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CIEN Q4 Earnings Crush Estimates on Record Sales, AI Trends Lift Stock
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Key Takeaways
Ciena's Q4 revenue rose 20.3% to $1.35B while adjusted EPS jumped 68.5% on operating model gains.
Cloud and telecom demand, AI-driven infrastructure and strong orders pushed results above guidance.
A $5B backlog and raised 2026 outlook highlight sustained momentum in optical and cloud markets.
Ciena Corporation (CIEN - Free Report) reported fourth-quarter fiscal 2025 (ended Nov. 1) results, wherein adjusted earnings per share (EPS) of 91 cents beat the Zacks Consensus Estimate of 77 cents. Also, the bottom line expanded 68.5% year over year, driven by improvements in the operating model.
Quarterly revenues rose 20.3% year over year to $1.35 billion, surpassing the Zacks Consensus Estimate of $1.3 billion. The top line exceeded the upper range of guidance ($1.24-$1.32 billion) due to continued strength in optical networking demand, expansion into AI-driven infrastructure and strong orders from cloud and telecom customers. With a $5 billion backlog, including $3.8 billion in hardware and software, Ciena has solid support for 2026 revenue and clear demand signals into 2027 and beyond.
As cloud operators and service providers modernize their networks aggressively, Ciena’s product portfolio remains key to supporting the bandwidth-intensive, low-latency requirements of AI models and data center interconnects. Ciena’s strategy also emphasizes operational efficiency, consistent share repurchases, strong free cash flow and a foothold in AI and cloud networking. All these factors contribute to a strong long-term financial outlook. With increasing momentum among cloud and service providers, Ciena has gained two points of optical market share year to date and is well-positioned for further growth in 2026.
In response to record performance, driven by surging global connectivity needs and the exponential growth of AI workloads, shares of CIEN jumped 9.25% on Dec. 11 and closed trading at $242.37. Shares of the company have risen 170.1% in the past year compared with the Zacks Communication-Components industry's growth of 106.3%.
Image Source: Zacks Investment Research
Segmental Results
Total revenues in Networking Platforms (77.5% of total revenues) increased 22% year over year to $1.05 billion. Within Networking, Optical revenue climbed 19%, powered by a 72% surge in RLS. Routing and Switching grew 49%, with 3,000 and 5,000 series revenue doubling on the back of DCOM-driven demand.
Platform Software and Services’ revenues (6.9%) totaled $93.3 million, down 6.3% from the prior-year quarter. We projected the metric to be $114 million.
Blue Planet Automation Software and Services’ revenues (2.5%) grew 43.8% to $33.8 million. We expected the metric to be $34.3 million.
Total revenues in Global Services (13.1%) were $177.3 million, up 25% year over year, driven by 53% growth in advisory and enablement services and a 45% increase in installation and implementation. Our estimate for segmental revenues was $157.7 million.
Ciena Corporation Price, Consensus and EPS Surprise
Non-telecom customer revenues accounted for 55% of total revenues in the fiscal fourth quarter. Three 10%-plus customers represented 43.6% of the top line in the reported quarter. Direct Cloud Provider revenues surged 49% year over year and accounted for 42% of total revenues.
CIEN shipped WaveLogic 6 (WLe6) Nano 800-gig pluggables for initial revenue this quarter and, post-quarter, delivered 800ZR plugs to three more cloud providers for testing and certification. WL6e ramped further with 12 new customers in the fiscal fourth quarter.
Other Details
Non-GAAP adjusted gross margin was 43.4% compared with 41.6% a year ago. The figure beat guidance (42-43%) by 90 basis points (bps) on higher revenue and software mix. Value-exchange improvements should show up in late 2026, while NPI ramps and tightening supply continue to pressure costs.
Adjusted operating expenses were $408.7 million, up 15.2%.
Non-GAAP adjusted operating margin was 13.2%, up 250 bps sequentially and 320 bps year over year. Non-GAAP adjusted EBITDA increased 50.3% to $205.5 million.
Cash Flow & Liquidity
For the quarter that ended on Nov. 1, 2025, CIEN’s net cash flow from operating activities was $371 million compared with $349 million in the prior-year period.
As of Nov. 1, the company had $1.4 billion in cash and investments and $1.52 billion of net long-term debt.
In the reported quarter, CIEN repurchased about 0.7 million shares worth $84.5 million.
Strengthened Guidance for Fiscal 2026
Ciena’s updated guidance for fiscal 2026 signals confidence in sustained demand driven by cloud expansion, data center interconnect (DCI) and the explosive growth of AI infrastructure. It now expects fiscal 2026 revenue of $5.7–$6.1 billion, or roughly 24% growth at the midpoint, up from the 17% outlook shared in September. It continues to expect gross margins to rise to around 43% (+/-1%) in fiscal 2026.
Ciena’s cost-mitigation and pricing actions should begin to benefit results in late fiscal 2026, supporting second-half margin improvement. Adjusted opex is expected to be flat at about $1.52 billion, including Nubis’ operating costs post buyout.
Ciena had previously accelerated its long-term 15–16% operating margin goal from fiscal 2027 to fiscal 2026. It now expects fiscal 2026 operating margin to improve further to about 17% (+/-1 pt).
Fiscal 2026 capital expenditures are estimated to be $250–$275 million, above typical levels to support robust demand into late 2026 and 2027 and to fund incremental 3-nanometer mask-set costs. Management expects to repurchase approximately $330 million in shares in fiscal 2026 under the 2024 authorization.
Fiscal Q1 Guidance
For the first quarter of fiscal 2026, management expects revenues in the range of $1.35-$1.43 billion.
The adjusted gross margin is estimated between 43% and 44%.
Adjusted operating expenses are projected to be nearly $380 million.
Adjusted operating margin estimated at 15.5-16.5%.
NETGEAR, Inc. (NTGR - Free Report) reported third-quarter 2025 non-GAAP earnings per share of 12 cents, in contrast to the Zacks Consensus Estimate of a loss of 9 cents. The company reported non-GAAP earnings of 17 cents per share in the year-ago quarter. NETGEAR generated net revenues of $184.6 million, beating the consensus estimate by 7% and surpassing the company’s guidance of $165-$180 million. Revenues rose 0.9% year over year and 8.2% sequentially. The higher-margin enterprise segment buoyed the performance, benefiting from ASP and unit growth in ProAV-managed switch products.
ADTRAN Holdings, Inc. (ADTN - Free Report) reported mixed third-quarter 2025 results, with the top line surpassing the Zacks Consensus Estimate but the bottom line missing the same. The company recorded a top-line expansion year over year, driven by solid demand trends in both segments. Management’s focus on cost optimization and enhancing its operating model to ensure higher long-term shareholder returns is positive. However, macroeconomic headwinds are worrisome.
Corning Incorporated (GLW - Free Report) reported impressive third-quarter 2025 results, wherein adjusted earnings and revenues surpassed the Zacks Consensus Estimate. The advanced glass substrates producer witnessed revenue expansion year over year, driven by healthy sales across multiple end markets. The growing adoption of its advanced products for Gen-AI (generative artificial intelligence) applications is a tailwind. Its U.S.-made solar products are also gaining solid market traction.
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CIEN Q4 Earnings Crush Estimates on Record Sales, AI Trends Lift Stock
Key Takeaways
Ciena Corporation (CIEN - Free Report) reported fourth-quarter fiscal 2025 (ended Nov. 1) results, wherein adjusted earnings per share (EPS) of 91 cents beat the Zacks Consensus Estimate of 77 cents. Also, the bottom line expanded 68.5% year over year, driven by improvements in the operating model.
Quarterly revenues rose 20.3% year over year to $1.35 billion, surpassing the Zacks Consensus Estimate of $1.3 billion. The top line exceeded the upper range of guidance ($1.24-$1.32 billion) due to continued strength in optical networking demand, expansion into AI-driven infrastructure and strong orders from cloud and telecom customers. With a $5 billion backlog, including $3.8 billion in hardware and software, Ciena has solid support for 2026 revenue and clear demand signals into 2027 and beyond.
As cloud operators and service providers modernize their networks aggressively, Ciena’s product portfolio remains key to supporting the bandwidth-intensive, low-latency requirements of AI models and data center interconnects. Ciena’s strategy also emphasizes operational efficiency, consistent share repurchases, strong free cash flow and a foothold in AI and cloud networking. All these factors contribute to a strong long-term financial outlook. With increasing momentum among cloud and service providers, Ciena has gained two points of optical market share year to date and is well-positioned for further growth in 2026.
In response to record performance, driven by surging global connectivity needs and the exponential growth of AI workloads, shares of CIEN jumped 9.25% on Dec. 11 and closed trading at $242.37. Shares of the company have risen 170.1% in the past year compared with the Zacks Communication-Components industry's growth of 106.3%.
Image Source: Zacks Investment Research
Segmental Results
Total revenues in Networking Platforms (77.5% of total revenues) increased 22% year over year to $1.05 billion. Within Networking, Optical revenue climbed 19%, powered by a 72% surge in RLS. Routing and Switching grew 49%, with 3,000 and 5,000 series revenue doubling on the back of DCOM-driven demand.
Platform Software and Services’ revenues (6.9%) totaled $93.3 million, down 6.3% from the prior-year quarter. We projected the metric to be $114 million.
Blue Planet Automation Software and Services’ revenues (2.5%) grew 43.8% to $33.8 million. We expected the metric to be $34.3 million.
Total revenues in Global Services (13.1%) were $177.3 million, up 25% year over year, driven by 53% growth in advisory and enablement services and a 45% increase in installation and implementation. Our estimate for segmental revenues was $157.7 million.
Ciena Corporation Price, Consensus and EPS Surprise
Ciena Corporation price-consensus-eps-surprise-chart | Ciena Corporation Quote
Non-telecom customer revenues accounted for 55% of total revenues in the fiscal fourth quarter. Three 10%-plus customers represented 43.6% of the top line in the reported quarter. Direct Cloud Provider revenues surged 49% year over year and accounted for 42% of total revenues.
CIEN shipped WaveLogic 6 (WLe6) Nano 800-gig pluggables for initial revenue this quarter and, post-quarter, delivered 800ZR plugs to three more cloud providers for testing and certification. WL6e ramped further with 12 new customers in the fiscal fourth quarter.
Other Details
Non-GAAP adjusted gross margin was 43.4% compared with 41.6% a year ago. The figure beat guidance (42-43%) by 90 basis points (bps) on higher revenue and software mix. Value-exchange improvements should show up in late 2026, while NPI ramps and tightening supply continue to pressure costs.
Adjusted operating expenses were $408.7 million, up 15.2%.
Non-GAAP adjusted operating margin was 13.2%, up 250 bps sequentially and 320 bps year over year. Non-GAAP adjusted EBITDA increased 50.3% to $205.5 million.
Cash Flow & Liquidity
For the quarter that ended on Nov. 1, 2025, CIEN’s net cash flow from operating activities was $371 million compared with $349 million in the prior-year period.
As of Nov. 1, the company had $1.4 billion in cash and investments and $1.52 billion of net long-term debt.
In the reported quarter, CIEN repurchased about 0.7 million shares worth $84.5 million.
Strengthened Guidance for Fiscal 2026
Ciena’s updated guidance for fiscal 2026 signals confidence in sustained demand driven by cloud expansion, data center interconnect (DCI) and the explosive growth of AI infrastructure. It now expects fiscal 2026 revenue of $5.7–$6.1 billion, or roughly 24% growth at the midpoint, up from the 17% outlook shared in September. It continues to expect gross margins to rise to around 43% (+/-1%) in fiscal 2026.
Ciena’s cost-mitigation and pricing actions should begin to benefit results in late fiscal 2026, supporting second-half margin improvement. Adjusted opex is expected to be flat at about $1.52 billion, including Nubis’ operating costs post buyout.
Ciena had previously accelerated its long-term 15–16% operating margin goal from fiscal 2027 to fiscal 2026. It now expects fiscal 2026 operating margin to improve further to about 17% (+/-1 pt).
Fiscal 2026 capital expenditures are estimated to be $250–$275 million, above typical levels to support robust demand into late 2026 and 2027 and to fund incremental 3-nanometer mask-set costs. Management expects to repurchase approximately $330 million in shares in fiscal 2026 under the 2024 authorization.
Fiscal Q1 Guidance
For the first quarter of fiscal 2026, management expects revenues in the range of $1.35-$1.43 billion.
The adjusted gross margin is estimated between 43% and 44%.
Adjusted operating expenses are projected to be nearly $380 million.
Adjusted operating margin estimated at 15.5-16.5%.
CIEN’s Zacks Rank
Ciena currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Peer Companies
NETGEAR, Inc. (NTGR - Free Report) reported third-quarter 2025 non-GAAP earnings per share of 12 cents, in contrast to the Zacks Consensus Estimate of a loss of 9 cents. The company reported non-GAAP earnings of 17 cents per share in the year-ago quarter. NETGEAR generated net revenues of $184.6 million, beating the consensus estimate by 7% and surpassing the company’s guidance of $165-$180 million. Revenues rose 0.9% year over year and 8.2% sequentially. The higher-margin enterprise segment buoyed the performance, benefiting from ASP and unit growth in ProAV-managed switch products.
ADTRAN Holdings, Inc. (ADTN - Free Report) reported mixed third-quarter 2025 results, with the top line surpassing the Zacks Consensus Estimate but the bottom line missing the same. The company recorded a top-line expansion year over year, driven by solid demand trends in both segments. Management’s focus on cost optimization and enhancing its operating model to ensure higher long-term shareholder returns is positive. However, macroeconomic headwinds are worrisome.
Corning Incorporated (GLW - Free Report) reported impressive third-quarter 2025 results, wherein adjusted earnings and revenues surpassed the Zacks Consensus Estimate. The advanced glass substrates producer witnessed revenue expansion year over year, driven by healthy sales across multiple end markets. The growing adoption of its advanced products for Gen-AI (generative artificial intelligence) applications is a tailwind. Its U.S.-made solar products are also gaining solid market traction.