Ciena Corp Q4 2025 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Ruben Roy - Stifel Financial Corp - Analyst : Thank you and congratulations, Gary and Marc, just great to see the progress here. So the first question, Marc, when we think about the guidance and the raise Gary talked about some of the new use cases and more hyperscalers looking at either scale across or also discussions around e-com with other hyperscalers. How much of that is in the new guidance versus just continued sort of growth across the existing relationships that you have? And then the second question for Gary is just thinking about the new scale across opportunities, Gary, you gave us some metrics around the first wins in terms of either revenue or bandwidth and bandwidth measured in petabit. Are the discussions that you're having in the wins with the new hyperscaler similar? Or if you could maybe give us a little more detail on those, that would be great.

Question: Simon Leopold - Raymond James - Analyst : Great, thanks for taking the question. Yes, I wanted to maybe expand a bit on the scale across outlook in particular. So you've gotten these two additionals that certainly earlier than we were expecting. I want to see if you can give us maybe a timeline of when you would expect those two other hyperscalers to really kick into the numbers, how imminent that is? And then maybe you could talk about sort of a longer-term cadence of scale across activity? Because I think when you first disclosed it, you talked about the initial customer, perhaps having opportunities of eight or nine kind of projects. So now that we see additional hyperscalers entering the fray, how would you look at it more broadly over the multiyear number of projects? That's question number one. Question number two is hopefully the easiest one you'll get today. But if you could just break up the 10% disclosures, you said two cloud and an operator, if you can give us the detail that will ultimately be in your SEC filings. But if we could break that down, I'd appreciate it.

Question: Simon Leopold - Raymond James - Analyst : Yes. Can you give us that split? So what each one was within that 44% in the quarter?

Question: Atif Malik - Citigroup - Analyst : Hi, thank you for taking the question and great job by the team. First one for Gary. Gary on Nubis, in September, you talked about in the second half of '26 and early '27 adoption for CPO, NPO type products. Are you seeing an acceleration over there?

Question: Atif Malik - Citigroup - Analyst : Great. And as my follow-up, Marc, a nice view on gross margins and keeping OpEx discipline. You have talked about advantages from bringing lasers in-house. I'm wondering what else is driving sustainable outlook for operating margins of 17%?

Question: George Notter - Wolfe Research, LLC - Analyst : Hi, thanks very much. It seems like there's just obviously tons and tons of demand here. Could you give us more on what you're doing on the supply side of things. Just curious like what do you see as the supply constraints in the business? Is it fabing chips? Is it contract manufacturing? Like anything you can tell us on what those bottlenecks are and what you're doing to open those up would be great.

Question: George Notter - Wolfe Research, LLC - Analyst : Got it. And then one last one. What are lead times right now? Any sense for kind of what blended or average lead times would look like for you guys?

Question: Tal Liani - Bank of America - Analyst : Hi, I have three questions. The first one is the sort of perspective. You guided before to 8% growth. And that -- you increased it multiple times, and now you're guiding for 30% growth for next quarter. That's a massive change. So you didn't have good visibility before for the growth. And the question I'm asking myself is, do you have now good visibility going forward. So can you take us through the historical perspective, meaning what happened over the last four quarters or five quarters that drove up the growth, so much better than expectations. And you spoke a little bit about customer concentration, but what kind -- what happened that enabled this kind of growth? Maybe I'll stop here and then I'll ask my other questions after because they're more on the margin side.

Question: Tal Liani - Bank of America - Analyst : Got it. My second question is on margins. In previous cycles, your margins shot up all the way to even 49%, even over 50%, if we go back a few years and cycles always had a direct impact on gross margin, like you always had a cycle in margin as well. This time, because it's coming in pluggables because it's coming in cloud, your margins are 43%, you're guiding to 43%, 43.5%. And the question is, is there a chance that the margin will also have a -- gross margin will also have a cycle with revenues or what needs to happen for the gross margin to have a similar cycle to revenues?

Question: Samik Chatterjee - JP Morgan - Analyst : Maybe for the first one, I had a question on scale across. And Gary, you mentioned the additional engagement with hyperscalers -- are you seeing any engagements yet from the new clouds on that front? Or would you expect most of that new cloud demand for scale across to come through the hyperscalers itself? And can you help us think about margin implications for scale across relative to like there's a heavy mix of client systems as well as capacity. So how should we think about margin implication of scale cross ramping here relative to your corporate average? And I have a quick follow-up.

Question: Samik Chatterjee - JP Morgan - Analyst : Okay. And just for my follow-up. I mean, clearly, FY '26 is your guide largely covered by the backlog. When you look at now sort of the long-term guide that you provided of 8% to 11% growth, like how -- what level of visibility are you getting from your customers about fiscal '27? Are they sort of giving you more detailed plans for the out year just so that you can plan out capacity? And does that sort of imply that your growth rate sort of stays above the 8% to 11% level in sort of the out year as well?

Question: Timothy Long - Barclays - Analyst : Two questions for me as well. First, Gary, follow on which you were just talking about. Could you maybe talk a little bit about DCOM and see if you can somewhat scale that for us and good news that it's expanded with Meta and being tested at others. Could this be a type of technology that would really accelerate that move into inside the data center as it gives you kind of a each front? And then second, on the telco side, I guess, the MOFN part and 5G currently, but tends to be a little bit more cyclical than probably what you're going to see from hyperscalers. How do you look about sustainability of that business over the next few years on the telco certificate side?

Question: Ryan Koontz - Needham & Company - Analyst : Gary, maybe you can just take a step back and regarding your great growth you're seeing here in the cloud segment. How has your product mix changed over, say, the last 12 months? Obviously, a lot around scale across and RLS and DCI, where you're historically more of a long-haul and subsea player. Can you give us any kind of perspective there on the product mix?

Question: Ryan Koontz - Needham & Company - Analyst : Really helpful. And just a quick follow-up, if I could. Just around growth limiters outside of your control as it relates to fiber supply, permitting, labor and really putting these lanes in the ground. What kind of supply constraints are you seeing for the industry for your cloud customers?