Key Takeaways July 8, 2025 04:05 AM GMT Telecom & Networking Equipment | North America The Optics of Multiple Expansion We have been more reserved on optical valuations given competitiveness of space relative to other AI opportunities. With optical names trading at meaningful premiums to historical multiples, we look at margin health behind revenue trajectories. Downgrade CIEN to UW given lack of margin upside in NT. Outlook is bright in optical, but need to be mindful of margins. Inside or outside the data ...

Key Takeaways CIEN and Telxius set a record 1.3 Tb/s single-wavelength transmission on the Marea cable. CIEN's WL6e tech delivers 1.6 Tb/s capacity with 50% lower power and space per bit. CIEN added 24 new WL6e customers in Q2, reaching 49 just two quarters after launch.Ciena Corporation (CIEN) recently partnered with Telxius, a leading international connectivity provider, to achieve the industry’s first 1.3 terabit-per-second (Tb/s) single-wavelength optical transmission across the 6,600-km Marea submari ...

Core Insights - Ciena Corporation reported adjusted earnings per share (EPS) of 42 cents for Q2 fiscal 2025, missing the Zacks Consensus Estimate by 19.2%, but up from 27 cents in the prior year [1][8] - Quarterly revenues increased by 23.6% year over year to $1.13 billion, exceeding the Zacks Consensus Estimate by 2.8% and reaching the high end of management's guidance [2][8] - The company achieved record direct cloud provider revenues of over $400 million, representing 38% of total revenues and an 85% year-over-year increase, driven by strong demand in AI infrastructure investments [3] Financial Performance - Adjusted gross margin fell to 40.2% due to tariffs and product mix affecting profitability [8] - Non-GAAP adjusted EBITDA expanded by 36% to $116.7 million [11] - Net cash flow from operating activities was $156.9 million, significantly up from $58.5 million in the prior year [12] Segment Performance - Networking Platforms revenues rose 28.1% year over year to $866.3 million, while Platform Software and Services revenues remained flat at $85.4 million [5] - Global Services revenues increased by 8.5% year over year to $146.2 million [6] - Non-telco customer revenues accounted for 54% of total revenues, with two customers contributing 23.9% of the top line [9] Regional Performance - Revenues in the Americas totaled $833.8 million, up 25.8% year over year, while Europe, the Middle East, and Africa generated $191.6 million, up 23% [6] Guidance and Outlook - For Q3 fiscal 2025, Ciena expects revenues between $1.13 billion and $1.21 billion, with adjusted gross margin in the low-40% range [13] - The company updated its full-year revenue growth outlook to approximately 14%, up from the previous estimate of 8-11% [14] - Adjusted operating expenses are projected to average $360-$370 million per quarter for the year [15]