The table below sets forth the changes in operating expense for the periods indicated (in thousands, except percentage data):

• Denotes % change from fiscal 2024 to fiscal 2025

** Denotes % of total revenue

Quarter ended August 2, 2025 as compared to the quarter ended July 27, 2024

• Research and development expense increased by $23.0 million. Net of hedging, this increase primarily reflects increases in employee-related compensation costs primarily due to increases in incentive compensation, partially offset by lower prototype expense.
• Selling and marketing expense increased by $27.2 million. This increase primarily reflects increases in employee-related compensation costs primarily due to increases in incentive compensation.
• General and administrative expense increased by $2.3 million. This increase primarily reflects increases in employee-related compensation costs primarily due to increases in incentive compensation, partially offset by lower legal fees.
• Significant asset impairments and restructuring costs remained relatively unchanged.
• Amortization of intangible assets remained relatively unchanged.

Nine months ended August 2, 2025 as compared to the nine months ended July 27, 2024

• Research and development expense increased by $47.9 million. Net of hedging, this increase primarily reflects increases in employee-related compensation costs primarily due to increases in incentive compensation, and professional services related to design engineering, fabrication and production of ASIC chips, partially offset by lower prototype expense.
• Selling and marketing expense increased by $51.2 million. This increase primarily reflects increases in employee-related compensation costs primarily due to increases in incentive compensation, and increases in travel and entertainment costs.
• General and administrative expense increased by $8.9 million. This increase primarily reflects increases in employee-related compensation costs primarily due to increases in incentive compensation, partially offset by lower legal fees and bad debt expense.
• Significant asset impairments and restructuring costs decreased by $16.7 million primarily due to a reduction in restructuring activities. For more information on our restructuring costs, see Note 4 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.
• Amortization of intangible assets decreased by $2.7 million, primarily reflecting certain intangible assets having reached the end of their economic lives.

Currency Fluctuations

During the third quarter and first nine months of fiscal 2025, approximately 47.7% and 48.2% of our operating expense was non-U.S. Dollar-denominated, respectively. During the third quarter and first nine months of fiscal 2025, as compared to the third quarter and first nine months of fiscal 2024, the U.S. Dollar fluctuated against other currencies. These currency fluctuations, net of hedging, had the effect of reducing our operating expense by a negligible amount as compared to the third quarter of fiscal 2024, and $12.3 million, or 1.0% as compared to the first nine months of fiscal 2024.

Segment Profit (Loss)

Segment profit (loss) is determined based on internal performance measures used by our chief executive officer to assess the performance of each operating segment in a given period. In connection with that assessment, the chief executive officer excludes the following items: selling and marketing costs; general and administrative costs; significant asset impairments and restructuring costs; amortization of intangible assets; interest and other income, net; interest expense; loss on extinguishment and modification of debt; and provision for income taxes.

The table below sets forth the changes in our segment profit (loss) for the periods indicated (in thousands, except percentage data):

• Denotes % change from fiscal 2024 to fiscal 2025

Quarter ended August 2, 2025 as compared to the quarter ended July 27, 2024

• Networking Platforms segment profit increased by $75.1 million, primarily due to higher sales volume as described above, partially offset by higher research and development costs.
• Platform Software and Services segment profit increased by $1.4 million, primarily due to higher sales volume as described above, partially offset by reduced services margin as described above, and increased research and development costs.
• Blue Planet Automation Software and Services segment profit slightly decreased, primarily due to reduced services margin, partially offset by higher sales volume as described above.
• Global Services segment profit slightly increased, primarily due to increased sales volume as described above, partially offset by reduced services margin also described above.

Nine months ended August 2, 2025 as compared to the nine months ended July 27, 2024

• Networking Platforms segment profit increased by $95.6 million, primarily due to higher sales volume, partially offset by reduced product margin as described above, and higher research and development costs.
• Platform Software and Services segment profit increased by $2.9 million, primarily due to higher services sales volume, partially offset by increased research and development costs and reduced margins as described above.
• Blue Planet Automation Software and Services segment profit increased by $23.2 million, primarily due to higher sales volume as described above, improved margins, and lower research and development costs.
• Global Services segment profit slightly decreased by $1.4 million, primarily due to reduced services margins as described above, partially offset by increased sales volume also described above.

Other Items

The table below sets forth the changes in other items for the periods indicated (in thousands, except percentage data):

• Denotes % change from fiscal 2024 to fiscal 2025

** Denotes % of total revenue

Quarter ended August 2, 2025 as compared to the quarter ended July 27, 2024

• Interest and other income, net remained relatively unchanged.
• Interest expense decreased by $1.6 million, primarily due to lower interest rates on our floating rate debt, net of hedging activity. For more information on our short-term and long-term debt, see Note 12 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.
• Provision for income taxes increased by $13.4 million, primarily due to the increase in income before income taxes.

Nine months ended August 2, 2025 as compared to the nine months ended July 27, 2024

• Interest and other income, net decreased by $1.9 million, primarily resulting from lower interest income on our investments, partially offset by the impact of foreign exchange rates on assets and liabilities denominated in a currency other than the relevant functional currency, net of hedging activity.
• Interest expense decreased by $4.6 million, primarily due to lower interest rates on our floating rate debt, net of hedging activity. For more information on our short-term and long-term debt, see Note 12 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.
• Loss on extinguishment and modification of debt reflects the refinance of our 2030 Term Loan in the first quarter of fiscal 2025. See Note 12 to our Condensed Consolidated Financial Statements included in Item 1 of Part 1 of this report for more details.
• Provision for income taxes increased by $24.7 million, primarily due to the increase in income before income taxes.

Liquidity and Capital Resources

Based on past performance and current expectations, we believe that cash from operations, cash, cash equivalents, investments, and other sources of liquidity, including our Revolving Credit Facility (as defined below), will satisfy our currently anticipated working capital needs, capital expenditures, and other liquidity requirements associated with our operations through the next 12 months and the reasonably foreseeable future. We regularly evaluate our capital structure, liquidity position, debt obligations, and anticipated cash needs to fund our operating or investment plans or increase our strategic flexibility, and we will continue to consider capital raising and other market opportunities.

Principal Sources of Liquidity. Our principal sources of liquidity on hand include our cash, cash equivalents, and investments, which, as of August 2, 2025, totaled $1.4 billion, as well as the unused portion of our senior secured revolving credit facility (the “Revolving Credit Facility”), to which we and certain of our subsidiaries are parties. The Revolving Credit Facility provides for a total commitment of $300.0 million with a maturity date of October 24, 2028. We principally use the Revolving Credit Facility to support the issuance of letters of credit that arise in the ordinary course of our business and for general corporate purposes. As of August 2, 2025, letters of credit totaling $52.1 million were issued under the Revolving Credit Facility. There were no borrowings outstanding under the Revolving Credit Facility as of August 2, 2025.

Foreign Liquidity. The amount of cash, cash equivalents and short-term investments held by our foreign subsidiaries was $539.5 million as of August 2, 2025. Approximately $92.1 million of future cash generated from these foreign subsidiaries is expected to be repatriated, with any remaining amount continuing to be indefinitely reinvested. A deferred tax liability related to the expected repatriation amount was accrued in fiscal 2023. There are no other significant temporary differences related to our investment in the foreign subsidiaries for which a deferred tax liability has not been recognized.

Stock Repurchase Authorization. On October 2, 2024, we announced that our Board of Directors authorized a program to repurchase up to $1.0 billion of our common stock, which replaced in its entirety the previous stock repurchase program authorized in fiscal 2022. During the first nine months of fiscal 2025, we repurchased $245.2 million of our common stock under the stock repurchase program, and $754.8 million remained under the current repurchase authorization as of August 2, 2025. The amount and timing of any further repurchases under our stock repurchase program are subject to a variety of factors including liquidity, cash flow, stock price, and general business and market conditions. The program may be modified, suspended, or discontinued at any time. See Note 15 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report as well as Item 2 of Part II of this report.

Cash Flows

The following table sets forth changes in our cash, cash equivalents, and investments in marketable debt securities for the periods indicated (in thousands):

Cash, cash equivalents and investments increased by $58.6 million during the first nine months of fiscal 2025. Cash from operating activities generated $435.0 million which was partially offset by the following: (i) cash used for stock repurchases under our stock repurchase program of $250.0 million; (ii) cash used to fund our investing activities for capital expenditures totaling $95.4 million; (iii) stock repurchases on vesting of our stock unit awards to employees relating to tax withholding of $60.0 million; and (iv) cash used for payments on our term loan due October 28, 2030 of $8.7 million. In addition to cash provided by operating activities, proceeds from the issuance of equity under our employee stock purchase plan provided $35.9 million in cash during the nine months ended August 2, 2025.

Cash Provided By Operating Activities

The following sections set forth the components of our $435.0 million of cash provided by operating activities during the first nine months of fiscal 2025. Net income (adjusted for non-cash charges) provided cash of approximately $369.5 million and cash provided by operating assets and liabilities was approximately $65.5 million.

Net income (adjusted for non-cash charges)

The following table sets forth our net income (adjusted for non-cash charges) during the period (in thousands):

Operating Assets and Liabilities

Operating asset and liability requirements decreased by $65.5 million during the period. The following table sets forth the major components of the cash changes in operating assets and liabilities (in thousands):

As compared to the end of fiscal 2024, for the first nine months of fiscal 2025:

• The change in accounts receivable primarily reflects the timing of cash collections from customers and increased sales volume;
• The change in inventories primarily reflects increases in raw materials;
• The change in prepaid expenses and other primarily reflects reduced refundable cash advances to a third-party contract manufacturer partially offset by increased contract assets for unbilled accounts receivable;
• The change in accounts payable, accruals, and other obligations primarily reflects a higher accrual associated with our annual incentive compensation plan, the timing of payments to suppliers and the timing of payments for payroll, partially offset by timing of payments for income taxes;
• The change in deferred revenue primarily represents an increase in advanced payments received on multi-year maintenance contracts from customers prior to revenue recognition; and
• The change in operating lease assets and liabilities, net, represents cash paid for operating lease payments in excess of operating lease costs.

Our days sales outstanding (“DSOs”) decreased from 97 for the first nine months of fiscal 2024 to 94 for the first nine months of fiscal 2025. The calculation of DSOs includes accounts receivables, net, and contract assets for unbilled receivables, net included in prepaid expenses and other. Our inventory turns increased from 1.9 for the first nine months of fiscal 2024 to 2.5 for the first nine months of fiscal 2025.

Cash Paid for Interest, Net

The following table sets forth the cash paid for interest, net, during the period (in thousands):

(1) The 2030 Term Loan bore interest at SOFR for the chosen borrowing period plus a spread of 2.00% subject to a minimum SOFR rate of 0.00%.

(2) Interest on the Refinanced 2030 Term Loan is payable periodically based on the interest period selected for borrowing. The Refinanced 2030 Term Loan bears interest at SOFR for the chosen borrowing period plus a spread of 1.75% subject to a minimum SOFR rate of 0.00%. At the end of the third quarter of fiscal 2025, the interest rate on the Refinanced 2030 Term Loan was 6.10%.

(3) The 2030 Notes bear interest at a rate of 4.00% per annum. Interest is payable on the 2030 Notes in arrears on January 31 and July 31 of each year.

(4) Our interest rate swaps fix the SOFR rate for $350.0 million of our Term Loan at 3.47% through January 2028 and another $350.0 million of our Term Loan at 2.968% through September 2025.

(5) During the first nine months of fiscal 2025, we utilized the Revolving Credit Facility to issue certain standby letters of credit and paid nominal commitment fees, interest expense and other administrative charges primarily relating to the Revolving Credit Facility.

For additional information about our debt and interest rate swaps, see Notes 10 and 12 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.

Contractual Obligations

Our contractual obligations have not changed materially since November 2, 2024. For a summary of our contractual obligations, see “Liquidity and Capital Resources – Contractual Obligations” in Item 7 of Part II of our 2024 Annual Report.

Critical Accounting Policies and Estimates

Our critical accounting policies and estimates have not changed materially since November 2, 2024. For a discussion of our critical accounting policies and estimates, see “Critical Accounting Policies and Estimates” in Item 7 of Part II of our 2024 Annual Report.

Effects of Recent Accounting Pronouncements

See Note 2 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report for information relating to our discussion of the effects of recent accounting pronouncements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk related to changes in interest rates and foreign currency exchange rates. For a discussion of quantitative and qualitative disclosures about market risk, see Item 7A of Part II of our 2024 Annual Report.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

The information set forth under the heading “Commitments and Contingencies - Litigation” in Note 18 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report, is incorporated herein by reference.

Item 1A. Risk Factors

Investing in our securities involves a high degree of risk. Before investing in our securities, you should consider carefully the information contained in this report and in our 2024 Annual Report, including the information under “Risk Factors” in Item 1A of Part I thereof. This report contains forward-looking statements that involve risks and uncertainties. See “Management’s Discussion and Analysis of Financial Conditions and Results of Operations – Cautionary Note Regarding Forward-Looking Statements” in Item 2 of Part I of this report. Our actual results could differ materially from those contained in the forward-looking statements. Any of the risks discussed in our 2024 Annual Report, in this report, in other reports we file with the SEC, and other risks we have not anticipated or discussed, could have a material adverse impact on our business, financial condition, or results of operations. Except as set forth below, there has been no material change to the material factors that make an investment in our securities speculative or risky from those presented in our 2024 Annual Report.

Tariffs and other import measures imposed by the United States or other countries may adversely affect our business, operations, and financial results.

In January 2025, the U.S. government commenced a broad review of U.S. trade relations and began imposing, or threatening to impose, tariffs on certain countries, materials, and industries. In response, certain impacted countries have imposed or threatened various retaliatory tariffs or other trade restrictions. We rely on a global sourcing strategy and third-party contract manufacturers outside of the United States to perform substantially all of our manufacturing. Moreover, revenue in the United States represented approximately 70% of our revenue in fiscal 2024. Significant changes to trade policy, the imposition of tariffs, or retaliatory responses thereto, have adversely impacted and could materially adversely impact our business, operations, and financial results, including by increasing our costs, by decreasing our profit margins, and/or by making our products less competitive. The tariff policy environment has been and can be expected to continue to be dynamic. Tariffs recently implemented that have impacted or could materially impact our business include tariffs on imports:

• from Canada and Mexico, as products making up a significant portion of our revenue are manufactured in or distributed from Mexico, and we generally introduce new products and conduct related early volume manufacturing in Canada;
• of steel, aluminum, and copper, including derivative goods that include certain of our products;
• from China, as our supply chain includes certain China-based suppliers; and
• from a wide range of countries globally, including Thailand and Vietnam, where we also rely on third-party manufacturing operations for a significant portion of our revenue.

Additionally, we currently rely upon certain trade agreements and product or technology based exemptions that reduce our tariff exposure. The U.S. government is currently investigating imports of a range of different products, including semiconductors and critical raw minerals, and derivative products relevant to our business and products, which could result in material additional tariffs. There can be no guarantee as to which of our products will be impacted by new or changing tariffs, or that they will remain eligible for exceptions under existing or future trade agreements or executive orders.

We have taken steps, and may take additional steps, to attempt to mitigate the impact of tariffs on our business, including: by availing ourselves of certain exemptions to tariffs; by making changes to our supply chain practices, sources of supply, or manufacturing locations; and by passing the cost of tariffs to customers. These changes could take considerable time to implement, result in significant costs, and cause supply chain delays or disruption. Moreover, there can be no assurance as to customer reaction to the current trade environment, the imposition of new tariffs, or any tariff mitigation steps we elect to take. Among other things, customers may elect to reduce spending, renegotiate contracts, defer orders or delivery of existing orders, or shift purchases to other vendors, each of which would adversely impact our financial results and competitive position with customers.

Certain tariffs that have been implemented or proposed are subject to legal challenges, but there can be no assurance that such challenges will be successful or that, if successful, additional or alternative tariffs will not be imposed. The results of such legal challenges, including any potential resulting retroactive changes to tariffs, could adversely impact our financial results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following table provides a summary of repurchases of our common stock during the third quarter of fiscal 2025:

(1) On October 2, 2024, we announced that our Board of Directors authorized a program to repurchase up to $1.0 billion of our common stock, which replaced in its entirety the previous stock repurchase program. The program may be modified, suspended, or discontinued at any time. During the third quarter of fiscal 2025, we repurchased $81.8 million of our common stock under the stock repurchase program, and we had $754.8 million remaining under the current repurchase authorization as of August 2, 2025. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Stock Repurchase Authorization” in Item 2 of Part I of this report and Note 15 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report for information regarding the stock repurchase program authorized by our Board of Directors.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Rule 10b5-1 Trading Arrangements

The following table describes, for the third quarter of fiscal 2025, each trading arrangement for the sale or purchase of our securities adopted, terminated or for which the amount, pricing or timing provisions were modified by our directors and officers (as defined in Rule 16a-1(f) of the Exchange Act) that is either (1) a contract, instruction or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) (a “Rule 10b5-1 trading arrangement”) or (2) a “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of Regulation S-K):

Name (Title) Action Taken (Date of Action) Type of Trading Arrangement Nature of Trading Arrangement Duration of Trading Arrangement Aggregate Number of Securities to be Purchased or Sold

Dino DiPerna (Senior Vice President, Global Research & Development) Adoption (July 11, 2025) Rule 10b5-1 trading arrangement Sales Until July 24, 2026, or such earlier date upon which all transactions are completed or expire without execution (1) (2)

Brodie Gage (Senior Vice President, Global Products & Supply Chain) Adoption (July 1, 2025) Rule 10b5-1 trading arrangement Sales Until December 31, 2026, or such earlier date upon which all transactions are completed or expire without execution (3) Up to 7,150 shares of common stock

(1) Sales under this arrangement will not begin until November 17, 2025, following expiration of Mr. DiPerna’s existing Rule 10b5-1 trading arrangement.

(2) The aggregate number of shares of common stock to be sold pursuant to Mr. DiPerna’s arrangement is up to (i) 6,391 shares of common stock, plus (ii) up to 50% of the net after-tax shares of common stock to be received as a result of the vesting on December 20, 2025 of an aggregate of (a) 2,616 earned performance stock units, (b) performance stock units that have not yet been earned, the actual number of which depends on performance and ranges from 0% to 200% of the 3,829 shares subject to the award at the target level of performance, and (c) 3,965 restricted stock units, plus (iii) up to 50% of the net after-tax shares of common stock to be received as a result of the vesting on March 20, 2026 of an aggregate of up to 3,368 restricted stock units, plus (iv) up to 50% of the net after-tax shares of common stock to be received as a result of the vesting on June 20, 2026 of an aggregate of 3,370 restricted stock units. The actual number of net after-tax shares to be received will vary based on the market price of our common stock at the time of settlement.

(3) Sales under this arrangement will not begin until December 15, 2025, following expiration of Mr. Gage’s existing Rule 10b5-1 trading arrangement.

Item 6. Exhibits

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10.1 Employment Offer Letter between Ciena Corporation and Marc D. Graff, dated June 13, 2025 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission File No. 001-36250) filed with the Securities and Exchange Commission on June 18, 2025).* 31.1 Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document (104) Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

• Represents management contract or compensatory plan or arrangement