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CIEN's Q1 Earnings Top, Revenues Up Y/Y on Strong Market Dynamics
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Ciena Corporation (CIEN - Free Report) reported first-quarter fiscal 2025 (ended Feb. 1) adjusted earnings per share (EPS) of 64 cents, which surpassed the Zacks Consensus Estimate of 39 cents. However, the bottom line declined 3% year over year.
Stay up-to-date with all quarterly releases: See ZacksEarnings Calendar.
Quarterly total revenues jumped 3.3% year over year to $1,072.3 million, beating the Zacks Consensus Estimate by 2%. Healthy orders momentum from both the cloud and service providers drove the expansion. AI growth is fueling global investment in ultra-fast, scalable networks by service and cloud providers. As businesses increasingly rely on cloud computing, AI-driven applications and data-intensive operations, demand for advanced networking infrastructure is likely to drive Ciena’s growth potential in the near term.
In the fiscal first quarter, service provider revenues soared 14% year over year, making up about 51% of total revenues. Despite strong financial performance with steady revenue growth, CIEN’s shares fell 2.4% in trading and closed at $63.95 on March 11 on the view of probable disruption in the United States and global markets due to the levying of extra tariffs and retaliatory actions.
However, shares went up 2% in pre-market trading on March 12, 2025. Shares of the company have soared 24.2% in the past year compared with the Zacks Fiber Optics industry's growth of 23.8%.
Image Source: Zacks Investment Research
Segment Results
Total revenues in Networking Platforms (76.6% of total revenues) inched up 1.7% year over year to $821.2 million. We expected the metric to be $785.9 million.
Platform Software and Services’ revenues (8.9%) totaled $95.1 million, up 6% from the prior year. We projected the metric to be $108 million.
Blue Planet Automation Software and Services’ revenues (2.4%) jumped 87% to $26 million. We suggested the metric to be $16.7 million.
Total revenues in Global Services (12.1%) were $130 million, up 2.5% year over year. Our estimate for segmental revenues was $132.5 million.
Ciena Corporation Price, Consensus and EPS Surprise
Region-wise, revenues in the Americas were $795.7 million, up 10.8% year over year. Europe, the Middle East and Africa generated $157.9 million in revenues, down 23.9% from the prior-year levels. Revenues in the Asia Pacific totaled $118.7 million, up 5.9%.
Non-telco customer revenues represented 49% of total revenues in the fiscal first quarter. Two 10%-plus customers represented 26.1% of the top line in the reported quarter. Direct cloud revenues accounted for 32% of total revenues, with five cloud providers among Ciena's top 10 customers for the quarter.
In the quarter under review, CIEN added 20 new customers for WaveLogic 6 Extreme, bringing the total number of customers shipped to 25.
Other Details
Non-GAAP adjusted gross margin was 44.7% compared with 45.7% a year ago.
Adjusted operating expenses were $347.4 million, up 3.1%.
Non-GAAP adjusted operating margin was 12.3% compared with 13.2% in the year-earlier quarter.
Non-GAAP adjusted EBITDA decreased 2.2% to $156.5 million.
Cash Flow & Liquidity
For the quarter that ended on Feb. 1, 2025, CIEN’s net cash flow from operating activities was $103.7 million compared with $266 million in the prior-year period.
As of Feb. 1, the company had $1.3 billion in cash and investments and $1,531 million of net long-term debt.
In the reported quarter, CIEN repurchased about 1 million shares worth $79 million. Ciena aims to buy back about $330 million in total during fiscal 2025.
Guidance
The company recognizes possible economic disruptions from new tariffs but expects bandwidth demand to grow. Management noted that the guidance excludes potential tariff impacts due to uncertainty.
For the second quarter of fiscal 2025, CIEN expects revenues in the range of $1.05 billion-$1.13 billion. The adjusted gross margin is estimated in the low-40% range. Adjusted operating expenses are projected to be roughly $355 million.
For fiscal 2025, management anticipates revenue growth at the upper end of the range of 8-11%. The adjusted gross margin is envisioned in the 42-44% band. Adjusted operating expenses are suggested to be an average of $350-$360 million per quarter.
Descartes Systems (DSGX - Free Report) reported fourth-quarter fiscal 2025 non-GAAP EPS of 43 cents, which met the Zacks Consensus Estimate. The bottom line expanded 16% year over year and 2% sequentially.
Shares of DSGX gained 3.9% in the past year.
Iridium Communications (IRDM - Free Report) reported EPS of 32 cents for the fourth quarter of 2024, beating the Zacks Consensus Estimate by 94%. The bottom line compared favorably with the prior quarter's figure of 30 cents per share.
In the past year, IRDM shares have risen 3%.
Pure Storage (PSTG - Free Report) reported fourth-quarter fiscal 2025 non-GAAP EPS of 45 cents, which beat the Zacks Consensus Estimate by 7.1%. The company reported non-GAAP EPS of 50 cents in the prior year quarter.
Shares of PSTG have declined 7.1% in the past year.
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CIEN's Q1 Earnings Top, Revenues Up Y/Y on Strong Market Dynamics
Ciena Corporation (CIEN - Free Report) reported first-quarter fiscal 2025 (ended Feb. 1) adjusted earnings per share (EPS) of 64 cents, which surpassed the Zacks Consensus Estimate of 39 cents. However, the bottom line declined 3% year over year.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Quarterly total revenues jumped 3.3% year over year to $1,072.3 million, beating the Zacks Consensus Estimate by 2%. Healthy orders momentum from both the cloud and service providers drove the expansion. AI growth is fueling global investment in ultra-fast, scalable networks by service and cloud providers. As businesses increasingly rely on cloud computing, AI-driven applications and data-intensive operations, demand for advanced networking infrastructure is likely to drive Ciena’s growth potential in the near term.
In the fiscal first quarter, service provider revenues soared 14% year over year, making up about 51% of total revenues. Despite strong financial performance with steady revenue growth, CIEN’s shares fell 2.4% in trading and closed at $63.95 on March 11 on the view of probable disruption in the United States and global markets due to the levying of extra tariffs and retaliatory actions.
However, shares went up 2% in pre-market trading on March 12, 2025. Shares of the company have soared 24.2% in the past year compared with the Zacks Fiber Optics industry's growth of 23.8%.
Image Source: Zacks Investment Research
Segment Results
Total revenues in Networking Platforms (76.6% of total revenues) inched up 1.7% year over year to $821.2 million. We expected the metric to be $785.9 million.
Platform Software and Services’ revenues (8.9%) totaled $95.1 million, up 6% from the prior year. We projected the metric to be $108 million.
Blue Planet Automation Software and Services’ revenues (2.4%) jumped 87% to $26 million. We suggested the metric to be $16.7 million.
Total revenues in Global Services (12.1%) were $130 million, up 2.5% year over year. Our estimate for segmental revenues was $132.5 million.
Ciena Corporation Price, Consensus and EPS Surprise
Ciena Corporation price-consensus-eps-surprise-chart | Ciena Corporation Quote
Region-wise, revenues in the Americas were $795.7 million, up 10.8% year over year. Europe, the Middle East and Africa generated $157.9 million in revenues, down 23.9% from the prior-year levels. Revenues in the Asia Pacific totaled $118.7 million, up 5.9%.
Non-telco customer revenues represented 49% of total revenues in the fiscal first quarter. Two 10%-plus customers represented 26.1% of the top line in the reported quarter. Direct cloud revenues accounted for 32% of total revenues, with five cloud providers among Ciena's top 10 customers for the quarter.
In the quarter under review, CIEN added 20 new customers for WaveLogic 6 Extreme, bringing the total number of customers shipped to 25.
Other Details
Non-GAAP adjusted gross margin was 44.7% compared with 45.7% a year ago.
Adjusted operating expenses were $347.4 million, up 3.1%.
Non-GAAP adjusted operating margin was 12.3% compared with 13.2% in the year-earlier quarter.
Non-GAAP adjusted EBITDA decreased 2.2% to $156.5 million.
Cash Flow & Liquidity
For the quarter that ended on Feb. 1, 2025, CIEN’s net cash flow from operating activities was $103.7 million compared with $266 million in the prior-year period.
As of Feb. 1, the company had $1.3 billion in cash and investments and $1,531 million of net long-term debt.
In the reported quarter, CIEN repurchased about 1 million shares worth $79 million. Ciena aims to buy back about $330 million in total during fiscal 2025.
Guidance
The company recognizes possible economic disruptions from new tariffs but expects bandwidth demand to grow. Management noted that the guidance excludes potential tariff impacts due to uncertainty.
For the second quarter of fiscal 2025, CIEN expects revenues in the range of $1.05 billion-$1.13 billion. The adjusted gross margin is estimated in the low-40% range. Adjusted operating expenses are projected to be roughly $355 million.
For fiscal 2025, management anticipates revenue growth at the upper end of the range of 8-11%. The adjusted gross margin is envisioned in the 42-44% band. Adjusted operating expenses are suggested to be an average of $350-$360 million per quarter.
CIEN’s Zacks Rank
Ciena currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Companies
Descartes Systems (DSGX - Free Report) reported fourth-quarter fiscal 2025 non-GAAP EPS of 43 cents, which met the Zacks Consensus Estimate. The bottom line expanded 16% year over year and 2% sequentially.
Shares of DSGX gained 3.9% in the past year.
Iridium Communications (IRDM - Free Report) reported EPS of 32 cents for the fourth quarter of 2024, beating the Zacks Consensus Estimate by 94%. The bottom line compared favorably with the prior quarter's figure of 30 cents per share.
In the past year, IRDM shares have risen 3%.
Pure Storage (PSTG - Free Report) reported fourth-quarter fiscal 2025 non-GAAP EPS of 45 cents, which beat the Zacks Consensus Estimate by 7.1%. The company reported non-GAAP EPS of 50 cents in the prior year quarter.
Shares of PSTG have declined 7.1% in the past year.