Cover Page
Cover Page - shares | 3 Months Ended | |
Jan. 31, 2020 | Mar. 06, 2020 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jan. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-36250 | |
Entity Registrant Name | Ciena Corp | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 23-2725311 | |
Entity Address, Address Line One | 7035 Ridge Road | |
Entity Address, City or Town | Hanover | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 21076 | |
City Area Code | 410 | |
Local Phone Number | 694-5700 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | CIEN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 153,503,455 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Central Index Key | 0000936395 | |
Current Fiscal Year End Date | --10-31 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Revenue: | ||
Total revenue | $ 832,912 | $ 778,527 |
Cost of goods sold: | ||
Total cost of goods sold | 462,377 | 455,186 |
Gross profit | 370,535 | 323,341 |
Operating expenses: | ||
Research and development | 130,900 | 128,633 |
Selling and marketing | 107,066 | 98,113 |
General and administrative | 42,468 | 39,243 |
Amortization of intangible assets | 5,853 | 5,528 |
Significant asset impairments and restructuring costs | 4,472 | 2,273 |
Acquisition and integration costs | 1,819 | 1,608 |
Total operating expenses | 292,578 | 275,398 |
Income from operations | 77,957 | 47,943 |
Interest and other income, net | 3,646 | 4,253 |
Interest expense | (8,815) | (9,441) |
Loss on extinguishment and modification of debt | (646) | 0 |
Income before income taxes | 72,142 | 42,755 |
Provision for income taxes | 9,814 | 9,139 |
Net income | $ 62,328 | $ 33,616 |
Basic net income (loss) per common share (in dollars per share) | $ 0.40 | $ 0.22 |
Diluted net income (loss) per potential common share (in dollars per share) | $ 0.40 | $ 0.21 |
Weighted average basic common shares outstanding (in shares) | 154,334 | 156,314 |
Weighted average dilutive potential common shares outstanding (in shares) | 155,738 | 158,174 |
Products | ||
Revenue: | ||
Total revenue | $ 687,215 | $ 642,532 |
Cost of goods sold: | ||
Total cost of goods sold | 389,013 | 380,442 |
Services | ||
Revenue: | ||
Total revenue | 145,697 | 135,995 |
Cost of goods sold: | ||
Total cost of goods sold | $ 73,364 | $ 74,744 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Net income | $ 62,328 | $ 33,616 |
Change in unrealized gain (loss) on available-for-sale securities, net of tax | (86) | 301 |
Change in cumulative translation adjustments | (2,982) | 1,150 |
Other comprehensive loss | (5,627) | (4,860) |
Total comprehensive income | 56,701 | 28,756 |
Change in unrealized gain (loss) on foreign currency forward contracts, net of tax | ||
Change in unrealized gain (loss) on foreign currency forward contracts and forward starting interest rate swaps, net of tax | (1,079) | 1,560 |
Change in unrealized loss on forward starting interest rate swaps, net of tax | ||
Change in unrealized gain (loss) on foreign currency forward contracts and forward starting interest rate swaps, net of tax | $ (1,480) | $ (7,871) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 31, 2020 | Oct. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 837,286 | $ 904,045 |
Short-term investments | 110,067 | 109,940 |
Accounts receivable, net of allowance for doubtful accounts of $22.3 million and $20.1 million as of January 31, 2020 and October 31, 2019, respectively. | 655,105 | 724,854 |
Inventories, net | 342,673 | 345,049 |
Prepaid expenses and other | 321,313 | 297,914 |
Total current assets | 2,266,444 | 2,381,802 |
Long-term investments | 10,076 | 10,014 |
Equipment, building, furniture and fixtures, net | 286,884 | |
Equipment, building, furniture and fixtures, net | 277,739 | |
Operating right-of-use assets | 50,148 | |
Goodwill | 310,913 | 297,937 |
Other intangible assets, net | 125,640 | 112,781 |
Deferred tax asset, net | 699,439 | 714,942 |
Other long-term assets | 90,488 | 88,986 |
Total assets | 3,830,887 | 3,893,346 |
Current liabilities: | ||
Accounts payable | 311,748 | 344,819 |
Accrued liabilities and other short-term obligations | 273,305 | 382,740 |
Deferred revenue | 122,410 | 111,381 |
Operating lease liabilities | 18,623 | |
Current portion of long-term debt | 7,000 | 7,000 |
Total current liabilities | 733,086 | 845,940 |
Long-term deferred revenue | 44,425 | 45,492 |
Other long-term obligations | 125,607 | 148,747 |
Long-term operating lease liabilities | 53,333 | |
Long-term debt, net | 680,786 | 680,406 |
Total liabilities | 1,637,237 | 1,720,585 |
Commitments and contingencies (Note 21) | ||
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; 153,946,833 and 154,403,850 shares issued and outstanding | 1,539 | 1,544 |
Additional paid-in capital | 6,801,907 | 6,837,714 |
Accumulated other comprehensive loss | (27,711) | (22,084) |
Accumulated deficit | (4,582,085) | (4,644,413) |
Total stockholders’ equity | 2,193,650 | 2,172,761 |
Total liabilities and stockholders’ equity | $ 3,830,887 | $ 3,893,346 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jan. 31, 2020 | Oct. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 22.3 | $ 20.1 |
Stockholders’ equity: | ||
Preferred stock par value per share (in dollars per share) | $ 0.1 | $ 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) | 153,946,833 | 154,403,850 |
Common stock shares outstanding (in shares) | 153,946,833 | 154,403,850 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Cash flows provided by (used in) operating activities: | ||
Net income | $ 62,328 | $ 33,616 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements | 25,782 | 21,513 |
Share-based compensation costs | 15,602 | 13,755 |
Amortization of intangible assets | 9,687 | 8,947 |
Deferred taxes | 10,788 | 5,037 |
Provision for inventory excess and obsolescence | 6,699 | 4,673 |
Provision for warranty | 7,898 | 3,891 |
Other | 4,540 | 3,356 |
Changes in assets and liabilities: | ||
Accounts receivable | 64,938 | 38,544 |
Inventories | (4,481) | (67,555) |
Prepaid expenses and other | (29,792) | 1,133 |
Operating lease right-of-use assets | 4,176 | |
Accounts payable, accruals and other obligations | (142,229) | (76,351) |
Deferred revenue | 8,926 | (4,664) |
Short and long-term operating lease liabilities | (5,098) | |
Net cash provided by (used in) operating activities | 39,764 | (14,105) |
Cash flows provided by (used in) investing activities: | ||
Payments for equipment, furniture, fixtures and intellectual property | (26,820) | (15,345) |
Purchase of available for sale securities | (29,733) | (68,516) |
Proceeds from maturities of available for sale securities | 30,000 | 60,000 |
Proceeds from sales of available for sale securities | 0 | 98,265 |
Settlement of foreign currency forward contracts, net | (73) | (4,650) |
Acquisition of business, net of cash acquired | (28,300) | 0 |
Purchase of equity investment | 0 | (333) |
Net cash provided by (used in) investing activities | (54,926) | 69,421 |
Cash flows used in financing activities: | ||
Payment of long-term debt | 0 | (1,750) |
Payment of debt issuance costs | (382) | 0 |
Payment of finance lease obligations | (722) | |
Payment of finance lease obligations | (758) | |
Payment for debt conversion liability | 0 | (111,268) |
Shares repurchased for tax withholdings on vesting of stock unit awards | (12,572) | (10,026) |
Repurchases of common stock - repurchase program | (49,203) | (19,721) |
Proceeds from issuance of common stock | 11,862 | 10,899 |
Net cash used in financing activities | (51,017) | (132,624) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (643) | 695 |
Net decrease in cash, cash equivalents and restricted cash | (66,822) | (76,613) |
Cash, cash equivalents and restricted cash at beginning of period | 904,161 | 745,423 |
Cash, cash equivalents and restricted cash at end of period | 837,339 | 668,810 |
Supplemental disclosure of cash flow information | ||
Cash paid during the period for interest | 9,325 | 10,007 |
Cash paid during the period for income taxes, net | 8,325 | 3,402 |
Operating lease payments | 5,642 | |
Non-cash investing and financing activities | ||
Purchase of equipment in accounts payable | 5,905 | 5,471 |
Repurchase of common stock in accrued liabilities from repurchase program | 1,501 | 1,441 |
Conversion of debt conversion liability into 1,585,140 shares of common stock | 0 | $ 52,944 |
Operating lease right-of-use assets subject to lease liability | $ 1,157 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Parenthetical) | 3 Months Ended |
Jan. 31, 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, 2018 | 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 | 33,616 | 33,616 | |||
Other comprehensive income (loss) | (4,860) | (4,860) | |||
Repurchase of common stock - repurchase program (in shares) | (591,897) | ||||
Repurchase of common stock - repurchase program | (21,162) | $ (6) | (21,156) | ||
Issuance of shares from employee equity plans (in shares) | 1,329,352 | ||||
Issuance of shares from employee equity plans | 10,899 | $ 13 | 10,886 | ||
Share-based compensation expense | 13,755 | 13,755 | |||
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 stock unit awards (in shares) | (304,916) | ||||
Shares repurchased for tax withholdings on vesting of stock unit awards | (10,026) | $ (3) | (10,023) | ||
Ending balance (in shares) at Jan. 31, 2019 | 156,336,210 | ||||
Ending balance at Jan. 31, 2019 | $ 2,054,305 | $ 1,563 | 6,927,613 | (10,640) | (4,864,231) |
Beginning balance (in shares) at Oct. 31, 2019 | 154,403,850 | 154,403,850 | |||
Beginning balance at Oct. 31, 2019 | $ 2,172,761 | $ 1,544 | 6,837,714 | (22,084) | (4,644,413) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 62,328 | 62,328 | |||
Other comprehensive income (loss) | (5,627) | (5,627) | |||
Repurchase of common stock - repurchase program (in shares) | (1,288,111) | ||||
Repurchase of common stock - repurchase program | (50,704) | $ (13) | (50,691) | ||
Issuance of shares from employee equity plans (in shares) | 1,128,096 | ||||
Issuance of shares from employee equity plans | 11,862 | $ 11 | 11,851 | ||
Share-based compensation expense | 15,602 | 15,602 | |||
Shares repurchased for tax withholdings on vesting of stock unit awards (in shares) | (297,002) | ||||
Shares repurchased for tax withholdings on vesting of stock unit awards | $ (12,572) | $ (3) | (12,569) | ||
Ending balance (in shares) at Jan. 31, 2020 | 153,946,833 | 153,946,833 | |||
Ending balance at Jan. 31, 2020 | $ 2,193,650 | $ 1,539 | $ 6,801,907 | $ (27,711) | $ (4,582,085) |
Interim Financial Statements
Interim Financial Statements | 3 Months Ended |
Jan. 31, 2020 | |
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 SEC rules and regulations. The Condensed Consolidated Balance Sheet as of October 31, 2019 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, 2019 . 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 2020 and 2019 |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Jan. 31, 2020 | |
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 the 2019 Annual Report. Newly Issued Accounting Standards - Effective Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification ASC 842 , 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. Effective November 1, 2019 , Ciena adopted ASC 842 which requires right-of-use ("ROU") assets and lease liabilities to be recorded on the balance sheet for leases. The guidance specifies that at the inception of a contract, an entity must determine whether the contract is or contains a lease. The contract is or contains a lease if the contract conveys the right to control the use of the property, plant, or equipment for a designated term in exchange for consideration. Ciena’s evaluation of its contracts followed the assessment of whether there was a right to obtain substantially all of the economic benefits from the use and the right to direct the use of the identified asset in the contract. Operating leases are included in the Operating right-of-use assets (“Operating ROU assets”), Operating lease liabilities and Long-term operating lease liabilities in the Condensed Consolidated Balance Sheets. Finance leases are included in Equipment, building, furniture and fixtures, net (“Finance ROU assets”), Accrued liabilities and other short-term obligations and Other long-term obligations are included in the Condensed Consolidated Balance Sheets. Ciena adopted the guidance on a modified retrospective basis as of November 1, 2019 , such that related amounts in prior periods have not been restated. Ciena has operating and finance leases that primarily relate to real property. As a practical expedient, Ciena has elected the “package of practical expedients” and, as a result, did not reassess existing lease identifications, lease classifications or initial direct costs. As a practical expedient, Ciena has elected not to capitalize leases with a term of 12 months or less without a purchase option that it is likely to exercise. Also as a practical expedient for disclosure, Ciena has elected not to separate lease and non-lease components on operating and finance leases. Lease components are payment items directly attributable to the use of the underlying asset, while non-lease components are explicit elements of a contract not directly related to the use of the underlying asset, including pass through operating expenses like common area maintenance and utilities. Operating ROU assets and lease liabilities and Finance ROU assets and lease liabilities are recognized on the Condensed Consolidated Balance Sheets at the present value of the future lease payments over the life of the lease term. Ciena uses discount rates based on incremental borrowing rates, on a collateralized basis, for the respective underlying assets, for terms similar to the respective leases when implicit rates for leases are not determinable. Operating lease costs are included as rent expense in the Condensed Consolidated Statements of Operations. Fixed base payments on operating leases paid directly to the lessor are recorded as lease expense on a straight-line basis. Related variable payments based on usage, changes in an index, or market rate are expensed as incurred. Finance ROU assets are generally amortized on a straight line basis over the lease term with the interest expense on the lease liability recorded using the interest method. The amortization and interest expense are recorded separately in the Condensed Consolidated Statements of Operations. Upon adoption, Ciena recorded Operating ROU assets of $53.3 million and lease liabilities of $76.0 million related to its operating leases. As of October 31, 2019 , the restructuring reserve liability for vacated office space of $11.1 million was included in Accrued liabilities and other short-term obligations and Other long-term obligations on the Condensed Consolidated Balance Sheet under prior accounting guidance. Upon adoption of the updated guidance, the existing lease reserve liability was reclassified as a reduction to the Operating ROU assets. ROU assets will be tested for impairment when circumstances indicate that the carrying values may not be recoverable. The adoption of this guidance did not require a cumulative effect adjustment or have an impact on the Condensed Consolidated Statements of Income or Condensed Consolidated Statements of Cash Flows. Opening Balance Adjustments The following table summarizes the cumulative effect of the changes made to Ciena’s Condensed Consolidated Balance Sheet in connection with the adoption of ASC 842 (in millions): Balance at October 31, 2019 New Lease Accounting Standard Adjusted Balance at November 1, 2019 ASSETS: Operating right-of-use assets $ — $ 53,334 (1) $ 53,334 Total assets $ 3,893,346 $ 53,334 $ 3,946,680 LIABILITIES AND STOCKHOLDERS’ EQUITY: Accrued liabilities and other short-term obligations $ 382,740 $ (1,484 ) (2) $ 381,256 Short-term lease liabilities $ — 20,498 (3) $ 20,498 Other long-term obligations $ 148,747 (21,244 ) (4) $ 127,503 Long-term operating lease liabilities $ — 55,564 (5) $ 55,564 Total liabilities and stockholders equity $ 3,893,346 $ 53,334 $ 3,946,680 (1) Represents $76.0 million of operating leases recognized as Operating ROU assets upon adoption of ASC 842, less $5.4 million of deferred rent, $6.2 million of tenant improvement allowances, $1.5 million of short-term restructuring reserve liability and $9.6 million of long-term restructuring reserve liability all recognized as a reduction to Right-of-use assets. (2) Represents $1.5 million of short-term restructuring reserve liability recognized as a reduction to Operating ROU assets. (3) Represents $20.5 million of lease liabilities for operating leases. (4) Represents $9.6 million of long-term restructuring reserve liability, $5.4 million of deferred rent, and $6.2 million of tenant improvement allowances recognized as a reduction to Right-of-use assets. (5) Represents $55.6 million of lease liabilities for operating leases. See Note 15 for additional information. Fair Value Measurement In August 2018, the FASB issued ASU No. 2018-13 ( “ASU 2018-13” ), Fair Value Measurement (Topic 820): Disclosure Framework which modifies the disclosure requirements on fair value measurements. Ciena adopted ASU 2018-13 beginning the first quarter of fiscal year 2020. Adoption of ASU 2018-13 did not have a material effect on Ciena’s financial position or results of operations. Newly Issued Accounting Standards - Not Yet Effective 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 collectability 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 related disclosures. |
Revenue
Revenue | 3 Months Ended |
Jan. 31, 2020 | |
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 January 31, 2020 Networking Platforms Platform Software and Services Blue Planet Automation Software and Services Global Services Total Product lines: Converged Packet Optical $ 591,549 $ — $ — $ — $ 591,549 Packet Networking 67,508 — — — 67,508 Platform Software and Services — 51,888 — — 51,888 Blue Planet Automation Software and Services — — 15,466 — 15,466 Maintenance Support and Training — — — 61,793 61,793 Installation and Deployment — — — 34,954 34,954 Consulting and Network Design — — — 9,754 9,754 Total revenue by product line $ 659,057 $ 51,888 $ 15,466 $ 106,501 $ 832,912 Timing of revenue recognition: Products and services at a point in time $ 659,057 $ 13,114 $ 3,736 $ 4,197 $ 680,104 Services transferred over time — 38,774 11,730 102,304 152,808 Total revenue by timing of revenue recognition $ 659,057 $ 51,888 $ 15,466 $ 106,501 $ 832,912 Quarter Ended January 31, 2019 Networking Platforms Platform Software and Services Blue Planet Automation Software and Services Global Services Total Product lines: Converged Packet Optical $ 548,997 $ — $ — $ — $ 548,997 Packet Networking 71,569 — — — 71,569 Platform Software and Services — 41,598 — — 41,598 Blue Planet Automation Software and Services — — 14,974 — 14,974 Maintenance Support and Training — — — 61,277 61,277 Installation and Deployment — — — 30,622 30,622 Consulting and Network Design — — — 9,490 9,490 Total revenue by product line $ 620,566 $ 41,598 $ 14,974 $ 101,389 $ 778,527 Timing of revenue recognition: Products and services at a point in time $ 620,566 $ 16,044 $ 6,228 $ 3,566 $ 646,404 Services transferred over time — 25,554 8,746 97,823 132,123 Total revenue by timing of revenue recognition $ 620,566 $ 41,598 $ 14,974 $ 101,389 $ 778,527 Effective the beginning of fiscal 2020, Ciena’s Global Sales and Marketing organization combined its previous North America and Caribbean and Latin America (“CALA”) regions into a new “Americas” sales region. Accordingly, Ciena reflects its sales geographically around the following markets: (i) Americas; (ii) Europe, Middle East and Africa (“EMEA”); and (iii) Asia Pacific, Japan and India (“APAC”). Within each geographic area, we maintain specific teams or personnel that focus on a particular region, country, customer or market vertical. These teams include sales management, account salespersons and sales engineers, as well as services professionals and commercial management personnel, who ensure that we maintain a high-touch, consultative relationship with our customers. For the periods below, Ciena’s geographic distribution of revenue was as follows (in thousands): Quarter Ended January 31, 2020 2019 Geographic distribution: Americas $ 574,004 $ 516,481 EMEA 129,965 129,190 APAC 128,943 132,856 Total revenue by geographic distribution $ 832,912 $ 778,527 • Networking Platforms reflects sales of Ciena’s Converged Packet Optical and Packet Networking product lines . • Converged Packet Optical - includes the 6500 Packet-Optical Platform, 5430 Reconfigurable Switching System, Waveserver® stackable interconnect system (“Waveserver”), 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. Operating system software and enhanced software features embedded in Ciena hardware are each considered distinct performance obligations for which the revenue is generally recognized upfront at a point in time upon transfer of control. • Platform Software and Services 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. Platform software-related services revenue includes sales of subscription, installation, support, and consulting services related to Ciena’s software platforms, operating system software and enhanced software features embedded in each of the Networking Platforms product lines above. Revenue from the software portion 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. • Blue Planet® Automation Software and Services is a comprehensive, open software suite, together with related services, that allows customers to use enhanced knowledge about their networks 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, unified assurance and analytics (UAA) and Ciena’s SDN Multilayer Controller and virtual wide area network (V-WAN) application. Services revenue includes sales of subscription, installation, support, consulting and design services related to Ciena’s Blue Planet Automation Platform. Revenue from the software portion 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 sales of 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 is 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 January 31, 2020 Balance at October 31, 2019 Accounts receivable, net $ 655,105 $ 724,854 Contract assets $ 83,717 $ 84,046 Deferred revenue $ 166,835 $ 156,873 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 and professional services arrangements where transfer of control has occurred, but Ciena has not yet invoiced the customer. Contract assets are included in prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets. See Note 11 for further discussion. Contract liabilities consist of deferred revenue and represent advanced payments against non-cancelable customer orders received prior to revenue recognition. Ciena recognized approximately $49.0 million and $39.4 million of revenue during the first three months of fiscal 2020 and 2019 that was included in the deferred revenue balance at October 31, 2019 and November 1, 2018 , respectively. Revenue recognized due to changes in transaction price from performance obligations satisfied or partially satisfied in previous periods was immaterial during the three months ended January 31, 2020 and 2019 . Capitalized Contract Acquisition Costs Capitalized contract acquisition costs consist of deferred sales commissions, and were $13.1 million and $15.7 million as of January 31, 2020 and October 31, 2019 , respectively, and were included in other current assets and other assets. The amortization expense associated with these costs was $5.6 million and $4.1 million during the first three months of fiscal 2020 and 2019 , respectively, 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 January 31, 2020 , the aggregate amount of RPO was $905 million . As of January 31, 2020 , Ciena expects approximately 82% of the RPO to be recognized as revenue within the next twelve months . |
Business Combinations
Business Combinations | 3 Months Ended |
Jan. 31, 2020 | |
Business Combinations [Abstract] | |
Business Combinations | BUSINESS COMBINATIONS Centina Systems, Inc. Acquisition On November 2, 2019 Ciena acquired Centina Systems, Inc. (“Centina”), a provider of service assurance analytics and network performance management solutions, for approximately $34.0 million in cash. This transaction has been accounted for as the acquisition of a business. During the first quarter of fiscal 2020, Ciena incurred approximately $0.5 million of acquisition-related costs associated with this transaction. These costs primarily reflect fees associated with financial, legal and accounting advisors. The following table summarizes the final purchase price allocation related to the acquisition based on the estimated fair value of the acquired assets and assumed liabilities (in thousands): Amount Cash and cash equivalents $ 5,718 Accounts receivable 610 Prepaid expenses and other 536 Equipment, furniture and fixtures 17 Goodwill 13,055 Customer relationships and contracts 400 Developed technology 22,200 Accounts payable (47 ) Accrued liabilities (286 ) Deferred revenue (1,493 ) Deferred tax liability (6,692 ) Total purchase consideration $ 34,018 Customer relationships and contracts represent agreements with existing Centina customers and have an estimated useful life of two years . Developed technology represents purchased technology that has reached technological feasibility and for which Centina had substantially completed development as of the date of acquisition. Fair value was determined using future discounted cash flows related to the projected income stream of the developed technology for a discrete projection period. Cash flows were discounted to their present value as of the closing date. Developed technology is amortized on a straight-line basis over its estimated useful life of five years . The goodwill generated from the acquisition of Centina is primarily related to expected synergies. The total goodwill amount was recorded in the Blue Planet Automation Software and Services segment. The goodwill is not deductible for income tax purposes. Pro forma disclosures have not been included due to immateriality. |
Restructuring Costs
Restructuring Costs | 3 Months Ended |
Jan. 31, 2020 | |
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, which are included in Accrued liabilities and other short-term obligations on our Condensed Consolidated Balance Sheets, for the three months ended January 31, 2020 (in thousands): Workforce reduction Consolidation of excess facilities and other restructuring activities Total Balance at October 31, 2019 $ 3,983 $ 11,160 $ 15,143 Charges 1,204 (1) 3,268 (2) 4,472 Adjustments related to ASC 842 — (11,160 ) (3) (11,160 ) Cash payments (2,955 ) (3,268 ) (6,223 ) Balance at January 31, 2020 $ 2,232 $ — $ 2,232 Current restructuring liabilities $ 2,232 $ — $ 2,232 Non-current restructuring liabilities $ — $ — $ — (1) Reflects a global workforce reduction of approximately 22 employees during the three months ended January 31, 2020 as part of a business optimization strategy to improve gross margin, constrain operating expense and redesign certain business processes. (2) Primarily represents variable costs and imputed interest expense related to restructured facilities (3) Represents restructuring reserve liability recognized as a reduction to Operating right-of-use assets, net in relation to adoption of ASC 842. See Notes 2 and 15 for further discussion. The following table sets forth the restructuring activity and balance of the restructuring liability accounts, which are included in Accrued liabilities and other short-term obligations on our Condensed Consolidated Balance Sheets for the three months ended January 31, 2019 (in thousands): Workforce reduction Consolidation of excess facilities Total Balance at October 31, 2018 $ 2,108 $ 1,739 $ 3,847 Charges 1,752 (1) 521 (2) 2,273 Cash payments (3,009 ) (548 ) (3,557 ) Balance at January 31, 2019 $ 851 $ 1,712 $ 2,563 Current restructuring liabilities $ 851 $ 525 $ 1,376 Non-current restructuring liabilities $ — $ 1,187 $ 1,187 (1) Reflects a global workforce reduction of approximately 10 employees during the three months ended January 31, 2019 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 | 3 Months Ended |
Jan. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Interest and Other Income, Net | INTEREST AND OTHER INCOME, NET The components of interest and other income, net, are as follows (in thousands): Quarter Ended January 31, 2020 2019 Interest income $ 3,390 $ 3,872 Gains on non-hedge designated foreign currency forward contracts 637 22 Foreign currency exchange gains (losses) (771 ) 783 Other 390 (424 ) Interest and other income, net $ 3,646 $ 4,253 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 $0.8 million in foreign currency exchange rate losses during the first three months of fiscal 2020 and $0.8 million in foreign currency exchange rate gains during the first three months of fiscal 2019 , as a result of monetary assets and liabilities that were transacted in a currency other than the entity’s functional currency, and the related remeasurement adjustments were recorded in interest and other income, 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, net, on the Condensed Consolidated Statements of Operations. During the first three months of fiscal 2020 , Ciena recorded gains of $0.6 million from non-hedge designated foreign currency forward contracts. During the first three months of fiscal 2019 , Ciena recorded minimal gains from non-hedge designated foreign currency forward contracts. |
Income Taxes
Income Taxes | 3 Months Ended |
Jan. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES On December 2, 2019, the U.S. Department of the Treasury released final regulations and proposed regulations under Section 59A, Base Erosion and Anti-Abuse Tax (“BEAT”). BEAT, which requires certain U.S. corporations to pay a minimum tax associated with deductible payments to non-U.S. related parties, was enacted by the Tax Cuts and Jobs Act (the “Tax Act”). Also, on December 2, 2019, the U.S. Department of the Treasury released final regulations that provide additional guidance with respect to the foreign tax credit regime under the Tax Act. The effective tax rate for the three months ended January 31, 2020 was lower than the effective tax rate for the three months ended January 31, 2019 , primarily due to the effect of the final regulations on December 2, 2019. |
Short-Term and Long-Term Invest
Short-Term and Long-Term Investments | 3 Months Ended |
Jan. 31, 2020 | |
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): January 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. government obligations: Included in short-term investments $ 109,962 $ 105 $ — $ 110,067 Included in long-term investments 10,073 3 — 10,076 $ 120,035 $ 108 $ — $ 120,143 October 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. government obligations: Included in short-term investments $ 109,715 $ 225 $ — $ 109,940 Included in long-term investments 10,017 — (3 ) 10,014 $ 119,732 $ 225 $ (3 ) $ 119,954 The following table summarizes the final legal maturities of debt investments at January 31, 2020 (in thousands): Amortized Cost Estimated Fair Value Less than one year $ 109,962 $ 110,067 Due in 1-2 years 10,073 10,076 $ 120,035 $ 120,143 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jan. 31, 2020 | |
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): January 31, 2020 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 632,620 $ — $ — $ 632,620 Bond mutual fund 50,180 — — 50,180 U.S. government obligations — 120,143 — 120,143 Foreign currency forward contracts — 273 — 273 Total assets measured at fair value $ 682,800 $ 120,416 $ — $ 803,216 Liabilities: Foreign currency forward contracts $ — $ 710 $ — $ 710 Forward starting interest rate swaps — 22,225 — 22,225 Contingent consideration — — 3,705 3,705 Total liabilities measured at fair value $ — $ 22,935 $ 3,705 $ 26,640 October 31, 2019 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 759,114 $ — $ — $ 759,114 U.S. government obligations — 119,954 — 119,954 Foreign currency forward contracts — 1,570 — 1,570 Total assets measured at fair value $ 759,114 $ 121,524 $ — $ 880,638 Liabilities: Foreign currency forward contracts $ — $ 35 $ — $ 35 Forward starting interest rate swaps — 21,093 — 21,093 Contingent consideration — — 3,705 3,705 Total liabilities measured at fair value $ — $ 21,128 $ 3,705 $ 24,833 As of the date indicated, the assets and liabilities above are presented on Ciena’s Condensed Consolidated Balance Sheets as follows (in thousands): January 31, 2020 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 682,800 $ — $ — $ 682,800 Short-term investments — 110,067 — 110,067 Prepaid expenses and other — 273 — 273 Long-term investments — 10,076 — 10,076 Total assets measured at fair value $ 682,800 $ 120,416 $ — $ 803,216 Liabilities: Accrued liabilities and other short-term obligations $ — $ 710 $ 3,705 $ 4,415 Other long-term obligations — 22,225 — 22,225 Total liabilities measured at fair value $ — $ 22,935 $ 3,705 $ 26,640 October 31, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 759,114 $ — $ — $ 759,114 Short-term investments — 109,940 — 109,940 Prepaid expenses and other — 1,570 — 1,570 Long-term investments — 10,014 — 10,014 Total assets measured at fair value $ 759,114 $ 121,524 $ — $ 880,638 Liabilities: Accrued liabilities and other short-term obligations $ — $ 35 $ — $ 35 Other long-term obligations — 21,093 3,705 24,798 Total liabilities measured at fair value $ — $ 21,128 $ 3,705 $ 24,833 Ciena did not have any transfers between Level 1 and Level 2 fair value measurements during the periods presented. Ciena’s Level 3 liability includes $3.7 million in accrued liabilities and other short-term obligations as of January 31, 2020 . This reflects a contingent consideration element of a three-year payout arrangement associated with Ciena’s purchase of DonRiver Holdings, LLC (“DonRiver”) in the fourth quarter of fiscal 2018. As of January 31, 2020 , there was no material change to the fair value. |
Inventories
Inventories | 3 Months Ended |
Jan. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES As of the dates indicated, inventories are comprised of the following (in thousands): January 31, October 31, Raw materials $ 106,522 $ 99,041 Work-in-process 11,728 13,657 Finished goods 219,907 226,622 Deferred cost of goods sold 49,256 53,051 Gross inventories 387,413 392,371 Provision for excess and obsolescence (44,740 ) (47,322 ) Inventories, net $ 342,673 $ 345,049 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, which are affected by changes in Ciena’s strategic direction, discontinuance of a product or introduction of newer versions of products, declines in the sales of or forecasted demand for certain products, and general market conditions. During the first three months of fiscal 2020 , Ciena recorded a provision for excess and obsolescence of $6.7 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 | 3 Months Ended |
Jan. 31, 2020 | |
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): January 31, October 31, Prepaid VAT and other taxes $ 87,706 $ 84,706 Contract assets for unbilled accounts receivable 83,717 84,046 Prepaid expenses 65,806 48,680 Product demonstration equipment, net 37,866 38,900 Other non-trade receivables 36,236 28,136 Capitalized contract acquisition costs 9,391 11,677 Deferred deployment expense 318 125 Derivative assets 273 1,570 Restricted cash — 74 $ 321,313 $ 297,914 Depreciation of product demonstration equipment was $2.2 million during the first three months of each of fiscal 2020 and 2019 . For further discussion on contract assets and capitalized contract acquisition costs, see Note 3 above. |
Other Balance Sheet Details
Other Balance Sheet Details | 3 Months Ended |
Jan. 31, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Other Balance Sheet Details | OTHER BALANCE SHEET DETAILS As of the dates indicated, accrued liabilities and other short-term obligations are comprised of the following (in thousands): January 31, October 31, Compensation, payroll related tax and benefits (1) $ 68,924 $ 182,363 Warranty 51,190 48,498 Vacation 22,708 22,290 Contingent consideration 3,705 4,372 Contingent compensation 2,880 — Finance lease obligations 2,710 2,764 Interest payable 717 1,007 Other 120,471 121,446 $ 273,305 $ 382,740 (1) Reduction is primarily due to the timing of bonus payments to employees under our annual cash incentive compensation plan. The following table summarizes the activity in Ciena’s accrued warranty for the fiscal periods indicated (in thousands): Three Months Ended January 31, Beginning Balance Current Period Provisions Settlements Ending Balance 2019 $ 44,740 3,891 (4,183 ) $ 44,448 2020 $ 48,498 7,898 (5,206 ) $ 51,190 |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Jan. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS Foreign Currency Derivatives As of January 31, 2020 and October 31, 2019 , 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 $180.4 million and $197.4 million as of January 31, 2020 and October 31, 2019 , respectively. These foreign exchange contracts have maturities of 24 months or less and have been designated as cash flow hedges. As of January 31, 2020 and October 31, 2019 , Ciena had forward contracts to hedge its foreign exchange exposure in order to reduce the variability in various currencies of certain balance sheet items. The notional amount of these contracts was approximately $187.7 million and $206.0 million as of January 31, 2020 and October 31, 2019 , 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 16 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 $350.0 million of the New 2025 Term Loan (as defined in Note 16 below) at 2.957% through September 2023. The total notional amount of interest rate swaps in effect was $350.0 million as of January 31, 2020 and October 31, 2019 . 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 loan. 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 6 and Note 9 above. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Jan. 31, 2020 | |
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 three months ended January 31, 2020 : Unrealized Gain/ Unrealized Gain/(Loss) on Unrealized Gain/(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, 2019 $ 152 $ 925 $ (13,686 ) $ (9,475 ) $ (22,084 ) Other comprehensive loss before reclassifications (86 ) (921 ) (1,718 ) (2,982 ) (5,707 ) Amounts reclassified from AOCI — (158 ) 238 — 80 Balance at January 31, 2020 $ 66 $ (154 ) $ (15,166 ) $ (12,457 ) $ (27,711 ) The following table summarizes the changes in AOCI, net of tax, for the three months ended January 31, 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 301 402 (7,593 ) 1,150 (5,740 ) Amounts reclassified from AOCI — 1,158 (278 ) — 880 Balance at January 31, 2019 $ (124 ) $ (1,500 ) $ (1,454 ) $ (7,562 ) $ (10,640 ) All amounts reclassified from AOCI related to settlement (gains) losses on foreign currency forward contracts designated as cash flow hedges impacted 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, net, on the Condensed Consolidated Statements of Operations. |
Leases Leases
Leases Leases | 3 Months Ended |
Jan. 31, 2020 | |
Leases [Abstract] | |
Leases | LEASES Ciena leases over 1.4 million square feet of facilities globally related to the ongoing operations of its business segments and related functions. Ciena’s principal executive offices are located in Hanover, Maryland. Ciena’s largest facilities are research and development centers located in Ottawa, Canada and Gurgaon, India. Ciena also has engineering and/or service delivery facilities located in San Jose, California; Petaluma, California; Alpharetta, Georgia; Quebec, Canada; Austin, Texas; and Pune and Bangalore, India. In addition, Ciena leases various smaller offices in regions throughout the world to support sales and services operations. Office facilities are leased under various non-cancelable operating or finance leases. Ciena's current leases have remaining terms that vary up to 13 years . Certain leases provide for options to extend up to 10 years and/or options to terminate within eight years . As previously disclosed in Note 2 , the restructuring reserve liability related to our subleased space and vacated space for which subleases are being pursued was $11.1 million as of October 31, 2019 . Upon Ciena’s adoption of ASC 842 on November 1, 2019 , the existing Accrued liabilities and other short-term obligations and Other long-term obligations were reclassified as a reduction of the Operating right-of-use assets recorded in accordance with the updated guidance. Leases included in the Condensed Consolidated Balance Sheets were as follows: Classification As of January 31, 2020 Operating leases: Operating ROU Assets Operating right-of-use assets $ 50,148 Operating lease liabilities Operating lease liabilities and Long-term operating lease liabilities 71,956 Finance leases: Buildings, gross Equipment, building, furniture and fixtures, net $ 71,235 Less: accumulated depreciation Equipment, building, furniture and fixtures, net (14,548 ) Buildings, net $ 56,687 Finance lease liabilities Accrued liabilities and other short-term obligations and other long-term obligations $ 66,831 The components of lease expense included in the Condensed Consolidated Statement of Operations were as follows: Three months ended Classification January 31, 2020 Operating lease costs Operating expense $ 4,457 Finance lease cost: Amortization of finance ROU asset Operating expense 1,140 Interest on finance lease liabilities Interest expense 1,244 Total finance lease cost 2,384 Non-capitalized lease cost Operating expense 621 Variable lease cost (1) Operating expense 1,311 Net lease cost (2) $ 8,773 (1) Variable lease costs includes expenses relating to insurance, taxes, maintenance and other costs required by the applicable operating lease. Variable lease costs are determined by whether they are to be included in base rent and if amounts are based on a consumer price index. (2) Excludes other operating expense of $4.3 million for the three months ended January 31, 2020 , related to amortization of leasehold improvements. Lease expense (excluding amortization of leasehold improvements of $2.4 million ) incurred in the three months ended January 31, 2019 was $6.8 million . Future minimum lease payments and the present value of minimum lease payments related to operating and finance leases as of January 31, 2020 were as follows: Operating Leases Finance Leases Total Remaining fiscal 2020 $ 15,778 $ 7,512 $ 23,290 2021 18,261 7,491 25,752 2022 13,440 7,932 21,372 2023 10,157 8,008 18,165 2024 8,052 8,024 16,076 Thereafter 12,205 64,616 76,821 Total lease payments 77,893 103,583 181,476 Less: Imputed interest (5,937 ) (36,752 ) (42,689 ) Present value of lease liabilities 71,956 66,831 138,787 Less: Current portion of present value of minimum lease payments (18,623 ) (2,710 ) (21,333 ) Long-term portion of present value of minimum lease payments $ 53,333 $ 64,121 $ 117,454 As of January 31, 2020 , the weighted average remaining lease terms and weighted average discount rates for operating and finance leases were as follows: Weighted-average remaining lease term in years: Operating leases 4.91 Finance leases 12.62 Weighted-average discount rates: Operating leases 2.39 % Finance leases 7.56 % There was no significant non-cash lease activity for the three months ended January 31, 2020 . As of October 31, 2019 , minimum aggregate rentals under operating leases were as follows: 2020 2021 2022 2023 2024 Thereafter Total Operating leases (1) $ 28,776 $ 24,184 $ 16,767 $ 13,393 $ 10,632 $ 26,110 $ 119,862 1) The amount for operating lease commitments above include estimated variable expenses relating to insurance, taxes, maintenance and other costs required by the applicable operating lease. |
Leases | LEASES Ciena leases over 1.4 million square feet of facilities globally related to the ongoing operations of its business segments and related functions. Ciena’s principal executive offices are located in Hanover, Maryland. Ciena’s largest facilities are research and development centers located in Ottawa, Canada and Gurgaon, India. Ciena also has engineering and/or service delivery facilities located in San Jose, California; Petaluma, California; Alpharetta, Georgia; Quebec, Canada; Austin, Texas; and Pune and Bangalore, India. In addition, Ciena leases various smaller offices in regions throughout the world to support sales and services operations. Office facilities are leased under various non-cancelable operating or finance leases. Ciena's current leases have remaining terms that vary up to 13 years . Certain leases provide for options to extend up to 10 years and/or options to terminate within eight years . As previously disclosed in Note 2 , the restructuring reserve liability related to our subleased space and vacated space for which subleases are being pursued was $11.1 million as of October 31, 2019 . Upon Ciena’s adoption of ASC 842 on November 1, 2019 , the existing Accrued liabilities and other short-term obligations and Other long-term obligations were reclassified as a reduction of the Operating right-of-use assets recorded in accordance with the updated guidance. Leases included in the Condensed Consolidated Balance Sheets were as follows: Classification As of January 31, 2020 Operating leases: Operating ROU Assets Operating right-of-use assets $ 50,148 Operating lease liabilities Operating lease liabilities and Long-term operating lease liabilities 71,956 Finance leases: Buildings, gross Equipment, building, furniture and fixtures, net $ 71,235 Less: accumulated depreciation Equipment, building, furniture and fixtures, net (14,548 ) Buildings, net $ 56,687 Finance lease liabilities Accrued liabilities and other short-term obligations and other long-term obligations $ 66,831 The components of lease expense included in the Condensed Consolidated Statement of Operations were as follows: Three months ended Classification January 31, 2020 Operating lease costs Operating expense $ 4,457 Finance lease cost: Amortization of finance ROU asset Operating expense 1,140 Interest on finance lease liabilities Interest expense 1,244 Total finance lease cost 2,384 Non-capitalized lease cost Operating expense 621 Variable lease cost (1) Operating expense 1,311 Net lease cost (2) $ 8,773 (1) Variable lease costs includes expenses relating to insurance, taxes, maintenance and other costs required by the applicable operating lease. Variable lease costs are determined by whether they are to be included in base rent and if amounts are based on a consumer price index. (2) Excludes other operating expense of $4.3 million for the three months ended January 31, 2020 , related to amortization of leasehold improvements. Lease expense (excluding amortization of leasehold improvements of $2.4 million ) incurred in the three months ended January 31, 2019 was $6.8 million . Future minimum lease payments and the present value of minimum lease payments related to operating and finance leases as of January 31, 2020 were as follows: Operating Leases Finance Leases Total Remaining fiscal 2020 $ 15,778 $ 7,512 $ 23,290 2021 18,261 7,491 25,752 2022 13,440 7,932 21,372 2023 10,157 8,008 18,165 2024 8,052 8,024 16,076 Thereafter 12,205 64,616 76,821 Total lease payments 77,893 103,583 181,476 Less: Imputed interest (5,937 ) (36,752 ) (42,689 ) Present value of lease liabilities 71,956 66,831 138,787 Less: Current portion of present value of minimum lease payments (18,623 ) (2,710 ) (21,333 ) Long-term portion of present value of minimum lease payments $ 53,333 $ 64,121 $ 117,454 As of January 31, 2020 , the weighted average remaining lease terms and weighted average discount rates for operating and finance leases were as follows: Weighted-average remaining lease term in years: Operating leases 4.91 Finance leases 12.62 Weighted-average discount rates: Operating leases 2.39 % Finance leases 7.56 % There was no significant non-cash lease activity for the three months ended January 31, 2020 . As of October 31, 2019 , minimum aggregate rentals under operating leases were as follows: 2020 2021 2022 2023 2024 Thereafter Total Operating leases (1) $ 28,776 $ 24,184 $ 16,767 $ 13,393 $ 10,632 $ 26,110 $ 119,862 1) The amount for operating lease commitments above include estimated variable expenses relating to insurance, taxes, maintenance and other costs required by the applicable operating lease. |
Short-Term and Long-Term Debt
Short-Term and Long-Term Debt | 3 Months Ended |
Jan. 31, 2020 | |
Debt Disclosure [Abstract] | |
Short-Term and Long-Term Debt | SHORT-TERM AND LONG-TERM DEBT New 2025 Term Loan Pursuant to a Credit Agreement, dated July 15, 2014, as amended (the “Credit Agreement”), by and among Ciena, the lenders party thereto and Bank of America, N.A., as administrative agent (the “Administrative Agent”), Ciena maintained an existing senior secured term loan with an outstanding aggregate principal amount of $693.0 million as of January 23, 2020 and maturing on September 28, 2025 (the “Old 2025 Term Loan”). On January 23, 2020, Ciena, as borrower, and Ciena Communications, Inc., Ciena Government Solutions, Inc., Ciena Communications International, LLC and Blue Planet Software, Inc., as guarantors, entered into a Refinancing Amendment to Credit Agreement with the lenders party thereto and the Administrative Agent (the “Refinancing Agreement”), pursuant to which Ciena consummated a permitted refinancing of the entire outstanding amount of the Old 2025 Term Loan, and in accordance therewith, incurred new senior secured term loans in an aggregate principal amount of $693.0 million and maturing on September 28, 2025 (the “New 2025 Term Loan”). The proceeds of the New 2025 Term Loan were used in their entirety to refinance the 2025 Term Loan. This arrangement was primarily accounted for as a modification of debt and, as such, $0.1 million of debt issuance costs associated with the New 2025 Term Loan was expensed. The Refinancing Agreement amends the Credit Agreement and provides that the New 2025 Term Loan will, among other things: • mature on September 28, 2025; • amortize in equal quarterly installments in aggregate amounts equal to 0.25% , or $1.73 million , of the principal amount of the New 2025 Term Loan as of January 23, 2020, with the balance payable at maturity; • be subject to mandatory prepayment provisions on the occurrence of certain specified events substantially similar to the 2025 Term Loan, including certain asset sales, debt issuances, and receipt of annual Excess Cash Flow (as defined in the Credit Agreement); • bear interest, at Ciena’s election, at a per annum rate equal to (a) LIBOR (subject to a floor of 0.00% ) plus an applicable margin of 1.75% , or (b) a base rate (subject to a floor of 1.00% ) plus an applicable margin of 0.75% ; and • be repayable at any time at Ciena’s election, provided that repayment of the New 2025 Term Loan with proceeds of certain indebtedness prior to July 23, 2020 will require a prepayment premium of 1.00% of the aggregate principal amount of such prepayment. Except as amended by the Refinancing Agreement, the remaining terms of the Credit Agreement remain in full force and effect. The net carrying values of Ciena’s term loans were comprised of the following for the fiscal periods indicated (in thousands): January 31, 2020 October 31, 2019 Principal Balance Unamortized Discount Deferred Debt Issuance Costs Net Carrying Value Net Carrying Value Term Loan Payable due September 28, 2025 (New) $ 693,000 $ (1,824 ) $ (3,390 ) $ 687,786 $ — Term Loan Payable due September 28, 2025 (Old) $ — $ — $ — $ — $ 687,406 Deferred debt issuance costs that were deducted from the carrying amounts of the term loans totaled $3.4 million at January 31, 2020 and $3.6 million at October 31, 2019 . Deferred debt issuance costs are amortized using the straight-line method, which approximates the effect of the effective interest rate, through the maturity of the term loans. The amortization of deferred debt issuance costs for these term loans are included in interest expense, and were $0.2 million during the first three months of fiscal 2020 and fiscal 2019 . The carrying value of the term loans listed above is also net of any unamortized debt discounts. As of January 31, 2020 , the estimated fair value of the New 2025 Term Loan was $694.7 million . Ciena’s term loan is categorized as Level 2 in the fair value hierarchy. Ciena estimated the fair value of its term loan using a market approach based on observable inputs, such as current market transactions involving comparable securities. |
Earnings Per Share Calculation
Earnings Per Share Calculation | 3 Months Ended |
Jan. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share Calculation | EARNINGS PER SHARE CALCULATION The following tables (in thousands except per share amounts) reconcile basic net income per common share (“Basic EPS”) and diluted net income 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 January 31, Numerator 2020 2019 Net income used to calculate Basic and Diluted EPS $ 62,328 $ 33,616 Quarter Ended January 31, Denominator 2020 2019 Basic weighted average shares outstanding 154,334 156,314 Add: Shares underlying outstanding stock options and stock unit awards and issuable under employee stock purchase plan 1,404 1,860 Dilutive weighted average shares outstanding 155,738 158,174 Quarter Ended January 31, EPS 2020 2019 Basic EPS $ 0.40 $ 0.22 Diluted EPS $ 0.40 $ 0.21 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 January 31, 2020 2019 Shares underlying stock options and stock unit awards 731 401 Total shares excluded due to anti-dilutive effect 731 401 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Jan. 31, 2020 | |
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. The following table summarizes activity of the stock repurchase program, reported based on trade date: Shares Repurchased Weighted-Average Price per Share Amount Repurchased (in thousands) Cumulative balance at October 31, 2019 3,838,466 $ 39.10 $ 150,076 Repurchase of common stock under the stock repurchase program 1,288,111 39.36 50,704 Cumulative balance at January 31, 2020 5,126,577 $ 39.16 $ 200,780 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 on vesting of stock unit awards. The purchase price of $ 12.6 million for the shares of Ciena’s stock repurchased during the first three months of fiscal 2020 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 | 3 Months Ended |
Jan. 31, 2020 | |
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 January 31, 2020 2019 Product costs $ 671 $ 637 Service costs 842 770 Share-based compensation expense included in cost of goods sold 1,513 1,407 Research and development 3,849 3,391 Sales and marketing 4,613 3,785 General and administrative 5,527 5,112 Share-based compensation expense included in operating expense 13,989 12,288 Share-based compensation expense capitalized in inventory, net 100 60 Total share-based compensation $ 15,602 $ 13,755 As of January 31, 2020 , total unrecognized share-based compensation expense was approximately $141.7 million , which relates to unvested stock unit awards and is expected to be recognized over a weighted-average period of 1.7 |
Segments and Entity-Wide Disclo
Segments and Entity-Wide Disclosures | 3 Months Ended |
Jan. 31, 2020 | |
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) Platform Software and Services; (iii) Blue Planet Automation Software and Services; and (iv) Global Services. During fiscal 2019, Ciena separated its previous Software and Software-Related Services segment into two stand-alone operating segments. Because Ciena previously disclosed its Platform Software and Services and Blue Planet Automation Software and Services as distinct product lines in its presentation of segment revenue for Software and Software-Related Services, there is no significant change to the presentation of segment revenues as a result of this separation. Comparative periods have been retrospectively adjusted to disclose segment profit for Platform Software and Services and Blue Planet Automation Software and 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 January 31, 2020 , equipment, building, furniture and fixtures, net, totaled $277.7 million , and operating right of use assets, net totaled $50.1 million , primarily supporting asset groups within Ciena’s Networking Platforms, Platform Software and Services and Blue Planet Automation Software and Services segments and supporting Ciena’s unallocated selling and general and administrative activities. As of January 31, 2020 , $17.9 million of Ciena’s intangible assets, net were assigned to asset groups within Ciena’s Networking Platforms segment and $107.7 million of Ciena’s intangible assets, net were assigned to asset groups within Ciena’s Blue Planet Automation Software and Services segment. As of January 31, 2020 , $65.7 million , $156.2 million and $89.0 million of Ciena’s Goodwill was assigned to asset groups within Ciena’s Networking Platforms, Platform Software and Services and Blue Planet Automation Software and Services segments, respectively. As of January 31, 2020 , all of the maintenance spares, net, totaling $54.9 million , were assigned to asset groups within Ciena’s Global Services segment. Segment Revenue The table below sets forth Ciena’s segment revenue for the respective periods (in thousands): Quarter Ended January 31, 2020 2019 Revenue: Networking Platforms Converged Packet Optical $ 591,549 $ 548,997 Packet Networking 67,508 71,569 Total Networking Platforms 659,057 620,566 Platform Software and Services 51,888 41,598 Blue Planet Automation Software and Services 15,466 14,974 Global Services Maintenance Support and Training 61,793 61,277 Installation and Deployment 34,954 30,622 Consulting and Network Design 9,754 9,490 Total Global Services 106,501 101,389 Consolidated revenue $ 832,912 $ 778,527 Segment Profit (Loss) Segment profit (loss) 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, net; interest expense; loss on extinguishment and modification of debt and provision for income taxes. The table below sets forth Ciena’s segment profit (loss) and the reconciliation to consolidated net income during the respective periods indicated (in thousands): Quarter Ended January 31, 2020 2019 Segment profit (loss): Networking Platforms $ 168,270 $ 136,590 Platform Software and Services 28,951 20,464 Blue Planet Automation Software and Services (3,113 ) (2,047 ) Global Services 45,527 39,701 Total segment profit 239,635 194,708 Less: Non-performance operating expenses Selling and marketing 107,066 98,113 General and administrative 42,468 39,243 Amortization of intangible assets 5,853 5,528 Significant asset impairments and restructuring costs 4,472 2,273 Acquisition and integration costs 1,819 1,608 Add: Other non-performance financial items Interest expense and other income, net (5,169 ) (5,188 ) Loss on extinguishment and modification of debt (646 ) — Less: Provision for income taxes 9,814 9,139 Consolidated net income $ 62,328 $ 33,616 Entity-Wide Reporting Ciena’s operating segments each engage in business across three geographic regions: Americas; Europe, Middle East and Africa (“EMEA”); and Asia-Pacific, Japan and India (“APAC”). Americas include activities in North America and South America (previously, Caribbean and Latin America (“CALA”)). The following table reflects Ciena’s geographic distribution of revenue principally based on the relevant location for Ciena’s delivery of products and performance of services. For the periods below, Ciena’s geographic distribution of revenue was as follows (in thousands): Quarter Ended January 31, 2020 2019 Americas $ 574,004 $ 516,481 EMEA 129,965 129,190 APAC 128,943 132,856 Total $ 832,912 $ 778,527 Ciena’s revenue includes $524.3 million and $464.1 million of United States revenue for the first quarter of fiscal 2020 and 2019 , 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): January 31, October 31, Canada $ 209,101 $ 211,901 United States 51,819 58,119 Other International 16,819 16,864 Total $ 277,739 $ 286,884 For the periods below, the only customers that accounted for at least 10% of Ciena’s revenue were as follows (in thousands): Quarter Ended January 31, 2020 2019 Verizon $ 114,548 $ 88,775 AT&T 84,010 94,172 Web-scale provider n/a 89,514 Total $ 198,558 $ 272,461 n/a Denotes revenue representing less than 10% of total revenue for the period The Web-scale provider noted above contributed greater than 10% of total revenue for the first time in fiscal 2019 and purchased products from each of Ciena’s operating segments excluding Blue Planet Automation Software and Services. The other customers identified above purchased products and services from each of Ciena’s operating segments. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jan. 31, 2020 | |
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 $43.5 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 January 31, 2020 , Ciena has recorded CAD $32.5 million (approximately $24.6 million ) in cumulative benefits as a reduction in research and development expense of which CAD $3.6 million (approximately $2.7 million ) was recorded in the first three months of fiscal 2020. As of January 31, 2020 , amounts receivable from this grant were CAD $12.0 million (approximately $9.1 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 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 | 3 Months Ended |
Jan. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Stock Repurchase Program From the end of the first quarter of fiscal 2020 through March 6 , 2020 , Ciena repurchased an additional 443,958 shares of its common stock, for an aggregate purchase price of $18.6 million at an average price of $41.90 per share, inclusive of repurchases pending settlement. As of March 6 , 2020 , Ciena has repurchased an aggregate of 5,570,535 shares and has an aggregate of $280.6 million of authorized funds remaining under its stock repurchase program. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Jan. 31, 2020 | |
Accounting Policies [Abstract] | |
Newly Issued Accounting Standards - Effective and Not Yet Effective | Newly Issued Accounting Standards - Effective Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification ASC 842 , 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. Effective November 1, 2019 , Ciena adopted ASC 842 which requires right-of-use ("ROU") assets and lease liabilities to be recorded on the balance sheet for leases. The guidance specifies that at the inception of a contract, an entity must determine whether the contract is or contains a lease. The contract is or contains a lease if the contract conveys the right to control the use of the property, plant, or equipment for a designated term in exchange for consideration. Ciena’s evaluation of its contracts followed the assessment of whether there was a right to obtain substantially all of the economic benefits from the use and the right to direct the use of the identified asset in the contract. Operating leases are included in the Operating right-of-use assets (“Operating ROU assets”), Operating lease liabilities and Long-term operating lease liabilities in the Condensed Consolidated Balance Sheets. Finance leases are included in Equipment, building, furniture and fixtures, net (“Finance ROU assets”), Accrued liabilities and other short-term obligations and Other long-term obligations are included in the Condensed Consolidated Balance Sheets. Ciena adopted the guidance on a modified retrospective basis as of November 1, 2019 , such that related amounts in prior periods have not been restated. Ciena has operating and finance leases that primarily relate to real property. As a practical expedient, Ciena has elected the “package of practical expedients” and, as a result, did not reassess existing lease identifications, lease classifications or initial direct costs. As a practical expedient, Ciena has elected not to capitalize leases with a term of 12 months or less without a purchase option that it is likely to exercise. Also as a practical expedient for disclosure, Ciena has elected not to separate lease and non-lease components on operating and finance leases. Lease components are payment items directly attributable to the use of the underlying asset, while non-lease components are explicit elements of a contract not directly related to the use of the underlying asset, including pass through operating expenses like common area maintenance and utilities. Operating ROU assets and lease liabilities and Finance ROU assets and lease liabilities are recognized on the Condensed Consolidated Balance Sheets at the present value of the future lease payments over the life of the lease term. Ciena uses discount rates based on incremental borrowing rates, on a collateralized basis, for the respective underlying assets, for terms similar to the respective leases when implicit rates for leases are not determinable. Operating lease costs are included as rent expense in the Condensed Consolidated Statements of Operations. Fixed base payments on operating leases paid directly to the lessor are recorded as lease expense on a straight-line basis. Related variable payments based on usage, changes in an index, or market rate are expensed as incurred. Finance ROU assets are generally amortized on a straight line basis over the lease term with the interest expense on the lease liability recorded using the interest method. The amortization and interest expense are recorded separately in the Condensed Consolidated Statements of Operations. Upon adoption, Ciena recorded Operating ROU assets of $53.3 million and lease liabilities of $76.0 million related to its operating leases. As of October 31, 2019 , the restructuring reserve liability for vacated office space of $11.1 million was included in Accrued liabilities and other short-term obligations and Other long-term obligations on the Condensed Consolidated Balance Sheet under prior accounting guidance. Upon adoption of the updated guidance, the existing lease reserve liability was reclassified as a reduction to the Operating ROU assets. ROU assets will be tested for impairment when circumstances indicate that the carrying values may not be recoverable. The adoption of this guidance did not require a cumulative effect adjustment or have an impact on the Condensed Consolidated Statements of Income or Condensed Consolidated Statements of Cash Flows. Opening Balance Adjustments The following table summarizes the cumulative effect of the changes made to Ciena’s Condensed Consolidated Balance Sheet in connection with the adoption of ASC 842 (in millions): Balance at October 31, 2019 New Lease Accounting Standard Adjusted Balance at November 1, 2019 ASSETS: Operating right-of-use assets $ — $ 53,334 (1) $ 53,334 Total assets $ 3,893,346 $ 53,334 $ 3,946,680 LIABILITIES AND STOCKHOLDERS’ EQUITY: Accrued liabilities and other short-term obligations $ 382,740 $ (1,484 ) (2) $ 381,256 Short-term lease liabilities $ — 20,498 (3) $ 20,498 Other long-term obligations $ 148,747 (21,244 ) (4) $ 127,503 Long-term operating lease liabilities $ — 55,564 (5) $ 55,564 Total liabilities and stockholders equity $ 3,893,346 $ 53,334 $ 3,946,680 (1) Represents $76.0 million of operating leases recognized as Operating ROU assets upon adoption of ASC 842, less $5.4 million of deferred rent, $6.2 million of tenant improvement allowances, $1.5 million of short-term restructuring reserve liability and $9.6 million of long-term restructuring reserve liability all recognized as a reduction to Right-of-use assets. (2) Represents $1.5 million of short-term restructuring reserve liability recognized as a reduction to Operating ROU assets. (3) Represents $20.5 million of lease liabilities for operating leases. (4) Represents $9.6 million of long-term restructuring reserve liability, $5.4 million of deferred rent, and $6.2 million of tenant improvement allowances recognized as a reduction to Right-of-use assets. (5) Represents $55.6 million of lease liabilities for operating leases. See Note 15 for additional information. Fair Value Measurement In August 2018, the FASB issued ASU No. 2018-13 ( “ASU 2018-13” ), Fair Value Measurement (Topic 820): Disclosure Framework which modifies the disclosure requirements on fair value measurements. Ciena adopted ASU 2018-13 beginning the first quarter of fiscal year 2020. Adoption of ASU 2018-13 did not have a material effect on Ciena’s financial position or results of operations. Newly Issued Accounting Standards - Not Yet Effective 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 collectability 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 related disclosures. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following table summarizes the cumulative effect of the changes made to Ciena’s Condensed Consolidated Balance Sheet in connection with the adoption of ASC 842 (in millions): Balance at October 31, 2019 New Lease Accounting Standard Adjusted Balance at November 1, 2019 ASSETS: Operating right-of-use assets $ — $ 53,334 (1) $ 53,334 Total assets $ 3,893,346 $ 53,334 $ 3,946,680 LIABILITIES AND STOCKHOLDERS’ EQUITY: Accrued liabilities and other short-term obligations $ 382,740 $ (1,484 ) (2) $ 381,256 Short-term lease liabilities $ — 20,498 (3) $ 20,498 Other long-term obligations $ 148,747 (21,244 ) (4) $ 127,503 Long-term operating lease liabilities $ — 55,564 (5) $ 55,564 Total liabilities and stockholders equity $ 3,893,346 $ 53,334 $ 3,946,680 (1) Represents $76.0 million of operating leases recognized as Operating ROU assets upon adoption of ASC 842, less $5.4 million of deferred rent, $6.2 million of tenant improvement allowances, $1.5 million of short-term restructuring reserve liability and $9.6 million of long-term restructuring reserve liability all recognized as a reduction to Right-of-use assets. (2) Represents $1.5 million of short-term restructuring reserve liability recognized as a reduction to Operating ROU assets. (3) Represents $20.5 million of lease liabilities for operating leases. (4) Represents $9.6 million of long-term restructuring reserve liability, $5.4 million of deferred rent, and $6.2 million of tenant improvement allowances recognized as a reduction to Right-of-use assets. (5) Represents $55.6 million of lease liabilities for operating leases. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
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 January 31, 2020 Networking Platforms Platform Software and Services Blue Planet Automation Software and Services Global Services Total Product lines: Converged Packet Optical $ 591,549 $ — $ — $ — $ 591,549 Packet Networking 67,508 — — — 67,508 Platform Software and Services — 51,888 — — 51,888 Blue Planet Automation Software and Services — — 15,466 — 15,466 Maintenance Support and Training — — — 61,793 61,793 Installation and Deployment — — — 34,954 34,954 Consulting and Network Design — — — 9,754 9,754 Total revenue by product line $ 659,057 $ 51,888 $ 15,466 $ 106,501 $ 832,912 Timing of revenue recognition: Products and services at a point in time $ 659,057 $ 13,114 $ 3,736 $ 4,197 $ 680,104 Services transferred over time — 38,774 11,730 102,304 152,808 Total revenue by timing of revenue recognition $ 659,057 $ 51,888 $ 15,466 $ 106,501 $ 832,912 Quarter Ended January 31, 2019 Networking Platforms Platform Software and Services Blue Planet Automation Software and Services Global Services Total Product lines: Converged Packet Optical $ 548,997 $ — $ — $ — $ 548,997 Packet Networking 71,569 — — — 71,569 Platform Software and Services — 41,598 — — 41,598 Blue Planet Automation Software and Services — — 14,974 — 14,974 Maintenance Support and Training — — — 61,277 61,277 Installation and Deployment — — — 30,622 30,622 Consulting and Network Design — — — 9,490 9,490 Total revenue by product line $ 620,566 $ 41,598 $ 14,974 $ 101,389 $ 778,527 Timing of revenue recognition: Products and services at a point in time $ 620,566 $ 16,044 $ 6,228 $ 3,566 $ 646,404 Services transferred over time — 25,554 8,746 97,823 132,123 Total revenue by timing of revenue recognition $ 620,566 $ 41,598 $ 14,974 $ 101,389 $ 778,527 Effective the beginning of fiscal 2020, Ciena’s Global Sales and Marketing organization combined its previous North America and Caribbean and Latin America (“CALA”) regions into a new “Americas” sales region. Accordingly, Ciena reflects its sales geographically around the following markets: (i) Americas; (ii) Europe, Middle East and Africa (“EMEA”); and (iii) Asia Pacific, Japan and India (“APAC”). Within each geographic area, we maintain specific teams or personnel that focus on a particular region, country, customer or market vertical. These teams include sales management, account salespersons and sales engineers, as well as services professionals and commercial management personnel, who ensure that we maintain a high-touch, consultative relationship with our customers. For the periods below, Ciena’s geographic distribution of revenue was as follows (in thousands): Quarter Ended January 31, 2020 2019 Geographic distribution: Americas $ 574,004 $ 516,481 EMEA 129,965 129,190 APAC 128,943 132,856 Total revenue by geographic distribution $ 832,912 $ 778,527 |
Contract Balances | The following table provides information about receivables, contract assets and contract liabilities (deferred revenue) from contracts with customers (in thousands): Balance at January 31, 2020 Balance at October 31, 2019 Accounts receivable, net $ 655,105 $ 724,854 Contract assets $ 83,717 $ 84,046 Deferred revenue $ 166,835 $ 156,873 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the final purchase price allocation related to the acquisition based on the estimated fair value of the acquired assets and assumed liabilities (in thousands): Amount Cash and cash equivalents $ 5,718 Accounts receivable 610 Prepaid expenses and other 536 Equipment, furniture and fixtures 17 Goodwill 13,055 Customer relationships and contracts 400 Developed technology 22,200 Accounts payable (47 ) Accrued liabilities (286 ) Deferred revenue (1,493 ) Deferred tax liability (6,692 ) Total purchase consideration $ 34,018 |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
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, which are included in Accrued liabilities and other short-term obligations on our Condensed Consolidated Balance Sheets, for the three months ended January 31, 2020 (in thousands): Workforce reduction Consolidation of excess facilities and other restructuring activities Total Balance at October 31, 2019 $ 3,983 $ 11,160 $ 15,143 Charges 1,204 (1) 3,268 (2) 4,472 Adjustments related to ASC 842 — (11,160 ) (3) (11,160 ) Cash payments (2,955 ) (3,268 ) (6,223 ) Balance at January 31, 2020 $ 2,232 $ — $ 2,232 Current restructuring liabilities $ 2,232 $ — $ 2,232 Non-current restructuring liabilities $ — $ — $ — (1) Reflects a global workforce reduction of approximately 22 employees during the three months ended January 31, 2020 as part of a business optimization strategy to improve gross margin, constrain operating expense and redesign certain business processes. (2) Primarily represents variable costs and imputed interest expense related to restructured facilities (3) Represents restructuring reserve liability recognized as a reduction to Operating right-of-use assets, net in relation to adoption of ASC 842. See Notes 2 and 15 for further discussion. The following table sets forth the restructuring activity and balance of the restructuring liability accounts, which are included in Accrued liabilities and other short-term obligations on our Condensed Consolidated Balance Sheets for the three months ended January 31, 2019 (in thousands): Workforce reduction Consolidation of excess facilities Total Balance at October 31, 2018 $ 2,108 $ 1,739 $ 3,847 Charges 1,752 (1) 521 (2) 2,273 Cash payments (3,009 ) (548 ) (3,557 ) Balance at January 31, 2019 $ 851 $ 1,712 $ 2,563 Current restructuring liabilities $ 851 $ 525 $ 1,376 Non-current restructuring liabilities $ — $ 1,187 $ 1,187 (1) Reflects a global workforce reduction of approximately 10 employees during the three months ended January 31, 2019 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) | 3 Months Ended |
Jan. 31, 2020 | |
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 January 31, 2020 2019 Interest income $ 3,390 $ 3,872 Gains on non-hedge designated foreign currency forward contracts 637 22 Foreign currency exchange gains (losses) (771 ) 783 Other 390 (424 ) Interest and other income, net $ 3,646 $ 4,253 |
Short-Term and Long-Term Inve_2
Short-Term and Long-Term Investments (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
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): January 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. government obligations: Included in short-term investments $ 109,962 $ 105 $ — $ 110,067 Included in long-term investments 10,073 3 — 10,076 $ 120,035 $ 108 $ — $ 120,143 October 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. government obligations: Included in short-term investments $ 109,715 $ 225 $ — $ 109,940 Included in long-term investments 10,017 — (3 ) 10,014 $ 119,732 $ 225 $ (3 ) $ 119,954 |
Schedule of Legal Maturities of Debt Investments | The following table summarizes the final legal maturities of debt investments at January 31, 2020 (in thousands): Amortized Cost Estimated Fair Value Less than one year $ 109,962 $ 110,067 Due in 1-2 years 10,073 10,076 $ 120,035 $ 120,143 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
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): January 31, 2020 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 632,620 $ — $ — $ 632,620 Bond mutual fund 50,180 — — 50,180 U.S. government obligations — 120,143 — 120,143 Foreign currency forward contracts — 273 — 273 Total assets measured at fair value $ 682,800 $ 120,416 $ — $ 803,216 Liabilities: Foreign currency forward contracts $ — $ 710 $ — $ 710 Forward starting interest rate swaps — 22,225 — 22,225 Contingent consideration — — 3,705 3,705 Total liabilities measured at fair value $ — $ 22,935 $ 3,705 $ 26,640 October 31, 2019 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 759,114 $ — $ — $ 759,114 U.S. government obligations — 119,954 — 119,954 Foreign currency forward contracts — 1,570 — 1,570 Total assets measured at fair value $ 759,114 $ 121,524 $ — $ 880,638 Liabilities: Foreign currency forward contracts $ — $ 35 $ — $ 35 Forward starting interest rate swaps — 21,093 — 21,093 Contingent consideration — — 3,705 3,705 Total liabilities measured at fair value $ — $ 21,128 $ 3,705 $ 24,833 |
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): January 31, 2020 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 682,800 $ — $ — $ 682,800 Short-term investments — 110,067 — 110,067 Prepaid expenses and other — 273 — 273 Long-term investments — 10,076 — 10,076 Total assets measured at fair value $ 682,800 $ 120,416 $ — $ 803,216 Liabilities: Accrued liabilities and other short-term obligations $ — $ 710 $ 3,705 $ 4,415 Other long-term obligations — 22,225 — 22,225 Total liabilities measured at fair value $ — $ 22,935 $ 3,705 $ 26,640 October 31, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 759,114 $ — $ — $ 759,114 Short-term investments — 109,940 — 109,940 Prepaid expenses and other — 1,570 — 1,570 Long-term investments — 10,014 — 10,014 Total assets measured at fair value $ 759,114 $ 121,524 $ — $ 880,638 Liabilities: Accrued liabilities and other short-term obligations $ — $ 35 $ — $ 35 Other long-term obligations — 21,093 3,705 24,798 Total liabilities measured at fair value $ — $ 21,128 $ 3,705 $ 24,833 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | As of the dates indicated, inventories are comprised of the following (in thousands): January 31, October 31, Raw materials $ 106,522 $ 99,041 Work-in-process 11,728 13,657 Finished goods 219,907 226,622 Deferred cost of goods sold 49,256 53,051 Gross inventories 387,413 392,371 Provision for excess and obsolescence (44,740 ) (47,322 ) Inventories, net $ 342,673 $ 345,049 |
Prepaid Expenses and Other (Tab
Prepaid Expenses and Other (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
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): January 31, October 31, Prepaid VAT and other taxes $ 87,706 $ 84,706 Contract assets for unbilled accounts receivable 83,717 84,046 Prepaid expenses 65,806 48,680 Product demonstration equipment, net 37,866 38,900 Other non-trade receivables 36,236 28,136 Capitalized contract acquisition costs 9,391 11,677 Deferred deployment expense 318 125 Derivative assets 273 1,570 Restricted cash — 74 $ 321,313 $ 297,914 |
Other Balance Sheet Details (Ta
Other Balance Sheet Details (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
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): January 31, October 31, Compensation, payroll related tax and benefits (1) $ 68,924 $ 182,363 Warranty 51,190 48,498 Vacation 22,708 22,290 Contingent consideration 3,705 4,372 Contingent compensation 2,880 — Finance lease obligations 2,710 2,764 Interest payable 717 1,007 Other 120,471 121,446 $ 273,305 $ 382,740 (1) Reduction is primarily due to the timing of bonus payments to employees under our annual cash incentive compensation plan. |
Schedule of Accrued Warranties | The following table summarizes the activity in Ciena’s accrued warranty for the fiscal periods indicated (in thousands): Three Months Ended January 31, Beginning Balance Current Period Provisions Settlements Ending Balance 2019 $ 44,740 3,891 (4,183 ) $ 44,448 2020 $ 48,498 7,898 (5,206 ) $ 51,190 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
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 three months ended January 31, 2020 : Unrealized Gain/ Unrealized Gain/(Loss) on Unrealized Gain/(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, 2019 $ 152 $ 925 $ (13,686 ) $ (9,475 ) $ (22,084 ) Other comprehensive loss before reclassifications (86 ) (921 ) (1,718 ) (2,982 ) (5,707 ) Amounts reclassified from AOCI — (158 ) 238 — 80 Balance at January 31, 2020 $ 66 $ (154 ) $ (15,166 ) $ (12,457 ) $ (27,711 ) The following table summarizes the changes in AOCI, net of tax, for the three months ended January 31, 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 301 402 (7,593 ) 1,150 (5,740 ) Amounts reclassified from AOCI — 1,158 (278 ) — 880 Balance at January 31, 2019 $ (124 ) $ (1,500 ) $ (1,454 ) $ (7,562 ) $ (10,640 ) |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
Leases [Abstract] | |
Leases Included in the Balance Sheet | Leases included in the Condensed Consolidated Balance Sheets were as follows: Classification As of January 31, 2020 Operating leases: Operating ROU Assets Operating right-of-use assets $ 50,148 Operating lease liabilities Operating lease liabilities and Long-term operating lease liabilities 71,956 Finance leases: Buildings, gross Equipment, building, furniture and fixtures, net $ 71,235 Less: accumulated depreciation Equipment, building, furniture and fixtures, net (14,548 ) Buildings, net $ 56,687 Finance lease liabilities Accrued liabilities and other short-term obligations and other long-term obligations $ 66,831 As of January 31, 2020 , the weighted average remaining lease terms and weighted average discount rates for operating and finance leases were as follows: Weighted-average remaining lease term in years: Operating leases 4.91 Finance leases 12.62 Weighted-average discount rates: Operating leases 2.39 % Finance leases 7.56 % |
Components of Lease Expense | The components of lease expense included in the Condensed Consolidated Statement of Operations were as follows: Three months ended Classification January 31, 2020 Operating lease costs Operating expense $ 4,457 Finance lease cost: Amortization of finance ROU asset Operating expense 1,140 Interest on finance lease liabilities Interest expense 1,244 Total finance lease cost 2,384 Non-capitalized lease cost Operating expense 621 Variable lease cost (1) Operating expense 1,311 Net lease cost (2) $ 8,773 (1) Variable lease costs includes expenses relating to insurance, taxes, maintenance and other costs required by the applicable operating lease. Variable lease costs are determined by whether they are to be included in base rent and if amounts are based on a consumer price index. (2) Excludes other operating expense of $4.3 million for the three months ended January 31, 2020 , related to amortization of leasehold improvements. |
Lessee, Operating Lease, Liability, Maturity | Future minimum lease payments and the present value of minimum lease payments related to operating and finance leases as of January 31, 2020 were as follows: Operating Leases Finance Leases Total Remaining fiscal 2020 $ 15,778 $ 7,512 $ 23,290 2021 18,261 7,491 25,752 2022 13,440 7,932 21,372 2023 10,157 8,008 18,165 2024 8,052 8,024 16,076 Thereafter 12,205 64,616 76,821 Total lease payments 77,893 103,583 181,476 Less: Imputed interest (5,937 ) (36,752 ) (42,689 ) Present value of lease liabilities 71,956 66,831 138,787 Less: Current portion of present value of minimum lease payments (18,623 ) (2,710 ) (21,333 ) Long-term portion of present value of minimum lease payments $ 53,333 $ 64,121 $ 117,454 |
Finance Lease, Liability, Maturity | Future minimum lease payments and the present value of minimum lease payments related to operating and finance leases as of January 31, 2020 were as follows: Operating Leases Finance Leases Total Remaining fiscal 2020 $ 15,778 $ 7,512 $ 23,290 2021 18,261 7,491 25,752 2022 13,440 7,932 21,372 2023 10,157 8,008 18,165 2024 8,052 8,024 16,076 Thereafter 12,205 64,616 76,821 Total lease payments 77,893 103,583 181,476 Less: Imputed interest (5,937 ) (36,752 ) (42,689 ) Present value of lease liabilities 71,956 66,831 138,787 Less: Current portion of present value of minimum lease payments (18,623 ) (2,710 ) (21,333 ) Long-term portion of present value of minimum lease payments $ 53,333 $ 64,121 $ 117,454 |
Future Minimum Rental Payments for Operating Leases | As of October 31, 2019 , minimum aggregate rentals under operating leases were as follows: 2020 2021 2022 2023 2024 Thereafter Total Operating leases (1) $ 28,776 $ 24,184 $ 16,767 $ 13,393 $ 10,632 $ 26,110 $ 119,862 1) The amount for operating lease commitments above include estimated variable expenses relating to insurance, taxes, maintenance and other costs required by the applicable operating lease. |
Short-Term and Long-Term Debt (
Short-Term and Long-Term Debt (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Convertible Notes | The net carrying values of Ciena’s term loans were comprised of the following for the fiscal periods indicated (in thousands): January 31, 2020 October 31, 2019 Principal Balance Unamortized Discount Deferred Debt Issuance Costs Net Carrying Value Net Carrying Value Term Loan Payable due September 28, 2025 (New) $ 693,000 $ (1,824 ) $ (3,390 ) $ 687,786 $ — Term Loan Payable due September 28, 2025 (Old) $ — $ — $ — $ — $ 687,406 |
Earnings Per Share Calculation
Earnings Per Share Calculation (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Numerator and Denominator of Basic and Diluted Earnings Per Share | The following tables (in thousands except per share amounts) reconcile basic net income per common share (“Basic EPS”) and diluted net income 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 January 31, Numerator 2020 2019 Net income used to calculate Basic and Diluted EPS $ 62,328 $ 33,616 Quarter Ended January 31, Denominator 2020 2019 Basic weighted average shares outstanding 154,334 156,314 Add: Shares underlying outstanding stock options and stock unit awards and issuable under employee stock purchase plan 1,404 1,860 Dilutive weighted average shares outstanding 155,738 158,174 Quarter Ended January 31, EPS 2020 2019 Basic EPS $ 0.40 $ 0.22 Diluted EPS $ 0.40 $ 0.21 |
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 January 31, 2020 2019 Shares underlying stock options and stock unit awards 731 401 Total shares excluded due to anti-dilutive effect 731 401 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
Equity [Abstract] | |
Schedule of Stock Repurchase Program | of the stock repurchase program, reported based on trade date: Shares Repurchased Weighted-Average Price per Share Amount Repurchased (in thousands) Cumulative balance at October 31, 2019 3,838,466 $ 39.10 $ 150,076 Repurchase of common stock under the stock repurchase program 1,288,111 39.36 50,704 Cumulative balance at January 31, 2020 5,126,577 $ 39.16 $ 200,780 |
Share-Based Compensation Expe_2
Share-Based Compensation Expense (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
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 January 31, 2020 2019 Product costs $ 671 $ 637 Service costs 842 770 Share-based compensation expense included in cost of goods sold 1,513 1,407 Research and development 3,849 3,391 Sales and marketing 4,613 3,785 General and administrative 5,527 5,112 Share-based compensation expense included in operating expense 13,989 12,288 Share-based compensation expense capitalized in inventory, net 100 60 Total share-based compensation $ 15,602 $ 13,755 |
Segments and Entity-Wide Disc_2
Segments and Entity-Wide Disclosures (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Revenue | The table below sets forth Ciena’s segment revenue for the respective periods (in thousands): Quarter Ended January 31, 2020 2019 Revenue: Networking Platforms Converged Packet Optical $ 591,549 $ 548,997 Packet Networking 67,508 71,569 Total Networking Platforms 659,057 620,566 Platform Software and Services 51,888 41,598 Blue Planet Automation Software and Services 15,466 14,974 Global Services Maintenance Support and Training 61,793 61,277 Installation and Deployment 34,954 30,622 Consulting and Network Design 9,754 9,490 Total Global Services 106,501 101,389 Consolidated revenue $ 832,912 $ 778,527 |
Schedule of Segment Profit (Loss) and the Reconciliation to Consolidated Net Income (Loss) | The table below sets forth Ciena’s segment profit (loss) and the reconciliation to consolidated net income during the respective periods indicated (in thousands): Quarter Ended January 31, 2020 2019 Segment profit (loss): Networking Platforms $ 168,270 $ 136,590 Platform Software and Services 28,951 20,464 Blue Planet Automation Software and Services (3,113 ) (2,047 ) Global Services 45,527 39,701 Total segment profit 239,635 194,708 Less: Non-performance operating expenses Selling and marketing 107,066 98,113 General and administrative 42,468 39,243 Amortization of intangible assets 5,853 5,528 Significant asset impairments and restructuring costs 4,472 2,273 Acquisition and integration costs 1,819 1,608 Add: Other non-performance financial items Interest expense and other income, net (5,169 ) (5,188 ) Loss on extinguishment and modification of debt (646 ) — Less: Provision for income taxes 9,814 9,139 Consolidated net income $ 62,328 $ 33,616 |
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): January 31, October 31, Canada $ 209,101 $ 211,901 United States 51,819 58,119 Other International 16,819 16,864 Total $ 277,739 $ 286,884 Quarter Ended January 31, 2020 2019 Americas $ 574,004 $ 516,481 EMEA 129,965 129,190 APAC 128,943 132,856 Total $ 832,912 $ 778,527 |
Schedule of Revenue by Major Customers | For the periods below, the only customers that accounted for at least 10% of Ciena’s revenue were as follows (in thousands): Quarter Ended January 31, 2020 2019 Verizon $ 114,548 $ 88,775 AT&T 84,010 94,172 Web-scale provider n/a 89,514 Total $ 198,558 $ 272,461 n/a Denotes revenue representing less than 10% of total revenue for the period |
Significant Accounting Polici_4
Significant Accounting Policies - Opening Balance Adjustments (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Nov. 01, 2019 | Oct. 31, 2019 | Jan. 31, 2019 |
ASSETS | ||||
Operating right-of-use assets | $ 50,148 | $ 53,334 | ||
Total assets | 3,830,887 | 3,946,680 | $ 3,893,346 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||
Accrued liabilities and other short-term obligations | 273,305 | 381,256 | 382,740 | |
Operating lease liabilities | 18,623 | 20,498 | ||
Other long-term obligations | 125,607 | 127,503 | 148,747 | |
Long-term operating lease liabilities | 53,333 | 55,564 | ||
Total liabilities and stockholders’ equity | 3,830,887 | 3,946,680 | $ 3,893,346 | |
Short-term restructuring reserve liability | 2,232 | $ 1,376 | ||
Long-term restructuring reserve liability | $ 0 | $ 1,187 | ||
Accounting Standards Update 2016-02 | ||||
ASSETS | ||||
Operating right-of-use assets | 53,334 | |||
Total assets | 53,334 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||
Accrued liabilities and other short-term obligations | (1,484) | |||
Operating lease liabilities | 20,498 | |||
Other long-term obligations | (21,244) | |||
Long-term operating lease liabilities | 55,564 | |||
Total liabilities and stockholders’ equity | 53,334 | |||
Operating right-of-use assets before adjustments | 76,000 | |||
Deferred rent | (5,400) | |||
Tenant improvement allowances | (6,200) | |||
Short-term restructuring reserve liability | (1,500) | |||
Long-term restructuring reserve liability | $ (9,600) |
Significant Accounting Polici_5
Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Nov. 01, 2019 | Oct. 31, 2019 | Jan. 31, 2019 | Oct. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Operating right-of-use assets | $ 50,148 | $ 53,334 | |||
Operating lease liabilities | 71,956 | $ 76,000 | |||
Restructuring reserve | $ 2,232 | $ 15,143 | $ 2,563 | $ 3,847 | |
Consolidation of excess facilities and other restructuring activities | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Restructuring reserve | $ 11,100 |
Revenue - Disaggregation of Re
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 832,912 | $ 778,527 |
Products and services at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 680,104 | 646,404 |
Services transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 152,808 | 132,123 |
Converged Packet Optical | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 591,549 | 548,997 |
Packet Networking | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 67,508 | 71,569 |
Platform Software and Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 51,888 | 41,598 |
Blue Planet Automation Software and Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 15,466 | 14,974 |
Maintenance Support and Training | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 61,793 | 61,277 |
Installation and Deployment | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 34,954 | 30,622 |
Consulting and Network Design | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 9,754 | 9,490 |
Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 832,912 | 778,527 |
Networking Platforms | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 659,057 | 620,566 |
Networking Platforms | Products and services at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 659,057 | 620,566 |
Networking Platforms | Services transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Networking Platforms | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 659,057 | 620,566 |
Networking Platforms | Operating Segments | Converged Packet Optical | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 591,549 | 548,997 |
Networking Platforms | Operating Segments | Packet Networking | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 67,508 | 71,569 |
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 |
Platform Software and Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 51,888 | 41,598 |
Platform Software and Services | Products and services at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 13,114 | 16,044 |
Platform Software and Services | Services transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 38,774 | 25,554 |
Platform Software and Services | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 51,888 | 41,598 |
Platform Software and Services | Operating Segments | Converged Packet Optical | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Platform Software and Services | Operating Segments | Packet Networking | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Platform Software and Services | Operating Segments | Platform Software and Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 51,888 | 41,598 |
Platform Software and Services | Operating Segments | Blue Planet Automation Software and Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Platform Software and Services | Operating Segments | Maintenance Support and Training | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Platform Software and Services | Operating Segments | Installation and Deployment | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Platform Software and Services | Operating Segments | Consulting and Network Design | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Blue Planet Automation Software and Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 15,466 | 14,974 |
Blue Planet Automation Software and Services | Products and services at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 3,736 | 6,228 |
Blue Planet Automation Software and Services | Services transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 11,730 | 8,746 |
Blue Planet Automation Software and Services | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 15,466 | 14,974 |
Blue Planet Automation Software and Services | Operating Segments | Converged Packet Optical | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Blue Planet Automation Software and Services | Operating Segments | Packet Networking | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Blue Planet Automation Software and Services | Operating Segments | Platform Software and Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Blue Planet Automation Software and Services | Operating Segments | Blue Planet Automation Software and Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 15,466 | 14,974 |
Blue Planet Automation Software and Services | Operating Segments | Maintenance Support and Training | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Blue Planet Automation Software and Services | Operating Segments | Installation and Deployment | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Blue Planet Automation Software and Services | Operating Segments | Consulting and Network Design | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Global Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 106,501 | 101,389 |
Global Services | Products and services at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 4,197 | 3,566 |
Global Services | Services transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 102,304 | 97,823 |
Global Services | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 106,501 | 101,389 |
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 | 61,793 | 61,277 |
Global Services | Operating Segments | Installation and Deployment | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 34,954 | 30,622 |
Global Services | Operating Segments | Consulting and Network Design | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 9,754 | $ 9,490 |
Revenue - Geographical Distribu
Revenue - Geographical Distribution of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 832,912 | $ 778,527 |
Americas | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 574,004 | 516,481 |
EMEA | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 129,965 | 129,190 |
APAC | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 128,943 | $ 132,856 |
Revenue - Contract Balances (De
Revenue - Contract Balances (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Oct. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable, net | $ 655,105 | $ 724,854 |
Contract assets | 83,717 | 84,046 |
Deferred revenue | $ 166,835 | $ 156,873 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 31, 2020 | Jan. 31, 2019 | Oct. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||
Revenue recognized that was previously deferred | $ 49 | $ 39.4 | |
Capitalized contract acquisition costs | 13.1 | $ 15.7 | |
Amortization of capitalized contract acquisition costs | 5.6 | $ 4.1 | |
Remaining performance obligation | $ 905 |
Revenue - Performance Obligatio
Revenue - Performance Obligation (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-02-01 | Jan. 31, 2020 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percentage of remaining performance obligation | 82.00% |
Period of remaining performance obligation | 12 months |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | Nov. 02, 2019 | Jan. 31, 2020 | Jan. 31, 2019 |
Business Acquisition [Line Items] | |||
Acquisition and integration costs | $ 1,819 | $ 1,608 | |
Centina Systems, Inc. | |||
Business Acquisition [Line Items] | |||
Cash transaction for acquisition | $ 34,000 | ||
Acquisition and integration costs | $ 500 | ||
Customer relationships and contracts | Centina Systems, Inc. | |||
Business Acquisition [Line Items] | |||
Estimated useful lives | 2 years | ||
Developed technology | Centina Systems, Inc. | |||
Business Acquisition [Line Items] | |||
Estimated useful lives | 5 years |
Business Combinations - Purchas
Business Combinations - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Nov. 02, 2019 | Oct. 31, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 310,913 | $ 297,937 | |
Centina Systems, Inc. | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 5,718 | ||
Accounts receivable | 610 | ||
Prepaid expenses and other | 536 | ||
Equipment, furniture and fixtures | 17 | ||
Goodwill | 13,055 | ||
Accounts payable | (47) | ||
Accrued liabilities | (286) | ||
Deferred revenue | (1,493) | ||
Deferred tax liability | (6,692) | ||
Total purchase consideration | 34,018 | ||
Customer relationships and contracts | Centina Systems, Inc. | |||
Business Acquisition [Line Items] | |||
Intangible assets | 400 | ||
Developed technology | Centina Systems, Inc. | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 22,200 |
Restructuring Costs (Details)
Restructuring Costs (Details) $ in Thousands | 3 Months Ended | |
Jan. 31, 2020USD ($)employee | Jan. 31, 2019USD ($)employee | |
Activity and balance of the restructuring liability accounts | ||
Balance at beginning of period | $ 15,143 | $ 3,847 |
Charges | 4,472 | 2,273 |
Adjustments related to ASC 842 | (11,160) | |
Cash payments | (6,223) | (3,557) |
Balance at end of period | 2,232 | 2,563 |
Current restructuring liabilities | 2,232 | 1,376 |
Non-current restructuring liabilities | 0 | 1,187 |
Workforce reduction | ||
Activity and balance of the restructuring liability accounts | ||
Balance at beginning of period | 3,983 | 2,108 |
Charges | 1,204 | 1,752 |
Adjustments related to ASC 842 | 0 | |
Cash payments | (2,955) | (3,009) |
Balance at end of period | 2,232 | 851 |
Current restructuring liabilities | 2,232 | 851 |
Non-current restructuring liabilities | $ 0 | $ 0 |
Number of employee reduction | employee | 22 | 10 |
Consolidation of excess facilities and other restructuring activities | ||
Activity and balance of the restructuring liability accounts | ||
Balance at beginning of period | $ 11,160 | $ 1,739 |
Charges | 3,268 | 521 |
Adjustments related to ASC 842 | (11,160) | |
Cash payments | (3,268) | (548) |
Balance at end of period | 0 | 1,712 |
Current restructuring liabilities | 0 | 525 |
Non-current restructuring liabilities | $ 0 | $ 1,187 |
Interest and Other Income, Ne_2
Interest and Other Income, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Other Income and Expenses [Abstract] | ||
Interest income | $ 3,390 | $ 3,872 |
Gains on non-hedge designated foreign currency forward contracts | 637 | 22 |
Foreign currency exchange gains (losses) | (771) | 783 |
Other | 390 | (424) |
Interest and other income, net | $ 3,646 | $ 4,253 |
Short-Term and Long-Term Inve_3
Short-Term and Long-Term Investments - Components of Investments (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Oct. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 120,035 | |
Estimated Fair Value | 120,143 | |
U.S. government obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 120,035 | $ 119,732 |
Gross Unrealized Gains | 108 | 225 |
Gross Unrealized Losses | 0 | (3) |
Estimated Fair Value | 120,143 | 119,954 |
Included in short-term investments | U.S. government obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 109,962 | 109,715 |
Gross Unrealized Gains | 105 | 225 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 110,067 | 109,940 |
Included in long-term investments | U.S. government obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 10,073 | 10,017 |
Gross Unrealized Gains | 3 | 0 |
Gross Unrealized Losses | 0 | (3) |
Estimated Fair Value | $ 10,076 | $ 10,014 |
Short-Term and Long-Term Inve_4
Short-Term and Long-Term Investments - Legal Maturities of Debt Investments (Details) $ in Thousands | Jan. 31, 2020USD ($) |
Amortized Cost | |
Less than one year | $ 109,962 |
Due in 1-2 years | 10,073 |
Amortized Cost | 120,035 |
Estimated Fair Value | |
Less than one year | 110,067 |
Due in 1-2 years | 10,076 |
Total | $ 120,143 |
- Fair Value Measurements (Deta
- Fair Value Measurements (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Oct. 31, 2019 |
Assets: | ||
Debt securities | $ 120,143 | |
Liabilities: | ||
Contingent consideration | 3,700 | |
Fair value, Measurements, Recurring | ||
Assets: | ||
Money market funds | 632,620 | $ 759,114 |
Total assets measured at fair value | 803,216 | 880,638 |
Liabilities: | ||
Contingent consideration | 3,705 | 3,705 |
Total liabilities measured at fair value | 26,640 | 24,833 |
Fair value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Money market funds | 632,620 | 759,114 |
Total assets measured at fair value | 682,800 | 759,114 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Fair value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Money market funds | 0 | 0 |
Total assets measured at fair value | 120,416 | 121,524 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total liabilities measured at fair value | 22,935 | 21,128 |
Fair value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Money market funds | 0 | 0 |
Total assets measured at fair value | 0 | 0 |
Liabilities: | ||
Contingent consideration | 3,705 | 3,705 |
Total liabilities measured at fair value | 3,705 | 3,705 |
Foreign Currency Forward Contracts | Fair value, Measurements, Recurring | ||
Assets: | ||
Derivative asset | 273 | 1,570 |
Liabilities: | ||
Derivative liability | 710 | 35 |
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 | 273 | 1,570 |
Liabilities: | ||
Derivative liability | 710 | 35 |
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 | ||
Liabilities: | ||
Derivative liability | 21,093 | |
Forward Starting Interest Rate Swaps | Fair value, Measurements, Recurring | ||
Liabilities: | ||
Derivative liability | 22,225 | |
Forward Starting Interest Rate Swaps | Fair value, Measurements, Recurring | Level 1 | ||
Liabilities: | ||
Derivative liability | 0 | 0 |
Forward Starting Interest Rate Swaps | Fair value, Measurements, Recurring | Level 2 | ||
Liabilities: | ||
Derivative liability | 22,225 | 21,093 |
Forward Starting Interest Rate Swaps | Fair value, Measurements, Recurring | Level 3 | ||
Liabilities: | ||
Derivative liability | 0 | 0 |
Bond mutual fund | Fair value, Measurements, Recurring | ||
Assets: | ||
Debt securities | 50,180 | |
Bond mutual fund | Fair value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Debt securities | 50,180 | |
Bond mutual fund | Fair value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Debt securities | 0 | |
Bond mutual fund | Fair value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Debt securities | 0 | |
U.S. government obligations | Fair value, Measurements, Recurring | ||
Assets: | ||
Debt securities | 120,143 | 119,954 |
U.S. government obligations | Fair value, Measurements, Recurring | Level 1 | ||
Assets: | ||
Debt securities | 0 | 0 |
U.S. government obligations | Fair value, Measurements, Recurring | Level 2 | ||
Assets: | ||
Debt securities | 120,143 | 119,954 |
U.S. government obligations | Fair value, Measurements, Recurring | Level 3 | ||
Assets: | ||
Debt securities | $ 0 | $ 0 |
Fair Value Measurements - Conde
Fair Value Measurements - Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Oct. 31, 2018 | Jan. 31, 2020 | Oct. 31, 2019 | |
Liabilities: | |||
Contingent consideration | $ 3,700 | ||
Contingent consideration term | 3 years | ||
Fair value, Measurements, Recurring | |||
Assets: | |||
Total assets measured at fair value | 803,216 | $ 880,638 | |
Liabilities: | |||
Total liabilities measured at fair value | 26,640 | 24,833 | |
Contingent consideration | 3,705 | 3,705 | |
Fair value, Measurements, Recurring | Cash equivalents | |||
Assets: | |||
Cash equivalents | 682,800 | 759,114 | |
Fair value, Measurements, Recurring | Short-term investments | |||
Assets: | |||
Short-term investments | 110,067 | 109,940 | |
Fair value, Measurements, Recurring | Prepaid expenses and other | |||
Assets: | |||
Prepaid expenses and other | 273 | 1,570 | |
Fair value, Measurements, Recurring | Long-term investments | |||
Assets: | |||
Long-term investments | 10,076 | 10,014 | |
Fair value, Measurements, Recurring | Accrued liabilities and other short-term obligations | |||
Liabilities: | |||
Accrued liabilities and other short-term obligations | 4,415 | 35 | |
Fair value, Measurements, Recurring | Other long-term obligations | |||
Liabilities: | |||
Other long-term obligations | 22,225 | 24,798 | |
Fair value, Measurements, Recurring | Level 1 | |||
Assets: | |||
Total assets measured at fair value | 682,800 | 759,114 | |
Liabilities: | |||
Total liabilities measured at fair value | 0 | 0 | |
Contingent consideration | 0 | 0 | |
Fair value, Measurements, Recurring | Level 1 | Cash equivalents | |||
Assets: | |||
Cash equivalents | 682,800 | 759,114 | |
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 | 0 | |
Fair value, Measurements, Recurring | Level 1 | Accrued liabilities and other short-term obligations | |||
Liabilities: | |||
Accrued liabilities and other short-term obligations | 0 | 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 | 120,416 | 121,524 | |
Liabilities: | |||
Total liabilities measured at fair value | 22,935 | 21,128 | |
Contingent consideration | 0 | 0 | |
Fair value, Measurements, Recurring | Level 2 | Cash equivalents | |||
Assets: | |||
Cash equivalents | 0 | 0 | |
Fair value, Measurements, Recurring | Level 2 | Short-term investments | |||
Assets: | |||
Short-term investments | 110,067 | 109,940 | |
Fair value, Measurements, Recurring | Level 2 | Prepaid expenses and other | |||
Assets: | |||
Prepaid expenses and other | 273 | 1,570 | |
Fair value, Measurements, Recurring | Level 2 | Long-term investments | |||
Assets: | |||
Long-term investments | 10,076 | 10,014 | |
Fair value, Measurements, Recurring | Level 2 | Accrued liabilities and other short-term obligations | |||
Liabilities: | |||
Accrued liabilities and other short-term obligations | 710 | 35 | |
Fair value, Measurements, Recurring | Level 2 | Other long-term obligations | |||
Liabilities: | |||
Other long-term obligations | 22,225 | 21,093 | |
Fair value, Measurements, Recurring | Level 3 | |||
Assets: | |||
Total assets measured at fair value | 0 | 0 | |
Liabilities: | |||
Total liabilities measured at fair value | 3,705 | 3,705 | |
Contingent consideration | 3,705 | 3,705 | |
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 | 0 | |
Fair value, Measurements, Recurring | Level 3 | Accrued liabilities and other short-term obligations | |||
Liabilities: | |||
Accrued liabilities and other short-term obligations | 3,705 | 0 | |
Fair value, Measurements, Recurring | Level 3 | Other long-term obligations | |||
Liabilities: | |||
Other long-term obligations | $ 0 | $ 3,705 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 31, 2020 | Jan. 31, 2019 | Oct. 31, 2019 | |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 106,522 | $ 99,041 | |
Work-in-process | 11,728 | 13,657 | |
Finished goods | 219,907 | 226,622 | |
Deferred cost of goods sold | 49,256 | 53,051 | |
Gross inventories | 387,413 | 392,371 | |
Provision for excess and obsolescence | (44,740) | (47,322) | |
Inventories, net | 342,673 | $ 345,049 | |
Provisions | $ 6,699 | $ 4,673 |
Prepaid Expenses and Other (Det
Prepaid Expenses and Other (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 31, 2020 | Jan. 31, 2019 | Oct. 31, 2019 | |
Capitalized Contract Cost [Line Items] | |||
Prepaid VAT and other taxes | $ 87,706 | $ 84,706 | |
Prepaid expenses | 65,806 | 48,680 | |
Product demonstration equipment, net | 37,866 | 38,900 | |
Other non-trade receivables | 36,236 | 28,136 | |
Deferred deployment expense | 318 | 125 | |
Derivative assets | 273 | 1,570 | |
Restricted cash | 0 | 74 | |
Prepaid expenses and other | 321,313 | 297,914 | |
Depreciation of product demonstration equipment | 2,200 | $ 2,200 | |
Contract assets for unbilled accounts receivable | |||
Capitalized Contract Cost [Line Items] | |||
Contract assets | 83,717 | 84,046 | |
Capitalized contract acquisition costs | |||
Capitalized Contract Cost [Line Items] | |||
Contract assets | $ 9,391 | $ 11,677 |
Other Balance Sheet Details (De
Other Balance Sheet Details (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Nov. 01, 2019 | Oct. 31, 2019 | Jan. 31, 2019 | Oct. 31, 2018 |
Balance Sheet Related Disclosures [Abstract] | |||||
Compensation, payroll related tax and benefits | $ 68,924 | $ 182,363 | |||
Warranty | 51,190 | 48,498 | $ 44,448 | $ 44,740 | |
Vacation | 22,708 | 22,290 | |||
Contingent consideration | 3,705 | 4,372 | |||
Contingent compensation | 2,880 | 0 | |||
Finance lease obligations | 2,710 | ||||
Finance lease obligations | 2,764 | ||||
Interest payable | 717 | 1,007 | |||
Other | 120,471 | 121,446 | |||
Total accrued liabilities and other short-term obligations | $ 273,305 | $ 381,256 | $ 382,740 |
Other Balance Sheet Details - A
Other Balance Sheet Details - Accrued Warranty (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning Balance | $ 48,498 | $ 44,740 |
Current Period Provisions | 7,898 | 3,891 |
Settlements | (5,206) | (4,183) |
Ending Balance | $ 51,190 | $ 44,448 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2020 | Oct. 31, 2019 | |
Foreign Currency Forward Contracts | Designated as hedging instrument | Cash flow hedging | ||
Derivative [Line Items] | ||
Derivative asset, notional amount | $ 180.4 | $ 197.4 |
Derivative maturity (in months) | 24 months | |
Foreign Currency Forward Contracts | Not designated as hedging instrument | ||
Derivative [Line Items] | ||
Derivative asset, notional amount | $ 187.7 | 206 |
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 | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income - beginning balance | $ 2,172,761 | |
Other comprehensive loss before reclassifications | (5,707) | $ (5,740) |
Amounts reclassified from AOCI | 80 | 880 |
Accumulated other comprehensive income - ending balance | 2,193,650 | |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income - beginning balance | (22,084) | (5,780) |
Accumulated other comprehensive income - ending balance | (27,711) | (10,640) |
Unrealized Gain/(Loss) on Available-for-sale Securities | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income - beginning balance | 152 | (425) |
Other comprehensive loss before reclassifications | (86) | 301 |
Amounts reclassified from AOCI | 0 | 0 |
Accumulated other comprehensive income - ending balance | 66 | (124) |
Unrealized Gain (Loss) Derivatives | Foreign Currency Forward Contracts | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income - beginning balance | 925 | (3,060) |
Other comprehensive loss before reclassifications | (921) | 402 |
Amounts reclassified from AOCI | (158) | 1,158 |
Accumulated other comprehensive income - ending balance | (154) | (1,500) |
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 | (13,686) | 6,417 |
Other comprehensive loss before reclassifications | (1,718) | (7,593) |
Amounts reclassified from AOCI | 238 | (278) |
Accumulated other comprehensive income - ending balance | (15,166) | (1,454) |
Cumulative Foreign Currency Translation Adjustment | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income - beginning balance | (9,475) | (8,712) |
Other comprehensive loss before reclassifications | (2,982) | 1,150 |
Amounts reclassified from AOCI | 0 | 0 |
Accumulated other comprehensive income - ending balance | $ (12,457) | $ (7,562) |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands, ft² in Millions | 3 Months Ended | |||
Jan. 31, 2020USD ($)ft² | Jan. 31, 2019USD ($) | Oct. 31, 2019USD ($) | Oct. 31, 2018USD ($) | |
Lessee, Lease, Description [Line Items] | ||||
Area leased (in sq ft) | ft² | 1.4 | |||
Remaining lease term (up to) | 13 years | |||
Extension term (up to) | 10 years | |||
Termination period (up to) | 8 years | |||
Restructuring reserve | $ 2,232 | $ 2,563 | $ 15,143 | $ 3,847 |
Operating lease expense | 6,800 | |||
Leasehold improvements | ||||
Lessee, Lease, Description [Line Items] | ||||
Amortization | $ 4,300 | $ 2,400 | ||
Consolidation of excess facilities and other restructuring activities | ||||
Lessee, Lease, Description [Line Items] | ||||
Restructuring reserve | $ 11,100 |
Leases - Leases Included in the
Leases - Leases Included in the Balance Sheet (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Nov. 01, 2019 |
Operating leases: | ||
Operating ROU Assets | $ 50,148 | $ 53,334 |
Operating lease liabilities | 71,956 | $ 76,000 |
Finance leases: | ||
Buildings, gross | 71,235 | |
Less: accumulated depreciation | (14,548) | |
Buildings, net | 56,687 | |
Finance lease liabilities | $ 66,831 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Leases [Abstract] | ||
Operating lease costs | $ 4,457 | |
Finance lease cost: | ||
Amortization of finance ROU asset | 1,140 | |
Interest on finance lease liabilities | 1,244 | |
Total finance lease cost | 2,384 | |
Non-capitalized lease cost | 621 | |
Variable lease cost | 1,311 | |
Net lease cost | 8,773 | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Amortization | $ 4,300 | $ 2,400 |
Leases - Leases Maturity (Detai
Leases - Leases Maturity (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Nov. 01, 2019 |
Operating Leases | ||
Remaining fiscal 2020 | $ 15,778 | |
2021 | 18,261 | |
2022 | 13,440 | |
2023 | 10,157 | |
2024 | 8,052 | |
Thereafter | 12,205 | |
Total lease payments | 77,893 | |
Less: Imputed interest | (5,937) | |
Present value of lease liabilities | 71,956 | $ 76,000 |
Less: Current portion of present value of minimum lease payments | (18,623) | (20,498) |
Long-term portion of present value of minimum lease payments | 53,333 | $ 55,564 |
Finance Leases | ||
Remaining fiscal 2020 | 7,512 | |
2021 | 7,491 | |
2022 | 7,932 | |
2023 | 8,008 | |
2024 | 8,024 | |
Thereafter | 64,616 | |
Total lease payments | 103,583 | |
Present value of lease liabilities | (36,752) | |
Present value of lease liabilities | 66,831 | |
Less: Current portion of present value of minimum lease payments | (2,710) | |
Long-term portion of present value of minimum lease payments | 64,121 | |
Lease, Liability, Payment, Due [Abstract] | ||
Remaining fiscal 2020 | 23,290 | |
2021 | 25,752 | |
2022 | 21,372 | |
2023 | 18,165 | |
2024 | 16,076 | |
Thereafter | 76,821 | |
Total lease payments | 181,476 | |
Less: Imputed interest | (42,689) | |
Present value of lease liabilities | 138,787 | |
Less: Current portion of present value of minimum lease payments | (21,333) | |
Long-term portion of present value of minimum lease payments | $ 117,454 |
Leases - Weighted Average Rema
Leases - Weighted Average Remaining Lease Terms and Discount Rates (Details) | Jan. 31, 2020 |
Weighted-average remaining lease term in years: | |
Operating leases | 4 years 10 months 28 days |
Finance leases | 12 years 7 months 13 days |
Weighted-average discount rates: | |
Operating leases | 2.39% |
Finance leases | 7.56% |
Leases - Minimum Aggregate Rent
Leases - Minimum Aggregate Rentals Under Operating Leases (Details) $ in Thousands | Oct. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 28,776 |
2021 | 24,184 |
2022 | 16,767 |
2023 | 13,393 |
2024 | 10,632 |
Thereafter | 26,110 |
Total | $ 119,862 |
Short-Term and Long-Term Debt_2
Short-Term and Long-Term Debt (Details) - Secured debt - USD ($) $ in Thousands | Jan. 23, 2020 | Jan. 31, 2020 | Jan. 31, 2019 | Oct. 31, 2019 |
Debt Instrument [Line Items] | ||||
Debt issuance costs, net | $ 3,400 | $ 3,600 | ||
Amortization of debt issuance costs | 200 | $ 200 | ||
2025 Term Loan | ||||
Debt Instrument [Line Items] | ||||
Outstanding principal | $ 693,000 | 0 | ||
Debt issuance costs, net | 0 | |||
New Term Loan 2025 | ||||
Debt Instrument [Line Items] | ||||
Outstanding principal | 693,000 | 693,000 | ||
Debt issuance costs for modification of debt | $ 100 | |||
Quarterly installments, percentage | 0.25% | |||
Quarterly installments | $ 1,730 | |||
Prepayment premium | 1.00% | |||
Debt issuance costs, net | $ 3,390 | |||
Fair value of debt | $ 694,700 | |||
LIBOR | New Term Loan 2025 | ||||
Debt Instrument [Line Items] | ||||
Applicable margin | 1.75% | |||
Interest rate floor | 0.00% | |||
Base Rate | New Term Loan 2025 | ||||
Debt Instrument [Line Items] | ||||
Applicable margin | 0.75% | |||
Interest rate floor | 1.00% |
Short-Term and Long-Term Debt -
Short-Term and Long-Term Debt - Debt Components (Details) - Secured debt - USD ($) $ in Thousands | Jan. 31, 2020 | Jan. 23, 2020 | Oct. 31, 2019 |
Debt Instrument [Line Items] | |||
Deferred Debt Issuance Costs | $ (3,400) | $ (3,600) | |
Term Loan Payable due September 28, 2025 (New) | |||
Debt Instrument [Line Items] | |||
Principal Balance | 693,000 | $ 693,000 | |
Unamortized Debt Discount | (1,824) | ||
Deferred Debt Issuance Costs | (3,390) | ||
Net Carrying Value | 687,786 | 0 | |
Term Loan Payable due September 28, 2025 (Old) | |||
Debt Instrument [Line Items] | |||
Principal Balance | 0 | $ 693,000 | |
Unamortized Debt Discount | 0 | ||
Deferred Debt Issuance Costs | 0 | ||
Net Carrying Value | $ 0 | $ 687,406 |
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 | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Numerator | ||
Net income used to calculate Basic and Diluted EPS | $ 62,328 | $ 33,616 |
Denominator | ||
Basic weighted average shares outstanding (in shares) | 154,334 | 156,314 |
Add: Shares underlying outstanding stock options and restricted stock units and issuable under employee stock purchase plan (in shares) | 1,404 | 1,860 |
Dilutive weighted average shares outstanding (in shares) | 155,738 | 158,174 |
EPS | ||
Basic EPS (in dollars per share) | $ 0.40 | $ 0.22 |
Diluted EPS (in dollars per share) | $ 0.40 | $ 0.21 |
Earnings Per Share Calculatio_3
Earnings Per Share Calculation - Antidilutive Securities Excluded (Details) - shares shares in Thousands | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total excluded due to anti-dilutive effect (in shares) | 731 | 401 |
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) | 731 | 401 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 3 Months Ended | ||
Jan. 31, 2020 | Jan. 31, 2019 | Dec. 13, 2018 | |
Equity [Abstract] | |||
Stock repurchase program authorized amount | $ 500,000,000 | ||
Payments for repurchase of common stock | $ 12,572,000 | $ 10,026,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of the Stock Repurchase Program (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Jan. 31, 2020USD ($)$ / sharesshares | |
Shares Repurchased | |
Cumulative beginning balance (in shares) | shares | 3,838,466 |
Repurchase of common stock under the stock repurchase program (in shares) | shares | 1,288,111 |
Cumulative ending balance (in shares) | shares | 5,126,577 |
Weighted-Average Price per Share | |
Cumulative beginning balance (in dollars per share) | $ / shares | $ 39.10 |
Repurchase of common stock under the stock repurchase program (in dollars per share) | $ / shares | 39.36 |
Cumulative ending balance (in dollars per share) | $ / shares | $ 39.16 |
Amount Repurchased (in thousands) | |
Cumulative beginning balance | $ | $ 150,076 |
Repurchase of common stock under the stock repurchase program | $ | 50,704 |
Cumulative ending balance | $ | $ 200,780 |
Share-Based Compensation Expe_3
Share-Based Compensation Expense - Expense in Period (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense capitalized in inventory, net | $ 100 | $ 60 |
Total share-based compensation | 15,602 | 13,755 |
Cost of Sales | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 1,513 | 1,407 |
Product costs | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 671 | 637 |
Service costs | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 842 | 770 |
Operating Expense | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 13,989 | 12,288 |
Research and development | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 3,849 | 3,391 |
Sales and marketing | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 4,613 | 3,785 |
General and administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $ 5,527 | $ 5,112 |
Share-Based Compensation Expe_4
Share-Based Compensation Expense (Details) - Restricted stock units (RSUs) $ in Millions | 3 Months Ended |
Jan. 31, 2020USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized share-based compensation | $ 141.7 |
Weighted-average period for recognition of share-based compensation (in years) | 1 year 8 months 12 days |
Segments and Entity-Wide Disc_3
Segments and Entity-Wide Disclosures (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jan. 31, 2020USD ($)region | Jan. 31, 2019USD ($) | Oct. 31, 2019USD ($)segment | Nov. 01, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||||
Equipment, building, furniture and fixtures, net | $ 277,739 | |||
Operating right-of-use assets | 50,148 | $ 53,334 | ||
Goodwill | $ 310,913 | $ 297,937 | ||
Number of geographic regions | region | 3 | |||
Net revenue | $ 832,912 | $ 778,527 | ||
United States | ||||
Segment Reporting Information [Line Items] | ||||
Equipment, building, furniture and fixtures, net | 51,819 | |||
Net revenue | 524,300 | 464,100 | ||
Software and Software-Related Services | ||||
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 2 | |||
Networking Platforms | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 659,057 | 620,566 | ||
Platform Software and Services | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 51,888 | 41,598 | ||
Blue Planet Automation Software and Services | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 15,466 | 14,974 | ||
Global Services | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 106,501 | 101,389 | ||
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 832,912 | 778,527 | ||
Operating Segments | Networking Platforms | ||||
Segment Reporting Information [Line Items] | ||||
Intangible assets, net | 17,900 | |||
Goodwill | 65,700 | |||
Net revenue | 659,057 | 620,566 | ||
Operating Segments | Platform Software and Services | ||||
Segment Reporting Information [Line Items] | ||||
Goodwill | 156,200 | |||
Net revenue | 51,888 | 41,598 | ||
Operating Segments | Blue Planet Automation Software and Services | ||||
Segment Reporting Information [Line Items] | ||||
Intangible assets, net | 107,700 | |||
Goodwill | 89,000 | |||
Net revenue | 15,466 | 14,974 | ||
Operating Segments | Global Services | ||||
Segment Reporting Information [Line Items] | ||||
Maintenance spares, net | 54,900 | |||
Net revenue | $ 106,501 | $ 101,389 |
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 | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Revenue: | ||
Total revenue | $ 832,912 | $ 778,527 |
Less: Non-performance operating expenses | ||
Selling and marketing | 107,066 | 98,113 |
General and administrative | 42,468 | 39,243 |
Amortization of intangible assets | 5,853 | 5,528 |
Significant asset impairments and restructuring costs | 4,472 | 2,273 |
Acquisition and integration costs | 1,819 | 1,608 |
Add: Other non-performance financial items | ||
Interest expense and other income, net | (5,169) | (5,188) |
Loss on extinguishment and modification of debt | (646) | 0 |
Less: Provision for income taxes | 9,814 | 9,139 |
Net income | 62,328 | 33,616 |
Networking Platforms | ||
Revenue: | ||
Total revenue | 659,057 | 620,566 |
Platform Software and Services | ||
Revenue: | ||
Total revenue | 51,888 | 41,598 |
Blue Planet Automation Software and Services | ||
Revenue: | ||
Total revenue | 15,466 | 14,974 |
Global Services | ||
Revenue: | ||
Total revenue | 106,501 | 101,389 |
Operating Segments | ||
Revenue: | ||
Total revenue | 832,912 | 778,527 |
Add: Other non-performance financial items | ||
Net income | 239,635 | 194,708 |
Operating Segments | Networking Platforms | ||
Revenue: | ||
Total revenue | 659,057 | 620,566 |
Add: Other non-performance financial items | ||
Net income | 168,270 | 136,590 |
Operating Segments | Platform Software and Services | ||
Revenue: | ||
Total revenue | 51,888 | 41,598 |
Add: Other non-performance financial items | ||
Net income | 28,951 | 20,464 |
Operating Segments | Blue Planet Automation Software and Services | ||
Revenue: | ||
Total revenue | 15,466 | 14,974 |
Add: Other non-performance financial items | ||
Net income | (3,113) | (2,047) |
Operating Segments | Global Services | ||
Revenue: | ||
Total revenue | 106,501 | 101,389 |
Add: Other non-performance financial items | ||
Net income | 45,527 | 39,701 |
Converged Packet Optical | ||
Revenue: | ||
Total revenue | 591,549 | 548,997 |
Converged Packet Optical | Operating Segments | Networking Platforms | ||
Revenue: | ||
Total revenue | 591,549 | 548,997 |
Converged Packet Optical | Operating Segments | Platform Software and Services | ||
Revenue: | ||
Total revenue | 0 | 0 |
Converged Packet Optical | Operating Segments | Blue Planet Automation Software and Services | ||
Revenue: | ||
Total revenue | 0 | 0 |
Converged Packet Optical | Operating Segments | Global Services | ||
Revenue: | ||
Total revenue | 0 | 0 |
Packet Networking | ||
Revenue: | ||
Total revenue | 67,508 | 71,569 |
Packet Networking | Operating Segments | Networking Platforms | ||
Revenue: | ||
Total revenue | 67,508 | 71,569 |
Packet Networking | Operating Segments | Platform Software and Services | ||
Revenue: | ||
Total revenue | 0 | 0 |
Packet Networking | Operating Segments | Blue Planet Automation Software and Services | ||
Revenue: | ||
Total revenue | 0 | 0 |
Packet Networking | Operating Segments | Global Services | ||
Revenue: | ||
Total revenue | 0 | 0 |
Platform Software and Services | ||
Revenue: | ||
Total revenue | 51,888 | 41,598 |
Platform Software and Services | Operating Segments | Networking Platforms | ||
Revenue: | ||
Total revenue | 0 | 0 |
Platform Software and Services | Operating Segments | Platform Software and Services | ||
Revenue: | ||
Total revenue | 51,888 | 41,598 |
Platform Software and Services | Operating Segments | Blue Planet Automation Software and Services | ||
Revenue: | ||
Total revenue | 0 | 0 |
Platform Software and Services | Operating Segments | Global Services | ||
Revenue: | ||
Total revenue | 0 | 0 |
Blue Planet Automation Software and Services | ||
Revenue: | ||
Total revenue | 15,466 | 14,974 |
Blue Planet Automation Software and Services | Operating Segments | Networking Platforms | ||
Revenue: | ||
Total revenue | 0 | 0 |
Blue Planet Automation Software and Services | Operating Segments | Platform Software and Services | ||
Revenue: | ||
Total revenue | 0 | 0 |
Blue Planet Automation Software and Services | Operating Segments | Blue Planet Automation Software and Services | ||
Revenue: | ||
Total revenue | 15,466 | 14,974 |
Blue Planet Automation Software and Services | Operating Segments | Global Services | ||
Revenue: | ||
Total revenue | 0 | 0 |
Maintenance Support and Training | ||
Revenue: | ||
Total revenue | 61,793 | 61,277 |
Maintenance Support and Training | Operating Segments | Networking Platforms | ||
Revenue: | ||
Total revenue | 0 | 0 |
Maintenance Support and Training | Operating Segments | Platform Software and Services | ||
Revenue: | ||
Total revenue | 0 | 0 |
Maintenance Support and Training | Operating Segments | Blue Planet Automation Software and Services | ||
Revenue: | ||
Total revenue | 0 | 0 |
Maintenance Support and Training | Operating Segments | Global Services | ||
Revenue: | ||
Total revenue | 61,793 | 61,277 |
Installation and Deployment | ||
Revenue: | ||
Total revenue | 34,954 | 30,622 |
Installation and Deployment | Operating Segments | Networking Platforms | ||
Revenue: | ||
Total revenue | 0 | 0 |
Installation and Deployment | Operating Segments | Platform Software and Services | ||
Revenue: | ||
Total revenue | 0 | 0 |
Installation and Deployment | Operating Segments | Blue Planet Automation Software and Services | ||
Revenue: | ||
Total revenue | 0 | 0 |
Installation and Deployment | Operating Segments | Global Services | ||
Revenue: | ||
Total revenue | 34,954 | 30,622 |
Consulting and Network Design | ||
Revenue: | ||
Total revenue | 9,754 | 9,490 |
Consulting and Network Design | Operating Segments | Networking Platforms | ||
Revenue: | ||
Total revenue | 0 | 0 |
Consulting and Network Design | Operating Segments | Platform Software and Services | ||
Revenue: | ||
Total revenue | 0 | 0 |
Consulting and Network Design | Operating Segments | Blue Planet Automation Software and Services | ||
Revenue: | ||
Total revenue | 0 | 0 |
Consulting and Network Design | Operating Segments | Global Services | ||
Revenue: | ||
Total revenue | $ 9,754 | $ 9,490 |
Segments and Entity-Wide Disc_5
Segments and Entity-Wide Disclosures - Revenue, Geographic Distribution (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Total revenue | $ 832,912 | $ 778,527 |
Americas | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 574,004 | 516,481 |
EMEA | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 129,965 | 129,190 |
APAC | ||
Segment Reporting Information [Line Items] | ||
Total revenue | $ 128,943 | $ 132,856 |
Segments and Entity-Wide Disc_6
Segments and Entity-Wide Disclosures - Geographic Distribution of Equipment, Building, Furniture and Fixtures (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Oct. 31, 2019 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Equipment, building, furniture and fixtures, net | $ 286,884 | |
Equipment, building, furniture and fixtures, net | $ 277,739 | |
Canada | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Equipment, building, furniture and fixtures, net | 211,901 | |
Equipment, building, furniture and fixtures, net | 209,101 | |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Equipment, building, furniture and fixtures, net | 58,119 | |
Equipment, building, furniture and fixtures, net | 51,819 | |
Other International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Equipment, building, furniture and fixtures, net | $ 16,864 | |
Equipment, building, furniture and fixtures, net | $ 16,819 |
Segments and Entity-Wide Disc_7
Segments and Entity-Wide Disclosures - Revenue by Major Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Revenue, Major Customer [Line Items] | ||
Total revenue | $ 832,912 | $ 778,527 |
Customer concentration risk | ||
Revenue, Major Customer [Line Items] | ||
Total revenue | 198,558 | 272,461 |
Verizon | Customer concentration risk | ||
Revenue, Major Customer [Line Items] | ||
Total revenue | 114,548 | 88,775 |
Verizon | Customer concentration risk | ||
Revenue, Major Customer [Line Items] | ||
Total revenue | $ 84,010 | 94,172 |
Web-scale provider | Customer concentration risk | ||
Revenue, Major Customer [Line Items] | ||
Total revenue | $ 89,514 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands, $ in Millions | 3 Months Ended | 35 Months Ended | ||||
Jan. 31, 2020USD ($)government_entity | Jan. 31, 2020CAD ($)government_entity | Jan. 31, 2019USD ($) | Jan. 31, 2020USD ($) | Jan. 31, 2020CAD ($) | Jan. 31, 2020CAD ($) | |
Loss Contingencies [Line Items] | ||||||
Maximum amount of Canadian grant | $ 43,500 | $ 43,500 | $ 57.6 | |||
Number of Canadian government entities | government_entity | 3 | 3 | ||||
Total revenue | $ | $ 832,912 | $ 778,527 | ||||
Amounts receivable from grant | 9,100 | 9,100 | $ 12 | |||
Grants | ||||||
Loss Contingencies [Line Items] | ||||||
Total revenue | $ 2,700 | $ 3.6 | $ 24,600 | $ 32.5 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |
Mar. 06, 2020 | Jan. 31, 2020 | Oct. 31, 2019 | |
Subsequent Event [Line Items] | |||
Stock repurchases (in shares) | 1,288,111 | ||
Stock repurchases | $ 50,704 | ||
Average price of shares repurchased (in dollars per share) | $ 39.36 | ||
Aggregate shares repurchased (in shares) | 5,126,577 | 3,838,466 | |
Subsequent event | |||
Subsequent Event [Line Items] | |||
Stock repurchases (in shares) | 443,958 | ||
Stock repurchases | $ 18,600 | ||
Average price of shares repurchased (in dollars per share) | $ 41.90 | ||
Aggregate shares repurchased (in shares) | 5,570,535 | ||
Authorized funds remaining under stock repurchase program | $ 280,600 |
Uncategorized Items - a20200131
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 49,805,000 |
Retained Earnings [Member] | ||
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 | $ 0 |