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What changed in CIENA CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CIENA CORP's 2023 and 2024 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 2024 report.

+514 added−595 removedSource: 10-K (2024-12-20) vs 10-K (2023-12-15)

Top changes in CIENA CORP's 2024 10-K

514 paragraphs added · 595 removed · 426 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

138 edited+29 added−61 removed93 unchanged
Biggest changeAcross 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.
Biggest changeAcross 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, including meeting customer delivery time requirements; • price for performance, cost per bit and total cost of ownership of network solutions; • incumbency and strength of existing business relationships; • technology roadmap, time-to-market in delivering products and features, and forward innovation capacity; • company stability and financial health; • ability to offer solutions that accommodate a range of different consumption models; • operating costs and total cost of ownership; • services and support capabilities; • product security capabilities; and • ability to help customers achieve their sustainability goals.
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.
Our network solutions are used globally by communications service providers, cable and multiservice operators, cloud providers, submarine network operators, governments, and enterprises across multiple industry verticals.
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.
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.
Our Blue Planet product applications are open and modular, and can be deployed either individually or in any combination on a single cloud-native platform. These applications include: • Inventory (“BPI”).
Our Blue Planet product applications are open and modular, and can be deployed either individually or in any combination on a single cloud-native platform. These applications include: • Blue Planet Inventory (“BPI”).
This changing bilateral relationship, which is marked by trade tensions and geopolitical complexities, has prompted both nations to reassess their economic strategies, creating a dynamic environment for many industries. This situation, characterized by tariffs and technological competition, may introduce reconfiguration of global supply chains and prompt companies to diversify sourcing and manufacturing locations.
This changing bilateral relationship, which is marked by trade tensions and geopolitical complexities, has prompted both nations to reassess their economic strategies, creating a dynamic environment for many industries. This environment, characterized by tariffs and technological competition, may introduce reconfiguration of global supply chains and prompt companies to diversify sourcing and manufacturing locations.
Through our “People Promise,” we promote a workplace environment where our employees are empowered, feel included, and have an opportunity to make a difference through their work at Ciena. In doing so, we seek to cultivate for employees a culture of vibrancy, belonging and happiness, enabling us to be an attractive employer of choice within our markets.
Through our “People Promise,” we promote a workplace environment where our employees are empowered, feel included, and have an opportunity to make a difference through their work at Ciena. In doing so, we seek to cultivate for employees a culture of belonging and happiness, enabling us to be an attractive employer of choice within our markets.
We seek to develop products aimed at optimizing price for performance, managing power consumption, lifecycle operating costs and space requirements, and minimizing the environmental impact of our customers’ network operations. Our approach is also focused on designing products that address a range of emerging consumption models for networking solutions.
We seek to develop products aimed at optimizing price for performance, managing power consumption, reducing lifecycle operating costs and space requirements, and minimizing the environmental impact of our customers’ network operations. Our approach is also focused on designing products that address a range of emerging consumption models for networking solutions.
Our competitive landscape has been and is likely to continue to be impacted by international trade and related matters, in particular between the U.S. and China. For example, in May 2019, the U.S. Department of Commerce amended the U.S. Export Administration Regulations (“EAR”) by adding Huawei Technologies Co., Ltd.
Our competitive landscape has been and is likely to continue to be impacted by international trade and related matters, in particular between the U.S. and China. For example, in 2019, the U.S. Department of Commerce amended the U.S. Export Administration Regulations (“EAR”) by adding Huawei Technologies Co., Ltd.
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”) .
Emerging technologies, services, and applications are further impacting, or are 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. Examples of these include: • Internet of Things (“IoT”) .
In addition, current dynamics between the United States and China are playing a pivotal role in shaping the global supply chain landscape, and have had an important impact on trade policies, resiliency efforts, and various domestic preference and investment initiatives.
Current dynamics between the United States and China are playing a pivotal role in shaping the global supply chain landscape, and have had an important impact on trade policies, resiliency efforts, and various domestic preference and investment initiatives.
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 and integrated 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.
As we promote our corporate strategy and seek increased customer adoption of our Blue Planet Automation Software, we expect to compete more directly with software vendors and traditional IT services vendors. Competitors for our Blue Planet Automation Software include Cisco, Nokia, Amdocs, Netcracker and Ericsson.
As we promote our corporate strategy and seek increased customer adoption of our Blue Planet Automation Software, we expect to compete more directly with software vendors and traditional IT services vendors. Competitors for our Blue Planet Automation Software include Cisco, Nokia, Amdocs, ServiceNow, Netcracker, and Ericsson.
(“Huawei”) and certain affiliates to the “Entity List” for actions contrary to the national security and foreign policy interests of the U.S., resulting in significant new restrictions on the export, reexport and transfer of U.S. regulated technologies and products to Huawei. In August 2020, the U.S.
(“Huawei”) and certain affiliates to the “Entity List” for actions contrary to the national security and foreign policy interests of the U.S., resulting in significant new restrictions on the export, reexport and transfer of U.S. regulated technologies and products to Huawei. In 2020, the U.S.
This network traffic growth is being driven by a diverse set of communications services that often require on-demand service levels by enterprise and consumer end users, as well as cloud-based services and applications: • Cloud-Based Services.
This network traffic growth is being driven by a diverse set of communications services that often require on-demand service levels by enterprise and consumer end users, as well as cloud-based and AI services and applications: • Cloud-Based Services.
Separately, the U.S. has taken steps to restrict federal agencies from doing business with, and U.S. wireless carriers from using federal subsidies to buy equipment from, Huawei and ZTE. The U.S. has also encouraged other governments to consider similar restrictions.
Separately, the U.S. government has taken steps to restrict federal agencies from doing business with, and U.S. wireless carriers from using federal subsidies to buy equipment from, Huawei and ZTE. The U.S. government has also encouraged other governments to consider similar restrictions.
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.
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 offer flexible paid time-off to more than 98% of our workforce globally.
Enterprises and consumers continue to replace locally-housed computing and storage by adopting a broad array of innovative cloud-based models – including Platform as a Service (PaaS), Software as a Service (SaaS) and Infrastructure as a Service (IaaS) – and an expanding range of cloud-based services that host key applications, store data, enable the viewing and downloading of content, and utilize on-demand computing resources.
Enterprises and consumers continue to replace locally-housed computing and storage by adopting a broad array of innovative cloud-based models – including Platform as a Service (PaaS), Software as a Service (“SaaS”) and Infrastructure as a Service (IaaS) – and an expanding range of cloud-based services that host key applications, store data, enable the viewing and downloading of content, and utilize on-demand computing resources.
Central to our Routing and Switching platforms is our SAOS next-gen IP network operating system, which provides the software-based capabilities to support 5G, IP VPN services, access, PON, converged interconnect network (CIN) architectures, and coherent optical transport applications in our portfolio. SAOS provides automation-friendly intelligence and operational data to enable network-level programmability supported by open standards.
Central to our Routing and Switching platforms is our SAOS next-gen IP network operating system, which provides the software-based capabilities to support 5G, IP VPN services, access, PON, converged interconnect network (CIN) architectures, and coherent routing applications in our portfolio. SAOS provides automation-friendly intelligence and operational data to enable network-level programmability supported by open standards.
Blue Planet provides model-driven, intent-based service orchestration across multiple physical and virtual network domains, multiple layers (Optical, Ethernet, IP, SD WAN, PON, Mobile Core, RAN, and slicing), and multiple hardware and software vendors. • Multi-Cloud Orchestration (“MCO”) . Operators are deploying a growing number of cloud-based services to meet the needs of their customers.
Blue Planet provides model-driven, intent-based service orchestration across multiple physical and virtual network domains, multiple layers (Optical, Ethernet, IP, SD WAN, PON, Mobile Core, RAN, and slicing), across any set of hardware and software vendors. • Multi-Cloud Orchestration (“MCO”) . Operators are deploying a growing number of cloud-based services to meet the needs of their customers.
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.
We also maintain a global partner program that includes distributors, resellers, systems integrators, service providers, OEMs, 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.
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.
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. We do this through recruiting outreach, internal networking and resource groups, inclusivity networks, and mentoring programs.
In addition to our systems and software, we also offer a broad range of services that help our customers build, operate and improve their networks and associated operational environments. These include network transformation, consulting, implementation, systems integration, maintenance, network operations center (“NOC”) management, learning, and optimization services.
In addition to our systems and software, we also offer a broad range of services that help our customers build, operate, and improve their networks and associated operational environments. These include network transformation, consulting, implementation, systems integration, maintenance, network operations center (NOC) management, learning, and optimization services.
The RBA Code of Conduct establishes standards that aim to ensure working conditions in the electronics industry, or industries in which electronics are a key component, and its supply chains are safe, that workers are treated with respect and dignity, and that business operations are environmentally responsible and conducted ethically.
The RBA Code of Conduct establishes standards that aim to ensure that working conditions in the electronics industry, or industries in which electronics are a key component, and in their supply chains are safe, that workers are treated with respect and dignity, and that business operations are environmentally responsible and conducted ethically.
For a more detailed discussion of the current supply and demand environment and our backlog, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations– Overview” in Item 7 of Part II of this report. Competition Competition among networking solution vendors remains intense on a global basis.
For a more detailed discussion of the current demand environment and our backlog, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations– Overview” in Item 7 of Part II of this annual report. Competition Competition among networking solution vendors remains intense on a global basis.
Our 6500 Reconfigurable Line System (“RLS”) is a compact, disaggregated, intelligent photonic layer line system that improves scalability, reduces footprint, and offers flexibility and programmability. Its applications include subsea, long-haul and metro data center interconnection and general network modernization and simplification.
Our 6500 Reconfigurable Line System (“RLS”) is a compact, disaggregated, open intelligent photonic layer line system that improves scalability, reduces footprint, and offers flexibility and programmability. Its applications include subsea, long-haul and metro networks and data center interconnection and general network modernization and simplification.
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 also offer solutions that 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. Optical Networking .
To ensure that our product development investments and solutions offerings are closely aligned with market demand, we continually seek input from customers and promote collaboration among our product development, marketing and sales organizations.
To ensure that our product development investments and solutions offerings are closely aligned with market demand, we regularly seek input from customers and promote collaboration among our product development, marketing, and sales organizations.
In fiscal 2023, we continued to run a targeted development program aimed at strengthening 17 Table of Contents underrepresented individuals’ sense of belonging and enhancing communication, confidence, self-awareness and financial acumen. • Support Employee Wellbeing and Engagement. We prioritize supporting the overall wellbeing of our employees and their eligible dependents.
In fiscal 2023, we continued to run a targeted development program aimed at strengthening underrepresented individuals’ sense of belonging and enhancing communication, confidence, self-awareness and financial acumen. • Support Employee Wellbeing and Engagement. We prioritize supporting the overall wellbeing of our employees and their eligible dependents.
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 rely upon third-party contract manufacturers, including those with facilities in Canada, Mexico, Thailand, India, 15 Table of Contents 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, including tariffs, and physical risk, including the impact of climate change.
Industry Background Network Traffic Growth and Increased Capacity Requirements 5 Table of Contents The markets into which we sell are dynamic and characterized by a high rate of change.
Industry Background Network Traffic Growth and Increased Capacity Requirements 6 Table of Contents The markets into which we sell are dynamic and characterized by a high rate of change.
These connections allow sharing of data that can be monitored and analyzed, including in smart grid applications, health care and safety monitoring, resource and inventory management, home entertainment, consumer appliances, connected transportation and other M2M data applications. • Immersive Technologies and Ultra-High Definition Video (“UHD”).
These connections allow sharing of data that can be monitored and analyzed, including in smart grid applications, health care and safety monitoring, resource and 7 Table of Contents inventory management, home entertainment, consumer appliances, connected transportation and other M2M data applications. • Immersive Technologies and Ultra-High Definition Video (“UHD”).
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.
The effects of the dynamic demand environment we have experienced in recent periods, together with our backlog, have impacted and may continue to impact the traditional seasonality in our business.
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.
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.
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.
Through our Blue Planet ® Automation Software, we also enable complete service lifecycle management automation with productized operational support systems (“OSS”), including inventory, orchestration, and assurance solutions that help our customers to achieve closed loop automation across multi-vendor and multi-domain environments.
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).
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.
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.
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 are focused on maintaining a high-touch, consultative relationship with our customers.
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.
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 European Union (“EU”) General Data Protection Regulation (the “GDPR”), cybersecurity laws and regulations, and environmental regulations, among others.
We also offer our 5400 family of Packet-Optical Platforms, which provide for optical transport, traffic aggregation at the network edge and switching that are optimized for handoff at the network core. Routing and Switching .
We also offer our 5400 family of Packet-Optical Platforms, which provide for optical transport, traffic aggregation at the network edge and switching that are optimized for handoff at the network core. 11 Table of Contents Routing and Switching .
Platform Software and Services Our software offerings also include our Platform Software, which provides domain control management, analytics, data and planning tools and applications to assist customers in managing their networks, including by creating more efficient operations and more proactive visibility into their networks. Our Platform Software includes: • Manage, Control and Plan .
Platform Software and Services Our software offerings also include our Platform Software, which provides domain control management, analytics, data and planning tools and applications to assist customers in managing their networks, including by creating more efficient operations and more proactive visibility into their networks. Our Platform Software includes: • Navigator NCS .
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.
Navigator NCS 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 Navigator NCS domain controller provides fault, configuration, accounting, performance, and security management for multi-layer, multi-vendor networks, in combination with services management and online network planning.
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.
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, inventory levels, and we continually evaluate their services in an effort to ensure performance on a reliable and cost-effective basis.
We may also face competition from system and component vendors, including those in our supply chain, who develop pluggable modem technology or other networking products based on off-the-shelf or commoditized hardware technology, referred to as “white box” hardware, particularly where a customer’s network strategy seeks to emphasize deployment of such product offerings or to adopt a disaggregated approach to the procurement of hardware and software.
We may also face competition from system and component vendors, including those in our supply chain, who develop pluggable modem technology or other networking products based on off-the-shelf or commoditized hardware technology, particularly where a customer’s network strategy seeks to emphasize deployment of such product offerings or the adoption of a disaggregated approach to the procurement of hardware and software.
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.
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 business and operations are currently subject to environmental laws in various jurisdictions around the world, including the Waste Electrical and Electronic Equipment (“WEEE”) and Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (“RoHS”) regulations adopted by the European Union (the “EU”).
Our business and operations are currently subject to environmental laws in various jurisdictions around the world, including the Waste Electrical and Electronic Equipment (“WEEE”) and Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (“RoHS”) regulations adopted by the EU.
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.
Optical networks – which carry video, data, and voice traffic by encoding digital information on multiple wavelengths of light traveling across fiber optic cables – continue to experience strong demand for increased bandwidth due to traffic growth.
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.
As we achieve further customer adoption of our Navigator NCS software platform, and as we transition features, functionality and customers to that platform, we expect revenue to decline for our legacy Platform Software solutions.
The Blue Planet Automation Software portfolio allows operators to fulfill services rapidly and to meet end-customer quality-of-experience expectations via an entire services lifecycle approach. It also advances network operators towards their vision of self-healing and self-optimizing networks via closed loop automation.
The Blue Planet Automation Software portfolio allows operators to fulfill services rapidly and to meet end-customer quality-of-experience expectations through an entire services lifecycle approach. It also advances network operators towards 13 Table of Contents their vision of self-healing and self-optimizing networks through closed loop automation.
Because of their scale and resources, they may be perceived to be a better fit for the procurement or network strategies of larger network operators.
Because of their scale and resources, 16 Table of Contents they may be perceived to be a better fit for the procurement or network strategies of larger network operators.
The O-NID allows network providers to seamlessly extend the reach of their OTN networks closer to the edge and customer premises where space and power are limited and can efficiently deliver gigabit ethernet (“GbE”)/10GbE services and 10G waves to the customer premises with a solution that simplifies deployments, service turn-up, and management.
The O-NID allows network providers to seamlessly extend the reach of their OTN networks closer to the edge and customer premises where space and power are limited and can efficiently deliver gigabit ethernet 1GbE/10GbE/100GbE services and 100/200G waves to the customer premises with a solution that simplifies deployments, service turn-up, and management.
Our 8100 Coherent Routing platforms combine high-capacity multi-terabit IP routing and switching from 1GbE to 100GbE with high capacity WaveLogic 5 Nano coherent optical transport from 100/200/400GbE for next-generation metro and edge applications. Our WaveRouter™ is a purpose-built coherent metro router designed to converge IP and Optical layers in the metro network.
Our 8100 Coherent Routing platforms combine high-capacity multi-terabit IP routing and switching from 1 gigabit ethernet (“GbE”) to 400GbE with high capacity WaveLogic 5 Nano coherent optical transport from 100/200/400GbE for next-generation metro and edge applications. Our WaveRouter™ is a purpose-built coherent metro router designed to converge IP and Optical layers in the metro network.
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.
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.
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.
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, or other strategic technology relationships or investments.
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.
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 November 2, 2024, 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.
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 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, Marvell Technology Group, and Adtran.
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.
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 68% of our employees on these surveys in fiscal 2024.
Further, some network operators are pursuing network strategies that emphasize the deployment of smaller form factor, pluggable modem technology, that can be housed in a switch or router platform or used in place of a modem in a traditional optical system.
In addition, some network operators are pursuing network strategies that emphasize the deployment of smaller form factor, 8 Table of Contents pluggable modem technology, that can be housed in a switch or router platform or used in place of a modem in a traditional optical system.
Following that, he held executive roles at Sidera Networks and SafeNet. He then joined Cyan, Inc. in 2013, where he served as Chief Marketing Officer, before rejoining Ciena in 2015 through our acquisition of Cyan, Inc.
Cumello initially joined Ciena in 2004 through our acquisition of Internet Photonics. Following that, he held executive roles at Sidera Networks and SafeNet. He then joined Cyan, Inc. in 2013, where he served as Chief Marketing Officer, before rejoining Ciena in 2015 through our acquisition of Cyan, Inc.
Our marketing team supports our sales efforts through a variety of activities, including direct customer interaction, account-based marketing campaigns, portfolio marketing, industry events, media relations, industry analyst relations, social media, trade shows, our website and other marketing vehicles for our customers and channel partners.
Our marketing team supports our sales efforts through a variety of activities, including direct customer interaction, account-based marketing campaigns, portfolio marketing, industry events, media relations, industry analyst relations, social media, trade shows, our website and other marketing vehicles for our customers and channel partners. A small number of customers currently account for a significant portion of our revenue.
Environment and Sustainability In 2023, we set new environmental goals that have been approved by the Science Based Target initiative and align our decarbonization efforts with the Paris Climate Agreement to limit global warming to 1.5 degrees Celsius above pre-industrial levels.
Environment and Sustainability Our environmental goals have been approved by the Science Based Target initiative and that align our decarbonization efforts with the Paris Climate Agreement goal to limit global warming to 1.5 degrees Celsius above pre-industrial levels.
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.
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 19 Table of Contents digital divide.
Our competitors include Nokia, Huawei (as defined below), Cisco, Juniper Networks, and ZTE. As compared to us, many of these competitors have substantially greater financial, operational and marketing resources, significantly broader product offerings and more established relationships with service providers and other customer segments.
Our competitors include Nokia, Huawei (as defined below), Cisco, Juniper Networks, and ZTE. As compared to us, many of these competitors have substantially greater financial, operational and marketing resources, significantly broader product offerings, and more established relationships with customers.
Smith 63 President, Chief Executive Officer and Director Joe Cumello 52 Senior Vice President and General Manager of Blue Planet Dino DiPerna 62 Senior Vice President, Global Research & Development Brodie Gage 48 Senior Vice President, Global Products & Supply Chain Sheela Kosaraju 51 Senior Vice President and General Counsel, and acting Chief People Officer James E.
Smith 64 President and Chief Executive Officer Joe Cumello 53 Senior Vice President and General Manager of Blue Planet Dino DiPerna 63 Senior Vice President, Global Research & Development Brodie Gage 49 Senior Vice President, Global Products & Supply Chain Sheela Kosaraju 52 Senior Vice President and General Counsel, and acting Chief People Officer James E.
Our 6500 Packet Transport System (“PTS”) combines packet switching, control plane operation and integrated optics. Together with our 3900 platforms, PTS enables our service provider customers to migrate their legacy TDM (SONET/SDH/PDH) services to a scalable, lower operational cost packet solution.
Our 6500 Packet Transport System (“PTS”) combines packet switching, control plane operation, and integrated optics. Together with our 3900 platforms, PTS enables our service provider customers to migrate their legacy TDM (SONET/SDH/PDH) services to a scalable, lower operational cost packet solution. Our Routing and Switching portfolio includes our fiber-based broadband access solutions.
We regularly assess and monitor our supply chain risks, and have implemented various strategies to mitigate these risks and enhance resilience. These measures include dual-sourcing strategies, inventory management initiatives, and ongoing collaboration with key suppliers to ensure transparency and alignment with our goals.
We regularly assess and monitor our supply chain risks and have implemented various strategies to mitigate these risks and enhance resilience. These measures include dual-sourcing strategies, inventory management initiatives, multi-geography operational capabilities, and ongoing direct relationships with key suppliers to ensure transparency and alignment with our goals.
In so doing, we believe that Blue Planet can help customers with their digital transformations by transitioning legacy networks into “service ready” networks, accelerating the creation, delivery and management of new services.
Through this automation, we believe that Blue Planet can help customers with their digital transformations by transitioning legacy networks into “service ready” networks, accelerating the creation, delivery and management of new 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.
Our suite of Navigator NCS applications integrate software control and analytics applications in a unified interface that provides network performance data. Through our suite of Navigator NCS applications and open APIs, Navigator NCS software can integrate into network operators’ OSS and business processes, supporting our customers’ journeys towards automation of end-to-end operational workflows. • Platform Software Services.
Our executive team is actively involved in and sponsors key initiatives and employee resource groups intended to promote this corporate culture. To that end, our people strategy is focused on the following: • Promote a Diverse, Inclusive, and Equitable Culture.
Our executive team is actively involved in and sponsors key initiatives and employee resource groups intended to promote this corporate culture. To that end, our people strategy is focused on the following: • Promote a Diverse, Inclusive, and Equitable Culture. We believe inclusivity and diversity contribute to business success.
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.
We have a broad base of talent in 39 countries, with approximately 56% in the Americas, 36% 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.
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.
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 submit CDP climate change and water disclosures and Ecovadis sustainability disclosures annually, and we are a member of the RBA.
We regularly monitor our recruitment process to improve the diversity of our workforce and candidate pool and continue to offer Conscious Inclusion workshops to deepen understanding within our diverse groups.
We regularly monitor our recruitment process in consideration of the diversity of our workforce and candidate pool and continue to offer Conscious Inclusion workshops to deepen understanding within our diverse 18 Table of Contents groups.
In addition to their direct investment in building and operating networks, these customers are also significant purchasers of capacity on submarine and wireline networks globally, and they heavily influence networking solution alternatives by other network operators, including communications service providers. • Cable and Multiservice Operators (MSO).
In addition to their direct purchases, these customers are also significant purchasers of capacity on submarine and wireline networks globally, and they heavily influence networking solution alternatives by other network operators, including communications service providers. • Cable and Multiservice Operators (MSO). Our customers include regional, metro, national, and international cable and multiservice operators. • Submarine Network Operators.
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.
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 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; • Investing in photonic line systems and coherent pluggables for application inside and around the data center; • 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 Navigator NCS 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. 14 Table of Contents 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.
Key to our delivery of strong services offerings is our close collaboration with our customers, which allows us to gain valuable insight into the challenges they face and provide services that meet their desired business outcomes. Embrace Multiple Consumption Models and Offer Component Level Solutions.
Key to our delivery of strong services offerings is our close collaboration with our customers, which allows us to gain insight into the challenges they face and to provide services that meet their desired business outcomes.
Adoption of these technologies is expected to continue to increase as the IoT expands and additional services are created, and ML and AI are expected to serve as drivers of further network traffic and solutions innovation, including driving bandwidth needs in industries including manufacturing, research and development, robotics, security, healthcare, and transportation. • Generative AI (“Gen-AI”).
Adoption of these technologies is expected to continue to increase as the IoT expands and additional services are created, and ML and AI are expected to continue to serve as drivers of further network traffic and solutions innovation, including driving bandwidth demands in various industries, including manufacturing, research and development, robotics, security, healthcare, and transportation. • Fiber-Based Access Networks - Residential and Enterprise .
By addressing multiple consumption models, including by offering component level solutions to the market, we seek to secure a larger portion of the world’s optical network wavelengths, expand our addressable market and access new customer verticals and applications. Grow Addressable Market Opportunity by Accessing High-Growth Applications and Customer Segments.
By addressing multiple consumption models, including by offering component level solutions to the market, we seek to secure a larger portion of the world’s optical network wavelengths, expand our addressable market and access new customer verticals and applications. Grow Addressable Market in Next Generation Metro and Edge Networking Solutions.
Generally, our agreements with our suppliers and contract manufacturers are frame agreements against which we place purchase orders and do not commit to long-term volume purchases. We currently use distribution partners to fulfill and deliver our products.
Generally, our agreements with our suppliers and contract manufacturers are frame agreements against which we place purchase orders and do not commit to long-term volume purchases. We currently use partners and, in some cases, the same partners that support our manufacturing, to fulfill and deliver our products to customers.
We seek to ensure that our key direct suppliers adopt the standards and principles set forth in the RBA Code of Conduct. People and Culture Our technology solutions are developed, marketed, sold and supported by the talented individuals that make up our global workforce of 8,483 employees as of October 28, 2023, over 98% of whom were full-time employees.
We seek to ensure that our key direct suppliers adopt the standards and principles set forth in the RBA Code of Conduct. People and Culture Our technology solutions are developed, marketed, sold and supported by our global workforce of 8,657 employees as of November 2, 2024, over 99% of whom were full-time employees.
Our Waveserver® family of products consists of compact, modular interconnect platforms that allow network operators to scale bandwidth and support high-bandwidth interconnect applications, such as high-speed data transfer from 100G to 800G, content delivery, virtual machine migration and disaster recovery/backup between data centers.
Our Waveserver ® family of products consists of compact, modular interconnect platforms that allow network operators to scale bandwidth and support high-bandwidth interconnect applications, such as high-speed data transfer from 100G to 1.6T, content delivery, including encrypted data transfer between data centers.
Network operators are increasingly looking to their technology vendor partners to help them manage the environmental impact of their networks, including energy use, greenhouse gas emissions, and equipment refurbishment and recycling.
Network operators are also increasingly looking to their technology vendors to help them manage the environmental impact of their networks, including energy use, greenhouse gas emissions, and waste.
Our products and product development efforts pursue improvements in our solutions space and power requirements, creating more efficient and sustainable networks for our customers and enabling their climate ambitions.
Our products and product development efforts pursue power and space improvements aimed to create more efficient and sustainable networks for our customers and enabling their climate ambitions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThere 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.
Biggest changeThere 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; • 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; 31 Table of Contents • the impact of commercial or contractual disputes on our relationships with or the performance of our manufacturing partners; • risks and uncertainties associated with the locations or countries where our products are manufactured, including disruption of manufacturing, logistics, or transit to final destinations caused by factors such as natural and man-made disasters, severe weather events, information technology system failures, commercial disputes, economic, business, labor, political, social, geopolitical, environmental, trade, or public health; • 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.
For example, our customers may choose to adopt disaggregated consumption models or third-party solutions that embed Ciena-designed optical modules instead of purchasing systems-based solutions from us. Accordingly, we may encounter situations where we are competing for opportunities in the market directly against a system from one of our competitors that incorporates Ciena-designed modules or other component technologies.
For example, our customers may choose to adopt disaggregated consumption models or third-party solutions that embed Ciena-designed optical modules instead of purchasing systems-based solutions directly from us. Accordingly, we may encounter situations where we are competing for opportunities in the market directly against a system from one of our competitors that incorporates Ciena-designed modules or other component technologies.
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.
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 could cause significant damage to our business, reputation and operational capacity.
At this time, it remains unclear what additional actions, if any, will be taken by the U.S. or other governments with respect to international trade agreements, the imposition of tariffs on goods imported into the U.S., tax policy related to international commerce, increased export control and investment restrictions, import or use of foreign communications equipment, or other trade matters.
At this time, it remains unclear what additional actions, if any, will be taken by the U.S. or other governments with respect to international trade agreements, the imposition of tariffs on goods imported into the U.S., tax policy related to international commerce, increased export control, sanctions and investment restrictions, import or use of foreign communications equipment, or other trade matters.
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.
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; 28 Table of Contents • 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.
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.
There are a number of significant technology trends or developments underway or emerging – including AI, 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 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.
Our network systems, devices, storage and other business applications, and those 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.
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.
Changes in trade policy, including the imposition of tariffs and other import measures, increased export control, sanctions 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.
A number of our key technology vendors rely upon sales to customers, including our competitors, in China for a material portion of their revenue. Recently, there have been a number of significant geopolitical events, including trade tensions and regulatory actions, involving the governments of the United States and China. In May 2019, the U.S.
A number of our key technology vendors rely upon sales to customers, including our competitors, in China for a material portion of their revenue. There have been a number of significant geopolitical events, including trade tensions and regulatory actions, involving the governments of the United States and China. In May 2019, the U.S.
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.
We are a party to credit agreements relating to a $300 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 million in aggregate principal amount of 4.00% senior notes due 2030.
Macroeconomic and market conditions could also be adversely affected by a variety of political, economic or other factors in the United States and international markets that could in turn adversely affect spending levels of our customers and their end users, and could create volatility or deteriorating conditions in the markets in which we operate.
Market conditions could also be adversely affected by a variety of political, economic or other factors in the United States and international markets that could in turn adversely affect spending levels of our customers and their end users, and could create volatility or deteriorating conditions in the markets in which we operate.
We may incur significant costs in response to claims by others that we infringe their intellectual property rights. From time to time third parties may assert claims or initiate litigation or other proceedings related to patent, copyright, trademark and other intellectual property rights to technologies and related standards that are relevant to our business.
We may incur significant costs in response to claims by others that we infringe upon their intellectual property rights. From time to time third parties may assert claims or initiate litigation or other proceedings related to patent, copyright, trademark and other intellectual property rights to technologies and related standards that are relevant to our business.
We refer to these different approaches as “consumption models.” These consumption models can include: the traditional systems procurement of fully integrated solutions including acquiring hardware, software and services from the same vendor; the procurement of a fully integrated hardware solution from one vendor with the separate use of a network operator’s own SDN-based controller; the procurement of an integrated photonic line system with open interfaces from one vendor and the separate or “disaggregated” procurement of modem technology from a different vendor; or the development and use of published reference designs and open source specifications for the procurement of “white box” hardware to be used with open source software.
We refer to these different approaches as “consumption models.” These consumption models can include: the traditional systems procurement of fully integrated solutions including acquiring hardware, software and services from the same vendor; the procurement of a fully integrated hardware solution from one vendor with the separate use of a network operator’s own software-denied network-based controller; the procurement of an integrated photonic line system with open interfaces from one vendor and the separate or “disaggregated” procurement of modem technology from a different vendor; or the development and use of published reference designs and open source specifications for the procurement of “white box” hardware to be used with open source software.
We are complying with a broad range of U.S. and international sanctions and export control requirements imposed on Russia and, in March 2022, we announced our decision to suspend our business operations in Russia immediately.
We are complying with a broad range of U.S. and international sanctions and export control requirements imposed on Russia and, in March 2022, we announced our decision to suspend our business operations in Russia.
Due to our concentration of revenue in the United States, we would expect to incur a more significant impact from any adverse change in the capital spending environment or macroeconomic or market weakness in the United States.
Due to our concentration of revenue in the United States, we would expect to incur a more significant impact from any adverse change in the capital spending environment or market weakness in the United States.
Moreover, global capital markets have undergone periods of significant volatility and uncertainty in the past, and there can be no assurance that such financing alternatives will be available to us on favorable terms or at all, should we determine it necessary or advisable to seek additional capital. 42 Table of Contents Item 1B. Unresolved Staff Comments Not applicable.
Moreover, global capital markets have undergone periods of significant volatility and uncertainty in the past, and there can be no assurance that such financing alternatives will be available to us on favorable terms or at all, should we determine it necessary or advisable to seek additional capital. 41 Table of Contents Item 1B. Unresolved Staff Comments Not applicable.
We have incurred, and will continue to incur, expenses to comply with privacy and data protection standards and protocols imposed by law, regulation, industry standards and contractual obligations.
We have incurred, and will continue to incur, expenses to comply with cybersecurity, privacy, and data protection standards and protocols imposed by law, regulation, industry standards and contractual obligations.
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.
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 and/or their network environments could be impacted, our reputation could be harmed, and we may become involved in litigation, including with respect to allegations of breach of contract.
The international scale of our sales and operations exposes us to additional risk and expense that could adversely affect our results of operations. 30 Table of Contents We market, sell and service our products globally, maintain personnel in numerous countries, and rely on a global supply chain for sourcing important components and manufacturing our products.
The international scale of our sales and operations exposes us to additional risk and expense that could adversely affect our results of operations. 29 Table of Contents We market, sell and service our products globally, maintain personnel in numerous countries, and rely on a global supply chain for sourcing important components and manufacturing our products.
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.
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.
If market conditions or our forecasts for our business or any particular operating segment change, we may be required to reassess the value of these assets. We could be required to record an impairment charge against our goodwill and long-lived assets or a valuation allowance against our deferred 28 Table of Contents tax assets.
If market conditions or our forecasts for our 27 Table of Contents business or any particular operating segment change, we may be required to reassess the value of these assets. We could be required to record an impairment charge against our goodwill and long-lived assets or a valuation allowance against our deferred tax assets.
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.
From fiscal 2020 through fiscal 2024, 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.
From time to time, we have had to replace certain components, provide software remedies or other remediation in response to defects or bugs, and we may have to do so again in the future. Remediation of such events could materially adversely impact our business and results of operations.
From time to time, we have had to replace certain components, provide software remedies or other remediation in response to defects or bugs, and we may have to do so again in the future. Such remediation costs could materially adversely impact our business and results of operations.
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.
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 2024, four cloud providers were among our top ten customers.
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.
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.
Generally, 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.
Generally, 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, including meeting customer delivery time requirements; • 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 24 Table of Contents • ability to offer solutions that help customers manage the lifecycle impacts of their networks and achieve their sustainability goals.
Emerging issues related to the development and use of artificial intelligence (AI) could give rise to legal or regulatory action, damage our reputation or otherwise materially harm of our business . Our development and use of AI technology in our products and operations remains in the early phases.
Emerging issues related to the development and use of AI could give rise to legal or regulatory action, damage our reputation, or otherwise materially harm of our business . Our development and use of AI technology in our products and operations remains in the early phases.
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 .
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 products.
Changes in market demand or investment priorities may also cause us to discontinue existing or planned development for new products or features, which can have a disruptive effect on our relationships with customers.
Changes in market demand or investment priorities may also cause us to discontinue development for new products or features, which can have a disruptive effect on our relationships with customers.
Increased regulation of data collection, use and retention practices, including self-regulation and industry standards, changes in existing laws and regulations, enactment of new laws and regulations, increased enforcement activity, and changes in interpretation of laws, could increase our cost of compliance and operation.
Increased regulation of data collection, use and retention practices, and product security regulations, including self-regulation and industry standards, changes in existing laws and regulations, enactment of new laws and regulations, increased enforcement activity, and changes in interpretation of laws, could increase our cost of compliance and operation.
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.
Within these dynamics, our results for a particular period 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 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, to gain new customers, or to 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 epidemics and pandemics like 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 • any potential seasonal effects in our business.
Department of Commerce amended the EAR by adding Huawei and certain affiliates to the “Entity List” for actions contrary to the national security and foreign policy interests of the United States, imposing significant new restrictions on export, reexport and transfer of U.S. regulated technologies and products to Huawei. In August 2020, the U.S.
Department of Commerce amended the EAR by adding Huawei and certain affiliates to the “Entity List” for actions contrary to the national security and foreign 32 Table of Contents policy interests of the United States, imposing significant new restrictions on export, reexport and transfer of U.S. regulated technologies and products to Huawei. In August 2020, the U.S.
We continually pursue initiatives to transform and optimize our business operations through the reengineering of certain processes, investment in automation, and engagement of strategic partners or resources to assist with certain business functions.
We regularly pursue initiatives to transform and optimize our business operations through the reengineering of certain processes, investment in automation, and engagement of strategic partners or resources to assist with certain business functions.
We recently entered the market for high-performance transceivers/modems to monetize our coherent optical technology, expand our addressable market and address a range of customer consumption models for networking solutions. Making our critical technology available in this manner could adversely impact the sale of products in our existing systems business.
To expand our addressable market and address a range of customer consumption models, we recently entered the market for high-performance transceivers/modems. Making our critical coherent optical technology available in this manner could adversely impact the sale of products in our existing systems business.
We have also been subject to unauthorized access and exfiltration of confidential data as a result of the exploitation of zero day vulnerabilities involving our use of third-party applications.
We have also been subject to unauthorized access and exfiltration of confidential data as a result of the exploitation of vulnerabilities involving our use of third-party applications.
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.
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, attacks against products, and other attempts to gain unauthorized access to network assets, infrastructure or sensitive information.
Emerging regulations may pertain to data privacy, data protection, and the ethical use of AI, as well as clarifying intellectual property considerations. Our use of AI could give rise to legal or regulatory action, increased scrutiny or liability, damage our reputation or otherwise materially harm our business.
Emerging regulations may also pertain to data privacy, data protection, and the ethical use of AI, as well as clarifying intellectual property considerations. Our use of AI could give rise to legal or regulatory action or increased scrutiny or liability, and maydamage our reputation or otherwise materially harm our business.
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.
Quarterly fluctuations from the above and other factors may cause our revenue, gross margin, and results of operations to underperform in relation to our 23 Table of Contents guidance, long-term financial targets or the expectations of financial analysts or investors, which may cause volatility or decreases in our stock price.
Our future success and ability to maintain a technology leadership position depends upon our ability to recruit and retain the services of executive, engineering, sales and marketing, and support personnel.
Our future success and ability to maintain a technology leadership position depend upon our ability to recruit and retain the services of executive, engineering, sales and marketing, and support personnel.
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.
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; • develop non-infringing technology or modify certain products, services, or features, 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.
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 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 37 Table of Contents competitors based in China. More recently, in October 2022, the U.S.
In addition, if the market for technology stocks or the broader stock market continues to experience a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations.
In addition, if the market for technology stocks or the broader stock market experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations.
Our products incorporate software and other technology under license from third parties, and our business would be adversely affected if this technology were no longer available to us on commercially reasonable terms. We integrate third-party software and other technology into our operating system, network management, and intelligent automation software and other products.
Our products incorporate software and other technology under license from third parties, and our business would be adversely affected if this technology were no longer available to us on commercially reasonable terms. 35 Table of Contents We integrate third-party software and other technology into our operating system, network management, and intelligent automation software and other products.
We may not be able to manage our relationships with our service partners effectively, and we cannot be certain that they will be able to deliver services in the manner or time required, that we will be able to maintain the continuity of their services, or that they will adhere to our approach to ethical business practices.
We may not be able to manage our relationships with our service partners effectively, and we cannot be certain that they will be able to perform necessary services in the manner or time required, that we will be able to maintain the continuity of their services, or that they will adhere to ethical business practices.
Although we have been issued numerous patents, and other patent applications are currently pending, there can be no assurance that any of these patents or other proprietary rights will not be challenged, invalidated or circumvented, or that our rights will provide us with any competitive advantage.
Although we own numerous patents, and other patent applications are currently pending, there can be no assurance that any of these patents or other proprietary rights will not be challenged, invalidated or circumvented, or that our rights will provide us with any competitive advantage.
During fiscal 2023, certain customers, including communications service providers and cable and multiservice operators in North America and cloud providers, that had earlier placed significant advanced orders, rescheduled deliveries for a portion of such orders. Accordingly, our inventory needs for a particular period can fluctuate and be difficult to predict.
In addition, during fiscal 2023 and fiscal 2024, certain customers, including communications service providers and cable and multiservice operators in North America, that had earlier placed significant advanced orders, rescheduled deliveries for or cancelled a portion of such orders. Accordingly, our inventory needs for a particular period can fluctuate and be difficult to predict.
We have been subject to several claims related to patent infringement, and we have been requested to indemnify customers pursuant to contractual indemnity obligations relating to infringement claims made by third parties. The rate of infringement assertions by patent assertion entities is increasing, particularly in the United States.
We have been subject to several claims related to patent infringement, and we have been requested to indemnify customers pursuant to contractual indemnity obligations relating to infringement claims made by third parties. The rate of infringement assertions by patent assertion entities remains high, particularly in the United States.
There can be no assurance that we will successfully identify and qualify these resources or that we will realize the expected benefits of these sales relationships. We also rely on a number of third-party service partners, both domestic and international, to complement our global service and support resources. We rely on these partners for certain installation, maintenance and support functions.
There can be no assurance that we will successfully identify and qualify these resources or that we will realize the expected benefits of these sales relationships. We also rely on a number of third-party service partners, both domestic and international, to complement our global service and support resources.
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.
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 November 2, 2024, we had $1.7 billion in outstanding purchase order commitments to our contract manufacturers and component suppliers for inventory.
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.
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. Unanticipated product performance problems can relate to the design, manufacturing, installation, operation and interoperability of our products.
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.
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, severe weather events, or impacts of climate change, data security related incidents, and computer system or network failures.
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.
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 38 Table of Contents jurisdictions. For example, in July 2019, the U.S.
This prohibition currently includes telecommunications equipment produced by Huawei and its affiliates and subsidiaries and four other Chinese companies, and additional entities may be subsequently added to this list.
This prohibition currently includes telecommunications equipment produced by Huawei, its affiliates and subsidiaries, and four other Chinese companies, and additional entities may be subsequently added to this list. In addition, U.S.
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.
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, such as those proposed by the incoming U.S. administration, export compliance, economic sanctions measures, domestic preference procurement requirements, qualification to transact business and additional regulatory requirements; • natural disasters and severe weather events (including related to climate change), acts of war or terrorism, and public health emergencies or pandemics; and • uncertain economic, legal and geopolitical 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 both Russia and Ukraine and Israel and groups based in surrounding regions, including related maritime impacts in the Red Sea, and changes in China-Taiwan and U.S.-China relations.
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.
A small number of customers account for a significant portion of our revenue. 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.
Our industry has historically been dominated by a small number of very large vendors, some of which have substantially greater financial, marketing and research and development resources, broader product offerings and more established relationships with service providers and other customer segments than we do.
Our industry has historically been dominated by a small number of very large vendors, some of which have substantially greater financial, marketing and research and development resources, broader product offerings and more established relationships with service providers and other customer segments than we do. Moreover, acquisition activity among our competitors and peers has increased.
In addition, failure to develop, on a cost-effective basis, innovative new or enhanced solutions that are attractive to customers and profitable to us could have a material adverse effect on our business, results of operations, financial condition and cash flows. We have no guaranteed purchases and regularly must re-win business for existing customers.
In addition, failure to develop new, innovative solutions that are attractive to customers and profitable to us could have a material adverse effect on our business, results of operations, financial condition and cash flows. We have no guaranteed purchases and regularly must re-win business with existing customers.
Delays in product development efforts by us or our supply chain may affect our reputation with customers, affect our ability to capture market opportunities and impact the timing and level of demand for our products.
Delays in product development efforts by us or our third-party partners may affect our reputation with customers, affect our ability to capture market opportunities and impact the timing and level of demand for our products.
Our go-to-market activities and the distribution of our WaveLogic coherent modem technology within the market for high-performance transceivers/modems could expose us to increased or new forms of competition, or adversely affect our existing systems business and results of operations.
Our go-to-market activities and the distribution of our WaveLogic coherent modem technology within the market for high-performance transceivers/modems could expose us to increased competition and poses other risks that could adversely affect our existing systems business or results of operations.
Risks Relating to the Macroeconomic Environment and our Global Presence Our business and operating results could be adversely affected by unfavorable changes in macroeconomic and market conditions and reductions in the level of spending by customers in response to these conditions. Our business and operating results depend significantly on general market and economic conditions.
Risks Relating to the Macroeconomic Environment and our Global Presence Our business and operating results could be adversely affected by unfavorable changes in macroeconomic and market conditions and any reduction in the level of customer spending in response. Our business and operating results depend significantly on general market and economic conditions.
The value of our net deferred tax assets can be significantly impacted by changes in tax policy, changes in future tax rates, or by our tax planning strategy. If any write-downs are required, our operating results may be materially adversely affected. As of October 28, 2023, our balance sheet also includes $444.8 million of goodwill.
The value of our net deferred tax assets can be significantly impacted by changes in tax policy, changes in future tax rates, or by our tax planning strategy. If any write-downs are required, our operating results may be materially adversely affected. As of November 2, 2024, our balance sheet also includes $444.7 million of goodwill.
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.
Accordingly, there is no assurance that we will maintain our incumbency with 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.
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.
Our budgeted expense levels are based on our intent to invest to maintain or increase our technology advantage, 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.
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.
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.
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.
While these types of incidents to which we have been subjected have not had a material effect on our business, technology, 36 Table of Contents operations or our network security to date, future data security incidents could compromise material confidential or otherwise protected information, seize, destroy or corrupt data, impact our customers’ data or systems through attacks on our products in our customers’ environments, or otherwise disrupt our operations or impact our customers or other stakeholders.
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.
Any actual or perceived exposure of our solutions to vulnerabilities, malicious software or cyber-attacks, as well as any product performance, reliability, security and quality problems, may result in some or all of the following effects: • damage to our reputation, reduced demand, 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; • write-offs of inventory or property; • increased warranty expense or estimates resulting from higher failure rates, additional field service obligations or other rework costs related to defects; • regulatory enforcement penalties or settlements; • 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 introducing new products and services, recognizing revenue, or collecting accounts receivable.
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.
China has retaliated by raising tariffs, and imposing new tariffs, on certain exports of U.S. goods to China, introducing blocking measures to restrict the ability of domestic companies to comply with U.S. trade restrictions, and recently prohibiting the export of certain rare minerals from China to the United States, and could take further steps to retaliate against U.S. industries or companies.
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.
We have a number of significant assets on our balance sheet as of November 2, 2024, 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 November 2, 2024, our balance sheet includes a net deferred tax asset of $885.9 million.
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.
As of November 2, 2024, our balance sheet also includes $608.1 million in long-lived assets, which includes $165.0 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.
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.
Citizenship and Immigration Services of 34 Table of Contents 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, operations and financial results could also be adversely impacted by instability, disruption or destruction in a significant geographic region, including as a result of war, terrorism, riot, civil insurrection or social unrest; natural or man-made disasters; public health emergencies; or economic instability or weakness. For example, in February 2022, armed conflict escalated between Russia and Ukraine.
Our business, operations and financial results could also be adversely impacted by instability, disruption or destruction in a significant geographic region, including as a result of war, terrorism, riot, civil insurrection or social unrest; natural or man-made disasters; severe weather events; public health emergencies; or economic instability or weakness.
While it is uncertain whether the U.S. will enact legislation to adopt the minimum tax directive, certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement the minimum tax directive.
While it is uncertain whether the United States will enact legislation to adopt Pillar Two, certain countries in which we operate have enacted legislation, and other countries are in the process of introducing draft legislation to implement the minimum tax directive.
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.
These and other consequences 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.
We rely on third-party resellers and distribution partners to sell our solutions, and on third-party service partners for installation, maintenance and support functions, and our failure to develop and manage these relationships effectively could adversely affect our business, results of operations, and relationships with our customers.
We rely on third-party resellers, distributors and service partners, and our failure to manage these relationships effectively could adversely affect our business, results of operations, and relationships with our customers.
Additionally, a data security incident may result in significant remediation expenses and increased cybersecurity protection and insurance costs. 37 Table of Contents While we work to safeguard our enterprise network systems and to validate the security of our third-party providers to mitigate these potential risks, including through information security policies, employee awareness and training and other technical, procedural and administrative controls, there is no assurance that such actions will be sufficient to prevent future data security incidents or insider threats.
While we work to safeguard our enterprise network systems and products and to diligence the security of our third-party providers to mitigate these potential risks, including through information security policies, employee awareness and training, and other technical, procedural and administrative controls, there is no assurance that such actions will be sufficient to prevent future data security incidents or insider threats.
The U.S. government has raised tariffs, and imposed new tariffs, on a wide range of imports of Chinese products, including component elements of our solutions and certain finished goods products that we sell. U.S. tariff policy involving imports from China are slated for a broad review in 2023.
The U.S. government has raised tariffs, and imposed new tariffs, on a wide range of imports of Chinese products, including component elements of our solutions and certain finished goods products that we sell.
For example, a cloud provider customer accounted for approximately 12.8% of our revenue for fiscal 2023, AT&T accounted for approximately 10.6% of our revenue for fiscal 2023 and 11.9% of our revenue for fiscal 2022, and Verizon accounted for approximately 11.1% of our revenue for fiscal 2022.
A cloud provider customer accounted for approximately 13.3% of our total revenue for fiscal 2024 and 12.8% of our total revenue for fiscal 2023, and AT&T accounted for approximately 11.8% of our total revenue for fiscal 2024 and 10.6% of our total revenue for fiscal 2023.
If our contract manufacturers are unable or unwilling to manufacture our products or components of our products, or if we experience a disruption in manufacturing, we may be required to identify and qualify alternative manufacturers, which could cause us to be delayed in or unable to meet our supply requirements to our customers.
If our contract manufacturers are unable or unwilling to manufacture our products or components of our products to our expected level of performance, or if we experience a disruption in manufacturing, we may be required to identify and qualify alternative manufacturers.
If we are unable to adapt our business to these new consumption models and offer attractive solutions and commercial models that accommodate the range of consumption models ultimately adopted by our customers or within our markets, our business, competitive position and results of operations could be adversely affected.
If we are unable to adapt our business to these new consumption models and offer attractive solutions and commercial models that meet our customers’ needs, our competitive position and results of operations could be adversely affected.
To the extent additional changes take place in the countries in which we operate, it is possible that these legislative changes and efforts may increase uncertainty and have an adverse impact on our effective tax rates or operations.
To the extent additional legislative changes take place in the countries in which we operate, it is possible that these changes may yield an adverse impact on our effective tax rate, financial results and cash flows.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe 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. 43 Table of Contents Hanover, Maryland Headquarters Lease .
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.
Item 2. Properties Overview . As of November 2, 2024, 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.
For additional information regarding our lease obligations, see Note 18 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report. 43 Table of Contents
For additional information regarding our lease obligations, see Note 17 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report. 44 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings The information set forth under the heading “Litigation” in Note 27 to our Consolidated Financial Statements included in Item 8 of Part II of this report, is incorporated herein by reference. Item 4. Mine Safety Disclosures Not applicable. PART II 44 Table of Contents
Biggest changeItem 3. Legal Proceedings The information set forth under the heading “Litigation” in Note 26 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report, is incorporated herein by reference. Item 4. Mine Safety Disclosures Not applicable. PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 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.
Biggest changeItem 4. Mine Safety Disclosures 45 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 62 Item 8.
Removed
Financial 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 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 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.
Biggest changeIssuer Purchases of Equity Securities The following table provides a summary of repurchases of our common stock during the fourth quarter of fiscal 2024: 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 28, 2024 to August 24, 2024 — $ — — $ 131,985 August 25, 2024 to September 28, 2024 865,189 $ 57.21 865,189 $ 82,489 September 29, 2024 to November 2, 2024 1,259,201 $ 65.51 1,259,201 $ — Total 2,124,390 $ 62.13 2,124,390 (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.
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.
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 annual report and Note 21 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for information regarding the stock repurchase programs authorized by our Board of Directors.
The S&P North American Technology-Multimedia Networking Index comprises stocks in the S&P Total Market Index that are classified under the Global Industry Classification Standard communications equipment sub-industry.
The S&P North American Technology-Multimedia Networking Index includes stocks in the S&P Total Market Index that are classified under the Global Industry Classification Standard communications equipment sub-industry.
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.
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 Index from November 1, 2019 to November 1, 2024. 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 8, 2023, there were approximately 685 holders of record of our common stock and 144,830,337 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 13, 2024, there were approximately 652 holders of record of our common stock and 142,115,595 shares of common stock outstanding.
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.
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.
Removed
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.
Added
During the fourth quarter of fiscal 2024, we repurchased $132.0 million of our common stock under such stock repurchase program which completed the authorized repurchases contemplated thereunder.
Added
Comparison of 5-Year Cumulative Total Return Among Ciena Corporation, the S&P North American Technology-Multimedia Networking Index and the Russell 1000 Index 45 Table of Contents The graph tracks the performance of a $100 investment in our common stock and in each of the indices on November 1, 2019 (with the subsequent reinvestment of all dividends at month end).
Added
This graph assumes $100 invested in Ciena Corporation, the Russell 1000 and the S&P North American Technology-Multimedia Networking Index, respectively, on November 1, 2019 with all dividends reinvested at month-end. Stockholder returns over the indicated period are based on historical data and should not be considered indicative of future stockholder returns. (b) Not applicable. (c) Not applicable.

Item 7. Management's Discussion & Analysis

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

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Biggest changeCash Provided by Operating Activities The following sections set forth the components of our $168.3 million of cash provided by operating activities for fiscal 2023: Net Income (adjusted for non-cash charges) The following table sets forth our net income (adjusted for non-cash charges) during fiscal 2023 (in thousands): Year Ended October 28, 2023 Net income $ 254,827 Adjustments for non-cash charges: Loss on extinguishment of debt 1,864 Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements 92,564 Share-based compensation costs 130,455 Amortization of intangible assets 49,616 Deferred taxes (14,852) Provision for inventory excess and obsolescence 29,464 Provision for warranty 31,742 Gain on cost method equity investments, net (26,368) Other 15,771 Net income (adjusted for non-cash charges) $ 565,083 Working Capital 57 Table of Contents We used $396.8 million of cash for working capital during fiscal 2023.
Biggest changeCash Provided by Operating Activities The following sections set forth the components of our $514.5 million of cash provided by operating activities for fiscal 2024: Net Income (adjusted for non-cash charges) The following table sets forth our net income (adjusted for non-cash charges) during fiscal 2024 (in thousands): Year Ended November 2, 2024 Net income $ 83,956 Adjustments for non-cash charges: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements 92,846 Share-based compensation costs 156,404 Amortization of intangible assets 40,624 Deferred taxes (76,810) Provision for inventory excess and obsolescence 77,341 Provision for warranty 25,643 Other 11,768 Net income (adjusted for non-cash charges) $ 411,772 Working Capital The following table sets forth the major components of the cash provided by working capital (in thousands): Year Ended November 2, 2024 Cash provided by accounts receivable $ 80,313 Cash provided by inventories 153,021 Cash used in prepaid expenses and other (198,910) Cash provided by accounts payable, accruals and other obligations 64,255 Cash provided by deferred revenue 9,884 Cash used in operating lease assets and liabilities, net (5,803) Total cash provided by working capital $ 102,760 As compared to the end of fiscal 2023: • The $80.3 million of cash provided by accounts receivable during fiscal 2024 primarily reflects lower sales volume and favorable cash collections during fiscal 2024; • The $153.0 million of cash provided by inventory during fiscal 2024 primarily reflects the consumption of raw materials in excess of purchases.
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.
Our network solutions are used globally by communications service providers, cable and multiservice operators, cloud providers, submarine network operators, governments, and enterprises across multiple industry verticals.
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.
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.
Goodwill is allocated to reporting units based on relative fair value using a discounted cash flow model. If this test indicates that the fair value is less than the carrying value, then an impairment loss is recognized limited to the total amount of goodwill allocated to that reporting unit.
Goodwill is allocated to reporting units based on relative fair value using a discounted cash flow model. If this test indicates that the fair value is less than the carrying value, an impairment loss is recognized limited to the total amount of goodwill allocated to that reporting unit.
Operating expense consists of the component elements described below. • Research and development expense primarily consists of salaries and related employee expense (including share-based compensation expense), prototype costs relating to design, development, product testing, depreciation expense, and third-party consulting costs. • Selling and marketing expense primarily consists of salaries, commissions and related employee expense (including share-based compensation expense) and sales and marketing support expense, including travel, demonstration units, trade show expense, and third-party consulting costs. • General and administrative expense primarily consists of salaries and related employee expense (including share-based compensation expense) and costs for third-party consulting and other services. • Significant asset impairments and restructuring costs primarily reflect actions we have taken to improve the alignment of our workforce, facilities and operating costs with perceived market opportunities, business strategies, changes in market and business conditions, the redesign of certain business processes and significant impairments of assets. • Amortization of intangible assets primarily reflects the amortization of both purchased technology and the value of customer relationships derived from our acquisitions. • 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 activity.
Operating expense consists of the component elements described below. • Research and development expense primarily consists of salaries and related employee expense (including share-based compensation expense), prototype costs relating to design, development, product testing, depreciation expense, and third-party consulting costs. 52 Table of Contents • Selling and marketing expense primarily consists of salaries, commissions and related employee expense (including share-based compensation expense) and sales and marketing support expense, including travel, demonstration units, trade show expense, and third-party consulting costs. • General and administrative expense primarily consists of salaries and related employee expense (including share-based compensation expense) and costs for third-party consulting and other services. • Significant asset impairments and restructuring costs primarily reflect actions we have taken to improve the alignment of our workforce, facilities and operating costs with perceived market opportunities, business strategies, changes in market and business conditions, the redesign of certain business processes and significant impairments of assets. • Amortization of intangible assets primarily reflects the amortization of both purchased technology and the value of customer relationships derived from our acquisitions. • 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 activity.
For more information on our short-term and long-term debt, see Note 19 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report. • Loss on extinguishment and modification of debt primarily reflects $1.9 million of extinguishment of debt costs and $6.0 million in debt modification costs, both related to our term loan refinancing which occurred in the fourth quarter of fiscal 2023.
For more information on our short-term and long-term debt, see Note 18 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report. • Loss on extinguishment and modification of debt primarily reflects $1.9 million of extinguishment of debt costs and $6.0 million in debt modification costs, both related to our term loan refinancing which occurred in the fourth quarter of fiscal 2023.
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.
See Note 17 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.
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.
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.
See Note 24 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for information regarding our assumptions related to share-based compensation and the amount of share-based compensation expense we incurred for the periods covered in this report.
See Note 23 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for information regarding our assumptions related to share-based compensation and the amount of share-based compensation expense we incurred for the periods covered in this annual report.
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.
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.
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.
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.
Inventory write downs are a component of our product cost of goods sold. Upon recognition of the write down, a new lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.
Inventory write downs are a component of our product cost of goods sold. Upon recognition of the write down, a new lower cost basis for 59 Table of Contents that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.
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.
Market Opportunity and Investment in Technology Innovation The market into 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.
Success in taking share and winning new business can result in additional pressure on gross margin from these pricing dynamics and the early stages of these network deployments.
Success in gaining market share and winning new business can result in additional pressure on gross margin from these pricing dynamics and the early stages of these network deployments.
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.
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 $25.6 million, $31.7 million and $17.4 million for fiscal 2024, 2023 and 2022, respectively.
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.
A discussion of fiscal 2023 compared to fiscal 2022 can be found under Item 7 of Part II of our Annual Report on Form 10-K for the fiscal year ended October 28, 2023, filed with the SEC on December 15, 2023, which is available free of charge on the SEC’s website at www.sec.gov and our Investor Relations website at investor.ciena.com.
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.
As of November 2, 2024 , 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.
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
See Note 14 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. 61 Table of Contents
For more information on our acquisitions, see Note 4 to our Consolidated Financial Statements included in Item 8 of Part II of this report.
For more information on our acquisitions, see Note 3 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report.
Deferred Tax Assets Pursuant to ASC Topic 740, Income Taxes, we maintain a valuation allowance for a deferred tax asset when it is deemed to be more likely than not that some or all of the deferred tax asset will not be realized.
Deferred Tax Assets Pursuant to Accounting Standards Codification (“ASC”) Topic 740, Income Taxes, we maintain a valuation allowance for a deferred tax asset when it is deemed to be more likely than not that some or all of the deferred tax asset will not be realized.
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.
For more details, see Note 17 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report. Our days sales outstanding (“DSOs”) were 96 for fiscal 2024, as compared to 95 for fiscal 2023. The calculation of DSOs includes accounts receivable, net and contract assets for unbilled receivables, net included in prepaid expenses and other.
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.
There were no goodwill impairments resulting from our fiscal 2024 and 2023 impairment tests, 60 Table of Contents and no reporting unit was determined to be at risk of failing the goodwill impairment test. See Note 13 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report.
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.
Through our Blue Planet Automation Software, we also enable complete service lifecycle management automation with productized OSS, including inventory, orchestration and assurance solutions that help our customers to achieve closed loop automation across multi-vendor and multi-domain environments.
During the second half of fiscal 2023, supply for certain long lead time components began to stabilize and the need to place advance orders decreased for these components. As of October 28, 2023 and October 29, 2022, we had $1.7 billion and $2.6 billion, respectively, in outstanding purchase order commitments to our contract manufacturers and component suppliers for inventory.
During the second half of fiscal 2023, supply for certain long lead time components began to stabilize, and the need to place advance orders decreased for these components. As of November 2, 2024 and October 28, 2023, we had $1.7 billion, for both fiscal periods in outstanding purchase order commitments to our contract manufacturers and component suppliers for inventory.
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.
As of November 2, 2024, we had $1.2 billion outstanding principal associated with our 2030 New Term Loan, with $11.7 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 November 2, 2024.
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.
For additional information about our short-term and long-term debt and interest rate swaps, see Notes 15 and 18 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. 57 Table of Contents Purchase Order Obligations.
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.
We expect operating expense to continue to increase from the level reported in fiscal 2024 primarily due to planned investment in research and development to advance our strategy and higher employee compensation costs.
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.
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 November 2, 2024 and October 28, 2023, these assets totaled $608.1 million and $575.0 million , net, respectively.
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.
Warranty Our liability for product warranties, included in accrued liabilities and other short-term obligations, was $55.3 million and $57.1 million as of November 2, 2024 and October 28, 2023, respectively. Our products are generally covered by a warranty for periods ranging from one to five years.
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.
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 November 2, 2024 , we had fixed lease payment obligations of $106.7 million, with $23.4 million payable within 12 months.
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.
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 $908.6 million and $1.0 billion as of November 2, 2024 and October 28, 2023 , respectively.
We regularly evaluate our liquidity position, debt obligations, and anticipated cash needs to fund our operating or investment plans, and will continue to consider capital raising and other market opportunities that may be available to us.
We regularly evaluate our liquidity position, debt obligations, and anticipated cash needs to fund our operating or investment plans, and we will continue to consider capital raising and other market opportunities that may be available to us. We regularly evaluate alternatives to manage our capital structure and market opportunities to enhance our liquidity and provide further operational and strategic flexibility.
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.
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 $19.0 million and $28.4 million as of November 2, 2024 and October 28, 2023 , respectively.
Our allowance for credit losses was $0.1 million and $0.2 million as of October 28, 2023 and October 29, 2022, respectively .
Our allowance for credit losses was $0.4 million and $0.1 million as of November 2, 2024 and October 28, 2023, respectively .
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.
For additional details on our cash provided by operating activities, see the discussion below under the caption “Cash Provided by Operating Activities.” Cash, cash equivalents and investments increased by $82.5 million during fiscal 2024.
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.
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 both November 2, 2024 and October 28, 2023, the goodwill balance was approximately $445.0 million.
At the end of each reporting period, we reassess the probability of achieving the performance targets and the performance period required to meet those targets, and the expense is adjusted accordingly.
At the end of each reporting period, for performance based awards not subject to total stockholder return, we reassess the probability of achieving the performance targets and the performance period required to meet those targets, and the expense is adjusted accordingly.
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 .
There were no borrowings outstanding under the Revolving Credit Facility as of November 2, 2024. Foreign Liquidity . The amount of cash, cash equivalents and short-term investments held by our foreign subsidiaries was $161.7 million as of November 2, 2024 .
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.
Our allowance for credit losses was $9.9 million and $11.7 million as of November 2, 2024 and October 28, 2023 , respectively. Our contract assets for unbilled accounts receivable, net of allowance for credit losses, was $127.9 million and $150.3 million as of November 2, 2024 and October 28, 2023, respectively.
To complement our Networking Platforms, we offer Platform Software, which includes our Manage, Control and Plan (“MCP”) applications that deliver advanced multi-layer domain control and operations.
To complement our Networking Platforms, we offer Platform Software, which includes our Navigator NCS and advanced applications that deliver multi-layer domain control and operations for network operators.
Our gross margin remains highly dependent on our continued ability to drive annual product cost reductions relative to the price erosion that we regularly encounter in our markets. This can be challenging, particularly within the current constrained supply environment.
Our gross margin remains highly dependent on our continued ability to drive annual product cost reductions relative to the price erosion that we regularly encounter in our markets.
At the end of fiscal 2023, the interest rate on the 2030 New Term Loan was 7.33%. (4) The 2030 Senior Notes bear interest at a rate of 4.00% per annum and mature on January 31, 2030. Interest on the 2030 Notes is payable semiannually on January 31 and July 31 of each year.
(2) The 2030 Senior Notes bear interest at a rate of 4.00% per annum and mature on January 31, 2030. Interest on the 2030 Notes is payable semiannually on January 31 and July 31 of each year.
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.
For additional information about our debt, revolving credit facilities and interest rate swaps, see Notes 15, 18 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. Contractual Obligations Debt.
See Note 22 to our Consolidated Financial Statements included in Item 8 of Part II of this report . Liquidity Position.
See Notes 21 and 27 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report . Liquidity Position.
For more information, see Note 19 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report. • Provision (benefit) for income taxes increased by $39.2 million, primarily due to the increase in pre-tax income in fiscal 2023.
For more information, see Note 18 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report. • Provision for income taxes decreased by $32.9 million, primarily due to the decrease in pre-tax income in fiscal 2024.
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.
We principally use the Revolving Credit Facility to support the issuance of letters of credit that arise in the ordinary course of our business and for general corporate purposes. As of November 2, 2024, letters of credit totaling $59.1 million were outstanding under our Revolving Credit Facility.
Future interest payments to be received net of payments under the interest rate swaps totaled $44.4 million, with $15.1 million to be received within 12 months.
Future interest payments to be received net of payments under the interest rate swaps totaled $37.7 million, with $10.8 million to be received within 12 months.
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.
Our Networking Platforms segment revenue decrease primarily reflects a product line sales decrease of $237.0 million of Optical Networking products, including a sales decrease of $198.3 million of our 6500 Packet-Optical Platform, primarily to communications service providers and enterprise customers. In fiscal 2024 and fiscal 2023, our top ten customers contributed 57.9% and 53.7% of our revenue, respectively.
For more information on our acquisition of Tibit, see Note 4 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report. • Interest expense increased, primarily due to additional indebtedness, including the 2030 Term Loan entered into during the first quarter of fiscal 2023, and increased interest on the unhedged portion of the 2025 Term Loan, 2030 Term Loan and 2030 New Term Loan (as defined below), primarily due to higher interest rates.
For more information on our acquisition of Tibit, see Note 3 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report. • Interest expense increased, primarily due to higher interest rates on our floating rate debt, net of hedging activity, and additional outstanding indebtedness, including the 2030 Term Loan incurred in the first quarter of fiscal 2023.
(3) Interest on the 2030 New Term Loan is payable periodically based on the interest period selected for borrowing. The 2030 New Term Loan bears interest at SOFR for the chosen borrowing period plus a spread of 2.00% subject to a minimum SOFR rate of 0.00%.
The 2030 New Term Loan bears interest at SOFR for the chosen borrowing period plus a spread of 2.00% subject to a minimum SOFR rate of 0.00%. At the end of fiscal 2024, the interest rate on the 2030 New Term Loan was 6.76%.
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.
Future interest payments associated with the 2030 New Term Loan totaled $462.8 million, with $78.9 million payable within 12 months. As of November 2, 2024, 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 $88.0 million, with $16.0 million payable within 12 months.
(5) Our interest rate swaps fix the SOFR rate for $350.0 million of our Term Loans at 3.47% through January 2028 and another $350.0 million of our Term Loans at 2.968% through September 2025. In January 2023, we entered into a LIBOR to SOFR basis swap (“basis swap”).
(3) Our interest rate swaps fix the SOFR rate for $350.0 million of our Term Loans at 3.47% through January 2028 and another $350.0 million of our Term Loans at 2.968% through September 2025.
We recognize the estimated fair value of performance-based awards as share-based expense over the performance period, using graded vesting, which considers each performance period or tranche separately, based on our determination of whether it is probable that the performance targets will be achieved.
We recognize the estimated fair value of performance-based awards as share-based expense over the performance period, using graded vesting, which considers each performance period or tranche separately.
Consequently, our financial results are closely correlated with the spending of a relatively small number of customers and can be significantly affected by market, industry or competitive dynamics affecting the businesses of those customers. Our reliance on a relatively small number of customers increases our exposure to changes in their spending levels, network priorities and purchasing strategies.
Consequently, our financial results are closely correlated with the spending of a relatively small number of customers and can 50 Table of Contents be significantly affected by market, industry or competitive dynamics affecting the businesses of those customers.
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.
The Revolving Credit Facility, which we and certain of our subsidiaries entered into on October 24, 2023, replaced the ABL Credit Facility (as defined in Note 19 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report) and provides for a total commitment of $300.0 million with a maturity date of October 24, 2028.
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 decrease in our Americas region revenue for fiscal 2024 was primarily driven by decreased sales in Canada and the United States. The decrease in our APAC region revenue for fiscal 2024 was primarily driven by decreased sales in Australia, India, Singapore and South Korea.
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.
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.
Our gross profit as a percentage of revenue, or “gross margin,” can fluctuate due to a number of factors, particularly when viewed on a quarterly basis. Our gross margin can fluctuate and be adversely impacted depending on our revenue concentration within a particular segment, product line, geography, or customer, including our success in selling software in a particular period.
Our gross margin can fluctuate and be adversely impacted depending on our revenue concentration within a particular segment, product line, geography, or customer, as well as our success in selling software in a particular period.
Other Items The table below sets forth the changes in other items for the periods indicated (in thousands, except percentage data): Fiscal Year 2023 %* 2022 %* Increase (decrease) %** Interest and other income (loss), net $ 62,008 1.4 $ 6,747 0.2 $ 55,261 819.0 Interest expense $ (88,026) (2.0) $ (47,050) (1.3) $ 40,976 87.1 Loss on extinguishment and modification of debt $ (7,874) (0.2) $ — — $ 7,874 100.0 Provision (benefit) for income taxes $ 68,826 1.6 $ 29,603 0.8 $ 39,223 132.5 _________________________________ * Denotes % of total revenue ** Denotes % change from 2022 to 2023 • Interest and other income (loss), net increased by $55.3 million, primarily resulting from higher interest income on our investments and the remeasurement of our previously held investment in Tibit to fair value, which resulted in a gain on our cost method equity investment of $26.5 million.
Other Items The table below sets forth the changes in other items for the periods indicated (in thousands, except percentage data): Fiscal Year 2024 %* 2023 %* Increase (decrease) %** Interest and other income, net $ 50,261 1.3 $ 62,008 1.4 $ (11,747) (18.9) Interest expense $ (97,028) (2.4) $ (88,026) (2.0) $ 9,002 10.2 Loss on extinguishment and modification of debt $ — — $ (7,874) (0.2) $ (7,874) (100.0) Provision for income taxes $ 35,894 0.9 $ 68,826 1.6 $ (32,932) (47.8) _________________________________ * Denotes % of total revenue ** Denotes % change from 2023 to 2024 • Interest and other income, net decreased by $11.7 million, primarily resulting from the remeasurement of our previously held investment in Tibit to fair value, in fiscal 2023, which resulted in a gain on our equity investment of $26.5 million and the impact of foreign exchange rates on assets and liabilities denominated in a currency other than the relevant functional currency, net of hedging activity.
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.
See Notes 2 and 24 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for more information on our segment reporting.
While drivers of bandwidth growth and network evolution remain strong, many of our network operator customers are under pressure to constrain their capital expenditure budgets, and their businesses cannot grow their network spending at the rate of bandwidth growth.
No other customer accounted for greater than 10% of our revenue in fiscal 2024 or fiscal 2023. While drivers of bandwidth growth and network evolution remain strong, many of our service provider customers are under pressure to constrain their capital expenditure budgets, and their businesses cannot grow their network spending at the rate of bandwidth growth.
Segment Profit (Loss) The table below sets forth the changes in our segment profit (loss) for the respective periods (in thousands, except percentage data): 55 Table of Contents Fiscal Year 2023 2022 Increase (decrease) %* Segment profit (loss): Networking Platforms $ 778,641 $ 572,305 $ 206,336 36.1 Platform Software and Services $ 186,945 $ 175,108 $ 11,837 6.8 Blue Planet Automation Software and Services $ (33,669) $ (22,388) $ (11,281) (50.4) Global Services $ 196,375 $ 210,663 $ (14,288) (6.8) _________________________________ * Denotes % change from 2022 to 2023 • Networking Platforms segment profit increased by $206.3 million, primarily due to higher sales volume as described above, and higher gross margin, partially offset by increased research and development costs. • Platform Software and Services segment profit increased by $11.8 million, primarily due to higher software-related services sales volume as described above, partially offset by lower software sales volume, increased research and development costs, and lower gross margin on software-related services. • Blue Planet Automation Software and Services segment loss increased by $11.3 million, primarily due to lower sales volume, increased research and development costs and lower gross margin on software-related services, as described above. • Global Services segment profit decreased by $14.3 million, primarily due to higher incremental costs on maintenance related support and lower maintenance support and training revenue, as described above.
Segment Profit (Loss) The table below sets forth the changes in our segment profit (loss) for the respective periods (in thousands, except percentage data): Fiscal Year 2024 2023 Increase (decrease) %* Segment profit (loss): Networking Platforms $ 536,510 $ 778,641 $ (242,131) (31.1) Platform Software and Services $ 231,900 $ 186,945 $ 44,955 24.0 Blue Planet Automation Software and Services $ (11,892) $ (33,669) $ 21,777 64.7 Global Services $ 195,575 $ 196,375 $ (800) (0.4) _________________________________ * Denotes % change from 2023 to 2024 • Networking Platforms segment profit decreased by $242.1 million, primarily due to lower product sales volume and lower product margin, as described above and increased research and development costs. 54 Table of Contents • Platform Software and Services segment profit increased by $45.0 million, primarily due to higher sales volume as described above, partially offset by increased research and development costs. • Blue Planet Automation Software and Services segment loss decreased by $21.8 million, primarily due to higher gross margin on software-related services, increased sales volume, as described above, and decreased research and development costs. • Global Services segment profit decreased slightly by $0.8 million, primarily due to lower gross margin on maintenance support and training partially offset by higher sales volume, as described above.
The value of our net deferred tax asset may be subject to change in the future, depending on our generation or projections of future taxable income, as well as changes in tax policy or our tax planning strategy.
The value of our net deferred tax asset may be subject to change in the future, depending on our generation or projections of future taxable income, as well as changes in tax policy or our tax planning strategy. For further discussion, see Note 22 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report.
The increase within our Routing and Switching product line primarily reflects sales increases of $40.3 million of our 3000 and 5000 families of service delivery and aggregation switches, primarily to cable and multiservice operators and enterprise customers, and $21.4 million of our 8100 Coherent IP networking platforms, primarily to communications service providers. • EMEA revenue increased by $87.9 million, reflecting sales increases of $68.0 million within our Networking Platforms segment, $9.2 million within our Global Services segment, $6.4 million within our Blue Planet Automation Software and Services segment and $4.3 million within our Platform Software and Services segment.
Routing and Switching product line sales primarily reflect a sales decrease of $83.9 million of our 3000 and 5000 families of service delivery and aggregation switches to communications service providers, cable and multiservice operators, and enterprise customers. • EMEA revenue increased by $5.7 million, primarily reflecting sales increases of $12.2 million within our Global Services segment and $5.5 million within our Platform Software and Services segment.
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.
The increase in our EMEA region revenue for fiscal 2024 was partially offset by sales decreases in Great Britain and the Netherlands. 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.
The excess of the purchase price over the estimated fair values of the net tangible and net intangible assets acquired is recorded as goodwill.
The assets acquired, liabilities assumed, contractual contingencies and contingent consideration are recognized at their fair value as of the acquisition date. The excess of the purchase price over the estimated fair values of the net tangible and net intangible assets acquired is recorded as goodwill.
Our outstanding restricted stock unit awards are subject to service-based vesting conditions and/or performance-based vesting conditions. We recognize the estimated fair value of service-based awards as share-based expense ratably over the vesting period on a straight-line basis.
We recognize the estimated fair value of service-based awards as share-based expense ratably over the vesting period on a straight-line basis. Awards with performance-based vesting conditions require the achievement of certain financial or other performance criteria or targets as a condition to the vesting, or acceleration of vesting.
On December 9, 2021, we announced that our Board of Directors authorized a program to repurchase up to $1.0 billion of our common stock, which replaced in its entirety the previous stock repurchase program authorized in fiscal 2019.
On December 9, 2021, we announced that our Board of Directors authorized a program to repurchase up to $1.0 billion of our common stock. During fiscal 2024, we repurchased an additional $250.0 million of our common stock under the stock repurchase program, which completed the authorized repurchases contemplated under the current program.
Other network operators are pursuing a diverse range of consumption models in their design and procurement of network infrastructure solutions. Our Adaptive Network vision and our business strategy to capitalize on these changing market dynamics include the initiatives set forth in the “Strategy” section of the description of our business in Item 1 of Part I of this annual report.
Our business strategy to capitalize on these market dynamics and investment opportunities also include the initiatives set forth in the “Strategy” section of the description of our business in Item 1 of Part I of this annual report.
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.
Operating Segment Revenue 48 Table of Contents See Notes 2 and 24 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for more information on our segment reporting.
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.
Liquidity and Capital Resources Overview. For the fiscal year ended November 2, 2024 , we generated $514.5 million of cash from operations. Net income (adjusted for non-cash charges) provided cash of $411.8 million and our working capital provided cash of $102.7 million.
Product gross margin increased by 50 basis points, primarily due to improved manufacturing efficiencies and lower product costs, partially offset by a higher concentration of lower margin ”common” equipment and photonics sales, as described above. • Gross profit on services increased by $15.1 million.
Product gross margin slightly decreased by 60 basis points, primarily due to a higher concentration of lower margin product mix and higher inventory excess and obsolescence costs partially offset by product cost reductions and improved manufacturing efficiencies. • Gross profit on services increased by $35.6 million.
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.
The table below sets forth the changes in operating expense for the periods indicated (in thousands, except percentage data): Fiscal Year 2024 %* 2023 %* Increase (decrease) %** Research and development $ 767,497 19.1 $ 750,559 17.1 $ 16,938 2.3 Selling and marketing 510,668 12.7 490,804 11.2 19,864 4.0 General and administrative 220,647 5.5 215,284 4.9 5,363 2.5 Significant asset impairments and restructuring costs 24,592 0.6 23,834 0.5 758 3.2 Amortization of intangible assets 29,569 0.7 37,351 0.9 (7,782) (20.8) Acquisition and integration costs — — 3,474 0.1 (3,474) (100.0) Total operating expenses $ 1,552,973 38.6 $ 1,521,306 34.7 $ 31,667 2.1 _________________________________ * Denotes % of total revenue ** Denotes % change from 2023 to 2024 • Research and development expense increased by $16.9 million, net of hedging.
Cash from operations was partially offset by the following: (i) cash used for stock repurchases under our stock repurchase program of $242.2 million; (ii) cash used for the acquisition of businesses of $230.0 million, net of cash acquired; (iii) cash used to fund our investing activities for capital expenditures totaling $106.2 million; (iv) stock repurchased upon vesting of our stock unit awards to employees relating to tax withholding of $38.5 million; and (v) cash used for payments on our term loans of $9.4 million.
Cash from operations was partially offset by the following: (i) cash used for stock repurchases under our stock repurchase program of $254.5 million; (ii) cash used to fund our investing activities for capital expenditures totaling $136.6 million; (iii) stock repurchased upon vesting of our stock unit awards to employees relating to tax withholding of $46.6 million; (iv) cash used for our purchase of an equity investment in a privately held technology company of $21.7 million; and (v) cash used for payments on our term loan due October 28, 2030 (the “2030 New Term Loan”) of $11.7 million.
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.
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.
(6) During fiscal 2023, we issued certain standby letters of credit under the Revolving Credit Facility and its predecessor, the ABL Credit Facility and paid $2.1 million in commitment fees, interest expense and other administrative charges primarily relating to the ABL Credit Facility. The ABL Credit Facility was terminated on October 24, 2023.
(4) During fiscal 2024, we utilized the Revolving Credit Facility to issue certain standby letters of credit and paid nominal commitment fees, interest expense and other administrative charges primarily relating to the Revolving Credit Facility.
The effective tax rate for fiscal 2023 was higher than the effective tax rate for fiscal 2022, primarily due to the mandatory capitalization of research and development expenses in fiscal 2023.
Similarly, the effective tax rate for fiscal 2024 was higher than the effective tax rate for fiscal 2023, primarily due to the decrease in pre-tax income.
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.
The table below sets forth the changes in geographic distribution of revenue for the periods indicated (in thousands, except percentage data): Fiscal Year 2024 %* 2023 %* Increase (decrease) %** Americas $ 2,951,915 73.5 $ 3,110,347 70.9 $ (158,432) (5.1) EMEA 648,870 16.2 643,142 14.7 5,728 0.9 APAC 414,170 10.3 633,060 14.4 (218,890) (34.6) Total $ 4,014,955 100.0 $ 4,386,549 100.0 $ (371,594) (8.5) _________________________________ * Denotes % of total revenue ** Denotes % change from 2023 to 2024 • Americas revenue decreased by $158.4 million, reflecting a sales decrease of $207.3 million within our Networking Platforms segment.
Our principal sources of liquidity include our cash, cash equivalents and investments, which as of October 28, 2023 totaled $1.2 billion, as well as the unused portion of the Revolving Credit Facility.
Our principal sources of liquidity include our cash, cash equivalents and investments, which as of November 2, 2024 totaled $1.3 billion, as well as the unused portion of the Revolving Credit Facility (as defined in Note 19 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report).
The following table sets forth changes in our cash and cash equivalents and investments in marketable debt securities (in thousands): October 28, 2023 October 29, 2022 Increase (decrease) Cash and cash equivalents $ 1,010,618 $ 994,352 $ 16,266 Short-term investments in marketable debt securities 104,753 153,989 (49,236) Long-term investments in marketable debt securities 134,278 35,385 98,893 Total cash and cash equivalents and investments in marketable debt securities $ 1,249,649 $ 1,183,726 $ 65,923 Principal Sources of Liquidity .
The following table sets forth changes in our cash and cash equivalents and investments in marketable debt securities (in thousands): November 2, 2024 October 28, 2023 Increase (decrease) Cash and cash equivalents $ 934,863 $ 1,010,618 $ (75,755) Short-term investments in marketable debt securities 316,343 104,753 211,590 Long-term investments in marketable debt securities 80,920 134,278 (53,358) Total cash and cash equivalents and investments in marketable debt securities $ 1,332,126 $ 1,249,649 $ 82,477 Principal Sources of Liquidity .

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

14 edited+0 added−1 removed3 unchanged
Biggest changeDuring 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.
Biggest changeDuring fiscal 2024, approximately 48.7% of our operating expense was non-U.S. Dollar denominated. During fiscal 2024 as compared to fiscal 2023, the U.S. Dollar primarily strengthened against a number of foreign currencies with minimal impact as compared to fiscal 2023. From time to time, we use foreign currency forward contracts to reduce variability in certain forecasted non-U.S.
We maintain an investment portfolio of various holdings, types, and maturities. See Notes 7 and 8 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for information relating to investments and fair value.
We maintain an investment portfolio of various holdings, types, and maturities. See Notes 6 and 7 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report for information relating to investments and fair value.
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 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, it is subsequently reclassified to the line item in the Consolidated Statements of Operations to which the hedged transaction relates.
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.
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 15 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report.
Generally, these derivatives have maturities of 24 months or less and are designated as cash flow hedges. At the inception of the cash flow hedge, and on an ongoing basis, we assess whether the forward contract has been effective in offsetting changes in cash flows attributable to the hedged risk during the hedging period.
Dollar denominated cash flows. Generally, these derivatives have maturities of 24 months or less and are designated as cash flow hedges. At the inception of the cash flow hedge, and on an ongoing basis, we assess whether the forward contract has been effective in offsetting changes in cash flows attributable to the hedged risk during the hedging period.
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.
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 $2.7 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 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 15 and 18 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.
Because we sell globally, some of our sales transactions and revenue are non-U.S. Dollar denominated, with the Euro, Canadian Dollar and British Pound being our most significant foreign currency revenue exposures. If the U.S. Dollar strengthens against these currencies, our revenue for these transactions reported in U.S. Dollars would decline. For our U.S.
Because we sell globally, some of our sales transactions and revenue are non-U.S. Dollar denominated, with the Euro, Indian Rupee, and Canadian Dollar being our most significant foreign currency revenue exposures. If the U.S. Dollar strengthens against these currencies, our revenue for these transactions reported in U.S. Dollars would decline. For our 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.
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 2024, approximately 14.3% of revenue was non-U.S. Dollar denominated. During fiscal 2024 as compared to fiscal 2023, the U.S.
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.
As such, a 100 basis point (1.0%) increase in the Secured Overnight Financing Rate (“SOFR”) rate as of our most recent SOFR rate setting would increase our annualized interest expense by approximately $4.6 million on the unhedged portion of our 2030 New Term Loan as recognized in our Consolidated Financial Statements.
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.
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, net. During fiscal 2024, we recorded gains on non-hedge designated foreign currency forward contracts of $1.4 million.
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.
During fiscal 2024, we recorded $11.7 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, net on our Consolidated Statements of Operations.
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
See Notes 1, 5 and 15 to our Consolidated Financial Statements included in Item 8 of Part II of this annual report. 62 Table of Contents
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 fluctuated against a number of foreign currencies with minimal impact as compared to fiscal 2023. With regard to operating expense, our primary exposure to foreign currency exchange risk relates to the Canadian Dollar, Indian Rupee and Euro. If these foreign currencies strengthen against the U.S. Dollar, costs reported in U.S. Dollars will increase.
Removed
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.

Other CIEN 10-K year-over-year comparisons