Ciena posts 40% revenue jump as AI demand surges
Adjusted earnings per share leapt 290% to $1.64 in the fiscal second quarter.
The optical-networking equipment supplier Ciena (CIEN) reported fiscal second-quarter revenue that rose 40% from a year earlier, the fastest growth in more than two years, as cloud providers and data-center operators raced to build AI-ready infrastructure.
The quarter marked a clear acceleration from the 33% year-over-year increase in the prior period and reflected broad-based strength across Ciena’s core optical and routing franchises. Management said the surge was driven by hyperscale customers deploying high-capacity coherent optics and multi-terabit switching platforms to link AI training clusters.
Revenue reached $1.57 billion for the three months ended May 2, up from $1.13 billion a year earlier. Adjusted earnings climbed to $1.64 a share, a 290% increase that far outpaced the 111% growth recorded in the January quarter. Adjusted gross margin expanded 390 basis points to 44.9%, while operating margin more than doubled to 19.5%.
Cloud-provider revenue jumped 70% year-over-year and accounted for 46% of total sales, up from 42% in the prior quarter. Within the Optical Networking segment, revenue rose 42% to $1.1 billion, while the Routing and Switching unit nearly doubled, climbing 88% to $174 million. The company also disclosed a new multi-rail architecture using its RLS Hyper-Rail platform to connect AI data centers, a first in the industry.
Ciena raised its outlook for the fiscal year. Third-quarter revenue is now expected to land between $1.575 billion and $1.675 billion, up from the prior midpoint of $1.5 billion. Full-year revenue guidance was lifted to a midpoint of $6.3 billion, a $200 million increase. Adjusted operating margin for the year is now projected at 19%, up from the previous range of 17.5% to 19.5%.
Free cash flow rose 71% to $219 million, and net debt fell to $138 million from $174 million in the prior quarter. The company repurchased $83 million of stock during the period, bringing cumulative buybacks under its $1 billion program to $493 million.
Source: company public filings.