FAIR VALUE MEASUREMENTS
As of the dates indicated, the following tables summarize the fair value of assets and liabilities that were recorded at fair value on a recurring basis (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| | November 1, 2025 |
| | Level 1 | | Level 2 | | Level 3 | | Total |
| Assets: | | | | | | | |
| Money market funds | $ | 713,707 | | | $ | — | | | $ | — | | | $ | 713,707 | |
| Bond mutual fund | 117,931 | | | — | | | — | | | 117,931 | |
| Time deposits | 74,990 | | | — | | | — | | | 74,990 | |
| Deferred compensation plan assets | 21,179 | | | — | | | — | | | 21,179 | |
| U.S. government obligations | — | | | 147,770 | | | — | | | 147,770 | |
| Corporate debt securities | — | | | 120,068 | | | — | | | 120,068 | |
| Foreign currency forward contracts | — | | | 3,236 | | | — | | | 3,236 | |
| | | | | | | |
| Total assets measured at fair value | $ | 927,807 | | | $ | 271,074 | | | $ | — | | | $ | 1,198,881 | |
| | | | | | | |
| Liabilities: | | | | | | | |
| Foreign currency forward contracts | $ | — | | | $ | 6,314 | | | $ | — | | | $ | 6,314 | |
| Forward starting interest rate swaps | — | | | 1,345 | | | — | | | 1,345 | |
| Total liabilities measured at fair value | $ | — | | | $ | 7,659 | | | $ | — | | | $ | 7,659 | |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | November 2, 2024 |
| | Level 1 | | Level 2 | | Level 3 | | Total |
| Assets: | | | | | | | |
| Money market funds | $ | 636,097 | | | $ | — | | | $ | — | | | $ | 636,097 | |
| Bond mutual fund | 112,703 | | | — | | | — | | | 112,703 | |
| Time deposits | 92,804 | | | — | | | — | | | 92,804 | |
| Deferred compensation plan assets | 16,519 | | | — | | | — | | | 16,519 | |
| U.S. government obligations | — | | | 286,181 | | | — | | | 286,181 | |
| Commercial paper | — | | | 111,143 | | | — | | | 111,143 | |
| Foreign currency forward contracts | — | | | 2,149 | | | — | | | 2,149 | |
| Interest rate swaps | — | | | 11,777 | | | — | | | 11,777 | |
| Total assets measured at fair value | $ | 858,123 | | | $ | 411,250 | | | $ | — | | | $ | 1,269,373 | |
| | | | | | | |
| Liabilities: | | | | | | | |
| Foreign currency forward contracts | $ | — | | | $ | 9,155 | | | $ | — | | | $ | 9,155 | |
| | | | | | | |
| | | | | | | |
| Total liabilities measured at fair value | $ | — | | | $ | 9,155 | | | $ | — | | | $ | 9,155 | |
| | | | | | | |
As of the dates indicated, the assets and liabilities above were presented on Ciena’s Consolidated Balance Sheets as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| | November 1, 2025 |
| | Level 1 | | Level 2 | | Level 3 | | Total |
| Assets: | | | | | | | |
| Cash equivalents | $ | 901,077 | | | $ | 99 | | | $ | — | | | $ | 901,176 | |
| Short-term investments | 5,551 | | | 210,597 | | | — | | | 216,148 | |
| Prepaid expenses and other | — | | | 3,236 | | | — | | | 3,236 | |
| Long-term investments | — | | | 57,142 | | | — | | | 57,142 | |
| Other long-term assets | 21,179 | | | — | | | — | | | 21,179 | |
| Total assets measured at fair value | $ | 927,807 | | | $ | 271,074 | | | $ | — | | | $ | 1,198,881 | |
| | | | | | | |
| Liabilities: | | | | | | | |
| Accrued liabilities and other short-term obligations | $ | — | | | $ | 6,314 | | | $ | — | | | $ | 6,314 | |
| | | | | | | |
| Other long-term obligations | — | | | 1,345 | | | — | | | 1,345 | |
| Total liabilities measured at fair value | $ | — | | | $ | 7,659 | | | $ | — | | | $ | 7,659 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | November 2, 2024 |
| | Level 1 | | Level 2 | | Level 3 | | Total |
| Assets: | | | | | | | |
| Cash equivalents | $ | 832,239 | | | $ | 9,426 | | | $ | — | | | $ | 841,665 | |
| Short-term investments | 9,365 | | | 306,978 | | | — | | | 316,343 | |
| Prepaid expenses and other | — | | | 2,149 | | | — | | | 2,149 | |
| Long-term investments | — | | | 80,920 | | | — | | | 80,920 | |
| Other long-term assets | 16,519 | | | 11,777 | | | — | | | 28,296 | |
| Total assets measured at fair value | $ | 858,123 | | | $ | 411,250 | | | $ | — | | | $ | 1,269,373 | |
| | | | | | | |
| Liabilities: | | | | | | | |
| Accrued liabilities and other short-term obligations | $ | — | | | $ | 9,155 | | | $ | — | | | $ | 9,155 | |
| | | | | | | |
| Total liabilities measured at fair value | $ | — | | | $ | 9,155 | | | $ | — | | | $ | 9,155 | |
There were no transfers between Level 1 and Level 2 fair value measurements during the periods presented.
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.