Ciena — 2026Q3 earnings
reported 2026-09-03
EPS $2.11 vs $1.73 est — beat
next session +1.1% (close 2026-09-03 → 2026-09-04)
Source
Press release ↗Summary
Ciena's fiscal third quarter was a record on both revenue and profit. Revenue reached $1.67 billion, up 37% year over year. Adjusted EPS of $2.11 rose 215%, and GAAP EPS was $1.83. Ciena guided the fourth quarter to $1.75 billion plus or minus $50 million and raised full-year revenue guidance to $6.42 billion. Revenue is concentrated: two customers made up 41.7% of it. On the call, management said demand is running ahead of supply. Backlog rose by $800 million to $8.5 billion and is expected to pass $10 billion by year end. Ciena has signed long-term agreements that secure supply of certain key components through 2029. Management also described price increases, some of which will apply to existing backlog. The CFO gave an early fiscal 2027 view: revenue growth of at least 30% and an adjusted operating margin of 25% to 27%. He also said a one-time accounting adjustment for tariff refunds added about 70 basis points to this quarter's gross margin.
Earnings call
Earnings call webcast ↗Review
From the report
Revenue up 37% year over year and adjusted EPS up 215% came with a raised full-year fiscal 2026 revenue outlook. The CEO linked the result to AI-driven network investment.
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Fiscal third-quarter revenue was $1.67 billion, up 37% year over year. show quote
“Fiscal third quarter 2026 revenue was $1.67 billion, up 37% year-over-year”
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Adjusted EPS was $2.11, up 215% from the fiscal third quarter of 2025. show quote
“Fiscal third quarter 2026 adjusted Earnings Per Share (EPS) was $2.11, an increase of 215% compared to fiscal third quarter 2025”
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GAAP diluted EPS was $1.83, compared with $0.35 a year earlier. Adjusted EPS was $2.11, compared with $0.67. show quote
“$1.83 GAAP and $2.11 adjusted (non-GAAP) for the fiscal third quarter 2026, compared to $0.35 and $0.67 for fiscal third quarter 2025, respectively”
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Ciena guided fiscal fourth-quarter revenue to $1.75 billion, plus or minus $50 million. show quote
“Providing revenue guidance for fiscal fourth quarter 2026 of $1.75 billion plus or minus $50 million”
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Ciena raised full-year fiscal 2026 revenue guidance to $6.42 billion, plus or minus $50 million. At the midpoint, that is 35% growth over the prior year. show quote
“Raising revenue guidance for fiscal year 2026 to $6.42 billion plus or minus $50 million, a 35% increase year-over-year at the midpoint”
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Revenue is concentrated: two customers each contributed at least 10% of revenue and together accounted for 41.7%. show quote
“Two customers represented 10%-plus of revenue for a total of 41.7% of revenue.”
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Ciena bought back about 0.4 million shares for $171.7 million in the quarter under its $1 billion repurchase program. show quote
“Repurchased approximately 0.4 million shares of common stock for an aggregate price of $171.7 million under the $1 billion share repurchase program.”
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The CEO said the quarter's performance demonstrates Ciena's connectivity leadership as AI drives compounding waves of network investment. show quote
“Today’s outstanding financial performance demonstrates Ciena’s leadership in providing industry-leading, high-speed connectivity solutions as AI continues to drive compounding waves of network investment”
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From the call
Management said supply, not demand, is what limits growth. Backlog is building faster than Ciena can ship, it has secured supply of certain key components through 2029, and it is negotiating price increases with customers. The CFO gave an early fiscal 2027 floor of at least 30% revenue growth.
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Backlog rose by $800 million in the quarter to $8.5 billion. One month into the current quarter, Ciena had booked nearly as many orders as in all of Q3, and it expects to end the year with more than $10 billion in backlog. show quote
“we exited Q3 with an $800 million increase in backlog to $8.5 billion. Orders continue to accelerate, as Gary noted, 1 month into the quarter, we have booked nearly as much demand as all of Q3 and expect to end the year with more than $10 billion in backlog.”
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As an early view of fiscal 2027, the CFO said he expects revenue to grow at least 30%, to at least $8.3 billion to $8.4 billion, with upside if supply allows. show quote
“we believe it's prudent to provide early direction for fiscal 2027. As we see it today, we expect to deliver another record year with revenue growing a minimum of 30% year-on-year, yielding at least $8.3 billion to $8.4 billion in revenue with supply-driven upsides.”
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The CFO expects a fiscal 2027 adjusted operating margin of 25% to 27%. show quote
“And we expect to achieve fiscal 2027 adjusted operating margin between 25% and 27%, posting yet another record in profitability”
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Ciena signed long-term agreements that secure supply of certain key components through 2029, including added capacity for them. show quote
“In recent weeks, we finalized long-term agreements that secure supply of certain key components through 2029, including incremental capacity for those key components that will enable us to support growing customer demand.”
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On pricing, the CFO said he expects increases ranging from high single digits to the high teens or low 20s, depending on customer and product line, and that some will apply to existing backlog. show quote
“depending on the customer and the product line, anywhere between, call it, high single digits types of price increases to something in the range of high teens, low 20s type of price increases. And what's remarkable, and I think you'll appreciate this, George, is some of that will selectively hit backlog, right?”
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The CFO said a one-time accounting adjustment for tariff refunds added about 70 basis points to Q3 gross margin. He does not expect it to recur. show quote
“in Q3 was kind of a onetime accounting adjustment for those tariff refunds that we don't expect to continue moving forward, and that gave us about 70 basis points of uplift.”
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The CFO said he thinks rebalancing supply and demand will be a multiyear journey, and he does not see it happening before '28. show quote
“And so we think it's going to be a multiyear journey before we see that supply and demand get back into balance and multiyear. So we don't see that happening before '28 at all.”
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Asked about the pace of data-center construction, the CEO said he thinks Ciena is largely immune to the pacing of new data centers for the next couple of years. show quote
“So Ryan, certainly, for the next couple of years, we think we're largely immune from what may or may not happen with the pacing of new data centers.”
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as of 2026-10-06