Ciena Revenue Jumps 29% in Fiscal Q3

Key Points

• Revenue grew 29.4% year over year in Q3 FY2025.

• Adjusted EPS nearly doubled to $0.67, while adjusted EBITDA rose 60.4%.

• Gross margin declined to 41.3% in Q3 fiscal 2025 compared to 42.9% in Q3 fiscal 2024, as Product mix shifts, particularly increased sales of pluggables and reconfigurable line systems, contributed to the lower gross margin.

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Ciena (NYSE:CIEN), a network solutions provider known for its advanced optical networking technology, posted notably strong results in its latest earnings release. On Sept. 4, 2025, it reported fiscal third quarter (Q3) results, with key results that beat analyst expectations. Revenue reached $1.22 billion, well above the $1.13 billion–$1.21 billion guidance range and up 29.4% from the previous year (GAAP). Adjusted EPS rose to $0.67, nearly double the prior year’s $0.35.

Despite record revenue, the report also showed continued pressure on margins. The quarter stood out for strong top-line growth and profit expansion, though management called attention to ongoing risks in margins and expenses as areas to monitor.

Source: Ciena. Note: Fiscal 2025's third quarter ended Aug. 2, 2025. Fiscal 2024's Q3 ended July 27, 2024.

About Ciena and What Drives Its Business

Ciena delivers equipment and software to power high-speed communication networks. Its products and services enable cloud and telecom operators to move massive amounts of data quickly and reliably. The company is best known for its Optical Networking solutions, including equipment that ensures fast, secure, and scalable data transmission over long distances.

Recently, Ciena has been focused on keeping ahead in the shift toward artificial intelligence (AI) and large-scale cloud data centers. Success depends on ongoing investment in innovation, especially in WaveLogic optical modem technology, and the ability to help network operators upgrade and automate their systems for the future. Key factors include expanding service offerings and navigating challenges related to supply chain and customer concentration.

Quarter in Review: Key Developments and Growth Drivers

During Q3 FY2025, Ciena saw its revenue (GAAP) grow faster than at any point in the past year. Several factors contributed to this result, primarily demand for Optical Networking hardware. Sales of these products rose 34% to $815.5 million compared to Q3 FY2024 (GAAP), making up nearly 67 % of total revenue. These solutions are the backbone of high-capacity networks that support cloud data centers and emerging AI workloads. Routing and Switching, another product family focused on directing and managing data traffic, grew 35.9% compared to Q3 FY2024, adding $125.9 million in Routing and Switching revenue. Altogether, Networking Platforms accounted for 77.2% of the company’s business.

Software continued to play a growing, though still small, role. Blue Planet Automation Software and Services, which helps service providers automate complex network tasks, brought in $27.8 million (GAAP), up 7.8% year-over-year. The broader Platform Software and Services category hit $90.0 million, a shift that is central to its long-term strategy but still represents less than 10% of quarterly sales.

Growth was not confined to North America. Revenue in the Americas climbed to $923.6 million (GAAP), with EMEA revenue rose 37.8% compared to Q3 FY2024. Asia-Pacific revenue reached $109.8 million, growing 23.8% compared to Q3 FY2024. The company’s Global Services segment, which includes support, installation, and consulting, saw a 19.7% increase compared to Q3 FY2024, reaching $160.2 million (GAAP).

Financially, Ciena translated higher sales into increased profits, as GAAP net income rose. Non-GAAP operating margin improved by 2.7 percentage points to 10.7%. Adjusted EBITDA rose more than 60%, while non-GAAP EPS grew 91.4% compared to Q3 FY2024. However, the quarter’s fast growth came with some trade-offs. Gross margin shrank to 41.3% in Q3 fiscal 2025 compared to 42.9% in Q3 fiscal 2024, with the company citing a greater share of lower-margin Optical Networking products, especially Reconfigurable Line Systems (systems that make networks flexible and programmable) and “coherent pluggables” (devices used to upgrade existing network links). Operating expenses (GAAP) increased 13.9%. Despite these rising costs, Ciena generated $174.3 million in cash from operations and ended the period with $1.39 billion in cash and investments on its balance sheet.

Looking Ahead

Management provided revenue guidance of $1.24 billion–1.32 billion for Q4 FY2025, and an adjusted (non-GAAP) gross margin between 42% and 43%. Planned operating expenses (adjusted, non-GAAP) will rise further to a range of $390 million–400 million. This outlook signals continued growth but only modest improvement in profitability trends. Leadership expressed confidence, citing “visibility well into fiscal year 2026” and ongoing customer spending.

No update on the full-year outlook was given this quarter.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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