Ciena Corporation

Record Q3 performance + strong operating leverage - Q3 FY26 revenue: $1.67B, +37% YoY (top end of guidance), another quarterly record. - Adjusted operating margin: 22.5% (record; more than doubled YoY; +250 bps YoY; exceeded guidance). - Adjusted EPS: $2.11, +215% YoY (record). - Profitability supported by disciplined cost execution, favorable mix, and pricing discipline; adjusted gross margin 46.4%.

Backlog acceleration (demand strong; supply is the binding constraint) - Book-to-bill > 1 drove backlog up: Q3 backlog increased by $800M to $8.5B. - Management expects to exit FY26 with >$10B backlog (and says within ~1 month of Q4 they are already approaching orders booked equal to all of Q3). - Core framing: this is an early stage multi-year “network investment era” driven by AI (optical connectivity for high capacity, low latency, reliability, and density).

Multi-market demand thesis (AI WAN + Data Center + Traditional WAN) - AI is increasing both bandwidth connectivity demand and network traffic growth, requiring high-speed optical connectivity. - Key product momentum cited: - WaveLogic 6 Extreme modems: ramp exceeds WaveLogic 5e; still “only 1.6T high-performance modem on market today.” - RLS intelligent line systems: strong installed base (~70% market share) and Hyper-Rail next-gen progress; expects RLS Hyper-Rail initial customer standardization by end of 2026, scaling to revenue into 2027. - Interconnects: strong WaveLogic 5 nano pluggables (Q3 shipped >2x volume of 800G ZR compared with prior quarter); early ecosystem/sample momentum for Vesta CPX expected revenue starting 2027, ramping into 2028.