Ciena Corp (NYSE:CIEN) stock fell 10.05% (As on December 12, 11:32:51 AM UTC-4, Source: Google Finance) after the company reported fiscal fourth-quarter earnings that significantly exceeded analyst expectations, driven by strong demand from cloud providers and growing opportunities in AI infrastructure. The company exited the year with $1.4 billion in cash, after generating $371 million in cash from operations in Q4 and free cash flow of $326 million. The company has also completed the cash purchase of Nubis, supplementing the interconnect portfolio to service the in portion of in and around the data center opportunity. The Optical business was up 19% year-over-year, driven by strength in RLS, which was up 72% year-over-year. The routing and switching business grew 49% year-over-year, with the 3,005 series product revenue doubling on a combined basis, with the DCOM opportunity driving much of this growth. Global Services had a strong quarter, growing 25% year-over-year driven largely by advisory and enablement, and installation and implementation services, which grew 53% and 45% year-over-year, respectively. Blue Planet had a very successful year achieving $34 million of revenue in the quarter, a record $115 million in fiscal 2025. CIEN exited the year with about $5 billion of backlog, of which approximately $3.8 billion is hardware and software, with the remaining being services.

CIEN in the fourth quarter of FY25 has reported the adjusted earnings per share of $0.91, beating the analysts’ estimates for the adjusted earnings per share of $0.77. The company had reported the adjusted revenue growth of 20 percent to $1.35 billion in the fourth quarter of FY25, missing the analysts’ estimates for revenue of $1.29 billion. The strong performance was fueled by robust growth in the company’s optical networking segment, which increased to $929.2 million from $779.6 million a year earlier.

Looking ahead, Ciena provided an optimistic outlook, forecasting first-quarter fiscal 2026 revenue between $1.35 billion and $1.43 billion, well above the consensus estimate of $1.25 billion. For fiscal first quarter 2026, the company expects Adjusted (non-GAAP) gross margin to be between 43% to 44%, Adjusted (non-GAAP) operating expense to be of approximately $380 million and Adjusted (non-GAAP) operating margin to be between 15.5% and 16.5%.

For the full fiscal year 2026, the company expects revenue of $5.7 billion to $6.1 billion, exceeding analyst projections of $5.53 billion. For the full fiscal year 2026, the company expects Adjusted (non-GAAP) gross margin of 43% plus or minus 1%, Adjusted (non-GAAP) operating expense to be of approximately $1.52 billion and Adjusted (non-GAAP) operating margin of 17% plus or minus 1%.