Benefiting from rising demand from cloud service providers and growing opportunities in AI infrastructure, optical networking equipment maker Ciena (CIEN.US) reported better-than-expected fiscal fourth-quarter results.
For the quarter ended November 1, Ciena posted adjusted earnings per share of $0.91, significantly surpassing the consensus estimate of $0.77. Revenue rose 20% year-over-year to $1.35 billion, also exceeding analysts' expectations of $1.29 billion. This strong performance was primarily driven by rapid growth in its optical networking business, where revenue increased to $929.2 million from $779.6 million a year earlier.
Gary Smith, President and CEO of Ciena, stated, "Our record fourth-quarter and full-year results reinforce our leadership in high-speed connectivity globally, while our role in the AI ecosystem continues to expand."
Ciena, a telecom equipment supplier specializing in optical transmission technology, manufactures fiber-optic networking gear for cloud providers to connect large data centers. With the surge in AI-dedicated data center construction—43% of new data centers are expected to handle AI workloads—demand for data center interconnect (DCI) bandwidth is projected to grow more than sixfold over the next five years, presenting significant opportunities for Ciena.
Analysts from Bank of America and Evercore ISI noted before the earnings release that robust hyperscale demand, AI-driven needs, and broader networking requirements serve as key growth drivers for the company. They believe continued infrastructure investments will sustain revenue outperformance and support Ciena's double-digit revenue growth trajectory.
Looking ahead, Ciena provided optimistic guidance, forecasting fiscal first-quarter 2026 revenue between $1.35 billion and $1.43 billion, well above the market estimate of $1.25 billion. For fiscal 2026, full-year revenue is expected to range from $5.7 billion to $6.1 billion, also exceeding analysts' projection of $5.53 billion.
CFO Marc Graff emphasized, "This quarter's performance reflects our momentum in a high-demand market and our commitment to financial discipline. With improved operating leverage, strong cash flow, and a solid balance sheet, we are well-positioned to deliver greater value to customers and shareholders in 2026."
Smith added, "We remain confident in our growth trajectory, supported by steady demand from cloud and carrier customers, as well as emerging opportunities within and beyond data centers."
For fiscal 2025, Ciena's revenue reached $4.77 billion, up 19% from $4.01 billion in fiscal 2024, while adjusted EPS climbed to $2.64 from $1.82 the prior year.
Following the earnings release, Ciena shares surged over 9% in premarket trading Thursday. Year-to-date, the stock has rallied 162%, driven by strong performance and soaring AI and cloud bandwidth demand.
Comments