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What changed in CIENA CORP's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of CIENA CORP's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+552 added−548 removedSource: 10-K (2023-12-15) vs 10-K (2022-12-16)

Top changes in CIENA CORP's 2023 10-K

552 paragraphs added · 548 removed · 426 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

158 edited+50 added−40 removed84 unchanged
Biggest changeWe seek to balance these goals through our sourcing and supply chain strategy, outsourcing and use of lower cost geographies. Our efforts also include process optimization initiatives, such as vendor-managed inventory, and other operational models and strategies designed to drive improved efficiencies in our sourcing, production, logistics and fulfillment.
Biggest changeOur efforts include process optimization initiatives, such as vendor-managed inventory, and other operational models and strategies designed to drive improved efficiencies in our sourcing, production, logistics and fulfillment. 14 Table of Contents To enhance operational efficiency and modernize our supply chain operations, while driving long-term sustainability and resilience in the face of dynamic market conditions, we are pursuing a number of digital technology transformation efforts, including advanced analytics, automation, and other digital solutions.
By transforming network infrastructures into dynamic, programmable environments driven by automation and analytics, network operators can realize greater business agility, dynamically adapt to changing end-user service demands and rapidly introduce new revenue-generating services. They can also gain valuable real-time network insights, allowing them to optimize network performance and maximize the return on their network infrastructure investment.
By transforming network infrastructures into dynamic, programmable environments driven by automation and analytics, network operators can realize greater business agility, adapt dynamically to changing end-user service demands, and rapidly introduce new revenue-generating services. They can also gain valuable, real-time network insights, allowing them to optimize network performance and maximize the return on their network infrastructure investment.
We believe that adoption of these strategies, and the related evolution of core, metro, aggregation and access network infrastructures, will require network operators and their network solutions vendors to increasingly look to utilize an ecosystem of both physical and virtual network resources, optimized through software.
We believe that adoption of these strategies, and the related evolution of core, metro, aggregation and access network infrastructures, will require network operators and their network solutions vendors increasingly to look to utilize an ecosystem of both physical and virtual network resources, optimized through software.
We are focused on using our significant research and development investment capacity to push the pace of innovation in our traditional markets and provide leading offerings that leverage our Adaptive Network vision to make our customers’ networks more dynamic through further advances in programmable network platforms, analytics, control and automation.
We are focused on using our significant research and development investment capacity to push the pace of innovation in our traditional markets and to provide leading offerings that leverage our Adaptive Network vision to make our customers’ networks more dynamic through further advances in programmable network platforms, analytics, control and automation.
Our research and development efforts are also geared toward portfolio optimization and engineering changes intended to drive product and manufacturing cost reductions across our platforms, and enable muti-vendor sourcing of components. We regularly review our existing solutions offerings and prospective development of new components, features or products in order to determine their fit within our portfolio and broader corporate strategy.
Our research and development efforts are also geared toward portfolio optimization and engineering changes intended to drive product and manufacturing cost reductions across our platforms, and enable muti-vendor sourcing of components. We regularly review our existing solutions offerings and prospective development of new features, components or products in order to determine their fit within our portfolio and broader corporate strategy.
We also recently launched a program to identify individuals throughout the organization who have been identified as having high potential for the future growth and development, so that this earlier in career talent can be nurtured for future leadership roles. • Promote Community Outreach and Support.
We also recently launched a program to identify individuals throughout the organization who have been identified as having high potential for future growth and development, so that this earlier in career talent can be nurtured for future leadership roles. • Promote Community Outreach and Support.
Gallagher served as Chairman of Macro 4 plc, and from May 2006 until March 2008, he served as Vice Chairman of Golden Telecom Inc. From 2003 until 2006, Mr. Gallagher was Executive Vice Chairman and served as Chief Executive Officer of FLAG Telecom Group Ltd. and, prior to that role, he held various senior management positions at British Telecom. Mr.
Gallagher served as Chairman of Macro 4 plc, and from May 2006 until March 2008, he served as Vice Chairman of Golden Telecom Inc. From 2003 until 2006, Mr. Gallagher was Executive Vice Chairman and served as Chief Executive Officer of FLAG Telecom Group Ltd. and, prior to that role, he held various senior management positions at British Telecom.
We rely upon third-party contract manufacturers, including those with facilities in Canada, Mexico, Thailand and the United States, to manufacture, support and ship our products, and therefore are exposed to risks associated with their businesses, financial condition and the geographies in which they operate, including political risk, changes in tax and trade policy involving such countries, and physical risk, including the impact of climate change in such geographies.
We rely upon third-party contract manufacturers, including those with facilities in Canada, Mexico, Thailand, India, and the United States, to manufacture, support and ship our products, and therefore are exposed to risks associated with their businesses, financial condition and the geographies in which they operate, including political risk, changes in tax and trade policy involving such countries, and physical risk, including the impact of climate change.
We deployed Syndio’s workplace equity platform beginning in fiscal 2020 to fine-tune our methodology and enable regular global pay fairness assessments. To align performance and stockholder interest, we base our annual incentive compensation on both business and individual performance, we maintain an employee stock purchase plan and we have broadly expanded employee participation in equity compensation in recent years.
We deployed Syndio’s workplace equity platform beginning in fiscal 2020 to fine-tune our methodology and enable regular global pay equity assessments. To align performance and stockholder interest, we base our annual incentive compensation on both business and individual performance, we maintain an employee stock purchase plan, and we have broadly expanded employee participation in equity compensation in recent years.
We also rely upon contract manufacturers and other third parties to perform design and prototype development, component procurement, full production, final assembly, testing and distribution operations. Our manufacturers procure components necessary for assembly and manufacture of our products based on our specifications, approved vendor lists, bills of materials and testing and quality standards.
We also rely upon contract manufacturers and other third parties to perform design and prototype development, component procurement, full production, final assembly, testing and distribution operations. Our manufacturers and component distribution partners procure components necessary for assembly and manufacture of our products based on our specifications, approved vendor lists, bills of materials and testing and quality standards.
Other Regulations As a company with global operations, we are subject to complex foreign and U.S. laws and regulations, including trade regulations, tariffs, import and export regulations, anti-bribery and corruption laws, antitrust or competition laws, data privacy laws, such as the EU General Data Protection Regulation (the “GDPR”), and environmental regulations, among others.
Other Regulations As a company with global operations, we are subject to complex foreign and U.S. laws and regulations, including trade regulations, tariffs, import and export regulations, anti-bribery and corruption laws, antitrust or competition laws, data privacy laws and regulations, such as the EU General Data Protection Regulation (the “GDPR”), cybersecurity laws and regulations, and environmental regulations, among others.
To provide end user’s with the required experience for a growing set of immersive cloud services, network operators have increased, and are expected to continue to increase, the number and capabilities of edge computing locations to allow these latency-sensitive workloads to be processed closer to users.
To provide end users with the required experience for a growing set of immersive cloud services, network operators have increased, and are expected to continue to increase, the number and capabilities of edge computing locations to allow these latency-sensitive workloads to be processed closer to users.
MCP software provides intelligent, multi-layer network control of our routing, switching and optical solutions, enabling simplification, acceleration and automation of multi-layer network operations. Our MCP domain controller provides fault, configuration, accounting, performance and security (“FCAPS”) management for multi-layer networks, in combination with services management and online network planning.
MCP software provides intelligent, multi-layer network control of our routing, switching and optical solutions, enabling simplification, acceleration and automation of multi-layer network operations. Our MCP domain controller provides fault, configuration, accounting, performance and security management for multi-layer networks, in combination with services management and online network planning.
Our portfolio is designed to enable the Adaptive Network™, which is our vision for a network end state that leverages a programmable and scalable network infrastructure, driven by software control and automation capabilities, that are informed by analytics and intelligence.
Our portfolio is designed to enable the Adaptive Network™, which is our vision for a network end state that leverages a programmable and scalable network infrastructure, driven by software control and automation capabilities, that is informed by network analytics and intelligence.
Product Development and Sustainability As network traffic and service expansion continue to grow, network operators are looking toward technology innovation as a means to help support their business models and prepare for a low carbon future.
Product Development and Sustainability As network traffic and service expansion continue to grow, network operators are looking toward technology innovation to help support their business models and prepare for a low carbon future.
The market in which we compete is characterized by rapidly advancing technologies, frequent introduction of new solutions and aggressive selling efforts, including using significant pricing pressure to displace incumbent vendors and capture market share. Competition for sales of networking solutions, including our Networking Platforms and Platform Software and Services, is dominated by a small number of very large, multi-national companies.
The market in which we compete is characterized by rapidly advancing technology, frequent introduction of new solutions, and aggressive selling efforts, including using significant pricing pressure to displace incumbent vendors and capture market share. Competition for sales of networking solutions, including our Networking Platforms and Platform Software and Services, is dominated by a small number of very large, multi-national companies.
We also offer competitive family leave, including global family leave to support employees throughout various life stages, carer’s leave, bereavement leave, parental leave that includes a minimum of 18 weeks paid time off for new mothers (including eight weeks recovery and ten weeks bonding) and ten weeks paid time off for new fathers and adoptive parents, and financial assistance for adoptive parents, and recently expanded flexible paid time-off to more than 98% of our workforce globally.
We also offer comprehensive family leave, including global family leave to support employees throughout various life stages, carer’s leave, bereavement leave, parental leave that includes a minimum of 18 weeks paid time off for new mothers (including eight weeks recovery and ten weeks bonding) and ten weeks paid time off for new fathers and adoptive parents, and financial assistance for adoptive parents, and recently expanded flexible paid time-off to more than 98% of our workforce globally.
Within each geographic area, we maintain specific teams or personnel that focus on a particular region, country, customer or market vertical, or portfolio. These teams include sales management, account salespersons and sales engineers, as well as partner resources, field marketing, services professionals and commercial management personnel, who ensure that we maintain a high-touch, consultative relationship with our customers.
Within each focus area, we maintain 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 partner resources, field marketing, services professionals and commercial management personnel, who ensure that we maintain a high-touch, consultative relationship with our customers.
Network infrastructures are comprised of multiple technology layers and domains – such as the radio access network (RAN), data center, cloud, access, transport, and mobile core networks. With new 5G network implementations, it is often complex for network operators to offer automated, end-to-end services in this environment.
Network infrastructures are comprised of multiple technology layers and domains – such as the radio access network (“RAN”), data center, cloud, access, transport, and mobile core networks. With new 5G network implementations, it is often complex for network operators to offer automated, end-to-end services in this environment.
Information contained on our website is not a part of this annual report. 19 Table of Contents Information About Our Directors and Executive Officers The table below sets forth certain information concerning our directors and executive officers: Name Age Position Patrick H. Nettles, Ph.D. 79 Executive Chairman of the Board of Directors Gary B.
Information contained on our website is not a part of this annual report. 19 Table of Contents Information About Our Executive Officers and Directors The table below sets forth certain information concerning our executive officers and directors: Name Age Position Patrick H. Nettles, Ph.D. 80 Executive Chairman of the Board of Directors Gary B.
Across our markets and segments, the principal competitive factors can include, among others: • functionality, speed, capacity, scalability and performance of network solutions; • the ability to meet business needs and drive successful outcomes; • price for performance, cost per bit and total cost of ownership of network solutions; • incumbency and strength of existing business relationships; • technology roadmap and forward innovation capacity, including the ability to invest significant sums in research and development; • time-to-market in delivering products and features; • company stability and financial health; • ability to offer comprehensive networking solutions, consisting of hardware, software and services; • flexibility and openness of platforms, including ease of integration, interoperability and integrated management; • ability to offer solutions that accommodate a range of different consumption models; • operating costs, space requirements and power consumption of network solutions; 15 Table of Contents • software and network automation capabilities; • ability to manage challenging supply chain environments, including manufacturing and lead-time capability; • services and support capabilities; • security of enterprise, product development, support processes, and products; and • ability to offer solutions that help customers meet their business needs while achieving their climate sustainability goals.
Across our markets and segments, the principal competitive factors can include, among others: • functionality, speed, capacity, scalability and performance of network solutions; • the ability to meet business needs and drive successful outcomes; 15 Table of Contents • price for performance, cost per bit and total cost of ownership of network solutions; • incumbency and strength of existing business relationships; • technology roadmap and forward innovation capacity, including the ability to invest significant sums in research and development; • time-to-market in delivering products and features; • company stability and financial health; • ability to offer comprehensive networking solutions, consisting of hardware, software and services; • flexibility and openness of platforms, including ease of integration, interoperability and integrated management; • ability to offer solutions that accommodate a range of different consumption models; • operating costs and total cost of ownership; • software and network automation capabilities; • ability to manage challenging supply chain environments, including manufacturing and lead-time capability; • services and support capabilities; • security of enterprise, product development, support processes, and products; • space requirements and power consumption of network solutions; and • ability to offer solutions that help customers manage the lifecycle impacts of their networks and achieve their climate sustainability goals.
Fitt has served as a Director of Ciena since November 2000. From October 2002 to March 2005, Ms. Fitt served as Director of the Royal Academy of Arts in London. From 1979 to October 2002, Ms. Fitt was an investment banker with Goldman Sachs & Co., where she was a partner from 1994 to October 2002. Ms.
Lawton W. Fitt has served as a Director of Ciena since November 2000. From October 2002 to March 2005, Ms. Fitt served as Director of the Royal Academy of Arts in London. From 1979 to October 2002, Ms. Fitt was an investment banker with Goldman Sachs & Co., where she was a partner from 1994 to October 2002. Ms.
We actively work with our third-party vendors and business partners to promote socially responsible business practices within our own business and those within our global supply chain. To that end, we have adopted the principles set forth in the Responsible Business Alliance (“RBA”) Code of Conduct.
We actively work with our third-party vendors and business partners to promote socially responsible business practices within our global supply chain. To that end, we have adopted the principles set forth in the Responsible Business Alliance (“RBA”) Code of Conduct.
Immersive technologies like virtual reality (“VR”), augmented reality (“AR”), interactive experiences, gaming and 360° video, as well as UHD (4K and 8K) video, are likely to place further capacity demands on networks as adoption of these technologies grows.
Immersive technologies like virtual reality (“VR”), augmented reality (“AR”), interactive experiences, gaming and 360° video, as well as UHD (4K and 8K) video, are placing or likely to place further capacity demands on networks as adoption of these technologies grows.
Our Converged Packet Optical portfolio includes a range of products and solutions that use our WaveLogic coherent optical technology and our intelligent photonics solutions and are optimized for the convergence of coherent optical transport, open optical networking, Optical Transport Network (“OTN”) switching and IP routing and switching.
Optical Networking . Our Optical Networking portfolio includes a range of products and solutions that use our WaveLogic coherent optical technology and our intelligent photonics solutions and are optimized for the convergence of coherent optical transport, open optical networking, Optical Transport Network (“OTN”) switching and IP routing and switching.
Item 1. Business Overview We are a networking systems, services and software company, providing solutions that enable a wide range of network operators to deploy and manage next-generation networks that deliver services to businesses and consumers. We provide hardware, software and services that support the delivery of video, data and voice traffic over core, metro, aggregation and access communications networks.
Item 1. Business Overview We are a network platform, software, and services company, providing solutions that enable a wide range of network operators to deploy and manage next-generation networks that deliver services to businesses and consumers. We provide hardware, software and services that support the delivery of video, data and voice traffic over core, metro, aggregation and access communications networks.
Through our development efforts, we seek to support network operators as they pursue new business models and sources of revenue from their network infrastructure, and to achieve improved economics and return on their network infrastructure investment.
Through our development efforts, we seek to support network operators as they pursue new business models and sources of revenue from their network infrastructure and services, and to achieve improved economics, network sustainability, and return on their network infrastructure investment.
We pursue opportunities to minimize the resource impacts in our product design, and to manage the life cycle impact of our products, including packaging and distribution, support, and end-of-life reuse, refurbishment, and recycling. We voluntarily provide on an annual basis CDP climate change and water disclosures and 16 Table of Contents are a member of the RBA.
We pursue opportunities to minimize the resource impacts in our product design, and to manage the life cycle impact of our products, including packaging and distribution, support, and end-of-life reuse, refurbishment, and recycling. We voluntarily provide on an annual basis CDP climate change and water disclosures and are a member of the RBA.
To support our customers business needs for rapid service introduction and optimized network operation, we seek to improve network layer automation and programmability by advancing our multi-layer domain controller - MCP software and applications.
To support our customers’ business needs for rapid service introduction and optimized network operation, we seek to improve network layer automation and programmability by advancing our multi-layer domain controller - MCP software and applications.
We also continue to compete with several smaller but established companies that offer one or more products that compete directly or indirectly with our offerings or whose products address specific niches within the markets and customer segments we address. These competitors include Infinera, ADVA, Ribbon Communications, Calix, and Adtran.
We also continue to compete with several smaller but established companies that offer one or more products that compete directly or indirectly with our offerings or whose products address specific niches within the markets and customer segments we address. These competitors include Infinera, Ribbon Communications, Calix, Adtran, DZS, and Ekinops.
We have a broad base of talent in more than 35 countries, with approximately 57% in the Americas, 35% in APAC, and 8% in EMEA, the majority of whom are in engineering, operations or sales roles. We understand that our industry and innovation leadership is ultimately rooted in people.
We have a broad base of talent in more than 38 countries, with approximately 57% in the Americas, 35% in APAC, and 8% in EMEA, the majority of whom are in engineering, operations or sales roles. We believe that our industry and innovation leadership is ultimately rooted in people.
These changes at the edge of networks may affect network topologies, demands and traffic patterns. • Machine Learning (“ML”) and Artificial Intelligence (“AI”) . By increasing network intelligence and improving automation, ML and AI can enable improvements in network planning, operations, user experience and trouble resolution.
These changes at the edge of networks may affect network topologies, demands and traffic patterns. 6 Table of Contents • Machine Learning (“ML”) and Artificial Intelligence (“AI”). By increasing network intelligence and improving automation, ML and AI can enable improvements in network planning, operations, user experience and trouble resolution.
We believe that commitments to good corporate governance and the highest ethical standards are essential to our long-term success, and we are dedicated to instilling in our employees a commitment to integrity and business ethics. We maintain a Code of Business Conduct and Ethics that sets standards of conduct for Ciena’s directors, officers and employees.
We believe that commitments to good corporate governance and the highest ethical standards are essential to our long-term success, and we are dedicated to instilling in our employees a 18 Table of Contents commitment to integrity and business ethics. We maintain a Code of Business Conduct and Ethics that sets standards of conduct for Ciena’s directors, officers and employees.
These providers are focused on applications such as search, social media, video, real-time communications and cloud-based service offerings, as well as other emerging network services.
These providers are focused on applications including search, social media, video, real-time communications and cloud-based service offerings, as well as other emerging network services.
Closed loop automation is a continuous cycle of communications between the programmable network infrastructure and software control elements to analyze network conditions, traffic demands, and resource availability to determine the best placement of traffic or network functions to deliver optimal service quality and resource utilization. • Software-Defined Networking (“SDN”).
Closed loop automation is a continuous cycle of communications between the programmable network infrastructure and software control elements to analyze network conditions, traffic demands, and resource availability to determine the best placement of traffic or network functions to deliver optimal service quality and resource utilization.
Customers and Markets We sell our product and service solutions through direct and indirect sales channels to network operators in the following customer and market segments: • Communications Service Providers. Our communications service provider customers include regional, metro, national and international wireline and wireless carriers, and access network providers. • Web-scale Providers.
Customers and Markets We sell our product and service solutions through direct and indirect sales channels to network operators in the following customer and market segments: • Communications Service Providers. Our communications service provider customers include regional, metro, national and international wireline and wireless carriers, and access network providers. • Cloud Providers.
We promote these principles and require our suppliers to agree to adhere to these same standards. We also 14 Table of Contents publish a Sustainability Report and maintain a Human Rights Policy applicable to suppliers, each of which includes more detail about our efforts to promote responsible business practices.
We promote these principles and require our suppliers to agree to adhere to these same standards. We also publish a Sustainability Report and maintain a Human Rights Policy applicable to suppliers, each of which includes more detail about our efforts to promote responsible business practices.
We are offering a range of networking solutions across different consumption models to drive the evolution of next-generation network infrastructures and to promote choice in our markets. We have made our coherent technology available in both integrated systems and pluggable form factors that together address a range of technical and economic requirements of network operators.
We offer a range of networking solutions across different consumption models to drive the evolution of next-generation network infrastructures and to promote choice in our markets. We have made our coherent optical technology available in both integrated systems and pluggable form factors that together address a range of technical and economic requirements of network operators.
In recent years, we have enhanced employer contributions to our North America retirement plans, added our first ESG fund option for employees and, as of October 29, 2022, achieved greater than 99% participation of eligible employees in the U.S. and Canada in our defined contribution retirement plans. • Provide Programs for Employee Recognition.
In recent years, we have enhanced employer contributions to our North America retirement plans, added our first ESG fund option for employees and, as of October 28, 2023, achieved greater than 99% participation of eligible employees in the U.S. and Canada in our defined contribution retirement plans. • Provide Programs for Employee Recognition.
Fitt previously served on the boards of directors of ARM Holdings PLC and Thomson Reuters Corporation. Patrick T. Gallagher has served as a Director of Ciena since May 2009. Since October 2007, Mr.
Fitt previously served on the boards of directors of Micro Focus International PLC, ARM Holdings PLC and Thomson Reuters Corporation. Patrick T. Gallagher has served as a Director of Ciena since May 2009. Since October 2007, Mr.
Our solutions include Networking Platforms, including our Converged Packet Optical and Routing and Switching portfolios, which can be applied from the network core to end-user access points, and which allow network operators to scale capacity, increase transmission speeds, allocate traffic efficiently and adapt dynamically to changing end-user service demands.
Our solutions include Networking Platforms, including our Optical Networking portfolio and our Routing and Switching portfolio, which can be applied from the network core to end-user access points, and which allow network operators to scale capacity, increase transmission speeds, allocate traffic efficiently and adapt dynamically to changing end-user service demands.
We also maintain a global partner program that includes distributors, resellers, systems integrators, service providers and other third-party distributors who market and sell our products and services. We utilize these third-party channel partners to market and sell our solutions into specific geographies, applications or customer verticals.
We also maintain a global partner program that includes distributors, resellers, systems integrators, service providers, original equipment manufacturers, original design manufacturers, and other third-party distributors who market and sell our products and services. We utilize these third-party channel partners to market and sell our solutions into specific geographies, applications or customer verticals.
In some cases, where we seek to utilize or gain access to complementary or emerging technologies or solutions, we may obtain technology through an acquisition or, alternatively, through initiatives with third parties pursuant to technology licenses, OEM arrangements and other strategic technology relationships or investments.
In some cases, where we seek to utilize or gain access to complementary or 13 Table of Contents emerging technologies or solutions, we may obtain technology through an acquisition or, alternatively, through initiatives with third parties pursuant to technology licenses, OEM arrangements and other strategic technology relationships or investments.
Phipps joined Ciena in 2002 and has served as Senior Vice President, Global Customer Engagement (formerly titled Senior Vice President, Global Sales and Marketing) since February 2017, in which capacity he is responsible for Ciena’s global sales organization. From January 2014 to February 2017, Mr.
Phipps joined Ciena in 2002 and has served as Senior Vice President, Global Customer Engagement (formerly titled Senior Vice President, Global Sales and Marketing) since February 2017, in which capacity he is responsible for Ciena’s global sales, systems engineering, services, and partner organization. From January 2014 to February 2017, Mr.
Through our Blue Planet® Software we also enable complete service lifecycle management automation with productized operational support systems (“OSS”) and service assurance solutions that help our customers to achieve closed loop automation across multi-vendor and multi-domain environments.
Through our Blue Planet ® Software, we also enable complete service lifecycle management automation with productized operational support systems (“OSS”), which include inventory, orchestration and assurance solutions that help our customers to achieve closed loop automation across multi-vendor and multi-domain environments.
Emerging technologies, services and applications are further impacting or expected to impact network infrastructures, particularly at the edge of networks, where increased computing power and automation are required to meet the quality of experience required by end users. These include: • 5G .
Emerging technologies, services and applications are further impacting, or expected to impact network infrastructures, particularly at the edge of networks, where increased computing power and automation are required to meet the quality of experience required by end users. These include: • Internet of Things (“IoT”) .
As we achieve further customer 11 Table of Contents adoption of our MCP software platform, and as we transition features, functionality and customers to that platform, we expect revenue to decline for our legacy Platform Software solutions.
As we achieve further customer adoption of our MCP software platform, and as we transition features, functionality and customers to that platform, we expect revenue to decline for our legacy Platform Software solutions.
These products include a cloud-grade router and software for enterprise and cloud networks that enable hardware-like routing performance for enterprises across multi-cloud and virtualized edge networks. This scalable and modular software can be deployed as a Virtual Machine (VM) application as well as in virtualized and disaggregated network environment.
Our Vyatta virtual routing and switching technology and products include a cloud-grade router and software for enterprise and cloud networks that enable hardware-like routing performance for enterprises across multi-cloud and virtualized edge networks. This scalable and modular software can be deployed as a Virtual Machine (VM) application as well as in virtualized and disaggregated network environment.
We strive to ensure that our employees receive competitive, fair and transparent compensation and progressive benefits offerings. We conduct an annual pay fairness assessment of 17 Table of Contents gender globally and of ethnicity in the U.S. and take action to ensure we are paying individuals performing similar work equitably.
We strive to ensure that our employees receive competitive, fair and transparent compensation, and progressive benefits offerings. We conduct an annual pay equity assessment of gender globally and of ethnicity in the U.S., and take action to ensure that we are paying individuals performing similar work equitably.
Through our “Ciena Cares” community program, we provide corporate matching of employee charitable donations, flexible volunteering during work time, and corporate rewards for service hours that can be donated by employees.
Through our “Ciena Cares” community program, we provide corporate matching of employee charitable donations, flexible volunteering during work time, and corporate rewards for service hours that can be donated by employees to their charity of choice.
Claflin currently serves on the board of directors of IDEXX Laboratories, Inc., a publicly traded company, where he is Chair of the Governance and Corporate Responsibility Committee and serves on the Audit Committee. Mr. Claflin previously served on the board of directors of Advanced Micro Devices, Inc. (“AMD”), where he served as Chairman for 10 years. Lawton W.
Claflin currently serves on the board of directors of IDEXX Laboratories, Inc., a publicly traded company, where he is Chair of the Governance and 21 Table of Contents Corporate Responsibility Committee and serves on the Audit Committee. Mr. Claflin previously served on the board of directors of Advanced Micro Devices, Inc. (“AMD”), where he served as Chairman for 10 years.
Consumer electronics and other technology companies are rapidly advancing these applications,which require high bandwidth and low latency, and making the associated devices more widely available and affordable to consumers. 6 Table of Contents • Edge Computing .
Consumer electronics and other technology companies are rapidly advancing these applications, which require high bandwidth and low latency, and are making the associated devices more widely available and affordable to consumers. • Edge Computing .
Our solutions are used globally by communications service providers, cable and multiservice operators, Web-scale providers, submarine network operators, governments, and enterprises across multiple industry verticals.
Our solutions are used globally by communications service providers, cable and multiservice operators, cloud providers, submarine network operators, governments, and enterprises across multiple industry verticals.
ROA combines routing, traffic and performance analytics for real-time monitoring of IP services across domains and across the cloud. These capabilities provide enhanced network observability capabilities and enable troubleshooting of latent or transient network problems, and modeling, to predict the impact of network infrastructure, service and workload changes, to build more resilient networks. • NFV Orchestration (“NFVO”) .
ROA combines routing, traffic and performance analytics for real-time monitoring of IP services across domains and across the cloud. These capabilities provide enhanced network observability capabilities and enable troubleshooting of latent or transient network problems, and modeling, to predict the impact of network infrastructure, service and workload changes, to build more resilient networks. • Unified Assurance & Analytics (“UAA”).
Failure to obtain or maintain such licenses or other third-party intellectual property rights could affect our development efforts and market opportunities, or could require us to re-engineer our products or to obtain alternate technologies.
Failure to obtain or maintain such licenses or other third-party intellectual property rights could affect our development efforts 16 Table of Contents and market opportunities, or could require us to re-engineer our products or to obtain alternate technologies.
Our Routing and Switching products are based on our Adaptive IP approach, which delivers end-to-end IP-based services in an automated and more simplified manner than traditional IP network designs.
Our Routing and Switching products are based on our Adaptive IP approach, which delivers end-to-end IP-based services in an automated and more simplified manner than traditional IP network 10 Table of Contents designs.
Our manufacturers’ activity is based on rolling forecasts that we provide to them to estimate demand for our products. We work closely with our manufacturers and suppliers to manage material, quality, cost and delivery times, and we continually evaluate their services to ensure performance on a reliable and cost-effective basis.
Our manufacturers and component distribution partners’ activity is based on rolling forecasts that we provide to them to estimate demand for our products. We work closely with these partners and our suppliers to manage material, quality, cost and delivery times, and we continually evaluate their services to ensure performance on a reliable and cost-effective basis.
In fact, the effects of the dynamic supply and demand environment we have experienced in recent periods, together with our increased backlog, may impact the traditional seasonality in our business.
The effects of the dynamic supply and demand environment we have experienced in recent periods, together with our increased backlog, have impacted and may continue to impact the traditional seasonality in our business.
We provide a broad and diverse suite of offerings that focus on physical, mental and emotional, financial and social wellbeing and, during fiscal 2022, we expanded our offerings to include a focus on key life events such as aging and retirement readiness.
We provide a broad and diverse suite of programs that focus on physical, mental and emotional, financial and social wellbeing, and have expanded our offerings to include a focus on key life events such as aging and retirement readiness.
We are pursuing sales opportunities that leverage our WaveLogic technology in the form of high-performance transceivers/modems – the combination of a Ciena-designed optical chipset and ASIC with other key optical components that is sold independently of integrated systems.
We are also pursuing sales opportunities that leverage our WaveLogic technology in the form of high-performance transceivers/modems – the combination of a Ciena-designed optical chipset and application-specific integrated circuit (“ASIC”) with other key optical components that is sold independently of integrated systems.
We also offer solutions that 9 Table of Contents bring together multiple products and services from across our operating segments and portfolios to address key customer use cases and infrastructure needs with an aim to enable our customers to evolve their existing network environments.
We also offer solutions that 9 Table of Contents bring together multiple products and services from across our operating segments and portfolios to address key customer use cases and infrastructure needs with an aim to enable our customers to evolve their existing network environments. Networking Platforms Our Networking Platforms segment consists of our Optical Networking and Routing and Switching portfolios.
We regularly file applications for patents and have a significant number of patents in the United States and other countries where we do business. As of December 1, 2022, we had approximately 2,100 issued patents and more than 580 pending patent applications worldwide.
We regularly file applications for patents and have a significant number of patents in the United States and other countries in which we do business. As of December 1, 2023, we had approximately 2,100 issued patents and more than 650 pending patent applications worldwide.
Our suite of MCP applications integrate software control and analytics applications in a unified interface that provides network performance data. Through our suite of MCP applications and open APIs, MCP software can integrate into network operators’ Operational Support Systems (“OSS”) and business processes, supporting our customers’ journey towards automation of end-to-end operational workflows. • Platform Software Services.
Our suite of MCP applications integrate software control and analytics applications in a unified interface that provides network performance data. Through our suite of MCP applications and open APIs, MCP software can integrate into network operators’ OSS and business processes, supporting our customers’ journey towards automation of end-to-end operational workflows. 11 Table of Contents • Platform Software Services.
By integrating or “federating” data from multiple inventory systems and presenting it in a single dynamic view, BPI allows real-time visibility into the end-to-end topology and status of network and service resources. Integrating with legacy OSS, BPI helps network providers simplify key operational processes such as service fulfillment, network planning and service assurance. • Route Optimization and Analysis (“ROA”).
By integrating or “federating” data from multiple inventory systems and presenting it in a single dynamic view, BPI allows real-time visibility into the end-to-end topology and status of network, cloud, and service resources. Integrating with legacy OSS, BPI helps network providers simplify key operational processes such as service fulfillment, network planning and service assurance. • Multi-Domain Service Orchestration (MDSO).
Traffic from streaming and OTT services, including high definition and ultra-high definition video, has expanded with the increased availability of, and end-user demand for, video content accessible through a variety of devices and media. • Mobile Traffic and Applications.
Traffic from streaming and OTT services, including high definition and ultra-high definition video, has expanded with the increased availability of, and end-user demand for, video content accessible through a variety of devices and media. • Mobile Traffic and Fifth-Generation Wireless Broadband (“5G”).
Optical networks – which carry video, data and voice traffic by encoding digital information on multiple wavelengths of light traveling across fiber optic cables – have experienced strong traffic growth.
Optical networks – which carry video, data and voice traffic by encoding digital information on multiple wavelengths of light traveling across fiber optic cables – have experienced strong demand for increased bandwidth due to traffic growth.
As of December 31, 2021, in the U.S., where we are headquartered, our 1,760 employee workforce approximately reflected the following ethnicities: 65.5% White, 21.3% Asian, 5.8% Hispanic or Latino, 4.7% Black or African American, 2.1% two or more races (Not Hispanic or Latino), and 0.6% additional groups (including American Indian, Alaska Native, Native Hawaiian or Other Pacific Islander).
As of December 31, 2022, in the U.S., where we are headquartered, our 1,890 employee workforce approximately reflected the following ethnicities: 64.2% White, 21.9% Asian, 6.2% Hispanic or Latino, 5.0% Black or African American, 2.2% two or more races (Not Hispanic or Latino), and 0.5% additional groups (including American Indian, Alaska Native, Native Hawaiian or Other Pacific Islander).
We conduct surveys of all employees on our compliance program and culture of integrity in order to assess and strengthen our culture and practices and received feedback from approximately 69% of our employees in fiscal 2022. Response to the COVID-19 Pandemic .
We conduct surveys of all employees on our compliance program and culture of integrity in order to assess and strengthen our culture and practices, and received feedback from approximately 69% of our employees on these surveys in fiscal 2022.
Fitt currently serves on the boards of directors of The Carlyle Group Inc., where she serves as Lead Independent Director, The Progressive Corporation, where she serves as Chairperson of the Board, and Micro Focus International PLC, all publicly traded companies. Ms. Fitt also serves as a 21 Table of Contents director or trustee of several non-profit organizations. Ms.
Fitt currently serves on the boards of directors of The Carlyle Group Inc., where she serves as Lead Independent Director, and The Progressive Corporation, where she serves as Chairperson of the Board, both publicly traded companies. Ms. Fitt also serves as a director or trustee of several non-profit organizations. Ms.
We believe that the continued diversification of our business is important to address the dynamic industry environment in which we operate, continue to grow our business, and better withstand potential slowdowns adversely affecting particular geographies, markets or customer segments.
We believe that addressable market expansion, and the diversification it provides, is important to address the dynamic industry environment in which we operate, to continue to grow our business, and to better withstand potential risks adversely affecting particular geographies, markets or customer segments.
Our fiscal 2022 employee engagement survey had a participation rate of approximately 77% and resulted in engagement scores across all indexes that met or exceeded industry benchmarks. Our global wellbeing program also includes a long-standing practice of remote and flexible working arrangements and flexible paid time off in many of our geographies. • Offer Competitive Compensation and Ensure Pay Equity.
Our fiscal 2023 employee engagement survey had a participation rate of approximately 84% and resulted in an engagement score that exceeded industry benchmarks. Our global wellbeing program also includes a long-standing practice of remote and flexible working arrangements and flexible paid time off in many of our geographies. • Offer Competitive Compensation and Ensure Pay Equity.
We promote an inclusive and diverse workplace, where all individuals are respected and feel they belong regardless of their age, race, national origin, gender, religion, disability, sexual orientation or gender identity through recruiting outreach, internal networking and resource groups, inclusivity networks, and mentoring programs. As of October 29, 2022, our global workforce was approximately 21.6% female.
We promote an inclusive and diverse workplace, where all individuals are respected and feel they belong regardless of their age, race, national origin, gender, religion, disability, sexual orientation or gender identity through recruiting outreach, internal networking and resource groups, inclusivity networks, and mentoring programs.
In addition, we support multiple active internal networking and resource groups, including our Women@Ciena group, Black & African Heritage group, LatinX group, Pride@Ciena LGBT+ group, and our Next@Ciena early in career group. In fiscal 2022, we also launched Vets at Ciena, our veterans’ employee resource group.
In addition, we support multiple active internal networking and resource groups, including our Women at Ciena group, Black & African Heritage at Ciena group, LatinX at Ciena group, Asian at Ciena group, Pride at Ciena group, Vets at Ciena group, and Next at Ciena early in career group.
In fiscal 2020, we launched our Digital Inclusion initiative, which aims to mobilize our global workforce, leverage our innovation leadership, and collaborate with customers, suppliers and other partners to bridge the digital divide.
Our Digital Inclusion initiative aims to mobilize our global workforce, leverage our innovation leadership, and collaborate with customers, suppliers and other partners to help bridge the digital divide.
These products route, aggregate and switch IP-based traffic to support such applications as IP services, Ethernet business services, cell site routing, mobile cross-haul, converged haul, and services, 5G and fiber-based access networks, and consumer/residential broadband access, as well as ongoing network infrastructure scaling.
These products route, aggregate and switch IP-based traffic to support applications including IP services, Ethernet business services, cell site routing, mobile cross-haul, converged haul, 5G, fiber-based access networks, and residential broadband access.
Moreover, there is a risk that open source and other technology licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to commercialize our products. Environment and Sustainability Our innovation efforts and our environmental sustainability initiatives are closely linked.
Moreover, there is a risk that open source and other technology licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to commercialize our products.
This period coincides with the first quarter of our fiscal year. This seasonality in our order flows has typically resulted in weaker revenue results in the first quarter of our fiscal year. These seasonal effects may not apply consistently in future periods and may not be a reliable indicator of our future revenue or results of operations.
This seasonality in our order flows has typically caused revenue for the first quarter of our fiscal year to be below that of the preceding quarter. These seasonal effects may not apply consistently in future periods and may not be a reliable indicator of our future revenue or results of operations.
Olsen began her career with IBM, where, between 1979 and 2010, she held a variety of executive management positions across sales, global financing and hardware. Ms. Olsen also serves on the boards of directors of Teradata Corporation and Keysight Technologies, Inc., both publicly traded companies. 22 Table of Contents
Olsen began her career with IBM, where, between 1979 and 2010, she held a variety of executive management positions across sales, global financing and hardware. Ms. Olsen also serves on the boards of directors of Teradata Corporation and Keysight Technologies, Inc., both publicly traded companies. Mary G. Puma has served as a Director of Ciena since August 2023. Ms.
Its applications include long-haul and metro data center interconnection and general network modernization and simplification. It offers increased fiber capacity through automated C- and L-band deployments and provides highly dense, remote optical add/drop multiplexing and switching features that enable network operators to react to unpredictable traffic requirements by scaling connectivity and capacity.
It offers increased fiber capacity through automated C- and L-band deployments and provides highly dense, remote optical add/drop multiplexing and switching features that enable network operators to react to unpredictable traffic requirements by scaling connectivity and capacity.
Our current development efforts are focused on: • Reinforcing our coherent optical leadership with continued development that advances reach, transmission speed and spectral efficiency, including by leading in intelligent photonics; • Executing on parallel innovation paths for our next generation modem technology, including expanding our WaveLogic 5n offerings; • Delivering on our Adaptive IP approach and extending the IP/routing capabilities and use cases of our Routing and Switching solutions to support mobile network cross-haul, edge cloud, and network densification and virtualization initiatives, such as 5G, fiber-based access networks, and residential access; • Pursuing development to address different consumption models, including our module, pluggable, component, disaggregated IP NOS and VNF development initiatives; • Enhancing our Adaptive Network vision through advances in hardware programmability and software-based domain control, automation and analytics through MCP and purpose-built applications; • Advancing our software-led transformation strategy and product development for our Blue Planet Automation Software to enable generation OSS transformation and closed loop automation • Developing products that enhance security and minimize the risk to our customers networks from cyberattacks; and • Delivering products that minimize the lifecycle climate impacts of our customers’ networks and support their sustainability goals.
Our current development efforts are focused on: • Reinforcing our coherent optical leadership with continued development that advances reach, transmission speed, spectral efficiency, power-per-bit, and service automation and assurance; • Executing on parallel innovation paths for our next generation modem technology, including introducing our WaveLogic6 Extreme and WaveLogic6 Nano offerings; • Delivering on our Adaptive IP approach and extending the IP/routing capabilities and use cases of our Routing and Switching solutions to include converged metro core routing and support for mobile network 5G routing and cross-haul, enterprise edge, and fiber-based access networks for enterprise and residential access service delivery; • Extending capacity of our fiber-based broadband access technologies and solutions; • Pursuing development to address different consumption models, including our module, pluggable, and component development initiatives; • Enhancing our Adaptive Network vision through advances in hardware programmability and software-based domain control, automation and analytics through MCP and purpose-built applications; • Advancing our software-led transformation strategy and product development for our Blue Planet Automation Software to enable generation OSS transformation and closed loop automation; • Developing products that enhance security and reduce risk to our customers’ networks from cyber attacks; and • Delivering products that minimize the lifecycle climate impacts of our customers’ networks and support their sustainability goals.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeGenerally, competition in our markets is based on any one or a combination of the following factors: • functionality, speed, capacity, scalability, performance, quality and reliability of solutions; • the ability to meet customer business needs and drive successful outcomes; • price for performance, cost per bit and total cost of ownership of solutions; • incumbency and strength of existing business relationships; • ability to offer comprehensive networking solutions, consisting of hardware, software and services; • time-to-market in delivering products and features; • technology roadmap and forward innovation capacity and ability to deliver on network innovation; • company stability and financial health; • ability to supply and product delivery lead times; • flexibility and openness of platforms, including ease of integration, interoperability and integrated management; • ability to offer solutions that accommodate a range of emerging customer consumption models for network solutions; • operating costs, space requirements and power consumption of network solutions; • software and network automation and analytics capabilities; and • services and support capabilities.
Biggest changeGenerally, competition in our markets is based on any one or a combination of the following factors: • functionality, speed, capacity, scalability and performance of network solutions; • the ability to meet business needs and drive successful outcomes; • price for performance, cost per bit and total cost of ownership of network solutions; • incumbency and strength of existing business relationships; • technology roadmap and forward innovation capacity, including the ability to invest significant sums in research and development; • time-to-market in delivering products and features; • company stability and financial health; • ability to offer comprehensive networking solutions, consisting of hardware, software and services; • flexibility and openness of platforms, including ease of integration, interoperability and integrated management; • ability to offer solutions that accommodate a range of different consumption models; • operating costs and total cost of ownership; • software and network automation capabilities; • ability to manage challenging supply chain environments, including manufacturing and lead-time capability; • services and support capabilities; • security of enterprise, product development, support processes, and products; • space requirements and power consumption of network solutions; and • ability to offer solutions that help customers manage the lifecycle impacts of their networks and achieve their climate sustainability goals.
For example, communications service providers continue to face a rapidly shifting competitive landscape as cloud service operators, OTT providers, and other content providers challenge their traditional business models and network infrastructures. These dynamics have in the past had an adverse effect on network spending levels by certain of our largest service provider customers.
For example, communications service providers continue to face a rapidly shifting competitive landscape as cloud service operators, OTT providers, and other content providers continue to challenge their traditional business models and network infrastructures. These dynamics have in the past had an adverse effect on network spending levels by certain of our largest service provider customers.
We have recently launched, or are in the process of launching, a number of new hardware and software offerings, including evolutions of our WaveLogic coherent optical modem technology and new Routing and Switching platforms and solutions targeting edge, access and aggregation networks. Unanticipated product performance problems can relate to the design, manufacturing, installation, operation and interoperability of our products.
We have recently launched, or are in the process of launching, a number of new hardware and software offerings, including new evolutions of our WaveLogic coherent optical modem technology and new Routing and Switching platforms and solutions targeting edge, access and aggregation networks. Unanticipated product performance problems can relate to the design, manufacturing, installation, operation and interoperability of our products.
Our policies and procedures to promote compliance with these laws and regulations and to mitigate these risks may not protect us from all acts committed by our employees or third-party vendors, including contractors, agents and services partners or the misinterpretation or changing application of such laws.
Our policies and procedures to promote compliance with these laws and regulations and to mitigate these risks may not protect us from all acts committed by our employees or third-party vendors, including contractors, agents and services partners or from the misinterpretation or changing application of such laws.
These claims, if successful, could require us to: • pay substantial damages or royalties; • comply with an injunction or other court order that could prevent us from offering certain of our products; 36 Table of Contents • seek a license for the use of certain intellectual property, which may not be available on commercially reasonable terms or at all; • develop non-infringing technology, which could require significant effort and expense and ultimately may not be successful; and • indemnify our customers or other third parties pursuant to contractual obligations to hold them harmless or pay expenses or damages on their behalf.
These claims, if successful, could require us to: • pay substantial damages or royalties; • comply with an injunction or other court order that could prevent us from offering certain of our products; • seek a license for the use of certain intellectual property, which may not be available on commercially reasonable terms or at all; 36 Table of Contents • develop non-infringing technology, which could require significant effort and expense and ultimately may not be successful; and • indemnify our customers or other third parties pursuant to contractual obligations to hold them harmless or pay expenses or damages on their behalf.
The impact of the COVID-19 pandemic has resulted in higher employee costs, increased attrition and significant shifts in the labor market and employee expectations. We may experience difficulty retaining and motivating existing employees and attracting qualified personnel to fill key positions. In addition, labor shortages and employee mobility may make it more difficult to hire and retain employees.
The lasting impact of the COVID-19 pandemic has resulted in higher employee costs, increased attrition, and significant shifts in the labor market and employee expectations. We may experience difficulty retaining and motivating existing employees and attracting qualified personnel to fill key positions. In addition, labor shortages and employee mobility may make it more difficult to hire and retain employees.
Changes in trade policy, including the imposition of tariffs, increased export control and investment restrictions, and efforts to withdraw from or materially modify international trade agreements, as well as other regulatory efforts impacting the import and sale of foreign equipment, may adversely affect our business, operations and financial condition.
Changes in trade policy, including the imposition of tariffs and other import measures, increased export control and investment restrictions, and efforts to withdraw from or materially modify international trade agreements, as well as other regulatory efforts impacting the import and sale of foreign equipment, may adversely affect our business, operations and financial condition.
If the market for these software solutions does not evolve in the way we anticipate or if customers do not adopt our Blue Planet Automation Software and Services, a key part of our strategy for growth would be adversely affected and our financial results may suffer.
If the market for these software solutions does not evolve in the way we anticipate or if customers do not adopt our Blue Planet Automation Software and Services, a part of our strategy for growth would be adversely affected and our financial results may suffer.
In addition, if customers were to cancel existing or forecasted orders for which we have significant outstanding commitments to our contract manufacturers or suppliers, we may be required to purchase inventory under these commitments that we are unable to sell.
In addition, if customers were to cancel or delay existing or forecasted orders for which we have significant outstanding commitments to our contract manufacturers or suppliers, we may be required to purchase inventory under these commitments that we are unable to sell.
Strategic transactions can involve numerous additional risks, including: • failure to consummate or delay in consummating such transactions; • failure to achieve the anticipated transaction benefits or the projected financial results and operational synergies; • greater than expected acquisition and integration costs; • disruption due to the integration and rationalization of operations, products, technologies and personnel; • diversion of management attention; • difficulty completing projects of the acquired company and costs related to in-process projects; • difficulty managing customer transitions or entering into new markets; • the loss of key employees; • disruption or termination of business relationships with customers, suppliers, vendors, landlords, licensors and other business partners; • ineffective internal controls over financial reporting; • dependence on unfamiliar suppliers or manufacturers; • assumption of or exposure to unanticipated liabilities, including intellectual property infringement or other legal claims; and • adverse tax or accounting impact.
Strategic transactions can involve numerous additional risks, including: • failure to consummate or delay in consummating such transactions; • failure to achieve the anticipated transaction benefits or the projected financial results and operational synergies; • greater than expected acquisition and integration costs; • disruption due to the integration and rationalization of operations, products, technologies and personnel; • diversion of management attention; • difficulty completing projects of the acquired company and costs related to in-process projects; • difficulty managing customer transitions or entering into new markets; • the loss of key employees; • disruption or termination of business relationships with customers, suppliers, vendors, landlords, licensors and other business partners; 29 Table of Contents • ineffective internal controls over financial reporting; • dependence on unfamiliar suppliers or manufacturers; • assumption of or exposure to unanticipated liabilities, including intellectual property infringement or other legal claims; and • adverse tax or accounting impact.
As these changes occur, we expect that our business will compete more directly with additional networking 25 Table of Contents solution suppliers, including IP router vendors and other suppliers or integrators of networking technology.
As these changes occur, we expect that our business will compete more directly with additional networking 25 Table of Contents solution suppliers, including IP router vendors, component vendors and other suppliers or integrators of networking technology.
We are also subject to the continuous examination of our income and other tax returns by the Internal Revenue Service and other tax authorities globally, and we have a number of such reviews underway at any time.
We are subject to the continuous examination of our income and other tax returns by the Internal Revenue Service and other tax authorities globally, and we have a number of such reviews underway at any time.
As a result of these factors and other conditions affecting our business and operating results, we believe that quarterly comparisons of our operating results are not necessarily a good indication of possible future performance.
As a result of these factors and other conditions affecting our business and operating results, we believe that quarterly comparisons of our operating results are not necessarily a good indication of future performance.
There are a number of significant technology trends or developments underway or emerging – including the IoT, autonomous vehicles, and advances in mobile communications such as the emergence of 5G – that have previously resulted in, and we believe will continue to result in, increased market demand for key raw materials or components upon which we rely.
There are a number of significant technology trends or developments underway or emerging – including the IoT, autonomous vehicles, and advances in mobile communications such as 5G technologies – that have previously resulted in, and we believe will continue to result in, increased market demand for key raw materials or components upon which we rely.
Our IT systems, and those of third-party IT providers or business partners, may also be vulnerable to damage or disruption caused by circumstances beyond our control, including catastrophic events, power anomalies or outages, natural disasters (including as a result of climate change), cyber-security related incidents, and computer system or network failures.
Our IT systems, and those of third-party IT providers or business partners, may also be vulnerable to damage or disruption caused by circumstances beyond our control, including catastrophic events, power anomalies or outages, natural disasters (including as a result of climate change), data security related incidents, and computer system or network failures.
These may include announcements by us or our competitors of financial results or changes in estimated financial results, technological innovations, the gain or loss of customers, or other strategic initiatives. Our common stock is also included in certain market indices, and any change in the composition of these indices to exclude our company would adversely affect our stock price.
These may include announcements by us or our competitors of financial results or changes in estimated financial results, technological innovations, the gain or loss of customers, or other strategic initiatives. Our common stock is also included in certain market indices, and any change in the composition of these indices to exclude our company could adversely affect our stock price.
As network operators seek to enhance programmability and automation of networks, we expect that we and other communications networking solutions vendors will increasingly contribute to and use technology or open source software developed by standards settings bodies or other industry forums that seek to promote the integration of network layers and functions.
As network operators seek to enhance programmability and automation of networks, we expect that we and other communications networking solutions vendors will increasingly contribute to and use technology or open source software developed by standards setting bodies or other industry forums that seek to promote the integration of network layers and functions.
While these types of incidents to which we have been subjected have not had a material effect on our business or our network security to date, future incidents could compromise confidential or otherwise protected information, destroy or corrupt data, or otherwise disrupt our operations or impact our customers or other stakeholders.
While these types of incidents to which we have been subjected have not had a material effect on our business, technology, operations or our network security to date, future data security incidents could compromise material confidential or otherwise protected information, seize, destroy or corrupt data, or otherwise disrupt our operations or impact our customers or other stakeholders.
Many of our largest customers, including service providers and cable and multiservice network operators, are subject to the rules and regulations of these agencies, while others participate in and benefit from government-funded programs that encourage the development of network infrastructures.
Many of our largest customers, including service providers and cable and multiservice network operators, are subject to the rules and regulations of these agencies, while others participate in and benefit from government-funded programs that encourage the deployment of network infrastructures.
Among our customers, AT&T, certain Web-scale providers and others are pursuing network strategies that emphasize enhanced software programmability, management and control of networks, and deployment of “white box” hardware. A number of network operators are pursuing the deployment of smaller form factor, pluggable modem technology, particularly within switching and routing solutions, as an alternative to integrated optical networking platforms.
Among our customers, AT&T, certain cloud providers and others are pursuing network strategies that emphasize enhanced software programmability, management and control of networks, and deployment of “white box” hardware. A number of network operators are pursuing the deployment of smaller form factor, pluggable modem technology, particularly within switching and routing solutions, as an alternative to integrated optical networking platforms.
A key part of our business strategy is to increase customer adoption of our Blue Planet Automation Software Platform.
A key part of our business strategy is to increase customer adoption of our Blue Planet Automation Software.
Department of Commerce imposed additional export control restrictions targeting the provision of, inter alia, certain semiconductors and related technology to China that could further disrupt supply chains that could adversely impact our business. In addition, the U.S.
Department of Commerce imposed additional export control restrictions targeting the provision of certain semiconductors and related technology to China that could further disrupt supply chains that could adversely impact our business. In addition, the U.S.
The loss of these customers or a significant reduction in their spending could have a material adverse effect on our business and results of operations. A significant portion of our revenue is concentrated among a small number of customers.
The loss of one or more of these customers or a significant reduction in their spending could have a material adverse effect on our business and results of operations. A significant portion of our revenue is concentrated among a small number of customers.
Such write-downs or write-offs could negatively affect our operating results for the period in which they occur, and, if large, could have a material adverse effect on our revenue and operating results. 28 Table of Contents We may be required to write down the value of certain significant assets, which would adversely affect our operating results.
Such write-downs or write-offs could negatively affect our operating results for the period in which they occur, and, if large, could have a material adverse effect on our revenue and operating results. We may be required to write down the value of certain significant assets, which would adversely affect our operating results.
Accordingly, our results for a particular quarter can be difficult to predict, and a range of factors including those set forth below can materially adversely affect quarterly revenue, gross margin and operating results: • changes in spending levels or network deployment plans by customers, particularly with respect to our service provider and Web-scale provider customers; • order timing and volume, including book to revenue orders; • the timing of revenue recognition on sales, particularly relating to large orders; • availability of components and manufacturing capacity; • shipment and delivery timing; • backlog levels; • the level of competition and pricing pressure in our industry; • the pace and impact of price erosion that we regularly encounter in our markets; • the impact of commercial concessions or unfavorable commercial terms required to maintain incumbency or secure new opportunities with key customers; • the mix of revenue by product segment, geography and customer in any particular quarter; • our level of success in achieving targeted cost reductions and improved efficiencies in our supply chain; • our incurrence of start-up costs, including lower margin phases of projects required to support initial deployments, gain new customers or enter new markets; • our level of success in accessing new markets and obtaining new customers; • long- and short-term changing behaviors or customer needs that impact demand for our products and services or the products and services of our customers; • technology-based price compression and our introduction of new platforms with improved price for performance; • changing market, economic and political conditions, including the impact of tariffs and other trade restrictions or efforts to withdraw from or materially modify international trade agreements; • factors beyond our control such as natural disasters, climate change, acts of war or terrorism, and public health emergencies, such as the COVID-19 pandemic; • the financial stability of our customers and suppliers; • consolidation activity among our customers, suppliers and competitors; • installation service availability and readiness of customer sites; • adverse impact of foreign exchange; and • seasonal effects in our business.
These dynamics, as well as a range of factors, including those set forth below, can materially adversely affect quarterly revenue, gross margin, and operating results: • changes in spending levels or network deployment plans by customers, particularly with respect to our service provider and cloud provider customers; • order timing and volume, including book to revenue orders; • the timing of revenue recognition on sales, particularly relating to large orders; • availability of components and manufacturing capacity; • shipment and delivery timing, including any deferral of delivery; • backlog levels; • the level of competition and pricing pressure in our industry; • the pace and impact of price erosion that we regularly encounter in our markets; • the impact of commercial concessions or unfavorable commercial terms required to maintain incumbency or secure new opportunities with key customers; • the mix of revenue by product segment, geography, and customer in any particular quarter; • our level of success in achieving targeted cost reductions and improved efficiencies in our supply chain; • our incurrence of start-up costs, including lower margin phases of projects required to support initial deployments, gain new customers or enter new markets; • our level of success in accessing new markets and obtaining new customers; • long- and short-term changing behaviors or customer needs that impact demand for our products and services or the products and services of our customers; • technology-based price compression and our introduction of new platforms with improved price for performance; 23 Table of Contents • changing market, economic, and political conditions, including the impact of tariffs and other trade restrictions or efforts to withdraw from or materially modify international trade agreements; • factors beyond our control such as natural disasters, climate change, acts of war or terrorism, and public health emergencies, such as the COVID-19 pandemic; • the financial stability of our customers and suppliers; • consolidation activity among our customers, suppliers, and competitors; • installation service availability and readiness of customer sites; • adverse impact of foreign exchange; and • seasonal effects in our business.
Although this decision did not materially impact our results of operations for fiscal 2022 due to the limited amount of business that we conducted in Russia historically, it is not possible to predict the broader or longer-term consequences of this conflict, which could include further sanctions, embargoes, regional instability, geopolitical shifts and adverse effects on macroeconomic conditions, security conditions, currency exchange rates and financial markets.
Although this decision did not materially impact our results of operations for fiscal 2022 or 2023 due to the limited amount of business that we conducted in Russia historically, it is not possible to predict the broader or longer-term consequences of this conflict, which could include further sanctions, export control and import restrictions, embargoes, regional instability, geopolitical shifts and adverse effects on macroeconomic conditions, security conditions, currency exchange rates and financial markets.
Web-scale customers have been important contributors to our revenue through both our direct sales to them, including for data center interconnection, and their indirect impact on purchases by other network operators. Consequently, our financial results and our ability to grow our business are closely correlated with the spending of a relatively small number of customers.
Cloud provider customers have been important contributors to our revenue through both our direct sales to them, including for data center interconnection, and their indirect impact on purchases by other network operators. Consequently, our financial results and our ability to grow our business are closely correlated with the spending of a relatively small number of customers.
If the markets relating to software solutions for network automation, including service orchestration, route optimization, analytics and assurance, and SDN or NFV, do not develop as we anticipate, or if we are unable to commercialize, increase market awareness and gain adoption of our Blue Planet Automation Software and Services within those markets, revenue from our Blue Planet Automation Software and Services may not grow.
If the markets relating to software solutions for network automation, including service orchestration, route optimization, analytics and assurance, and multi-cloud orchestration, do not develop as we anticipate, or if we are unable to commercialize, increase market awareness and gain adoption of our Blue Planet Automation Software and Services within those markets, revenue from our Blue Planet Automation Software and Services may not grow.
Department of Justice announced that it would commence an antitrust review into significant online technology platforms, and in September 2019, various state attorneys general announced antitrust investigations involving certain technology companies. In addition, certain committees of the U.S.
Department of Justice announced that it would commence an antitrust review into significant 39 Table of Contents online technology platforms, and in September 2019, various state attorneys general announced antitrust investigations involving certain technology companies. In addition, certain committees of the U.S.
It is possible that tax authorities may 40 Table of Contents disagree with certain positions we have taken and an adverse outcome of such a review or audit could have a negative effect on our financial position and operating results.
It is possible that tax authorities may disagree with certain positions we have taken, and an adverse outcome of such a review or audit could have a negative effect on our financial position and operating results.
In addition, Web-scale providers tend to operate on shorter procurement cycles than some of our traditional customers, which can require us to compete to re-win business with these customers more frequently than required with other customers segments.
In addition, cloud providers tend to operate on shorter procurement cycles than some of our traditional customers, which can require us to compete to re-win business with these customers more frequently than required with other customers segments.
Difficulty obtaining and maintaining technology licenses with third parties may disrupt development of our products, increase our costs and adversely affect our business. Data security breaches and cyber-attacks could compromise our intellectual property or other sensitive information and cause significant damage to our business, reputation and operational capacity.
Difficulty obtaining and maintaining technology licenses with third parties may disrupt development of our products, increase our costs and adversely affect our business. Data security breaches and cyber-attacks targeting our enterprise technology environment and assets could compromise our intellectual property, technology or other sensitive information and cause significant damage to our business, reputation and operational capacity.
Our international sales and operations are subject to inherent risks, including: • adverse social, political and economic conditions, such as continued inflation and rising interest rates; • effects of adverse changes in currency exchange rates; • greater difficulty in collecting accounts receivable and longer collection periods; • difficulty and cost of staffing and managing foreign operations; • higher incidence of corruption or unethical business practices; • less protection for intellectual property rights in some countries; • tax and customs changes that adversely impact our global sourcing strategy, manufacturing practices, transfer-pricing, or competitiveness of our products for global sales; • compliance with certain testing, homologation or customization of products to conform to local standards; • significant changes to free trade agreements, trade protection measures, tariffs, export compliance, domestic preference procurement requirements, qualification to transact business and additional regulatory requirements; • natural disasters (including as a result of climate change), acts of war or terrorism, and public health emergencies, including the COVID-19 pandemic; and • uncertain economic, legal and political conditions in Europe, Asia and other regions where we do business, including, for example, as a result of the ongoing military conflict between Russia and Ukraine and changes in China-Taiwan and U.S.-China relations.
Our international sales and operations are subject to inherent risks, including: • adverse social, political and economic conditions, such as continued inflation and rising interest rates; • effects of adverse changes in currency exchange rates; • greater difficulty in collecting accounts receivable and longer collection periods; • difficulty and cost of staffing and managing foreign operations; • higher incidence and risk of corruption or unethical business practices; • less protection for intellectual property rights in some countries; • tax and customs changes that adversely impact our global sourcing strategy, manufacturing practices, transfer-pricing, or competitiveness of our products for global sales; • compliance with certain testing, homologation or customization of products to conform to local standards; • significant changes to free trade agreements, trade protection measures, tariffs and other import measures, export compliance, economic sanctions measures, domestic preference procurement requirements, qualification to transact business and additional regulatory requirements; • natural disasters (including as a result of climate change), acts of war or terrorism, and public health emergencies, including the COVID-19 pandemic; and • uncertain economic, legal and political conditions in Europe, Asia and other regions where we do business, including, for example, as a result of continued impacts of Brexit on the relationship between the United Kingdom and Europe, the ongoing military conflicts between Russia and Ukraine and Israel and Hamas, and changes in China-Taiwan and U.S.-China relations.
Department of Commerce has expanded the scope of the EAR by amending the foreign direct product rule, resulting in more products made outside the United States becoming subject to the EAR for purposes of exports or transfers to certain countries and/or parties, which increases compliance risks and licensing obligations for companies dealing with such p roducts.
Department of Commerce has expanded the scope of the EAR by amending the foreign direct product rule, resulting in more products made outside the United States becoming subject to the EAR for purposes of exports or transfers to certain 33 Table of Contents countries and/or parties, which increases compliance risks and licensing obligations for companies dealing with such products .
Several of our third-party component suppliers, including certain sole and limited source suppliers, sell products to Huawei and, 33 Table of Contents in some cases, Huawei is a significant customer for such suppliers.
Several of our third-party component suppliers, including certain sole and limited source suppliers, sell products to Huawei and, in some cases, Huawei is a significant customer for such suppliers.
Product performance, reliability, security and quality problems may result in some or all of the following effects: • damage to our reputation, declining sales and order cancellations; • increased costs to remediate defects or replace products; • payment of liquidated damages, contractual or similar penalties, or other claims for performance failures or delays; • increased warranty expense or estimates resulting from higher failure rates, additional field service obligations or other rework costs related to defects; • higher charges for increased inventory obsolescence; • costs, liabilities and claims that may not be covered by insurance coverage or recoverable from third parties; and • delays in recognizing revenue or collecting accounts receivable.
Product performance, reliability, security and quality problems may result in some or all of the following effects: • damage to our reputation, declining sales and order cancellations; • increased costs to remediate defects or replace products; • payment of liquidated damages, contractual or similar penalties, or other claims for performance failures or delays; • increased warranty expense or estimates resulting from higher failure rates, additional field service obligations or other rework costs related to defects; • higher charges for increased inventory obsolescence; • disruption to the operation of our network operator customers; • reporting and other publication to customers or regulatory bodies; • costs, liabilities and claims that may not be covered by insurance coverage or recoverable from third parties; and • delays in recognizing revenue or collecting accounts receivable.
In recent years, a significant portion of our quarterly revenue was generated from customer orders received during that same quarter (which we refer to as “book to revenue”) and therefore less predictable and subject to fluctuation due to a quarterly shortfall in orders.
Historically, a significant portion of our quarterly revenue was generated from customer orders received during that same quarter (which we refer to as “book to revenue”) and was therefore less predictable and subject to fluctuation due to a quarterly shortfall in orders from expectations.
Separately, certain of our Web-scale customers have been the subject of regulatory and other government actions, including inquiries and investigations, formal or informal, by competition authorities in the United States, Europe and other jurisdictions. In July 2019, the U.S.
Separately, certain of our cloud provider customers have been the subject of regulatory and other government actions, including inquiries and investigations, formal or informal, by competition authorities in the United States, Europe and other jurisdictions. In July 2019, the U.S.
We have accessed the capital markets in the past and have successfully raised funds, including through the issuance of equity, convertible notes and other indebtedness, to increase our cash position, support our operations and undertake strategic growth initiatives.
The operation of our business requires significant capital. We have accessed the capital markets in the past and have successfully raised funds, including through the issuance of equity, convertible notes and other indebtedness, to increase our cash position, support our operations and undertake strategic growth initiatives.
As a result of efforts in recent years to diversify our business, the customer segments and geographies that comprise our customer base and top customers by revenue have changed. During fiscal 2022, four Web-scale providers were among our top ten customers.
As a result of efforts in recent years to diversify our business, the customer segments and geographies that comprise our customer base and top customers by revenue have changed. During fiscal 2023, four cloud providers were among our top ten customers.
Our inability to effectively manage the matching of inventory with customer demand within the current environment could adversely impact our results of operations and financial condition, and could result in loss of revenue, increased costs, or delays that could adversely impact customer satisfaction.
Our inability to effectively manage the matching of inventory with customer demand, particularly within any supply constrained environment, could adversely impact our results of operations and financial condition, and could result in loss of revenue, increased costs, or delays that could adversely impact customer satisfaction.
As a result, undetected defects or errors, and product quality, interoperability, reliability and performance problems are often more acu te for initial deployments of new products and product enhancements.
As a result, undetected defects or errors, and product quality, interoperability, reliability, security and performance problems are often more acute for initial deployments of new products and product enhancements.
There is no assurance that we will be able to secure the components or subsystems that we require, in sufficient quantity and quality, and on reasonable terms.
There is no assurance that we will be able to secure the components or subsystems that we require, in sufficient quantity and quality, within our preferred timelines and on reasonable terms.
We have been subjected in the past, and expect to be subjected in the future, to a range of incidents including phishing, emails purporting to come from a company executive or vendor seeking payment requests, malware, and communications from look-alike corporate domains, as well as 37 Table of Contents security-related risks created by the use of third-party software and services.
We have been subjected in the past, and expect to be subjected in the future, to a range of incidents including phishing, emails purporting to come from a company executive or vendor seeking payment requests, malware, and communications from look-alike corporate domains, as well as security-related risks created by malicious internal actors internally and our use of third-party software and services.
In recent years, the U.S. government has indicated a willingness to revise, renegotiate, or terminate various existing multilateral trade agreements and to impose new taxes and restrictions on certain goods imported into the U.S.
From time to time, the U.S. government has indicated a willingness to revise, renegotiate, or terminate various existing multilateral trade agreements and to impose new taxes and restrictions on certain goods imported into the U.S.
In May 2020, the U.S. introduced significant further restrictions limiting access to controlled U.S. technology to additional Chinese government and commercial entities, including certain of our competitors based in China. In August 2020, the U.S.
In May 2020, the U.S. introduced significant further restrictions limiting access to controlled U.S. technology to additional Chinese government and commercial entities, including certain of our competitors based in China. More recently, in October 2022, the U.S.
In the face of extraordinary demand across a range of industries, the global supply market for certain raw materials and components, including, in particular, semiconductor, integrated circuits and other electronic components used in most of our products, has experienced significant constraint and disruption in recent periods.
In the face of demand across a range of industries, global supply for certain raw materials and components, including, in particular, semiconductor, integrated circuits, and other electronic components used in most of our products, experienced substantial constraint and disruption in recent prior periods.
There are a number of risks associated with our dependence on contract manufacturers, including: • reduced control over delivery schedules and planning; • reliance on the quality assurance procedures of third parties; • potential uncertainty regarding manufacturing yields and costs; • availability of manufacturing capability and capacity, particularly during periods of high demand; 32 Table of Contents • risks and uncertainties associated with the locations or countries where our products are manufactured, including potential manufacturing disruptions caused by social, geopolitical, environmental or health factors, including pandemics or widespread health epidemics such as the COVID-19 pandemic; • risks associated with data security breaches, interdiction or cyber-attacks targeting our third-party manufacturers, including manufacturing disruptions or unauthorized access to information; • changes in law or policy governing tax, trade, manufacturing, development and investment in the countries where we currently manufacture our products, including the World Trade Organization Information Technology Agreement or other free trade agreements; • inventory liability for excess and obsolete supply; • limited warranties provided to us; and • potential misappropriation of our intellectual property.
There are a number of risks associated with our dependence on contract manufacturers, including: • reduced control over delivery schedules and planning; • reliance on the quality assurance procedures of third parties; 32 Table of Contents • potential uncertainty regarding manufacturing yields and costs; • availability of manufacturing capability and capacity, particularly during periods of high demand; • the impact of wage inflation and labor shortages on cost; • the impact of supply chain constraints on our contract manufacturers’ costs and business models; • risks associated with the ability of our contract manufacturers to perform to our manufacturing needs; • risks and uncertainties associated with the locations or countries where our products are manufactured, including manufacturing disruptions caused by social, geopolitical, environmental, or health factors, such as the COVID-19 pandemic; • risks associated with data security incidents, including disruptions, interdiction, or cyber-attacks targeting or affecting our third-party manufacturers, including manufacturing disruptions or unauthorized access to or acquisition of information; • changes in law or policy governing tax, trade, manufacturing, development, and investment in the countries where we currently manufacture our products, including the World Trade Organization Information Technology Agreement or other free trade agreements; • inventory liability for excess and obsolete supply; • limited warranties provided to us; and • potential misappropriation of our intellectual property.
During fiscal 2022, delays and lower-than-expected deliveries from a small group of our suppliers of integrated circuit components that are essential for delivering finished products had a disproportionate, adverse impact on our results of operations.
In recent periods, delays and lower-than-expected deliveries from a small group of our suppliers of integrated circuit components that are essential for delivering finished products had a disproportionate, adverse impact on our results of operations.
We have a number of significant assets on our balance sheet as of October 29, 2022, the value of which can be adversely impacted by factors related to our business and operating performance, as well as factors outside of our control. As of October 29, 2022, our balance sheet includes a $824.0 million net deferred tax asset.
We have a number of significant assets on our balance sheet as of October 28, 2023, the value of which can be adversely impacted by factors related to our business and operating performance, as well as factors outside of our control. As of October 28, 2023, our balance sheet includes a $809.3 million net deferred tax asset.
Such geopolitical instability and uncertainty could have a negative impact on our ability to sell to, ship products to, collect payments from, and support customers in certain countries and regions based on trade restrictions, sanctions, embargoes and export control law restrictions, and logistics restrictions including closures of air space, and could increase the costs, risks and adverse impacts from supply chain and logistics challenges. 31 Table of Contents The success of our international sales and operations will depend, in large part, on our ability to anticipate and manage these risks effectively.
Such geopolitical instability and uncertainty could have a negative impact on our ability to sell to, ship products to, collect payments from, and support customers in certain countries and regions based on trade restrictions, sanctions, embargoes and export control law restrictions, and 31 Table of Contents logistics restrictions including closures of air space, and could increase the costs, risks and adverse impacts from supply chain and logistics challenges.
We may also face competition from system and component vendors, including those in our supply chain, that develop networking products based on off-the-shelf or commoditized hardware technology, referred to as “white box” hardware.
We may also face competition from system and component vendors, including those in our supply chain, that develop networking products based on off-the-shelf or commoditized hardware technology, referred to as “white box” hardware, and as we pursue additional methods to bring the enabling technologies in our networking platforms to market.
We have a limited history in commercializing and selling these software solutions and have only recently acquired certain elements of our Blue Planet portfolio. Moreover, the market and competitive landscape for these solutions is dynamic, and it is difficult to predict important trends, including the potential growth, if any, of this market.
We have a limited history in commercializing and selling these software solutions and we continue to build out the capability of our Blue Planet portfolio. Moreover, the market and competitive landscape for these solutions is dynamic, and it is difficult to predict important trends, including the potential growth, if any, of this market.
During fiscal 2022, our closing stock price ranged from a high of $77.60 per share to a low of $39.16 per share. The stock market has experienced significant price and volume fluctuation that has affected the market price of many technology companies, with such volatility often unrelated to the operating performance of these companies.
From fiscal 2020 through fiscal 2023, our closing stock price ranged from a high of $77.60 per share to a low of $34.50 per share. The stock market has experienced significant price and volume fluctuation that has affected the market price of many technology companies, with such volatility often unrelated to the operating performance of these companies.
China has retaliated by raising tariffs, and imposing new tariffs, on certain exports of U.S. goods to China, as well as introducing blocking measures to restrict the ability of domestic companies to comply with U.S. trade restrictions.
China has retaliated by raising tariffs, and imposing new tariffs, on certain exports of U.S. goods to China, as well as introducing blocking measures to restrict the ability of domestic companies to comply with U.S. trade restrictions and could take further steps to retaliate against U.S. industries or companies.
For example, our ten largest customers contributed 56.3% of our revenue for fiscal 2022 and 55.5% of our revenue for fiscal 2021. Historically, our largest customers by revenue have principally consisted of large communications service providers.
For example, our ten largest customers contributed 53.7% of our revenue for fiscal 2023 and 56.3% of our revenue for fiscal 2022. Historically, our largest customers by revenue have principally consisted of large communications service providers.
Our indebtedness could have important negative consequences, including: • increasing our vulnerability to adverse economic and industry conditions; • limiting our ability to obtain additional financing, particularly in unfavorable capital and credit market conditions; • debt service and repayment obligations that may adversely impact our results of operations and reduce the availability of cash resources for other business purposes; • limiting our flexibility in planning for, or reacting to, changes in our business and the markets; and • placing us at a possible competitive disadvantage to competitors that have better access to capital resources. 41 Table of Contents We may also enter into additional debt transactions or credit facilities, including equipment loans, working capital lines of credit, senior notes and other long-term debt, which may increase our indebtedness and result in additional restrictions on our business.
Our indebtedness could have important negative consequences, including: 41 Table of Contents • increasing our vulnerability to adverse economic and industry conditions; • limiting our ability to obtain additional financing, particularly in unfavorable capital and credit market conditions; • debt service and repayment obligations that may adversely impact our results of operations and reduce the availability of cash resources for other business purposes; • limiting our flexibility in planning for, or reacting to, changes in our business and the markets; and • placing us at a possible competitive disadvantage to competitors that have better access to capital resources.
We are a party to credit agreements relating to a $300.0 million senior secured asset-based revolving credit facility, an outstanding senior secured term loan with approximately $675.7 million due 2025 and an outstanding senior unsecured indenture pursuant to which we issued $400.0 million in aggregate principal amount of 4.00% senior notes due 2030 (the “2030 Notes”).
We are a party to credit agreements relating to a $300.0 million senior secured revolving credit facility, an outstanding senior secured term loan with approximately $1.2 billion due 2030, and an outstanding senior unsecured indenture pursuant to which we issued $400.0 million in aggregate principal amount of 4.00% senior notes due 2030.
The current supply chain challenges could also impact customer satisfaction or future business opportunities with customers, and result in increased use of cash, engineering design changes, and delays in new product introductions, each of which could adversely impact our business and financial results.
Supply chain challenges could also impact customer satisfaction or future business opportunities with customers, and result in increased use of cash, engineering design changes, and delays in new product introductions, each of which could adversely impact our business and financial results. A small number of customers account for a significant portion of our revenue.
In some cases, it is difficult to anticipate or to detect immediately such incidents and the damage caused thereby.
In some cases, it is difficult to anticipate, detect or identify indicators of such incidents and assess the damage caused thereby.
As of October 29, 2022, our balance sheet also includes $427.2 million in long-lived assets, which includes $69.5 million of intangible assets. Valuation of our long-lived assets requires us to make assumptions about future sales prices and sales volumes for our products. These assumptions are used to forecast future, undiscounted cash flows on which our estimates are based.
As of October 28, 2023, our balance sheet also includes $575.0 million in long-lived assets, which includes $205.6 million of intangible assets. Valuation of our long-lived assets requires us to make assumptions about future sales prices and sales volumes for our products. These assumptions are used to forecast future, undiscounted cash flows on which our estimates are based.
The development and production of sophisticated hardware and software for communications network equipment is highly complex. Some of our products can be fully tested only when deployed in communications networks or when carrying traffic with other equipment, and software products may contain bugs that can interfere with expected performance.
Some of our products can be fully tested only when deployed in communications networks or when carrying traffic with other equipment, and software products may contain bugs that can interfere with expected performance.
As such, there is no assurance that our incumbency will be maintained at any given customer or that our revenue levels from a customer in a particular period can be achieved in future periods.
As such, there is no assurance that our incumbency will be maintained at any given customer or that our revenue levels from a customer in a particular period can be achieved in future periods. Customer spending levels can be unpredictable, and our sales to any customer could significantly decrease or cease at any time.
We are regularly introducing new products and enhancements and each step in their development cycle presents serious risks of failure, rework or delay, any one of which could adversely affect the cost-effectiveness and timely development of our products.
We are regularly introducing new products and enhancements and each step in their development cycle presents serious risks of failure, rework or delay, any one of which could adversely affect the cost-effectiveness and timely development of our products. Reworks, in particular, if required, can be a very expensive and time-consuming effort.
We have and continue to take a number of steps to mitigate the current supply chain challenges, including extending our purchase commitments and placing non-cancellable, advanced orders with or through suppliers, particularly for long lead time components. As of October 29, 2022 we had $2.6 billion in outstanding purchase order commitments to our contract manufacturers and component suppliers for inventory.
We took a number of steps to mitigate these challenges, including extending our purchase commitments and placing non-cancellable, advanced orders with or through suppliers, particularly for long lead-time components. As of October 28, 2023, we had $1.7 billion in outstanding purchase order commitments to our contract manufacturers and component suppliers for inventory.
Companies in the technology industry, and in particular in the telecommunications industry, have been increasingly subjected to a wide variety of security incidents, cyber-attacks and other attempts to gain unauthorized access to networks or sensitive information.
In addition, companies in the technology industry, and in particular, manufacturers of networking and communications products, have been increasingly subjected to a wide variety of data security incidents, including cyber-attacks and other attempts to gain unauthorized access to network asset, infrastructure or sensitive information.
Our products are used in customer networks transmitting a range of sensitive information, and any actual or perceived exposure of our solutions to malicious software or cyber-attacks could result in liability or regulatory action and adversely affect our business and results of operations.
Any actual or perceived exposure of our solutions to vulnerabilities, malicious software or cyber-attacks could result in liability or regulatory action and adversely affect our business and results of operations.
Visibility into customer spending levels can be uncertain, spending patterns are subject to change, and reductions in our expense levels can take significant time to implement.
Our budgeted expense levels are based on our visibility into customer spending plans and our projections of future revenue and gross margin. Visibility into customer spending levels can be uncertain, spending patterns are subject to change, and reductions in our expense levels can take significant time to implement.
We face an intense competitive market for sales of communications networking equipment, software and services. Competition is intense on a global basis, as we and our competitors aggressively seek to capture market share and displace incumbent equipment vendors.
Competition is intense on a global basis, as we and our competitors aggressively seek to capture market share and displace incumbent equipment vendors.
Our sales efforts, particularly with communications service providers, Web-scale providers and other large customers, often involve lengthy sales cycles. These selling efforts often involve a significant commitment of time and resources that may include extensive product testing, laboratory or network certification, network or region-specific product certification and homologation requirements for deployment in networks.
These selling efforts often involve a significant commitment of time and resources that may include extensive product testing, laboratory or network certification, network or region-specific product certification and homologation requirements for deployment in networks.
These and other consequences relating to undetected errors affecting the quality, reliability and security of our products could negatively affect our business and results of operations.
These and other consequences relating to undetected errors affecting the quality, reliability and security of our products could negatively affect our business and results of operations. Strategic acquisitions and investments could disrupt our operations and may expose us to increased costs and unexpected liabilities.
If an actual or perceived breach of security occurs in our network or any of our third-party providers’ networks, we could incur significant costs, our operations could be impacted, our customers and other stakeholders could be impacted, and our reputation could be harmed.
If an actual or perceived data security incident affects our network or any of our third-party providers’ networks, we could incur significant costs, our technology and operations could be impacted, our customers and other stakeholders could be impacted, our reputation could be harmed, and we may become involved in litigation, including with respect to allegations of breach of contract.
Citizenship and Immigration Services of regulatory requirements for H-1B, L-1 and other U.S. work visa categories, may also adversely affect our ability to hire or retain key talent, which could have an impact on our business operations. Risks Related to Intellectual Property, Litigation, Regulation and Government Policy Our intellectual property rights may be difficult and costly to enforce.
Changes in immigration policy, including the implementation of restrictive interpretations by the U.S. Citizenship and Immigration Services of regulatory requirements for H-1B, L-1 and other U.S. work visa categories, may also adversely affect our ability to hire or retain key talent, which could have an impact on our business operations.
Our business and results of operations could be materially adversely impacted by the loss of a large customer within or outside of these customer segments as well as by reductions in spending or capital expenditure budgets, changes in network deployment plans or changes in consumption models for acquiring networking solutions by our largest customers. 24 Table of Contents There have been significant horizontal and vertical consolidation activities by communications service providers and cable operators, with several such operators acquiring media and content companies.
Our business and results of operations could be materially adversely impacted by the loss of a large customer within or outside of these customer segments as well as by reductions in spending or capital expenditure budgets, changes in network deployment plans or changes in consumption models for acquiring networking solutions by our largest customers.
Quarterly fluctuations from the above factors may cause our revenue, gross margin and results of operations to underperform in relation to our guidance, long-term financial targets or the expectations of financial analysts or investors, which may cause volatility or decreases in our stock price. 23 Table of Contents Challenges relating to current supply chain constraints, including semiconductor components, could adversely impact our growth, gross margins and financial results.
Quarterly fluctuations from the above and other factors may cause our revenue, gross margin, and results of operations to underperform in relation to our guidance, long-term financial targets or the expectations of financial analysts or investors, which may cause volatility or decreases in our stock price.
As a result of this strategy, our inventory has increased from $374.3 million at the end of fiscal 2021 to $946.7 million at the end of fiscal 2022. These inventory practices, and their associated costs, have had, and can be expected to continue to have, an adverse impact on our cash from operations.
As a result of this strategy, our inventory increased from $374.3 27 Table of Contents million at the end of of fiscal 2021 to $1.1 billion at the end of fiscal 2023. These inventory practices and their associated costs, had in recent fiscal periods, and could in the future continue to have, an adverse impact on our cash from operations.
Losses associated with these hedging instruments and the adverse effect of foreign currency exchange rate fluctuation may negatively affect our results of operations. Risks Related to Our Operations and Reliance on Third Parties We may experience delays in the development and production of our products that may negatively affect our competitive position and business.
Risks Related to Our Operations and Reliance on Third Parties We may experience delays in the development and production of our products that may negatively affect our competitive position and business.
Due to our global presence, a portion of our revenue, operating expense and assets and liabilities are non-U.S. Dollar denominated and therefore subject to foreign currency fluctuation. We face exposure to currency exchange rates as a result of the growth in our non-U.S. Dollar denominated operating expense in Canada, Europe, Asia and Latin America.
We may be adversely affected by fluctuations in currency exchange rates. As a company with global operations, we face exposure to movements in foreign currency exchange rates. Due to our global presence, a portion of our revenue, operating expense and assets and liabilities are non-U.S. Dollar denominated and therefore subject to foreign currency fluctuation.
We generally rely on a combination of patents, copyrights, trademarks and trade secret laws to establish and maintain proprietary rights in our products and technology.
Risks Related to Intellectual Property, Litigation, Regulation and Government Policy Our intellectual property rights may be difficult and costly to enforce. We generally rely on a combination of patents, copyrights, trademarks and trade secret laws to establish and maintain proprietary rights in our products and technology.
Our network systems, devices, storage and other business applications, and the systems, storage and other business applications maintained by our third-party providers, have been in the past, and may be in the future, subjected to attempts to gain unauthorized access to our networks, devices, applications or information, malfeasance or other system disruptions.
Our network systems, devices, storage and other business applications, and the systems, storage and other business applications that we rely on and that are maintained by our third-party providers, have been in the past, and may be in the future, subjected to security incidents including attack, exploitation, intrusion, disruption and other malfeasance or attempts to gain unauthorized access or conduct other unauthorized activities.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition, we lease various smaller offices in the United States, Canada, Mexico, South America, Europe, the Middle East and the Asia Pacific region to support our sales and services operations. We believe the facilities we are now using are adequate and suitable for our business requirements. Hanover, Maryland Headquarters Lease .
Biggest changeWe believe the facilities we are now using are adequate and suitable for our business requirements. Hanover, Maryland Headquarters Lease .
We entered into an agreement dated November 3, 2011, with W2007 RDG Realty, L.L.C. relating to a 15-year lease of office space for our corporate headquarters in Hanover, Maryland, consisting of an agreed-upon rentable area of approximately 105,000 square feet. Ottawa Leases.
We entered into an agreement dated November 3, 2011, with W2007 RDG Realty, L.L.C. relating to a 15-year lease of office space for our corporate headquarters in Hanover, Maryland, consisting of an agreed-upon rentable area of approximately 88,000 square feet. Ottawa Leases.
Item 2. Properties Overview . As of October 29, 2022, all of our properties are leased, and we do not own any real property. We lease facilities globally related to the ongoing operations of our business segments and related functions. Our corporate headquarters are located in one building in Hanover, Maryland.
Item 2. Properties Overview . As of October 28, 2023, all of our properties are leased, and we do not own any real property. We lease facilities globally related to the ongoing operations of our business segments and related functions. Our corporate headquarters are located in one building in Hanover, Maryland.
Our largest facilities are our research and development centers located in Ottawa, Canada and Gurgaon, India. We also have engineering facilities located in San Jose, California; Alpharetta, Georgia; Quebec, Canada; and Pune and Bangalore, India.
Our largest facilities are our research and development centers located in Ottawa, Canada and Gurgaon, India. We also lease smaller engineering facilities in the United States, Canada, and Europe. In addition, we lease various smaller offices in regions throughout the world to support our sales and services operations.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeFinancial Statements and Supplementary Data 66 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 112 Item 9A. Controls and Procedures 113
Biggest changeFinancial Statements and Supplementary Data 65 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 112 Item 9A. Controls and Procedures 113 Item 9B. Other Information 113
Item 4. Mine Safety Disclosures 44 PART II Item 5. Market for Registrant’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities 45 Item 6. [Reserved] 46 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 47 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 65 Item 8.
Item 4. Mine Safety Disclosures 44 PART II Item 5. Market for Registrant’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities 45 Item 6. [Reserved] 46 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 47 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 64 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities The following table provides a summary of repurchases of our common stock during the fourth quarter of fiscal 2022: Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in Thousands) July 31, 2022 to August 27, 2022 154,247 $ 51.91 154,247 $ 500,000 August 28, 2022 to September 24, 2022 — $ — — $ 500,000 September 25, 2022 to October 29, 2022 — $ — — $ 500,000 Total 154,247 $ 51.91 154,247 (1) On December 9, 2021, we announced that our Board of Directors had authorized a program to repurchase up to $1.0 billion of our common stock, which replaced in its entirety our previous stock repurchase program.
Biggest changeIssuer Purchases of Equity Securities The following table provides a summary of repurchases of our common stock during the fourth quarter of fiscal 2023: Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in Thousands) July 30, 2023 to August 26, 2023 841,444 $ 41.59 841,444 $ 403,764 August 27, 2023 to September 23, 2023 1,147,400 $ 48.03 1,147,400 $ 348,650 September 24, 2023 to October 28, 2023 2,241,844 $ 44.00 2,241,844 $ 250,000 Total 4,230,688 $ 44.62 4,230,688 (1) On December 9, 2021, we announced that our Board of Directors had authorized a program to repurchase up to $1.0 billion of our common stock, which replaced in its entirety our previous stock repurchase program.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations- Liquidity and Capital Resources - Stock Repurchase Authorization” in Item 7 of Part II of this report and Notes 22 to our Consolidated Financial Statements included in Item 8 of Part II of this report for information regarding the stock repurchase programs authorized by our Board of Directors.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations– Liquidity and Capital Resources – Stock Repurchase Authorization” in Item 7 of Part II of this report and Note 22 to our Consolidated Financial Statements included in Item 8 of Part II of this report for information regarding the stock repurchase programs authorized by our Board of Directors.
This graph is not deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the graph shall not be deemed to be incorporated by reference into any prior or subsequent filing by us under the Securities Act of 1933, as amended, or the Exchange Act. 45 Table of Contents Assumes $100 invested in Ciena Corporation, the Russell 1000 and the S&P North American Technology-Multimedia Networking Index, respectively, on October 28, 2017 with all dividends reinvested at month-end.
This graph is not deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the graph shall not be deemed to be incorporated by reference into any prior or subsequent filing by us under the Securities Act of 1933, as amended, or the Exchange Act. 45 Table of Contents Assumes $100 invested in Ciena Corporation, the Russell 1000 and the S&P North American Technology-Multimedia Networking Index, respectively, on November 2, 2018 with all dividends reinvested at month-end.
Stock Performance Graph The following graph shows a comparison of cumulative total returns for an investment in our common stock, the S&P North American Technology-Multimedia Networking Index and the Russell 1000 from October 28, 2017 to October 29, 2022. The Russell 1000 index comprises the stocks representing the 1,000 largest publicly traded American companies as measured by market capitalization.
Stock Performance Graph The following graph shows a comparison of cumulative total returns for an investment in our common stock, the S&P North American Technology-Multimedia Networking Index and the Russell 1000 from November 2, 2018 to October 27, 2023. The Russell 1000 index comprises the stocks representing the 1,000 largest publicly traded American companies as measured by market capitalization.
Item 5. Market for Registrant’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities (a) Our common stock is traded on the New York Stock Exchange under the stock symbol “CIEN.” As of December 9, 2022, there were approximately 712 holders of record of our common stock and 148,415,009 shares of common stock outstanding.
Item 5. Market for Registrant’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities (a) Our common stock is traded on the New York Stock Exchange under the stock symbol “CIEN.” As of December 8, 2023, there were approximately 685 holders of record of our common stock and 144,830,337 shares of common stock outstanding.
During the fourth quarter of fiscal 2022, we repurchased $8.0 million of our common stock under the stock repurchase program, and we had $500.0 million remaining under the current repurchase authorization as of October 29, 2022.
The program may be modified, suspended, or discontinued at any time. During the fourth quarter of fiscal 2023, we repurchased $188.8 million of our common stock under the stock repurchase program, and we had $250.0 million remaining under the current repurchase authorization as of October 28, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

119 edited+32 added−42 removed70 unchanged
Biggest changeOperating Segment Revenue The table below sets forth the changes in our operating segment revenue for the periods indicated (in thousands, except percentage data): 50 Table of Contents Fiscal Year 2022 %* 2021 %* Increase (decrease) %** Revenue: Networking Platforms Converged Packet Optical $ 2,379,931 65.5 $ 2,553,509 70.5 $ (173,578) (6.8) Routing and Switching 398,439 11.0 271,796 7.5 126,643 46.6 Total Networking Platforms 2,778,370 76.5 2,825,305 78.0 (46,935) (1.7) Platform Software and Services 277,191 7.6 229,588 6.4 47,603 20.7 Blue Planet Automation Software and Services 76,567 2.1 77,247 2.1 (680) (0.9) Global Services Maintenance Support and Training 292,375 8.1 283,350 7.8 9,025 3.2 Installation and Deployment 157,443 4.3 171,489 4.7 (14,046) (8.2) Consulting and Network Design 50,715 1.4 33,705 1.0 17,010 50.5 Total Global Services 500,533 13.8 488,544 13.5 11,989 2.5 Consolidated revenue $ 3,632,661 100.0 $ 3,620,684 100.0 $ 11,977 0.3 _________________________________ * Denotes % of total revenue ** Denotes % change from 2021 to 2022 • Networking Platforms segment revenue decreased by $46.9 million, reflecting product line sales decreases of $173.6 million of our Converged Packet Optical products, offset by product line sales increases of $126.6 million of our Routing and Switching products.
Biggest changeThe table below sets forth the changes in our operating segment revenue for the periods indicated (in thousands, except percentage data): Fiscal Year 2023 %* 2022 %* Increase (decrease) %** Revenue: Networking Platforms Optical Networking $ 2,987,245 68.1 $ 2,379,931 65.5 $ 607,314 25.5 Routing and Switching 506,247 11.5 398,439 11.0 107,808 27.1 Total Networking Platforms 3,493,492 79.6 2,778,370 76.5 715,122 25.7 Platform Software and Services 303,873 6.9 277,191 7.6 26,682 9.6 Blue Planet Automation Software and Services 69,170 1.6 76,567 2.1 (7,397) (9.7) Global Services Maintenance Support and Training 288,334 6.6 292,375 8.1 (4,041) (1.4) Installation and Deployment 180,951 4.1 157,443 4.3 23,508 14.9 Consulting and Network Design 50,729 1.2 50,715 1.4 14 — Total Global Services 520,014 11.9 500,533 13.8 19,481 3.9 Consolidated revenue $ 4,386,549 100.0 $ 3,632,661 100.0 $ 753,888 20.8 _________________________________ * Denotes % of total revenue ** Denotes % change from 2022 to 2023 • Networking Platforms segment revenue increased by $715.1 million, reflecting product line sales increases of $607.3 million of our Optical Networking products and $107.8 million of our Routing and Switching products. ◦ Optical Networking sales increased, primarily reflecting sales increases of $374.3 million of our 6500 RLS products, primarily to cloud providers, and $131.3 million of our 6500 Packet-Optical Platform, primarily to communications service providers and enterprise customers, and a sales increase of $101.9 million of our Waveserver® modular interconnect system, primarily to cloud providers. ◦ Routing and Switching sales increased, primarily reflecting a sales increase of $81.1 million of our 3000 and 5000 families of service delivery and aggregation switches, including initial sales of our microplug OLT transceivers that are integrated in our aggregation switches or sold on a stand-alone basis, primarily to communications service providers, cable and multiservice operators and enterprise customers.
The allowances for credit losses are each measured by multiplying the exposure probability of default (the probability that asset will default within a given time frame) by the loss given default rate (the percentage of the asset not expected to be collected due to default) based on the pool of assets.
The allowances for credit losses are each measured by multiplying the exposure probability of default (the probability that the asset will default within a given time frame) by the loss given default rate (the percentage of the asset not expected to be collected due to default) based on the pool of assets.
Our portfolio is designed to enable the Adaptive Network, which is our vision for a network end state that leverages a programmable and scalable network infrastructure, driven by software control and automation capabilities, that are informed by analytics and intelligence.
Our portfolio is designed to enable the Adaptive Network, which is our vision for a network end state that leverages a programmable and scalable network infrastructure, driven by software control and automation capabilities, that is informed by analytics and intelligence.
As a result, we have experienced significant component shortages, extended lead times, increased costs, and unexpected cancellation or delay of previously committed supply of key components across our supplier base.
As a result, we experienced significant component shortages, extended lead times, increased costs, and unexpected cancellation or delay of previously committed supply of key components across our supplier base.
We write down inventory that has become obsolete or unmarketable by an amount equal to the difference between the cost of inventory and the estimated market value based on assumptions about future demand, which are affected by changes in our strategic direction, discontinuance of a product or introduction of newer versions of our products, declines in the sales of or forecasted demand for certain products, and general market conditions.
We write down inventory that has become obsolete or unmarketable by an amount equal to the difference between the cost of inventory and the estimated net realizable value based on assumptions about future demand, which are affected by changes in our strategic direction, discontinuance of a product or introduction of newer versions of our products, declines in the sales of or forecasted demand for certain products, and general market conditions.
Based on past performance and current expectations, we believe that cash from operations, cash, cash equivalents, investments, and other sources of liquidity, including our ABL Credit Facility, 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.
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, 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.
There were no goodwill impairments resulting from our fiscal 2022 and 2021 impairment tests and no reporting unit was determined to be at risk of failing the goodwill impairment test. See Note 14 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report.
There were no goodwill impairments resulting from our fiscal 2023 and 2022 impairment tests and no reporting unit was determined to be at risk of failing the goodwill impairment test. See Note 14 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report.
Our solutions include Networking Platforms, including our Converged Packet Optical and Routing and Switching portfolios, which can be applied from the network core to end-user access points, and which allow network operators to scale capacity, increase transmission speeds, allocate traffic efficiently and adapt dynamically to changing end-user service demands.
Our solutions include Networking Platforms, including our Optical Networking and Routing and Switching portfolios, which can be applied from the network core to end-user access points, and which allow network operators to scale capacity, increase transmission speeds, allocate traffic efficiently and adapt dynamically to changing end-user service demands.
See Note 15 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report. Effects of Recent Accounting Pronouncements See Note 1 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for information relating to our discussion of the effects of recent accounting pronouncements. 64 Table of Contents
See Note 15 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report. Effects of Recent Accounting Pronouncements See Note 1 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for information relating to our discussion of the effects of recent accounting pronouncements. 63 Table of Contents
These assumptions and estimates require a significant amount of judgment and are made based on current and projected circumstances and conditions. Quarterly, we perform an analysis to determine the likelihood of realizing our deferred tax assets and whether sufficient evidence exists to support reversal of all or a portion of the valuation allowance.
These assumptions and estimates require a significant amount of judgment and are made based on current and projected circumstances and conditions. 62 Table of Contents Quarterly, we perform an analysis to determine the likelihood of realizing our deferred tax assets and whether sufficient evidence exists to support reversal of all or a portion of the valuation allowance.
Overview We are a networking systems, services and software company, providing solutions that enable a wide range of network operators to deploy and manage next-generation networks that deliver services to businesses and consumers. We provide hardware, software and services that support the delivery of video, data and voice traffic over core, metro, aggregation and access communications networks.
Overview We are a network platform, software, and services company, providing solutions that enable a wide range of network operators to deploy and manage next-generation networks that deliver services to businesses and consumers. We provide hardware, software, and services that support the delivery of video, data, and voice traffic over core, metro, aggregation, and access communications networks.
Market Opportunity 48 Table of Contents The market in which we sell our communications networking solutions is dynamic and characterized by a high rate of change, including rapid growth in bandwidth demand and network traffic, the proliferation of cloud-based services and new approaches, or “consumption models,” for designing and procuring networking solutions.
Market Opportunity The market in which we sell our communications networking solutions is dynamic and characterized by a high rate of change, including rapid growth in bandwidth demand and network traffic, the proliferation of cloud-based services and new approaches, or “consumption models,” for designing and procuring networking solutions.
See Note 4 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for more information regarding these transactions. Share-Based Compensation We estimate the fair value of our restricted stock unit awards based on the fair value of our common stock on the date of grant.
See Note 4 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for more information regarding these transactions. 60 Table of Contents Share-Based Compensation We estimate the fair value of our restricted stock unit awards based on the fair value of our common stock on the date of grant.
Note 1 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty.
Note 1 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report describes the significant accounting 59 Table of Contents policies and methods used in the preparation of the Consolidated Financial Statements. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty.
Our significant assumptions and estimates can include, but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital, 61 Table of Contents and the cost savings expected to be derived from acquiring an asset. These estimates are inherently uncertain and unpredictable.
Our significant assumptions and estimates can include, but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital, and the cost savings expected to be derived from acquiring an asset. These estimates are inherently uncertain and unpredictable.
Supply Chain Constraints In the face of extraordinary demand across a range of industries, global supply for certain raw materials and components, including, in particular, semiconductor, integrated circuits and other electronic components used in most of our products, has experienced substantial constraint and disruption in recent periods.
Supply Chain Constraints In the face of demand across a range of industries, global supply for certain raw materials and components, including, in particular, semiconductor, integrated circuits, and other electronic components used in most of our products, experienced substantial constraint and disruption in recent prior periods.
We have historically been successful in our ability to secure such sources of financing, however, our access to these sources of capital could be materially and adversely impacted and we may not be able to receive terms as favorable as we have historically received, whether due to inflation or otherwise.
We have historically been successful in our ability to secure such sources of financing; however, our access to these sources of capital could be materially and adversely impacted, and we may not be able to receive terms as favorable as we have historically received, whether due to inflation or other factors.
For more details, see Note 18 to our Consolidated Financial Statements included in Item 8 of Part II of this report. Our days sales outstanding (“DSOs”) were 107 for fiscal 2022, as compared to 98 for fiscal 2021. The calculation of DSOs includes accounts receivable, net and contract assets for unbilled receivables, net included in prepaid expenses and other.
For more details, see Note 18 to our Consolidated Financial Statements included in Item 8 of Part II of this report. Our days sales outstanding (“DSOs”) were 95 for fiscal 2023, as compared to 107 for fiscal 2022. The calculation of DSOs includes accounts receivable, net and contract assets for unbilled receivables, net included in prepaid expenses and other.
The ultimate realization of deferred tax assets is dependent on the generation of future taxable income (including the reversals of deferred tax liabilities) during the 63 Table of Contents periods in which those deferred tax assets will become deductible.
The ultimate realization of deferred tax assets is dependent on the generation of future taxable income (including the reversals of deferred tax liabilities) during the periods in which those deferred tax assets will become deductible.
A discussion of fiscal 2021 compared to fiscal 2020 can be found under Item 7 of Part II of our Annual Report on Form 10-K for the fiscal year ended October 30, 2021, filed with the SEC on December 17, 2021, which is available free of charge on the SEC’s website at www.sec.gov and our Investor Relations website at investor.ciena.com.
A discussion of fiscal 2022 compared to fiscal 2021 can be found under Item 7 of Part II of our Annual Report on Form 10-K for the fiscal year ended October 29, 2022, filed with the SEC on December 16, 2022, which is available free of charge on the SEC’s website at www.sec.gov and our Investor Relations website at investor.ciena.com.
Technical support labor cost is estimated based primarily on historical trends and the cost to support customer repairs within the warranty period. The provision for product warranties, net of adjustments for previous years’ provisions, was $17.4 million, $17.1 million and $22.4 million for fiscal 2022, 2021 and 2020, respectively.
Technical support labor cost is estimated based primarily on historical trends and the cost to support customer repairs within the warranty period. The provision for product warranties, net of adjustments for previous years’ provisions, was $31.7 million, $17.4 million and $17.1 million for fiscal 2023, 2022 and 2021, respectively.
Our solutions are used globally by communications service providers, cable and multiservice operators, Web-scale providers, submarine network operators, governments, and enterprises across multiple industry verticals.
Our solutions are used globally by communications service providers, cable and multiservice operators, cloud providers, submarine network operators, governments, and enterprises across multiple industry verticals.
For additional information about our term loan and the interest rate swaps, see Notes 16 and 19 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report and Item 7A of Part II of this annual report. Purchase Order Obligations.
For additional information about our short-term and long-term debt and interest rate swaps, see Notes 16 and 19 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report and Item 7A of Part II of this annual report. Purchase Order Obligations.
Dollar in relation to the Canadian Dollar and Indian Rupee. Including the effect of foreign exchange rates, net of hedging, research and development expenses increased by $88.0 million.
Dollar in relation to the Canadian Dollar and Indian Rupee. Including the effect of foreign exchange rates, net of hedging, research and development expenses increased by $125.9 million.
Our total deferred revenue for services was $180.4 million and $162.6 million as of October 29, 2022 and October 30, 2021 , respectively. Business Combinations We record acquisitions using the purchase method of accounting. All of the assets acquired, liabilities assumed, contractual contingencies and contingent consideration are recognized at their fair value as of the acquisition date.
Our total deferred revenue for services was $200.1 million and $180.4 million as of October 28, 2023 and October 29, 2022 , respectively. Business Combinations We record acquisitions using the purchase method of accounting. All of the assets acquired, liabilities assumed, contractual contingencies and contingent consideration are recognized at their fair value as of the acquisition date.
A non-cash goodwill impairment charge would have the effect of decreasing earnings or increasing losses in such period. If we are required to take a substantial impairment charge, our operating results would be materially adversely affected in such period. As of October 29, 2022 and October 30, 2021, the goodwill balance was $328.3 million and $311.6 million, respectively.
A non-cash goodwill impairment charge would have the effect of decreasing earnings or increasing losses in such period. If we are required to take a substantial impairment charge, our operating results would be materially adversely affected in such period. As of October 28, 2023 and October 29, 2022, the goodwill balance was $444.8 million and $328.3 million, respectively.
As of October 29, 2022 , we had $2.6 billion in outstanding purchase order commitments to our contract manufacturers and component suppliers for inventory. In certain instances, we are permitted to cancel, reschedule or adjust these orders. Consequently, only a portion of this amount relates to firm, non-cancelable and unconditional obligations. Leases.
As of October 28, 2023 , we had $1.7 billion in outstanding purchase order commitments to our contract manufacturers and component suppliers for inventory. In certain instances, we are permitted to cancel, reschedule or adjust these orders. Consequently, only a portion of this amount relates to firm, non-cancelable and unconditional obligations. Leases.
These factors are updated regularly or when facts and circumstances indicate that an update is deemed necessary. Our accounts receivable, net of allowance for credit losses, was $920.8 million and $885.0 million as of October 29, 2022 and October 30, 2021 , respectively.
These factors are updated regularly or when facts and circumstances indicate that an update is deemed necessary. Our accounts receivable, net of allowance for credit losses, was $1.0 billion and $920.8 million as of October 28, 2023 and October 29, 2022 , respectively.
We have lease arrangements for facilities including research and development centers, engineering facilities and smaller offices in regions throughout the world to support sales and services operations. Office facilities are leased under various non-cancelable operating or finance leases. As of October 29, 2022 , we had fixed lease payment obligations of $145.5 million, with $28.2 million payable within 12 months.
We have lease arrangements for facilities including research and development centers, engineering facilities and smaller offices in regions throughout the world to support sales and services operations. Office facilities are leased under various non-cancelable operating or finance leases. As of October 28, 2023 , we had fixed lease payment obligations of $125.7 million, with $25.8 million payable within 12 months.
During fiscal 2022, we repurchased an additional $250.0 million of our common stock under the stock repurchase program, and we had $500.0 million remaining under the current repurchase authorization as of October 29, 2022.
During fiscal 2023, we repurchased an additional $250.0 million of our common stock under the stock repurchase program, and we had $250.0 million remaining under the current repurchase authorization as of October 28, 2023.
Warranty Our liability for product warranties, included in accrued liabilities and other short-term obligations, was $45.5 million and $48.0 million as of October 29, 2022 and October 30, 2021, respectively. Our products are generally covered by a warranty for periods ranging from one to five years.
Warranty Our liability for product warranties, included in accrued liabilities and other short-term obligations, was $57.1 million and $45.5 million as of October 28, 2023 and October 29, 2022, respectively. Our products are generally covered by a warranty for periods ranging from one to five years.
Revenue for software subscription and maintenance is recognized ratably over the period during which the services are performed. Our total deferred revenue for products was $19.8 million and $12.9 million as of October 29, 2022 and October 30, 2021 , respectively. Our services revenue is deferred and recognized ratably over the period during which the services are to be performed.
Revenue for software subscription and maintenance is recognized ratably over the period during which the services are performed. Our total deferred revenue for products was $28.4 million and $19.8 million as of October 28, 2023 and October 29, 2022 , respectively. Our services revenue is deferred and recognized ratably over the period during which the services are to be performed.
For fiscal 2022, future demand was calculated primarily based on customer backlog as described in “Overview” above. Generally, our customers may cancel or change their orders with limited advance notice, or they may decide not to accept our products and services, although instances of both cancellation and non-acceptance are rare.
For fiscal 2023, future demand was calculated using both customer backlog and future forecasted sales. For fiscal 2022, future demand was calculated primarily based on customer backlog. Generally, our customers may cancel or change their orders with limited advance notice, or they may decide not to accept our products and services, although instances of both cancellation and non-acceptance are rare.
We expect operating expense to continue to increase from the level reported in fiscal 2022 primarily due to planned investment in research and development to advance our strategy and higher employee compensation costs.
We 53 Table of Contents expect operating expense to continue to increase from the level reported in fiscal 2023 primarily due to planned investment in research and development to advance our strategy and higher employee compensation costs.
Sales to AT&T were $433.4 million, or 11.9% of total revenue, in fiscal 2022, and $447.4 million, or 12.4% of total revenue, in fiscal 2021. Verizon accounted for $402.8 million, or 11.1% of total revenue, in fiscal 2022. No other customer accounted for greater than 10% of our revenue in fiscal 2022 or fiscal 2021.
Sales to AT&T were $464.7 million, or 10.6% of total revenue, in fiscal 2023, and $433.4 million, or 11.9% of total revenue, in fiscal 2022. Verizon accounted for $402.8 million, or 11.1% of total revenue, in fiscal 2022. No other customer accounted for greater than 10% of our revenue in fiscal 2023 or fiscal 2022.
Operating Expense Currency Fluctuations During fiscal 2022, approximately 50.0% of our operating expense was non-U.S. Dollar denominated, including Canadian Dollars, Indian Rupees, and Euros. During fiscal 2022 as compared to fiscal 2021, the U.S. Dollar primarily strengthened against these and other currencies. Consequently, our operating expense reported in U.S. Dollars decreased by approximately $25.5 million, or 1.9%, net of hedging.
Operating Expense Currency Fluctuations During fiscal 2023, approximately 49.4% of our operating expense was non-U.S. Dollar denominated, including Canadian Dollars, Indian Rupees, and Euros. During fiscal 2023 as compared to fiscal 2022, the U.S. Dollar primarily strengthened against these and other currencies. Consequently, our operating expense reported in U.S. Dollars decreased by approximately $23.3 million, or 1.5%, net of hedging.
Our allowance for credit losses was $0.2 million and $0.1 million as of October 29, 2022 and October 30, 2021, respectively .
Our allowance for credit losses was $0.1 million and $0.2 million as of October 28, 2023 and October 29, 2022, respectively .
Long-lived Assets Our long-lived assets include equipment, building, furniture and fixtures, operating right-of-use assets, finite-lived intangible assets and maintenance spares. As of October 29, 2022 and October 30, 2021 these assets totaled $427.2 million and $450.3 million , net, respectively.
Long-lived Assets Our long-lived assets include equipment, building, furniture and fixtures, operating right-of-use assets, finite-lived intangible assets and maintenance spares. As of October 28, 2023 and October 29, 2022, these assets totaled $575.0 million and $427.2 million , net, respectively.
We expect these constrained supply conditions to increase our costs of goods sold in the near term and to adversely impact our ability to continue to reduce the cost to produce our products in a manner consistent with prior periods.
Supply constrained conditions have impacted our revenue and will continue to impact our costs of goods sold in the near term and our ability to continue to reduce the cost to produce our products in a manner consistent with prior periods.
As of October 29, 2022 , total unrecognized compensation expense was $185.7 million, which relates to unvested restricted stock units and is expected to be recognized over a weighted-average period of 1.51 years.
As of October 28, 2023 , total unrecognized compensation expense was $201.0 million, which relates to unvested restricted stock units and is expected to be recognized over a weighted-average period of 1.39 years.
For additional details on our cash used in operating activities, see the discussion below under the caption “Cash Used in Operating Activities.” Cash, cash equivalents and investments decreased by $490.3 million during fiscal 2022.
For additional details on our cash used in operating activities, see the discussion below under the caption “Cash Provided by Operating Activities.” Cash, cash equivalents and investments increased by $65.9 million during fiscal 2023.
Liquidity and Capital Resources Overview. For the fiscal year ended October 29, 2022 , we used $167.8 million of cash from operations, as our working capital requirements of $572.1 million exceeded our net income (adjusted for non-cash charges) of $404.3 million.
Liquidity and Capital Resources Overview. For the fiscal year ended October 28, 2023 , we generated $168.3 million of cash from operations, as our net income (adjusted for non-cash charges) of $565.1 million exceeded our working capital requirements of $396.8 million.
In addition, unanticipated events and circumstances may occur that may affect the accuracy or validity of such estimates. During fiscal 2020, we completed the acquisition of Centina Systems, Inc. (“Centina”) for a purchase price of $34.0 million. During fiscal 2022, we completed the acquisitions of Vyatta and Xelic for an aggregate purchase price of $64.1 million.
In addition, unanticipated events and circumstances may occur that may affect the accuracy or validity of such estimates. During fiscal 2022, we completed the acquisitions of AT&T’s Vyatta Software Technology (“Vyatta”) and Xelic, Inc. (“Xelic”) for an aggregate purchase price of $64.1 million.
Demand Environment Since the second quarter of fiscal 2021, we have experienced unprecedented demand for our products and services. Our quarterly order volumes during this period have significantly exceeded our revenue and historical order volumes, with some concentration of orders among certain existing Webscale and North America-based service provider customers.
Order Volumes From the second quarter of fiscal 2021 through the third quarter of fiscal 2022, we received an unprecedented volume of orders for our products and services. Our quarterly order volumes during this period significantly exceeded our revenue and historical order volumes, with concentration of orders among certain existing cloud provider and North America-based service provider customers.
Goodwill Our goodwill was generated from the acquisitions of (i) Cyan, Inc. during fiscal 2015, (ii) the high-speed photonics components assets of TeraXion, Inc. during fiscal 2016, (iii) Packet Design, LLC on July 2, 2018, (iv) DonRiver Holdings, LLC on October 1, 2018, (v) Centina on November 2, 2019, (vi) Vyatta on November 1, 2021, and (vii) Xelic on March 9, 2022.
Goodwill Our goodwill was generated from the acquisitions of (i) Cyan, Inc. during fiscal 2015, (ii) the high-speed photonics components assets of TeraXion, Inc. during fiscal 2016, (iii) Packet Design, LLC and DonRiver Holdings, LLC during fiscal 2019, (iv) Centina Systems, Inc. during fiscal 2020, (v) Vyatta and Xelic during fiscal 2022 and (vi) Benu and Tibit during fiscal 2023.
The ABL Credit Facility, which we and certain of our subsidiaries entered into on October 28, 2019, replaced a predecessor senior secured asset-based revolving credit facility and provides for a total commitment of $300 million with a maturity date of October 28, 2024.
The Revolving Credit Facility, which we and certain of our subsidiaries entered into on October 24, 2023, replaced the ABL Credit Facility and provides for a total commitment of $300.0 million with a maturity date of October 24, 2028.
Our allowance for credit losses was $11.0 million and $10.9 million as of October 29, 2022 and October 30, 2021 , respectively. Our contract assets for unbilled accounts receivable, net of allowance for credit losses, was $156.0 million and $101.4 million as of October 29, 2022 and October 30, 2021, respectively.
Our allowance for credit losses was $11.7 million and $11.0 million as of October 28, 2023 and October 29, 2022 , respectively. Our contract assets for unbilled accounts receivable, net of allowance for credit losses, was $150.3 million and $156.0 million as of October 28, 2023 and October 29, 2022, respectively.
The table below sets forth the changes in operating expense for the periods indicated (in thousands, except percentage data): Fiscal Year 2022 %* 2021 %* Increase (decrease) %** Research and development $ 624,656 17.2 $ 536,666 14.8 $ 87,990 16.4 Selling and marketing 466,565 12.9 452,214 12.5 14,351 3.2 General and administrative 179,382 4.9 181,874 5.0 (2,492) (1.4) Significant asset impairments and restructuring costs 33,824 0.9 29,565 0.8 4,259 14.4 Amortization of intangible assets 32,511 0.9 23,732 0.7 8,779 37.0 Acquisition and integration costs 598 — 2,572 0.1 (1,974) (76.7) Total operating expenses $ 1,337,536 36.8 $ 1,226,623 33.9 $ 110,913 9.0 _________________________________ * Denotes % of total revenue ** Denotes % change from 2021 to 2022 55 Table of Contents • Research and development expense benefited from $ 13.5 million as a result of foreign exchange rates, net of hedging, primarily due to a stronger U.S.
The table below sets forth the changes in operating expense for the periods indicated (in thousands, except percentage data): Fiscal Year 2023 %* 2022 %* Increase (decrease) %** Research and development $ 750,559 17.1 $ 624,656 17.2 $ 125,903 20.2 Selling and marketing 490,804 11.2 466,565 12.9 24,239 5.2 General and administrative 215,284 4.9 179,382 4.9 35,902 20.0 Significant asset impairments and restructuring costs 23,834 0.5 33,824 0.9 (9,990) (29.5) Amortization of intangible assets 37,351 0.9 32,511 0.9 4,840 14.9 Acquisition and integration costs 3,474 0.1 598 — 2,876 480.9 Total operating expenses $ 1,521,306 34.7 $ 1,337,536 36.8 $ 183,770 13.7 _________________________________ * Denotes % of total revenue ** Denotes % change from 2022 to 2023 • Research and development expense benefited from $ 16.3 million as a result of foreign exchange rates, net of hedging, primarily due to a stronger U.S.
For additional information about the 2025 Term Loan, 2030 Notes, ABL Credit Facility and interest rate swaps, see Notes 16, 19 and 20 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report and Item 7A of Part II of this annual report. Contractual Obligations Debt.
For additional information about our short-term and long-term debt, revolving credit facilities and derivative instruments, see Notes 16, 19 and 20 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report and Item 7A of Part II of this annual report. Contractual Obligations Debt.
See Note 5 to our Consolidated Financial Statements included in Item 8 of Part II of this report for more information on the impact of suspending our business operations in Russia.
See Note 19 to our Consolidated Financial Statements included in Item 8 of Part II of this report for more information on our term loans.
This increase primarily reflects an increase in travel and entertainment costs, employee headcount and compensation costs related to sales commission, partially offset by lower costs associated with our annual cash incentive compensation plan. • General and administrative expense benefited from $ 2.4 million as a result of foreign exchange rates, primarily due to a stronger U.S.
This increase primarily reflects increases in travel and entertainment costs, professional services and employee-related compensation costs primarily related to higher costs associated with our annual cash incentive compensation plan. 54 Table of Contents • General and administrative expense benefited from $ 1.6 million as a result of foreign exchange rates, primarily due to a stronger U.S.
The loss of a significant customer could have a material adverse effect on our business and results of operations, and our results of operations can fluctuate quarterly depending on sales volumes and purchasing priorities with these large customers.
The loss of a significant customer could have a material adverse effect on our business and results of operations, and our results of operations can fluctuate quarterly depending on sales volumes and purchasing priorities with these large customers. Sales to one of our cloud provider customers were $561.4 million, or 12.8% of total revenue, in fiscal 2023.
Future interest payments associated with the 2025 Term Loan Notes total $103.9 million, with $35.7 million payable within 12 months. As of October 29, 2022, we had $400.0 million outstanding principal associated with the 2030 Notes payable January 31, 2030. Future interest payments associated with the 2030 Notes total $120.0 million, with $16.0 million payable within 12 months.
Future interest payments associated with the 2030 New Term Loan totaled $589.7 million, with $87.2 million payable within 12 months. As of October 28, 2023, we had $400.0 million outstanding principal associated with the 2030 Notes payable January 31, 2030. Future interest payments associated with the 2030 Notes totaled $104.0 million, with $16.0 million payable within 12 months.
See Note 18 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report. Off-Balance Sheet Arrangements We do not engage in any off-balance sheet financing arrangements.
See Note 18 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report. Off-Balance Sheet Arrangements We do not engage in any off-balance sheet financing arrangements. In particular, we do not have any equity interests in so-called limited purpose entities, which include special purpose entities (SPEs) and structured finance entities.
The valuation allowance balances at October 29, 2022 and October 30, 2021 were $162.1 million and $159.6 million, respectively. The corresponding net deferred tax assets were $824.0 million and $800.2 million, respectively.
The valuation allowance balances at October 28, 2023 and October 29, 2022 were $189.9 million and $162.1 million, respectively. The corresponding net deferred tax assets were $809.3 million and $824.0 million, respectively.
Dollar in relation to the Euro. Including the effect of foreign exchange rates, general and administrative expense decreased by $2.5 million.
Dollar in relation to the Canadian Dollar and Indian Rupee. Including the effect of foreign exchange rates, general and administrative expense increased by $35.9 million.
There were no borrowings outstanding under the ABL Credit Facility as of October 29, 2022. Foreign Liquidity . The amount of cash, cash equivalents and short-term investments held by our foreign subsidiaries was $280.1 million as of October 29, 2022 . We intend to reinvest indefinitely our foreign earnings.
There were no borrowings outstanding under the Revolving Credit Facility as of October 28, 2023. Foreign Liquidity . The amount of cash, cash equivalents and short-term investments held by our foreign subsidiaries was $308.0 million as of October 28, 2023 .
To complement our Networking Platforms, we offer Platform Software, which includes our MCP applications that deliver advanced multi-layer domain control and operations. Through our Blue Planet Software we also enable complete service lifecycle management automation with productized OSS and service assurance solutions that help our customers to achieve closed loop automation across multi-vendor and multi-domain environments.
Through our Blue Planet Software, we also enable complete service lifecycle management automation with productized operational support systems (OSS), which include inventory, orchestration and assurance solutions that help our customers to achieve closed loop automation across multi-vendor and multi-domain environments.
Our Networking Platforms segment revenue increase reflects product line sales increases of $20.5 million of Converged Packet Optical products, primarily reflecting sales increases of $26.4 million of our 6500 Packet-Optical Platform, primarily to enterprise customers and communications service providers. 52 Table of Contents In fiscal 2022 and fiscal 2021, our top ten customers contributed 56.3% and 55.5% of our revenue, respectively.
Our Networking Platforms segment revenue increase reflects a product line sales increase of $177.0 million of our Optical Networking products, primarily reflecting a sales increase of $110.6 million of our 6500 Packet-Optical Platform, primarily to communication service providers and enterprise customers In fiscal 2023 and fiscal 2022, our top ten customers contributed 53.7% and 56.3% of our revenue, respectively.
This decrease primarily reflects decreases in employee-related compensation costs primarily related to lower costs associated with our annual cash incentive compensation plan and legal fees, offset by increased professional services. • Significant asset impairments and restructuring costs increased by $4.3 million, reflecting alignment of our global workforce and facilities and a $3.8 million impairment charge due to our suspended operations in Russia, partially offset by reduced costs associated with actions that we have taken to redesign certain business processes as part of a business optimization strategy to improve gross margin and constrain operating expense. • Amortization of intangible assets increased by $8.8 million due to additional intangibles acquired in connection with our acquisition of Vyatta during the first quarter of fiscal 2022 and our acquisition of Xelic during the second quarter of fiscal 2022. • Acquisition and integration costs primarily consist of expenses for financial, legal and accounting advisors and severance and other employee-related costs, associated with our acquisition of Vyatta during the first quarter of fiscal 2022 and our acquisition of Xelic during the second quarter of fiscal 2022.
This decrease primarily reflects the effect of a $3.8 million impairment charge due to our suspended operations in Russia recorded in fiscal 2022 and lower costs on actions that we have taken with respect to our operations, global workforce, and facilities as part of a business optimization strategy to improve gross margin, constrain operating expense, redesign certain business processes, and restructure real estate facilities. • Amortization of intangible assets increased by $4.8 million reflecting additional intangibles acquired in connection with our acquisitions of Benu and Tibit during the first quarter of fiscal 2023, partially offset by certain intangible assets having reached the end of their economic lives. • Acquisition and integration costs increased by $2.9 million and primarily reflect financial, legal, and accounting advisors and employee-related costs related to our acquisitions of Benu and Tibit.
Operating expense increased in fiscal 2022 from the level reported for fiscal 2021 primarily due to increases in employee headcount and variable compensation costs related to sales commissions, the expiration of the CEWS program, and increases in travel and entertainment costs, partially offset by decreases in employee variable compensation costs related to lower costs associated with our annual cash incentive compensation plan.
Operating expense increased in fiscal 2023 from the level reported for fiscal 2022, primarily due to increases in employee headcount and variable compensation costs associated with our annual cash incentive compensation plan and increases in professional services.
The table below sets forth the changes in geographic distribution of revenue for the periods indicated (in thousands, except percentage data): Fiscal Year 2022 %* 2021 %* Increase (decrease) %** Americas $ 2,636,840 72.6 $ 2,525,619 69.8 $ 111,221 4.4 EMEA 555,215 15.3 670,462 18.5 (115,247) (17.2) APAC 440,606 12.1 424,603 11.7 16,003 3.8 Total $ 3,632,661 100.0 $ 3,620,684 100.0 $ 11,977 0.3 _________________________________ * Denotes % of total revenue ** Denotes % change from 2021 to 2022 • Americas revenue increased by $111.2 million, reflecting sales increases of $47.1 million within our Networking Platforms segment, $33.2 million within our Platform Software and Services segment, $25.5 million within our Global Services segment, and $5.4 million within our Blue Planet Automation Software and Services segment.
The table below sets forth the changes in geographic distribution of revenue for the periods indicated (in thousands, except percentage data): Fiscal Year 2023 %* 2022 %* Increase (decrease) %** Americas $ 3,110,347 70.9 $ 2,636,840 72.6 $ 473,507 18.0 EMEA 643,142 14.7 555,215 15.3 87,927 15.8 APAC 633,060 14.4 440,606 12.1 192,454 43.7 Total $ 4,386,549 100.0 $ 3,632,661 100.0 $ 753,888 20.8 _________________________________ * Denotes % of total revenue ** Denotes % change from 2022 to 2023 • Americas revenue increased by $473.5 million, reflecting sales increases of $460.4 million within our Networking Platforms segment, $17.2 million within our Platform Software and Services segment and $5.1 million within our Global Services segment, partially offset by a sales decrease of $9.2 million within our Blue Planet Automation Software and Services segment.
See Note 28 “Subsequent Events” to our Consolidated Financial Statements included in Item 8 of Part II of this report for more information on this acquisition. Stock Repurchase Program.
See Note 4 to our Consolidated Financial Statements included in Item 8 of Part II of this report for more information on these acquisitions. Credit Facility Refinancings.
Generally, our customers may cancel, delay or change their orders with limited advance notice, or they may decide not to accept our products and services, although instances of both cancellation and non-acceptance are rare.
Generally, our customers may cancel, delay or change their orders with limited advance notice, or they may decide not to accept our products and services, although instances of both cancellation and non-acceptance are rare. Backlog may be fulfilled several quarters following receipt of a purchase order, or in the case of certain service obligations, may relate to multi-year support period.
Dollar in relation to the Euro and Australian Dollar. Including the effect of foreign exchange rates, sales and marketing expense increased by $14.4 million.
Including the effect of foreign exchange rates, sales and marketing expense increased by $24.2 million.
Our Networking Platforms segment revenue increase reflects product line sales increases of $130.5 million of Routing and Switching products, partially offset by product line sales decreases of $83.3 million of Converged Packet Optical products.
Our Networking Platforms segment revenue increase reflects product line sales increases of $395.2 million of our Optical Networking products and $65.2 million of our Routing and Switching products.
See Notes 2 and 25 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for more information on our segment reporting. Fiscal 2022 Compared to Fiscal 2021 Revenue Currency Fluctuations During fiscal 2022, approximately 13.7% of our revenue was non-U.S. Dollar denominated, primarily including sales in Euros, Canadian Dollars and British Pounds.
Dollars was adversely impacted by approximately $4.7 million, or 0.1%, as compared to fiscal 2022. Operating Segment Revenue See Notes 2 and 25 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for more information on our segment reporting.
We recorded charges for excess and obsolete inventory of $16.2 million, $17.9 million and $24.7 million in fiscal 2022, 2021 and 2020, respectively.
We recorded charges for excess and obsolete inventory of $29.5 million, $16.2 million and $17.9 million in fiscal 2023, 2022 and 2021, respectively. Our inventory, net of allowance for excess and obsolescence, was $1.1 billion and $946.7 million as of October 28, 2023 and October 29, 2022 , respectively.
In particular, we do not have any equity interests in so-called limited purpose entities, which include special purpose entities (SPEs) and structured finance entities. 60 Table of Contents Critical Accounting Policies and Estimates The preparation of our consolidated financial statements requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense, and related disclosure of contingent assets and liabilities.
Critical Accounting Policies and Estimates The preparation of our consolidated financial statements requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense, and related disclosure of contingent assets and liabilities.
The increase in our APAC region revenue for fiscal 2022 was primarily driven by increased sales in India and Australia, partially offset by decreased sales in Japan. The following table reflects our geographic distribution of revenue, which is principally based on the relevant location for our delivery of products and performance of services.
The following table reflects our geographic distribution of revenue, which is principally based on the relevant location for the delivery of our products and performance of services.
This information is related to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. When assessing for credit losses, we determine collectability by pooling assets with similar characteristics. The allowances for credit losses are each measured on a collective basis when similar risk characteristics exist.
When assessing for credit losses, we determine 61 Table of Contents collectability by pooling assets with similar characteristics. The allowances for credit losses are each measured on a collective basis when similar risk characteristics exist.
The increase in our Americas region revenue for fiscal 2022 was primarily driven by increased sales in the United States partially offset by decreased sales in Brazil. The decrease in our EMEA region revenue for fiscal 2022 was primarily driven by decreased sales in the Netherlands, France and Russia. Our Russia operations were suspended in March 2022.
The increase in our Americas region revenue for fiscal 2023 was primarily driven by increased sales in the United States. The increase in our APAC region revenue for fiscal 2023 was primarily driven by increased sales in India, Australia and Singapore. The increase in our EMEA region revenue for fiscal 2023 was primarily driven by increased sales in the Netherlands.
The 2025 Term Loan bears interest at the London Interbank Offered Rate (“LIBOR”) for the chosen borrowing period plus a spread of 1.75% subject to a minimum LIBOR rate of 0.00%. At the end of fiscal 2022, the interest rate on the 2025 Term Loan was 5.24%.
The 2025 Term Loan was terminated on October 24, 2023. (2) The 2030 Term Loan bore interest at SOFR for the chosen borrowing period plus a spread of 2.50% subject to a minimum SOFR rate of 0.00%. The 2030 Term Loan was terminated on October 24, 2023.
As of October 29, 2022, we had $675.7 million outstanding principal associated with our 2025 Term Loan, with $6.9 million payable within 12 months. Interest on the 2025 Term Loan and payments due under the interest rate swaps is variable and is calculated using the rate in effect on the balance sheet date.
As of October 28, 2023, we had $1.2 billion outstanding principal associated with our 2030 New Term Loan, with $8.8 million maturing within 12 months. Interest payments on the 2030 New Term Loan and payments to be received under the interest rate swaps are variable and are calculated using the interest rate in effect as of the October 28, 2023.
During the first quarter of fiscal 2023, we acquired Benu and its portfolio of cloud-native software solutions, including a virtual Broadband Network Gateway ((v)BNG), which complement our existing portfolio of broadband access solutions. In the first quarter of fiscal 2023, we also entered into a definitive agreement to acquire Tibit Communications, Inc., a provider of passive optical network solutions.
Strategic and Financial Initiatives Acquisitions. On November 17, 2022, we acquired Benu Networks, Inc. (“Benu”) and its portfolio of cloud-native software solutions, including a virtual Broadband Network Gateway ((v)BNG), which complement our existing portfolio of broadband access solutions. On December 30, 2022, we acquired Tibit Communications, Inc. (“Tibit”), a provider of passive optical network solutions.
The following table sets forth the major components of the cash used in working capital (in thousands): Year Ended October 29, 2022 Cash used in accounts receivable $ (47,069) Cash used in inventories (589,113) Cash used in prepaid expenses and other (58,996) Cash provided by accounts payable, accruals and other obligations 100,327 Cash provided by deferred revenue 26,380 Cash used in operating lease assets and liabilities, net (3,643) Total cash used for working capital $ (572,114) As compared to the end of fiscal 2021: • The $47.1 million of cash used in accounts receivable during fiscal 2022 primarily reflects increased sales volume at the end of the fourth quarter of fiscal 2022; • The $589.1 million of cash used in inventory during fiscal 2022 primarily reflects increases in raw materials inventory related to the steps we are taking to mitigate the impact of current supply chain constraints and the global market shortage of semiconductor parts described in “Overview” above; • The $59.0 million of cash used in prepaid expenses and other during fiscal 2022 primarily reflects increases in contract assets and capitalized commissions, partially offset by decreases in prepaid foreign currency forward contracts and lower prepaid value added taxes; • The $100.3 million of cash provided by accounts payable, accruals and other obligations during fiscal 2022 primarily reflects the timing of payments for inventory purchases partially offset by a lower accrual rate related to Ciena’s 2022 annual cash incentive compensation plan; • The $26.4 million of cash provided by deferred revenue during fiscal 2022 represents an increase in advanced payments received from customers prior to revenue recognition; and • The $3.6 million of cash used in operating lease assets and liabilities, net, during fiscal 2022 represents cash paid for operating lease payments in excess of operating lease costs.
The following table sets forth the major components of the cash used in working capital (in thousands): Year Ended October 28, 2023 Cash used in accounts receivable $ (94,565) Cash used in inventories (132,497) Cash used in prepaid expenses and other (51,965) Cash used in accounts payable, accruals and other obligations (138,469) Cash provided by deferred revenue 27,412 Cash used in operating lease assets and liabilities, net (6,667) Total cash used for working capital $ (396,751) As compared to the end of fiscal 2022: • The $94.6 million of cash used in accounts receivable during fiscal 2023 primarily reflects increased sales volume in the fourth quarter of fiscal 2023; • The $132.5 million of cash used in inventory during fiscal 2023 related to increases in finished goods inventories from planned fulfillment of customer advance orders for which some deliveries have since been rescheduled as described in “Overview” above; • The $52.0 million of cash used in prepaid expenses and other during fiscal 2023 primarily reflects increases in prepaid value added taxes; • The $138.5 million of cash used in accounts payable, accruals and other obligations during fiscal 2023 primarily reflects the timing of payments to suppliers, partially offset by a higher accrual rate related to Ciena’s 2023 annual cash incentive compensation plan; • The $27.4 million of cash provided by deferred revenue during fiscal 2023 represents an increase in advanced payments received on multi-year maintenance contracts from customers prior to revenue recognition; and • The $6.7 million of cash used in operating lease assets and liabilities, net, during fiscal 2023 represents cash paid for operating lease payments in excess of operating lease costs.
During fiscal 2022, as compared to fiscal 2021, the U.S. Dollar primarily strengthened against these and other currencies. Consequently, our revenue reported in U.S. Dollars was adversely impacted by approximately $32.0 million, or 0.9%, as compared to fiscal 2021.
Fiscal 2023 Compared to Fiscal 2022 Revenue Currency Fluctuations 49 Table of Contents During fiscal 2023, approximately 14.9% of our revenue was non-U.S. Dollar denominated, primarily including sales in Euros, Canadian Dollars and British Pounds. During fiscal 2023, as compared to fiscal 2022, the U.S. Dollar primarily strengthened against these and other currencies. Consequently, our revenue reported in U.S.
We principally use the ABL Credit Facility to support the issuance of letters of credit that arise in the ordinary course of our business and thereby to reduce our use of cash required to collateralize these instruments. As of October 29, 2022, letters of credit totaling $85.6 million were outstanding under our ABL Credit Facility.
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 56 Table of Contents corporate purposes. As of October 28, 2023, letters of credit totaling $72.5 million were outstanding under our Revolving Credit Facility.
During the second half of fiscal 2022, reliability of supply improved gradually, and the majority of our suppliers were able to deliver components by their promised, though in many cases, extended, lead times.
During the second half of fiscal 2023, lead times, costs, and predictability of supply for semiconductors, integrated circuits, and other electronic components began to stabilize and the majority of our suppliers have been able to deliver by their promised, though extended, lead times.
We have also implemented additional mitigation strategies, including multi-sourcing activities, qualifying alternative parts, and product redesign, and expect, over time, to realize certain benefits of these mitigation activities. Together with increased costs of supply, these mitigation strategies have impacted, and can be expected to continue to impact, our result of operations and cash from operations.
Together with increased costs of supply, these mitigation strategies have impacted, and we expect them to continue to impact, our result of operations and cash from operations.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

13 edited+0 added−0 removed5 unchanged
Biggest changeWe have entered into interest rate swap arrangements (“interest rate swaps”) that fix the floating rate for $350.0 million of the 2025 Term Loan at 2.957% through September 2023, and at 2.968% from October 2023 through September 2025.
Biggest changeWe have entered into interest rate swaps that fix the floating rate for $350.0 million of our floating rate debt at 2.968% from September 2023 through September 2025, and another $350.0 million of our floating rate debt at 3.47% from January 2023 through January 2028.
The derivative’s net gain or loss is initially reported as a component of accumulated other comprehensive income (loss) and, upon the occurrence of the forecasted transaction, is subsequently reclassified to the line item in the Consolidated Statements of Operations to which the hedged transaction relates.
The derivative’s net gain or loss is initially reported as a component of accumulated other comprehensive loss and, upon the occurrence of the forecasted transaction, is subsequently reclassified to the line item in the Consolidated Statements of Operations to which the hedged transaction relates.
The estimated impact on these investments of a 100 basis point (1.0%) increase in interest rates across the yield curve from rates in effect as of the balance sheet date would be a $1.2 million decline in value.
The estimated impact on these investments of a 100 basis point (1.0%) increase in interest rates across the yield curve from rates in effect as of the balance sheet date would be a $2.3 million decline in value.
See Notes 16 and 19 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for information relating to our 2025 Term Loan. Foreign Currency Exchange Risk. As a global concern, our business and results of operations are exposed to and can be impacted by movements in foreign currency exchange rates.
See Notes 16 and 19 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for information relating to our 2030 New Term Loan. Foreign Currency Exchange Risk. As a global concern, our business and results of operations are exposed to and can be impacted by movements in foreign currency exchange rates.
See Notes 1, 6 and 16 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report. 65 Table of Contents
See Notes 1, 6 and 16 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report. 64 Table of Contents
Dollar strengthened against a number of foreign currencies. Consequently, our revenue reported in U.S. Dollars was adversely impacted by approximately $32.0 million or 0.9%. As it relates to costs of goods sold, employee-related and facilities costs associated with certain manufacturing-related operations in Canada represent our primary exposure to foreign currency exchange risk.
Dollar primarily strengthened against a number of foreign currencies. Consequently, our revenue reported in U.S. Dollars was adversely impacted by approximately $4.7 million or 0.1%. As it relates to costs of goods sold, employee-related and facilities costs associated with certain manufacturing-related operations in Canada represent our primary exposure to foreign currency exchange risk.
From time to time, we use foreign currency forwards to hedge these balance sheet exposures. 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 (loss), net. During fiscal 2022, we recorded losses on non-hedge designated foreign currency forward contracts of $4.0 million.
From time to time, we use foreign currency forwards to hedge these balance sheet exposures. 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 (loss), net. During fiscal 2023, we recorded losses on non-hedge designated foreign currency forward contracts of $3.9 million.
Our earnings and cash flows from operations would be exposed to changes in interest rates because of the floating rate of interest in our 2025 Term Loan if such loan was not hedged using floating-to-fixed rate interest rate swaps. See Note 16 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report.
Our earnings and cash flows from operations would be exposed to changes in interest rates because of the floating rate of interest on our 2030 New Term Loan if such loan were not hedged using floating-to-fixed rate interest rate swaps. See Note 16 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report.
Dollar denominated sales, an increase in the value of the U.S. Dollar would increase the real costs of our products to customers in markets outside the United States, which could impact our competitive position. During fiscal 2022, approximately 13.7% of revenue was non-U.S. Dollar denominated. During fiscal 2022 as compared to fiscal 2021, the U.S.
Dollar denominated sales, an increase in the value of the U.S. Dollar would increase the real costs of our products to customers in markets outside the United States, which could impact our competitive position. During fiscal 2023, approximately 14.9% of revenue was non-U.S. Dollar denominated. During fiscal 2023 as compared to fiscal 2022, the U.S.
During fiscal 2022, we recorded $2.5 million in foreign currency exchange gains, as a result of monetary assets and liabilities that were transacted in a currency other than the entity’s functional currency, and the re-measurement adjustments were recorded in interest and other income (loss), net on our Consolidated Statements of Operations.
During fiscal 2023, we recorded $0.4 million in foreign currency exchange losses, as a result of monetary assets and liabilities that were transacted in a currency other than the entity’s functional currency, and the re-measurement adjustments were recorded in interest and other income (loss), net on our Consolidated Statements of Operations.
As such, a 100 basis point (1.0%) increase in the LIBOR rate as of our most recent LIBOR rate setting would increase our annualized interest expense by approximately $3.3 million on the unhedged portion of our 2025 Term Loan as recognized in our Consolidated Financial Statements.
As such, a 100 basis point (1.0%) increase in the SOFR rate as of our most recent SOFR rate setting would increase our annualized interest expense by approximately $4.7 million on the unhedged portion of our 2030 New Term Loan as recognized in our Consolidated Financial Statements.
With regard to operating expense, our primary exposure to foreign currency exchange risk relates to the Euro, Canadian Dollar and Indian Rupee. During fiscal 2022, approximately 50.0% of our operating expense was non-U.S. Dollar denominated. If currencies strengthen against the U.S. Dollar, costs reported in U.S. Dollars will increase. During fiscal 2022 as compared to fiscal 2021, the U.S.
With regard to operating expense, our primary exposure to foreign currency exchange risk relates to the Canadian Dollar, Indian Rupee and Euro. During fiscal 2023, approximately 49.4% of our operating expense was non-U.S. Dollar denominated. If these foreign currencies strengthen against the U.S. Dollar, costs reported in U.S. Dollars will increase.
Dollar primarily strengthened against these and other currencies. Consequently, our operating expense reported in U.S. Dollars decreased by approximately $25.5 million, or 1.9%, net of hedging. From time to time, we use foreign currency forward contracts to reduce variability in certain forecasted non-U.S. Dollar denominated cash flows.
During fiscal 2023 as compared to fiscal 2022, the U.S. Dollar primarily strengthened against these and other currencies. Consequently, our operating expense reported in U.S. Dollars decreased by approximately $23.3 million, or 1.5%, net of hedging impact. From time to time, we use foreign currency forward contracts to reduce variability in certain forecasted non-U.S. Dollar denominated cash flows.

Other CIEN 10-K year-over-year comparisons