Ciena Corporation (NYSE:CIEN) reported fiscal second-quarter results that exceeded Wall Street expectations on both earnings and revenue, while also lifting its full-year guidance. Despite the strong performance, the networking equipment provider’s shares fell 5.7% in premarket trading.
The company credited its results to robust demand across its product portfolio and effective execution amid a complex supply chain environment.
Earnings and Revenue Top Forecasts
For the quarter, Ciena posted adjusted earnings per share of $1.64, outperforming analyst expectations of $1.46 by $0.18.
Revenue rose to $1.57 billion, exceeding the consensus estimate of $1.50 billion and representing a 40% increase from $1.13 billion reported in the same period a year earlier.
Management highlighted strong customer demand and continued momentum across key networking technologies as drivers of the growth.
Company Raises Full-Year Revenue Forecast
Looking ahead, Ciena issued third-quarter revenue guidance of between $1.575 billion and $1.675 billion. The midpoint of $1.625 billion sits comfortably above analysts’ expectations of $1.555 billion.
The company also increased its fiscal 2026 revenue outlook, now forecasting annual revenue of $6.2 billion to $6.4 billion. The midpoint of $6.3 billion exceeds the current consensus estimate of $6.183 billion and implies year-over-year growth of approximately 32%.
“Today’s results reflect the strength of our portfolio, the power of our business model, and disciplined execution in a dynamic supply environment,” said Gary Smith, president and CEO of Ciena.
Profitability Improves Significantly
Margins strengthened considerably during the quarter, reflecting both operational leverage and product mix improvements.
Adjusted gross margin increased to 44.9%, compared with 41.0% in the prior-year period, while adjusted operating margin expanded to 19.5% from 8.2% a year earlier.
Adjusted earnings per share surged 290% year-over-year from $0.42 in the fiscal second quarter of 2025.
Optical Networking Leads Growth
The company’s Optical Networking division remained its largest contributor, generating $1.1 billion in revenue, up from $773.6 million in the prior-year quarter.
Meanwhile, revenue from Routing and Switching nearly doubled, rising to $174.2 million from $92.7 million a year earlier, highlighting strong demand across multiple networking segments.
Positive Margin Outlook and Share Repurchases
For the fiscal third quarter, Ciena expects adjusted gross margin of approximately 45% and adjusted operating margin in the range of 19% to 20%.
The company also continued returning capital to shareholders, repurchasing approximately 0.2 million shares for $83.1 million during the quarter.
Despite the earnings beat and improved outlook, investors appeared to take profits following the stock’s recent performance, resulting in weakness in premarket trading.