Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Apr. 30, 2019 | Jun. 07, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CIENA CORP | |
Entity Central Index Key | 0000936395 | |
Current Fiscal Year End Date | --10-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Apr. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 155,088,524 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Revenue: | ||||
Total revenue | $ 865,011 | $ 729,978 | $ 1,643,538 | $ 1,376,113 |
Cost of goods sold: | ||||
Total cost of goods sold | 490,334 | 436,671 | 945,520 | 811,041 |
Gross profit | 374,677 | 293,307 | 698,018 | 565,072 |
Operating expenses: | ||||
Research and development | 137,969 | 116,924 | 266,602 | 235,448 |
Selling and marketing | 103,502 | 97,359 | 201,615 | 185,874 |
General and administrative | 42,154 | 38,976 | 81,397 | 77,382 |
Amortization of intangible assets | 5,529 | 3,623 | 11,057 | 7,246 |
Significant asset impairments and restructuring costs | 4,068 | 4,359 | 6,341 | 10,320 |
Acquisition and integration costs | 1,135 | 0 | 2,743 | 0 |
Total operating expenses | 294,357 | 261,241 | 569,755 | 516,270 |
Income from operations | 80,320 | 32,066 | 128,263 | 48,802 |
Interest and other income (loss), net | (244) | 1,296 | 4,009 | 2,871 |
Interest expense | (9,471) | (13,031) | (18,912) | (26,765) |
Income before income taxes | 70,605 | 20,331 | 113,360 | 24,908 |
Provision for income taxes | 17,867 | 6,475 | 27,006 | 484,415 |
Net income (loss) | $ 52,738 | $ 13,856 | $ 86,354 | $ (459,507) |
Basic net income (loss) per common share (in dollars per share) | $ 0.34 | $ 0.10 | $ 0.55 | $ (3.19) |
Diluted net income (loss) per potential common share (in dollars per share) | $ 0.33 | $ 0.09 | $ 0.55 | $ (3.19) |
Weighted average basic common shares outstanding (in shares) | 156,170 | 143,975 | 156,244 | 143,948 |
Weighted average dilutive potential common shares outstanding (in shares) | 158,289 | 147,973 | 158,211 | 143,948 |
Products | ||||
Revenue: | ||||
Total revenue | $ 710,688 | $ 604,226 | $ 1,353,220 | $ 1,129,835 |
Cost of goods sold: | ||||
Total cost of goods sold | 411,050 | 372,568 | 791,492 | 685,688 |
Services | ||||
Revenue: | ||||
Total revenue | 154,323 | 125,752 | 290,318 | 246,278 |
Cost of goods sold: | ||||
Total cost of goods sold | $ 79,284 | $ 64,103 | $ 154,028 | $ 125,353 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Net income (loss) | $ 52,738 | $ 13,856 | $ 86,354 | $ (459,507) |
Change in unrealized gain (loss) on available-for-sale securities, net of tax | 112 | (76) | 413 | (337) |
Change in cumulative translation adjustments | (4,996) | (7,133) | (3,846) | 1,069 |
Other comprehensive income (loss) | (8,566) | (7,447) | (13,426) | 5,945 |
Total comprehensive income (loss) | 44,172 | 6,409 | 72,928 | (453,562) |
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 | (856) | (2,537) | 704 | (35) |
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 | $ (2,826) | $ 2,299 | $ (10,697) | $ 5,248 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Apr. 30, 2019 | Oct. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 699,148 | $ 745,423 |
Short-term investments | 119,327 | 148,981 |
Accounts receivable, net of allowance for doubtful accounts of $18.0 million and $17.4 million as of April 30, 2019 and October 31, 2018, respectively. | 756,607 | 786,502 |
Inventories | 359,417 | 262,751 |
Prepaid expenses and other | 243,669 | 198,945 |
Total current assets | 2,178,168 | 2,142,602 |
Long-term investments | 0 | 58,970 |
Equipment, building, furniture and fixtures, net | 282,022 | 292,067 |
Goodwill | 297,711 | 297,968 |
Other intangible assets, net | 129,971 | 148,225 |
Deferred tax asset, net | 715,968 | 745,039 |
Other long-term assets | 82,938 | 71,652 |
Total assets | 3,686,778 | 3,756,523 |
Current liabilities: | ||
Accounts payable | 366,932 | 340,582 |
Accrued liabilities and other short-term obligations | 291,417 | 340,075 |
Deferred revenue | 104,030 | 111,134 |
Current portion of long-term debt | 7,000 | 7,000 |
Debt conversion liability | 0 | 164,212 |
Total current liabilities | 769,379 | 963,003 |
Long-term deferred revenue | 40,992 | 58,323 |
Other long-term obligations | 129,779 | 119,413 |
Long-term debt, net | 683,429 | 686,450 |
Total liabilities | 1,623,579 | 1,827,189 |
Commitments and contingencies (Note 19) | ||
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; 155,566,701 and 154,318,531 shares issued and outstanding | 1,556 | 1,543 |
Additional paid-in capital | 6,892,342 | 6,881,223 |
Accumulated other comprehensive loss | (19,206) | (5,780) |
Accumulated deficit | (4,811,493) | (4,947,652) |
Total stockholders’ equity | 2,063,199 | 1,929,334 |
Total liabilities and stockholders’ equity | $ 3,686,778 | $ 3,756,523 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Apr. 30, 2019 | Oct. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 18 | $ 17.4 |
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) | 155,566,701 | 154,318,531 |
Common stock shares outstanding (in shares) | 155,566,701 | 154,318,531 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Cash flows provided by operating activities: | ||
Net income (loss) | $ 86,354 | $ (459,507) |
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 | 42,995 | 41,400 |
Share-based compensation costs | 29,362 | 26,559 |
Amortization of intangible assets | 17,778 | 11,824 |
Deferred taxes | 18,293 | 481,401 |
Provision for inventory excess and obsolescence | 10,245 | 14,977 |
Provision for warranty | 9,276 | 10,565 |
Other | (2,259) | 12,645 |
Changes in assets and liabilities: | ||
Accounts receivable | 43,174 | (28,055) |
Inventories | (109,554) | 20,420 |
Prepaid expenses and other | (33,241) | 2,623 |
Accounts payable, accruals and other obligations | (26,971) | (55,986) |
Deferred revenue | 4,560 | (5,736) |
Net cash provided by operating activities | 90,012 | 73,130 |
Cash flows provided by (used in) investing activities: | ||
Payments for equipment, furniture, fixtures and intellectual property | (35,289) | (31,946) |
Restricted cash | 0 | 54 |
Purchase of available for sale securities | (97,897) | (198,026) |
Proceeds from maturities of available for sale securities | 90,000 | 200,000 |
Proceeds from sales of available for sale securities | 98,263 | 0 |
Settlement of foreign currency forward contracts, net | (2,741) | 132 |
Purchase of equity investment | (2,667) | (767) |
Net cash provided by (used in) investing activities | 49,669 | (30,553) |
Cash flows used in financing activities: | ||
Payment of long-term debt | (3,500) | (2,000) |
Payment of capital lease obligations | (1,679) | (1,868) |
Payment for debt conversion liability | (111,268) | 0 |
Shares repurchased for tax withholdings on vesting of stock unit awards | (15,865) | 0 |
Repurchases of common stock - repurchase program | (65,103) | (38,036) |
Proceeds from issuance of common stock | 11,235 | 11,804 |
Net cash used in financing activities | (186,180) | (30,100) |
Effect of exchange rate changes on cash and cash equivalents | 224 | (894) |
Net increase (decrease) in cash and cash equivalents | (46,275) | 11,583 |
Cash and cash equivalents at beginning of period | 745,423 | 640,513 |
Cash and cash equivalents at end of period | 699,148 | 652,096 |
Supplemental disclosure of cash flow information | ||
Cash paid during the period for interest | 19,978 | 21,843 |
Cash paid during the period for income taxes, net | 9,258 | 15,136 |
Non-cash investing activities | ||
Purchase of equipment in accounts payable | 2,793 | 3,226 |
Non-cash financing activities | ||
Repurchase of common stock in accrued liabilities from repurchase program | 1,441 | 1,111 |
Conversion of debt conversion liability into 1,585,140 shares of common stock | $ 52,944 | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Parenthetical) | 6 Months Ended |
Apr. 30, 2019shares | |
Statement of Cash Flows [Abstract] | |
Conversion of debt conversion liability into 1,585,140 shares of common stock (in shares) | 1,585,140 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements 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, 2017 | 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) | (459,507) | (459,507) | |||
Other comprehensive income (loss) | 5,945 | 5,945 | |||
Repurchase of common stock - repurchase program (in shares) | (1,627,233) | ||||
Repurchase of common stock - repurchase program | (39,147) | $ (16) | (39,131) | ||
Issuance of shares from employee equity plans (in shares) | 2,011,982 | ||||
Issuance of shares from employee equity plans | 11,804 | $ 20 | 11,784 | ||
Share-based compensation expense | 26,559 | 26,559 | |||
Ending balance (in shares) at Apr. 30, 2018 | 143,427,976 | ||||
Ending balance at Apr. 30, 2018 | $ 1,744,119 | $ 1,434 | 6,810,226 | (5,072) | (5,062,469) |
Beginning balance (in shares) at Oct. 31, 2018 | 154,318,531 | 154,318,531 | |||
Beginning balance at Oct. 31, 2018 | $ 1,929,334 | $ 1,543 | 6,881,223 | (5,780) | (4,947,652) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 86,354 | 86,354 | |||
Other comprehensive income (loss) | (13,426) | (13,426) | |||
Repurchase of common stock - repurchase program (in shares) | (1,752,525) | ||||
Repurchase of common stock - repurchase program | (66,544) | $ (17) | (66,527) | ||
Issuance of shares from employee equity plans (in shares) | 1,875,159 | ||||
Issuance of shares from employee equity plans | 11,235 | $ 19 | 11,216 | ||
Share-based compensation expense | 29,362 | 29,362 | |||
Settlement of debt conversion liability (in shares) | 1,585,140 | ||||
Settlement of debt conversion liability | 52,944 | $ 16 | 52,928 | ||
Shares repurchased for tax withholdings on vesting of restricted stock units (in shares) | (459,604) | ||||
Shares repurchased for tax withholdings on vesting of stock unit awards | $ (15,865) | $ (5) | (15,860) | ||
Ending balance (in shares) at Apr. 30, 2019 | 155,566,701 | 155,566,701 | |||
Ending balance at Apr. 30, 2019 | $ 2,063,199 | $ 1,556 | $ 6,892,342 | $ (19,206) | $ (4,811,493) |
Interim Financial Statements
Interim Financial Statements | 6 Months Ended |
Apr. 30, 2019 | |
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 of Ciena for the interim periods covered and of the financial position of Ciena at the date of the interim balance sheets. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with 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, 2018 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, 2018 . 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 2019 is a 52-week fiscal year. Fiscal 2018 |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Apr. 30, 2019 | |
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, 2018 . Newly Issued Accounting Standards - Effective Revenue Recognition In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , a new accounting standard related to revenue recognition. ASC 606 supersedes nearly all U.S. GAAP standards on revenue recognition and eliminates industry-specific guidance. The underlying principle of ASC 606 is to recognize revenue when a customer obtains control of the promised products or services at an amount that reflects the consideration that is expected to be received in exchange for those products or services. ASC 606 also requires additional disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows related to contracts with customers. ASC 606 allows two methods of adoption: (i) retrospectively to each prior period presented (“full retrospective method”), or (ii) retrospectively with the cumulative effect recognized in retained earnings as of the date of adoption (“modified retrospective method”). Effective upon the start of its first quarter of fiscal 2019, Ciena adopted ASC 606 using the modified retrospective method and accordingly recognized the cumulative effect in accumulated deficit for those contracts that were not completed as of October 31, 2018. Accordingly, results for the reporting periods after October 31, 2018 are presented under ASC 606, while prior periods have not been adjusted and continue to be reported in accordance with Ciena’s historical revenue recognition practices. Refer to Opening Balance Adjustments below for the impact of ASC 606 adoption on Ciena’s Condensed Consolidated Financial Statements. In connection with its adoption of ASC 606, Ciena has implemented new accounting policies and processes, and incorporated such into its existing internal control environment as necessary to support the requirements of ASC 606. Revenue Recognition Timing Differences The adoption of ASC 606 requires Ciena to recognize revenue when the customer obtains control of promised products or services in an amount that reflects the consideration that Ciena would expect to receive in exchange for those products or services. Under the prior revenue standard, the timing of revenue recognition for delivered products or services was limited to such amount not contingent upon future delivery of products or service or future performance obligations, or subject to customer-specified return or privileges. In the case of multiple element software arrangements for which vendor-specific objective evidence (“VSOE”) of undelivered maintenance did not exist, under the prior revenue standard, Ciena recognized revenue for the entire arrangement over the maintenance term. The adoption of ASC 606 requires Ciena to determine the stand-alone selling price for each of the software and software-related deliverables of such multiple element arrangements at contract inception. Consequently, under ASC 606, certain software deliverables will be recognized at a point in time rather than over a period of time. In addition, under ASC 606, 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. Revenue Recognition Policy Under ASC 606 Ciena recognizes revenue when control of the promised products or services is transferred to its customer, in an amount that reflects the consideration that Ciena expects to be entitled to in exchange for those products or services. Ciena determines revenue recognition by applying the following five-step approach: • identification of the contract, or contracts, with a customer; • identification of the performance obligations in the contract; • determination of the transaction price; • allocation of the transaction price to the performance obligations in the contract; and • recognition of revenue when, or as, Ciena satisfies a performance obligation. Generally, Ciena makes sales pursuant to purchase orders placed by customers under framework agreements that govern the general commercial terms and conditions of the sale of Ciena’s products and services. These purchase orders under framework agreements are used to determine the identification of the contract or contracts with this customer. Purchase orders typically include the description, quantity, and price of each product or service purchased. Purchase orders may include one-line bundled pricing for both products and services. Accordingly, purchase orders can include various combinations of products and services that are generally distinct and accounted for as separate performance obligations. Ciena evaluates each promised product and service offering to determine whether it represents a distinct performance obligation. In doing so, Ciena considers, among other things, customary business practices, whether the customer can benefit from the product or service on its own or together with other resources that are readily available, and whether Ciena’s commitment to transfer the product or service to the customer is separately identifiable from other obligations in the purchase order. For transactions where Ciena delivers the product or services, Ciena is typically the principal and records revenue and costs of goods sold on a gross basis. Purchase orders are invoiced based upon the terms set forth either in the purchase order or the framework agreement, as applicable. Generally, sales of products and software licenses are invoiced upon shipment or delivery. Maintenance and software subscription services are invoiced quarterly or annually in advance of the service term. Ciena’s other service offerings are generally invoiced upon completion of the service. Payment terms and cash received typically range from 30 to 90 days from the invoicing date. Historically, Ciena has not provided any material financing arrangements to its customers. As a practical expedient, Ciena does not adjust the amount of consideration it will receive for the effects of a significant financing component as it expects, at contract inception, that the period between Ciena transfer of the products or services to the customer, and customer payment for the products or services will be one year or less. Shipping and handling fees invoiced to customers are included in revenue, with the associated expense included in product cost of goods sold. Ciena records revenue net of any associated sales taxes. Ciena recognizes revenue upon the transfer of control of promised products or services to a customer. Transfer of control occurs once the customer has the contractual right to use the product, generally upon shipment or delivery to the customer. Transfer of control can also occur over time for services such as software subscription, maintenance, installation, and various professional services as the customer receives the benefit over the contract term. Significant Judgments Revenue is allocated among performance obligations based on standalone selling price (“SSP”). SSP reflects the price at which Ciena would expect to sell that product or service on a stand-alone basis at contract inception and that Ciena would expect to be entitled to receive for the promised products or services. SSP is estimated for each distinct performance obligation and judgment may be required in its determination. The best evidence of SSP is the observable price of a product or service when Ciena sells the products separately in similar circumstances and to similar customers. In instances where SSP is not directly observable, Ciena determines SSP using information that may include market conditions and other observable inputs. Ciena applies judgment in determining the transaction price, as Ciena may be required to estimate variable consideration when determining the amount of revenue to recognize. Variable consideration can include various rebate, cooperative marketing, and other incentive programs that Ciena offers to its distributors, partners and customers. When determining the amount of revenue to recognize, Ciena estimates the expected usage of these programs, applying the expected value or most likely estimate and updates the estimate at each reporting period as actual utilization data becomes available. Ciena also considers any customer right of return and any actual or potential payment of liquidated damages, contractual or similar penalties, or other claims for performance failures or delays in determining the transaction price, where applicable. When transfer of control is judged to be over time for installation and professional service arrangements, Ciena applies the input method to determine the amount of revenue to be recognized in a given period. Utilizing the input method, Ciena recognizes revenue based on the ratio of actual costs incurred to date to the total estimated costs expected to be incurred. Revenue for software subscription and maintenance is recognized ratably over the period during which the services are performed. Capitalized Contract Acquisition Costs Ciena has considered the impact of the guidance in 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 considers each customer purchase in combination with the corresponding framework agreement, if applicable, as a contract. Ciena has elected to implement the practical expedient, which allows for incremental costs to be recognized as an expense when incurred if the period of the asset recognition is one year or less. If the period of the asset recognition is greater than one year, Ciena amortizes these costs over the period of performance. Ciena considers sales commissions incurred upon receipt of purchase orders placed by customers as incremental costs to obtain such purchase orders. The practical expedient method is applied to the purchase order as a whole and thus the capitalized costs of obtaining a purchase order is applied even if the purchase order contains more than one performance obligation. In cases where a purchase order includes various distinct products or services with both short-term (one year or less) and long-term (more than a year) performance periods, the cost of commissions incurred for the total value of the purchase order is capitalized and subsequently amortized as each performance obligation is recognized. For the additional disclosures required as part of ASC 606, see Note 3 below. Impact of ASC 606 Adoption The following table summarizes the impact of adopting ASC 606 on Ciena’s Condensed Consolidated Statements of Operations (in millions): Quarter Ended April 30, 2019 As Reported Adjustments Balances without adoption of ASC 606 Total revenue $ 865,011 $ (14,219 ) $ 850,792 Total cost of goods sold $ 490,334 $ (13,436 ) $ 476,898 Net income $ 52,738 $ (467 ) $ 52,271 Diluted net income per potential common share $ 0.33 $ — $ 0.33 Six Months Ended April 30, 2019 As Reported Adjustments Balances without adoption of ASC 606 Total revenue $ 1,643,538 $ (25,119 ) $ 1,618,419 Total cost of goods sold $ 945,520 $ (22,565 ) $ 922,955 Net income $ 86,354 $ (862 ) $ 85,492 Diluted net income per potential common share $ 0.55 $ (0.01 ) $ 0.54 The increase in revenue from adoption of ASC 606 was primarily the result of installation and deployment services, where revenue was recognized over a period of time rather than at a point in time under the prior revenue recognition standard. The adoption of ASC 606 did not have a material impact to Ciena’s Condensed Consolidated Balance Sheets or any impact on net cash provided by operating activities as of April 30, 2019. See “ Revenue Recognition Timing Differences” above . For additional information regarding ASC 606, see Note 3 below. Opening Balance Adjustments The following table summarizes the cumulative effect of the changes made to Ciena’s Condensed Consolidated Balance Sheets in connection with the adoption of ASC 606 (in millions): Balance at October 31, 2018 New Revenue Recognition Standard Adjusted Balance at November 1, 2018 ASSETS: Accounts receivable, net $ 786,502 $ 12,509 (1) $ 799,011 Inventories $ 262,751 (2,486 ) (2) $ 260,265 Prepaid expenses and other $ 198,945 21,470 (3) $ 220,415 Deferred tax asset, net $ 745,039 (14,439 ) (4) $ 730,600 Other long-term assets $ 71,652 3,998 (5) $ 75,650 Total assets $ 3,756,523 $ 21,052 $ 3,777,575 LIABILITIES AND STOCKHOLDERS’ EQUITY: Deferred revenue $ 111,134 $ (14,403 ) (6) $ 96,731 Long-term deferred revenue $ 58,323 (14,350 ) (7) $ 43,973 Accumulated deficit $ (4,947,652 ) 49,805 (8) $ (4,897,847 ) Total liabilities and stockholders equity $ 3,756,523 $ 21,052 $ 3,777,575 (1) Unpaid accounts receivable and related deferred revenue related to rights and obligations in a contract are interdependent and therefore recorded net within Ciena’s balance sheet. This represents an increase of $12.5 million from the reversal of certain net unpaid accounts receivable and related deferred revenue. (2) Represents a decrease of $2.5 million in deferred costs of goods sold due to change in revenue recognition for certain product sales. (3) Represents increases of $27.5 million in unbilled accounts receivable for change in recognizing revenue for installation services, $3.9 million in unbilled accounts receivable from change in recognizing revenue for certain product sales and $9.6 million related to short-term capitalized acquisition costs (e.g., commissions) and a decrease of $19.5 million related to prepaid cost of installation services. (4) Represents a decrease of $14.4 million in deferred tax asset, net, related to the unrecognized income tax effects of the net adjustments from the new revenue recognition standard. (5) Represents an increase of $4.0 million related to long-term capitalized acquisition costs (e.g., commissions). (6) Represents decreases of $23.6 million in deferred revenue, primarily due to a change in revenue recognition for certain multiple-element software arrangements and $1.7 million in deferred revenue, primarily due to a change in revenue recognition for certain product sales, and increases of $2.7 million for a change in revenue recognition from certain maintenance services and $8.2 million from the reversal of balance sheet netting for certain unpaid invoices included in accounts receivable, net and deferred revenue. (7) Represents a decrease of $18.6 million in long-term deferred revenue, primarily due to a change in revenue recognition for certain multiple-element software arrangements and an increase of $4.3 million from the reversal of balance sheet netting for certain unpaid invoices included in accounts receivable, net and long-term deferred revenue. (8) Accumulated deficit impact from the adjustments noted above. Intangibles 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. Ciena adopted ASU 2018-15 during the first quarter of fiscal 2019. The application of this accounting standard did not have a material impact on Ciena's Condensed Consolidated Financial Statements. Newly Issued Accounting Standards - Not Yet Effective 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. 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 recognized as assets and liabilities on Ciena’s balance sheet. ASU 2016-02 is effective for Ciena beginning in the first quarter of fiscal 2020. Ciena is continuing to evaluate other possible impacts of the adoption of ASU 2016-02 on its Consolidated Financial Statements and disclosures. In June 2016, the FASB issued ASU No. 2016-13 ( “ASU 2016-13” ), Financial Instruments - Credit Losses, which requires measurement and recognition of expected credit losses for financial assets held based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. ASU 2016-13 is effective for Ciena beginning in the first quarter of fiscal 2021 and early adoption is permitted. Ciena is currently evaluating the impact of this accounting standard update on its Consolidated Financial Statements and disclosures. In August 2018, the FASB issued ASU No. 2018-13 ( “ASU 2018-13” ), Fair Value Measurement (Topic 820): Disclosure Framework |
Revenue
Revenue | 6 Months Ended |
Apr. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | REVENUE Disaggregation of Revenue Ciena’s disaggregated revenue represents similar groups that depict the nature, amount, and timing of revenue and cash flows for Ciena’s various offerings. The sales cycle, contractual obligations, customer requirements, and go-to-market strategies may differ for each of its product categories, resulting in different economic risk profiles for each category. The tables below (in thousands) set forth Ciena’s disaggregated revenue for the respective period: Quarter Ended April 30, 2019 Networking Platforms Software and Software-Related Services Global Services Total Product lines: Converged Packet Optical $ 623,838 $ — $ — $ 623,838 Packet Networking 73,138 — — 73,138 Platform Software and Services — 35,229 — 35,229 Blue Planet Automation Software and Services — 12,473 — 12,473 Maintenance Support and Training — — 68,788 68,788 Installation and Deployment — — 41,322 41,322 Consulting and Network Design — — 10,223 10,223 Total revenue by product line $ 696,976 $ 47,702 $ 120,333 $ 865,011 Timing of revenue recognition: Products and services at a point in time $ 696,976 $ 14,148 $ 5,575 $ 716,699 Services transferred over time — 33,554 114,758 148,312 Total revenue by timing of revenue recognition $ 696,976 $ 47,702 $ 120,333 $ 865,011 Six Months Ended April 30, 2019 Networking Platforms Software and Software-Related Services Global Services Total Product lines: Converged Packet Optical $ 1,172,835 $ — $ — $ 1,172,835 Packet Networking 144,707 — — 144,707 Platform Software and Services — 76,827 — 76,827 Blue Planet Automation Software and Services — 27,447 — 27,447 Maintenance Support and Training — — 130,065 130,065 Installation and Deployment — — 71,944 71,944 Consulting and Network Design — — 19,713 19,713 Total revenue by product line $ 1,317,542 $ 104,274 $ 221,722 $ 1,643,538 Timing of revenue recognition: Products and services at a point in time $ 1,317,542 $ 36,420 $ 9,141 $ 1,363,103 Services transferred over time — 67,854 212,581 280,435 Total revenue by timing of revenue recognition $ 1,317,542 $ 104,274 $ 221,722 $ 1,643,538 Quarter Ended April 30, 2019 Six Months Ended April 30, 2019 Geographic distribution: North America $ 576,093 $ 1,061,599 EMEA 114,993 244,183 CALA 39,399 70,374 APAC 134,526 267,382 Total revenue by geographic distribution $ 865,011 $ 1,643,538 • 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. • Packet Networking - includes the 3000 family of service delivery switches and service aggregation switches and the 5000 family of service aggregation switches. This product line also includes the 8700 Packetwave Platform, the Ethernet packet configuration for the 5410 Service Aggregation Switch, and the 6500 Packet Transport System (PTS), which combines packet switching, control plane operation, and integrated optics. 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. Ciena’s hardware with the embedded operating system software and enhanced software features are considered distinct performance obligations for which the revenue is generally recognized upfront at a point in time upon transfer of control. • Software and Software-Related Services reflects sales of the following: • Ciena’s Blue Planet Automation Software and Services, 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 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), inventory management 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, LLC (“Packet Design”). Ciena acquired the inventory management software solution as a part of its acquisition of DonRiver Holdings, LLC (“DonRiver”). Services revenue includes sales of subscription, installation, support, consulting and design services related to Ciena’s Blue Planet Automation Platform. • Ciena’s Platform Software and Services, which provides analytics, data, and planning tools to assist customers in managing Ciena’s Networking Platforms products in their networks. Ciena’s platform software includes its Manage, Control and Plan (MCP) domain controller solution, OneControl Unified Management System, ON-Center® Network and Service Management Suite, Ethernet Services Manager, Optical Suite Release and Planet Operate. As Ciena seeks further adoption of its MCP software platform and transitions features, functionality and customers to this platform, Ciena expects revenue declines for its other platform software solutions. Software-related services revenue includes sales of subscription, installation, support, and consulting services related to Ciena’s software platforms and operating system software and enhanced software features embedded in each of the Networking Platforms product lines above. Revenue from the software portions of this segment is included in product revenue on the Condensed Consolidated Statements of Operations. Revenue from services portions of this segment is included in services revenue on the Condensed Consolidated Statements of Operations. Ciena’s software platform revenue typically reflects either perpetual or term-based software licenses, and these sales are considered a distinct performance obligation where revenue is generally recognized upfront at a point in time upon transfer of control. Revenue from software subscription and support are recognized ratably over the period during which the services are performed. Revenue from professional services for solution customization, software and solution support services, consulting and design, and build-operate-transfer services relating to Ciena’s software offerings are recognized over time with Ciena applying the input method to determine the amount of revenue to be recognized in a given period. • Global Services reflects sales of a broad range of Ciena’s services for maintenance support and training, installation and deployment, and consulting and network design activities. Revenue from this segment is included in services revenue on the Condensed Consolidated Statements of Operations. Ciena’s Global Services are considered a distinct performance obligation where revenue is generally recognized over time. Revenue from maintenance support is recognized ratably over the period during which the services are performed. Revenue from installation and deployment services and consulting and network design services are recognized over time with Ciena applying the input method to determine the amount of revenue to be recognized in a given period. Revenue from training services are generally recognized at a point in time upon completion of the service. Contract Balances The following table provides information about receivables, contract assets and contract liabilities (deferred revenue) from contracts with customers (in thousands): Balance at April 30, 2019 Adjusted Balance at November 1, 2018 Accounts receivable, net $ 756,607 $ 799,011 Contract assets $ 74,439 $ 31,380 Deferred revenue $ 145,022 $ 140,704 Our contract assets represent unbilled accounts receivable where transfer of a product or service has occurred but invoicing is conditional upon completion of future performance obligations. These amounts are primarily related to installation and deployment services arrangements where transfer of control has occurred but Ciena has not yet invoiced the customer. Contract liabilities consist of deferred revenue and represent advanced payments against non-cancelable customer orders received prior to revenue recognition. Ciena recognized approximately $73.0 million of revenue during the first six months of fiscal 2019 that was included in the deferred revenue balance at November 1, 2018. Revenue recognized due to changes in transaction price from performance obligations satisfied or partially satisfied in previous periods were immaterial during the six months ended April 30, 2019 . Capitalized Contract Acquisition Costs Capitalized contract acquisition costs consist of deferred sales commissions and were $12.2 million and $13.6 million as of April 30, 2019 and November 1, 2018, respectively, and were included in other current assets and other assets. The amortization expense associated with these costs was $8.4 million during the first six months of fiscal 2019 and was included in sales and marketing expense. Remaining Performance Obligations Remaining Performance Obligations (RPO) are comprised of non-cancelable customer purchase orders for products and services that are awaiting transfer of control for revenue recognition under the applicable contract terms. As of April 30, 2019 , the aggregate amount of RPO was $1.28 billion . As of April 30, 2019 , Ciena expects approximately 83% |
Restructuring Costs
Restructuring Costs | 6 Months Ended |
Apr. 30, 2019 | |
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 six months ended April 30, 2019 (in thousands): Workforce reduction Consolidation of excess facilities Total Balance at October 31, 2018 $ 2,108 $ 1,739 $ 3,847 Additional liability recorded 5,661 (1) 680 (2) 6,341 Cash payments (6,667 ) (847 ) (7,514 ) Balance at April 30, 2019 $ 1,102 $ 1,572 $ 2,674 Current restructuring liabilities $ 1,102 $ 347 $ 1,449 Non-current restructuring liabilities $ — $ 1,225 $ 1,225 (1) Reflects a global workforce reduction of approximately 95 employees during the six months ended April 30, 2019 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 the facilities for certain locations in the United States and India where Ciena has vacated unused space. The following table sets forth the restructuring activity and balance of the restructuring liability accounts for the six months ended April 30, 2018 (in thousands): Workforce reduction Consolidation of excess facilities Total Balance at October 31, 2017 $ 1,291 $ 1,648 $ 2,939 Additional liability recorded 8,232 (1) 2,088 (2) 10,320 Cash payments (8,211 ) (1,896 ) (10,107 ) Balance at April 30, 2018 $ 1,312 $ 1,840 $ 3,152 Current restructuring liabilities $ 1,312 $ 865 $ 2,177 Non-current restructuring liabilities $ — $ 975 $ 975 (1) Reflects a global workforce reduction of approximately 150 employees during fiscal 2018 as part of a business optimization strategy to improve gross margin, constrain operating expense and redesign certain business processes. (2) |
Interest and Other Income (Loss
Interest and Other Income (Loss), Net | 6 Months Ended |
Apr. 30, 2019 | |
Other Income and Expenses [Abstract] | |
Interest and Other Income (Loss), Net | INTEREST AND OTHER INCOME (LOSS), NET The components of interest and other income, net, are as follows (in thousands): Quarter Ended April 30, Six Months Ended April 30, 2019 2018 2019 2018 Interest income $ 3,519 $ 3,212 $ 7,391 $ 5,656 Gains (losses) on non-hedge designated foreign currency forward contracts (898 ) 2,868 (877 ) 2,169 Foreign currency exchange losses (2,995 ) (4,804 ) (2,212 ) (4,791 ) Other 130 20 (293 ) (163 ) Interest and other income (loss), net $ (244 ) $ 1,296 $ 4,009 $ 2,871 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 $2.2 million and $4.8 million in foreign currency exchange rate losses during the first six months of fiscal 2019 and fiscal 2018 , 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. 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 six months of fiscal 2019 , Ciena recorded losses of $0.9 million from non-hedge designated foreign currency forward contracts. During the first six months of fiscal 2018 , Ciena recorded gains of $2.2 million from non-hedge designated foreign currency forward contracts. |
Income Taxes
Income Taxes | 6 Months Ended |
Apr. 30, 2019 | |
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 revised the U.S. corporate income tax laws by, among other things, lowering the statutory corporate income 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. The enactment of the Tax Act resulted in Ciena recording a provisional tax expense of $472.8 million in fiscal 2018. The effective tax rate for the second quarter and six months ended April 30, 2019 was lower than the effective tax rate for the second quarter and six months ended April 30, 2018 , primarily due to the impact of the Tax Act. The reduction of the U.S. federal corporate income tax rate from 35% to 21% effective January 1, 2018, required the remeasurement of the net deferred tax assets and liabilities (“DTA”). Also, Ciena recorded U.S. transition tax in the six months ended April 30, 2018. |
Short-Term and Long-Term Invest
Short-Term and Long-Term Investments | 6 Months Ended |
Apr. 30, 2019 | |
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): April 30, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. government obligations: Included in short-term investments $ 119,316 $ 47 $ (36 ) $ 119,327 $ 119,316 $ 47 $ (36 ) $ 119,327 October 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. government obligations: Included in short-term investments $ 139,365 $ — $ (347 ) $ 139,018 Included in long-term investments 59,029 — (59 ) 58,970 $ 198,394 $ — $ (406 ) $ 197,988 Commercial paper: Included in short-term investments $ 9,963 $ — $ — $ 9,963 $ 9,963 $ — $ — $ 9,963 The following table summarizes the final legal maturities of debt investments at April 30, 2019 (in thousands): Amortized Cost Estimated Fair Value Less than one year $ 119,316 $ 119,327 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Apr. 30, 2019 | |
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): April 30, 2019 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 584,859 $ — $ — $ 584,859 U.S. government obligations — 119,327 — 119,327 Foreign currency forward contracts — 764 — 764 Total assets measured at fair value $ 584,859 $ 120,091 $ — $ 704,950 Liabilities: Foreign currency forward contracts $ — $ 3,630 $ — $ 3,630 Forward starting interest rate swap — 10,927 — 10,927 Contingent consideration — — 10,900 10,900 Total liabilities measured at fair value $ — $ 14,557 $ 10,900 $ 25,457 October 31, 2018 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 590,684 $ — $ — $ 590,684 U.S. government obligations — 197,988 — 197,988 Commercial paper — 69,888 — 69,888 Foreign currency forward contracts — 133 — 133 Forward starting interest rate swaps — 779 — 779 Total assets measured at fair value $ 590,684 $ 268,788 $ — $ 859,472 Liabilities: Foreign currency forward contracts $ — $ 3,231 $ — $ 3,231 Debt conversion liability — 164,212 — 164,212 Contingent consideration — — 10,900 10,900 Total liabilities measured at fair value $ — $ 167,443 $ 10,900 $ 178,343 As of the date indicated, the assets and liabilities above are presented on Ciena’s Condensed Consolidated Balance Sheets as follows (in thousands): April 30, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 584,859 $ — $ — $ 584,859 Short-term investments — 119,327 — 119,327 Prepaid expenses and other — 764 — 764 Total assets measured at fair value $ 584,859 $ 120,091 $ — $ 704,950 Liabilities: Accrued liabilities $ — $ 3,630 $ 7,491 $ 11,121 Other long-term obligations — 10,927 3,409 14,336 Total liabilities measured at fair value $ — $ 14,557 $ 10,900 $ 25,457 October 31, 2018 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 590,684 $ 59,925 $ — $ 650,609 Short-term investments — 148,981 — 148,981 Prepaid expenses and other — 133 — 133 Long-term investments — 58,970 — 58,970 Other long-term assets — 779 — 779 Total assets measured at fair value $ 590,684 $ 268,788 $ — $ 859,472 Liabilities: Accrued liabilities $ — $ 3,231 $ — $ 3,231 Debt conversion liability — 164,212 — 164,212 Other long-term obligations — — 10,900 10,900 Total liabilities measured at fair value $ — $ 167,443 $ 10,900 $ 178,343 Ciena did not have any transfers between Level 1 and Level 2 fair value measurements during the periods presented. Ciena’s Level 3 liability is included in both accrued liabilities and other long-term obligations and reflects a contingent consideration element of a three-year payout arrangement associated with Ciena’s purchase of DonRiver in the fourth quarter of fiscal 2018. The contingent consideration is valued by applying the income approach based upon a discounted cash flow technique using Monte Carlo simulations. As of April 30, 2019 , there was no material change to the fair value. |
Inventories
Inventories | 6 Months Ended |
Apr. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES As of the dates indicated, inventories are comprised of the following (in thousands): April 30, October 31, Raw materials $ 90,317 $ 67,468 Work-in-process 11,986 9,589 Finished goods 205,440 188,575 Deferred cost of goods sold 100,637 48,057 408,380 313,689 Provision for excess and obsolescence (48,963 ) (50,938 ) $ 359,417 $ 262,751 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 six months of fiscal 2019 , Ciena recorded a provision for excess and obsolescence of $10.2 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. |
Prepaid Expenses and Other
Prepaid Expenses and Other | 6 Months Ended |
Apr. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER | PREPAID EXPENSES AND OTHER As of the dates indicated, prepaid expenses and other are comprised of the following (in thousands): April 30, October 31, Prepaid VAT and other taxes $ 77,788 $ 82,518 Contract assets for unbilled accounts receivable 74,439 — Product demonstration equipment, net 39,323 37,623 Prepaid expenses 31,469 32,987 Other non-trade receivables 11,513 25,716 Capitalized commissions - short term 8,373 — Financing receivable — 626 Deferred deployment expense — 19,342 Derivative assets 764 133 $ 243,669 $ 198,945 Depreciation of product demonstration equipment was $4.3 million and $4.6 million first six months of fiscal 2019 and 2018 , respectively. |
Accrued Liabilities and Other S
Accrued Liabilities and Other Short-Term Obligations | 6 Months Ended |
Apr. 30, 2019 | |
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): April 30, October 31, Compensation, payroll related tax and benefits (1) $ 94,235 $ 140,277 Warranty 44,907 44,740 Vacation (2) 21,648 42,507 Contingent consideration 7,491 — Capital lease obligations 3,011 3,547 Interest payable 1,000 1,072 Other 119,125 107,932 $ 291,417 $ 340,075 (1) Reduction is primarily due to the timing of bonus payments to employees under Ciena's annual cash incentive compensation plan. (2) Reduction is primarily due to the payout of North America vacation accruals in conjunction with adoption of a new vacation policy. The following table summarizes the activity in Ciena’s accrued warranty for the fiscal periods indicated (in thousands): Six Months Ended April 30, Beginning Balance Current Period Provisions Settlements Ending Balance 2018 $ 42,456 10,565 (9,629 ) $ 43,392 2019 $ 44,740 9,276 (9,109 ) $ 44,907 Settlement of Conversions of 3.75% Convertible Senior Notes due October 15, 2018 (“New Notes”) Debt Conversion Liability Associated With the New Notes The New Notes provided Ciena the option, at its election, to settle conversions of such notes for cash, shares of its common stock, or a combination of cash and shares equal to the aggregate amount due upon conversion. On August 30, 2018, Ciena notified the noteholders that it had elected to settle conversion of the New Notes in a combination of cash and shares, provided that the cash portion would not exceed an aggregate amount of $400 million . Ciena became obligated to settle a portion of the conversion feature in cash and reclassified the cash conversion feature from equity to a derivative liability at its fair value of $164.2 million . On November 15, 2018, Ciena paid approximately $111.3 million in cash and issued 1.6 million shares in settlement of this embedded conversion feature. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Apr. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS Foreign Currency Derivatives As of April 30, 2019 and October 31, 2018 , 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. The notional amount of these contracts was approximately $146.1 million and $163.2 million as of April 30, 2019 and October 31, 2018 , respectively. These foreign exchange contracts have maturities of 24 months or less and have been designated as cash flow hedges. During the first six months of fiscal 2019 and fiscal 2018 , in order to hedge foreign exchange exposures of certain balance sheet items, Ciena entered into forward contracts to mitigate risk due to variability in various currencies. The notional amount of these contracts was approximately $164.8 million and $162.6 million as of April 30, 2019 and October 31, 2018 , 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 14 below) and has hedged such risk by entering into floating to fixed interest rate swap arrangements (“interest rate swaps”). The interest rate swaps fix the LIBOR rate for $350 million of the 2025 Term Loan at 2.957% through September 2023. The total notional amount of interest rate swaps in effect was $350.0 million as of April 30, 2019 and October 31, 2018 . 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 | 6 Months Ended |
Apr. 30, 2019 | |
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”), net of tax, for the six months ended April 30, 2019 : Unrealized Unrealized Loss on Unrealized Loss on Cumulative Loss on Available-for-sale Securities Foreign Currency Forward Contracts Forward Starting Interest Rate Swaps Foreign Currency Translation Adjustment Total Balance at October 31, 2018 $ (425 ) $ (3,060 ) $ 6,417 $ (8,712 ) $ (5,780 ) Other comprehensive income (loss) before reclassifications 413 (1,613 ) (10,013 ) (3,846 ) (15,059 ) Amounts reclassified from AOCI — 2,317 (684 ) — 1,633 Balance at April 30, 2019 $ (12 ) $ (2,356 ) $ (4,280 ) $ (12,558 ) $ (19,206 ) The following table summarizes the changes in AOCI, net of tax, for the six months ended April 30, 2018 : Unrealized Unrealized Loss on Unrealized Gain on Cumulative Loss on Available-for-sale Securities Foreign Currency Forward Contracts Forward Starting Interest Rate Swaps Foreign Currency Translation Adjustment Total Balance at October 31, 2017 $ (451 ) $ (1,386 ) $ 218 $ (9,398 ) $ (11,017 ) Other comprehensive income (loss) before reclassifications (337 ) (440 ) 4,725 1,069 5,017 Amounts reclassified from AOCI — 405 523 — 928 Balance at April 30, 2018 $ (788 ) $ (1,421 ) $ 5,466 $ (8,329 ) $ (5,072 ) All amounts reclassified from AOCI related to settlement (gains) losses on foreign currency forward contracts designated as cash flow hedges impacted revenue and 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 | 6 Months Ended |
Apr. 30, 2019 | |
Debt Disclosure [Abstract] | |
Short-Term and Long-Term Debt | SHORT-TERM AND LONG-TERM DEBT Outstanding Term Loan Payable 2025 Term Loan The net carrying value of Ciena’s Term Loan due September 28, 2025 (the “2025 Term Loan”) was comprised of the following for the fiscal periods indicated (in thousands): April 30, 2019 October 31, 2018 Term Loan Payable due September 28, 2025 $ 690,429 $ 693,450 Deferred debt issuance costs that were deducted from the carrying amounts of the 2025 Term Loan totaled $3.9 million at April 30, 2019 and $4.3 million at October 31, 2018 . 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 2025 Term Loan. The amortization of deferred debt issuance costs for the 2025 Term Loan is included in interest expense, and was $0.3 million during the first six months of fiscal 2019 . The carrying value of the 2025 Term Loan listed above is also net of any unamortized debt discounts. The principal balance, unamortized debt discount, deferred debt issuance costs, net carrying value and fair value of the 2025 Term Loan were as follows as of April 30, 2019 (in thousands): Principal Balance Unamortized Debt Discount Deferred Debt Issuance Costs Net Carrying Value Fair Value (1) Term Loan Payable due September 28, 2025 $ 696,500 $ (2,129 ) $ (3,942 ) $ 690,429 $ 696,500 (1) The 2025 Term Loan is categorized as Level 2 in the fair value hierarchy. Ciena estimated the fair value of the 2025 Term Loan using a market approach based upon observable inputs, such as current market transactions involving comparable securities. |
Earnings Per Share Calculation
Earnings Per Share Calculation | 6 Months Ended |
Apr. 30, 2019 | |
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 stock unit awards; and (iii) shares issuable under Ciena’s employee stock purchase plan and upon exercise of outstanding stock options, using the treasury stock method. Quarter Ended April 30, Six Months Ended April 30, Numerator 2019 2018 2019 2018 Net income (loss) $ 52,738 $ 13,856 $ 86,354 $ (459,507 ) Quarter Ended April 30, Six Months Ended April 30, Denominator 2019 2018 2019 2018 Basic weighted average shares outstanding 156,170 143,975 156,244 143,948 Add: Shares underlying outstanding stock options and stock unit awards and issuable under employee stock purchase plan 2,119 1,345 1,967 — Add: Shares underlying 3.75% Convertible Senior Notes due 2018 (New) — 2,653 — — Dilutive weighted average shares outstanding 158,289 147,973 158,211 143,948 Quarter Ended April 30, Six Months Ended April 30, EPS 2019 2018 2019 2018 Basic EPS $ 0.34 $ 0.10 $ 0.55 $ (3.19 ) Diluted EPS $ 0.33 $ 0.09 $ 0.55 $ (3.19 ) 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 April 30, Six Months Ended April 30, 2019 2018 2019 2018 Shares underlying stock options and stock unit awards 283 304 257 2,496 3.75% Convertible Senior Notes due October 15, 2018 (Original) — 3,038 — 3,038 3.75% Convertible Senior Notes due October 15, 2018 (New) — — — 1,672 4.0% Convertible Senior Notes due December 15, 2020 — 9,198 — 9,198 Total shares excluded due to anti-dilutive effect 283 12,540 257 16,404 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Apr. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Stock Repurchase Program On December 13, 2018, Ciena announced that its Board of Directors authorized a program to repurchase up to $500 million of Ciena’s common stock. 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, 2018 — $ — $ — Repurchase of common stock under the stock repurchase program 1,752,525 37.97 66,544 Cumulative balance at April 30, 2019 1,752,525 $ 37.97 $ 66,544 The purchase price for the shares of Ciena’s stock repurchased is reflected as a reduction of common stock and additional paid-in capital. Stock Repurchases Related to Stock Unit Award Tax Withholdings Ciena repurchases shares of common stock to satisfy employee tax withholding obligations due upon vesting of stock unit awards. The purchase price of $15.9 million for the shares of Ciena’s stock repurchased during the first six months of fiscal 2019 is reflected as a reduction to stockholders’ equity. Ciena is required to allocate the purchase price of the repurchased shares as a reduction of common stock and additional paid-in capital. |
Share-Based Compensation Expens
Share-Based Compensation Expense | 6 Months Ended |
Apr. 30, 2019 | |
Share-based Payment Arrangement [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 April 30, Six Months Ended April 30, 2019 2018 2019 2018 Product costs $ 702 $ 824 $ 1,339 $ 1,496 Service costs 907 722 1,677 1,346 Share-based compensation expense included in cost of sales 1,609 1,546 3,016 2,842 Research and development 4,083 3,796 7,474 7,052 Sales and marketing 4,346 3,760 8,131 7,088 General and administrative 5,491 5,109 10,603 9,583 Share-based compensation expense included in operating expense 13,920 12,665 26,208 23,723 Share-based compensation expense capitalized in inventory, net 78 (45 ) 138 (6 ) Total share-based compensation $ 15,607 $ 14,166 $ 29,362 $ 26,559 As of April 30, 2019 , total unrecognized share-based compensation expense was approximately $110.7 million , which relates to unvested stock unit awards and is expected to be recognized over a weighted-average period of 1.6 |
Segments and Entity-Wide Disclo
Segments and Entity-Wide Disclosures | 6 Months Ended |
Apr. 30, 2019 | |
Segment Reporting [Abstract] | |
Segments and Entity-Wide Disclosures | SEGMENTS AND ENTITY-WIDE DISCLOSURES Segment Reporting Ciena has the following operating segments for reporting purposes: (i) Networking Platforms; (ii) Software and Software-Related Services; and (iii) Global Services. See Note 3 to Ciena’s Condensed Consolidated Financial Statements included in Item 1 of Part I of this report. 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 April 30, 2019 , equipment, building, furniture and fixtures, net totaled $282.0 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 April 30, 2019 , $25.0 million of Ciena’s intangible assets, net were assigned to asset groups within Ciena’s Networking Platforms segment and $105.0 million of Ciena’s intangible assets, net were assigned to asset groups within Ciena’s Software and Software-Related Services segment. As of April 30, 2019 , $65.5 million of Ciena’s Goodwill was assigned to asset groups within Ciena’s Networking Platforms segment and $232.2 million of Ciena’s Goodwill was assigned to asset groups within Ciena’s Software and Software-Related Services segment. As of April 30, 2019 , all of the maintenance spares, net, totaling $50.9 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 April 30, Six Months Ended April 30, 2019 2018 2019 2018 Revenue: Networking Platforms Converged Packet Optical $ 623,838 $ 527,867 $ 1,172,835 $ 955,297 Packet Networking 73,138 63,815 144,707 132,418 Total Networking Platforms 696,976 591,682 1,317,542 1,087,715 Software and Software-Related Services Platform Software and Services 35,229 36,393 76,827 80,529 Blue Planet Automation Software and Services 12,473 2,352 27,447 11,703 Total Software and Software-Related Services 47,702 38,745 104,274 92,232 Global Services Maintenance Support and Training 68,788 60,904 130,065 116,862 Installation and Deployment 41,322 28,209 71,944 58,225 Consulting and Network Design 10,223 10,438 19,713 21,079 Total Global Services 120,333 99,551 221,722 196,166 Consolidated revenue $ 865,011 $ 729,978 $ 1,643,538 $ 1,376,113 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; amortization of intangible assets; significant asset impairments and restructuring costs; 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 April 30, Six Months Ended April 30, 2019 2018 2019 2018 Segment profit: Networking Platforms $ 175,191 $ 126,823 $ 311,782 $ 215,392 Software and Software-Related Services 6,536 8,276 24,952 31,911 Global Services 54,981 41,284 94,682 82,321 Total segment profit 236,708 176,383 431,416 329,624 Less: Non-performance operating expenses Selling and marketing 103,502 97,359 201,615 185,874 General and administrative 42,154 38,976 81,397 77,382 Amortization of intangible assets 5,529 3,623 11,057 7,246 Significant asset impairments and restructuring costs 4,068 4,359 6,341 10,320 Acquisition and integration costs 1,135 — 2,743 — Add: Other non-performance financial items Interest expense and other income (loss), net (9,715 ) (11,735 ) (14,903 ) (23,894 ) Less: Provision for income taxes 17,867 6,475 27,006 484,415 Consolidated net income (loss) $ 52,738 $ 13,856 $ 86,354 $ (459,507 ) Entity-Wide Reporting Ciena’s revenue includes $545.6 million and $392.8 million of United States revenue for the second quarter of fiscal 2019 and 2018 , respectively. For the six months ended April 30, 2019 and 2018 , United States revenue was $1.01 billion and $776.1 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, net, was as follows (in thousands): April 30, October 31, Canada $ 196,069 $ 198,028 United States 67,633 75,479 Other International 18,320 18,560 Total $ 282,022 $ 292,067 For the periods below, AT&T, Verizon 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 April 30, Six Months Ended April 30, 2019 2018 2019 2018 AT&T $ 108,416 $ 85,419 $ 202,587 $ 176,065 Verizon 106,350 n/a 195,125 n/a Web-scale provider n/a n/a 174,853 n/a Total $ 214,766 $ 85,419 $ 572,565 $ 176,065 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 | 6 Months Ended |
Apr. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Canadian Grant During 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 (approximately $42.9 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. As of April 30, 2019 , Ciena has recorded CAD $23.1 million (approximately $17.2 million ) in cumulative benefits as a reduction in research and development expense of which CAD $6.5 million (approximately $4.9 million ) was recorded in the first six months of fiscal 2019. As of April 30, 2019 , amounts receivable from this grant were CAD $7.9 million (approximately $5.9 million ). 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, the first of two purported stockholder class action lawsuits 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. The 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. During the fourth quarter of fiscal 2018, the parties agreed to the terms of a settlement of the action, which settlement is subject to notice to class members and approval by the court. The terms of the proposed settlement, which include a release and dismissal of all claims against all defendants without any liability or wrongdoing attributed to them, are not material to the Ciena’s financial results. There is no assurance that the court will ultimately approve the settlement. Internal Investigation 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. On December 10, 2018, the DOJ advised that it has declined to prosecute this matter and that its investigation into the matter is now closed. Ciena continues to cooperate fully with the SEC in its investigation into this matter. Ciena’s operations in the relevant country constituted less than 1.5% of consolidated revenues as reported by Ciena in each fiscal year from 2012 through 2017. 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 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 Investigation” 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 | 6 Months Ended |
Apr. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Stock Repurchase Program From the end of the second quarter of fiscal 2019 through June 7, 2019 , Ciena repurchased an additional 485,235 shares of its common stock, for an aggregate purchase price of $17.3 million at an average price of $35.63 per share, inclusive of repurchases pending settlement. As of June 7, 2019 , Ciena has repurchased an aggregate of 2,237,760 shares and has an aggregate of $416.2 million of authorized funds remaining under its Stock Repurchase Program. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Apr. 30, 2019 | |
Accounting Policies [Abstract] | |
Newly Issued Accounting Standards - Effective and Not Yet Effective | Newly Issued Accounting Standards - Effective Revenue Recognition In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , a new accounting standard related to revenue recognition. ASC 606 supersedes nearly all U.S. GAAP standards on revenue recognition and eliminates industry-specific guidance. The underlying principle of ASC 606 is to recognize revenue when a customer obtains control of the promised products or services at an amount that reflects the consideration that is expected to be received in exchange for those products or services. ASC 606 also requires additional disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows related to contracts with customers. ASC 606 allows two methods of adoption: (i) retrospectively to each prior period presented (“full retrospective method”), or (ii) retrospectively with the cumulative effect recognized in retained earnings as of the date of adoption (“modified retrospective method”). Effective upon the start of its first quarter of fiscal 2019, Ciena adopted ASC 606 using the modified retrospective method and accordingly recognized the cumulative effect in accumulated deficit for those contracts that were not completed as of October 31, 2018. Accordingly, results for the reporting periods after October 31, 2018 are presented under ASC 606, while prior periods have not been adjusted and continue to be reported in accordance with Ciena’s historical revenue recognition practices. Refer to Opening Balance Adjustments below for the impact of ASC 606 adoption on Ciena’s Condensed Consolidated Financial Statements. In connection with its adoption of ASC 606, Ciena has implemented new accounting policies and processes, and incorporated such into its existing internal control environment as necessary to support the requirements of ASC 606. Revenue Recognition Timing Differences The adoption of ASC 606 requires Ciena to recognize revenue when the customer obtains control of promised products or services in an amount that reflects the consideration that Ciena would expect to receive in exchange for those products or services. Under the prior revenue standard, the timing of revenue recognition for delivered products or services was limited to such amount not contingent upon future delivery of products or service or future performance obligations, or subject to customer-specified return or privileges. In the case of multiple element software arrangements for which vendor-specific objective evidence (“VSOE”) of undelivered maintenance did not exist, under the prior revenue standard, Ciena recognized revenue for the entire arrangement over the maintenance term. The adoption of ASC 606 requires Ciena to determine the stand-alone selling price for each of the software and software-related deliverables of such multiple element arrangements at contract inception. Consequently, under ASC 606, certain software deliverables will be recognized at a point in time rather than over a period of time. In addition, under ASC 606, 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. Revenue Recognition Policy Under ASC 606 Ciena recognizes revenue when control of the promised products or services is transferred to its customer, in an amount that reflects the consideration that Ciena expects to be entitled to in exchange for those products or services. Ciena determines revenue recognition by applying the following five-step approach: • identification of the contract, or contracts, with a customer; • identification of the performance obligations in the contract; • determination of the transaction price; • allocation of the transaction price to the performance obligations in the contract; and • recognition of revenue when, or as, Ciena satisfies a performance obligation. Generally, Ciena makes sales pursuant to purchase orders placed by customers under framework agreements that govern the general commercial terms and conditions of the sale of Ciena’s products and services. These purchase orders under framework agreements are used to determine the identification of the contract or contracts with this customer. Purchase orders typically include the description, quantity, and price of each product or service purchased. Purchase orders may include one-line bundled pricing for both products and services. Accordingly, purchase orders can include various combinations of products and services that are generally distinct and accounted for as separate performance obligations. Ciena evaluates each promised product and service offering to determine whether it represents a distinct performance obligation. In doing so, Ciena considers, among other things, customary business practices, whether the customer can benefit from the product or service on its own or together with other resources that are readily available, and whether Ciena’s commitment to transfer the product or service to the customer is separately identifiable from other obligations in the purchase order. For transactions where Ciena delivers the product or services, Ciena is typically the principal and records revenue and costs of goods sold on a gross basis. Purchase orders are invoiced based upon the terms set forth either in the purchase order or the framework agreement, as applicable. Generally, sales of products and software licenses are invoiced upon shipment or delivery. Maintenance and software subscription services are invoiced quarterly or annually in advance of the service term. Ciena’s other service offerings are generally invoiced upon completion of the service. Payment terms and cash received typically range from 30 to 90 days from the invoicing date. Historically, Ciena has not provided any material financing arrangements to its customers. As a practical expedient, Ciena does not adjust the amount of consideration it will receive for the effects of a significant financing component as it expects, at contract inception, that the period between Ciena transfer of the products or services to the customer, and customer payment for the products or services will be one year or less. Shipping and handling fees invoiced to customers are included in revenue, with the associated expense included in product cost of goods sold. Ciena records revenue net of any associated sales taxes. Ciena recognizes revenue upon the transfer of control of promised products or services to a customer. Transfer of control occurs once the customer has the contractual right to use the product, generally upon shipment or delivery to the customer. Transfer of control can also occur over time for services such as software subscription, maintenance, installation, and various professional services as the customer receives the benefit over the contract term. Significant Judgments Revenue is allocated among performance obligations based on standalone selling price (“SSP”). SSP reflects the price at which Ciena would expect to sell that product or service on a stand-alone basis at contract inception and that Ciena would expect to be entitled to receive for the promised products or services. SSP is estimated for each distinct performance obligation and judgment may be required in its determination. The best evidence of SSP is the observable price of a product or service when Ciena sells the products separately in similar circumstances and to similar customers. In instances where SSP is not directly observable, Ciena determines SSP using information that may include market conditions and other observable inputs. Ciena applies judgment in determining the transaction price, as Ciena may be required to estimate variable consideration when determining the amount of revenue to recognize. Variable consideration can include various rebate, cooperative marketing, and other incentive programs that Ciena offers to its distributors, partners and customers. When determining the amount of revenue to recognize, Ciena estimates the expected usage of these programs, applying the expected value or most likely estimate and updates the estimate at each reporting period as actual utilization data becomes available. Ciena also considers any customer right of return and any actual or potential payment of liquidated damages, contractual or similar penalties, or other claims for performance failures or delays in determining the transaction price, where applicable. When transfer of control is judged to be over time for installation and professional service arrangements, Ciena applies the input method to determine the amount of revenue to be recognized in a given period. Utilizing the input method, Ciena recognizes revenue based on the ratio of actual costs incurred to date to the total estimated costs expected to be incurred. Revenue for software subscription and maintenance is recognized ratably over the period during which the services are performed. Capitalized Contract Acquisition Costs Ciena has considered the impact of the guidance in 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 considers each customer purchase in combination with the corresponding framework agreement, if applicable, as a contract. Ciena has elected to implement the practical expedient, which allows for incremental costs to be recognized as an expense when incurred if the period of the asset recognition is one year or less. If the period of the asset recognition is greater than one year, Ciena amortizes these costs over the period of performance. Ciena considers sales commissions incurred upon receipt of purchase orders placed by customers as incremental costs to obtain such purchase orders. The practical expedient method is applied to the purchase order as a whole and thus the capitalized costs of obtaining a purchase order is applied even if the purchase order contains more than one performance obligation. In cases where a purchase order includes various distinct products or services with both short-term (one year or less) and long-term (more than a year) performance periods, the cost of commissions incurred for the total value of the purchase order is capitalized and subsequently amortized as each performance obligation is recognized. For the additional disclosures required as part of ASC 606, see Note 3 below. Impact of ASC 606 Adoption The following table summarizes the impact of adopting ASC 606 on Ciena’s Condensed Consolidated Statements of Operations (in millions): Quarter Ended April 30, 2019 As Reported Adjustments Balances without adoption of ASC 606 Total revenue $ 865,011 $ (14,219 ) $ 850,792 Total cost of goods sold $ 490,334 $ (13,436 ) $ 476,898 Net income $ 52,738 $ (467 ) $ 52,271 Diluted net income per potential common share $ 0.33 $ — $ 0.33 Six Months Ended April 30, 2019 As Reported Adjustments Balances without adoption of ASC 606 Total revenue $ 1,643,538 $ (25,119 ) $ 1,618,419 Total cost of goods sold $ 945,520 $ (22,565 ) $ 922,955 Net income $ 86,354 $ (862 ) $ 85,492 Diluted net income per potential common share $ 0.55 $ (0.01 ) $ 0.54 The increase in revenue from adoption of ASC 606 was primarily the result of installation and deployment services, where revenue was recognized over a period of time rather than at a point in time under the prior revenue recognition standard. The adoption of ASC 606 did not have a material impact to Ciena’s Condensed Consolidated Balance Sheets or any impact on net cash provided by operating activities as of April 30, 2019. See “ Revenue Recognition Timing Differences” above . For additional information regarding ASC 606, see Note 3 below. Opening Balance Adjustments The following table summarizes the cumulative effect of the changes made to Ciena’s Condensed Consolidated Balance Sheets in connection with the adoption of ASC 606 (in millions): Balance at October 31, 2018 New Revenue Recognition Standard Adjusted Balance at November 1, 2018 ASSETS: Accounts receivable, net $ 786,502 $ 12,509 (1) $ 799,011 Inventories $ 262,751 (2,486 ) (2) $ 260,265 Prepaid expenses and other $ 198,945 21,470 (3) $ 220,415 Deferred tax asset, net $ 745,039 (14,439 ) (4) $ 730,600 Other long-term assets $ 71,652 3,998 (5) $ 75,650 Total assets $ 3,756,523 $ 21,052 $ 3,777,575 LIABILITIES AND STOCKHOLDERS’ EQUITY: Deferred revenue $ 111,134 $ (14,403 ) (6) $ 96,731 Long-term deferred revenue $ 58,323 (14,350 ) (7) $ 43,973 Accumulated deficit $ (4,947,652 ) 49,805 (8) $ (4,897,847 ) Total liabilities and stockholders equity $ 3,756,523 $ 21,052 $ 3,777,575 (1) Unpaid accounts receivable and related deferred revenue related to rights and obligations in a contract are interdependent and therefore recorded net within Ciena’s balance sheet. This represents an increase of $12.5 million from the reversal of certain net unpaid accounts receivable and related deferred revenue. (2) Represents a decrease of $2.5 million in deferred costs of goods sold due to change in revenue recognition for certain product sales. (3) Represents increases of $27.5 million in unbilled accounts receivable for change in recognizing revenue for installation services, $3.9 million in unbilled accounts receivable from change in recognizing revenue for certain product sales and $9.6 million related to short-term capitalized acquisition costs (e.g., commissions) and a decrease of $19.5 million related to prepaid cost of installation services. (4) Represents a decrease of $14.4 million in deferred tax asset, net, related to the unrecognized income tax effects of the net adjustments from the new revenue recognition standard. (5) Represents an increase of $4.0 million related to long-term capitalized acquisition costs (e.g., commissions). (6) Represents decreases of $23.6 million in deferred revenue, primarily due to a change in revenue recognition for certain multiple-element software arrangements and $1.7 million in deferred revenue, primarily due to a change in revenue recognition for certain product sales, and increases of $2.7 million for a change in revenue recognition from certain maintenance services and $8.2 million from the reversal of balance sheet netting for certain unpaid invoices included in accounts receivable, net and deferred revenue. (7) Represents a decrease of $18.6 million in long-term deferred revenue, primarily due to a change in revenue recognition for certain multiple-element software arrangements and an increase of $4.3 million from the reversal of balance sheet netting for certain unpaid invoices included in accounts receivable, net and long-term deferred revenue. (8) Accumulated deficit impact from the adjustments noted above. Intangibles 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. Ciena adopted ASU 2018-15 during the first quarter of fiscal 2019. The application of this accounting standard did not have a material impact on Ciena's Condensed Consolidated Financial Statements. Newly Issued Accounting Standards - Not Yet Effective 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. 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 recognized as assets and liabilities on Ciena’s balance sheet. ASU 2016-02 is effective for Ciena beginning in the first quarter of fiscal 2020. Ciena is continuing to evaluate other possible impacts of the adoption of ASU 2016-02 on its Consolidated Financial Statements and disclosures. In June 2016, the FASB issued ASU No. 2016-13 ( “ASU 2016-13” ), Financial Instruments - Credit Losses, which requires measurement and recognition of expected credit losses for financial assets held based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. ASU 2016-13 is effective for Ciena beginning in the first quarter of fiscal 2021 and early adoption is permitted. Ciena is currently evaluating the impact of this accounting standard update on its Consolidated Financial Statements and disclosures. In August 2018, the FASB issued ASU No. 2018-13 ( “ASU 2018-13” ), Fair Value Measurement (Topic 820): Disclosure Framework |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following table summarizes the impact of adopting ASC 606 on Ciena’s Condensed Consolidated Statements of Operations (in millions): Quarter Ended April 30, 2019 As Reported Adjustments Balances without adoption of ASC 606 Total revenue $ 865,011 $ (14,219 ) $ 850,792 Total cost of goods sold $ 490,334 $ (13,436 ) $ 476,898 Net income $ 52,738 $ (467 ) $ 52,271 Diluted net income per potential common share $ 0.33 $ — $ 0.33 Six Months Ended April 30, 2019 As Reported Adjustments Balances without adoption of ASC 606 Total revenue $ 1,643,538 $ (25,119 ) $ 1,618,419 Total cost of goods sold $ 945,520 $ (22,565 ) $ 922,955 Net income $ 86,354 $ (862 ) $ 85,492 Diluted net income per potential common share $ 0.55 $ (0.01 ) $ 0.54 The following table summarizes the cumulative effect of the changes made to Ciena’s Condensed Consolidated Balance Sheets in connection with the adoption of ASC 606 (in millions): Balance at October 31, 2018 New Revenue Recognition Standard Adjusted Balance at November 1, 2018 ASSETS: Accounts receivable, net $ 786,502 $ 12,509 (1) $ 799,011 Inventories $ 262,751 (2,486 ) (2) $ 260,265 Prepaid expenses and other $ 198,945 21,470 (3) $ 220,415 Deferred tax asset, net $ 745,039 (14,439 ) (4) $ 730,600 Other long-term assets $ 71,652 3,998 (5) $ 75,650 Total assets $ 3,756,523 $ 21,052 $ 3,777,575 LIABILITIES AND STOCKHOLDERS’ EQUITY: Deferred revenue $ 111,134 $ (14,403 ) (6) $ 96,731 Long-term deferred revenue $ 58,323 (14,350 ) (7) $ 43,973 Accumulated deficit $ (4,947,652 ) 49,805 (8) $ (4,897,847 ) Total liabilities and stockholders equity $ 3,756,523 $ 21,052 $ 3,777,575 (1) Unpaid accounts receivable and related deferred revenue related to rights and obligations in a contract are interdependent and therefore recorded net within Ciena’s balance sheet. This represents an increase of $12.5 million from the reversal of certain net unpaid accounts receivable and related deferred revenue. (2) Represents a decrease of $2.5 million in deferred costs of goods sold due to change in revenue recognition for certain product sales. (3) Represents increases of $27.5 million in unbilled accounts receivable for change in recognizing revenue for installation services, $3.9 million in unbilled accounts receivable from change in recognizing revenue for certain product sales and $9.6 million related to short-term capitalized acquisition costs (e.g., commissions) and a decrease of $19.5 million related to prepaid cost of installation services. (4) Represents a decrease of $14.4 million in deferred tax asset, net, related to the unrecognized income tax effects of the net adjustments from the new revenue recognition standard. (5) Represents an increase of $4.0 million related to long-term capitalized acquisition costs (e.g., commissions). (6) Represents decreases of $23.6 million in deferred revenue, primarily due to a change in revenue recognition for certain multiple-element software arrangements and $1.7 million in deferred revenue, primarily due to a change in revenue recognition for certain product sales, and increases of $2.7 million for a change in revenue recognition from certain maintenance services and $8.2 million from the reversal of balance sheet netting for certain unpaid invoices included in accounts receivable, net and deferred revenue. (7) Represents a decrease of $18.6 million in long-term deferred revenue, primarily due to a change in revenue recognition for certain multiple-element software arrangements and an increase of $4.3 million from the reversal of balance sheet netting for certain unpaid invoices included in accounts receivable, net and long-term deferred revenue. (8) Accumulated deficit impact from the adjustments noted above. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The tables below (in thousands) set forth Ciena’s disaggregated revenue for the respective period: Quarter Ended April 30, 2019 Networking Platforms Software and Software-Related Services Global Services Total Product lines: Converged Packet Optical $ 623,838 $ — $ — $ 623,838 Packet Networking 73,138 — — 73,138 Platform Software and Services — 35,229 — 35,229 Blue Planet Automation Software and Services — 12,473 — 12,473 Maintenance Support and Training — — 68,788 68,788 Installation and Deployment — — 41,322 41,322 Consulting and Network Design — — 10,223 10,223 Total revenue by product line $ 696,976 $ 47,702 $ 120,333 $ 865,011 Timing of revenue recognition: Products and services at a point in time $ 696,976 $ 14,148 $ 5,575 $ 716,699 Services transferred over time — 33,554 114,758 148,312 Total revenue by timing of revenue recognition $ 696,976 $ 47,702 $ 120,333 $ 865,011 Six Months Ended April 30, 2019 Networking Platforms Software and Software-Related Services Global Services Total Product lines: Converged Packet Optical $ 1,172,835 $ — $ — $ 1,172,835 Packet Networking 144,707 — — 144,707 Platform Software and Services — 76,827 — 76,827 Blue Planet Automation Software and Services — 27,447 — 27,447 Maintenance Support and Training — — 130,065 130,065 Installation and Deployment — — 71,944 71,944 Consulting and Network Design — — 19,713 19,713 Total revenue by product line $ 1,317,542 $ 104,274 $ 221,722 $ 1,643,538 Timing of revenue recognition: Products and services at a point in time $ 1,317,542 $ 36,420 $ 9,141 $ 1,363,103 Services transferred over time — 67,854 212,581 280,435 Total revenue by timing of revenue recognition $ 1,317,542 $ 104,274 $ 221,722 $ 1,643,538 Quarter Ended April 30, 2019 Six Months Ended April 30, 2019 Geographic distribution: North America $ 576,093 $ 1,061,599 EMEA 114,993 244,183 CALA 39,399 70,374 APAC 134,526 267,382 Total revenue by geographic distribution $ 865,011 $ 1,643,538 |
Contract Balances | The following table provides information about receivables, contract assets and contract liabilities (deferred revenue) from contracts with customers (in thousands): Balance at April 30, 2019 Adjusted Balance at November 1, 2018 Accounts receivable, net $ 756,607 $ 799,011 Contract assets $ 74,439 $ 31,380 Deferred revenue $ 145,022 $ 140,704 |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
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 six months ended April 30, 2019 (in thousands): Workforce reduction Consolidation of excess facilities Total Balance at October 31, 2018 $ 2,108 $ 1,739 $ 3,847 Additional liability recorded 5,661 (1) 680 (2) 6,341 Cash payments (6,667 ) (847 ) (7,514 ) Balance at April 30, 2019 $ 1,102 $ 1,572 $ 2,674 Current restructuring liabilities $ 1,102 $ 347 $ 1,449 Non-current restructuring liabilities $ — $ 1,225 $ 1,225 (1) Reflects a global workforce reduction of approximately 95 employees during the six months ended April 30, 2019 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 the facilities for certain locations in the United States and India where Ciena has vacated unused space. The following table sets forth the restructuring activity and balance of the restructuring liability accounts for the six months ended April 30, 2018 (in thousands): Workforce reduction Consolidation of excess facilities Total Balance at October 31, 2017 $ 1,291 $ 1,648 $ 2,939 Additional liability recorded 8,232 (1) 2,088 (2) 10,320 Cash payments (8,211 ) (1,896 ) (10,107 ) Balance at April 30, 2018 $ 1,312 $ 1,840 $ 3,152 Current restructuring liabilities $ 1,312 $ 865 $ 2,177 Non-current restructuring liabilities $ — $ 975 $ 975 (1) Reflects a global workforce reduction of approximately 150 employees during fiscal 2018 as part of a business optimization strategy to improve gross margin, constrain operating expense and redesign certain business processes. (2) |
Interest and Other Income, Net
Interest and Other Income, Net (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Other Income and Expenses [Abstract] | |
Schedule of Interest and Other Income, Net | The components of interest and other income, net, are as follows (in thousands): Quarter Ended April 30, Six Months Ended April 30, 2019 2018 2019 2018 Interest income $ 3,519 $ 3,212 $ 7,391 $ 5,656 Gains (losses) on non-hedge designated foreign currency forward contracts (898 ) 2,868 (877 ) 2,169 Foreign currency exchange losses (2,995 ) (4,804 ) (2,212 ) (4,791 ) Other 130 20 (293 ) (163 ) Interest and other income (loss), net $ (244 ) $ 1,296 $ 4,009 $ 2,871 |
Short-Term and Long-Term Inve_2
Short-Term and Long-Term Investments (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
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): April 30, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. government obligations: Included in short-term investments $ 119,316 $ 47 $ (36 ) $ 119,327 $ 119,316 $ 47 $ (36 ) $ 119,327 October 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. government obligations: Included in short-term investments $ 139,365 $ — $ (347 ) $ 139,018 Included in long-term investments 59,029 — (59 ) 58,970 $ 198,394 $ — $ (406 ) $ 197,988 Commercial paper: Included in short-term investments $ 9,963 $ — $ — $ 9,963 $ 9,963 $ — $ — $ 9,963 |
Schedule of Legal Maturities of Debt Investments | The following table summarizes the final legal maturities of debt investments at April 30, 2019 (in thousands): Amortized Cost Estimated Fair Value Less than one year $ 119,316 $ 119,327 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
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): April 30, 2019 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 584,859 $ — $ — $ 584,859 U.S. government obligations — 119,327 — 119,327 Foreign currency forward contracts — 764 — 764 Total assets measured at fair value $ 584,859 $ 120,091 $ — $ 704,950 Liabilities: Foreign currency forward contracts $ — $ 3,630 $ — $ 3,630 Forward starting interest rate swap — 10,927 — 10,927 Contingent consideration — — 10,900 10,900 Total liabilities measured at fair value $ — $ 14,557 $ 10,900 $ 25,457 October 31, 2018 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 590,684 $ — $ — $ 590,684 U.S. government obligations — 197,988 — 197,988 Commercial paper — 69,888 — 69,888 Foreign currency forward contracts — 133 — 133 Forward starting interest rate swaps — 779 — 779 Total assets measured at fair value $ 590,684 $ 268,788 $ — $ 859,472 Liabilities: Foreign currency forward contracts $ — $ 3,231 $ — $ 3,231 Debt conversion liability — 164,212 — 164,212 Contingent consideration — — 10,900 10,900 Total liabilities measured at fair value $ — $ 167,443 $ 10,900 $ 178,343 |
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 Sheets as follows (in thousands): April 30, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 584,859 $ — $ — $ 584,859 Short-term investments — 119,327 — 119,327 Prepaid expenses and other — 764 — 764 Total assets measured at fair value $ 584,859 $ 120,091 $ — $ 704,950 Liabilities: Accrued liabilities $ — $ 3,630 $ 7,491 $ 11,121 Other long-term obligations — 10,927 3,409 14,336 Total liabilities measured at fair value $ — $ 14,557 $ 10,900 $ 25,457 October 31, 2018 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 590,684 $ 59,925 $ — $ 650,609 Short-term investments — 148,981 — 148,981 Prepaid expenses and other — 133 — 133 Long-term investments — 58,970 — 58,970 Other long-term assets — 779 — 779 Total assets measured at fair value $ 590,684 $ 268,788 $ — $ 859,472 Liabilities: Accrued liabilities $ — $ 3,231 $ — $ 3,231 Debt conversion liability — 164,212 — 164,212 Other long-term obligations — — 10,900 10,900 Total liabilities measured at fair value $ — $ 167,443 $ 10,900 $ 178,343 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | As of the dates indicated, inventories are comprised of the following (in thousands): April 30, October 31, Raw materials $ 90,317 $ 67,468 Work-in-process 11,986 9,589 Finished goods 205,440 188,575 Deferred cost of goods sold 100,637 48,057 408,380 313,689 Provision for excess and obsolescence (48,963 ) (50,938 ) $ 359,417 $ 262,751 |
Prepaid Expenses and Other (Tab
Prepaid Expenses and Other (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid expenses and other | As of the dates indicated, prepaid expenses and other are comprised of the following (in thousands): April 30, October 31, Prepaid VAT and other taxes $ 77,788 $ 82,518 Contract assets for unbilled accounts receivable 74,439 — Product demonstration equipment, net 39,323 37,623 Prepaid expenses 31,469 32,987 Other non-trade receivables 11,513 25,716 Capitalized commissions - short term 8,373 — Financing receivable — 626 Deferred deployment expense — 19,342 Derivative assets 764 133 $ 243,669 $ 198,945 |
Accrued Liabilities and Other_2
Accrued Liabilities and Other Short-Term Obligations (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
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): April 30, October 31, Compensation, payroll related tax and benefits (1) $ 94,235 $ 140,277 Warranty 44,907 44,740 Vacation (2) 21,648 42,507 Contingent consideration 7,491 — Capital lease obligations 3,011 3,547 Interest payable 1,000 1,072 Other 119,125 107,932 $ 291,417 $ 340,075 (1) Reduction is primarily due to the timing of bonus payments to employees under Ciena's annual cash incentive compensation plan. (2) |
Schedule of Accrued Warranties | The following table summarizes the activity in Ciena’s accrued warranty for the fiscal periods indicated (in thousands): Six Months Ended April 30, Beginning Balance Current Period Provisions Settlements Ending Balance 2018 $ 42,456 10,565 (9,629 ) $ 43,392 2019 $ 44,740 9,276 (9,109 ) $ 44,907 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
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”), net of tax, for the six months ended April 30, 2019 : Unrealized Unrealized Loss on Unrealized Loss on Cumulative Loss on Available-for-sale Securities Foreign Currency Forward Contracts Forward Starting Interest Rate Swaps Foreign Currency Translation Adjustment Total Balance at October 31, 2018 $ (425 ) $ (3,060 ) $ 6,417 $ (8,712 ) $ (5,780 ) Other comprehensive income (loss) before reclassifications 413 (1,613 ) (10,013 ) (3,846 ) (15,059 ) Amounts reclassified from AOCI — 2,317 (684 ) — 1,633 Balance at April 30, 2019 $ (12 ) $ (2,356 ) $ (4,280 ) $ (12,558 ) $ (19,206 ) The following table summarizes the changes in AOCI, net of tax, for the six months ended April 30, 2018 : Unrealized Unrealized Loss on Unrealized Gain on Cumulative Loss on Available-for-sale Securities Foreign Currency Forward Contracts Forward Starting Interest Rate Swaps Foreign Currency Translation Adjustment Total Balance at October 31, 2017 $ (451 ) $ (1,386 ) $ 218 $ (9,398 ) $ (11,017 ) Other comprehensive income (loss) before reclassifications (337 ) (440 ) 4,725 1,069 5,017 Amounts reclassified from AOCI — 405 523 — 928 Balance at April 30, 2018 $ (788 ) $ (1,421 ) $ 5,466 $ (8,329 ) $ (5,072 ) |
Short-Term and Long-Term Debt (
Short-Term and Long-Term Debt (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Convertible Notes | The net carrying value of Ciena’s Term Loan due September 28, 2025 (the “2025 Term Loan”) was comprised of the following for the fiscal periods indicated (in thousands): April 30, 2019 October 31, 2018 Term Loan Payable due September 28, 2025 $ 690,429 $ 693,450 |
Schedule of Debt Details | The principal balance, unamortized debt discount, deferred debt issuance costs, net carrying value and fair value of the 2025 Term Loan were as follows as of April 30, 2019 (in thousands): Principal Balance Unamortized Debt Discount Deferred Debt Issuance Costs Net Carrying Value Fair Value (1) Term Loan Payable due September 28, 2025 $ 696,500 $ (2,129 ) $ (3,942 ) $ 690,429 $ 696,500 (1) The 2025 Term Loan is categorized as Level 2 in the fair value hierarchy. Ciena estimated the fair value of the 2025 Term Loan using a market approach based upon observable inputs, such as current market transactions involving comparable securities. |
Earnings Per Share Calculation
Earnings Per Share Calculation (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
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 stock unit awards; and (iii) shares issuable under Ciena’s employee stock purchase plan and upon exercise of outstanding stock options, using the treasury stock method. Quarter Ended April 30, Six Months Ended April 30, Numerator 2019 2018 2019 2018 Net income (loss) $ 52,738 $ 13,856 $ 86,354 $ (459,507 ) Quarter Ended April 30, Six Months Ended April 30, Denominator 2019 2018 2019 2018 Basic weighted average shares outstanding 156,170 143,975 156,244 143,948 Add: Shares underlying outstanding stock options and stock unit awards and issuable under employee stock purchase plan 2,119 1,345 1,967 — Add: Shares underlying 3.75% Convertible Senior Notes due 2018 (New) — 2,653 — — Dilutive weighted average shares outstanding 158,289 147,973 158,211 143,948 Quarter Ended April 30, Six Months Ended April 30, EPS 2019 2018 2019 2018 Basic EPS $ 0.34 $ 0.10 $ 0.55 $ (3.19 ) Diluted EPS $ 0.33 $ 0.09 $ 0.55 $ (3.19 ) |
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 April 30, Six Months Ended April 30, 2019 2018 2019 2018 Shares underlying stock options and stock unit awards 283 304 257 2,496 3.75% Convertible Senior Notes due October 15, 2018 (Original) — 3,038 — 3,038 3.75% Convertible Senior Notes due October 15, 2018 (New) — — — 1,672 4.0% Convertible Senior Notes due December 15, 2020 — 9,198 — 9,198 Total shares excluded due to anti-dilutive effect 283 12,540 257 16,404 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
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, 2018 — $ — $ — Repurchase of common stock under the stock repurchase program 1,752,525 37.97 66,544 Cumulative balance at April 30, 2019 1,752,525 $ 37.97 $ 66,544 |
Share-Based Compensation Expe_2
Share-Based Compensation Expense (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-Based Compensation Expense | The following table summarizes share-based compensation expense for the periods indicated (in thousands): Quarter Ended April 30, Six Months Ended April 30, 2019 2018 2019 2018 Product costs $ 702 $ 824 $ 1,339 $ 1,496 Service costs 907 722 1,677 1,346 Share-based compensation expense included in cost of sales 1,609 1,546 3,016 2,842 Research and development 4,083 3,796 7,474 7,052 Sales and marketing 4,346 3,760 8,131 7,088 General and administrative 5,491 5,109 10,603 9,583 Share-based compensation expense included in operating expense 13,920 12,665 26,208 23,723 Share-based compensation expense capitalized in inventory, net 78 (45 ) 138 (6 ) Total share-based compensation $ 15,607 $ 14,166 $ 29,362 $ 26,559 |
Segments and Entity-Wide Disc_2
Segments and Entity-Wide Disclosures (Tables) | 6 Months Ended |
Apr. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Revenue | The table below (in thousands) sets forth Ciena’s segment revenue for the respective periods: Quarter Ended April 30, Six Months Ended April 30, 2019 2018 2019 2018 Revenue: Networking Platforms Converged Packet Optical $ 623,838 $ 527,867 $ 1,172,835 $ 955,297 Packet Networking 73,138 63,815 144,707 132,418 Total Networking Platforms 696,976 591,682 1,317,542 1,087,715 Software and Software-Related Services Platform Software and Services 35,229 36,393 76,827 80,529 Blue Planet Automation Software and Services 12,473 2,352 27,447 11,703 Total Software and Software-Related Services 47,702 38,745 104,274 92,232 Global Services Maintenance Support and Training 68,788 60,904 130,065 116,862 Installation and Deployment 41,322 28,209 71,944 58,225 Consulting and Network Design 10,223 10,438 19,713 21,079 Total Global Services 120,333 99,551 221,722 196,166 Consolidated revenue $ 865,011 $ 729,978 $ 1,643,538 $ 1,376,113 |
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 April 30, Six Months Ended April 30, 2019 2018 2019 2018 Segment profit: Networking Platforms $ 175,191 $ 126,823 $ 311,782 $ 215,392 Software and Software-Related Services 6,536 8,276 24,952 31,911 Global Services 54,981 41,284 94,682 82,321 Total segment profit 236,708 176,383 431,416 329,624 Less: Non-performance operating expenses Selling and marketing 103,502 97,359 201,615 185,874 General and administrative 42,154 38,976 81,397 77,382 Amortization of intangible assets 5,529 3,623 11,057 7,246 Significant asset impairments and restructuring costs 4,068 4,359 6,341 10,320 Acquisition and integration costs 1,135 — 2,743 — Add: Other non-performance financial items Interest expense and other income (loss), net (9,715 ) (11,735 ) (14,903 ) (23,894 ) Less: Provision for income taxes 17,867 6,475 27,006 484,415 Consolidated net income (loss) $ 52,738 $ 13,856 $ 86,354 $ (459,507 ) |
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, net, was as follows (in thousands): April 30, October 31, Canada $ 196,069 $ 198,028 United States 67,633 75,479 Other International 18,320 18,560 Total $ 282,022 $ 292,067 |
Schedule of Revenue by Major Customers by Reporting Segments | For the periods below, AT&T, Verizon 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 April 30, Six Months Ended April 30, 2019 2018 2019 2018 AT&T $ 108,416 $ 85,419 $ 202,587 $ 176,065 Verizon 106,350 n/a 195,125 n/a Web-scale provider n/a n/a 174,853 n/a Total $ 214,766 $ 85,419 $ 572,565 $ 176,065 n/a Denotes revenue representing less than 10% of total revenue for the period |
Significant Accounting Polici_4
Significant Accounting Policies - Impact of Adopting ASC 606 on Condensed Consolidated Statement of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ 865,011 | $ 729,978 | $ 1,643,538 | $ 1,376,113 |
Total cost of goods sold | 490,334 | 436,671 | 945,520 | 811,041 |
Net income (loss) | $ 52,738 | $ 13,856 | $ 86,354 | $ (459,507) |
Diluted net income (loss) per potential common share (in dollars per share) | $ 0.33 | $ 0.09 | $ 0.55 | $ (3.19) |
Adjustments | Accounting Standards Update 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ (14,219) | $ (25,119) | ||
Total cost of goods sold | (13,436) | (22,565) | ||
Net income (loss) | $ (467) | $ (862) | ||
Diluted net income (loss) per potential common share (in dollars per share) | $ 0 | $ (0.01) | ||
Balances without adoption of ASC 606 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ 850,792 | $ 1,618,419 | ||
Total cost of goods sold | 476,898 | 922,955 | ||
Net income (loss) | $ 52,271 | $ 85,492 | ||
Diluted net income (loss) per potential common share (in dollars per share) | $ 0.33 | $ 0.54 |
Significant Accounting Polici_5
Significant Accounting Policies - Cumulative Effect of the Changes Made to Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Apr. 30, 2019 | Nov. 01, 2018 | Oct. 31, 2018 |
ASSETS: | |||
Accounts receivable, net | $ 756,607 | $ 786,502 | |
Accounts receivable, net | 756,607 | $ 799,011 | |
Inventories | 359,417 | 260,265 | 262,751 |
Prepaid expenses and other | 243,669 | 220,415 | 198,945 |
Deferred tax asset, net | 715,968 | 730,600 | 745,039 |
Other long-term assets | 82,938 | 75,650 | 71,652 |
Total assets | 3,686,778 | 3,777,575 | 3,756,523 |
LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||
Deferred revenue | 104,030 | 96,731 | 111,134 |
Long-term deferred revenue | 40,992 | 43,973 | 58,323 |
Accumulated deficit | (4,811,493) | (4,897,847) | (4,947,652) |
Total liabilities and stockholders’ equity | 3,686,778 | 3,777,575 | 3,756,523 |
Capitalized Contract Acquisition Costs | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||
Capitalized acquisition costs, short term | $ 8,373 | $ 0 | |
Adjustments | Accounting Standards Update 2014-09 | |||
ASSETS: | |||
Accounts receivable, net | 12,509 | ||
Inventories | (2,486) | ||
Prepaid expenses and other | 21,470 | ||
Deferred tax asset, net | (14,439) | ||
Other long-term assets | 3,998 | ||
Total assets | 21,052 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||
Deferred revenue | (14,403) | ||
Long-term deferred revenue | (14,350) | ||
Accumulated deficit | 49,805 | ||
Total liabilities and stockholders’ equity | 21,052 | ||
Adjustments | Multiple Element Software Arrangements | Accounting Standards Update 2014-09 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||
Deferred revenue | (23,600) | ||
Long-term deferred revenue | (18,600) | ||
Adjustments | Product Sales Other Than Multiple Element Software Arrangements | Accounting Standards Update 2014-09 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||
Deferred revenue | (1,700) | ||
Adjustments | Maintenance Services Other Than Multiple Element Software Arrangements | Accounting Standards Update 2014-09 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||
Deferred revenue | 2,700 | ||
Adjustments | Products and Services With Unpaid Invoices | Accounting Standards Update 2014-09 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||
Deferred revenue | 8,200 | ||
Long-term deferred revenue | 4,300 | ||
Adjustments | Unbilled Accounts Receivable, Installation Services | Accounting Standards Update 2014-09 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||
Capitalized acquisition costs, short term | 27,500 | ||
Adjustments | Unbilled Accounts Receivable, Products | Accounting Standards Update 2014-09 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||
Capitalized acquisition costs, short term | 3,900 | ||
Adjustments | Capitalized Contract Acquisition Costs | Accounting Standards Update 2014-09 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||
Capitalized acquisition costs, short term | 9,600 | ||
Capitalized acquisition costs, long term | 4,000 | ||
Adjustments | Prepaid Costs of Installation Services | Accounting Standards Update 2014-09 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||
Capitalized acquisition costs, short term | $ (19,500) |
Revenue - Disaggregation of R
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 865,011 | $ 729,978 | $ 1,643,538 | $ 1,376,113 |
Products and services at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 716,699 | 1,363,103 | ||
Services transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 148,312 | 280,435 | ||
Converged Packet Optical | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 623,838 | 1,172,835 | ||
Packet Networking | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 73,138 | 144,707 | ||
Platform Software and Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 35,229 | 76,827 | ||
Blue Planet Automation Software and Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 12,473 | 27,447 | ||
Maintenance Support and Training | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 68,788 | 130,065 | ||
Installation and Deployment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 41,322 | 71,944 | ||
Consulting and Network Design | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 10,223 | 19,713 | ||
Networking Platforms | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 696,976 | 591,682 | 1,317,542 | 1,087,715 |
Networking Platforms | Operating Segments | Products and services at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 696,976 | 1,317,542 | ||
Networking Platforms | Operating Segments | Services transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | ||
Networking Platforms | Operating Segments | Converged Packet Optical | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 623,838 | 527,867 | 1,172,835 | 955,297 |
Networking Platforms | Operating Segments | Packet Networking | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 73,138 | 63,815 | 144,707 | 132,418 |
Networking Platforms | Operating Segments | Platform Software and Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | ||
Networking Platforms | Operating Segments | Blue Planet Automation Software and Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | ||
Networking Platforms | Operating Segments | Maintenance Support and Training | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | ||
Networking Platforms | Operating Segments | Installation and Deployment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | ||
Networking Platforms | Operating Segments | Consulting and Network Design | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | ||
Software and Software-Related Services | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 47,702 | 38,745 | 104,274 | 92,232 |
Software and Software-Related Services | Operating Segments | Products and services at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 14,148 | 36,420 | ||
Software and Software-Related Services | Operating Segments | Services transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 33,554 | 67,854 | ||
Software and Software-Related Services | Operating Segments | Converged Packet Optical | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | ||
Software and Software-Related Services | Operating Segments | Packet Networking | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | ||
Software and Software-Related Services | Operating Segments | Platform Software and Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 35,229 | 36,393 | 76,827 | 80,529 |
Software and Software-Related Services | Operating Segments | Blue Planet Automation Software and Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 12,473 | 2,352 | 27,447 | 11,703 |
Software and Software-Related Services | Operating Segments | Maintenance Support and Training | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | ||
Software and Software-Related Services | Operating Segments | Installation and Deployment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | ||
Software and Software-Related Services | Operating Segments | Consulting and Network Design | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | ||
Global Services | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 120,333 | 99,551 | 221,722 | 196,166 |
Global Services | Operating Segments | Products and services at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 5,575 | 9,141 | ||
Global Services | Operating Segments | Services transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 114,758 | 212,581 | ||
Global Services | Operating Segments | Converged Packet Optical | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | ||
Global Services | Operating Segments | Packet Networking | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | ||
Global Services | Operating Segments | Platform Software and Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | ||
Global Services | Operating Segments | Blue Planet Automation Software and Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | ||
Global Services | Operating Segments | Maintenance Support and Training | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 68,788 | 60,904 | 130,065 | 116,862 |
Global Services | Operating Segments | Installation and Deployment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 41,322 | 28,209 | 71,944 | 58,225 |
Global Services | Operating Segments | Consulting and Network Design | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 10,223 | $ 10,438 | $ 19,713 | $ 21,079 |
Revenue - Geographical Distribu
Revenue - Geographical Distribution of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 865,011 | $ 729,978 | $ 1,643,538 | $ 1,376,113 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 576,093 | 1,061,599 | ||
EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 114,993 | 244,183 | ||
CALA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 39,399 | 70,374 | ||
APAC | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 134,526 | $ 267,382 |
Revenue - Contract Balances (D
Revenue - Contract Balances (Details) - USD ($) $ in Thousands | Apr. 30, 2019 | Nov. 01, 2018 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable, net | $ 756,607 | $ 799,011 |
Contract assets | 74,439 | 31,380 |
Deferred revenue | $ 145,022 | $ 140,704 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Apr. 30, 2019 | Oct. 31, 2018 | |
Capitalized Contract Cost [Line Items] | ||
Revenue recognized that was previously deferred | $ 73 | |
Remaining performance obligations | $ 1,280 | |
Percentage of remaining performance obligation expected to be recognized within next twelve months | 83.00% | |
Capitalized Contract Acquisition Costs | ||
Capitalized Contract Cost [Line Items] | ||
Capitalized contract acquisition costs | $ 12.2 | $ 13.6 |
Amortization of capitalized contract acquisition costs | $ 8.4 |
Restructuring Costs (Details)
Restructuring Costs (Details) $ in Thousands | 6 Months Ended | |
Apr. 30, 2019USD ($)employee | Apr. 30, 2018USD ($)employee | |
Activity and balance of the restructuring liability accounts | ||
Balance at beginning of period | $ 3,847 | $ 2,939 |
Additional liability recorded | 6,341 | 10,320 |
Cash payments | (7,514) | (10,107) |
Balance at end of period | 2,674 | 3,152 |
Current restructuring liabilities | 1,449 | 2,177 |
Non-current restructuring liabilities | 1,225 | 975 |
Workforce reduction | ||
Activity and balance of the restructuring liability accounts | ||
Balance at beginning of period | 2,108 | 1,291 |
Additional liability recorded | 5,661 | 8,232 |
Cash payments | (6,667) | (8,211) |
Balance at end of period | 1,102 | 1,312 |
Current restructuring liabilities | 1,102 | 1,312 |
Non-current restructuring liabilities | $ 0 | $ 0 |
Number of employee reduction | employee | 95 | 150 |
Consolidation of excess facilities | ||
Activity and balance of the restructuring liability accounts | ||
Balance at beginning of period | $ 1,739 | $ 1,648 |
Additional liability recorded | 680 | 2,088 |
Cash payments | (847) | (1,896) |
Balance at end of period | 1,572 | 1,840 |
Current restructuring liabilities | 347 | 865 |
Non-current restructuring liabilities | $ 1,225 | $ 975 |
Interest and Other Income, Ne_2
Interest and Other Income, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Other Income and Expenses [Abstract] | ||||
Interest income | $ 3,519 | $ 3,212 | $ 7,391 | $ 5,656 |
Gains (losses) on non-hedge designated foreign currency forward contracts | (898) | 2,868 | (877) | 2,169 |
Foreign currency exchange losses | (2,995) | (4,804) | (2,212) | (4,791) |
Other | 130 | 20 | (293) | (163) |
Interest and other income (loss), net | $ (244) | $ 1,296 | $ 4,009 | $ 2,871 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | 12 Months Ended |
Oct. 31, 2018USD ($) | |
Income Tax Disclosure [Abstract] | |
Provisional tax expense | $ 472.8 |
Short-Term and Long-Term Inve_3
Short-Term and Long-Term Investments (Details) - USD ($) $ in Thousands | Apr. 30, 2019 | Oct. 31, 2018 |
U.S. government obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 119,316 | $ 198,394 |
Gross Unrealized Gains | 47 | 0 |
Gross Unrealized Losses | (36) | (406) |
Estimated Fair Value | 119,327 | 197,988 |
U.S. government obligations | Included in short-term investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 119,316 | 139,365 |
Gross Unrealized Gains | 47 | 0 |
Gross Unrealized Losses | (36) | (347) |
Estimated Fair Value | $ 119,327 | 139,018 |
U.S. government obligations | Included in long-term investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 59,029 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (59) | |
Estimated Fair Value | 58,970 | |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 9,963 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Estimated Fair Value | 9,963 | |
Commercial paper | Included in short-term investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 9,963 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Estimated Fair Value | $ 9,963 |
Short-Term and Long-Term Inve_4
Short-Term and Long-Term Investments - Legal Maturities of Debt Investments (Details) $ in Thousands | Apr. 30, 2019USD ($) |
Amortized Cost | |
Less than one year | $ 119,316 |
Estimated Fair Value | |
Less than one year | $ 119,327 |
- Fair Value Measurements (Deta
- Fair Value Measurements (Details) - USD ($) $ in Thousands | Apr. 30, 2019 | Oct. 31, 2018 |
Liabilities: | ||
Debt conversion liability | $ 0 | $ 164,212 |
Fair value, Measurements, Recurring | ||
Assets: | ||
Money market funds | 584,859 | 590,684 |
U.S. government obligations | 119,327 | 197,988 |
Commercial paper | 69,888 | |
Total assets measured at fair value | 704,950 | 859,472 |
Liabilities: | ||
Debt conversion liability | 164,212 | |
Contingent consideration | 10,900 | 10,900 |
Total liabilities measured at fair value | 25,457 | 178,343 |
Fair value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Money market funds | 584,859 | 590,684 |
U.S. government obligations | 0 | 0 |
Commercial paper | 0 | |
Total assets measured at fair value | 584,859 | 590,684 |
Liabilities: | ||
Debt conversion liability | 0 | |
Contingent consideration | 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 | 119,327 | 197,988 |
Commercial paper | 69,888 | |
Total assets measured at fair value | 120,091 | 268,788 |
Liabilities: | ||
Debt conversion liability | 164,212 | |
Contingent consideration | 0 | 0 |
Total liabilities measured at fair value | 14,557 | 167,443 |
Fair value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Money market funds | 0 | 0 |
U.S. government obligations | 0 | 0 |
Commercial paper | 0 | |
Total assets measured at fair value | 0 | 0 |
Liabilities: | ||
Debt conversion liability | 0 | |
Contingent consideration | 10,900 | 10,900 |
Total liabilities measured at fair value | 10,900 | 10,900 |
Foreign Currency Forward Contracts | Fair value, Measurements, Recurring | ||
Assets: | ||
Derivative asset | 764 | 133 |
Liabilities: | ||
Derivative liability | 3,630 | 3,231 |
Foreign Currency Forward Contracts | Fair value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Derivative asset | 0 | 0 |
Liabilities: | ||
Derivative liability | 0 | 0 |
Foreign Currency Forward Contracts | Fair value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Derivative asset | 764 | 133 |
Liabilities: | ||
Derivative liability | 3,630 | 3,231 |
Foreign Currency Forward Contracts | Fair value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Derivative asset | 0 | 0 |
Liabilities: | ||
Derivative liability | 0 | 0 |
Forward Starting Interest Rate Swaps | Fair value, Measurements, Recurring | ||
Assets: | ||
Derivative asset | 779 | |
Liabilities: | ||
Derivative liability | 10,927 | |
Forward Starting Interest Rate Swaps | Fair value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Derivative asset | 0 | |
Liabilities: | ||
Derivative liability | 0 | |
Forward Starting Interest Rate Swaps | Fair value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Derivative asset | 779 | |
Liabilities: | ||
Derivative liability | 10,927 | |
Forward Starting Interest Rate Swaps | Fair value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Derivative asset | $ 0 | |
Liabilities: | ||
Derivative liability | $ 0 |
Fair Value Measurements - Conde
Fair Value Measurements - Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2018 | Apr. 30, 2019 | |
Liabilities: | ||
Debt conversion liability | $ 164,212 | $ 0 |
Fair value, Measurements, Recurring | ||
Assets: | ||
Total assets measured at fair value | 859,472 | 704,950 |
Liabilities: | ||
Debt conversion liability | 164,212 | |
Total liabilities measured at fair value | 178,343 | 25,457 |
Fair value, Measurements, Recurring | Cash equivalents | ||
Assets: | ||
Cash equivalents | 650,609 | 584,859 |
Fair value, Measurements, Recurring | Short-term investments | ||
Assets: | ||
Short-term investments | 148,981 | 119,327 |
Fair value, Measurements, Recurring | Prepaid expenses and other | ||
Assets: | ||
Prepaid expenses and other | 133 | 764 |
Fair value, Measurements, Recurring | Long-term investments | ||
Assets: | ||
Long-term investments | 58,970 | |
Fair value, Measurements, Recurring | Other long-term assets | ||
Assets: | ||
Other long-term assets | 779 | |
Fair value, Measurements, Recurring | Accrued liabilities | ||
Liabilities: | ||
Accrued liabilities | 3,231 | 11,121 |
Fair value, Measurements, Recurring | Debt conversion liability | ||
Liabilities: | ||
Debt conversion liability | 164,212 | |
Fair value, Measurements, Recurring | Other long-term obligations | ||
Liabilities: | ||
Other long-term obligations | 10,900 | 14,336 |
Fair value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Total assets measured at fair value | 590,684 | 584,859 |
Liabilities: | ||
Debt conversion liability | 0 | |
Total liabilities measured at fair value | 0 | 0 |
Fair value, Measurements, Recurring | Level 1 | Cash equivalents | ||
Assets: | ||
Cash equivalents | 590,684 | 584,859 |
Fair value, Measurements, Recurring | Level 1 | Short-term investments | ||
Assets: | ||
Short-term investments | 0 | 0 |
Fair value, Measurements, Recurring | Level 1 | Prepaid expenses and other | ||
Assets: | ||
Prepaid expenses and other | 0 | 0 |
Fair value, Measurements, Recurring | Level 1 | Long-term investments | ||
Assets: | ||
Long-term investments | 0 | |
Fair value, Measurements, Recurring | Level 1 | Other long-term assets | ||
Assets: | ||
Other long-term assets | 0 | |
Fair value, Measurements, Recurring | Level 1 | Accrued liabilities | ||
Liabilities: | ||
Accrued liabilities | 0 | 0 |
Fair value, Measurements, Recurring | Level 1 | Debt conversion liability | ||
Liabilities: | ||
Debt conversion liability | 0 | |
Fair value, Measurements, Recurring | Level 1 | Other long-term obligations | ||
Liabilities: | ||
Other long-term obligations | 0 | 0 |
Fair value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Total assets measured at fair value | 268,788 | 120,091 |
Liabilities: | ||
Debt conversion liability | 164,212 | |
Total liabilities measured at fair value | 167,443 | 14,557 |
Fair value, Measurements, Recurring | Level 2 | Cash equivalents | ||
Assets: | ||
Cash equivalents | 59,925 | 0 |
Fair value, Measurements, Recurring | Level 2 | Short-term investments | ||
Assets: | ||
Short-term investments | 148,981 | 119,327 |
Fair value, Measurements, Recurring | Level 2 | Prepaid expenses and other | ||
Assets: | ||
Prepaid expenses and other | 133 | 764 |
Fair value, Measurements, Recurring | Level 2 | Long-term investments | ||
Assets: | ||
Long-term investments | 58,970 | |
Fair value, Measurements, Recurring | Level 2 | Other long-term assets | ||
Assets: | ||
Other long-term assets | 779 | |
Fair value, Measurements, Recurring | Level 2 | Accrued liabilities | ||
Liabilities: | ||
Accrued liabilities | 3,231 | 3,630 |
Fair value, Measurements, Recurring | Level 2 | Debt conversion liability | ||
Liabilities: | ||
Debt conversion liability | 164,212 | |
Fair value, Measurements, Recurring | Level 2 | Other long-term obligations | ||
Liabilities: | ||
Other long-term obligations | 0 | 10,927 |
Fair value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Total assets measured at fair value | 0 | 0 |
Liabilities: | ||
Debt conversion liability | 0 | |
Total liabilities measured at fair value | 10,900 | 10,900 |
Fair value, Measurements, Recurring | Level 3 | Cash equivalents | ||
Assets: | ||
Cash equivalents | 0 | 0 |
Fair value, Measurements, Recurring | Level 3 | Short-term investments | ||
Assets: | ||
Short-term investments | 0 | 0 |
Fair value, Measurements, Recurring | Level 3 | Prepaid expenses and other | ||
Assets: | ||
Prepaid expenses and other | 0 | 0 |
Fair value, Measurements, Recurring | Level 3 | Long-term investments | ||
Assets: | ||
Long-term investments | 0 | |
Fair value, Measurements, Recurring | Level 3 | Other long-term assets | ||
Assets: | ||
Other long-term assets | 0 | |
Fair value, Measurements, Recurring | Level 3 | Accrued liabilities | ||
Liabilities: | ||
Accrued liabilities | 0 | 7,491 |
Fair value, Measurements, Recurring | Level 3 | Debt conversion liability | ||
Liabilities: | ||
Debt conversion liability | 0 | |
Fair value, Measurements, Recurring | Level 3 | Other long-term obligations | ||
Liabilities: | ||
Other long-term obligations | $ 10,900 | $ 3,409 |
DonRiver | ||
Liabilities: | ||
Contingent consideration term | 3 years |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Apr. 30, 2019 | Apr. 30, 2018 | Nov. 01, 2018 | Oct. 31, 2018 | |
Inventory Disclosure [Abstract] | ||||
Raw materials | $ 90,317 | $ 67,468 | ||
Work-in-process | 11,986 | 9,589 | ||
Finished goods | 205,440 | 188,575 | ||
Deferred cost of goods sold | 100,637 | 48,057 | ||
Inventories before provision | 408,380 | 313,689 | ||
Provision for excess and obsolescence | (48,963) | (50,938) | ||
Total inventories | 359,417 | $ 260,265 | $ 262,751 | |
Provisions | $ 10,245 | $ 14,977 |
Prepaid Expenses and Other (Det
Prepaid Expenses and Other (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Apr. 30, 2019 | Apr. 30, 2018 | Nov. 01, 2018 | Oct. 31, 2018 | |
Capitalized Contract Cost [Line Items] | ||||
Prepaid VAT and other taxes | $ 77,788 | $ 82,518 | ||
Product demonstration equipment, net | 39,323 | 37,623 | ||
Prepaid expenses | 31,469 | 32,987 | ||
Other non-trade receivables | 11,513 | 25,716 | ||
Financing receivable | 0 | 626 | ||
Deferred deployment expense | 0 | 19,342 | ||
Derivative assets | 764 | 133 | ||
Prepaid expenses and other | 243,669 | $ 220,415 | 198,945 | |
Depreciation of product demonstration equipment | 4,300 | $ 4,600 | ||
Contract assets for unbilled accounts receivable | ||||
Capitalized Contract Cost [Line Items] | ||||
Contract assets | 74,439 | 0 | ||
Capitalized commissions - short term | ||||
Capitalized Contract Cost [Line Items] | ||||
Contract assets | $ 8,373 | $ 0 |
Accrued Liabilities and Other_3
Accrued Liabilities and Other Short-Term Obligations (Details) - USD ($) $ in Thousands | Apr. 30, 2019 | Oct. 31, 2018 | Apr. 30, 2018 | Oct. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||||
Compensation, payroll related tax and benefits | $ 94,235 | $ 140,277 | ||
Warranty | 44,907 | 44,740 | $ 43,392 | $ 42,456 |
Vacation | 21,648 | 42,507 | ||
Contingent consideration | 7,491 | 0 | ||
Capital lease obligations | 3,011 | 3,547 | ||
Interest payable | 1,000 | 1,072 | ||
Other | 119,125 | 107,932 | ||
Total accrued liabilities and other short-term obligations | $ 291,417 | $ 340,075 |
Accrued Liabilities and Other_4
Accrued Liabilities and Other Short-Term Obligations - Accrued Warranty (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning Balance | $ 44,740 | $ 42,456 |
Current Period Provisions | 9,276 | 10,565 |
Settlements | (9,109) | (9,629) |
Ending Balance | $ 44,907 | $ 43,392 |
Accrued Liabilities and Other_5
Accrued Liabilities and Other Short-Term Obligations - Narrative (Details) - USD ($) shares in Millions | Nov. 15, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | Oct. 31, 2018 | Aug. 30, 2018 |
Debt Instrument [Line Items] | |||||
Debt conversion liability | $ 0 | $ 164,212,000 | |||
Payment for debt conversion liability | $ 111,268,000 | $ 0 | |||
3.75% Convertible Senior Notes due October 15, 2018 (New) | |||||
Debt Instrument [Line Items] | |||||
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] | |||||
Interest rate on convertible notes (as a percent) | 3.75% | ||||
Maximum cash settlement | $ 400,000,000 | ||||
Debt conversion liability | $ 164,200,000 | ||||
Payment for debt conversion liability | $ 111,300,000 | ||||
Shares issued for debt conversion liability (in shares) | 1.6 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Millions | 6 Months Ended | |
Apr. 30, 2019 | Oct. 31, 2018 | |
Foreign Currency Forward Contracts | Designated as hedging instrument | Cash flow hedging | ||
Derivative [Line Items] | ||
Derivative asset, notional amount | $ 146.1 | $ 163.2 |
Derivative maturity (in months) | 24 months | |
Foreign Currency Forward Contracts | Not designated as hedging instrument | ||
Derivative [Line Items] | ||
Derivative asset, notional amount | $ 164.8 | 162.6 |
Derivative maturity (in months) | 12 months | |
Forward Starting Interest Rate Swaps | Designated as hedging instrument | Cash flow hedging | Secured debt | 2025 Term Loan | ||
Derivative [Line Items] | ||
Derivative asset, notional amount | $ 350 | $ 350 |
Derivative, fixed interest rate | 2.957% |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income - beginning balance | $ 1,929,334 | |
Other comprehensive income (loss) before reclassifications | (15,059) | $ 5,017 |
Amounts reclassified from AOCI | 1,633 | 928 |
Accumulated other comprehensive income - ending balance | 2,063,199 | |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income - beginning balance | (5,780) | (11,017) |
Accumulated other comprehensive income - ending balance | (19,206) | (5,072) |
Unrealized Loss on Available-for-sale Securities | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income - beginning balance | (425) | (451) |
Other comprehensive income (loss) before reclassifications | 413 | (337) |
Amounts reclassified from AOCI | 0 | 0 |
Accumulated other comprehensive income - ending balance | (12) | (788) |
Unrealized Gain (Loss) Derivatives | Foreign Currency Forward Contracts | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income - beginning balance | (3,060) | (1,386) |
Other comprehensive income (loss) before reclassifications | (1,613) | (440) |
Amounts reclassified from AOCI | 2,317 | 405 |
Accumulated other comprehensive income - ending balance | (2,356) | (1,421) |
Unrealized Gain (Loss) Derivatives | Forward Starting Interest Rate Swaps | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income - beginning balance | 6,417 | 218 |
Other comprehensive income (loss) before reclassifications | (10,013) | 4,725 |
Amounts reclassified from AOCI | (684) | 523 |
Accumulated other comprehensive income - ending balance | (4,280) | 5,466 |
Cumulative Foreign Currency Translation Adjustment | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income - beginning balance | (8,712) | (9,398) |
Other comprehensive income (loss) before reclassifications | (3,846) | 1,069 |
Amounts reclassified from AOCI | 0 | 0 |
Accumulated other comprehensive income - ending balance | $ (12,558) | $ (8,329) |
Short-Term and Long-Term Debt -
Short-Term and Long-Term Debt - Carrying Value of Debt (Details) - USD ($) $ in Thousands | Apr. 30, 2019 | Oct. 31, 2018 |
Secured debt | 2025 Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 690,429 | $ 693,450 |
Short-Term and Long-Term Debt_2
Short-Term and Long-Term Debt (Details) - Secured debt - 2025 Term Loan - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 30, 2019 | Oct. 31, 2018 | |
Debt Instrument [Line Items] | ||
Debt issuance costs, net | $ 3,942 | $ 4,300 |
Amortization of debt issuance costs included in interest expense | $ 300 |
Short-Term and Long-Term Debt_3
Short-Term and Long-Term Debt - Debt Components (Details) - Secured debt - 2025 Term Loan - USD ($) $ in Thousands | Apr. 30, 2019 | Oct. 31, 2018 |
Debt Instrument [Line Items] | ||
Principal Balance | $ 696,500 | |
Unamortized Debt Discount | (2,129) | |
Deferred Debt Issuance Costs | (3,942) | $ (4,300) |
Net Carrying Value | 690,429 | $ 693,450 |
Fair Value | $ 696,500 |
Earnings Per Share Calculatio_2
Earnings Per Share Calculation - Earnings Per Share Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Numerator | ||||
Net income (loss) | $ 52,738 | $ 13,856 | $ 86,354 | $ (459,507) |
Denominator | ||||
Basic weighted average shares outstanding (in shares) | 156,170 | 143,975 | 156,244 | 143,948 |
Add: Shares underlying outstanding stock options and restricted stock units and issuable under employee stock purchase plan (in shares) | 2,119 | 1,345 | 1,967 | 0 |
Dilutive weighted average shares outstanding (in shares) | 158,289 | 147,973 | 158,211 | 143,948 |
EPS | ||||
Basic EPS (in dollars per share) | $ 0.34 | $ 0.10 | $ 0.55 | $ (3.19) |
Diluted EPS (in dollars per share) | $ 0.33 | $ 0.09 | $ 0.55 | $ (3.19) |
3.75% Convertible Senior Notes due October 15, 2018 (New) | ||||
Denominator | ||||
Add: Shares underlying 3.75% Convertible Senior Notes due 2018 (New) (in shares) | 0 | 2,653 | 0 | 0 |
Earnings Per Share Calculatio_3
Earnings Per Share Calculation - Antidilutive Securities Excluded (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | Oct. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Total excluded due to anti-dilutive effect (in shares) | 283 | 12,540 | 257 | 16,404 | |
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% 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% | ||||
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% | ||||
Shares underlying stock options and stock unit awards | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Total excluded due to anti-dilutive effect (in shares) | 283 | 304 | 257 | 2,496 | |
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 | 3,038 | 0 | 3,038 | |
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 | 0 | 1,672 | |
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 | 9,198 | 0 | 9,198 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 6 Months Ended | |
Apr. 30, 2019 | Dec. 13, 2018 | |
Equity [Abstract] | ||
Stock repurchase program authorized amount | $ 500,000,000 | |
Shares repurchased for tax withholdings on vesting of restricted stock units | $ 15,865,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of the Stock Repurchase Program (Details) $ / shares in Units, $ in Thousands | 6 Months Ended |
Apr. 30, 2019USD ($)$ / sharesshares | |
Shares Repurchased | |
Cumulative beginning balance (in shares) | shares | 0 |
Repurchase of common stock under the stock repurchase program (in shares) | shares | 1,752,525 |
Cumulative ending balance (in shares) | shares | 1,752,525 |
Weighted-Average Price per Share | |
Cumulative beginning balance (in dollars per share) | $ / shares | $ 0 |
Repurchase of common stock under the stock repurchase program (in dollars per share) | $ / shares | 37.97 |
Cumulative ending balance (in dollars per share) | $ / shares | $ 37.97 |
Amount Repurchased (in thousands) | |
Cumulative beginning balance | $ | $ 0 |
Repurchase of common stock under the stock repurchase program | $ | 66,544 |
Cumulative ending balance | $ | $ 66,544 |
Share-Based Compensation Expe_3
Share-Based Compensation Expense - Expense in Period (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense capitalized in inventory, net | $ 78 | $ (45) | $ 138 | $ (6) |
Total share-based compensation | 15,607 | 14,166 | 29,362 | 26,559 |
Cost of Sales | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 1,609 | 1,546 | 3,016 | 2,842 |
Product costs | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 702 | 824 | 1,339 | 1,496 |
Service costs | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 907 | 722 | 1,677 | 1,346 |
Operating Expense | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 13,920 | 12,665 | 26,208 | 23,723 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 4,083 | 3,796 | 7,474 | 7,052 |
Sales and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 4,346 | 3,760 | 8,131 | 7,088 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 5,491 | $ 5,109 | $ 10,603 | $ 9,583 |
Share-Based Compensation Expe_4
Share-Based Compensation Expense (Details) - Restricted stock units (RSUs) $ in Millions | 6 Months Ended |
Apr. 30, 2019USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized share-based compensation | $ 110.7 |
Weighted-average period for recognition of share-based compensation (in years) | 1 year 7 months 6 days |
Segments and Entity-Wide Disc_3
Segments and Entity-Wide Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | Oct. 31, 2018 | |
Segment Reporting Information [Line Items] | |||||
Equipment, building, furniture and fixtures, net | $ 282,022 | $ 282,022 | $ 292,067 | ||
Goodwill | 297,711 | 297,711 | 297,968 | ||
Maintenance spares, net | 50,900 | 50,900 | |||
Net revenue | 865,011 | $ 729,978 | 1,643,538 | $ 1,376,113 | |
United States | |||||
Segment Reporting Information [Line Items] | |||||
Equipment, building, furniture and fixtures, net | 67,633 | 67,633 | $ 75,479 | ||
Net revenue | 545,600 | $ 392,800 | 1,010,000 | $ 776,100 | |
Networking Platforms | |||||
Segment Reporting Information [Line Items] | |||||
Intangible assets, net | 25,000 | 25,000 | |||
Goodwill | 65,500 | 65,500 | |||
Software and Software-Related Services | |||||
Segment Reporting Information [Line Items] | |||||
Intangible assets, net | 105,000 | 105,000 | |||
Goodwill | $ 232,200 | $ 232,200 |
Segments and Entity-Wide Disc_4
Segments and Entity-Wide Disclosures - Revenue, Profit (Loss) and Net Income (Loss) Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Revenue: | ||||
Total revenue | $ 865,011 | $ 729,978 | $ 1,643,538 | $ 1,376,113 |
Segment profit: | ||||
Operating income (loss) | 80,320 | 32,066 | 128,263 | 48,802 |
Less: Non-performance operating expenses | ||||
Selling and marketing | 103,502 | 97,359 | 201,615 | 185,874 |
General and administrative | 42,154 | 38,976 | 81,397 | 77,382 |
Amortization of intangible assets | 5,529 | 3,623 | 11,057 | 7,246 |
Significant asset impairments and restructuring costs | 4,068 | 4,359 | 6,341 | 10,320 |
Acquisition and integration costs | 1,135 | 0 | 2,743 | 0 |
Add: Other non-performance financial items | ||||
Interest expense and other income (loss), net | (9,715) | (11,735) | (14,903) | (23,894) |
Less: Provision for income taxes | 17,867 | 6,475 | 27,006 | 484,415 |
Net income (loss) | 52,738 | 13,856 | 86,354 | (459,507) |
Operating Segments | ||||
Segment profit: | ||||
Operating income (loss) | 236,708 | 176,383 | 431,416 | 329,624 |
Operating Segments | Networking Platforms | ||||
Revenue: | ||||
Total revenue | 696,976 | 591,682 | 1,317,542 | 1,087,715 |
Segment profit: | ||||
Operating income (loss) | 175,191 | 126,823 | 311,782 | 215,392 |
Operating Segments | Software and Software-Related Services | ||||
Revenue: | ||||
Total revenue | 47,702 | 38,745 | 104,274 | 92,232 |
Segment profit: | ||||
Operating income (loss) | 6,536 | 8,276 | 24,952 | 82,321 |
Operating Segments | Global Services | ||||
Revenue: | ||||
Total revenue | 120,333 | 99,551 | 221,722 | 196,166 |
Segment profit: | ||||
Operating income (loss) | 54,981 | 41,284 | 94,682 | 31,911 |
Converged Packet Optical | ||||
Revenue: | ||||
Total revenue | 623,838 | 1,172,835 | ||
Converged Packet Optical | Operating Segments | Networking Platforms | ||||
Revenue: | ||||
Total revenue | 623,838 | 527,867 | 1,172,835 | 955,297 |
Converged Packet Optical | Operating Segments | Software and Software-Related Services | ||||
Revenue: | ||||
Total revenue | 0 | 0 | ||
Converged Packet Optical | Operating Segments | Global Services | ||||
Revenue: | ||||
Total revenue | 0 | 0 | ||
Packet Networking | ||||
Revenue: | ||||
Total revenue | 73,138 | 144,707 | ||
Packet Networking | Operating Segments | Networking Platforms | ||||
Revenue: | ||||
Total revenue | 73,138 | 63,815 | 144,707 | 132,418 |
Packet Networking | Operating Segments | Software and Software-Related Services | ||||
Revenue: | ||||
Total revenue | 0 | 0 | ||
Packet Networking | Operating Segments | Global Services | ||||
Revenue: | ||||
Total revenue | 0 | 0 | ||
Platform Software and Services | ||||
Revenue: | ||||
Total revenue | 35,229 | 76,827 | ||
Platform Software and Services | Operating Segments | Networking Platforms | ||||
Revenue: | ||||
Total revenue | 0 | 0 | ||
Platform Software and Services | Operating Segments | Software and Software-Related Services | ||||
Revenue: | ||||
Total revenue | 35,229 | 36,393 | 76,827 | 80,529 |
Platform Software and Services | Operating Segments | Global Services | ||||
Revenue: | ||||
Total revenue | 0 | 0 | ||
Blue Planet Automation Software and Services | ||||
Revenue: | ||||
Total revenue | 12,473 | 27,447 | ||
Blue Planet Automation Software and Services | Operating Segments | Networking Platforms | ||||
Revenue: | ||||
Total revenue | 0 | 0 | ||
Blue Planet Automation Software and Services | Operating Segments | Software and Software-Related Services | ||||
Revenue: | ||||
Total revenue | 12,473 | 2,352 | 27,447 | 11,703 |
Blue Planet Automation Software and Services | Operating Segments | Global Services | ||||
Revenue: | ||||
Total revenue | 0 | 0 | ||
Maintenance Support and Training | ||||
Revenue: | ||||
Total revenue | 68,788 | 130,065 | ||
Maintenance Support and Training | Operating Segments | Networking Platforms | ||||
Revenue: | ||||
Total revenue | 0 | 0 | ||
Maintenance Support and Training | Operating Segments | Software and Software-Related Services | ||||
Revenue: | ||||
Total revenue | 0 | 0 | ||
Maintenance Support and Training | Operating Segments | Global Services | ||||
Revenue: | ||||
Total revenue | 68,788 | 60,904 | 130,065 | 116,862 |
Installation and Deployment | ||||
Revenue: | ||||
Total revenue | 41,322 | 71,944 | ||
Installation and Deployment | Operating Segments | Networking Platforms | ||||
Revenue: | ||||
Total revenue | 0 | 0 | ||
Installation and Deployment | Operating Segments | Software and Software-Related Services | ||||
Revenue: | ||||
Total revenue | 0 | 0 | ||
Installation and Deployment | Operating Segments | Global Services | ||||
Revenue: | ||||
Total revenue | 41,322 | 28,209 | 71,944 | 58,225 |
Consulting and Network Design | ||||
Revenue: | ||||
Total revenue | 10,223 | 19,713 | ||
Consulting and Network Design | Operating Segments | Networking Platforms | ||||
Revenue: | ||||
Total revenue | 0 | 0 | ||
Consulting and Network Design | Operating Segments | Software and Software-Related Services | ||||
Revenue: | ||||
Total revenue | 0 | 0 | ||
Consulting and Network Design | Operating Segments | Global Services | ||||
Revenue: | ||||
Total revenue | $ 10,223 | $ 10,438 | $ 19,713 | $ 21,079 |
Segments and Entity-Wide Disc_5
Segments and Entity-Wide Disclosures - Geographic Distribution of Equipment, Building, Furniture and Fixtures (Details) - USD ($) $ in Thousands | Apr. 30, 2019 | Oct. 31, 2018 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Equipment, building, furniture and fixtures, net | $ 282,022 | $ 292,067 |
Canada | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Equipment, building, furniture and fixtures, net | 196,069 | 198,028 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Equipment, building, furniture and fixtures, net | 67,633 | 75,479 |
Other International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Equipment, building, furniture and fixtures, net | $ 18,320 | $ 18,560 |
Segments and Entity-Wide Disc_6
Segments and Entity-Wide Disclosures - Revenue by Major Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Revenue, Major Customer [Line Items] | ||||
Total revenue | $ 865,011 | $ 729,978 | $ 1,643,538 | $ 1,376,113 |
Customer concentration risk | Sales revenue, net | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenue | 214,766 | 85,419 | 572,565 | 176,065 |
AT&T | Customer concentration risk | Sales revenue, net | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenue | 108,416 | $ 85,419 | 202,587 | $ 176,065 |
Verizon | Customer concentration risk | Sales revenue, net | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenue | $ 106,350 | 195,125 | ||
Web-scale provider | Customer concentration risk | Sales revenue, net | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenue | $ 174,853 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | 26 Months Ended | 72 Months Ended | |||||
Apr. 30, 2019USD ($) | Apr. 30, 2018USD ($) | Apr. 30, 2019USD ($)government_entity | Apr. 30, 2019CAD ($)government_entity | Apr. 30, 2018USD ($) | Apr. 30, 2019USD ($) | Apr. 30, 2019CAD ($) | Oct. 31, 2017 | Apr. 30, 2019CAD ($) | |
Loss Contingencies [Line Items] | |||||||||
Maximum amount of Canadian grant | $ 42,900 | $ 42,900 | $ 42,900 | $ 57.6 | |||||
Number of Canadian government entities | government_entity | 3 | 3 | |||||||
Total revenue | 865,011 | $ 729,978 | $ 1,643,538 | $ 1,376,113 | |||||
Amounts receivable from grant | 5,900 | 5,900 | 5,900 | $ 7.9 | |||||
Customer concentration risk | Sales revenue, net | |||||||||
Loss Contingencies [Line Items] | |||||||||
Total revenue | $ 214,766 | $ 85,419 | 572,565 | $ 176,065 | |||||
ASEAN country | Customer concentration risk | Sales revenue, net | |||||||||
Loss Contingencies [Line Items] | |||||||||
Concentration risk, percentage | 1.50% | ||||||||
Grants | |||||||||
Loss Contingencies [Line Items] | |||||||||
Total revenue | $ 4,900 | $ 6.5 | $ 17,200 | $ 23.1 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | |
Jun. 07, 2019 | Apr. 30, 2019 | Oct. 31, 2018 | |
Subsequent Event [Line Items] | |||
Stock repurchases (in shares) | 1,752,525 | ||
Stock repurchases | $ 66,544 | ||
Average price of shares repurchased (in dollars per share) | $ 37.97 | ||
Aggregate shares repurchased (in shares) | 1,752,525 | 0 | |
Subsequent event | |||
Subsequent Event [Line Items] | |||
Stock repurchases (in shares) | 485,235 | ||
Stock repurchases | $ 17,300 | ||
Average price of shares repurchased (in dollars per share) | $ 35.63 | ||
Aggregate shares repurchased (in shares) | 2,237,760 | ||
Authorized funds remaining under stock repurchase program | $ 416,200 |
Uncategorized Items - a20190430
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 62,123,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 49,805,000 |
Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 832,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 49,805,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 61,291,000 |