Strong AI demand helps Ciena (CIEN.US) Q3 results! Optical network business revenue soared 46% year over year, annual guidelines were raised

The Zhitong Finance App learned that before the US stock market on Thursday, optical networking leader Ciena (CIEN.US) announced better-than-expected results and guidelines. Financial reports show that in the third quarter of the 2026 fiscal year ending August 1, 2026, Ciena's revenue for the quarter increased 37% year over year to US$1,671 billion, better than analysts' general expectations of US$1.64 billion; adjusted earnings per share were US$2.11, up 215% year over year, and also better than analysts' general expectations of US$1.73 billion.

By business division, optical network business revenue, which is closely related to data center optical interconnection, was US$1,191 million, up 46% year on year; routing and switching business revenue was US$164 million, up 31% year on year. The rest of the revenue came from various service business revenue for the quarter.

Gary Smith, CEO of Ciena, said in a press release: “Artificial intelligence (AI) continues to drive compound growth round after round of network investment. As the only business-only company focused on optical systems and interconnect products, Ciena's unrivaled combination of existing customer base, technological innovation and deep expertise in the industry has given us a strong competitive advantage.”

Ciena said that two customers each contributed 10% or more of the company's revenue; the two together accounted for 41.7% of the company's revenue; the average accounts receivable turnover (DSO) was 76 days; and the inventory turnover rate was 3.5 times.

Before the results were announced, Wall Street paid particular attention to Ciena's performance guidelines, hoping to measure how strong data center demand is still. Ciena met Wall Street's expectations at this point. The company raised the median revenue guidance for the full year of FY2026 to US$6.42 billion, higher than the previous US$6.3 billion, and higher than analysts' general estimate of US$6.34 billion. The company also said it expects median revenue of 1.75 billion US dollars for the fourth fiscal quarter, which is also higher than analysts' general expectations of 1.7 billion US dollars.

This financial report unquestionably shows the boost that AI data center demand has brought to Ciena's performance. From a medium- to long-term perspective, the expansion of AI computing power infrastructure is becoming more clustered, distributed, and cross-data center collaboration, and optical interconnection is increasingly being upgraded from a “communication equipment cycle product” to a rigid bottleneck asset for AI computing power infrastructure.

It is worth mentioning that although Ciena, Maywell Technology, Lumentum, and Coherent all belong to the AI optical interconnection/optical communication infrastructure industry chain, the specific industrial location is not the same. Maywell Technology is more focused on lower-layer semiconductors—optical DSPs, consistent-lite DSPs, PAM4 DSPs, switching chips, SerDes, custom AI ASICs, and silicon photonics platforms. Lumentum and Coherent are more optical hardware such as polarizer devices/optical modules/lasers/transceivers. Ciena is more like a platform-based optical interconnection/optical communication company focusing on a complete set of data center optical systems and coherent optical transmission. Its core capabilities are WaveLogic coherent light engine, 800G/1.6T coherent transmission, optical network equipment, route switching, network automation, and operator/cloud service provider network ecosystem solutions, rather than simply selling chips or core lasers.

Therefore, Ciena is more focused on “system-level AI optical interconnection and DCI,” and the company's traditional strengths prefer high-speed interconnection DCI between different data centers, metro/long-distance/operator backbone networks, and WAN interconnection of cloud service providers, that is, connecting multiple data centers, parks, regional clouds, and telecommunication networks with high-speed coherent optical systems. However, Ciena is expanding from “DCI between data centers” to “high-speed optical interconnection within AI data centers.” It acquired Nubis to expand its inside-the-data-center strategy to address AI workloads. Meanwhile, industry trends are also driving the optical signal chain from computer rooms, buildings, and parks to gradually move closer to cabinets, switching chips, and even advanced packaging systems.