Ciena Corp (NYSE:CIEN) stock fell 0.19% (As on June 6, 11:26:17 AM UTC-4, Source: Google Finance) after the company posted mixed result for the first quarter of FY25. Adjusted operating expense in Q2 was $369 million. This was higher than expected, driven entirely by higher incentive compensation associated with very strong order performance in the quarter. In Q2, the company delivered an adjusted operating margin of 8.2% and adjusted net income of $61 million. In addition, the company generated $157 million in cash from operations. Adjusted EBITDA was $117 million. Finally, the company ended the quarter with approximately $1.35 billion in cash and investments. The company added 24 new WaveLogic 6 Extreme customers in Q2, bringing the total to 49 within just two quarters of general availability. WaveLogic 5 Extreme and Nano also performed well with continued adoption among cloud customers and service providers. The company has added 10 new WaveLogic 5 Extreme customers in Q2 for a total of 344 customers overall. WaveLogic 5 Nano pluggables continued ramping, now shipping to 178 customers, including both cloud providers and service providers.
Moreover, the company has introduced the first 800-gig router to the coherent routing portfolio and expanded the flagship WAV router family with WaveLogic 6 Extreme capabilities, making it the industry’s first generally available 1.6 terabit coherent router.
CIEN in the second quarter of FY25 has reported the adjusted earnings per share of 42 cents, missing the analysts’ estimates for the adjusted earnings per share of 51 cents. The company had reported the adjusted revenue of $1.13 billion in the second quarter of FY25, beating the analysts’ estimates for revenue of $1.09 billion. This included two 10%+ customers, one cloud provider and one service provider. Adjusted gross margin was 41%, driven by product mix and, to a lesser extent, the cost of tariffs.
Under this current tariff structure, the company expects the total cost of tariffs to be approximately $10 million per quarter. The company expects to mitigate most of the quarterly impact as compared to Q2. Therefore, the company believe the net effect on the bottom line in future quarters will be immaterial. So for the fiscal third quarter, the company expects to deliver revenue in a range of $1.13 to $1.21 billion. The company expects Q3 adjusted gross margin to be roughly in line with Q2. And the company expects adjusted operating expense to be approximately $370 million to $375 million.