Ciena Stock Earnings Reports

Ciena reported a strong fiscal Q3 2025: revenue $1.22B (above guidance), adjusted EPS $0.67 (+91% YoY, +60% sequentially), record order book and backlog, and $174M operating cash flow. Demand was broad-based across hyperscalers, neo-scalers and service providers; management highlighted two industry-first cloud wins — a North America dedicated AI training DCI (RLS + WaveLogic 6 nano 800G ZR plugs) expected to ramp to hundreds of millions, and a co-developed in‑data‑center out‑of‑band management solution (DCOM) with significant orders. The interconnects (pluggables/component) business is on track to at least double in 2025 and is expected to at least double again in FY2026. Management is reallocating R&D toward coherent systems, interconnects, coherent routing and DCOM, and away from next‑gen residential broadband (will continue to support but not invest further); this shift triggers a Q4 noncash in‑process R&D charge of ~ $90M and a Q4 restructuring charge of ~ $20M related to a 4–5% workforce reduction. Q4 guidance: revenue $1.24B–$1.32B, adjusted gross margin 42–43%, OpEx $390–$400M. Early FY2026 view: ~17% revenue growth, gross margin ~43% (±1%), OpEx ~flat at ~$1.5B, and management now expects to achieve its long‑term 15–16% operating margin target in 2026 (one year earlier). Key investor considerations: durable secular AI-driven networking demand, improving margin and operating‑leverage trajectory, strong backlog and buyback activity (year‑to‑date repurchases ~$245M, expect ~$330M total), versus execution risks from tariffs, supply constraints, and successful ramp of large AI/DCI programs.