Ciena Corp reported fiscal third-quarter 2026 revenue of $1.67 billion, a 37% increase from the prior year and above the $1.63 billion estimate. Adjusted earnings per share rose 215% year-over-year to $2.11, surpassing the $1.72 forecast by $0.39. The company posted a 46.4% adjusted gross margin, up 450 basis points from a year ago, and a 22.5% adjusted operating margin, the highest in its history.
Free cash flow for the quarter totaled $116 million, while cash and equivalents stood at $2.8 billion. Ciena repurchased 356,000 shares for $172 million during the period. Backlog reached $8.5 billion, up $800 million sequentially, with management targeting over $10 billion by the end of fiscal 2026. Revenue growth was led by direct cloud providers, which rose more than 80% year-over-year, while in-and-around-data-center revenue quadrupled year-to-date. Optical networks revenue, including interconnects, grew more than 45% year-over-year.
Despite the strong performance, Ciena shares fell 9.05% in premarket trading to $322.10, extending declines from the prior close of $354.16. The stock remains 49.5% below its 52-week high of $637.51.
For fiscal Q4 2026, Ciena guided revenue to $1.75 billion, plus or minus $50 million, with adjusted gross margin of 45% and operating margin around 20%. Full-year 2026 revenue is now expected to reach $6.42 billion, up $120 million from prior guidance, representing 35% growth year-over-year. Early direction for fiscal 2027 points to revenue growth of at least 30% to $8.3 billion–$8.4 billion, with gross margins holding at 45%–46% and operating margins projected to expand to 25%–27%.
Chief Executive Officer Gary Smith described the company as being in the "early stages of a multiyear, highly durable network investment era," emphasizing the role of high-speed optical connectivity in supporting AI-driven network and data center investments. Chief Financial Officer Marc Graff noted the durability of the company’s cost structure and leadership portfolio, which he said would support further gross margin expansion.
