Ciena Corporation (NYSE:CIEN) Q3 2023 Earnings Call Transcript

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Tim Savageaux: Hi. Good morning. It looks like your backlog came down much less significantly than last quarter. So, what I’m seeing is a pretty significant uptick in orders in Q3 in the order of 30% sequential. I just want to make sure I’m reading that right. And to the extent that’s from cloud, I guess, what I really want to ask is, what was your book-to-bill in cloud in the quarter? And given how concentrated you are there, almost one customer, almost 50%, how concentrated was that? And if you could comment on applications at all, whether we’re talking about data center interconnects, more long-haul type stuff, subsea, what might be driving that? And I’ll count that all as my follow-up. But, thanks.

Gary Smith: Thanks, Tim. Let me take the first of the multi questions. I would say — I would describe it as a slight order uptick. I wouldn’t describe it as large. Our backlog did go up. And obviously, we — our orders came in — I think the point is we really think it’s bottomed out on the orders and is heading in the right direction now from an alignment point of view. And I think that will gather more momentum in Q4 as well. In terms of the uptick, it was cloud-based, but also the service providers were reasonably solid as well, which gives us some comfort that we think that over the next couple of quarters will begin to come out. I would also say from a cloud point of view that it’s broadly based amongst the cloud players. It’s not just one, which also gives us some encouragement across the various applications that we’re seeing. Scott, in terms of particular applications…

Scott McFeely: Yes Tim, I mean our position across that customer set really falls into three applications. Their metro cap is data center interconnect where they can own their own infrastructure. We participate strongly in their backbone. And then obviously, on the submarine segment where they have private installs as well on cables. We are seeing growth across all three of those, and that’s what sort of sums up to the 39% year-to-date growth in the broader segment. In addition to that, there are quite a few parts around the world where they have chosen not to or are not able to own their own infrastructure. So, they have a significant indirect pull on the service provider revenue, particularly outside of North America.

Operator: At this time, we will conclude the question-and-answer session. I’d like to turn the conference back over to Gregg Lampf, Vice President of Investor Relations, for any closing remarks.

Gregg Lampf: Thank you. Thanks, everyone, for joining us today. We appreciate it. We look forward to speaking with you during the day and seeing you at various events over the next several weeks. Also, again, as a reminder, Jim and I will be at ECOC. If you’re interested in meeting with us while we’re there, please reach out, and we’ll be happy to do so. Thank you.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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