CIENA CORP

Previous wording

We are a network platform, software, and services company, providing solutions that enable a wide range of network operators to deploy and manage next-generation networks that deliver services to businesses and consumers. We provide hardware, software, and services that support the delivery of video, data, and voice traffic over core, metro, aggregation, and access communications networks. Our solutions are used globally by communications service providers, cable and multiservice operators, cloud providers, submarine network operators, governments, and enterprises across multiple industry verticals. Our portfolio is designed to enable the Adaptive Network, which is our vision for a network end state that leverages a programmable and scalable network infrastructure, driven by software control and automation capabilities, that is informed by analytics and intelligence. Our solutions include Networking Platforms, including our Optical Networking and Routing and Switching portfolios, which can be applied from the network core to end-user access points, and which allow network operators to scale capacity, increase transmission speeds, allocate traffic efficiently and adapt dynamically to changing end-user service demands. To complement our Networking Platforms, we offer Platform Software, which includes our Navigator Network Control Suite TM (“Navigator NCS”), which we previously referred to as Manage, Control, and Plan (MCP), applications that deliver advanced multi-layer domain control and operations. Through our Blue Planet Software, we also enable complete service lifecycle management automation with productized operational support systems (OSS), which include inventory, orchestration and assurance solutions that help our customers to achieve closed loop automation across multi-vendor and multi-domain environments.

Current wording

We are a network platform, software, and services company, providing solutions that enable a wide range of network operators to deploy and manage next-generation networks that deliver services to businesses and consumers. We provide hardware, software, and services that support the delivery of video, data, and voice traffic over core, metro, aggregation, and access communications networks. Our solutions are used globally by communications service providers, cable and multiservice operators, cloud providers, submarine network operators, governments, and enterprises across multiple industry verticals. Our portfolio is designed to enable the Adaptive Network, which is our vision for a network end state that leverages a programmable and scalable network infrastructure, driven by software control and automation capabilities, that is informed by analytics and intelligence. Our solutions include Networking Platforms, including our Optical Networking and Routing and Switching portfolios, which can be applied from the network core to end-user access points, and which allow network operators to scale capacity, increase transmission speeds, allocate traffic efficiently and adapt dynamically to changing end-user service demands. To complement our Networking Platforms, we offer Platform Software, which includes our Navigator Network Control Suite TM (“Navigator NCS”), which we previously referred to as Manage, Control, and Plan (MCP), and applications that deliver advanced multi-layer domain control and operations. Through our Blue Planet Software, we also enable complete service lifecycle management automation with productized operational support systems (OSS), which include inventory, orchestration and assurance solutions that help our customers to achieve closed loop automation across multi-vendor and multi-domain environments.

Previous wording

From the second quarter of fiscal 2021 through the third quarter of fiscal 2022, we received an unprecedented volume of orders for our products and services, which significantly exceeded our revenue and historical order volumes. We believe some portion of these large orders reflected customer acceleration of future orders due to a constrained supply environment, as well as orders which were delayed due to the dynamics of the COVID-19 pandemic. Our order volumes began to moderate in the fourth quarter of fiscal 2022, and we experienced order levels below revenue during fiscal 2023 and the first quarter of fiscal 2024, particularly from our communications service provider customers. Our expected return to more typical order patterns with our service provider customers in fiscal 2024 is taking longer than anticipated. We believe this is, in part, due to service providers in North America working through relatively high levels of inventory previously acquired, which has been made more difficult due to challenges installing and deploying equipment, including site readiness and access to fiber or other resources. In addition, in certain international geographies, we believe that caution driven by macroecononic concerns and market-specific issues are contributing to lower-than-expected order volumes from service providers. We expect these dynamics with our service provider customers to persist for the next few quarters. Notwithstanding these near-term impacts, we continue to believe that certain trends and shifts in business and consumer behaviors, including enterprise and consumer cloud network adoption, 5G, high-definition video, generative AI, and network operator focus on resilience and automation, represent positive, long-term drivers of bandwidth demand and long-term opportunities for our business.

Current wording

For large portions of fiscal 2021 and fiscal 2022, we received an unprecedented volume of orders for our products and services, which significantly exceeded our revenue and historical order volumes. We believe some portion of these orders reflected customer acceleration of future orders due to a constrained supply environment, as well as orders that were delayed due to the dynamics of the COVID-19 pandemic. Our order volumes began to moderate in the fourth quarter of fiscal 2022, and we experienced order levels below revenue during fiscal 2023 and the first half of fiscal 2024, particularly from our communications service provider customers. Our expected return to more typical order patterns with our communications service provider customers is taking longer than anticipated. We believe this is, in part, due to communications service providers in North America working through relatively high levels of inventory previously acquired, which has been made more difficult due to challenges installing and deploying equipment, including site readiness and access to fiber or other resources. In addition, in certain international geographies, we believe that caution driven by macroeconomic concerns and market-specific issues are contributing to lower-than-expected order volumes from communications service providers. We expect these dynamics with our communications service provider customers to persist during fiscal 2024 and anticipate that any future improvements to these dynamics will be gradual. Notwithstanding these near-term impacts, we continue to believe that certain trends and shifts in business and consumer behaviors, including enterprise and consumer cloud network adoption, 5G, high-definition video, generative AI, and network operator focus on resilience and automation, represent positive, long-term drivers of bandwidth demand and long-term opportunities for our business.

Previous wording

Historically, a meaningful portion of our quarterly revenue was generated from customer orders received during that same quarter (which we refer to as “book to revenue”) and was therefore less predictable and subject to fluctuation. As a result of elevated order volumes during portions of fiscal 2021 and fiscal 2022, however, our backlog grew from $1.2 billion at the end of fiscal 2020 to $4.2 billion at the end of fiscal 2022. Accordingly, our revenue in recent fiscal years has been more significantly impacted by factors including availability of supply and customer delivery deferrals, as we converted our existing backlog to revenue. As supply chain conditions have improved, and we have been able to increase shipment volumes and reduce lead times, our backlog decreased to $2.2 billion as of the end of the first quarter of fiscal 2024. We expect our backlog to continue to reduce during fiscal 2024 as supply chain conditions continue to improve and customers place fewer advanced orders. As that happens, we expect that our reliance upon securing quarterly book to revenue orders will grow, and that increased orders and a return to a more typical composition of our quarterly revenue will be a critical element of any future revenue growth.

Current wording

Historically, a meaningful portion of our quarterly revenue was generated from customer orders received during that same quarter (which we refer to as “book to revenue”) and was therefore less predictable and subject to fluctuation. As a result of elevated order volumes during portions of fiscal 2021 and fiscal 2022, however, our backlog grew from $1.2 billion at the end of fiscal 2020 to $4.2 billion at the end of fiscal 2022. Accordingly, our revenue in recent fiscal years has been more significantly impacted by factors including availability of supply and customer delivery deferrals, as we converted our existing backlog to revenue. As supply chain conditions have improved, and we have been able to increase shipment volumes and reduce lead times, our backlog decreased to $1.9 billion as of the end of the second quarter of fiscal 2024. As backlog consumption reduces and represents a relatively smaller portion of our quarterly revenue, we expect that our reliance upon securing quarterly book to revenue orders will grow, and that increased orders and a return to a more typical composition of our quarterly revenue will be a critical element of any future revenue growth.

Previous wording

The timing and degree to which we fulfill our backlog will have a significant impact on our revenue and can be affected by factors outside of our control, including customer readiness and willingness to receive shipment against existing orders. During fiscal 2023 and the first quarter of fiscal 2024, certain customers, including communications service providers and cable and multiservice operators in North America, that had earlier placed significant advanced orders, rescheduled deliveries for a portion of such orders. We believe that this was the result of a number of factors, including the rapid improvement in our delivery lead times as supply chain conditions improved and their capital expenditure and inventory levels. Accordingly, our results for a particular period can be difficult to predict. As a result of these and other factors, the timing of our fulfillment of backlog could cause some volatility in our results of operations and our backlog should not necessarily be viewed as an accurate indicator of revenue for any particular period.

Current wording

The timing, pace, and degree to which we fulfill our backlog will have a significant impact on our revenue and can be affected by factors outside of our control, including customer readiness and willingness to receive shipment against existing orders. During fiscal 2023 and the first half of fiscal 2024, certain customers, including communications service providers and cable and multiservice operators in North America, that had earlier placed significant advanced orders, rescheduled deliveries for a portion of such orders. We believe that this was the result of a number of factors, including the rapid improvement in our delivery lead times as supply chain conditions improved and their capital expenditure and inventory levels. Accordingly, our results for a particular period can be difficult to predict. As a result of these and other factors, the timing of our fulfillment of backlog could cause some volatility in our results of operations and our backlog should not necessarily be viewed as an accurate indicator of revenue for any particular period.

Previous wording

As a result of the reduction in orders relative to revenue described under “Overview” above, our revenue declined by 1.8% in the first quarter of fiscal 2024 as compared to the first quarter of fiscal 2023. In addition, during the first quarter of fiscal 2024, approximately 14.3% of our revenue was non-U.S. Dollar-denominated primarily including sales in Euros, Canadian Dollars, and British Pounds. During the first quarter of fiscal 2024 as compared to the first quarter of fiscal 2023, the U.S. Dollar primarily weakened against these currencies. Consequently, our revenue reported in U.S. Dollars slightly increased by approximately $3.4 million, or 0.3%, as compared to the first quarter of fiscal 2023, as a result of foreign exchange rates.

Current wording

As a result of the factors impacting order volumes and order delivery timing described under “Overview” above, our revenue declined by 19.6% in the second quarter of fiscal 2024 as compared to the second quarter of fiscal 2023, and 11.0% in the first six months of fiscal 2024 as compared to the first six months of fiscal 2023. In addition, during the second quarter and first six months of fiscal 2024, approximately 15.0% of our revenue was non-U.S. Dollar-denominated primarily including sales in Euros, Canadian Dollars, and Indian Rupees. During the second quarter of fiscal 2024 as compared to the second quarter of fiscal 2023, and during the first six months of fiscal 2024 as compared to the first six months of fiscal 2023, the U.S. Dollar fluctuated against these currencies. As a result of these currency fluctuations, our revenue reported in U.S. Dollars was adversely impacted by approximately $0.6 million, or 0.1%, as compared to the second quarter of fiscal 2023, and increased by approximately $5.5 million, or 0.3% as compared to the first six months of fiscal 2023.

Previous wording

•Networking Platforms segment revenue decreased by $47.9 million, reflecting product line sales decreases of $39.8 million of our Optical Networking products and $8.1 million of our Routing and Switching products.

Current wording

•Networking Platforms segment revenue decreased by $238.6 million, reflecting product line sales decreases of $224.3 million of our Optical Networking products and $14.3 million of our Routing and Switching products.

Previous wording

◦Optical Networking sales decreased, primarily reflecting a sales decrease of $178.6 million of our 6500 Packet-Optical Platform, primarily to communications service providers. This sales decrease was partially offset by sales increases of $73.5 million of our 6500 Reconfigurable Line System (RLS) products and $64.5 million of our Waveserver® modular interconnect system, both primarily to cloud providers.

Current wording

◦Optical Networking sales decreased, primarily reflecting sales decreases of $188.1 million of our 6500 Packet-Optical Platform, primarily to communications service providers and enterprise customers, $40.0 million of our Waveserver® modular interconnect system, primarily to cloud providers, and $10.5 million of our 5400 family of Packet-Optical Platforms primarily to communications service providers. These sales decreases were partially offset by a sales increase of $13.2 million of our 6500 Reconfigurable Line System (RLS) products, primarily to enterprise customers and cloud providers partially offset by decreased sales to communications service providers.

Previous wording

•Platform Software and Services segment revenue increased by $16.3 million, reflecting sales increases of $8.8 million of our software platforms and $7.5 million in our software maintenance services, both primarily for our Navigator NCS software platform.

Current wording

•Platform Software and Services segment revenue increased by $16.0 million, reflecting sales increases of $9.3 million of our software platforms and $6.7 million in our software maintenance services, both primarily for our Navigator NCS software platform.

Previous wording

•Blue Planet Automation Software and Services segment revenue decreased by $1.5 million reflecting a sales decrease of $2.8 million in software platforms, partially offset by a sales increase of $1.3 million in professional software services, both primarily to communications service providers.

Current wording

•Blue Planet Automation Software and Services segment revenue decreased by $6.1 million reflecting sales decreases of $4.7 million in software platforms and $1.4 million in professional software services, both primarily to communications service providers.

Previous wording

•Global Services segment revenue increased by $14.3 million, primarily reflecting sales increases of $8.1 million of our installation and deployment services and $6.2 million of our maintenance support and training.

Current wording

•Global Services segment revenue increased by $6.9 million, primarily reflecting sales increases of $4.3 million of our installation and deployment services and $4.2 million of our maintenance support and training, partially offset by a sales decrease of $1.6 million of our consulting and network design services.

Previous wording

•Routing and Switching sales decreased, primarily reflecting a sales decrease of $29.8 million of our virtualization software primarily to communications service providers, partially offset by sales increases of $11.0 million of our 3000 and 5000 families of service delivery and aggregation switches, primarily to cable and multiservice operators, $5.6 million of our platform independent software and $5.3 million of our 8100 Coherent IP networking platforms, both primarily to communications service providers.

Current wording

◦Routing and Switching sales decreased, primarily reflecting a sales decrease of $34.3 million of our virtualization software, primarily to communications service providers. This sales decrease was partially offset by sales increases of $7.1 million of our 8100 Coherent IP networking platforms, primarily to communications service providers and enterprise customers, and $4.6 million of our platform independent software, primarily to communications service providers.

Previous wording

Our operating segments engage in business and operations across three geographic regions: the United States, Canada, the Caribbean and Latin America (“Americas”); Europe, Middle East and Africa (“EMEA”); and Asia Pacific, Japan and India (“APAC”). The geographic distribution of our revenue can fluctuate significantly from period to period, and the timing of revenue recognition for large network projects, particularly outside of the United States, can result in large variations in geographic revenue results in any particular period. The decrease in our Americas region revenue for the quarter ended January 27, 2024 was primarily driven by decreased sales in Canada and the United States. The decrease in our APAC region revenue for the quarter ended January 27, 2024 was primarily driven by decreased sales in India. The increase in our EMEA region revenue for the quarter ended January 27, 2024 was primarily driven by increased sales in the Netherlands.

Current wording

Our operating segments engage in business and operations across three geographic regions: the United States, Canada, the Caribbean and Latin America (“Americas”); Europe, Middle East and Africa (“EMEA”); and Asia Pacific, Japan and India (“APAC”). The geographic distribution of our revenue can fluctuate significantly from period to period, and the timing of revenue recognition for large network projects, particularly outside of the United States, can result in large variations in geographic revenue results in any particular period. The decrease in our Americas region revenue for the quarter and six months ended April 27, 2024 was primarily driven by decreased sales in the United States and Canada. The decrease in our APAC region revenue for the quarter and six months ended April 27, 2024 was primarily driven by decreased sales in India and Australia. The decrease in our EMEA region revenue for the quarter April 27, 2024 was primarily driven by decreased sales in France and the Great Britain. The increase in our EMEA region revenue for the six months ended April 27, 2024 was primarily driven by increased sales in the Netherlands.

Previous wording

•Americas revenue decreased by $46.9 million, primarily reflecting sales decreases of $59.7 million within our Networking Platforms segment and $1.4 million within our Blue Planet Automation Software and Services segment, partially offset by sales increases of $8.8 million within our Platform Software and Services segment and $5.3 million within our Global Services segment. The decrease within our Networking Platforms segment reflects product line sales decreases of $42.3 million of our Optical Networking products and $17.4 million of our Routing and Switching products. The decrease within our Optical Networking product line was primarily related to a sales decrease of $136.1 million of our 6500 Packet-Optical Platform, primarily to communication service providers. This decrease was partially offset by sales increases of $55.8 million of our 6500 RLS products, primarily to cloud providers, and $39.7 million of our Waveserver® modular interconnect system, primarily to cloud providers and communication service providers. The decrease within our Routing and Switching product line primarily reflects a sales decrease of $29.8 million of our virtualization software, primarily to communications service providers.

Current wording

•Americas revenue decreased by $131.5 million, primarily reflecting sales decreases of $143.7 million within our Networking Platforms segment and $1.0 million within our Blue Planet Automation Software and Services segment, partially offset by a sales increase of $13.4 million within our Platform Software and Services. The decrease within our Networking Platforms segment reflects product line sales decreases of $133.8 million of our Optical Networking products and $9.9 million of our Routing and Switching products. The decrease within our Optical Networking product line was primarily related to sales decreases of $99.2 million of our 6500 Packet-Optical Platform, primarily to communications service providers, and $23.0 million of our Waveserver® modular interconnect system, primarily to cloud providers. The decrease within our Routing and Switching product line primarily reflects sales decreases of $5.1 million of our 3000 and 5000 families of service delivery and aggregation switches to enterprise customers and cable and multiservice operators, and $4.4 million of our virtualization software, primarily to communications service providers.

Previous wording

Networking Platforms segment, partially offset by increased sales of $2.1 million within our Platform Software and Services segment and $1.8 million within our Global Services segment. The decrease within our Networking Platforms segment primarily reflects a product line sales decrease of $34.3 million of Optical Networking products, which primarily reflects a sales decrease of $40.5 million of our 6500 Packet-Optical Platform, primarily to communication service providers.

Current wording

•APAC revenue decreased by $72.7 million, primarily reflecting a sales decrease of $77.6 million within our Networking Platforms segment, partially offset by increased sales of $3.7 million within our Platform Software and Services segment and $1.3 million within our Global Services segment. The decrease within our Networking Platforms segment primarily reflects a product line sales decrease of $78.9 million of Optical Networking products, which primarily reflects a sales decrease of $67.8 million of our 6500 Packet-Optical Platform, primarily to communications service providers.

Previous wording

•Gross profit increased by $11.0 million. Gross margin increased by 180 basis points, primarily due to reduced component costs and improved margins on Blue Planet software services, partially offset by a higher concentration of lower margin product mix.

Current wording

•Gross profit decreased by $88.0 million. Gross margin increased by 80 basis points, primarily due to reduced component costs and improved margins on Blue Planet software, partially offset by higher inventory excess and obsolescence costs and lower manufacturing efficiencies.

Previous wording

•Gross profit on products decreased by $8.1 million. Product gross margin increased by 120 basis points, primarily due to reduced component costs and higher software sales, partially offset by a higher concentration of lower margin product mix and higher inventory excess and obsolescence costs.

Current wording

•Gross profit on products decreased by $115.9 million. Product gross margin slightly increased by 10 basis points, primarily due to reduced component costs and higher software revenue, partially offset by higher inventory excess and obsolescence costs and lower manufacturing efficiencies.

Previous wording

•Gross profit on services increased by $19.1 million. Gross margin increased by 450 basis points, primarily due to improved margins on Blue Planet software services due to improved efficiencies on delivery. Additionally, margins on deployment services increased due to increased revenue and efficiencies reducing costs.

Current wording

•Gross profit on services increased by $27.9 million. Services gross margin increased by 290 basis points, primarily due to higher margins on Blue Planet software services due to improved efficiencies on delivery. Additionally, margins on deployment services increased due to increased revenue and efficiencies reducing costs.

Previous wording

Approximately 48.0% of our operating expense was non-U.S. Dollar-denominated during the first quarter of fiscal 2024, including expenses in Canadian Dollars, Indian Rupees, and Euros. During the first quarter of fiscal 2024, as compared to the first quarter of fiscal 2023, the U.S. Dollar fluctuated against these currencies. Consequently, our operating expense, net of hedging, reported in U.S. Dollars, was adversely affected by approximately $0.9 million, or 0.2%.

Current wording

Approximately 50.3% and 49.1% of our operating expense was non-U.S. Dollar-denominated during the second quarter and first six months of fiscal 2024, respectively, including expenses in Canadian Dollars, Indian Rupees, and Euros. During the second quarter of fiscal 2024, as compared to the second quarter of fiscal 2023, and during the firstsix months of fiscal 2024, as compared to the firstsix months of fiscal 2023, the U.S. Dollar fluctuated against these currencies. As a result of these currency fluctuations, our operating expense, net of hedging, reported in U.S. Dollars, was adversely affected by approximately $0.6 million, or 0.1% and $1.5 million, or 0.2%, respectively.

Previous wording

•Significant asset impairments and restructuring costs reflects actions that we have taken with respect to our operations, global workforce, and facilities as part of a business optimization strategy to improve gross margin, constrain operating expense, redesign certain business processes, and restructure real estate facilities.

Current wording

•Significant asset impairments and restructuring costs reflects actions that we have taken with respect to our operations, global workforce, and facilities as part of a business optimization strategy to improve gross margin, constrain operating expense, redesign certain business processes, and restructure real estate facilities. For more information on our restructuring costs, see Note 4 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.

Previous wording

•Amortization of intangible assets remained relatively unchanged.

Current wording

•Amortization of intangible assets decreased by $1.9 million, primarily reflecting certain intangible assets having reached the end of their economic lives.

Previous wording

•Acquisition and integration costsin the first quarter of fiscal 2023 reflect financial, legal, and accounting advisors and employee-related costs related to our acquisitions of Benu Networks, Inc. (“Benu”) and Tibit Communications, Inc. (“Tibit”) during the first quarter of fiscal 2023.

Current wording

•Acquisition and integration costsin fiscal 2023 reflect financial, legal, and accounting advisors and employee-related costs related to our acquisitions of Benu Networks, Inc. (“Benu”) and Tibit Communications, Inc. (“Tibit”) during the first quarter of fiscal 2023.

Previous wording

•Research and development expense increased by $5.5 million. This increase primarily reflects increases in employee headcount and related compensation costs, partially offset by decreased professional services related to design engineering, fabrication and production of ASIC chips.

Current wording

•Research and development expense increased by $10.9 million, net of hedging. This increase primarily reflects increases in employee-related compensation costs, net of a lower provision associated with our annual cash incentive compensation plan, facility and information technology costs and higher technology related costs, partially offset by decreased professional services.

Previous wording

•Selling and marketing expense increased by $4.4 million. This increase primarily reflects increases in employee-related compensation costs.

Current wording

•Selling and marketing expense increased by $3.3 million. This increase primarily reflects increases in employee-related compensation costs, net of lower commission expense and lower provisions associated with our annual cash incentive compensation plan, and increases in travel and entertainment costs, partially offset by decreased selling and marketing costs.

Previous wording

•General and administrative expense increased by $3.8 million. This increase primarily reflects increases in employee-related compensation costs and bad debt expense, partially offset by decreased costs for professional services.

Current wording

•General and administrative expense increased by $2.4 million. This increase primarily reflects an increase in employee-related compensation costs, net of a lower provision associated with our annual cash incentive compensation plan and bad debt expense partially offset by a decrease in costs for professional services.

Previous wording

•Provision for income taxes decreased by $3.1 million, primarily due to the effect of research and development expenditures and tax credits. The effective tax rate for the first quarter of fiscal 2024 was higher than the effective tax rate for the first quarter of fiscal 2023, primarily due to the tax benefit of a gain on our cost method equity investment in the first quarter of fiscal 2023.

Current wording

•Provision for income taxes decreased by $29.0 million, and the effective tax rate for the second quarter of fiscal 2024 was lower than the effective tax rate for the second quarter of fiscal 2023, both primarily due to the decrease in pre-tax book income for the quarter.

Previous wording

•Interest and other income, net decreased by $21.3 million, primarily resulting from the remeasurement of our previously held investment in Tibit to fair value, which resulted in a gain on our cost method equity investment of $26.5 million in the first quarter of fiscal 2023, partially offset by higher interest income on our investments.

Current wording

•Interest and other income, netdecreased by $18.1 million, primarily resulting from the remeasurement of our previously held investment in Tibit to fair value, in fiscal 2023, which resulted in a gain on our equity investment of $26.5 million and the impact of foreign exchange rates on assets and liabilities denominated in a currency other than the relevant functional currency, net of hedging activity. These decreases were partially offset by higher interest income on our investments.

Previous wording

•Interest expense increased by $7.9 million, primarily due to higher interest rates on our floating rate debt, net of hedging activity. For more information on our short-term and long-term debt, see Note 13 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.

Current wording

•Interest expense increased by $7.9 million, primarily due to higher interest rates on our floating rate debt, net of hedging activity, and additional outstanding indebtedness, including the 2030 Term Loan incurred in the first quarter of fiscal 2023. For more information on our short-term and long-term debt, see Note 13 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.

Previous wording

•Networking Platforms segment profit decreased by $18.4 million, primarily due to lower product sales volume and increased research and development costs, offset by slightly higher gross margin as described above.

Current wording

•Networking Platforms segment profit decreased by $118.2 million, primarily due to lower product sales volume and lower gross margin as described above, and increased research and development costs.

Previous wording

•Blue Planet Automation Software and Services segment loss decreased by $4.0 million, primarily due to improved margins on software services as described above, partially offset by lower sales volume as described above.

Current wording

•Blue Planet Automation Software and Services segment loss slightly increased, primarily due to lower sales volume, partially offset by improved margins on software services as described above and decreased research and development costs.

Previous wording

•Platform Software and Services segment profit increased by $12.4 million, primarily due to higher sales volume as described above, partially offset by increased research and development costs.

Current wording

•Platform Software and Services segment profit increased by $25.7 million, primarily due to higher sales volume partially offset by increased research and development costs.

Previous wording

Overview. For the three months ended January 27, 2024, we generated $266.1 million of cash in operating activities. Net income (adjusted for non-cash charges) provided approximately $136.1 million of cash and working capital provided approximately $130.0 million of cash. For additional details, see “Cash Provided By Operating Activities” below.

Current wording

Overview. For the six months ended April 27, 2024, we generated $324.5 million of cash in operating activities. Net income (adjusted for non-cash charges) provided approximately $211.8 million of cash and working capital provided approximately $112.7 million of cash. For additional details, see “Cash Provided By Operating Activities” below.

Previous wording

Cash, cash equivalents and investments increased by $225.6 million during the first three months of fiscal 2024. Cash from operations was partially offset by the following: (i) cash used for stock repurchases under our stock repurchase program of $38.2 million; (ii) cash used to fund our investing activities for capital expenditures totaling $16.6 million; and (iii) stock repurchases on vesting of our stock unit awards to employees relating to tax withholding of $10.1 million. In addition to cash provided by operating activities, proceeds from the issuance of equity under our employee stock purchase plan provided $16.9 million in cash during the three months ended January 27, 2024.

Current wording

Cash, cash equivalents and investments increased by $173.2 million during the first six months of fiscal 2024. Cash from operations was partially offset by the following: (i) cash used for stock repurchases under our stock repurchase program of $94.8 million; (ii) cash used to fund our investing activities for capital expenditures totaling $33.5 million; (iii) stock repurchases on vesting of our stock unit awards to employees relating to tax withholding of $22.4 million; and (iv) cash used for our purchase of an equity investmentin a privately held technology company of $16.3 million. In addition to cash provided by operating activities, proceeds from the issuance of equity under our employee stock purchase plan provided $16.9 million in cash during the six months ended April 27, 2024.

Previous wording

Principal Sources of Liquidity. Our principal sources of liquidity on hand include our cash, cash equivalents, and investments, which, as of January 27, 2024 totaled $1.5 billion, as well as the unused portion of the Revolving Credit Facility, to which we and certain of our subsidiaries are parties. The Revolving Credit Facility provides for a total commitment of $300.0 million with a maturity date of October 24, 2028. We principally use the Revolving Credit Facility to support the issuance of letters of credit that arise in the ordinary course of our business and for general corporate purposes. As of

Current wording

Principal Sources of Liquidity. Our principal sources of liquidity on hand include our cash, cash equivalents, and investments, which, as of April 27, 2024, totaled $1.4 billion, as well as the unused portion of the Revolving Credit Facility, to which we and certain of our subsidiaries are parties. The Revolving Credit Facility provides for a total commitment of $300.0 million with a maturity date of October 24, 2028. We principally use the Revolving Credit Facility to support the issuance of letters of credit that arise in the ordinary course of our business and for general corporate purposes. As of April 27, 2024, letters of credit totaling $70.5 million were issued under the Revolving Credit Facility. There were no borrowings outstanding under the Revolving Credit Facility as of April 27, 2024.

Previous wording

Foreign Liquidity. The amount of cash, cash equivalents and short-term investments held by our foreign subsidiaries was $214.6 million as of January 27, 2024. Approximately $93.0 million of future cash generated from these foreign subsidiaries is expected to be repatriated with any remaining amount continuing to be indefinitely reinvested. A deferred tax liability related to the expected repatriation amount was accrued in fiscal 2023. There are no other significant temporary differences related to our investment in the foreign subsidiaries for which a deferred tax liability has not been recognized.

Current wording

Foreign Liquidity. The amount of cash, cash equivalents and short-term investments held by our foreign subsidiaries was $216.8 million as of April 27, 2024. Approximately $93.0 million of future cash generated from these foreign subsidiaries is expected to be repatriated, with any remaining amount continuing to be indefinitely reinvested. A deferred tax liability related to the expected repatriation amount was accrued in fiscal 2023. There are no other significant temporary differences related to our investment in the foreign subsidiaries for which a deferred tax liability has not been recognized.

Previous wording

Stock Repurchase Authorization. On December 9, 2021, we announced that our Board of Directors authorized a program to repurchase up to $1.0 billion of our common stock, which replaced in its entirety the previous stock repurchase program authorized in fiscal 2019. During the first quarter of fiscal 2024, we repurchased an additional$32.0 million of our common stock under the stock repurchase program, and $218.0 million remained under the current repurchase authorization as of January 27, 2024. The amount and timing of any further repurchases under our stock repurchase program 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. See Note 16 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.

Current wording

Stock Repurchase Authorization. On December 9, 2021, we announced that our Board of Directors authorized a program to repurchase up to $1.0 billion of our common stock, which replaced in its entirety the previous stock repurchase program authorized in fiscal 2019. During thefirst six months of fiscal 2024, we repurchased an additional$89.0 million of our common stock under the stock repurchase program, and $161.0 million remained under the current repurchase authorization as of April 27, 2024. The amount and timing of any further repurchases under our stock repurchase program 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. See Note 16 to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report as well as Item 2 of Part II of this report.

Previous wording

The following sections set forth the components of our $266.1 million of cash provided by operating activities during the first three months of fiscal 2024:

Current wording

The following sections set forth the components of our $324.5 million of cash provided by operating activities during the first six months of fiscal 2024:

Previous wording

We provided$130.0 million of cash for working capital during the period. The following table sets forth the major components of the cash used in working capital (in thousands):

Current wording

Working capital provided$112.7 million of cash during the period. The following table sets forth the major components of the cash provided by working capital (in thousands):

Previous wording

•The $135.2 million of cash provided by accounts receivable during the first three months of fiscal 2024 primarily reflects increased cash collections and lower sales volume as compared to the fourth quarter of fiscal 2023;

Current wording

•The $155.1 million of cash provided by accounts receivable during the first six months of fiscal 2024 primarily reflects increased cash collections and lower sales volume during the first half of fiscal 2024;

Previous wording

•The $56.2 million of cash provided by inventories during the first three months of fiscal 2024 primarily reflects the consumption of raw materials in excess of purchases, partially offset by increases in finished goods inventories from planned fulfillment of customer advance orders for which some deliveries have since been rescheduled as described in “Overview” above;

Current wording

•The $5.3 million of cash provided by inventories during the first six months of fiscal 2024 primarily reflects the consumption of raw materials in excess of purchases, partially offset by increases in finished goods and work-in-process inventories from planned fulfillment of customer advance orders for which some deliveries have since been rescheduled as described in “Overview” above;

Previous wording

•The $17.1 million of cash provided by prepaid expense and other during the first three months of fiscal 2024 primarily reflects lower non-trade receivables, upfront fees paid to customers and capitalized contract acquisition costs;

Current wording

•The $37.4 million of cash used in prepaid expense and other during the first six months of fiscal 2024 primarily reflects increased prepaid supplier costs, higher maintenance spares, and increased non-trade receivables;