CIENA Corp.

Strong Q2 performance; margin + EPS beat; record quarter - Revenue $1.57B, +40% YoY and $71M above guidance; adjusted EPS $1.64 (nearly 4x prior year). - Adjusted gross margin 44.9%, +4 pts YoY and 90 bps above guidance. - Adjusted operating margin 19.5% (OpEx $398M), above the guide midpoint by 100+ bps. - Free cash flow $219M (13.9% of revenue); cash balance $1.4B; cash conversion cycle improved by 20 days vs Q1.

Business momentum driven by AI-led network build + constrained supply - Customer demand remains robust and backlog is growing: backlog increased $600M sequentially to $7.7B; company expects to exit the year with even higher backlog, providing strong visibility into 2027. - Demand is tied to AI needs: high capacity, low latency connectivity for training, ingestion, inference. - Company cites backlog visibility plus co-creation with hyperscalers/service providers as a key reason they expect strength to continue into 2027.

Key segment growth: Optical + Routing/Switching; DCOM ramp is central - Optical Networking revenue +42% YoY; RLS and Waveserver each +55% YoY. - Routing & Switching revenue +88% YoY, primarily from the ramp of DCOM (data center out-of-band management); DCOM ramp drove 88% growth and contributed to Routing/Switching expansion. - Direct cloud customer revenue +70% YoY; service providers +28% YoY. - India service provider revenue more than doubled YoY, linked to MOFN deployments.