Ciena raises annual revenue guide as cloud demand accelerates
The networking equipment provider reported second-quarter revenue of $1.57 billion, a 39.5% increase year-over-year.
Ciena (CIEN), the networking equipment provider, reported a significant acceleration in growth for the second fiscal quarter as demand from cloud providers drove a sharp increase in profitability.
The results marked a trajectory inflection for the company, characterized by expanding margins and a substantial increase in the scale of its cloud-based business.
Revenue for the quarter rose 39.5% year-over-year to $1.57 billion, compared to $1.13 billion in the same period last year. Adjusted earnings per share rose 290% to $1.64 a share, up from $0.42 a share in the prior-year quarter.
Cloud provider revenue grew 70% year-over-year and accounted for 46% of total revenue. This growth was supported by the adoption of WaveLogic 6 Extreme, which added 20 new customers during the quarter to reach a total base of 110. Revenue from both RLS and Waveserver grew more than 50% year-over-year.
Geographic growth was led by India, where revenue more than doubled year-over-year driven by MOFN.
Profitability improved across the board. Adjusted gross margin expanded 390 basis points to 44.9%, while adjusted operating margin rose 1,130 basis points to 19.5%.
Ciena raised its full-year 2026 revenue guidance to $6.3 billion plus or minus $100 million, representing a 32% increase year-over-year at the midpoint. The company provided revenue guidance for the third fiscal quarter of $1.625 billion plus or minus $50 million.
Operational efficiency improved as inventory turns rose to 3.6x from 2.5x a year ago, and average days' sales outstanding decreased to 71 from 87. Free cash flow rose 71% to $219 million.
On June 8, 2026, the company priced a private offering of $2.5 billion in 0.00% convertible senior notes due 2031, which was upsized from an initial $2.0 billion.