On this page of StockholderLetter.com we present the latest annual shareholder letter from CIENA CORP — ticker symbol CIEN. Reading current and past CIEN letters to shareholders can bring important insights into the investment thesis.
Annual Report 2024
Ciena Leadership Executive Officers Gary B. Smith Joseph R. Cumello James E. Moylan, Jr. Dino DiPerna President, Chief Executive Officer and Director Senior Vice President and Chief Financial Officer Senior Vice President and General Manager of Blue Planet Senior Vice President, Global Research and Development Brodie Gage Scott A. McFeely Executive Advisor Jason M. Phipps Senior Vice President, Global Customer Engagement David M. Rothenstein Senior Vice President, Global Products and Supply Chain Senior Vice President, Chief Strategy Officer and Corporate Secretary Senior Vice President and General Counsel, Interim Chief People Officer Senior Vice President, Global Marketing and Communications Sheela Kosaraju Rebecca Smith Directors Lawton W. Fitt Independent Chairperson of the Board of Directors (Ciena) The Progressive Corporation Hassan M. Ahmed, Ph.D. Former Chairman of the Board and Chief Executive Officer Affirmed Networks Bruce L. Claflin Former Chief Executive Officer 3Com Corporation Patrick T. Gallagher T. Michael Nevens Devinder Kumar Joanne B. Olsen Chairperson Harmonic, Inc. Former Senior Vice President, Chief Financial Officer, Treasurer Advanced Micro Devices, Inc Patrick H. Nettles, Ph.D. Executive Chairperson of the Board of Directors Senior Adviser Permira Advisers, LLC Former Executive Vice President Global Cloud Services and Support Oracle Corporation Mary Puma Former President and Chief Executive Officer Axcelis Technologies, Inc.
To our shareholders Amidst a rapidly evolving industry, we delivered a solid performance in fiscal 2024 and remain a market leader with strong momentum. Our focus on helping customers address rapidly increasing bandwidth demands driven by cloud and Artificial Intelligence (AI) with our industry-leading portfolio is driving market share gains and positions us for accelerated growth in the coming years. Fiscal 2024 Financial Highlights In 2024, we delivered more than $4 billion in revenue, and our orders grew more than 20% year-over-year, demonstrating the demand for our technology and reflecting the strength of our customer relationships. As our Cloud Provider customers invest in their networks to support the growth of AI, they are comprising an increasing proportion of our revenue. In fact, we delivered record revenue to Cloud Providers, with this key customer segment directly contributing $1.2 billion and 30% of total revenue. We also saw continued improvement in the purchasing patterns of Service Providers, particularly in North America, as they work through inventory built up from prior periods and play an increasing role in cloud trends through Managed Optical Fiber Network (MOFN) opportunities. As network operators address growing network demands, our software and services offerings are well-positioned to meet their automation and digital transformation needs. Platform Software and Services revenue was up 18%, while Global Services revenue increased 3% over last year. Our domain controller software, Navigator Network Control Suite, continues to resonate strongly with customers who Gary B. Smith, President and Chief Executive Officer need the control and visibility it delivers across all layers of their networks. Blue Planet, our intelligent automation software division, achieved record revenue of $78 million, an annual increase of 12%. Our balance sheet also remains a significant differentiator. We ended the year with $1.3 billion in cash and investments and generated nearly $380 million in free cash flow. We repurchased $250 million in shares during the fiscal year, completing a $1 billion share repurchase program that began in fiscal 2022. Underscoring our confidence in the future, our Board of Directors authorized a new program to repurchase up to an additional $1 billion in our shares over a threeyear period commencing in fiscal 2025. 1
Technology Market Leadership In 2024, we extended our innovation leadership with significant product development achievements for our Optical Networking solutions, reinforcing our market leadership. We delivered WaveLogic 6, the world s first coherent DSP to be built on a 3 nanometer CMOS process, setting a new standard in optical networking. In doing so, we locked in our position as the only provider of 1.6T-capable coherent modems in the market today. At the same time, our WaveLogic 5 Extreme (WL5e) technology continues to be widely adopted by our customer base. By year-end, we had shipped more than 150,000 WL5e modems, providing customers a solution that delivers meaningful reductions in power and space in their networks. We exited the year with solid momentum behind our pluggables portfolio, having shipped more than 43,000 WaveLogic 5 Nano (WL5n) pluggables. In 2024, we also won the first award from any major Cloud Provider for an 800G ZR plug. And, we continue to innovate to expand our market opportunity with pluggables. We announced our WL6n 1.6T CoherentLite pluggable, which is designed to optimize performance and efficiency of data center and campus networks as they scale to support cloud and AI traffic. In Routing and Switching, we gained more than 125 new customers for our advanced IP Routing solutions, demonstrating the strength and innovation in this portfolio. Importantly, we announced a Tier 1 Service Provider customer for WaveRouter and added two new solutions to the WaveRouter family that deliver expanded flexibility and scale for customers. As Service Providers evolve their businesses, they seek to accelerate the automation and optimization of their network and service lifecycle operations. Blue Planet and Navigator fulfill these needs with advanced solutions that enable this operational transformation. While these elements are not new to our business, Revenue Adjusted Gross Profit1 (in billions) (in billions) $4.39 $3.53 $3.62 $3.63 20 21 22 23 $4.01 24 Adjusted Operating Profit1 $1.74 $1.68 20 21 $1.91 $1.58 22 23 $1.75 24 Adjusted EPS1 (in millions) $620 $607 $407 20 1 21 $2.95 $573 22 $2.91 $388 23 24 $1.90 20 A reconciliation of these non-GAAP measures to our GAAP results is included in the press release for the relative period. 2 $2.72 21 22 $1.82 23 24
they deliver a strong and differentiated value proposition to address the transformation challenges our customers face. Intersecting Opportunity Across the broader market landscape, bandwidth remains the most consistent driver for our business, growing approximately 30% per year. With cloud and AI now the leading drivers of demand, we believe bandwidth growth will rise above these historical levels over the coming years. AI traffic is already flowing out of the data center and impacting all parts of the network, and we see evidence of this in our business today, based on the needs of our Cloud and Service Provider customers alike. Our strategy to take full advantage of this growth of cloud and AI traffic across multiple network segments is rooted in our high-speed optical technology leadership. More specifically, we aim to grow our core business while expanding our addressable market, leveraging the significant competitive advantage of our leading optical technology. This includes driving continued market share gain in subsea, long-haul, metro, DCI and MOFN opportunities with our optical systems. Additionally, we seek to expand our addressable market to include a large and growing opportunity to sell coherent technology to Cloud Providers around the data center, including for metro data center campus opportunities in the 2km to 20km range. We are pursuing these applications through our Interconnects portfolio, which includes key infrastructure technologies like pluggables and components, that provide critical connectivity between and within data centers. Leveraging our optical expertise, we also anticipate growing opportunities in metro routing and broadband access. In the metro, IP and optical convergence will become essential for Service Providers to achieve greater scale and cost efficiencies. Our Coherent Routing solution is ideally suited to address these needs. In broadband access, public funding is being allocated to enhance connectivity in unserved and underserved communities. As deployments begin to materialize in the next few years, solutions like our Passive Optical Network (PON) technologies and industry-first pluggable Optical Line Terminals (OLT) will provide customers more deployment flexibility and scale. In Software and Services, we are well-positioned to help our customers modernize their operational environments with Blue Planet, Navigator and our advanced services capabilities. Accordingly, we will continue to invest in these industry-leading portfolios. Our Commitment to Stakeholders During the last year, we furthered our sustainability efforts with approval by the Science Based Targets initiative of two new greenhouse gas reduction goals that align with the latest climate science and recognize our operational footprint and emissions from the production, distribution and use of our products in networks. Specifically, by 2030, we aim to reduce our Scope 1 and 2 emissions by 81% and reduce our Scope 3 emissions per unit of capacity shipped in Gigabits per second by 71%, all from 2019 levels. We firmly believe that Ciena s success is rooted in our people. Our employee engagement scores remain above the industry benchmark, and more than 90% of our team express satisfaction with the flexible working philosophy we have implemented. We are proud of the corporate culture we ve built and the dedication of our people to giving back to our communities through our Ciena Cares volunteering and giving program. In 2024, our employees volunteered more than 37,000 hours and donated nearly $4 million through individual giving and corporate matching to non-profit organizations and charities across the globe. Into the Future with Optimism Ciena s role in supporting our customers has never been more profound. The cloud and AI-driven economy is escalating customers need for advanced networks, and our portfolio delivers innovation that powers their businesses. We will work every day to maintain a leadership position in our industry and deliver profitable growth and improved operating leverage over the next few years. Our team is exceptional, and I thank everyone at Ciena for their commitment and dedication. I want to also thank our valued stakeholders for your continued trust and support. Gary B. Smith President and Chief Executive Officer 3
 • shareholder letter icon 2/13/2025 Letter Continued (Full PDF)
 • stockholder letter icon 2/16/2023 CIEN Stockholder Letter
 • stockholder letter icon 2/8/2024 CIEN Stockholder Letter
 • stockholder letter icon More "Information Technology Services" Category Stockholder Letters
 • Benford's Law Stocks icon CIEN Benford's Law Stock Score = 51


CIEN Shareholder/Stockholder Letter Transcript:

Annual Report 2024

Ciena Leadership
Executive Officers
Gary B. Smith
Joseph R. Cumello
James E. Moylan, Jr.
Dino DiPerna
President, Chief Executive Officer
and Director
Senior Vice President and
Chief Financial Officer
Senior Vice President and
General Manager of Blue Planet
Senior Vice President,
Global Research and Development
Brodie Gage
Scott A. McFeely
Executive Advisor
Jason M. Phipps
Senior Vice President,
Global Customer Engagement
David M. Rothenstein
Senior Vice President,
Global Products and Supply Chain
Senior Vice President,
Chief Strategy Officer and
Corporate Secretary
Senior Vice President
and General Counsel,
Interim Chief People Officer
Senior Vice President,
Global Marketing
and Communications
Sheela Kosaraju
Rebecca Smith
Directors
Lawton W. Fitt
Independent Chairperson
of the Board of Directors (Ciena)
The Progressive Corporation
Hassan M. Ahmed, Ph.D.
Former Chairman of the Board
and Chief Executive Officer
Affirmed Networks
Bruce L. Claflin
Former Chief Executive Officer
3Com Corporation
Patrick T. Gallagher
T. Michael Nevens
Devinder Kumar
Joanne B. Olsen
Chairperson
Harmonic, Inc.
Former Senior Vice President,
Chief Financial Officer, Treasurer
Advanced Micro Devices, Inc
Patrick H. Nettles, Ph.D.
Executive Chairperson
of the Board of Directors
Senior Adviser
Permira Advisers, LLC
Former Executive Vice President
Global Cloud Services and Support
Oracle Corporation
Mary Puma
Former President and
Chief Executive Officer
Axcelis Technologies, Inc.

To our shareholders
Amidst a rapidly evolving industry, we
delivered a solid performance in fiscal 2024
and remain a market leader with strong
momentum. Our focus on helping customers
address rapidly increasing bandwidth
demands driven by cloud and Artificial
Intelligence (AI) with our industry-leading
portfolio is driving market share gains and
positions us for accelerated growth in the
coming years.
Fiscal 2024 Financial Highlights
In 2024, we delivered more than $4 billion in
revenue, and our orders grew more than 20%
year-over-year, demonstrating the demand for
our technology and reflecting the strength of our
customer relationships.
As our Cloud Provider customers invest in their
networks to support the growth of AI, they are
comprising an increasing proportion of our revenue.
In fact, we delivered record revenue to Cloud
Providers, with this key customer segment directly
contributing $1.2 billion and 30% of total revenue.
We also saw continued improvement in the
purchasing patterns of Service Providers, particularly
in North America, as they work through inventory
built up from prior periods and play an increasing
role in cloud trends through Managed Optical Fiber
Network (MOFN) opportunities.
As network operators address growing network
demands, our software and services offerings
are well-positioned to meet their automation and
digital transformation needs. Platform Software and
Services revenue was up 18%, while Global Services
revenue increased 3% over last year. Our domain
controller software, Navigator Network Control Suite,
continues to resonate strongly with customers who
Gary B. Smith, President and Chief Executive Officer
need the control and visibility it delivers across all
layers of their networks. Blue Planet, our intelligent
automation software division, achieved record
revenue of $78 million, an annual increase of 12%.
Our balance sheet also remains a significant
differentiator. We ended the year with $1.3 billion in
cash and investments and generated nearly $380
million in free cash flow. We repurchased $250 million
in shares during the fiscal year, completing a $1 billion
share repurchase program that began in fiscal 2022.
Underscoring our confidence in the future, our Board
of Directors authorized a new program to repurchase
up to an additional $1 billion in our shares over a threeyear period commencing in fiscal 2025.
1

Technology Market Leadership
In 2024, we extended our innovation leadership with
significant product development achievements for our
Optical Networking solutions, reinforcing our market
leadership. We delivered WaveLogic 6, the world   s
first coherent DSP to be built on a 3 nanometer CMOS
process, setting a new standard in optical networking.
In doing so, we locked in our position as the only
provider of 1.6T-capable coherent modems in the
market today.
At the same time, our WaveLogic 5 Extreme (WL5e)
technology continues to be widely adopted by our
customer base. By year-end, we had shipped more
than 150,000 WL5e modems, providing customers a
solution that delivers meaningful reductions in power
and space in their networks.
We exited the year with solid momentum behind
our pluggables portfolio, having shipped more than
43,000 WaveLogic 5 Nano (WL5n) pluggables. In
2024, we also won the first award from any major
Cloud Provider for an 800G ZR plug. And, we continue
to innovate to expand our market opportunity with
pluggables. We announced our WL6n 1.6T CoherentLite pluggable, which is designed to optimize
performance and efficiency of data center and
campus networks as they scale to support cloud and
AI traffic.
In Routing and Switching, we gained more than 125
new customers for our advanced IP Routing solutions,
demonstrating the strength and innovation in this
portfolio. Importantly, we announced a Tier 1 Service
Provider customer for WaveRouter and added two
new solutions to the WaveRouter family that deliver
expanded flexibility and scale for customers.
As Service Providers evolve their businesses, they
seek to accelerate the automation and optimization
of their network and service lifecycle operations. Blue
Planet and Navigator fulfill these needs with advanced
solutions that enable this operational transformation.
While these elements are not new to our business,
Revenue
Adjusted Gross Profit1
(in billions)
(in billions)
$4.39
$3.53
$3.62
$3.63
   20
   21
   22
   23
$4.01
   24
Adjusted Operating Profit1
$1.74
$1.68
   20
   21
$1.91
$1.58
   22
   23
$1.75
   24
Adjusted EPS1
(in millions)
$620
$607
$407
   20
1
   21
$2.95
$573
   22
$2.91
$388
   23
   24
$1.90
   20
 A reconciliation of these non-GAAP measures to our GAAP results is included in the press release for the relative period.
2
$2.72
   21
   22
$1.82
   23
   24

they deliver a strong and differentiated value
proposition to address the transformation challenges
our customers face.
Intersecting Opportunity
Across the broader market landscape, bandwidth
remains the most consistent driver for our business,
growing approximately 30% per year. With cloud and
AI now the leading drivers of demand, we believe
bandwidth growth will rise above these historical
levels over the coming years. AI traffic is already
flowing out of the data center and impacting all parts
of the network, and we see evidence of this in our
business today, based on the needs of our Cloud and
Service Provider customers alike.
Our strategy to take full advantage of this growth of
cloud and AI traffic across multiple network segments
is rooted in our high-speed optical technology
leadership. More specifically, we aim to grow our core
business while expanding our addressable market,
leveraging the significant competitive advantage of
our leading optical technology.
This includes driving continued market share gain in
subsea, long-haul, metro, DCI and MOFN opportunities
with our optical systems. Additionally, we seek to
expand our addressable market to include a large
and growing opportunity to sell coherent technology
to Cloud Providers around the data center, including
for metro data center campus opportunities in the 2km
to 20km range. We are pursuing these applications
through our Interconnects portfolio, which includes
key infrastructure technologies like pluggables
and components, that provide critical connectivity
between and within data centers.
Leveraging our optical expertise, we also anticipate
growing opportunities in metro routing and broadband
access. In the metro, IP and optical convergence will
become essential for Service Providers to achieve
greater scale and cost efficiencies. Our Coherent
Routing solution is ideally suited to address these needs.
In broadband access, public funding is being allocated
to enhance connectivity in unserved and underserved
communities. As deployments begin to materialize in
the next few years, solutions like our Passive Optical
Network (PON) technologies and industry-first
pluggable Optical Line Terminals (OLT) will provide
customers more deployment flexibility and scale.
In Software and Services, we are well-positioned
to help our customers modernize their operational
environments with Blue Planet, Navigator and our
advanced services capabilities. Accordingly, we will
continue to invest in these industry-leading portfolios.
Our Commitment to Stakeholders
During the last year, we furthered our sustainability
efforts with approval by the Science Based Targets
initiative of two new greenhouse gas reduction goals
that align with the latest climate science and recognize
our operational footprint and emissions from the
production, distribution and use of our products in
networks. Specifically, by 2030, we aim to reduce
our Scope 1 and 2 emissions by 81% and reduce our
Scope 3 emissions per unit of capacity shipped in
Gigabits per second by 71%, all from 2019 levels.
We firmly believe that Ciena   s success is rooted in our
people. Our employee engagement scores remain
above the industry benchmark, and more than 90% of
our team express satisfaction with the flexible working
philosophy we have implemented. We are proud of the
corporate culture we   ve built and the dedication of our
people to giving back to our communities through our
Ciena Cares volunteering and giving program. In 2024,
our employees volunteered more than 37,000 hours
and donated nearly $4 million through individual giving
and corporate matching to non-profit organizations
and charities across the globe.
Into the Future with Optimism
Ciena   s role in supporting our customers has never
been more profound. The cloud and AI-driven
economy is escalating customers    need for advanced
networks, and our portfolio delivers innovation that
powers their businesses. We will work every day to
maintain a leadership position in our industry and
deliver profitable growth and improved operating
leverage over the next few years.
Our team is exceptional, and I thank everyone at Ciena
for their commitment and dedication. I want to also
thank our valued stakeholders for your continued trust
and support.
Gary B. Smith
President and Chief Executive Officer
3



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