Ciena raises annual revenue guide as cloud demand accelerates
The networking equipment provider reported second-quarter revenue of $1.57 billion, a 40% increase from a year ago.
Ciena (CIEN), the networking systems and software provider, reported second-quarter revenue that exceeded prior growth trajectories. The company saw a significant acceleration in its financial performance, driven largely by an expanding footprint among hyperscale cloud providers.
Revenue rose 40% year-over-year to $1.57 billion, an acceleration from the 33% growth recorded in the first quarter. Adjusted earnings per share grew 290% to $1.64, compared to 111% growth in the previous quarter.
Profitability metrics expanded alongside the top line. Adjusted gross margin rose 390 basis points to 44.9%, up from 41.0% in the second quarter of 2025. Adjusted operating margin increased 1,130 basis points to 19.5%, compared to 8.2% in the same period last year.
Cloud provider revenue grew 70% year-over-year, accounting for 46% of total revenue in the second quarter, up from 42% in the first quarter. The company also reported the award of the industry's first hyperscaler multi-rail opportunity utilizing its RLS Hyper-Rail solution. In other segments, routing and switching revenue rose to $174.2 million, up from $126.0 million in the first quarter.
Ciena raised its fiscal year 2026 revenue guidance to $6.3 billion plus or minus $100 million, representing a 32% increase at the midpoint over the prior year. This is an increase from the previous range of $5.9 billion to $6.3 billion provided in the first quarter. The company provided new revenue guidance for the third quarter of $1.625 billion plus or minus $50 million.
Operational efficiency improved as inventory turns rose to 3.6x, up from 3.2x in the first quarter and 2.5x in the second quarter of 2025. Average days' sales outstanding decreased to 71, down from 87 in the second quarter of 2025.
Free cash flow rose 71% year-over-year to $219 million, compared to $128 million in the second quarter of 2025.