Ciena

Ciena Corporation is an American telecommunications networking equipment and software services supplier based in Hanover, Maryland. The company has been described by The Baltimore Sun as the "world's biggest player in optical connectivity." The company reported revenues of $3.57 billion for 2019. Ciena had approximately 6,000 employees, as of October 2018. Gary Smith serves as president and chief executive officer (CEO).

Customers include AT&T, Deutsche Telekom, Korea Telecom, Sprint Corporation, and Verizon Communications.

History

Early history and initial public offering

Ciena was founded in 1992 under the name HydraLite by electrical engineer David R. Huber. Huber served as chief executive officer, while Optelecom, a company building optical networking products, provided "management assistance and production facilities," and co-founder Kevin Kimberlin who "provided initial equity capital during the formation of the Company". The company subsequently received funding from Sevin Rosen Funds as a result of a demonstration at its laboratory attended by Jon Bayless, a partner at the firm, who saw the value in applying HydraLite's fiber-optic technology to cable television. Sevin Rosen offered funding immediately, investing $1.25 million in April 1994.

Ciena received $40 million in venture capital financing, including $3.3 million from Sevin Rosen Funds. Other early investors in the company included Charles River Ventures, Japan Associated Finance Co., Star Venture, and Vanguard Venture Partners. Bayless also recruited physicist Patrick Nettles, a former colleague at the telecommunications company Optilink, to serve as Ciena's first CEO, and Lawrence P. Huang, another former colleague, to accept the sales chief role. Huber and Nettles, who changed the company's name to Ciena, began working from an office in Dallas in February 1994; Huber would remain with Ciena until 1995.

The name of the company was changed to Ciena in 1994. Its first products were introduced in May 1996, and Sprint Corporation was the company's first customer. At $195 million, the company's first-year sales were the highest ever recorded by a startup at the time. Ciena had sold $54.8 million in products to Sprint alone by November 1996. WorldCom also became an early customer, and Sprint and WorldCom accounted for 97 percent of Ciena's revenue, as of early 1997. Ciena began diversifying its clientele and acquiring smaller contracts in 1997.

Ciena went public on NASDAQ in February 1997, and was the largest initial public offering of a startup company to date, with a valuation of $3.4 billion. The company's headquarters were relocated to Maryland in March 1997. Ciena earned approximately $370 million in revenue and profits of $110 million for the fiscal year ending in October 1997. Customers at the time included AT&T, Bell Atlantic, and Digital Teleport.

In March 1998, Nettles and Michael Birck of Tellabs began discussing a possible merger. Tellabs announced the purchase of Ciena for $7.1 billion in June. Revenue surpassed $700 million by August 1998, and Ciena had approximately 1,300 employees at the time. The merger was not completed. Financial performance and shareholder disapproval were cited in the media as reasons for the abandoned acquisition proposal in September 1998.

2000s–present

Following the telecoms crash, Ciena's annual sales decreased from $1.6 billion to approximately $300 million. To address the company's challenges, Smith replaced Nettles as the company's CEO in 2001, and Nettles became executive chairman; Ciena was the second largest fiber optic networking equipment producer in the U.S. at the time. The company raised $1.52 billion by selling 11 million shares of stock and $600 million in convertible bonds in 2001.

While many telecommunications companies experienced downturns during the early 2000s, Ciena's cash influx provided flexibility and allowed the company to expand its product portfolio to include a broader range of advanced networking solutions and other technologies. Ciena also completed a series of strategic acquisitions, buying 11 companies between 1997 and early 2004. Ciena spent more than $2 billion to purchase five networking technology companies during 2001–2004.

AT&T, which previously tested select Ciena equipment, signed a supply agreement in 2001. In 2002, Ciena reported $361.1 million in sales and a loss of $1.59 billion, and had approximately 3,500 employees. The company was the fourth largest producer of fiber optic equipment in the U.S. by 2003.

In 2003, a federal court jury determined that Corvis Corporation, another fiber optic telecommunications equipment provider established by Huber in 1997, infringed a patent owned by Ciena.

In 2008, Ciena earned $902 million and reported a profit of $39 million. The company earned $653 million and reported a loss of $580 million in 2009; Ciena was generating approximately two-thirds of its revenue in the U.S. at the time. Ciena had net losses until 2015, when the company earned $2.4 billion in sales and posted a $12 million profit. Ciena's global workforce increased from 4,300 in 2011 to 5,345 by October 2015. The company's research and development budget for its Ottawa facilities was approximately $180 million per year, as of 2015.

Ciena earned $2.8 billion in revenue in 2017, and reported annual sales of approximately $3.09 billion in 2018. The company ranked number 770 and number 744 on the Fortune 1000 in 2017 and 2018, respectively.