Ciena (CIEN) investor relations material

Executive summary

• Q2 2026 revenue grew 40% year-over-year to $1.57 billion, driven by strong AI-led demand from hyperscalers and service providers, with record profitability and operational discipline.

• Adjusted EPS nearly quadrupled to $1.64, and GAAP diluted EPS rose to $1.49, reflecting significant margin expansion and cost optimization.

• Backlog reached $7.7 billion, providing strong multi-year visibility, supported by AI-driven demand and technology leadership.

• Secured the industry's first multi-rail order for RLS Hyper-Rail from a leading hyperscaler, reinforcing technology leadership in AI infrastructure.

• Operating expenses increased, with R&D investment up 11% year-over-year, supporting innovation in optical networking and AI-driven solutions.

Financial highlights

• Q2 2026 revenue was $1.57 billion, up 40% year-over-year and $71 million above guidance; cloud provider revenue accounted for 46% of total, up 70% YoY.

• Adjusted gross margin expanded to 44.9%, up four percentage points year-over-year and 90 basis points above guidance; adjusted operating margin reached 19.5%.

• Free cash flow was $219 million (13.9% of revenue), up 71% YoY; cash and investments at quarter-end were $1.4 billion.

• GAAP net income for Q2 2026 was $218.2 million, up from $9.0 million in Q2 2025; adjusted EBITDA was $342 million, up 193% YoY.

• Two cloud customers each contributed over 10% of revenue, together accounting for about one-third of Q2 revenue.

Outlook and guidance

• Q3 2026 revenue expected at ~$1.625 billion (±$50 million), adjusted gross margin at 45% (±50 bps), and operating margin of 19%-20%.

• Fiscal 2026 revenue guidance raised to $6.3 billion (±$100 million), representing 32% year-over-year growth; gross margin expected between 44.5% and 45%.

• Backlog expected to increase further by year-end, supporting strong visibility into 2027.

• Continued investment in R&D and innovation, especially in AI and optical networking.

• Guidance assumes stable supply chain and continued AI infrastructure investment.