Ciena buys AT&T’s Vyatta to strengthen metro, edge portfolio

M&A concept - M&A word made with wooden blocks on laptop
The deal is expected to close by the end of 2021. (SB/Getty Images)(SB/GettyImages)

Ciena inked a deal to acquire AT&T’s Vyatta routing and switching technology for an undisclosed sum, a move executives touted as strengthening the vendor's metro and edge portfolios.

AT&T acquired Vyatta’s assets from networking hardware company Brocade in mid-2017. On a call with investors, Ciena SVP of Global Products and Services Scott McFeely said the operator has used Vyatta's technology to further its network transformation and virtualization initiatives, putting it to work for use cases ranging from edge applications and 4G/5G backhaul to enterprise business services.  

“Those use cases are very much in the sweet spot for what we’re trying to accomplish in our next generation metro and edge campaigns,” he continued. “So, if you look at the assets we’re picking up it adds a capability set to enhance our routing and switching portfolio as we address the increased market size of next generation metro and edge. It obviously deepens our relationship with a really important customer of ours, AT&T. And we pick up an engineering resources in a location that we had no presence before, in the U.K.”

As part of the deal, Ciena will continue to support the Vyatta platform on AT&T’s network, and will integrate Vyatta’s engineers into its own routing and switching R&D organization.

The deal is expected to close by the end of 2021.

Financial results

The announcement came as Ciena reported results for its fiscal Q3 2021, which ended on July 31. Revenue increased 1.2% year on year to $988.1 million, with net income of $238.2 million up substantially from $142.3 million.

Its networking platforms accounted for nearly 80% of Ciena’s revenue, despite converged packet optical sales sliding 1.3% to $712.9 million and routing and switching falling 12.7% to $69.7 million. Revenue from platform software and services increased from $46.4 million to $56.9 million, with Blue Planet revenue up from $11.3 million to $16.6 million. Global services revenue grew from $116.7 million to $132 million.

RELATED: Ciena nearly doubles 800G shipments in its fiscal Q2

On the call, executives touted a strong demand environment, but said pressure from global supply chain issues was expected to persist through the first half of calendar 2022.

Ciena CEO Gary Smith noted it now has 106 customers signed on to use its 800G-enabled WaveLogic 5 Extreme product and has shipped approximately 20,000 units, up from 95 customers and 11,500 units in its fiscal Q2.