© Ciena Confidential and Proprietary...

© Ciena Confidential and Proprietary

Welcome to Ciena’s Analyst Day 2008

Today’s presentations/Q&A sessions are being webcast live and will be recorded and archived on Ciena.com

Members of the press/media are in attendance


Forward-looking statements

Comments made during this presentation may contain forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties. These statements are based on information available to the Company as of the date of this event, October 7, 2008; and Ciena’s actual results could differ materially from those stated or implied, due to risks and uncertainties associated with its business, which include the risk factors disclosed in its Report on Form 10-Q filed with the Securities and Exchange Commission on September 5, 2008.

Forward-looking statements include statements regarding Ciena’s expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,”“expect,” “intend,” “may,” “should,” “will,” and “would” or similar words.

Ciena assumes no obligation to update the information presented today, whether as a result of new information, future events or otherwise.

© Ciena Confidential and Proprietary

Execution & Strategy

Gary Smith President & CEO

October 7, 2008


Discussion points

Level setEnvironmental overviewStrategy/positioning


Why Ciena?(from October 2, 2007 – last year’s analyst day)

Thematic playBenefiting from significant demand drivers and positioned to capitalize on a sizable infrastructure cycle Product cyclesDeveloping new products/features designed to drive future growthRevenue growthDelivering faster than market growth as a result of targeting high growth segments and taking shareOperating leverageImproving financial performance with a stabilizing business model


Thematic play

The waves: PDH SONET/SDH Ethernet

Infrastructure Investment


Product cyclesDelivering new revenue drivers


250

225

200

175

150

125

100

75

50

25

0

Rev

enue

in m

illio

ns (U

SD

)

Q4’

06

Q1’

07

Q2’

07

Q3’

07

Q4’

07

Q1’

08

Q2’

08

160M

242MG

rowth %

50

45

40

35

30

25

20

15

10

5

0

42%Ciena growth

24%Target market growth

Q3’

08

253M

Product cyclesEnabling market share gains


Revenue growthOutpacing peers/competitors

© Ciena Confidential and Proprietary 12© Ciena Confidential and Proprietary 12

Revenue growth

Mobile Backhaul

Managed Service

MetroNetworking

Core Transport

Core Switching

Expanding relationships


Revenue growth

2005 2006 2007 2008

21CN

GlobalServices

EthernetAccess

WiMaxDeployment

(N.AmericaService Provider)

Ethernet Access(N.European

Service Provider)

Carrier EthernetBusiness Services

(Latin AmericanService Provider)

IPTVDeployment

(Int’l PPT)

Forging new relationships – some examples

Carrier EthernetBusiness Services

(N.American MSO)


Operating leverage – to date

* As-adjusted OPEX excludes certain GAAP charges such as stock comp as set forth in our quarterly press releases

45%52%

7%Op Margin

15%Op Margin


Target business model

R&D

Sales & Mktg

G&A

12.5% 15.5%

12.5% 15.5%

4.5% 5.0%

15%As-adjusted operating profit target

(range as % of revenue)

−

−

−

* As-adjusted” operating profit excludes certain GAAP charges such as stock comp as set forth in our quarterly press releases

Revenue

Gross Margin

Grow faster than the market

High 40’s moving into low 50’s over time


Y/Y revenue growth rate comparison

Note: A constant exchange rate has been used for companies reporting in foreign currencies to remove impact of currency fluctuation. Industry average calculated from a larger basket of companies than those displayed.

Industry conditions and the larger economic crisis have caused an abrupt slowdown in our business and that of our competitors.


Market/demand trendsDespite macroeconomic concerns, most top-tier service providers financially healthy Traffic demand remains fundamental CAPEX driverWireless services are key revenue growth driver for top-tier, diversified customers

Source: Cisco


Top questions

1. Are the current conditions different from 2001-2002?


Top questions

1. Why is this different from 2001-2002?2. What gives you confidence this slowdown will be short-lived?


Top questions

1. Why is this different from 2001-2002?2. What gives you confidence this slowdown will be short-lived? 3. What happens if it’s not short-lived?


Top questions

1. Why is this different from 2001-2002?2. What gives you confidence this slowdown will be short-lived? 3. What happens if it’s not short-lived?4. How will you know either way?


Top questions

1. Why is this different from 2001-2002?2. What gives you confidence this slowdown will be short-lived? 3. What happens if it’s not short-lived? 4. How will you know either way?5. When will you know?


We specialize in transition to service-driven networks


The evolution of Ciena innovation

First…

We made the transport network

flexible, automated and resilient

Transport



Then…

We combined the economics of Ethernet with our heritage of resilient transport

EthernetTransport



Now…

We’re adding the tools for service enablement, velocity and monetization

Service deliveryEthernetTransport

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