Ciena Revenue Climbs 37% on AI Network Spending; CFO Sketches Fiscal 2027 Above $8.3 Billion

by Henry Nakamura · September 3, 2026

Earnings Reporter, Earnings Dispatch

Ciena Corp. said Thursday morning that revenue in its fiscal third quarter reached $1.671 billion, up 37% from $1.219 billion a year earlier, as spending on the long-haul and data center interconnect links that carry artificial intelligence traffic continued to run ahead of the company's own supply.

The profit line moved further than the top line. On a GAAP basis Ciena reported net income of $266.4 million, or $1.83 a diluted share, against $0.35 a share in the year-ago quarter. On an adjusted, non-GAAP basis the company reported net income of $307.7 million, or $2.11 a diluted share, versus $0.67 a year ago. Both bases appear in the company's fiscal third quarter release; on the arithmetic of the figures it gives, the adjusted earnings line is more than three times its year-ago level and the GAAP line more than five times.

Margins expanded on both bases. GAAP gross margin was 45.4%, up from 41.3%; adjusted gross margin was 46.4%, up from 41.9%. GAAP operating margin came in at 18.0% and adjusted operating margin at 22.5%. GAAP operating expense was $458.1 million against $400.0 million on an adjusted basis, a spread of roughly $58 million between the two presentations in the quarter.

Two consensus numbers, two different beats

How large the earnings beat looks depends on whose survey you use, and the gap is worth naming rather than glossing. Zacks put its consensus estimate for adjusted earnings at $1.74 a share, making the $2.11 result a 21.26% surprise, with revenue coming in 1.44% above the Zacks consensus, according to a Zacks report published Sept. 3. Investing.com, writing the same morning, cited a consensus of $1.72 and described the result as a $0.39 beat, with revenue topping a $1.63 billion estimate. Both figures refer to the adjusted line, not the GAAP one.

The mix underneath the headline number was concentrated. Optical Networking accounted for $1,191.3 million of revenue, or 71.3% of the total, with Routing and Switching at $164.4 million, Global Services at $193.6 million, Platform Software and Services at $98.6 million and Blue Planet automation software at $23.2 million. The company disclosed that two customers each exceeded 10% of revenue and together represented 41.7% of the quarter's total.

The outlook, line by line

For the fiscal fourth quarter Ciena guided to revenue of $1.75 billion, plus or minus $50 million; adjusted gross margin of 45%, plus or minus 50 basis points; adjusted operating expense of $415 million, plus or minus $10 million; and adjusted operating margin of 20%, plus or minus 50 basis points. Revenue is a GAAP measure even when the margin lines around it are not, and the fourth quarter gross margin figure sits about a point below the 46.4% adjusted level just reported.

The full-year fiscal 2026 revenue outlook was raised to $6.42 billion, plus or minus $50 million, which the company described as a 35% increase at the midpoint. That midpoint sits above the $6.33 billion full-year revenue figure in the Zacks consensus cited in its Sept. 3 report; the same Zacks item put the full-year adjusted earnings consensus at $6.55 a share and the coming-quarter consensus at $1.83 a share on $1.7 billion of revenue.

Chief Executive Gary Smith, in the release, tied the quarter to AI capital spending, saying the results demonstrate "Ciena's leadership in providing industry-leading, high-speed connectivity solutions as AI continues to drive compounding waves of network investment." Chief Financial Officer Marc Graff described the quarter as a record for the fiscal third period.

What management told analysts

On the call, according to a transcript published by Investing.com, Graff said direct cloud provider revenue grew more than 80% year over year, and Smith said about half of Ciena's business is now hyperscalers directly. Graff also told analysts that one month into the fiscal fourth quarter the company had booked nearly as much demand as all of the third quarter, and that Ciena expects to end the year with more than $10 billion in backlog. Scott McFeely, an executive advisor at the company, said on the same call that the vast majority of that backlog carries customer request dates in 2027. Backlog stood at $7.7 billion at the end of the fiscal second quarter after a sequential increase of more than $600 million, according to a Zacks commentary published Aug. 14.

Graff also used the call to lay out a preliminary frame for fiscal 2027 — revenue growing a minimum of 30% year on year to at least $8.3 billion to $8.4 billion, with gross margins in a 45% to 46% band and operating margins of 25% to 27%, per the Investing.com transcript. Those figures were not in the earnings release itself and, on the transcript's presentation, are adjusted rather than GAAP measures. This desk has seen them in only that one account and reports them on that basis.

The tape did not settle on a verdict quickly, and both readings on offer were premarket ones. Investing.com, in a report time-stamped 7:13 a.m. ET Thursday, said shares had risen 4.3% in premarket trading. The same outlet's write-up of the earnings call, published at 9:46 a.m. ET, said shares had fallen 9.05% in premarket trading, to $322.10. The regular session was open at the time of writing and no closing level for Thursday was available. Ciena had entered the print with a substantial run behind it: Zacks noted the shares had added about 51.4% since the start of the year against a 12% gain for the S&P 500. The index closed Wednesday at 7,666.60, a gain of 0.5% on the day, according to a Zacks market recap. Nothing here is a recommendation to buy or sell any security.