Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jul. 31, 2018 | Aug. 31, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CIENA CORP | |
Entity Central Index Key | 936,395 | |
Current Fiscal Year End Date | --10-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jul. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 142,601,249 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Revenue: | ||||
Total revenue | $ 818,817 | $ 728,719 | $ 2,194,930 | $ 2,057,238 |
Cost of goods sold: | ||||
Total cost of goods sold | 467,274 | 400,643 | 1,278,315 | 1,137,137 |
Gross profit | 351,543 | 328,076 | 916,615 | 920,101 |
Operating expenses: | ||||
Research and development | 121,133 | 117,729 | 356,581 | 356,221 |
Selling and marketing | 95,395 | 86,739 | 281,269 | 260,292 |
General and administrative | 38,212 | 35,569 | 115,594 | 106,423 |
Significant asset impairments and restructuring costs | 6,359 | 2,203 | 16,679 | 8,874 |
Amortization of intangible assets | 3,837 | 3,837 | 11,083 | 29,368 |
Acquisition and integration costs | 1,333 | 0 | 1,333 | 0 |
Total operating expenses | 266,269 | 246,077 | 782,539 | 761,178 |
Income from operations | 85,274 | 81,999 | 134,076 | 158,923 |
Interest and other income (loss), net | (1,543) | (848) | 1,328 | (3,396) |
Interest expense | (13,611) | (13,415) | (40,376) | (41,926) |
Income before income taxes | 70,120 | 67,736 | 95,028 | 113,601 |
Provision for income taxes | 19,280 | 7,726 | 503,695 | 11,704 |
Net income (loss) | $ 50,840 | $ 60,010 | $ (408,667) | $ 101,897 |
Basic net income (loss) per common share (in dollars per share) | $ 0.35 | $ 0.42 | $ (2.84) | $ 0.72 |
Diluted net income (loss) per potential common share (in dollars per share) | $ 0.34 | $ 0.39 | $ (2.84) | $ 0.69 |
Weighted average basic common shares outstanding (in shares) | 143,400 | 142,464 | 143,766 | 141,631 |
Weighted average dilutive potential common shares outstanding (in shares) | 159,998 | 172,112 | 143,766 | 164,431 |
Products | ||||
Revenue: | ||||
Total revenue | $ 691,758 | $ 610,742 | $ 1,821,593 | $ 1,702,365 |
Cost of goods sold: | ||||
Total cost of goods sold | 399,886 | 341,197 | 1,085,574 | 955,303 |
Services | ||||
Revenue: | ||||
Total revenue | 127,059 | 117,977 | 373,337 | 354,873 |
Cost of goods sold: | ||||
Total cost of goods sold | $ 67,388 | $ 59,446 | $ 192,741 | $ 181,834 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Net income (loss) | $ 50,840 | $ 60,010 | $ (408,667) | $ 101,897 |
Change in unrealized gain (loss) on available-for-sale securities, net of tax | 279 | (6) | (59) | (533) |
Change in cumulative translation adjustments | (3,230) | 13,644 | (2,161) | 11,891 |
Other comprehensive income | (3,633) | 15,691 | 2,312 | 18,834 |
Total comprehensive income (loss) | 47,207 | 75,701 | (406,355) | 120,731 |
Change in unrealized gain (loss) on foreign currency forward contracts, net of tax | ||||
Change in unrealized gain (loss) on foreign currency forward contracts and forward starting interest rate swaps, net of tax | (1,032) | 2,380 | (1,067) | 2,906 |
Change in unrealized gain (loss) on forward starting interest rate swap, net of tax | ||||
Change in unrealized gain (loss) on foreign currency forward contracts and forward starting interest rate swaps, net of tax | $ 350 | $ (327) | $ 5,599 | $ 4,570 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 31, 2018 | Oct. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 726,214 | $ 640,513 |
Short-term investments | 228,940 | 279,133 |
Accounts receivable, net of allowance for doubtful accounts of $17.7 million and $17.6 million as of July 31, 2018 and October 31, 2017, respectively. | 728,940 | 622,183 |
Inventories | 227,885 | 267,143 |
Prepaid expenses and other | 192,497 | 197,339 |
Total current assets | 2,104,476 | 2,006,311 |
Long-term investments | 29,465 | 49,783 |
Equipment, building, furniture and fixtures, net | 295,863 | 308,465 |
Goodwill | 287,551 | 267,458 |
Other intangible assets, net | 108,302 | 100,997 |
Deferred tax asset, net | 724,087 | 1,155,104 |
Other long-term assets | 72,951 | 63,593 |
Total assets | 3,622,695 | 3,951,711 |
Current liabilities: | ||
Accounts payable | 312,611 | 260,098 |
Accrued liabilities and other short-term obligations | 297,988 | 322,934 |
Deferred revenue | 104,170 | 102,418 |
Current portion of long-term debt | 353,669 | 352,293 |
Total current liabilities | 1,068,438 | 1,037,743 |
Long-term deferred revenue | 79,914 | 82,589 |
Other long-term obligations | 108,884 | 111,349 |
Long-term debt, net | 586,505 | 583,688 |
Total liabilities | 1,843,741 | 1,815,369 |
Commitments and contingencies (Note 18) | ||
Stockholders’ equity: | ||
Preferred stock – par value $0.01; 20,000,000 shares authorized; zero shares issued and outstanding | 0 | 0 |
Common stock – par value $0.01; 290,000,000 shares authorized; 143,050,180 and 143,043,227 shares issued and outstanding | 1,431 | 1,430 |
Additional paid-in capital | 6,797,857 | 6,810,182 |
Accumulated other comprehensive income (loss) | (8,705) | (11,017) |
Accumulated deficit | (5,011,629) | (4,664,253) |
Total stockholders’ equity | 1,778,954 | 2,136,342 |
Total liabilities and stockholders’ equity | $ 3,622,695 | $ 3,951,711 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jul. 31, 2018 | Oct. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 17.7 | $ 17.6 |
Stockholders’ equity: | ||
Preferred stock par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Preferred stock shares outstanding (in shares) | 0 | 0 |
Common stock par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized (in shares) | 290,000,000 | 290,000,000 |
Common stock shares issued (in shares) | 143,050,180 | 143,043,227 |
Common stock shares outstanding (in shares) | 143,050,180 | 143,043,227 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Cash flows provided by operating activities: | ||
Net income (loss) | $ (408,667) | $ 101,897 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements | 63,104 | 55,873 |
Share-based compensation costs | 38,896 | 36,843 |
Amortization of intangible assets | 18,196 | 39,721 |
Deferred tax provision | 491,863 | 0 |
Provision for inventory excess and obsolescence | 19,942 | 28,727 |
Provision for warranty | 15,715 | 5,188 |
Other | 18,164 | 21,076 |
Changes in assets and liabilities: | ||
Accounts receivable | (112,696) | (80,652) |
Inventories | 17,751 | (93,896) |
Prepaid expenses and other | (11,163) | (26,450) |
Accounts payable, accruals and other obligations | 14,840 | (5,960) |
Deferred revenue | (4,710) | 13,978 |
Net cash provided by operating activities | 161,235 | 96,345 |
Cash flows used in investing activities: | ||
Payments for equipment, furniture, fixtures and intellectual property | (50,386) | (76,004) |
Purchase of available for sale securities | (217,715) | (189,802) |
Proceeds from maturities of available for sale securities | 290,000 | 260,003 |
Settlement of foreign currency forward contracts, net | 4,759 | (1,619) |
Acquisition of business, net of cash acquired | (40,412) | 0 |
Purchase of cost method investment | (1,433) | 0 |
Net cash used in investing activities | (15,187) | (7,422) |
Cash flows used in financing activities: | ||
Payment of long-term debt | (3,000) | (232,554) |
Payment for modification of term loans | 0 | (93,625) |
Payment of capital lease obligations | (2,811) | (2,650) |
Repurchases of common stock-repurchase program | (73,512) | 0 |
Proceeds from issuance of common stock | 22,735 | 20,395 |
Net cash used in financing activities | (56,588) | (308,434) |
Effect of exchange rate changes on cash and cash equivalents | (3,759) | 1,436 |
Net increase (decrease) in cash and cash equivalents | 85,701 | (218,075) |
Cash and cash equivalents at beginning of period | 640,513 | 777,615 |
Cash and cash equivalents at end of period | 726,214 | 559,540 |
Supplemental disclosure of cash flow information | ||
Cash paid during the period for interest | 31,561 | 33,861 |
Cash paid during the period for income taxes, net | 20,099 | 26,793 |
Non-cash investing activities | ||
Purchase of equipment in accounts payable | 5,677 | 6,012 |
Building subject to capital lease | 0 | 50,370 |
Non-cash financing activities | ||
Repurchase of common stock in accrued liabilities from repurchase program | $ 1,275 | $ 0 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Changes in Stockholders’ Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in-Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Oct. 31, 2016 | 139,767,627 | ||||
Beginning balance at Oct. 31, 2016 | $ 766,341 | $ 1,398 | $ 6,715,478 | $ (24,329) | $ (5,926,206) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 101,897 | 101,897 | |||
Other comprehensive income | 18,834 | 18,834 | |||
Issuance of shares from employee equity plans (in shares) | 2,905,157 | ||||
Issuance of shares from employee equity plans | 20,395 | $ 29 | 20,366 | ||
Share-based compensation expense | 36,843 | 36,843 | |||
Ending balance (in shares) at Jul. 31, 2017 | 142,672,784 | ||||
Ending balance at Jul. 31, 2017 | 944,310 | $ 1,427 | 6,772,687 | (5,495) | (5,824,309) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Effect of adoption of new accounting standard | $ 62,123 | 832 | 61,291 | ||
Beginning balance (in shares) at Oct. 31, 2017 | 143,043,227 | 143,043,227 | |||
Beginning balance at Oct. 31, 2017 | $ 2,136,342 | $ 1,430 | 6,810,182 | (11,017) | (4,664,253) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (408,667) | (408,667) | |||
Other comprehensive income | $ 2,312 | 2,312 | |||
Repurchase of common stock (in shares) | (3,028,118) | (3,028,118) | |||
Repurchase of common stock | $ (74,787) | $ (30) | (74,757) | ||
Issuance of shares from employee equity plans (in shares) | 3,035,071 | ||||
Issuance of shares from employee equity plans | 22,735 | $ 31 | 22,704 | ||
Share-based compensation expense | $ 38,896 | 38,896 | |||
Ending balance (in shares) at Jul. 31, 2018 | 143,050,180 | 143,050,180 | |||
Ending balance at Jul. 31, 2018 | $ 1,778,954 | $ 1,431 | $ 6,797,857 | $ (8,705) | $ (5,011,629) |
Interim Financial Statements
Interim Financial Statements | 9 Months Ended |
Jul. 31, 2018 | |
Quarterly Financial Data [Abstract] | |
Interim Financial Statements | INTERIM FINANCIAL STATEMENTS The interim financial statements included herein for Ciena Corporation and its wholly owned subsidiaries (“Ciena”) have been prepared by Ciena, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). In the opinion of management, the financial statements included in this report reflect all normal recurring adjustments that Ciena considers necessary for the fair statement of the results of operations for the interim periods covered and of the financial position of Ciena at the date of the interim balance sheets. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The Condensed Consolidated Balance Sheet as of October 31, 2017 was derived from audited financial statements, but does not include all disclosures required by GAAP. However, Ciena believes that the disclosures are adequate to understand the information presented herein. The operating results for interim periods are not necessarily indicative of the operating results for the entire year. These financial statements should be read in conjunction with Ciena’s audited consolidated financial statements and the notes thereto included in Ciena’s annual report on Form 10-K for the fiscal year ended October 31, 2017 . Ciena has a 52 or 53-week fiscal year, with quarters ending on the Saturday nearest to the last day of January, April, July and October, respectively, of each year. Fiscal 2018 is a 53-week fiscal year with the additional week occurring in the fourth quarter. Fiscal 2017 was a 52-week fiscal year. For purposes of financial statement presentation, each fiscal year is described as having ended on October 31, and the fiscal quarters are described as having ended on January 31, April 30 and July 31 of each fiscal year. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Jul. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES Except for the changes in certain policies described below, there have been no material changes to Ciena’s significant accounting policies, compared to the accounting policies described in Note 1, Ciena Corporation and Significant Accounting Policies and Estimates, in Notes to Consolidated Financial Statements in Item 8 of Part II of Ciena’s annual report on Form 10-K for the fiscal year ended October 31, 2017. Government Grants Ciena accounts for proceeds from government grants as a reduction of expense when there is reasonable assurance that Ciena has met the required conditions associated with the grant and that grant proceeds will be received. Grant benefits are recorded to the particular line item of the Condensed Consolidated Statement of Operations to which the grant activity relates. See Note 18 below. Newly Issued Accounting Standards - Effective In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-01 (“ASU 2017-01”) , Business Combinations: Clarifying the Definition of a Business , which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisition or disposal of assets or businesses. The amendments in this update provide a screen to determine when a set of assets is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set of assets is not a business. Ciena will evaluate the effect of the update at the time of any future acquisition or disposal. Ciena adopted ASU 2017-01 during the first quarter of fiscal 2018. In August 2017, the FASB issued ASU No. 2017-12 (“ASU 2017-12”) , Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities , which improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements and make certain targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. The amendments in this update better align an entity’s risk management activities and financial reporting for hedging relationships, through changes to both the designation and measurement guidance for qualifying hedging relationships and presentation of hedge results. Ciena adopted ASU 2017-12 during the first quarter of fiscal 2018. For hedges for which Ciena has elected to exclude the spot-forward difference from assessment of effectiveness, Ciena has elected to amortize the difference on a straight-line basis. Ciena will record amortization in earnings each period with an offsetting entry to other comprehensive income, and all changes in fair value over the term of the derivative in other comprehensive income. The application of this accounting standard did not have a material impact on Ciena’s Condensed Consolidated Financial Statements. In March 2016, the FASB issued ASU No. 2016-09 (“ASU 2016-09”) , Improvements to Employee Share-Based Payment Accounting , which provides guidance on several aspects of accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification on the statement of cash flows. Ciena adopted ASU 2016-09 during the first quarter of fiscal 2018. In connection with the adoption of this guidance, Ciena recognized approximately $62.1 million of deferred tax assets related to previously unrecognized tax benefits. This was recorded as a cumulative-effect adjustment to retained earnings as of the beginning of the first quarter of fiscal 2018. Additionally, the consolidated statements of cash flows will include excess tax benefits as an operating activity, on a prospective basis as a result of the adoption. Finally, Ciena has elected to recognize forfeitures when they occur, rather than to estimate the impact of forfeitures when the award is granted. Accordingly, Ciena recognized approximately $0.8 million for this change through a cumulative effect adjustment recorded to opening retained earnings in the first quarter of fiscal 2018. Newly Issued Accounting Standards - Not Yet Effective In May 2014, the FASB issued ASU No. 2014-09 (“ASU 2014-09”) , Revenue from Contracts with Customers (Topic 606), which provides guidance for revenue recognition. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. ASU 2014-09 will supersede the revenue recognition requirements in Topic 605, Revenue Recognition , and most industry-specific guidance. ASU 2014-09 also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts . For multiple element software arrangements where vendor-specific objective evidence (“VSOE”) of undelivered maintenance does not exist, Ciena currently recognizes revenue for the entire arrangement over the maintenance term. The adoption of ASU 2014-09 will require Ciena to determine the stand alone selling price for each of the software and software-related deliverables at contract inception, and Ciena consequently expects certain software deliverables will be recognized at a point in time rather than over a period of time. Ciena also expects certain installation and deployment, and consulting and network design services, will be recognized over a period of time rather than at a point in time. Ciena has considered the impact of the guidance in Accounting Standards Codification (“ASC”) 340-40, Other Assets and Deferred Costs; Contracts with Customers , and the interpretations of the FASB Transition Resource Group for Revenue Recognition (TRG) with respect to capitalization and amortization of incremental costs of obtaining a contract. In conjunction with this interpretation, Ciena has elected to implement the practical expedient clause allowing for incremental costs to be recognized as an expense when incurred if the period of the asset recognition is one year or less, and amortized over the period of performance, if the period of the asset recognition is greater than one year. Ciena expects to implement ASU 2014-09 using the modified retrospective approach whereby the cumulative effect at adoption will be presented as an adjustment to the opening balance of retained earnings. The comparative information will not be restated and will continue to be reported under the accounting standards in effect for those periods. ASU 2014-09 will be effective for Ciena beginning in the first quarter of fiscal 2019. Ciena is continuing to evaluate other possible impacts of the adoption of this ASU on its Consolidated Financial Statements and disclosures. In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”) , Leases , which requires an entity to recognize assets and liabilities on the balance sheet for the rights and obligations created by leased assets and to provide additional disclosures. ASU 2016-02 is effective for Ciena beginning in the first quarter of fiscal 2020. Under current GAAP, the majority of Ciena’s leases for its properties are considered operating leases, and Ciena expects that the adoption of this ASU will require these leases to be classified as financing leases and to be recognized as assets and liabilities on Ciena’s balance sheet. Ciena is continuing to evaluate other possible impacts of the adoption of ASU 2016-02 on its Consolidated Financial Statements and disclosures. In August 2018, the FASB issued ASU No. 2018-09 ( “ASU 2018-09” ), Codification Improvements which does not prescribe any new accounting guidance, but instead makes minor improvements and clarifications of several different FASB Accounting Standards Codification areas based on comments and suggestions made by various stakeholders. Certain updates are applicable immediately while others provide for a transition period to adopt as part of the next fiscal year beginning after December 15, 2018. Ciena is currently evaluating this guidance to determine the impact it may have on the consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13 ( “ASU 2018-13” ), Fair Value Measurement (Topic 820): Disclosure Framework which modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for Ciena beginning in the first quarter of fiscal year 2020, early adoption is permitted. Ciena is currently evaluating this guidance to determine the impact on its disclosures. In August 2018, the FASB issued ASU No. 2018-14 ( “ASU 2018-14” ), Compensation -Retirement Benefits - Defined Benefit Plans which modifies the disclosure requirements on company-sponsored defined benefit plans. ASU 2018-14 is effective for Ciena beginning in the first quarter of fiscal year 2021, early adoption is permitted. Ciena is currently evaluating this guidance to determine the impact on its disclosures. In August 2018, the FASB issued ASU No. 2018-15 ( “ASU 2018-15” ), Intangibles - Goodwill and Other-Internal-Use Software which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for Ciena beginning in the first quarter of fiscal year 2020, early adoption is permitted. Ciena is currently evaluating this guidance to determine the impact on its disclosures. |
Business Combinations
Business Combinations | 9 Months Ended |
Jul. 31, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | BUSINESS COMBINATIONS Packet Design, LLC Acquisition On July 2, 2018 , Ciena acquired Packet Design, LLC (“Packet Design”), a provider of network performance management software focused on Layer 3 network optimization, topology and route analytics, in a cash transaction for approximately $ 41 million in cash. This transaction has been accounted for as the acquisition of a business. During the third quarter of fiscal 2018, Ciena incurred approximately $1.3 million of acquisition-related costs associated with this transaction. These costs and expenses include fees associated with financial, legal and accounting advisors and severance and other employment-related costs, including payments to certain former Packet Design employees. The following table summarizes the final purchase price allocation related to the acquisition based on the estimated fair value of the acquired assets and assumed liabilities (in thousands): Amount Cash and cash equivalents $ 642 Accounts receivable 1,525 Prepaid expenses and other 450 Equipment, furniture and fixtures 31 Goodwill 20,304 Customer relationships and contracts 2,200 Developed technology 21,900 Accounts payable (165 ) Accrued liabilities (657 ) Deferred revenue (5,176 ) Total purchase consideration $ 41,054 Customer relationships and contracts represent agreements with existing Packet Design customers and have an estimated useful life of three years. Developed technology represents purchased technology that had reached technological feasibility and for which Packet Design had substantially completed development as of the date of acquisition. Fair value was determined using future discounted cash flows related to the projected income stream of the developed technology for a discrete projection period. Cash flows were discounted to their present value as of the closing date. Developed technology is amortized on a straight line basis over its estimated useful life of five years. The goodwill generated from the acquisition of Packet Design is primarily related to expected synergies. The total goodwill amount was recorded in the Software and Software-Related Services segment. Pro forma disclosures have not been included due to immateriality. |
Restructuring Costs
Restructuring Costs | 9 Months Ended |
Jul. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | RESTRUCTURING COSTS Ciena has undertaken a number of restructuring activities intended to reduce expense and to better align its workforce and costs with market opportunities, product development and business strategies. The following table sets forth the restructuring activity and balance of the restructuring liability accounts for the nine months ended July 31, 2018 (in thousands): Workforce reduction Consolidation of excess facilities Total Balance at October 31, 2017 $ 1,291 $ 1,648 $ 2,939 Additional liability recorded 12,876 (1) 3,803 (2) 16,679 Cash payments (10,987 ) (3,084 ) (14,071 ) Balance at July 31, 2018 $ 3,180 $ 2,367 $ 5,547 Current restructuring liabilities $ 3,180 $ 1,076 $ 4,256 Non-current restructuring liabilities $ — $ 1,291 $ 1,291 (1) Reflects a global workforce reduction of approximately 230 employees during fiscal 2018 as part of a business optimization strategy to improve gross margin, constrain operating expense and redesign certain business processes. (2) Reflects unfavorable lease commitments in connection with a portion of facilities located in Petaluma, California and in Gurgaon, India. The following table sets forth the restructuring activity and balance of the restructuring liability accounts for the nine months ended July 31, 2017 (in thousands): Workforce reduction Consolidation of excess facilities Total Balance at October 31, 2016 $ 868 $ 1,970 $ 2,838 Additional liability recorded 3,967 (1) 4,907 (2) 8,874 Cash payments (3,370 ) (2,679 ) (6,049 ) Balance at July 31, 2017 $ 1,465 $ 4,198 $ 5,663 Current restructuring liabilities $ 1,465 $ 4,198 $ 5,663 Non-current restructuring liabilities $ — $ — $ — (1) Reflects a global workforce reduction of approximately 60 employees during fiscal 2017 as part of a business optimization strategy to improve gross margin, constrain operating expense and redesign certain business processes and systems. (2) Reflects unfavorable lease commitments and relocation costs incurred during fiscal 2017 in connection with the facility transition from Ciena’s existing research and development center located at Lab 10 on the former Nortel Carling Campus to a new campus facility in Ottawa, Canada. |
Interest and Other Income (Loss
Interest and Other Income (Loss), Net | 9 Months Ended |
Jul. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Interest and Other Income (Loss), Net | INTEREST AND OTHER INCOME (LOSS), NET The components of interest and other income (loss), net, are as follows (in thousands): Quarter Ended July 31, Nine Months Ended July 31, 2018 2017 2018 2017 Interest income $ 3,620 $ 1,820 $ 9,276 $ 4,609 Gains (losses) on non-hedge designated foreign currency forward contracts 2,182 834 4,351 (891 ) Foreign currency exchange loss (6,879 ) (2,946 ) (11,670 ) (4,071 ) Modification of term loan — — — (2,924 ) Other (466 ) (556 ) (629 ) (119 ) Interest and other income (loss), net $ (1,543 ) $ (848 ) $ 1,328 $ (3,396 ) Ciena Corporation, as the U.S. parent entity, uses the U.S. Dollar as its functional currency; however, some of its foreign branch offices and subsidiaries use local currencies as their functional currencies. Ciena recorded $11.7 million and $4.1 million in foreign currency exchange rate losses during the first nine months of fiscal 2018 and fiscal 2017 , respectively, as a result of monetary assets and liabilities that were transacted in a currency other than the entity’s functional currency, and the remeasurement adjustments were recorded in interest and other income (loss), net on the Condensed Consolidated Statements of Operations. For the first nine months of fiscal 2018 , the majority of the foreign currency exchange rate losses relate to Ciena’s Argentinian and Brazilian subsidiaries owing U.S. Dollars to Ciena Corporation. From time to time, Ciena uses foreign currency forwards to hedge this type of balance sheet exposure. 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 on the Condensed Consolidated Statements of Operations. During the first nine months of fiscal 2018 , Ciena recorded gains of $4.4 million from non-hedge designated foreign currency forward contracts. During the first nine months of fiscal 2017 , Ciena recorded losses of $0.9 million from non-hedge designated foreign currency forward contracts. |
Income Taxes
Income Taxes | 9 Months Ended |
Jul. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted. The Tax Act significantly revises the U.S. corporate income tax by, among other things, lowering the statutory corporate income tax rate (“federal tax rate”) from 35% to 21% effective January 1, 2018, implementing a modified territorial tax system, and imposing a mandatory one-time transition tax on accumulated earnings of foreign subsidiaries that were previously tax deferred. As a fiscal-year taxpayer, certain provisions of the Tax Act impact Ciena in fiscal 2018, including the change in the federal tax rate and the one-time transition tax, while other provisions will be effective at the beginning of fiscal 2019, including the implementation of a modified territorial tax system, other changes to how foreign earnings are subject to U.S. tax, and adoption of an alternative tax system. As a result of the decrease in the federal tax rate from 35% to 21% effective January 1, 2018, Ciena has computed its income tax expense for the October 31, 2018 fiscal year using a blended federal tax rate of 23.4% . The 21% federal tax rate is expected to apply to Ciena’s fiscal year ending October 31, 2019 and each year thereafter. Ciena remeasured its deferred tax assets and liabilities (“DTA”) using the federal tax rate that will apply when the related temporary differences are expected to reverse. During the nine months ended July 31, 2018 , Ciena recorded a provisional tax expense of $503.7 million , primarily related to the Tax Act and consisting of the following: a $431.3 million charge related to the remeasurement of U.S. net deferred tax assets at the lower statutory rate under the Tax Act and a $45.6 million charge related to a transition tax on accumulated historical foreign earnings and its deemed repatriation to the U.S. In December 2017, the SEC issued Staff Accounting Bulletin No. 118, which addresses how a company recognizes provisional amounts when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the effect of the changes due to the Tax Act. The measurement period ends when a company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year. The final impact of the Tax Act may differ from the above provisional amounts due to changes in interpretations of the Tax Act, legislative action to address questions that arise because of the Tax Act, changes in accounting standards for income taxes and related interpretations in response to the Tax Act, and any updates or changes to estimates used in the provisional amounts. Ciena has determined that the $45.6 million of tax expense for the U.S. transition tax on accumulated earnings of foreign subsidiaries and the $431.3 million of tax expense for DTA remeasurement were each provisional amounts and reasonable estimates as of July 31, 2018 . Estimates used in the provisional amounts include the anticipated reversal pattern of the gross DTA plus the earnings and profits, cash position at the end of fiscal year 2018, foreign taxes and withholding taxes attributable to foreign subsidiaries. Ciena currently intends to reinvest indefinitely its foreign earnings outside the U.S. However, Ciena intends to continue to study changes enacted by the Tax Act, costs of repatriation and the current and future cash needs of foreign operations to determine whether there is an opportunity to repatriate these earnings in the future on a tax-efficient basis. If Ciena determines to repatriate these earnings, the provisional amount of unrecognized deferred income tax liability related to these foreign withholding taxes would be approximately $23.0 million . There are no other significant temporary differences for which a deferred tax liability has not been recognized. The significant components of DTA are as follows (in thousands): July 31, October 31, 2018 2017 Deferred tax assets: Reserves and accrued liabilities $ 35,022 $ 56,597 Depreciation and amortization 317,526 451,385 NOL and credit carry forward 496,327 803,622 Other 20,077 29,398 Gross deferred tax assets 868,952 1,341,002 Valuation allowance (144,865 ) (185,898 ) Deferred tax asset, net of valuation allowance $ 724,087 $ 1,155,104 In connection with the adoption of ASU 2016-09, Ciena recognized approximately $62.1 million of deferred tax assets related to previously unrecognized tax benefits. This was recorded as a cumulative-effect adjustment to retained earnings as of the beginning of the first quarter of fiscal 2018. See Note 2 above and Note 15 below. As of July 31, 2018 , Ciena continues to maintain a valuation allowance of $144.9 million . This valuation allowance is primarily related to state and foreign net operating losses and credits that Ciena estimates it will not be able to use. |
Short-Term and Long-Term Invest
Short-Term and Long-Term Investments | 9 Months Ended |
Jul. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-Term and Long-Term Investments | SHORT-TERM AND LONG-TERM INVESTMENTS As of the dates indicated, investments are comprised of the following (in thousands): July 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. government obligations: Included in short-term investments $ 199,415 $ — (418 ) $ 198,997 Included in long-term investments 29,538 — (73 ) 29,465 $ 228,953 $ — $ (491 ) $ 228,462 Commercial paper: Included in short-term investments $ 29,941 2 — $ 29,943 $ 29,941 $ 2 $ — $ 29,943 October 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. government obligations: Included in short-term investments $ 249,498 $ — $ (305 ) $ 249,193 Included in long-term investments 49,910 — (127 ) 49,783 $ 299,408 $ — $ (432 ) $ 298,976 Commercial paper: Included in short-term investments $ 29,939 1 — $ 29,940 $ 29,939 $ 1 $ — $ 29,940 The following table summarizes the final legal maturities of debt investments at July 31, 2018 (in thousands): Amortized Cost Estimated Fair Value Less than one year $ 229,356 $ 228,940 Due in 1-2 years 29,538 29,465 $ 258,894 $ 258,405 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Jul. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS As of the date indicated, the following table summarizes the assets and liabilities that are recorded at fair value on a recurring basis (in thousands): July 31, 2018 Level 1 Level 2 Total Assets: Money market funds $ 579,413 $ — $ 579,413 U.S. government obligations — 228,462 228,462 Commercial paper — 69,860 69,860 Foreign currency forward contracts — 668 668 Forward starting interest rate swaps — 6,667 6,667 Total assets measured at fair value $ 579,413 $ 305,657 $ 885,070 Liabilities: Foreign currency forward contracts $ — $ 2,968 $ 2,968 Total liabilities measured at fair value $ — $ 2,968 $ 2,968 October 31, 2017 Level 1 Level 2 Total Assets: Money market funds $ 511,355 $ — $ 511,355 U.S. government obligations — 298,976 298,976 Commercial paper — 89,865 89,865 Foreign currency forward contracts — 227 227 Forward starting interest rate swaps — 218 218 Total assets measured at fair value $ 511,355 $ 389,286 $ 900,641 Liabilities: Foreign currency forward contracts $ — $ 2,129 $ 2,129 Total liabilities measured at fair value $ — $ 2,129 $ 2,129 As of the date indicated, the assets and liabilities above are presented on Ciena’s Condensed Consolidated Balance Sheet as follows (in thousands): July 31, 2018 Level 1 Level 2 Total Assets: Cash equivalents $ 579,413 $ 39,917 $ 619,330 Short-term investments — 228,940 228,940 Prepaid expenses and other — 668 668 Long-term investments — 29,465 29,465 Other long-term assets — 6,667 6,667 Total assets measured at fair value $ 579,413 $ 305,657 $ 885,070 Liabilities: Accrued liabilities $ — $ 2,968 $ 2,968 Total liabilities measured at fair value $ — $ 2,968 $ 2,968 October 31, 2017 Level 1 Level 2 Total Assets: Cash equivalents $ 511,355 $ 59,925 $ 571,280 Short-term investments — 279,133 279,133 Prepaid expenses and other — 227 227 Long-term investments — 49,783 49,783 Other long-term assets — 218 218 Total assets measured at fair value $ 511,355 $ 389,286 $ 900,641 Liabilities: Accrued liabilities $ — $ 2,129 $ 2,129 Total liabilities measured at fair value $ — $ 2,129 $ 2,129 Ciena did not have any transfers between Level 1 and Level 2 fair value measurements during the periods presented. |
Inventories
Inventories | 9 Months Ended |
Jul. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES As of the dates indicated, inventories are comprised of the following (in thousands): July 31, October 31, Raw materials $ 54,003 $ 52,898 Work-in-process 11,100 18,623 Finished goods 173,419 185,488 Deferred cost of goods sold 38,525 61,340 277,047 318,349 Provision for excess and obsolescence (49,162 ) (51,206 ) $ 227,885 $ 267,143 Ciena writes down its inventory for estimated obsolescence or unmarketable inventory by an amount equal to the difference between the cost of inventory and the estimated net realizable value based on assumptions about future demand and market conditions. During the first nine months of fiscal 2018 , Ciena recorded a provision for excess and obsolescence of $19.9 million , primarily related to a decrease in the forecasted demand for certain Networking Platforms products. Deductions from the provision for excess and obsolete inventory relate primarily to disposal activities. |
Accrued Liabilities and Other S
Accrued Liabilities and Other Short-Term Obligations | 9 Months Ended |
Jul. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Accrued Liabilities and Other Short-Term Obligations | ACCRUED LIABILITIES AND OTHER SHORT-TERM OBLIGATIONS As of the dates indicated, accrued liabilities and other short-term obligations are comprised of the following (in thousands): July 31, October 31, Compensation, payroll related tax and benefits $ 99,740 $ 113,272 Warranty 44,150 42,456 Vacation 40,747 39,778 Capital lease obligations 3,773 3,772 Interest payable 4,991 3,612 Other 104,587 120,044 $ 297,988 $ 322,934 The following table summarizes the activity in Ciena’s accrued warranty for the fiscal periods indicated (in thousands): Nine Months Ended July 31, Beginning Balance Current Period Provisions (1) Settlements Ending Balance 2017 $ 52,324 5,188 (13,216 ) $ 44,296 2018 $ 42,456 15,715 (14,021 ) $ 44,150 (1) As a result of lower than expected actual failure rates, Ciena adjusted its fiscal 2017 provision for warranty. This adjustment had the effect of reducing warranty provision by $8.0 million for the nine months ended July 31, 2017 . |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Jul. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS Foreign Currency Derivatives As of July 31, 2018 and October 31, 2017 , Ciena had forward contracts to hedge its foreign exchange exposure in order to reduce the variability in its Canadian Dollar and Indian Rupee denominated expense, which principally relates to research and development activities, and its Euro denominated revenue. The notional amount of these contracts was approximately $134.6 million and $86.1 million as of July 31, 2018 and October 31, 2017 , respectively. These foreign exchange contracts have maturities of 18 months or less and have been designated as cash flow hedges. During the first nine months of fiscal 2018 and fiscal 2017 , in order to hedge certain balance sheet exposures, Ciena entered into forward contracts to mitigate risk due to volatility in the Brazilian Real, Canadian Dollar and Mexican Peso. The notional amount of these contracts was approximately $98.2 million and $83.4 million as of July 31, 2018 and October 31, 2017 , respectively. These foreign exchange contracts have maturities of 12 months or less and have not been designated as hedges for accounting purposes. Interest Rate Derivatives Ciena is exposed to floating rates of LIBOR interest on its term loan borrowings (see Note 13 below) and has hedged such risk by entering into floating to fixed interest rate swap arrangements (“interest rate swaps”). The interest rate swaps fix 82% and 77% of the principal value of the 2022 Term Loan from July 2018 through June 2020 and June 2020 through January 2021, respectively. The fixed rate on the amounts hedged during these periods will be 4.25% and 4.75% , respectively. The total notional amount of interest rate swaps in effect as of July 31, 2018 was $321.6 million . The total notional amount of interest rate swaps in effect as of October 31, 2017 was $389.6 million . Ciena expects the variable rate payments to be received under the terms of the interest rate swaps to offset exactly the forecasted variable rate payments on the equivalent notional amounts of the term loans. These derivative contracts have been designated as cash flow hedges. Other information regarding Ciena’s derivatives is immaterial for separate financial statement presentation. See Note 5 and Note 8 above. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
Jul. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income | ACCUMULATED OTHER COMPREHENSIVE INCOME The following table summarizes the changes in accumulated balances of other comprehensive income (“AOCI”) for the nine months ended July 31, 2018 : Unrealized Unrealized Loss on Unrealized Gain on Cumulative Foreign Currency Loss on Available-for-sale Securities Foreign Currency Forward Contracts Forward Starting Interest Rate Swap Foreign Currency Translation Adjustment Total Balance at October 31, 2017 $ (451 ) $ (1,386 ) $ 218 $ (9,398 ) $ (11,017 ) Other comprehensive income (loss) before reclassifications (59 ) (9 ) 5,330 (2,161 ) 3,101 Amounts reclassified from AOCI — (1,058 ) 269 — (789 ) Balance at July 31, 2018 $ (510 ) $ (2,453 ) $ 5,817 $ (11,559 ) $ (8,705 ) The following table summarizes the changes in AOCI for the nine months ended July 31, 2017 : Unrealized Gain/(Loss) on Unrealized Gain (Loss) on Unrealized Gain on Cumulative Foreign Currency Available-for-sale Securities Foreign Currency Forward Contracts Forward Starting Interest Rate Swap Foreign Currency Translation Adjustment Total Balance at October 31, 2016 $ 139 $ (1,091 ) $ (5,967 ) $ (17,410 ) $ (24,329 ) Other comprehensive income (loss) before reclassifications (533 ) 896 4,838 11,891 17,092 Amounts reclassified from AOCI — 2,010 (268 ) — 1,742 Balance at July 31, 2017 $ (394 ) $ 1,815 $ (1,397 ) $ (5,519 ) $ (5,495 ) All amounts reclassified from AOCI related to settlement (gains) losses on foreign currency forward contracts designated as cash flow hedges impacted revenue or research and development expense on the Condensed Consolidated Statements of Operations. All amounts reclassified from AOCI related to settlement (gains) losses on forward starting interest rate swaps designated as cash flow hedges impacted interest and other income (loss), net on the Condensed Consolidated Statements of Operations. |
Short-Term and Long-Term Debt
Short-Term and Long-Term Debt | 9 Months Ended |
Jul. 31, 2018 | |
Debt Disclosure [Abstract] | |
Short-Term and Long-Term Debt | SHORT-TERM AND LONG-TERM DEBT Outstanding Term Loan Payable 2022 Term Loan The net carrying value of Ciena’s Term Loan due January 30, 2022 (the “2022 Term Loan”) was comprised of the following for the fiscal periods indicated (in thousands): July 31, 2018 October 31, 2017 Term Loan Payable due January 30, 2022 $ 390,863 $ 392,972 Deferred debt issuance costs that were deducted from the carrying amounts of the 2022 Term Loan totaled $2.6 million at July 31, 2018 and $3.1 million at October 31, 2017 . Deferred debt issuance costs are amortized using the straight-line method, which approximates the effect of the effective interest rate method, through the maturity of the 2022 Term Loan. The amortization of deferred debt issuance costs for the 2022 Term Loan is included in interest expense, and was $0.5 million and $0.4 million during the first nine months of fiscal 2018 and 2017 , respectively. The carrying values of the 2022 Term Loan listed above are also net of any unamortized debt discounts. The principal balance, unamortized debt discount, deferred debt issuance costs and net carrying value of the liability components of the 2022 Term Loan were as follows as of July 31, 2018 (in thousands): Principal Balance Unamortized Debt Discount Deferred Debt Issuance Costs Net Carrying Value Term Loan Payable due January 30, 2022 $ 395,000 $ (1,580 ) $ (2,557 ) $390,863 The following table sets forth the carrying value and the estimated fair value of the 2022 Term Loan (in thousands): July 31, 2018 Carrying Value Fair Value (1) Term Loan Payable due January 30, 2022 $ 390,863 $ 396,481 (1) The 2022 Term Loan is categorized as Level 2 in the fair value hierarchy. Ciena estimated the fair value of the 2022 Term Loan using a market approach based upon observable inputs, such as current market transactions involving comparable securities. Outstanding Convertible Notes Payable The net carrying values of Ciena’s outstanding convertible notes payable was comprised of the following for the fiscal periods indicated (in thousands): July 31, 2018 October 31, 2017 3.75% Convertible Senior Notes due October 15, 2018 (Original) $ 61,234 $ 61,071 3.75% Convertible Senior Notes due October 15, 2018 (New) 288,435 287,221 4.0% Convertible Senior Notes due December 15, 2020 199,642 194,717 $ 549,311 $ 543,009 Deferred debt issuance costs that were deducted from the carrying amounts of the convertible notes payable totaled $0.9 million at July 31, 2018 and $2.1 million at October 31, 2017 . Deferred debt issuance costs are amortized using the straight-line method, which approximates the effect of the effective interest rate method, through the maturity of the convertible notes payable. The amortization of deferred debt issuance costs is included in interest expense, and was $1.2 million during both the first nine months of fiscal 2018 and 2017 . The carrying values of the convertible notes payable listed above also include accretion of principal and are net of any unamortized debt discounts. The principal balance, unamortized debt discount, deferred debt issuance costs and net carrying value of the liability and equity components of Ciena’s outstanding issues of convertible notes were as follows as of July 31, 2018 (in thousands): Liability Component Equity Component Principal Balance Unamortized Debt Discount Deferred Debt Issuance Costs Net Carrying Value Net Carrying Value 3.75% Convertible Senior Notes, due October 15, 2018 (Original) $ 61,270 $ — $ (36 ) $ 61,234 $ — 3.75% Convertible Senior Notes, due October 15, 2018 (New) $ 288,730 $ (125 ) $ (170 ) $ 288,435 $ — 4.0% Convertible Senior Notes due December 15, 2020 (1) $ 207,809 $ (7,437 ) $ (730 ) $ 199,642 $ 43,131 (1) Includes accretion of principal at a rate of 1.85% per year. The following table sets forth, in thousands, the net carrying value and the estimated fair value of Ciena’s outstanding issues of convertible notes as of July 31, 2018 : July 31, 2018 Net Carrying Value Fair Value (1) 3.75% Convertible Senior Notes, due October 15, 2018 (Original) $ 61,234 $ 77,047 3.75% Convertible Senior Notes, due October 15, 2018 (New) 288,435 363,078 4.0% Convertible Senior Notes due December 15, 2020 199,642 233,269 $ 549,311 $ 673,394 (1) The convertible notes were categorized as Level 2 in the fair value hierarchy. Ciena estimates the fair value of its outstanding convertible notes using a market approach based on observable inputs, such as current market transactions involving comparable securities. |
Earnings Per Share Calculation
Earnings Per Share Calculation | 9 Months Ended |
Jul. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share Calculation | EARNINGS PER SHARE CALCULATION The following table (in thousands except per share amounts) is a reconciliation of the numerator and denominator of the basic net income (loss) per common share (“Basic EPS”) and the diluted net income (loss) per potential common share (“Diluted EPS”). Basic EPS is computed using the weighted average number of common shares outstanding. Diluted EPS is computed using the weighted average number of the following, in each case, to the extent the effect is not anti-dilutive: (i) common shares outstanding; (ii) shares issuable upon vesting of restricted stock units; (iii) shares issuable under Ciena’s employee stock purchase plan and upon exercise of outstanding stock options, using the treasury stock method; (iv) shares underlying Ciena’s outstanding convertible notes for which Ciena uses the treasury stock method (the New Notes); and (v) shares underlying Ciena’s outstanding convertible notes for which Ciena uses the if-converted method. Quarter Ended July 31, Nine Months Ended July 31, Numerator 2018 2017 2018 2017 Net income (loss) $ 50,840 $ 60,010 $ (408,667 ) $ 101,897 Add: Interest expense associated with 0.875% Convertible Senior Notes due 2017 (1) — 246 — 1,343 Add: Interest expense associated with 3.75% Convertible Senior Notes due 2018 (Original) 464 3,572 — 10,750 Add: Interest expense associated with 4.0% Convertible Senior Notes due 2020 2,624 3,323 — — Net income (loss) used to calculate Diluted EPS $ 53,928 $ 67,151 $ (408,667 ) $ 113,990 Quarter Ended July 31, Nine Months Ended July 31, Denominator 2018 2017 2018 2017 Basic weighted average shares outstanding 143,400 142,464 143,766 141,631 Add: Shares underlying outstanding stock options and restricted stock units and issuable under employee stock purchase plan 1,330 1,386 — 1,401 Add: Shares underlying 0.875% Convertible Senior Notes due 2017 (1) — 1,708 — 4,043 Add: Shares underlying 3.75% Convertible Senior Notes due 2018 (New) (2) 3,032 — — — Add: Shares underlying 3.75% Convertible Senior Notes due 2018 (Original) 3,038 17,356 — 17,356 Add: Shares underlying 4.0% Convertible Senior Notes due 2020 9,198 9,198 — — Dilutive weighted average shares outstanding 159,998 172,112 143,766 164,431 Quarter Ended July 31, Nine Months Ended July 31, EPS 2018 2017 2018 2017 Basic EPS $ 0.35 $ 0.42 $ (2.84 ) $ 0.72 Diluted EPS $ 0.34 $ 0.39 $ (2.84 ) $ 0.69 The following table summarizes the weighted average shares excluded from the calculation of the denominator for Diluted EPS due to their anti-dilutive effect for the periods indicated (in thousands): Quarter Ended July 31, Nine Months Ended July 31, 2018 2017 2018 2017 Shares underlying stock options and restricted stock units 318 682 2,183 988 3.75% Convertible Senior Notes due October 15, 2018 (Original) — — 3,038 — 3.75% Convertible Senior Notes due October 15, 2018 (New) (2) — — 2,125 — 4.0% Convertible Senior Notes due December 15, 2020 — — 9,198 9,198 Total shares excluded due to anti-dilutive effect 318 682 16,544 10,186 (1) Ciena’s 0.875% convertible senior notes were paid at maturity during the third quarter of fiscal 2017. (2) Upon any conversion of the outstanding 3.75% Convertible Senior Notes due 2018 (New) (the “New Notes”), Ciena intends to settle the principal amount thereof in cash. See Note 19 below. Accordingly, Ciena uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The 14.3 million shares underlying the New Notes will have a dilutive impact on diluted net income per share of common stock when the average market price of Ciena common stock for a given period exceeds the conversion price of $ 20.17 per share for the New Notes. During the third quarter of fiscal 2018 , the average market price of Ciena common stock was $ 25.59 . As a result, for the quarter ended July 31 , 2018 , the conversion spread for the New Notes of 3.0 million shares is included in the calculation of the denominator. For the nine months ended July 31, 2018 , the conversion spread for the New Notes of 2.1 million shares is excluded from the calculation of the denominator as their inclusion would have had an anti-dilutive effect. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Jul. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Adoption of ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting In connection with the adoption of ASU 2016-09, Ciena recognized approximately $62.1 million of deferred tax assets related to previously unrecognized tax benefits. This was recorded as a cumulative-effect adjustment to retained earnings as of the beginning of the first quarter of fiscal 2018. Ciena also elected to recognize forfeitures of stock awards when they occur, rather than estimate the impact of forfeitures when the award is granted. Accordingly, Ciena recognized approximately $0.8 million for this change through a cumulative effect adjustment recorded to opening retained earnings in the period of adoption. Stock Repurchase Program On December 7, 2017, Ciena announced that its Board of Directors authorized a program to repurchase up to $300 million of Ciena’s common stock through the end of fiscal 2020. Ciena may purchase shares at management’s discretion in the open market, in privately negotiated transactions, in transactions structured through investment banking institutions, or a combination of the foregoing. Ciena may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization. The amount and timing of repurchases are subject to a variety of factors, including liquidity, cash flow, stock price, and general business and market conditions. The program may be modified, suspended, or discontinued at any time. A summary of the stock repurchase program, reported based on trade date, is summarized as follows: Shares Repurchased Weighted-Average Price per Share Amount Repurchased (in thousands) Cumulative balance at October 31, 2017 — $ — $ — Repurchase of common stock under the stock repurchase program 3,028,118 24.70 74,787 Cumulative balance at July 31, 2018 3,028,118 $ 24.70 $ 74,787 The purchase price for the shares of Ciena’s stock repurchased is reflected as a reduction of common stock and additional paid-in capital. |
Share-Based Compensation Expens
Share-Based Compensation Expense | 9 Months Ended |
Jul. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation Expense | SHARE-BASED COMPENSATION EXPENSE The following table summarizes share-based compensation expense for the periods indicated (in thousands): Quarter Ended July 31, Nine Months Ended July 31, 2018 2017 2018 2017 Product costs $ 783 $ 709 $ 2,279 $ 1,978 Service costs 618 619 1,965 1,926 Share-based compensation expense included in cost of sales 1,401 1,328 4,244 3,904 Research and development 3,082 3,139 10,133 10,001 Sales and marketing 3,417 3,242 10,505 9,628 General and administrative 4,538 4,321 14,121 13,191 Share-based compensation expense included in operating expense 11,037 10,702 34,759 32,820 Share-based compensation expense capitalized in inventory, net (101 ) (17 ) (107 ) 119 Total share-based compensation $ 12,337 $ 12,013 $ 38,896 $ 36,843 As of July 31, 2018 , total unrecognized share-based compensation expense was approximately $86.7 million which relates to unvested restricted stock units and is expected to be recognized over a weighted-average period of 1.5 years. |
Segments and Entity-Wide Disclo
Segments and Entity-Wide Disclosures | 9 Months Ended |
Jul. 31, 2018 | |
Segment Reporting [Abstract] | |
Segments and Entity-Wide Disclosures | SEGMENTS AND ENTITY-WIDE DISCLOSURES Segment Reporting Ciena manages its business, measures its performance and allocates its resources based on the following operating segments: • Networking Platforms reflects sales of Ciena’s Converged Packet Optical and Packet Networking product lines . ◦ Converged Packet Optical — includes the 6500 Packet-Optical Platform, the 5430 Reconfigurable Switching System, Waveserver® stackable interconnect system, the family of CoreDirector® Multiservice Optical Switches and the OTN configuration for the 5410 Reconfigurable Switching System. This product line also includes sales of the Z-Series Packet-Optical Platform. As of the first quarter of fiscal 2018, sales of Optical Transport products are also reflected within the Converged Packet Optical product line for all periods presented. ◦ Packet Networking — includes the 3000 family of service delivery switches and the 5000 family of service aggregation switches. This product line also includes the 8700 Packetwave® Platform and the Ethernet packet configuration for the 5410 Service Aggregation Switch. The Networking Platforms segment also includes sales of operating system software and enhanced software features embedded in each of the product lines above. Revenue from this segment is included in product revenue on the Condensed Consolidated Statements of Operations. • Software and Software-Related Services reflects sales of Ciena’s software platforms and software-related services. Software platforms includes: ◦ Ciena’s Blue Planet Intelligent Automation Platform, which is a comprehensive, open software suite that allows customers to use enhanced knowledge about their network to drive adaptive optimization of their services and operations. Ciena’s Blue Planet Intelligent Automation Platform includes multi-domain service orchestration (MDSO), network function virtualization (NFV), management and orchestration (NFV MANO), analytics, network health predictor (NHP), route optimization and assurance (ROA) and Ciena’s SDN Multilayer Controller and virtual wide area network (V-WAN) application. Ciena acquired the NHP and ROA software solutions as a part of its acquisition of Packet Design. ◦ Ciena’s management software, which provides analytics, data, and planning tools to assist customers in managing Ciena’s Networking Platforms products in their networks. Ciena’s management software consists of Blue Planet Manage, Control and Plan (MCP) domain controller solution, OneControl Unified Management System, ON-Center® Network & Service Management Suite, Ethernet Services Manager, Optical Suite Release and Planet Operate. As Ciena seeks adoption of its Blue Planet MCP software platform and transitions features, functionality and customers to this platform, Ciena expects revenue declines for its other management software solutions. Software-related services includes sales of subscription, installation, support, and consulting services related to Ciena’s software platforms. Revenue from the software platforms portion of this segment is included in product revenue on the Condensed Consolidated Statements of Operations. Revenue from software-related services is included in services revenue on the Condensed Consolidated Statements of Operations. • Global Services reflects sales of a broad range of Ciena’s services for consulting and network design, installation and deployment, maintenance support and training activities. Revenue from this segment is included in services revenue on the Condensed Consolidated Statements of Operations. Ciena's long-lived assets, including equipment, building, furniture and fixtures, finite-lived intangible assets and maintenance spares, are not reviewed by Ciena's chief operating decision maker for purposes of evaluating performance and allocating resources. As of July 31, 2018 , equipment, building, furniture and fixtures, net totaled $295.9 million primarily supporting asset groups within Ciena’s Networking Platforms and Software and Software-Related Services segments and supporting Ciena’s unallocated selling and general and administrative activities. As of July 31, 2018 , $32.1 million of Ciena’s intangible assets, net were assigned to asset groups within Ciena’s Networking Platforms segment and $76.2 million of Ciena’s intangible assets, net were assigned to asset groups within Ciena’s Software and Software-Related Services segment. As of July 31, 2018 , all of the maintenance spares, net, totaling $43.7 million , were assigned to asset groups within Ciena’s Global Services segment. Segment Revenue The table below (in thousands) sets forth Ciena’s segment revenue for the respective periods: Quarter Ended July 31, Nine Months Ended July 31, 2018 2017 2018 2017 Revenue: Networking Platforms Converged Packet Optical $ 592,892 $ 510,226 $ 1,548,189 $ 1,433,137 Packet Networking 84,559 82,121 216,977 220,641 Total Networking Platforms 677,451 592,347 1,765,166 1,653,778 Software and Software-Related Services Software Platforms 14,307 18,395 56,427 48,587 Software-Related Services 26,876 23,856 76,988 70,760 Total Software and Software-Related Services 41,183 42,251 133,415 119,347 Global Services Maintenance Support and Training 60,897 57,902 177,759 171,133 Installation and Deployment 31,262 27,397 89,487 84,011 Consulting and Network Design 8,024 8,822 29,103 28,969 Total Global Services 100,183 94,121 296,349 284,113 Consolidated revenue $ 818,817 $ 728,719 $ 2,194,930 $ 2,057,238 Segment Profit Segment profit is determined based on internal performance measures used by Ciena’s chief executive officer to assess the performance of each operating segment in a given period. In connection with that assessment, the chief executive officer excludes the following items: selling and marketing costs; general and administrative costs; significant asset impairments and restructuring costs; amortization of intangible assets; acquisition and integration costs; interest and other income (loss), net; interest expense; and provision for income taxes. The table below (in thousands) sets forth Ciena’s segment profit and the reconciliation to consolidated net income (loss) during the respective periods indicated: Quarter Ended July 31, Nine Months Ended July 31, 2018 2017 2018 2017 Segment profit: Networking Platforms $ 181,603 $ 159,649 $ 396,995 $ 423,859 Software and Software-Related Services 9,305 11,133 41,216 23,384 Global Services 39,502 39,565 121,823 116,637 Total segment profit 230,410 210,347 560,034 563,880 Less: Non-performance operating expenses Selling and marketing 95,395 86,739 281,269 260,292 General and administrative 38,212 35,569 115,594 106,423 Significant asset impairments and restructuring costs 6,359 2,203 16,679 8,874 Amortization of intangible assets 3,837 3,837 11,083 29,368 Acquisition and integration costs 1,333 — 1,333 — Add: Other non-performance financial items Interest expense and other income (loss), net (15,154 ) (14,263 ) (39,048 ) (45,322 ) Less: Provision for income taxes 19,280 7,726 503,695 11,704 Consolidated net income (loss) $ 50,840 $ 60,010 $ (408,667 ) $ 101,897 Entity-Wide Reporting Ciena’s revenue includes $469.2 million and $438.1 million of United States revenue for the third quarter of fiscal 2018 and 2017 , respectively. Ciena’s revenue also includes $83.6 million of India revenue for the third quarter of fiscal 2018 . For the nine months ended July 31, 2018 and 2017 , United States revenue was $1,245.3 million and $1,209.8 million , respectively. No other country accounted for 10% or more of total revenue for the periods presented above. The following table reflects Ciena’s geographic distribution of equipment, building, furniture and fixtures, net, with any country accounting for at least 10% of total equipment, building, furniture and fixtures, net, specifically identified. Equipment, building, furniture and fixtures, net, attributable to geographic regions outside of the U.S. and Canada are reflected as “Other International.” For the periods below, Ciena’s geographic distribution of equipment, building, furniture and fixtures was as follows (in thousands): July 31, October 31, Canada $ 197,057 $ 203,491 United States 79,243 90,482 Other International 19,563 14,492 Total $ 295,863 $ 308,465 For the periods below, Verizon, AT&T and a Web-scale provider were the only customers that accounted for at least 10% of Ciena’s revenue as follows (in thousands): Quarter Ended July 31, Nine Months Ended July 31, 2018 2017 2018 2017 Verizon $ 97,103 $ 82,918 $ 221,475 $ 206,272 AT&T 87,389 120,931 263,453 324,900 Web-scale provider 86,364 n/a n/a n/a Total $ 270,856 $ 203,849 $ 484,928 $ 531,172 n/a Denotes revenue representing less than 10% of total revenue for the period The customers identified above purchased products and services from each of Ciena’s operating segments. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jul. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Canadian Grant During the second quarter of fiscal 2018, Ciena entered into agreements related to the Evolution of Networking Services through a Corridor in Quebec and Ontario for Research and Innovation (“ENCQOR”) project with the Canadian federal government, the government of the province of Ontario and the government of the province of Quebec to develop a 5G technology corridor between Quebec and Ontario to promote research and development, small business enterprises and entrepreneurs in Canada. Under these agreements, Ciena can receive up to an aggregate CAD$ 57.6 million ( $45.0 million ) in reimbursement from the three Canadian government entities for eligible costs over a period commencing on February 20, 2017 and ending on March 31, 2022. Ciena anticipates receiving recurring disbursements over this period. Amounts received under the agreements are subject to recoupment in the event that Ciena fails to achieve certain minimum investment, employment and project milestones. During the nine months ended July 31, 2018 , Ciena recorded a CAD $13.5 million ( $10.5 million ) benefit as a reduction in research and development expense, related to eligible costs that it incurred from the commencement date of February 20, 2017 to July 31, 2018 , because it believes it has complied with the conditions of the agreements entitling it to this amount. In future periods, through the term of these agreements, Ciena expects to record a quarterly benefit to operating expense of approximately CAD$ 2.95 million (approximately $2.3 million ) related to these grants. As of July 31, 2018, amounts receivable from this grant were CAD $8.3 million ( $6.3 million ). Foreign Tax Contingencies Ciena is subject to various tax liabilities arising in the ordinary course of business. Ciena does not expect that the ultimate settlement of these tax liabilities will have a material effect on its results of operations, financial position or cash flows. Litigation As a result of the acquisition of Cyan in August 2015, Ciena became a defendant in a securities class action lawsuit. On April 1, 2014, a purported stockholder class action lawsuit was filed in the Superior Court of California, County of San Francisco, against Cyan, the members of Cyan’s board of directors, Cyan’s former Chief Financial Officer, and the underwriters of Cyan’s initial public offering. On April 30, 2014, a substantially similar lawsuit was filed in the same court against the same defendants. The two cases were consolidated as Beaver County Employees Retirement Fund, et al. v. Cyan, Inc. et al., Case No. CGC-14-538355. The consolidated complaint alleges violations of federal securities laws on behalf of a purported class consisting of purchasers of Cyan’s common stock pursuant or traceable to the registration statement and prospectus for Cyan’s initial public offering in April 2013, and seeks unspecified compensatory damages and other relief. On May 19, 2015, the proposed class was certified. On August 25, 2015, the defendants filed a motion for judgment on the pleadings based on an alleged lack of subject matter jurisdiction over the case, which motion was denied on October 23, 2015. On May 24, 2016, the defendants filed a petition for a writ of certiorari on the jurisdiction issue with the U.S. Supreme Court, which petition was granted on June 27, 2017. The matter was stayed by the Superior Court pending the outcome of the Supreme Court’s decision. On March 20, 2018, the Supreme Court held that the Superior Court had subject matter jurisdiction over the case. A case management conference was held before the Superior Court during the third quarter of fiscal 2018. Ciena believes that the consolidated lawsuit is without merit and intends to defend it vigorously. Internal Investigations During fiscal 2017, one of Ciena’s third-party vendors raised allegations about certain questionable payments to one or more individuals employed by a customer in a country in the ASEAN region. Ciena promptly initiated an internal investigation into the matter, with the assistance of outside counsel, which investigation corroborated direct and indirect payments to one such individual and sought to determine whether the payments may have violated applicable laws and regulations, including the U.S. Foreign Corrupt Practices Act (“FCPA”). In September 2017, Ciena voluntarily contacted the SEC and the U.S. Department of Justice (“DOJ”) to advise them of the relevant events and the findings of Ciena’s internal investigation. With the direct oversight of Ciena’s Board of Directors, Ciena continues to cooperate fully with the SEC and DOJ in their review of the investigation. Ciena’s operations in the relevant country have constituted less than 1.5% of consolidated revenues as reported by Ciena in each fiscal year since 2012. Ciena does not currently anticipate that this matter will have a material adverse effect on its business, financial condition or results of operations. However, as discussions with the SEC and DOJ are ongoing, the ultimate outcome of this matter cannot be predicted at this time. As of the filing of this Report, no provision with respect to this matter has been made in Ciena’s consolidated financial statements. Any determination that Ciena’s operations or activities are not in compliance with the FCPA or other applicable laws or regulations could result in the imposition of fines, civil and criminal penalties, and equitable remedies, including disgorgement or injunctive relief. In addition to the matters described in “Litigation” and “Internal Investigations” above, Ciena is subject to various legal proceedings, claims and other matters arising in the ordinary course of business, including those that relate to employment, commercial, tax and other regulatory matters. Ciena is also subject to intellectual property related claims, including claims against third parties that may involve contractual indemnification obligations on the part of Ciena. Ciena does not expect that the ultimate costs to resolve such matters will have a material effect on its results of operations, financial position or cash flows. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Jul. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Stock Repurchase Program From the end of the third quarter of fiscal 2018 through August 31, 2018 , Ciena repurchased an additional 472,542 shares of its common stock, for an aggregate purchase price of $12.4 million at an average price of $26.25 per share, inclusive of repurchases pending settlement. As of August 31, 2018 , Ciena has repurchased an aggregate of 3,500,660 shares and has an aggregate of $212.8 million of authorized funds remaining under its Stock Repurchase Program. Stock Repurchases Related to Restricted Stock Unit Tax Withholding Historically, Ciena satisfied employee tax withholding obligations due upon the vesting of restricted stock units (RSUs) through directed open market sales to cover the employee tax obligations. Beginning in the fourth quarter of fiscal 2018, Ciena will change this practice to repurchase shares of common stock delivered with respect to such RSUs in settlement of employee tax withholding obligations due upon the vesting of RSUs. The purchase price for the shares of Ciena’s stock repurchased will be reflected as a reduction to stockholders’ equity. Ciena is required to allocate the purchase price of the repurchased shares as a reduction of common stock and additional paid-in capital. Settlement of Conversions of New Notes Ciena has elected to settle any conversion of the New Notes prior to maturity in a combination of cash and shares, with the cash portion not to exceed an aggregate amount of approximately $ 400 million . Per the settlement provisions of the indenture governing conversion of the New Notes, an amount of $ 288.7 million (representing the aggregate principal amount) will be paid in cash on October 15, 2018. To the extent Ciena’s shares trade during the relevant settlement period in excess of the $ 20.17 per share conversion price, Ciena will pay up to approximately $111.3 million of any amounts due in excess of the aggregate principal amount in cash, and any remaining amounts due will be settled in shares. These amounts will be settled during the first quarter of fiscal 2019. DonRiver Acquisition On August 31, 2018, Ciena entered into a definitive agreement to acquire privately-held DonRiver Holdings, LLC, a global software and services company specializing in federated network and service inventory management solutions within the service provider Operational Support Systems (OSS) environment. The transaction is expected to close during Ciena’s fourth quarter of fiscal 2018 and is subject to customary closing conditions. |
Significant Accounting Polici27
Significant Accounting Policies (Policies) | 9 Months Ended |
Jul. 31, 2018 | |
Accounting Policies [Abstract] | |
Government Grants | Government Grants Ciena accounts for proceeds from government grants as a reduction of expense when there is reasonable assurance that Ciena has met the required conditions associated with the grant and that grant proceeds will be received. Grant benefits are recorded to the particular line item of the Condensed Consolidated Statement of Operations to which the grant activity relates. |
Newly Issued Accounting Standards - Effective and Not Yet Effective | Newly Issued Accounting Standards - Effective In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-01 (“ASU 2017-01”) , Business Combinations: Clarifying the Definition of a Business , which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisition or disposal of assets or businesses. The amendments in this update provide a screen to determine when a set of assets is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set of assets is not a business. Ciena will evaluate the effect of the update at the time of any future acquisition or disposal. Ciena adopted ASU 2017-01 during the first quarter of fiscal 2018. In August 2017, the FASB issued ASU No. 2017-12 (“ASU 2017-12”) , Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities , which improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements and make certain targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. The amendments in this update better align an entity’s risk management activities and financial reporting for hedging relationships, through changes to both the designation and measurement guidance for qualifying hedging relationships and presentation of hedge results. Ciena adopted ASU 2017-12 during the first quarter of fiscal 2018. For hedges for which Ciena has elected to exclude the spot-forward difference from assessment of effectiveness, Ciena has elected to amortize the difference on a straight-line basis. Ciena will record amortization in earnings each period with an offsetting entry to other comprehensive income, and all changes in fair value over the term of the derivative in other comprehensive income. The application of this accounting standard did not have a material impact on Ciena’s Condensed Consolidated Financial Statements. In March 2016, the FASB issued ASU No. 2016-09 (“ASU 2016-09”) , Improvements to Employee Share-Based Payment Accounting , which provides guidance on several aspects of accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification on the statement of cash flows. Ciena adopted ASU 2016-09 during the first quarter of fiscal 2018. In connection with the adoption of this guidance, Ciena recognized approximately $62.1 million of deferred tax assets related to previously unrecognized tax benefits. This was recorded as a cumulative-effect adjustment to retained earnings as of the beginning of the first quarter of fiscal 2018. Additionally, the consolidated statements of cash flows will include excess tax benefits as an operating activity, on a prospective basis as a result of the adoption. Finally, Ciena has elected to recognize forfeitures when they occur, rather than to estimate the impact of forfeitures when the award is granted. Accordingly, Ciena recognized approximately $0.8 million for this change through a cumulative effect adjustment recorded to opening retained earnings in the first quarter of fiscal 2018. Newly Issued Accounting Standards - Not Yet Effective In May 2014, the FASB issued ASU No. 2014-09 (“ASU 2014-09”) , Revenue from Contracts with Customers (Topic 606), which provides guidance for revenue recognition. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. ASU 2014-09 will supersede the revenue recognition requirements in Topic 605, Revenue Recognition , and most industry-specific guidance. ASU 2014-09 also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts . For multiple element software arrangements where vendor-specific objective evidence (“VSOE”) of undelivered maintenance does not exist, Ciena currently recognizes revenue for the entire arrangement over the maintenance term. The adoption of ASU 2014-09 will require Ciena to determine the stand alone selling price for each of the software and software-related deliverables at contract inception, and Ciena consequently expects certain software deliverables will be recognized at a point in time rather than over a period of time. Ciena also expects certain installation and deployment, and consulting and network design services, will be recognized over a period of time rather than at a point in time. Ciena has considered the impact of the guidance in Accounting Standards Codification (“ASC”) 340-40, Other Assets and Deferred Costs; Contracts with Customers , and the interpretations of the FASB Transition Resource Group for Revenue Recognition (TRG) with respect to capitalization and amortization of incremental costs of obtaining a contract. In conjunction with this interpretation, Ciena has elected to implement the practical expedient clause allowing for incremental costs to be recognized as an expense when incurred if the period of the asset recognition is one year or less, and amortized over the period of performance, if the period of the asset recognition is greater than one year. Ciena expects to implement ASU 2014-09 using the modified retrospective approach whereby the cumulative effect at adoption will be presented as an adjustment to the opening balance of retained earnings. The comparative information will not be restated and will continue to be reported under the accounting standards in effect for those periods. ASU 2014-09 will be effective for Ciena beginning in the first quarter of fiscal 2019. Ciena is continuing to evaluate other possible impacts of the adoption of this ASU on its Consolidated Financial Statements and disclosures. In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”) , Leases , which requires an entity to recognize assets and liabilities on the balance sheet for the rights and obligations created by leased assets and to provide additional disclosures. ASU 2016-02 is effective for Ciena beginning in the first quarter of fiscal 2020. Under current GAAP, the majority of Ciena’s leases for its properties are considered operating leases, and Ciena expects that the adoption of this ASU will require these leases to be classified as financing leases and to be recognized as assets and liabilities on Ciena’s balance sheet. Ciena is continuing to evaluate other possible impacts of the adoption of ASU 2016-02 on its Consolidated Financial Statements and disclosures. In August 2018, the FASB issued ASU No. 2018-09 ( “ASU 2018-09” ), Codification Improvements which does not prescribe any new accounting guidance, but instead makes minor improvements and clarifications of several different FASB Accounting Standards Codification areas based on comments and suggestions made by various stakeholders. Certain updates are applicable immediately while others provide for a transition period to adopt as part of the next fiscal year beginning after December 15, 2018. Ciena is currently evaluating this guidance to determine the impact it may have on the consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13 ( “ASU 2018-13” ), Fair Value Measurement (Topic 820): Disclosure Framework which modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for Ciena beginning in the first quarter of fiscal year 2020, early adoption is permitted. Ciena is currently evaluating this guidance to determine the impact on its disclosures. In August 2018, the FASB issued ASU No. 2018-14 ( “ASU 2018-14” ), Compensation -Retirement Benefits - Defined Benefit Plans which modifies the disclosure requirements on company-sponsored defined benefit plans. ASU 2018-14 is effective for Ciena beginning in the first quarter of fiscal year 2021, early adoption is permitted. Ciena is currently evaluating this guidance to determine the impact on its disclosures. In August 2018, the FASB issued ASU No. 2018-15 ( “ASU 2018-15” ), Intangibles - Goodwill and Other-Internal-Use Software which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for Ciena beginning in the first quarter of fiscal year 2020, early adoption is permitted. Ciena is currently evaluating this guidance to determine the impact on its disclosures. |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the final purchase price allocation related to the acquisition based on the estimated fair value of the acquired assets and assumed liabilities (in thousands): Amount Cash and cash equivalents $ 642 Accounts receivable 1,525 Prepaid expenses and other 450 Equipment, furniture and fixtures 31 Goodwill 20,304 Customer relationships and contracts 2,200 Developed technology 21,900 Accounts payable (165 ) Accrued liabilities (657 ) Deferred revenue (5,176 ) Total purchase consideration $ 41,054 |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Activity and Balance of the Restructuring Liability Accounts | The following table sets forth the restructuring activity and balance of the restructuring liability accounts for the nine months ended July 31, 2018 (in thousands): Workforce reduction Consolidation of excess facilities Total Balance at October 31, 2017 $ 1,291 $ 1,648 $ 2,939 Additional liability recorded 12,876 (1) 3,803 (2) 16,679 Cash payments (10,987 ) (3,084 ) (14,071 ) Balance at July 31, 2018 $ 3,180 $ 2,367 $ 5,547 Current restructuring liabilities $ 3,180 $ 1,076 $ 4,256 Non-current restructuring liabilities $ — $ 1,291 $ 1,291 (1) Reflects a global workforce reduction of approximately 230 employees during fiscal 2018 as part of a business optimization strategy to improve gross margin, constrain operating expense and redesign certain business processes. (2) Reflects unfavorable lease commitments in connection with a portion of facilities located in Petaluma, California and in Gurgaon, India. The following table sets forth the restructuring activity and balance of the restructuring liability accounts for the nine months ended July 31, 2017 (in thousands): Workforce reduction Consolidation of excess facilities Total Balance at October 31, 2016 $ 868 $ 1,970 $ 2,838 Additional liability recorded 3,967 (1) 4,907 (2) 8,874 Cash payments (3,370 ) (2,679 ) (6,049 ) Balance at July 31, 2017 $ 1,465 $ 4,198 $ 5,663 Current restructuring liabilities $ 1,465 $ 4,198 $ 5,663 Non-current restructuring liabilities $ — $ — $ — (1) Reflects a global workforce reduction of approximately 60 employees during fiscal 2017 as part of a business optimization strategy to improve gross margin, constrain operating expense and redesign certain business processes and systems. (2) Reflects unfavorable lease commitments and relocation costs incurred during fiscal 2017 in connection with the facility transition from Ciena’s existing research and development center located at Lab 10 on the former Nortel Carling Campus to a new campus facility in Ottawa, Canada. |
Interest and Other Income (Lo30
Interest and Other Income (Loss), Net (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of Interest and Other Income (Loss), Net | The components of interest and other income (loss), net, are as follows (in thousands): Quarter Ended July 31, Nine Months Ended July 31, 2018 2017 2018 2017 Interest income $ 3,620 $ 1,820 $ 9,276 $ 4,609 Gains (losses) on non-hedge designated foreign currency forward contracts 2,182 834 4,351 (891 ) Foreign currency exchange loss (6,879 ) (2,946 ) (11,670 ) (4,071 ) Modification of term loan — — — (2,924 ) Other (466 ) (556 ) (629 ) (119 ) Interest and other income (loss), net $ (1,543 ) $ (848 ) $ 1,328 $ (3,396 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Significant Components of Deferred Tax Assets and Liabilities | The significant components of DTA are as follows (in thousands): July 31, October 31, 2018 2017 Deferred tax assets: Reserves and accrued liabilities $ 35,022 $ 56,597 Depreciation and amortization 317,526 451,385 NOL and credit carry forward 496,327 803,622 Other 20,077 29,398 Gross deferred tax assets 868,952 1,341,002 Valuation allowance (144,865 ) (185,898 ) Deferred tax asset, net of valuation allowance $ 724,087 $ 1,155,104 |
Short-Term and Long-Term Inve32
Short-Term and Long-Term Investments (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Short-Term and Long-Term Investments | As of the dates indicated, investments are comprised of the following (in thousands): July 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. government obligations: Included in short-term investments $ 199,415 $ — (418 ) $ 198,997 Included in long-term investments 29,538 — (73 ) 29,465 $ 228,953 $ — $ (491 ) $ 228,462 Commercial paper: Included in short-term investments $ 29,941 2 — $ 29,943 $ 29,941 $ 2 $ — $ 29,943 October 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. government obligations: Included in short-term investments $ 249,498 $ — $ (305 ) $ 249,193 Included in long-term investments 49,910 — (127 ) 49,783 $ 299,408 $ — $ (432 ) $ 298,976 Commercial paper: Included in short-term investments $ 29,939 1 — $ 29,940 $ 29,939 $ 1 $ — $ 29,940 |
Schedule of Legal Maturities of Debt Investments | The following table summarizes the final legal maturities of debt investments at July 31, 2018 (in thousands): Amortized Cost Estimated Fair Value Less than one year $ 229,356 $ 228,940 Due in 1-2 years 29,538 29,465 $ 258,894 $ 258,405 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of the Fair Value of Assets and Liabilities Recorded on a Recurring Basis | As of the date indicated, the following table summarizes the assets and liabilities that are recorded at fair value on a recurring basis (in thousands): July 31, 2018 Level 1 Level 2 Total Assets: Money market funds $ 579,413 $ — $ 579,413 U.S. government obligations — 228,462 228,462 Commercial paper — 69,860 69,860 Foreign currency forward contracts — 668 668 Forward starting interest rate swaps — 6,667 6,667 Total assets measured at fair value $ 579,413 $ 305,657 $ 885,070 Liabilities: Foreign currency forward contracts $ — $ 2,968 $ 2,968 Total liabilities measured at fair value $ — $ 2,968 $ 2,968 October 31, 2017 Level 1 Level 2 Total Assets: Money market funds $ 511,355 $ — $ 511,355 U.S. government obligations — 298,976 298,976 Commercial paper — 89,865 89,865 Foreign currency forward contracts — 227 227 Forward starting interest rate swaps — 218 218 Total assets measured at fair value $ 511,355 $ 389,286 $ 900,641 Liabilities: Foreign currency forward contracts $ — $ 2,129 $ 2,129 Total liabilities measured at fair value $ — $ 2,129 $ 2,129 |
Schedule of Assets and Liabilities as Presented on Ciena's Condensed Consolidated Balance Sheets | As of the date indicated, the assets and liabilities above are presented on Ciena’s Condensed Consolidated Balance Sheet as follows (in thousands): July 31, 2018 Level 1 Level 2 Total Assets: Cash equivalents $ 579,413 $ 39,917 $ 619,330 Short-term investments — 228,940 228,940 Prepaid expenses and other — 668 668 Long-term investments — 29,465 29,465 Other long-term assets — 6,667 6,667 Total assets measured at fair value $ 579,413 $ 305,657 $ 885,070 Liabilities: Accrued liabilities $ — $ 2,968 $ 2,968 Total liabilities measured at fair value $ — $ 2,968 $ 2,968 October 31, 2017 Level 1 Level 2 Total Assets: Cash equivalents $ 511,355 $ 59,925 $ 571,280 Short-term investments — 279,133 279,133 Prepaid expenses and other — 227 227 Long-term investments — 49,783 49,783 Other long-term assets — 218 218 Total assets measured at fair value $ 511,355 $ 389,286 $ 900,641 Liabilities: Accrued liabilities $ — $ 2,129 $ 2,129 Total liabilities measured at fair value $ — $ 2,129 $ 2,129 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | As of the dates indicated, inventories are comprised of the following (in thousands): July 31, October 31, Raw materials $ 54,003 $ 52,898 Work-in-process 11,100 18,623 Finished goods 173,419 185,488 Deferred cost of goods sold 38,525 61,340 277,047 318,349 Provision for excess and obsolescence (49,162 ) (51,206 ) $ 227,885 $ 267,143 |
Accrued Liabilities and Other35
Accrued Liabilities and Other Short-Term Obligations (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Accrued Liabilities | As of the dates indicated, accrued liabilities and other short-term obligations are comprised of the following (in thousands): July 31, October 31, Compensation, payroll related tax and benefits $ 99,740 $ 113,272 Warranty 44,150 42,456 Vacation 40,747 39,778 Capital lease obligations 3,773 3,772 Interest payable 4,991 3,612 Other 104,587 120,044 $ 297,988 $ 322,934 |
Schedule of Accrued Warranties | The following table summarizes the activity in Ciena’s accrued warranty for the fiscal periods indicated (in thousands): Nine Months Ended July 31, Beginning Balance Current Period Provisions (1) Settlements Ending Balance 2017 $ 52,324 5,188 (13,216 ) $ 44,296 2018 $ 42,456 15,715 (14,021 ) $ 44,150 (1) As a result of lower than expected actual failure rates, Ciena adjusted its fiscal 2017 provision for warranty. This adjustment had the effect of reducing warranty provision by $8.0 million for the nine months ended July 31, 2017 . |
Accumulated Other Comprehensi36
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income | The following table summarizes the changes in accumulated balances of other comprehensive income (“AOCI”) for the nine months ended July 31, 2018 : Unrealized Unrealized Loss on Unrealized Gain on Cumulative Foreign Currency Loss on Available-for-sale Securities Foreign Currency Forward Contracts Forward Starting Interest Rate Swap Foreign Currency Translation Adjustment Total Balance at October 31, 2017 $ (451 ) $ (1,386 ) $ 218 $ (9,398 ) $ (11,017 ) Other comprehensive income (loss) before reclassifications (59 ) (9 ) 5,330 (2,161 ) 3,101 Amounts reclassified from AOCI — (1,058 ) 269 — (789 ) Balance at July 31, 2018 $ (510 ) $ (2,453 ) $ 5,817 $ (11,559 ) $ (8,705 ) The following table summarizes the changes in AOCI for the nine months ended July 31, 2017 : Unrealized Gain/(Loss) on Unrealized Gain (Loss) on Unrealized Gain on Cumulative Foreign Currency Available-for-sale Securities Foreign Currency Forward Contracts Forward Starting Interest Rate Swap Foreign Currency Translation Adjustment Total Balance at October 31, 2016 $ 139 $ (1,091 ) $ (5,967 ) $ (17,410 ) $ (24,329 ) Other comprehensive income (loss) before reclassifications (533 ) 896 4,838 11,891 17,092 Amounts reclassified from AOCI — 2,010 (268 ) — 1,742 Balance at July 31, 2017 $ (394 ) $ 1,815 $ (1,397 ) $ (5,519 ) $ (5,495 ) |
Short-Term and Long-Term Debt (
Short-Term and Long-Term Debt (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Convertible Notes | The following table sets forth, in thousands, the net carrying value and the estimated fair value of Ciena’s outstanding issues of convertible notes as of July 31, 2018 : July 31, 2018 Net Carrying Value Fair Value (1) 3.75% Convertible Senior Notes, due October 15, 2018 (Original) $ 61,234 $ 77,047 3.75% Convertible Senior Notes, due October 15, 2018 (New) 288,435 363,078 4.0% Convertible Senior Notes due December 15, 2020 199,642 233,269 $ 549,311 $ 673,394 (1) The convertible notes were categorized as Level 2 in the fair value hierarchy. Ciena estimates the fair value of its outstanding convertible notes using a market approach based on observable inputs, such as current market transactions involving comparable securities. The net carrying values of Ciena’s outstanding convertible notes payable was comprised of the following for the fiscal periods indicated (in thousands): July 31, 2018 October 31, 2017 3.75% Convertible Senior Notes due October 15, 2018 (Original) $ 61,234 $ 61,071 3.75% Convertible Senior Notes due October 15, 2018 (New) 288,435 287,221 4.0% Convertible Senior Notes due December 15, 2020 199,642 194,717 $ 549,311 $ 543,009 The net carrying value of Ciena’s Term Loan due January 30, 2022 (the “2022 Term Loan”) was comprised of the following for the fiscal periods indicated (in thousands): July 31, 2018 October 31, 2017 Term Loan Payable due January 30, 2022 $ 390,863 $ 392,972 The following table sets forth the carrying value and the estimated fair value of the 2022 Term Loan (in thousands): July 31, 2018 Carrying Value Fair Value (1) Term Loan Payable due January 30, 2022 $ 390,863 $ 396,481 (1) The 2022 Term Loan is categorized as Level 2 in the fair value hierarchy. Ciena estimated the fair value of the 2022 Term Loan using a market approach based upon observable inputs, such as current market transactions involving comparable securities. |
Schedule of Debt Details | The principal balance, unamortized debt discount, deferred debt issuance costs and net carrying value of the liability and equity components of Ciena’s outstanding issues of convertible notes were as follows as of July 31, 2018 (in thousands): Liability Component Equity Component Principal Balance Unamortized Debt Discount Deferred Debt Issuance Costs Net Carrying Value Net Carrying Value 3.75% Convertible Senior Notes, due October 15, 2018 (Original) $ 61,270 $ — $ (36 ) $ 61,234 $ — 3.75% Convertible Senior Notes, due October 15, 2018 (New) $ 288,730 $ (125 ) $ (170 ) $ 288,435 $ — 4.0% Convertible Senior Notes due December 15, 2020 (1) $ 207,809 $ (7,437 ) $ (730 ) $ 199,642 $ 43,131 (1) Includes accretion of principal at a rate of 1.85% per year The principal balance, unamortized debt discount, deferred debt issuance costs and net carrying value of the liability components of the 2022 Term Loan were as follows as of July 31, 2018 (in thousands): Principal Balance Unamortized Debt Discount Deferred Debt Issuance Costs Net Carrying Value Term Loan Payable due January 30, 2022 $ 395,000 $ (1,580 ) $ (2,557 ) $390,863 |
Earnings Per Share Calculation
Earnings Per Share Calculation (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Numerator and Denominator of Basic and Diluted Earnings Per Share | The following table (in thousands except per share amounts) is a reconciliation of the numerator and denominator of the basic net income (loss) per common share (“Basic EPS”) and the diluted net income (loss) per potential common share (“Diluted EPS”). Basic EPS is computed using the weighted average number of common shares outstanding. Diluted EPS is computed using the weighted average number of the following, in each case, to the extent the effect is not anti-dilutive: (i) common shares outstanding; (ii) shares issuable upon vesting of restricted stock units; (iii) shares issuable under Ciena’s employee stock purchase plan and upon exercise of outstanding stock options, using the treasury stock method; (iv) shares underlying Ciena’s outstanding convertible notes for which Ciena uses the treasury stock method (the New Notes); and (v) shares underlying Ciena’s outstanding convertible notes for which Ciena uses the if-converted method. Quarter Ended July 31, Nine Months Ended July 31, Numerator 2018 2017 2018 2017 Net income (loss) $ 50,840 $ 60,010 $ (408,667 ) $ 101,897 Add: Interest expense associated with 0.875% Convertible Senior Notes due 2017 (1) — 246 — 1,343 Add: Interest expense associated with 3.75% Convertible Senior Notes due 2018 (Original) 464 3,572 — 10,750 Add: Interest expense associated with 4.0% Convertible Senior Notes due 2020 2,624 3,323 — — Net income (loss) used to calculate Diluted EPS $ 53,928 $ 67,151 $ (408,667 ) $ 113,990 Quarter Ended July 31, Nine Months Ended July 31, Denominator 2018 2017 2018 2017 Basic weighted average shares outstanding 143,400 142,464 143,766 141,631 Add: Shares underlying outstanding stock options and restricted stock units and issuable under employee stock purchase plan 1,330 1,386 — 1,401 Add: Shares underlying 0.875% Convertible Senior Notes due 2017 (1) — 1,708 — 4,043 Add: Shares underlying 3.75% Convertible Senior Notes due 2018 (New) (2) 3,032 — — — Add: Shares underlying 3.75% Convertible Senior Notes due 2018 (Original) 3,038 17,356 — 17,356 Add: Shares underlying 4.0% Convertible Senior Notes due 2020 9,198 9,198 — — Dilutive weighted average shares outstanding 159,998 172,112 143,766 164,431 Quarter Ended July 31, Nine Months Ended July 31, EPS 2018 2017 2018 2017 Basic EPS $ 0.35 $ 0.42 $ (2.84 ) $ 0.72 Diluted EPS $ 0.34 $ 0.39 $ (2.84 ) $ 0.69 |
Schedule of Weighted Average Shares Excluded From Calculation of Denominator for Basic and Diluted EPS | The following table summarizes the weighted average shares excluded from the calculation of the denominator for Diluted EPS due to their anti-dilutive effect for the periods indicated (in thousands): Quarter Ended July 31, Nine Months Ended July 31, 2018 2017 2018 2017 Shares underlying stock options and restricted stock units 318 682 2,183 988 3.75% Convertible Senior Notes due October 15, 2018 (Original) — — 3,038 — 3.75% Convertible Senior Notes due October 15, 2018 (New) (2) — — 2,125 — 4.0% Convertible Senior Notes due December 15, 2020 — — 9,198 9,198 Total shares excluded due to anti-dilutive effect 318 682 16,544 10,186 (1) Ciena’s 0.875% convertible senior notes were paid at maturity during the third quarter of fiscal 2017. (2) Upon any conversion of the outstanding 3.75% Convertible Senior Notes due 2018 (New) (the “New Notes”), Ciena intends to settle the principal amount thereof in cash. See Note 19 below. Accordingly, Ciena uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The 14.3 million shares underlying the New Notes will have a dilutive impact on diluted net income per share of common stock when the average market price of Ciena common stock for a given period exceeds the conversion price of $ 20.17 per share for the New Notes. During the third quarter of fiscal 2018 , the average market price of Ciena common stock was $ 25.59 . As a result, for the quarter ended July 31 , 2018 , the conversion spread for the New Notes of 3.0 million shares is included in the calculation of the denominator. For the nine months ended July 31, 2018 , the conversion spread for the New Notes of 2.1 million shares is excluded from the calculation of the denominator as their inclusion would have had an anti-dilutive effect. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Equity [Abstract] | |
Schedule of Stock Repurchase Program | A summary of the stock repurchase program, reported based on trade date, is summarized as follows: Shares Repurchased Weighted-Average Price per Share Amount Repurchased (in thousands) Cumulative balance at October 31, 2017 — $ — $ — Repurchase of common stock under the stock repurchase program 3,028,118 24.70 74,787 Cumulative balance at July 31, 2018 3,028,118 $ 24.70 $ 74,787 |
Share-Based Compensation Expe40
Share-Based Compensation Expense (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-Based Compensation Expense | The following table summarizes share-based compensation expense for the periods indicated (in thousands): Quarter Ended July 31, Nine Months Ended July 31, 2018 2017 2018 2017 Product costs $ 783 $ 709 $ 2,279 $ 1,978 Service costs 618 619 1,965 1,926 Share-based compensation expense included in cost of sales 1,401 1,328 4,244 3,904 Research and development 3,082 3,139 10,133 10,001 Sales and marketing 3,417 3,242 10,505 9,628 General and administrative 4,538 4,321 14,121 13,191 Share-based compensation expense included in operating expense 11,037 10,702 34,759 32,820 Share-based compensation expense capitalized in inventory, net (101 ) (17 ) (107 ) 119 Total share-based compensation $ 12,337 $ 12,013 $ 38,896 $ 36,843 |
Segments and Entity-Wide Disc41
Segments and Entity-Wide Disclosures (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Revenue | The table below (in thousands) sets forth Ciena’s segment revenue for the respective periods: Quarter Ended July 31, Nine Months Ended July 31, 2018 2017 2018 2017 Revenue: Networking Platforms Converged Packet Optical $ 592,892 $ 510,226 $ 1,548,189 $ 1,433,137 Packet Networking 84,559 82,121 216,977 220,641 Total Networking Platforms 677,451 592,347 1,765,166 1,653,778 Software and Software-Related Services Software Platforms 14,307 18,395 56,427 48,587 Software-Related Services 26,876 23,856 76,988 70,760 Total Software and Software-Related Services 41,183 42,251 133,415 119,347 Global Services Maintenance Support and Training 60,897 57,902 177,759 171,133 Installation and Deployment 31,262 27,397 89,487 84,011 Consulting and Network Design 8,024 8,822 29,103 28,969 Total Global Services 100,183 94,121 296,349 284,113 Consolidated revenue $ 818,817 $ 728,719 $ 2,194,930 $ 2,057,238 |
Schedule of Segment Profit (Loss) and the Reconciliation to Consolidated Net Income (Loss) | The table below (in thousands) sets forth Ciena’s segment profit and the reconciliation to consolidated net income (loss) during the respective periods indicated: Quarter Ended July 31, Nine Months Ended July 31, 2018 2017 2018 2017 Segment profit: Networking Platforms $ 181,603 $ 159,649 $ 396,995 $ 423,859 Software and Software-Related Services 9,305 11,133 41,216 23,384 Global Services 39,502 39,565 121,823 116,637 Total segment profit 230,410 210,347 560,034 563,880 Less: Non-performance operating expenses Selling and marketing 95,395 86,739 281,269 260,292 General and administrative 38,212 35,569 115,594 106,423 Significant asset impairments and restructuring costs 6,359 2,203 16,679 8,874 Amortization of intangible assets 3,837 3,837 11,083 29,368 Acquisition and integration costs 1,333 — 1,333 — Add: Other non-performance financial items Interest expense and other income (loss), net (15,154 ) (14,263 ) (39,048 ) (45,322 ) Less: Provision for income taxes 19,280 7,726 503,695 11,704 Consolidated net income (loss) $ 50,840 $ 60,010 $ (408,667 ) $ 101,897 |
Schedule of Ciena's Geographic Distribution of Revenue and Long-Lived Assets | For the periods below, Ciena’s geographic distribution of equipment, building, furniture and fixtures was as follows (in thousands): July 31, October 31, Canada $ 197,057 $ 203,491 United States 79,243 90,482 Other International 19,563 14,492 Total $ 295,863 $ 308,465 |
Schedule of Revenue by Major Customers by Reporting Segments | For the periods below, Verizon, AT&T and a Web-scale provider were the only customers that accounted for at least 10% of Ciena’s revenue as follows (in thousands): Quarter Ended July 31, Nine Months Ended July 31, 2018 2017 2018 2017 Verizon $ 97,103 $ 82,918 $ 221,475 $ 206,272 AT&T 87,389 120,931 263,453 324,900 Web-scale provider 86,364 n/a n/a n/a Total $ 270,856 $ 203,849 $ 484,928 $ 531,172 |
Significant Accounting Polici42
Significant Accounting Policies (Details) $ in Thousands | Oct. 31, 2017USD ($) |
Significant Accounting Policies [Line Items] | |
Cumulative adjustment | $ 62,123 |
Retained earnings | |
Significant Accounting Policies [Line Items] | |
Cumulative adjustment | 61,291 |
Retained earnings | ASU 2016-09, Excess tax benefit component | |
Significant Accounting Policies [Line Items] | |
Cumulative adjustment | 62,100 |
Retained earnings | ASU 2016-09, Forfeiture rate component | |
Significant Accounting Policies [Line Items] | |
Cumulative adjustment | $ 800 |
Business Combinations - Narrat
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | Jul. 02, 2018 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 |
Business Acquisition [Line Items] | |||||
Acquisition costs | $ 1,333 | $ 0 | $ 1,333 | $ 0 | |
Packet Design, LLC | |||||
Business Acquisition [Line Items] | |||||
Cash transaction for acquisition | $ 41,000 | ||||
Acquisition costs | $ 1,300 | ||||
Customer relationships and contracts | Packet Design, LLC | |||||
Business Acquisition [Line Items] | |||||
Estimated useful lives | 3 years | ||||
Developed technology | Packet Design, LLC | |||||
Business Acquisition [Line Items] | |||||
Estimated useful lives | 5 years |
Business Combinations - Purchas
Business Combinations - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 02, 2018 | Oct. 31, 2017 |
Business Acquisition [Line Items] | |||
Goodwill | $ 287,551 | $ 267,458 | |
Packet Design, LLC | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 642 | ||
Accounts receivable | 1,525 | ||
Prepaid expenses and other | 450 | ||
Equipment, furniture and fixtures | 31 | ||
Goodwill | 20,304 | ||
Accounts payable | (165) | ||
Accrued liabilities | (657) | ||
Deferred revenue | (5,176) | ||
Total purchase consideration | 41,054 | ||
Customer relationships and contracts | Packet Design, LLC | |||
Business Acquisition [Line Items] | |||
Intangible assets | 2,200 | ||
Developed technology | Packet Design, LLC | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 21,900 |
Restructuring Costs (Details)
Restructuring Costs (Details) $ in Thousands | 9 Months Ended | |
Jul. 31, 2018USD ($)employee | Jul. 31, 2017USD ($)employee | |
Activity and balance of the restructuring liability accounts | ||
Balance at beginning of period | $ 2,939 | $ 2,838 |
Additional liability recorded | 16,679 | 8,874 |
Cash payments | (14,071) | (6,049) |
Balance at end of period | 5,547 | 5,663 |
Current restructuring liabilities | 4,256 | 5,663 |
Non-current restructuring liabilities | 1,291 | 0 |
Workforce reduction | ||
Activity and balance of the restructuring liability accounts | ||
Balance at beginning of period | 1,291 | 868 |
Additional liability recorded | 12,876 | 3,967 |
Cash payments | (10,987) | (3,370) |
Balance at end of period | 3,180 | 1,465 |
Current restructuring liabilities | 3,180 | 1,465 |
Non-current restructuring liabilities | $ 0 | $ 0 |
Number of employee reduction | employee | 230 | 60 |
Consolidation of excess facilities | ||
Activity and balance of the restructuring liability accounts | ||
Balance at beginning of period | $ 1,648 | $ 1,970 |
Additional liability recorded | 3,803 | 4,907 |
Cash payments | (3,084) | (2,679) |
Balance at end of period | 2,367 | 4,198 |
Current restructuring liabilities | 1,076 | 4,198 |
Non-current restructuring liabilities | $ 1,291 | $ 0 |
Interest and Other Income (Lo46
Interest and Other Income (Loss), Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Other Income and Expenses [Abstract] | ||||
Interest income | $ 3,620 | $ 1,820 | $ 9,276 | $ 4,609 |
Gains (losses) on non-hedge designated foreign currency forward contracts | 2,182 | 834 | 4,351 | (891) |
Foreign currency exchange loss | (6,879) | (2,946) | (11,670) | (4,071) |
Modification of term loan | 0 | 0 | 0 | (2,924) |
Other | (466) | (556) | (629) | (119) |
Interest and other income (loss), net | $ (1,543) | $ (848) | $ 1,328 | $ (3,396) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Jul. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | |
Income Tax Contingency [Line Items] | |||
Provisional tax expense | $ 503,700 | ||
Remeasurement of net DTA | 431,300 | ||
U.S. transition tax | 45,600 | ||
Unrecognized deferred income tax liability | 23,000 | ||
Cumulative adjustment | $ 62,123 | ||
Deferred tax asset, net | 724,087 | 1,155,104 | |
Valuation allowance | $ 144,865 | 185,898 | |
Scenario, Forecast | |||
Income Tax Contingency [Line Items] | |||
Blended federal tax rate | 23.40% | ||
Retained earnings | |||
Income Tax Contingency [Line Items] | |||
Cumulative adjustment | 61,291 | ||
ASU 2016-09, Excess tax benefit component | |||
Income Tax Contingency [Line Items] | |||
Deferred tax asset, net | 62,100 | ||
ASU 2016-09, Excess tax benefit component | Retained earnings | |||
Income Tax Contingency [Line Items] | |||
Cumulative adjustment | $ 62,100 |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jul. 31, 2018 | Oct. 31, 2017 |
Deferred tax assets: | ||
Reserves and accrued liabilities | $ 35,022 | $ 56,597 |
Depreciation and amortization | 317,526 | 451,385 |
NOL and credit carry forward | 496,327 | 803,622 |
Other | 20,077 | 29,398 |
Gross deferred tax assets | 868,952 | 1,341,002 |
Valuation allowance | (144,865) | (185,898) |
Deferred tax asset, net of valuation allowance | $ 724,087 | $ 1,155,104 |
Short-Term and Long-Term Inve49
Short-Term and Long-Term Investments (Details) - USD ($) $ in Thousands | Jul. 31, 2018 | Oct. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 258,894 | |
U.S. government obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 228,953 | $ 299,408 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (491) | (432) |
Estimated Fair Value | 228,462 | 298,976 |
U.S. government obligations | Included in short-term investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 199,415 | 249,498 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (418) | (305) |
Estimated Fair Value | 198,997 | 249,193 |
U.S. government obligations | Included in long-term investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 29,538 | 49,910 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (73) | (127) |
Estimated Fair Value | 29,465 | 49,783 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 29,941 | 29,939 |
Gross Unrealized Gains | 2 | 1 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 29,943 | 29,940 |
Commercial paper | Included in short-term investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 29,941 | 29,939 |
Gross Unrealized Gains | 2 | 1 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | $ 29,943 | $ 29,940 |
Short-Term and Long-Term Inve50
Short-Term and Long-Term Investments - Legal Maturities of Debt Investments (Details) $ in Thousands | Jul. 31, 2018USD ($) |
Amortized Cost | |
Less than one year | $ 229,356 |
Due in 1-2 years | 29,538 |
Amortized Cost | 258,894 |
Estimated Fair Value | |
Less than one year | 228,940 |
Due in 1-2 years | 29,465 |
Estimated Fair Value | $ 258,405 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jul. 31, 2018 | Oct. 31, 2017 |
Assets: | ||
U.S. government obligations | $ 258,405 | |
Fair value, Measurements, Recurring | ||
Assets: | ||
Money market funds | 579,413 | $ 511,355 |
U.S. government obligations | 228,462 | 298,976 |
Commercial paper | 69,860 | 89,865 |
Foreign currency forward contracts | 668 | 227 |
Forward starting interest rate swaps | 6,667 | 218 |
Total assets measured at fair value | 885,070 | 900,641 |
Liabilities: | ||
Foreign currency forward contracts | 2,968 | 2,129 |
Total liabilities measured at fair value | 2,968 | 2,129 |
Fair value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Money market funds | 579,413 | 511,355 |
U.S. government obligations | 0 | 0 |
Commercial paper | 0 | 0 |
Foreign currency forward contracts | 0 | 0 |
Forward starting interest rate swaps | 0 | 0 |
Total assets measured at fair value | 579,413 | 511,355 |
Liabilities: | ||
Foreign currency forward contracts | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Fair value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Money market funds | 0 | 0 |
U.S. government obligations | 228,462 | 298,976 |
Commercial paper | 69,860 | 89,865 |
Foreign currency forward contracts | 668 | 227 |
Forward starting interest rate swaps | 6,667 | 218 |
Total assets measured at fair value | 305,657 | 389,286 |
Liabilities: | ||
Foreign currency forward contracts | 2,968 | 2,129 |
Total liabilities measured at fair value | $ 2,968 | $ 2,129 |
Fair Value Measurements - Conde
Fair Value Measurements - Condensed Consolidated Balance Sheet (Details) - Fair value, Measurements, Recurring - USD ($) $ in Thousands | Jul. 31, 2018 | Oct. 31, 2017 |
Assets: | ||
Total assets measured at fair value | $ 885,070 | $ 900,641 |
Liabilities: | ||
Total liabilities measured at fair value | 2,968 | 2,129 |
Cash equivalents | ||
Assets: | ||
Cash equivalents | 619,330 | 571,280 |
Short-term investments | ||
Assets: | ||
Short-term investments | 228,940 | 279,133 |
Prepaid expenses and other | ||
Assets: | ||
Prepaid expenses and other | 668 | 227 |
Long-term investments | ||
Assets: | ||
Long-term investments | 29,465 | 49,783 |
Other long-term assets | ||
Assets: | ||
Other long-term assets | 6,667 | 218 |
Accrued liabilities | ||
Liabilities: | ||
Accrued liabilities | 2,968 | 2,129 |
Level 1 | ||
Assets: | ||
Total assets measured at fair value | 579,413 | 511,355 |
Liabilities: | ||
Total liabilities measured at fair value | 0 | 0 |
Level 1 | Cash equivalents | ||
Assets: | ||
Cash equivalents | 579,413 | 511,355 |
Level 1 | Short-term investments | ||
Assets: | ||
Short-term investments | 0 | 0 |
Level 1 | Prepaid expenses and other | ||
Assets: | ||
Prepaid expenses and other | 0 | 0 |
Level 1 | Long-term investments | ||
Assets: | ||
Long-term investments | 0 | 0 |
Level 1 | Other long-term assets | ||
Assets: | ||
Other long-term assets | 0 | 0 |
Level 1 | Accrued liabilities | ||
Liabilities: | ||
Accrued liabilities | 0 | 0 |
Level 2 | ||
Assets: | ||
Total assets measured at fair value | 305,657 | 389,286 |
Liabilities: | ||
Total liabilities measured at fair value | 2,968 | 2,129 |
Level 2 | Cash equivalents | ||
Assets: | ||
Cash equivalents | 39,917 | 59,925 |
Level 2 | Short-term investments | ||
Assets: | ||
Short-term investments | 228,940 | 279,133 |
Level 2 | Prepaid expenses and other | ||
Assets: | ||
Prepaid expenses and other | 668 | 227 |
Level 2 | Long-term investments | ||
Assets: | ||
Long-term investments | 29,465 | 49,783 |
Level 2 | Other long-term assets | ||
Assets: | ||
Other long-term assets | 6,667 | 218 |
Level 2 | Accrued liabilities | ||
Liabilities: | ||
Accrued liabilities | $ 2,968 | $ 2,129 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Oct. 31, 2017 | |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 54,003 | $ 52,898 | |
Work-in-process | 11,100 | 18,623 | |
Finished goods | 173,419 | 185,488 | |
Deferred cost of goods sold | 38,525 | 61,340 | |
Inventories before provision | 277,047 | 318,349 | |
Provision for excess and obsolescence | (49,162) | (51,206) | |
Total inventories | 227,885 | $ 267,143 | |
Provisions | $ 19,942 | $ 28,727 |
Accrued Liabilities and Other54
Accrued Liabilities and Other Short-Term Obligations (Details) - USD ($) $ in Thousands | Jul. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Oct. 31, 2016 |
Balance Sheet Related Disclosures [Abstract] | ||||
Compensation, payroll related tax and benefits | $ 99,740 | $ 113,272 | ||
Warranty | 44,150 | 42,456 | $ 44,296 | $ 52,324 |
Vacation | 40,747 | 39,778 | ||
Capital lease obligations | 3,773 | 3,772 | ||
Interest payable | 4,991 | 3,612 | ||
Other | 104,587 | 120,044 | ||
Total accrued liabilities and other short-term obligations | $ 297,988 | $ 322,934 |
Accrued Liabilities and Other55
Accrued Liabilities and Other Short-Term Obligations - Accrued Warranty (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning Balance | $ 42,456 | $ 52,324 |
Current Period Provisions | 15,715 | 5,188 |
Settlements | (14,021) | (13,216) |
Ending Balance | $ 44,150 | 44,296 |
Adjustment on prior year provisions | $ 8,000 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2018 | Oct. 31, 2017 | |
Foreign Currency Forward Contracts | Designated as hedging instrument | Cash flow hedging | ||
Derivative [Line Items] | ||
Derivative asset, notional amount | $ 134.6 | $ 86.1 |
Derivative maturity (in months) | 18 months | |
Foreign Currency Forward Contracts | Not designated as hedging instrument | ||
Derivative [Line Items] | ||
Derivative asset, notional amount | $ 98.2 | 83.4 |
Derivative maturity (in months) | 12 months | |
Interest Rate Swap One | Designated as hedging instrument | Cash flow hedging | Secured debt | Term Loan 2022 | ||
Derivative [Line Items] | ||
Interest rate swap fix | 82.00% | |
Derivative, swaption interest rate | 4.25% | |
Interest Rate Swap Two | Designated as hedging instrument | Cash flow hedging | Secured debt | Term Loan 2022 | ||
Derivative [Line Items] | ||
Interest rate swap fix | 77.00% | |
Derivative, swaption interest rate | 4.75% | |
Forward Starting Interest Rate Swap | Designated as hedging instrument | Cash flow hedging | Secured debt | Term Loan 2022 | ||
Derivative [Line Items] | ||
Derivative asset, notional amount | $ 321.6 | $ 389.6 |
Accumulated Other Comprehensi57
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income - beginning balance | $ 2,136,342 | |
Accumulated other comprehensive income - ending balance | 1,778,954 | |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income - beginning balance | (11,017) | $ (24,329) |
Other comprehensive income (loss) before reclassifications | 3,101 | 17,092 |
Amounts reclassified from AOCI | (789) | 1,742 |
Accumulated other comprehensive income - ending balance | (8,705) | (5,495) |
Unrealized Loss on Available-for-sale Securities | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income - beginning balance | (451) | 139 |
Other comprehensive income (loss) before reclassifications | (59) | (533) |
Amounts reclassified from AOCI | 0 | 0 |
Accumulated other comprehensive income - ending balance | (510) | (394) |
Unrealized Gain (Loss) Derivatives | Foreign Currency Forward Contracts | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income - beginning balance | (1,386) | (1,091) |
Other comprehensive income (loss) before reclassifications | (9) | 896 |
Amounts reclassified from AOCI | (1,058) | 2,010 |
Accumulated other comprehensive income - ending balance | (2,453) | 1,815 |
Unrealized Gain (Loss) Derivatives | Forward Starting Interest Rate Swap | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income - beginning balance | 218 | (5,967) |
Other comprehensive income (loss) before reclassifications | 5,330 | 4,838 |
Amounts reclassified from AOCI | 269 | (268) |
Accumulated other comprehensive income - ending balance | 5,817 | (1,397) |
Cumulative Foreign Currency Translation Adjustment | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income - beginning balance | (9,398) | (17,410) |
Other comprehensive income (loss) before reclassifications | (2,161) | 11,891 |
Amounts reclassified from AOCI | 0 | 0 |
Accumulated other comprehensive income - ending balance | $ (11,559) | $ (5,519) |
Short-Term and Long-Term Debt -
Short-Term and Long-Term Debt - 2022 Term Loan Net Carry Value and Estimated Fair Value (Details) - Secured debt - Term Loan Payable due Jan 30, 2022 - USD ($) $ in Thousands | Jul. 31, 2018 | Oct. 31, 2017 |
Debt Instrument [Line Items] | ||
Carrying Value | $ 390,863 | $ 392,972 |
Fair Value | $ 396,481 |
Short-Term and Long-Term Debt59
Short-Term and Long-Term Debt (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Oct. 31, 2017 | |
Secured debt | Term Loan 2022 | |||
Debt Instrument [Line Items] | |||
Debt issuance costs, net | $ 2,557 | $ 3,100 | |
Amortization of debt issuance costs included in interest expense | 500 | $ 400 | |
Convertible notes payable | Convertible senior notes due 2018 and 2020 | |||
Debt Instrument [Line Items] | |||
Debt issuance costs, net | 900 | $ 2,100 | |
Amortization of debt issuance costs included in interest expense | $ 1,200 | $ 1,200 |
Short-Term and Long-Term Debt60
Short-Term and Long-Term Debt - 2022 Term Loan Debt Components (Details) - Secured debt - Term Loan 2022 - USD ($) $ in Thousands | Jul. 31, 2018 | Oct. 31, 2017 |
Debt Instrument [Line Items] | ||
Principal Balance | $ 395,000 | |
Unamortized Debt Discount | (1,580) | |
Deferred Debt Issuance Costs | (2,557) | $ (3,100) |
Net Carrying Value | $ 390,863 | $ 392,972 |
Short-Term and Long-Term Debt61
Short-Term and Long-Term Debt - Outstanding Convertible Notes Payable Net Carry Value and Estimated Fair Value (Details) - USD ($) $ in Thousands | Jul. 31, 2018 | Oct. 31, 2017 |
Convertible notes payable | ||
Debt Instrument [Line Items] | ||
Net Carrying Value | $ 549,311 | $ 543,009 |
Fair Value | $ 673,394 | |
3.75% Convertible Senior Notes due October 15, 2018 (Original) | ||
Debt Instrument [Line Items] | ||
Interest rate on convertible notes (as a percent) | 3.75% | |
3.75% Convertible Senior Notes due October 15, 2018 (Original) | Convertible notes payable | ||
Debt Instrument [Line Items] | ||
Net Carrying Value | $ 61,234 | 61,071 |
Fair Value | $ 77,047 | |
Interest rate on convertible notes (as a percent) | 3.75% | |
3.75% Convertible Senior Notes due October 15, 2018 (New) | ||
Debt Instrument [Line Items] | ||
Interest rate on convertible notes (as a percent) | 3.75% | |
3.75% Convertible Senior Notes due October 15, 2018 (New) | Convertible notes payable | ||
Debt Instrument [Line Items] | ||
Net Carrying Value | $ 288,435 | 287,221 |
Fair Value | $ 363,078 | |
Interest rate on convertible notes (as a percent) | 3.75% | |
4.0% Convertible Senior Notes due December 15, 2020 | ||
Debt Instrument [Line Items] | ||
Interest rate on convertible notes (as a percent) | 4.00% | |
4.0% Convertible Senior Notes due December 15, 2020 | Convertible notes payable | ||
Debt Instrument [Line Items] | ||
Net Carrying Value | $ 199,642 | $ 194,717 |
Fair Value | $ 233,269 | |
Interest rate on convertible notes (as a percent) | 4.00% |
Short-Term and Long-Term Debt62
Short-Term and Long-Term Debt - Outstanding Convertible Notes Payable Debt Components (Details) $ in Thousands | 9 Months Ended |
Jul. 31, 2018USD ($) | |
3.75% Convertible Senior Notes due October 15, 2018 (Original) | |
Debt Instrument [Line Items] | |
Interest rate on convertible notes (as a percent) | 3.75% |
3.75% Convertible Senior Notes due October 15, 2018 (New) | |
Debt Instrument [Line Items] | |
Interest rate on convertible notes (as a percent) | 3.75% |
4.0% Convertible Senior Notes due December 15, 2020 | |
Debt Instrument [Line Items] | |
Interest rate on convertible notes (as a percent) | 4.00% |
Convertible notes payable | 3.75% Convertible Senior Notes due October 15, 2018 (Original) | |
Debt Instrument [Line Items] | |
Principal Balance | $ 61,270 |
Unamortized Debt Discount | 0 |
Deferred Debt Issuance Costs | (36) |
Net Carrying Value | 61,234 |
Equity component, Net carrying value | $ 0 |
Interest rate on convertible notes (as a percent) | 3.75% |
Convertible notes payable | 3.75% Convertible Senior Notes due October 15, 2018 (New) | |
Debt Instrument [Line Items] | |
Principal Balance | $ 288,730 |
Unamortized Debt Discount | (125) |
Deferred Debt Issuance Costs | (170) |
Net Carrying Value | 288,435 |
Equity component, Net carrying value | $ 0 |
Interest rate on convertible notes (as a percent) | 3.75% |
Convertible notes payable | 4.0% Convertible Senior Notes due December 15, 2020 | |
Debt Instrument [Line Items] | |
Principal Balance | $ 207,809 |
Unamortized Debt Discount | (7,437) |
Deferred Debt Issuance Costs | (730) |
Net Carrying Value | 199,642 |
Equity component, Net carrying value | $ 43,131 |
Accretion rate of principal amount | 1.85% |
Interest rate on convertible notes (as a percent) | 4.00% |
Earnings Per Share Calculatio63
Earnings Per Share Calculation - Earnings Per Share Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | Oct. 31, 2017 | |
Numerator | |||||
Net income (loss) | $ 50,840 | $ 60,010 | $ (408,667) | $ 101,897 | |
Net income (loss) used to calculate Diluted EPS | $ 53,928 | $ 67,151 | $ (408,667) | $ 113,990 | |
Denominator | |||||
Basic weighted average shares outstanding (in shares) | 143,400 | 142,464 | 143,766 | 141,631 | |
Add: Shares underlying outstanding stock options and restricted stock units and issuable under employee stock purchase plan (in shares) | 1,330 | 1,386 | 0 | 1,401 | |
Dilutive weighted average shares outstanding (in shares) | 159,998 | 172,112 | 143,766 | 164,431 | |
EPS | |||||
Basic EPS (in dollars per share) | $ 0.35 | $ 0.42 | $ (2.84) | $ 0.72 | |
Diluted EPS (in dollars per share) | $ 0.34 | $ 0.39 | $ (2.84) | $ 0.69 | |
0.875% Convertible Senior Notes due June 15, 2017 | |||||
Numerator | |||||
Add: Interest expense associated with convertible senior notes | $ 0 | $ 246 | $ 0 | $ 1,343 | |
Denominator | |||||
Add: Shares underlying convertible senior notes (in shares) | 0 | 1,708 | 0 | 4,043 | |
EPS | |||||
Interest rate on convertible notes (as a percent) | 0.875% | 0.875% | 0.875% | ||
3.75% Convertible Senior Notes due October 15, 2018 (New) | |||||
Denominator | |||||
Add: Shares underlying convertible senior notes (in shares) | 3,032 | 0 | 0 | 0 | |
EPS | |||||
Interest rate on convertible notes (as a percent) | 3.75% | 3.75% | |||
3.75% Convertible Senior Notes due October 15, 2018 (Original) | |||||
Numerator | |||||
Add: Interest expense associated with convertible senior notes | $ 464 | $ 3,572 | $ 0 | $ 10,750 | |
Denominator | |||||
Add: Shares underlying convertible senior notes (in shares) | 3,038 | 17,356 | 0 | 17,356 | |
EPS | |||||
Interest rate on convertible notes (as a percent) | 3.75% | 3.75% | |||
4.0% Convertible Senior Notes due December 15, 2020 | |||||
Numerator | |||||
Add: Interest expense associated with convertible senior notes | $ 2,624 | $ 3,323 | $ 0 | $ 0 | |
Denominator | |||||
Add: Shares underlying convertible senior notes (in shares) | 9,198 | 9,198 | 0 | 0 | |
EPS | |||||
Interest rate on convertible notes (as a percent) | 4.00% | 4.00% |
Earnings Per Share Calculatio64
Earnings Per Share Calculation - Antidilutive Securities Excluded (Details) - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | Oct. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Total excluded due to anti-dilutive effect (in shares) | 318 | 682 | 16,544 | 10,186 | |
Common stock average market price (in dollars per share) | $ 25.59 | $ 25.59 | |||
0.875% Convertible Senior Notes due June 15, 2017 | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Interest rate on convertible notes (as a percent) | 0.875% | 0.875% | 0.875% | ||
Dilutive conversion spread (in shares) | 0 | 1,708 | 0 | 4,043 | |
3.75% Convertible Senior Notes due October 15, 2018 (Original) | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Interest rate on convertible notes (as a percent) | 3.75% | 3.75% | |||
Dilutive conversion spread (in shares) | 3,038 | 17,356 | 0 | 17,356 | |
3.75% Convertible Senior Notes due October 15, 2018 (New) | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Interest rate on convertible notes (as a percent) | 3.75% | 3.75% | |||
Shares of underlying convertible senior notes due (in shares) | 14,300 | ||||
Dilutive conversion spread (in shares) | 3,032 | 0 | 0 | 0 | |
Initial conversion price per share equivalent (in dollars per share) | $ 20.17 | $ 20.17 | |||
4.0% Convertible Senior Notes due December 15, 2020 | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Interest rate on convertible notes (as a percent) | 4.00% | 4.00% | |||
Dilutive conversion spread (in shares) | 9,198 | 9,198 | 0 | 0 | |
Shares underlying stock options and restricted stock units | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Total excluded due to anti-dilutive effect (in shares) | 318 | 682 | 2,183 | 988 | |
Convertible Senior Notes | 3.75% Convertible Senior Notes due October 15, 2018 (Original) | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Total excluded due to anti-dilutive effect (in shares) | 0 | 0 | 3,038 | 0 | |
Convertible Senior Notes | 3.75% Convertible Senior Notes due October 15, 2018 (New) | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Total excluded due to anti-dilutive effect (in shares) | 0 | 0 | 2,125 | 0 | |
Dilutive conversion spread (in shares) | 3,000 | ||||
Convertible Senior Notes | 4.0% Convertible Senior Notes due December 15, 2020 | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Total excluded due to anti-dilutive effect (in shares) | 0 | 0 | 9,198 | 9,198 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Jul. 31, 2018 | Dec. 07, 2017 | Oct. 31, 2017 |
Class of Stock [Line Items] | |||
Effect of adoption of new accounting standard | $ 62,123,000 | ||
Deferred tax asset, net | $ 724,087,000 | 1,155,104,000 | |
Stock repurchase program authorized amount | $ 300,000,000 | ||
ASU 2016-09, Excess tax benefit component | |||
Class of Stock [Line Items] | |||
Deferred tax asset, net | 62,100,000 | ||
Retained earnings | |||
Class of Stock [Line Items] | |||
Effect of adoption of new accounting standard | 61,291,000 | ||
Retained earnings | ASU 2016-09, Excess tax benefit component | |||
Class of Stock [Line Items] | |||
Effect of adoption of new accounting standard | 62,100,000 | ||
Retained earnings | ASU 2016-09, Forfeiture rate component | |||
Class of Stock [Line Items] | |||
Effect of adoption of new accounting standard | $ 800,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of the Stock Repurchase Program (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Jul. 31, 2018USD ($)$ / sharesshares | |
Shares Repurchased | |
Cumulative balance at October 31, 2017 (in shares) | shares | 0 |
Repurchase of common stock under the stock repurchase program (in shares) | shares | 3,028,118 |
Cumulative balance at July 31, 2018 (in shares) | shares | 3,028,118 |
Weighted-Average Price per Share | |
Cumulative balance at October 31, 2017 (in dollars per share) | $ / shares | $ 0 |
Repurchase of common stock under the stock repurchase program (in dollars per share) | $ / shares | 24.70 |
Cumulative balance at July 31, 2018 (in dollars per share) | $ / shares | $ 24.70 |
Amount Repurchased (in thousands) | |
Cumulative balance at October 31, 2017 | $ | $ 0 |
Repurchase of common stock under the stock repurchase program | $ | 74,787 |
Cumulative balance at July 31, 2018 | $ | $ 74,787 |
Share-Based Compensation Expe67
Share-Based Compensation Expense - Expense in Period (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense capitalized in inventory, net | $ (101) | $ (17) | $ (107) | $ 119 |
Total share-based compensation | 12,337 | 12,013 | 38,896 | 36,843 |
Cost of Sales | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 1,401 | 1,328 | 4,244 | 3,904 |
Product costs | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 783 | 709 | 2,279 | 1,978 |
Service costs | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 618 | 619 | 1,965 | 1,926 |
Operating Expense | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 11,037 | 10,702 | 34,759 | 32,820 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 3,082 | 3,139 | 10,133 | 10,001 |
Sales and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 3,417 | 3,242 | 10,505 | 9,628 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 4,538 | $ 4,321 | $ 14,121 | $ 13,191 |
Share-Based Compensation Expe68
Share-Based Compensation Expense (Details) - Restricted stock units (RSUs) $ in Millions | 9 Months Ended |
Jul. 31, 2018USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized share-based compensation | $ 86.7 |
Weighted-average period for recognition of share-based compensation (in years) | 1 year 6 months 5 days |
Segments and Entity-Wide Disc69
Segments and Entity-Wide Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | Oct. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||
Equipment, building, furniture and fixtures, net | $ 295,863 | $ 295,863 | $ 308,465 | ||
Maintenance spares, net | 43,700 | 43,700 | |||
Net revenue | 818,817 | $ 728,719 | 2,194,930 | $ 2,057,238 | |
United States | |||||
Segment Reporting Information [Line Items] | |||||
Equipment, building, furniture and fixtures, net | 79,243 | 79,243 | $ 90,482 | ||
Net revenue | 469,200 | $ 438,100 | 1,245,300 | $ 1,209,800 | |
India | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | 83,600 | ||||
Networking Platforms | |||||
Segment Reporting Information [Line Items] | |||||
Other intangible assets, net | 32,100 | 32,100 | |||
Software and Software-Related Services | |||||
Segment Reporting Information [Line Items] | |||||
Other intangible assets, net | $ 76,200 | $ 76,200 |
Segments and Entity-Wide Disc70
Segments and Entity-Wide Disclosures - Revenue, Profit (Loss) and Net Income (Loss) Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Revenue: | ||||
Total revenue | $ 818,817 | $ 728,719 | $ 2,194,930 | $ 2,057,238 |
Segment profit: | ||||
Operating income (loss) | 85,274 | 81,999 | 134,076 | 158,923 |
Less: Non-performance operating expenses | ||||
Selling and marketing | 95,395 | 86,739 | 281,269 | 260,292 |
General and administrative | 38,212 | 35,569 | 115,594 | 106,423 |
Significant asset impairments and restructuring costs | 6,359 | 2,203 | 16,679 | 8,874 |
Amortization of intangible assets | 3,837 | 3,837 | 11,083 | 29,368 |
Acquisition and integration costs | 1,333 | 0 | 1,333 | 0 |
Add: Other non-performance financial items | ||||
Interest expense and other income (loss), net | (15,154) | (14,263) | (39,048) | (45,322) |
Less: Provision for income taxes | 19,280 | 7,726 | 503,695 | 11,704 |
Net income (loss) | 50,840 | 60,010 | (408,667) | 101,897 |
Operating Segments | ||||
Segment profit: | ||||
Operating income (loss) | 230,410 | 210,347 | 560,034 | 563,880 |
Operating Segments | Networking Platforms | ||||
Revenue: | ||||
Total revenue | 677,451 | 592,347 | 1,765,166 | 1,653,778 |
Segment profit: | ||||
Operating income (loss) | 181,603 | 159,649 | 396,995 | 423,859 |
Operating Segments | Networking Platforms | Converged Packet Optical | ||||
Revenue: | ||||
Total revenue | 592,892 | 510,226 | 1,548,189 | 1,433,137 |
Operating Segments | Networking Platforms | Packet Networking | ||||
Revenue: | ||||
Total revenue | 84,559 | 82,121 | 216,977 | 220,641 |
Operating Segments | Software and Software-Related Services | ||||
Revenue: | ||||
Total revenue | 41,183 | 42,251 | 133,415 | 119,347 |
Segment profit: | ||||
Operating income (loss) | 9,305 | 11,133 | 41,216 | 116,637 |
Operating Segments | Software and Software-Related Services | Software Platforms | ||||
Revenue: | ||||
Total revenue | 14,307 | 18,395 | 56,427 | 48,587 |
Operating Segments | Software and Software-Related Services | Software-Related Services | ||||
Revenue: | ||||
Total revenue | 26,876 | 23,856 | 76,988 | 70,760 |
Operating Segments | Global Services | ||||
Revenue: | ||||
Total revenue | 100,183 | 94,121 | 296,349 | 284,113 |
Segment profit: | ||||
Operating income (loss) | 39,502 | 39,565 | 121,823 | 23,384 |
Operating Segments | Global Services | Maintenance Support and Training | ||||
Revenue: | ||||
Total revenue | 60,897 | 57,902 | 177,759 | 171,133 |
Operating Segments | Global Services | Installation and Deployment | ||||
Revenue: | ||||
Total revenue | 31,262 | 27,397 | 89,487 | 84,011 |
Operating Segments | Global Services | Consulting and Network Design | ||||
Revenue: | ||||
Total revenue | $ 8,024 | $ 8,822 | $ 29,103 | $ 28,969 |
Segments and Entity-Wide Disc71
Segments and Entity-Wide Disclosures - Geographic Distribution of Equipment, Building, Furniture and Fixtures (Details) - USD ($) $ in Thousands | Jul. 31, 2018 | Oct. 31, 2017 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Equipment, building, furniture and fixtures, net | $ 295,863 | $ 308,465 |
Canada | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Equipment, building, furniture and fixtures, net | 197,057 | 203,491 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Equipment, building, furniture and fixtures, net | 79,243 | 90,482 |
Other International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Equipment, building, furniture and fixtures, net | $ 19,563 | $ 14,492 |
Segments and Entity-Wide Disc72
Segments and Entity-Wide Disclosures - Revenue by Major Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Revenue, Major Customer [Line Items] | ||||
Total revenue | $ 818,817 | $ 728,719 | $ 2,194,930 | $ 2,057,238 |
Customer concentration risk | Sales revenue, net | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenue | 270,856 | 203,849 | 484,928 | 531,172 |
Verizon | Customer concentration risk | Sales revenue, net | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenue | 97,103 | 82,918 | 221,475 | 206,272 |
AT&T | Customer concentration risk | Sales revenue, net | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenue | 87,389 | $ 120,931 | $ 263,453 | $ 324,900 |
Web-scale provider | Customer concentration risk | Sales revenue, net | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenue | $ 86,364 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 44 Months Ended | |||||
Jul. 31, 2018USD ($) | Jul. 31, 2017USD ($) | Jul. 31, 2018USD ($)government_entity | Jul. 31, 2018CAD ($)government_entity | Jul. 31, 2017USD ($) | Mar. 31, 2022USD ($) | Mar. 31, 2022CAD ($) | Jul. 31, 2018CAD ($) | |
Loss Contingencies [Line Items] | ||||||||
Maximum amount of Canadian grant | $ 45,000 | $ 45,000 | $ 57,600 | |||||
Number of Canadian government entities | government_entity | 3 | 3 | ||||||
Total revenue | $ | 818,817 | $ 728,719 | $ 2,194,930 | $ 2,057,238 | ||||
Amounts receivable from grant | $ 6,300 | $ 6,300 | $ 8,300 | |||||
ASEAN country | Customer concentration risk | Sales Revenue, Net | ||||||||
Loss Contingencies [Line Items] | ||||||||
Concentration risk, percentage | 1.50% | 1.50% | ||||||
Grants | ||||||||
Loss Contingencies [Line Items] | ||||||||
Total revenue | $ 10,500 | $ 13,500 | ||||||
Grants | Scenario, Forecast | ||||||||
Loss Contingencies [Line Items] | ||||||||
Total revenue | $ 2,300 | $ 2,950 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | |
Aug. 31, 2018 | Jul. 31, 2018 | Oct. 31, 2017 | |
Subsequent Event [Line Items] | |||
Stock repurchases (in shares) | 3,028,118 | ||
Stock repurchases | $ 74,787 | ||
Average price of shares repurchased (in dollars per share) | $ 24.70 | ||
Aggregate shares repurchased (in shares) | 3,028,118 | 0 | |
Subsequent event | |||
Subsequent Event [Line Items] | |||
Stock repurchases (in shares) | 472,542 | ||
Stock repurchases | $ 12,400 | ||
Average price of shares repurchased (in dollars per share) | $ 26.25 | ||
Aggregate shares repurchased (in shares) | 3,500,660 | ||
Authorized funds remaining under stock repurchase program | $ 212,800 | ||
3.75% Convertible Senior Notes due October 15, 2018 (New) | |||
Subsequent Event [Line Items] | |||
Conversion price per share equivalent (in dollars per share) | $ 20.17 | ||
Convertible notes payable | 3.75% Convertible Senior Notes due October 15, 2018 (New) | |||
Subsequent Event [Line Items] | |||
Maximum cash settlement | $ 400,000 | ||
Principal | $ 288,730 | ||
Conversion price per share equivalent (in dollars per share) | $ 20.17 | ||
Amounts due in excess of aggregate principal amount in cash | $ 111,300 |