Q4 2025 Ciena Corp Earnings Call

December 11, 2025

Participants will be in listen-only mode. Should you need assistance? Please signal a conference specialist by pressing star, then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions to ask a question. You may press star then 1 on your telephone keypad to withdraw your question. Please press star then 2. Please note. This event is being recorded. I would now like to turn the conference over to Greg lamp vice president of investor relations. Please go ahead.

Thank you drew, good morning, and welcome to Sienna's 2025 fiscal fourth quarter and year-end results conference call.

on the call today is Gary Smith, president and CEO and Mark graph CFO

Scott, McFly executive adviser is also with us for Q&A.

In addition to this call and the press release, we have posted to the investor section of our website and accompanying investor presentation that reflects this discussion as well as certain highlighted items for the fiscal quarter and year end.

Our comments today, speak to our recent performance, our view on current market dynamics and drivers of our business as well as a discussion of our financial Outlook.

Today's discussion includes certain adjusted or non-gaap measures of Sanders results of operations. A Reconciliation of these non-gaap measures to our Gap. Results is included. In today's press release.

Before turning the call over to Gary, I'll remind you that during this call we'll be making certain forward-looking statements.

Speaker #1: Good morning and welcome to CIENA's fiscal fourth quarter and year-end 2025 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad.

Operator: Good morning and welcome to Ciena's Fiscal Q4 and Year End 2025 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Gregg Lampf, Vice President of Investor Relations. Please go ahead.

Such statements including our quarterly and annual guidance, commentary on market, dynamics and discussion of our opportunities. And strategy are based on current expectations forecasts, and assumptions regarding the company and its markets, which include risks and uncertainties, that could cause actual results to differ, materially from the statements discussed today.

Speaker #1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad.

Assumptions relating to our Outlook, whether the mention on this call or included in the investor presentation that we posted earlier today are an important part of such forward-looking statements and we encourage you to consult them.

Speaker #1: To withdraw your question, please press star, then record. I would now like to turn the conference over to Gregg Lampf, Vice President of Investor Relations.

Speaker #1: Please note this event is being recorded. Please go ahead.

Our forward-looking statements should also be viewed in the context of the risk factors detailed. In our most recent 10 q and an upcoming 10K. Filing.

Speaker #2: Thank you, Drew. Good morning and welcome to CIENA's fiscal 2025 fourth quarter and year-end results conference call. On the call today is Gary Smith, President and CEO, and Marc Graff, CFO.

Gregg Lampf: Thank you, Drew. Good morning and welcome to Ciena's 2025 Fiscal Q4 and Year End Results Conference Call. On the call today is Gary Smith, President and CEO, and Marc Graff, CFO. Scott McFeely, Executive Advisor, is also with us for Q&A. In addition to this call and the press release, we have posted to the Investor section of our website an accompanying investor presentation that reflects this discussion, as well as certain highlighted items for the fiscal quarter and year end. Our comments today speak to our recent performance, our view on current market dynamics and drivers of our business, as well as a discussion of our financial outlook. Today's discussion includes certain adjusted or non-GAAP measures of Ciena's results of operations. A reconciliation of these non-GAAP measures to our GAAP results is included in today's press release.

If the end assumes no obligation to update the information discussed in this conference call whether as a result of new information, future events or otherwise, as always, we'll allow for as much Q&A as possible today. They'll ask that you limit yourselves to 1 question when follow-up with that. I'll turn the call over to Gary.

Thanks Greg and good morning everyone.

Speaker #2: Scott McFeely, Executive Advisor, is also with us for Q&A. In addition to this call and the press our website an accompanying investor presentation that reflects this release, we have posted to the investor section of discussion, as well as certain highlighted items for the fiscal quarter and year-end.

Today, we reported record, fiscal, fourth quarter, and full year revenue of 1.35 billion and 4.77 billion respectively.

Our comments today speak to our recent performance, our view on current market dynamics and drivers of our business, as well as a discussion of our financial outlook. Today's discussion includes certain adjusted or non-GAAP measures of Ciena's results of operations. A reconciliation of these non-GAAP measures to our GAAP results is included in today's press release.

Speaker #2: Our comments today speak to our recent performance, our view on current market dynamics and drivers of our business, as well as a discussion of our financial outlook.

These records are a direct result of our sustained purposeful investment and focus on leading high-speed connectivity Technologies.

Together with disciplined execution and deep collaboration with our customers.

Speaker #2: Today's discussion includes certain adjusted or non-GAAP measures of CIENA's results of operations, a reconciliation of these non-GAAP measures to our GAAP results, is included in today's press release.

Combined, these advantages have positioned and will continue to position.

Sienna to deliver value in the AI ecosystem.

Speaker #2: Before turning the call over to Gary, I'll remind you that during this call, we'll be making certain forward-looking statements. Such statements include our quarterly and annual guidance, commentary on market dynamics, and discussion of our opportunities and strategy, which are based on current expectations, forecasts, and assumptions regarding the company and its markets. These include risks and uncertainties that could cause actual results to differ materially from the statements discussed today.

Gregg Lampf: Before turning the call over to Gary, I'll remind you that during this call, we'll be making certain forward-looking statements. Such statements, including our quarterly and annual guidance, commentary on market dynamics, and discussion of our opportunities and strategy, are based on current expectations, forecasts, and assumptions regarding the company and its markets, which include risks and uncertainties that could cause actual results to differ materially from the statements discussed today. Assumptions relating to our outlook, whether mentioned on this call or included in the investor presentation that we posted earlier today, are an important part of such forward-looking statements, and we encourage you to consider them. Our forward-looking statements should also be viewed in the context of the risk factors detailed in our most recent 10-Q and in our upcoming 10-K filing.

Before turning the call over to Gary, I'll remind you that during this call, we'll be making certain forward-looking statements. Such statements, including our quarterly and annual guidance, commentary on market dynamics, and discussion of our opportunities and strategy, are based on current expectations, forecasts, and assumptions regarding the company and its markets, which include risks and uncertainties that could cause actual results to differ materially from the statements discussed today.

Serving both cloud and service provider customers for many years to come.

And our progress in driving value from our operating model is also reflected in Q4 earnings per. Share of 91 cents up, 69% year-over-year, and fully your EPS of $2.64 up. 45% from fiscal 2024,

Assumptions relating to our outlook, whether mentioned on this call or included in the investor presentation that we posted earlier today, are an important part of such forward-looking statements, and we encourage you to consider them. Our forward-looking statements should also be viewed in the context of the risk factors detailed in our most recent 10-Q and in our upcoming 10-K filing.

Speaker #2: Assumptions relating to our outlook, whether mentioned on this call or included in the investor presentation that we posted earlier today, are an important part of such forward-looking statements, and we encourage you to consider them.

Lastly, we generated record orders for the year of 7.8 billion which resulted in our entering this year. Again with record backlog.

Speaker #2: Our forward-looking statements should also be viewed in the context of the risk factors detailed in our most recent 10-Q and in our upcoming 10-K filing.

These strong results, really underscore our overall Market leadership position, as well as the ramping broad-based demand across our business.

Speaker #2: CIENA assumes no obligation to update the information discussed in this conference call, whether as a result of new information, future events, or otherwise. As always, we'll allow for as much Q&A as possible today, though we ask that you limit yourselves to one question and one follow-up.

Gregg Lampf: Ciena assumes no obligation to update the information discussed in this conference call, whether as a result of new information, future events, or otherwise. As always, we'll allow for as much Q&A as possible today, though ask that you limit yourselves to one question, one follow-up. With that, I'll turn the call over to Gary.

Ciena assumes no obligation to update the information discussed in this conference call, whether as a result of new information, future events, or otherwise. As always, we'll allow for as much Q&A as possible today, though ask that you limit yourselves to one question, one follow-up. With that, I'll turn the call over to Gary.

And to this point, I'd like to provide some insights into what we believe to be robust and durable demand over the next several years.

Firstly, we continue to see accelerating demand from our Cloud customer providers.

Speaker #2: With that, I'll turn the call over to.

Speaker #2: Gary. Thanks, Gregg.

Gary Smith: Thanks, Gregg, and good morning, everyone. Today, we reported record fiscal Q4 and full year revenue of $1.35 billion and $4.77 billion, respectively. These records are a direct result of our sustained, purposeful investment and focus on leading high-speed connectivity technologies, together with disciplined execution and deep collaboration with our customers. Combined, these advantages have positioned and will continue to position Ciena to deliver value in the AI ecosystem, serving both cloud and service provider customers for many years to come. And our progress in driving value from our operating model is also reflected in Q4 earnings per share of $0.91, up 69% year over year, and full year EPS of $2.64, up 45% from fiscal 2024. Lastly, we generated record orders for the year of $7.8 billion, which resulted in our entering this year again with record backlog.

Speaker #3: And good morning, everyone. Today, we reported record fiscal fourth-quarter and full-year revenue of $1.35 billion and $4.77 billion, respectively. These records are a direct result of our sustained purposeful investment and focus on leading high-speed connectivity technologies.

And that includes the large hyperscalers and the emerging Neo scale, segment that we talked with you, uh, about last quarter.

In fact, cloud.

Providers today are as focused on scaling their Network as they are on their access to power.

Orders from cloud providers are very strong and ramping across our portfolio and they constitute a substantial portion of our growing backlog.

Speaker #3: Together with disciplined execution and deep collaboration with our customers, these advantages have positioned and will continue to position Ciena to deliver value in the AI ecosystem.

It's important to note that this accelerating demand is being driven by several Dynamics.

Tested in their networks to date.

Speaker #3: Serving both cloud and service provider customers for many years to come. Our progress in driving value from our operating model is also reflected in Q4 earnings per share of $0.91, up 69% year over year, and full year EPS of $2.64, up 45% from fiscal 2024.

Particularly relative to other areas of AI infrastructure.

And our progress in driving value from our operating model is also reflected in Q4 earnings per share of $0.91, up 69% year over year, and full year EPS of $2.64, up 45% from fiscal 2024. Lastly, we generated record orders for the year of $7.8 billion, which resulted in our entering this year again with record backlog. These strong results really underscore our overall market leadership position, as well as the ramping broad-based demand across our business. To this point, I'd like to provide some insights into what we believe to be robust and durable demand over the next several years.

The major hyperscalers who are seeing rapid traffic growth, not only have the capital to invest

but also have real sustainable business models that are currently constrained by the need to dramatically scale their Global Networks.

Speaker #3: Lastly, we generated record orders for the year of $7.8 billion, which resulted in our entering this year again with record backlog. These strong results really underscore our overall market leadership position.

These Cloud providers cannot and do not intend to strand their significant investments in AI related data, center infrastructure.

And I would stress that that traffic needs to leave the data center to be monetized and operationalized.

Gary Smith: These strong results really underscore our overall market leadership position, as well as the ramping broad-based demand across our business. To this point, I'd like to provide some insights into what we believe to be robust and durable demand over the next several years. Firstly, we continue to see accelerating demand from our cloud customer providers, and that includes the large hyperscalers and the emerging neoscaler segment that we talked with you about last quarter. In fact, cloud providers today are as focused on scaling their network as they are on their access to power. Orders from cloud providers are very strong and ramping across our portfolio, and they constitute a substantial portion of our growing backlog. It's important to note that this accelerating demand is being driven by several dynamics.

And we are their strategic technology partner for those Network requirements.

Speaker #3: As well as the ramping broad-based demand across our business. To this point, I'd like to provide some insights into what we believe to be robust and durable demand over the next several years.

Firstly, we continue to see accelerating demand from our cloud customer providers, and that includes the large hyperscalers and the emerging neoscaler segment that we talked with you about last quarter. In fact, cloud providers today are as focused on scaling their network as they are on their access to power. Orders from cloud providers are very strong and ramping across our portfolio, and they constitute a substantial portion of our growing backlog. It's important to note that this accelerating demand is being driven by several dynamics.

Speaker #3: Firstly, we continue to see accelerating demand from our cloud customer providers. And that includes the large hyperscalers and the emerging neoscaler segment that we talked with you about last quarter.

Secondly, demand from our service provider, customers continues to grow steadily as they too reinvest in their transport infrastructure, after years of digesting, accumulated inventory. And also I'm focused on other areas of their networks, most notably and specifically 5G.

Speaker #3: In fact, cloud providers today are as focused on scaling their network as they are on their access to cloud providers, which are very strong. And ramping across our portfolio, they constitute a substantial portion of our growing backlog.

In addition service providers businesses are also being fueled by AI through the Enterprise Cloud demand and specifically Cloud providers need for managed optical fiber, networks or mofin.

And as a proof Point here, we have recently won and are working to deploy a large muffin project in India with 2 service providers for a major hyperscaler.

Speaker #3: It's important to note that this accelerating demand is being driven by several dynamics. As counterintuitive as it may seem, the cloud providers have largely actually under-invested in their networks to date.

Additionally, in the quarter, we have secured, multiple major, muffin, winds in other regions, including several in new and emerging geographies for our business.

Gary Smith: As counterintuitive as it may seem, the cloud providers have largely actually underinvested in their networks to date, particularly relative to other areas of AI infrastructure. The major hyperscalers who are seeing rapid traffic growth not only have the capital to invest, but also have real, sustainable business models that are currently constrained by the need to dramatically scale their global networks. These cloud providers cannot and do not intend to strand their significant investments in AI-related data center infrastructure. I would stress that that traffic needs to leave the data center to be monetized and operationalized. We are their strategic technology partner for those network requirements. Secondly, demand from our service provider customers continues to grow steadily as they, too, reinvest in their transport infrastructure after years of digesting accumulated inventory, and also are focused on other areas of their networks, most notably and specifically 5G.

As counterintuitive as it may seem, the cloud providers have largely actually underinvested in their networks to date, particularly relative to other areas of AI infrastructure. The major hyperscalers who are seeing rapid traffic growth not only have the capital to invest, but also have real, sustainable business models that are currently constrained by the need to dramatically scale their global networks. These cloud providers cannot and do not intend to strand their significant investments in AI-related data center infrastructure. I would stress that that traffic needs to leave the data center to be monetized and operationalized.

And as a result of these Dynamics service provider orders were up nearly 70% for the year.

Speaker #3: Particularly relative to other areas of AI infrastructure, the major hyperscalers who are seeing rapid traffic growth not only have the capital to invest but also have real sustainable business models that are currently constrained by the need to dramatically scale their global networks.

and in fact, our top 3 service providers revenue from 24 to 25 grew 16%

due to the increasing momentum across both cloud and service providers, Sienna's Optical market share has continued to grow

Speaker #3: These cloud providers cannot and do not intend to strand their significant investments in AI-related data center infrastructure. And I would stress that this traffic needs to leave the data center to be monetized and operationalized.

and extend our overall leadership adding 2 points year to date and we expect further gains clearly in 2026.

In order to address this accelerating demand, we are committed to increasing Investments and working with our supply chain Partners to scale the business.

We are their strategic technology partner for those network requirements. Secondly, demand from our service provider customers continues to grow steadily as they, too, reinvest in their transport infrastructure after years of digesting accumulated inventory, and also are focused on other areas of their networks, most notably and specifically 5G.

Speaker #3: And we are their strategic technology partner for those network requirements. Secondly, demand from our service provider customers continues to grow steadily as they too reinvest in their transport infrastructure, after years of digesting accumulated inventory and also having focused on other areas of their networks, most notably and specifically 5G.

With product delivery, lead times extending, in the face of this unprecedented demand, we are proactively expanding our capacity to ensure our ability to timely meet our customers demands.

Indeed, this is already yielded results for fiscal 25. As we delivered, double our initial Revenue, growth expectations for the year.

Speaker #3: In addition, service providers' businesses are also being fueled by AI through the enterprise cloud demand and specifically cloud providers' need for managed optical fiber networks (MOFN).

Gary Smith: In addition, service providers' businesses are also being fueled by AI through the enterprise cloud demand and specifically cloud providers' need for managed optical fiber networks, or MOFEN. As a proof point here, we have recently won and are working to deploy a large MOFEN project in India with two service providers for a major hyperscaler. Additionally, in the quarter, we have secured multiple major MOFEN wins in other regions, including several in new and emerging geographies for our business. As a result of these dynamics, service provider orders were up nearly 70% for the year. In fact, our top three service providers' revenue from 2024 to 2025 grew 16%.

In addition, service providers' businesses are also being fueled by AI through the enterprise cloud demand and specifically cloud providers' need for managed optical fiber networks, or MOFEN. As a proof point here, we have recently won and are working to deploy a large MOFEN project in India with two service providers for a major hyperscaler. Additionally, in the quarter, we have secured multiple major MOFEN wins in other regions, including several in new and emerging geographies for our business.

Mark will discuss how we are stepping up Investments to support demand and the expanding opportunities. We expect over the coming years.

You know, the simple truth is that AI continues to drive Network expansion across all our customer segments.

Speaker #3: And as a proof won and are working to deploy a large point here, we have recently MOFN project in India with two service providers for a major hyperscaler.

And the scale of investment currently underway is massive and accelerating faster than anything. We or indeed, the industry have seen to date.

Speaker #3: Additionally, in the quarter, we have secured multiple major MOFN wins in other regions, including geographies for our business. As a result of these dynamics, service provider orders were up nearly 70% for several new and emerging years.

And it would also mention that unlike the co inspired Supply, demand imbalance. We are seeing this Demand Being installed and leveraged for real near-term Revenue opportunities at our customers.

As a result of these dynamics, service provider orders were up nearly 70% for the year. In fact, our top three service providers' revenue from 2024 to 2025 grew 16%. Due to the increasing momentum across both cloud and service providers, Ciena's optical market share has continued to grow and extend our overall leadership, adding two points year to date, and we expect further gains clearly in 2026.

As evidenced by accelerated implementation services that increase in Revenue, by 34% in fiscal 25.

Speaker #3: And in fact, our top three service providers' revenue from 24 to 25 grew 16%. Due to the increasing momentum across both cloud and service providers, CIENA's optical market share has continued to grow.

With that. I'd like to take a moment to share our sort of broader perspective.

Gary Smith: Due to the increasing momentum across both cloud and service providers, Ciena's optical market share has continued to grow and extend our overall leadership, adding two points year to date, and we expect further gains clearly in 2026. In order to address this accelerating demand, we are committed to increasing investments and working with our supply chain partners to scale the business. With product delivery lead times extending in the face of this unprecedented demand, we are proactively expanding our capacity to ensure our ability to timely meet our customers' demands. Indeed, this has already yielded results for fiscal 2025, as we delivered double our initial revenue growth expectations for the year. Marc will discuss how we are stepping up investments to support demand and the expanding opportunities we expect over the coming years.

Opportunity as it relates to high-speed connectivity.

Speaker #3: And extend our overall leadership, adding two points year-to-date, and we expect further gains clearly in 2026. In order to address this accelerating demand, we are committed to increasing investments and working with our supply chain partners to scale the business.

As bandwidth continues to grow inside the data center. And as this traffic flows out of the data center,

AI inference models are moving closer to the network Edge.

In order to address this accelerating demand, we are committed to increasing investments and working with our supply chain partners to scale the business. With product delivery lead times extending in the face of this unprecedented demand, we are proactively expanding our capacity to ensure our ability to timely meet our customers' demands. Indeed, this has already yielded results for fiscal 2025, as we delivered double our initial revenue growth expectations for the year. Marc will discuss how we are stepping up investments to support demand and the expanding opportunities we expect over the coming years.

And for the reasons that I mentioned earlier, we will continue to expand our existing leadership and addressable Market in high-speed connectivity. In the Wan.

Speaker #3: With product delivery lead times extending in the face of this unprecedented demand, we are proactively expanding our capacity to ensure our ability to timely meet our customers' demands.

In addition to the wide area network, we're also seeing a significant addressable Market opportunity in the in and around the data center.

Speaker #3: Indeed, this has already yielded results for fiscal 2025, as we deliver double our initial revenue growth expectations for the year. Marc will discuss how we are stepping up investments to support demand and the expanding opportunities we expect over the coming years.

It is, I think, well, understood that cloud providers or investing heavily in data centers to deliver on the current and future Promises of AI.

Many third parties are estimating Capital spending of more than 7 trillion through the end of the decade in all AI related infrastructure.

And this is obviously necessitating, the need for both training and inference workloads at massive scale.

Speaker #3: You know, the simple truth is that AI continues to drive network expansion across all our customer segments. The scale of investment currently underway is massive, and accelerating faster than anything we, or indeed the industry, have seen to date.

Gary Smith: The simple truth is that AI continues to drive network expansion across all our customer segments, and the scale of investment currently underway is massive and accelerating faster than anything we, or indeed the industry, have seen to date. I would also mention that unlike the COVID-inspired supply-demand imbalance, we are seeing this demand being stalled and leveraged for real, near-term revenue opportunities at our customers, as evidenced by accelerated implementation services that increased in revenue by 34% in fiscal 2025. With that, I'd like to take a moment to share our sort of broader perspectives on the AI opportunity as it relates to high-speed connectivity. As bandwidth continues to grow inside the data center and as this traffic flows out of the data center, AI inference models are moving closer to the network edge.

The simple truth is that AI continues to drive network expansion across all our customer segments, and the scale of investment currently underway is massive and accelerating faster than anything we, or indeed the industry, have seen to date. I would also mention that unlike the COVID-inspired supply-demand imbalance, we are seeing this demand being stalled and leveraged for real, near-term revenue opportunities at our customers, as evidenced by accelerated implementation services that increased in revenue by 34% in fiscal 2025.

Speaker #3: And I would also mention that, unlike the COVID-inspired supply-demand imbalance, we are seeing this demand be installed and leveraged for real near-term revenue opportunities at our customers.

Growing Power and space, constraints Cloud providers, are Planning and Building distributed AI data center training, clusters or AI factories, which require multiple clusters to act as 1?

Speaker #3: As evidenced by accelerated implementation services that increased in revenue by 34% in fiscal 2025. With that, I'd like to take a moment to share our broader perspectives on the AI opportunity as it relates to high-speed connectivity.

In fact, along with those power and space, constraints, the ability of the cloud providers and specifically, the major hyperscalers to scale. Their Global networks is becoming the critical long pole in the tent for them to operationalize, AI for both training and inference purposes.

With that, I'd like to take a moment to share our sort of broader perspectives on the AI opportunity as it relates to high-speed connectivity. As bandwidth continues to grow inside the data center and as this traffic flows out of the data center, AI inference models are moving closer to the network edge. For the reasons that I mentioned earlier, we will continue to expand our existing leadership and addressable market in high-speed connectivity in the WAN. In addition to the wide area network, we're also seeing a significant addressable market opportunity in and around the data center.

Within These data center environments, there are 3 key connectivity requirements to scale up within a data center rack.

Speaker #3: As bandwidth continues to grow inside the data center and as this traffic flows out of the data center, AI inference models are moving closer to the network edge.

Speaker #3: And for the reasons that I mentioned earlier, we will continue to expand our existing leadership and addressable market in high-speed connectivity in the WAN.

Gary Smith: For the reasons that I mentioned earlier, we will continue to expand our existing leadership and addressable market in high-speed connectivity in the WAN. In addition to the wide area network, we're also seeing a significant addressable market opportunity in and around the data center. It is, I think, well understood that cloud providers are investing heavily in data centers to deliver on the current and future promises of AI. Many third parties are estimating capital spending of more than $7 trillion through the end of the decade in all AI-related infrastructure. This is obviously necessitating the need for both training and inference workloads at massive scale.

To scale out between racks in a Data Center and finally to scale across between geographically, distributed data centers, which must operate at the highest levels of performance with super high capacity and the lowest latency possible.

Speaker #3: In addition to the wide area network, we're also seeing a significant addressable market opportunity in and around the data center. It is, I think, well understood that cloud providers are investing heavily in data centers to deliver on the current and future promises of AI.

With our Innovation and time to Market leadership in high-speed connectivity Solutions. Our position could not be better to fulfill this critical demand.

It is, I think, well understood that cloud providers are investing heavily in data centers to deliver on the current and future promises of AI. Many third parties are estimating capital spending of more than $7 trillion through the end of the decade in all AI-related infrastructure. This is obviously necessitating the need for both training and inference workloads at massive scale.

Speaker #3: Many third parties are estimating capital spending of more than $7 trillion through the end of the decade in all AI-related infrastructure. This, both training and inference, is obviously necessitating the need for workloads at massive scale.

This growing AI driven opportunity for Sienna is what we refer to as in and around the data center. In fact, our in and around the data center opportunities, Grew threefold From 24 to 25 and are a major contributor to our 26 expected growth rate.

We have proactively invested in our portfolio to intersect this growing Market segment and with a few notable examples.

Speaker #3: As a result of the massive growth in AI workloads, and to address growing power and speed space constraints, cloud providers are planning and building distributed AI data center training clusters, or AI factories, which require multiple clusters to act as one.

Gary Smith: As a result of the massive growth in AI workloads and to address growing power and space constraints, cloud providers are planning and building distributed AI data center training clusters, or AI factories, which require multiple clusters to act as one. In fact, along with those power and space constraints, the ability of the cloud providers, and specifically the major hyperscalers, to scale their global networks is becoming the critical long pole in the tent for them to operationalize AI for both training and inference purposes. Within these data center environments, there are three key connectivity requirements: to scale up within a data center rack, to scale out between racks in a data center, and finally, to scale across between geographically distributed data centers, which must operate at the highest levels of performance with super high capacity and the lowest latency possible.

As a result of the massive growth in AI workloads and to address growing power and space constraints, cloud providers are planning and building distributed AI data center training clusters, or AI factories, which require multiple clusters to act as one. In fact, along with those power and space constraints, the ability of the cloud providers, and specifically the major hyperscalers, to scale their global networks is becoming the critical long pole in the tent for them to operationalize AI for both training and inference purposes.

First is our interconnects portfolio comprising both our power and space savings ZR and ZR plus pluggables and our Optical components.

we expect interconnects to play a meaningful role in scale up scale out and in fact scale across workloads,

Speaker #3: In fact, along with ability of the cloud providers and specifically the major those power and space constraints, the hyperscalers to scale their global networks is becoming the critical long pole in the tent for them to operationalize AI for both training and inference purposes.

In fiscal year 25, we surpassed our Target of more than doubling fy24 pluggable, Revenue reaching revenue of more than 168 million.

Within these data center environments, there are three key connectivity requirements: to scale up within a data center rack, to scale out between racks in a data center, and finally, to scale across between geographically distributed data centers, which must operate at the highest levels of performance with super high capacity and the lowest latency possible.

Speaker #3: Within these data center environments, there are three key connectivity requirements. To scale up within a data center rack, to scale out between racks in a data center, and finally to scale across between geographically distributed data centers which must operate at the highest levels of performance with super high capacity and the lowest latency possible.

In the quarter, our wave logic 6. Nano 800 gig pluggables are shipped for initial revenue and since the end of the quarter, we have shipped 800 ZR plugs to 3 additional Cloud providers for testing and certification.

And with regard to components, we address the cloud providers. Preferred disaggregated consumption model with our high-speed coherent and other industry-leading wave logic Technologies, including our DSP sertis and other high-speed analog and Electro Optical components.

Speaker #3: With our innovation and time-to-market leadership in high-speed connectivity solutions, our position could not be better to fulfill this critical demand. This growing AI-driven opportunity for CIENA is what we refer to as "in and around the data center."

Gary Smith: With our innovation and time-to-market leadership in high-speed connectivity solutions, our position could not be better to fulfill this critical demand. This growing AI-driven opportunity for Ciena is what we refer to as in and around the data center. In fact, our in and around the data center opportunities grew threefold from 2024 to 2025 and are a major contributor to our 2026 expected growth rate. We have proactively invested in our portfolio to intersect this growing market segment, and with a few notable examples. First is our interconnects portfolio, comprising both our power and space-saving ZR and ZR Plus pluggables and our optical components. We expect interconnects to play a meaningful role in scale-up, scale-out, and in fact, scale-across workloads. In fiscal year 2025, we surpassed our target of more than doubling FY 2024 pluggable revenue, reaching revenue of more than $168 million.

With our innovation and time-to-market leadership in high-speed connectivity solutions, our position could not be better to fulfill this critical demand. This growing AI-driven opportunity for Ciena is what we refer to as in and around the data center. In fact, our in and around the data center opportunities grew threefold from 2024 to 2025 and are a major contributor to our 2026 expected growth rate. We have proactively invested in our portfolio to intersect this growing market segment, and with a few notable examples.

In addition our components business. Now includes the electrical and Optical interconnect solutions from our acquisition of nubis communications. The nubes Technologies and expertise will help us address the scale up and scale out opportunities inside the data center.

Speaker #3: In fact, our in and around the data center opportunities grew threefold from 24 to 25 and are a major contributor to our 26 expected growth rate.

We're excited to have the nubes team as part of Sienna and are on track to G the first products in fiscal 26.

Speaker #3: We have proactively invested in our portfolio to intersect this growing market segment, with a few notable examples. First is our interconnects portfolio, comprising both our power and space-saving ZR and ZR Plus pluggables and our optical components.

And as we previously, noted as technology advances and data rates, increase the components portion of our interconnect portfolio primarily represents Revenue opportunities Beyond fiscal 26.

First is our interconnects portfolio, comprising both our power and space-saving ZR and ZR Plus pluggables and our optical components. We expect interconnects to play a meaningful role in scale-up, scale-out, and in fact, scale-across workloads. In fiscal year 2025, we surpassed our target of more than doubling FY 2024 pluggable revenue, reaching revenue of more than $168 million.

In addition, to our interconnect portfolio, as Market needs continue to evolve driven by AI, we're seeing new architectural, applications arise in and around the data center.

Speaker #3: We expect interconnects to play a meaningful role in scale-up, scale-out, and in fact scale across workloads. In fiscal year 2025, we surpassed our target of more than doubling FY24 pluggable revenue, reaching revenue of more than $168 million.

With 2 recent cloud provider, use cases, I think of particular note.

Use case is the scale across. Architecture linking geographically dispersed AI training clusters, using our Market leading RLS, atonic line system, wave servers and interconnects portfolio.

Speaker #3: In the quarter, our wave logic 6 nano 800 gig pluggables has shipped for initial revenue. And since the end of the quarter, we have shipped 800 ZR plugs to three additional cloud providers for testing and certification.

Gary Smith: In the quarter, our WaveLogic 6 Nano 800 Gig pluggables have shipped for initial revenue. Since the end of the quarter, we have shipped 800 ZR plugs to three additional cloud providers for testing and certification. With regard to components, we address the cloud providers' preferred disaggregated consumption model with our high-speed coherent and other industry-leading WaveLogic technologies, including our DSP, CERTES, and other high-speed analog and electro-optical components. In addition, our components business now includes the electrical and optical interconnect solutions from our acquisition of Nubis Communications. The Nubis technologies and expertise will help us address the scale-up and scale-out opportunities inside the data center. We're excited to have the Nubis team as part of Ciena and are on track to GA the first products in fiscal 2026.

In the quarter, our WaveLogic 6 Nano 800 Gig pluggables have shipped for initial revenue. Since the end of the quarter, we have shipped 800 ZR plugs to three additional cloud providers for testing and certification. With regard to components, we address the cloud providers' preferred disaggregated consumption model with our high-speed coherent and other industry-leading WaveLogic technologies, including our DSP, CERTES, and other high-speed analog and electro-optical components. In addition, our components business now includes the electrical and optical interconnect solutions from our acquisition of Nubis Communications.

This is an opportunity, we discussed over the past couple of quarters, where a large hyperscale is linking to 2 Regional data centers to build an AI backbone.

I'm pleased to report that this hyperscaler is now extending this architecture to more locations.

Speaker #3: And with regard to components, we address the cloud providers' preferred disaggregated consumption model with our high-speed coherent and other industry-leading WaveLogic technologies, including our DSP, CERTES, and other high-speed analog and electro-optical components.

Additionally, I am pleased to announce that 2 more major hyperscalers of chosen. Our Optical solutions for their scale across training applications as well.

Speaker #3: In addition, our components business now includes the electrical and optical interconnect solutions from our acquisition of Nubis Communications. The Nubis technologies and expertise will help us address the scale-up and scale-out opportunities inside the data center.

The Second Use case is out of band Network management, CNAs unique decom solution, leverages our, xgs pawn, and other routing, and switching products, and was initially designed with meta to meet hyperscale requirements.

The Nubis technologies and expertise will help us address the scale-up and scale-out opportunities inside the data center. We're excited to have the Nubis team as part of Ciena and are on track to GA the first products in fiscal 2026. As we previously noted, as technology advances and data rates increase, the components portion of our interconnects portfolio primarily represents revenue opportunities beyond fiscal 2026.

Today, I'm pleased to announce that our Decon business with meta as expanded as they plan to deploy in multiple new data centers.

Speaker #3: We're excited to have the Nubis team as part of CIENA and are on track to GA the first products in fiscal 26. And as we previously noted, as technology advances and data rates increase, the components portion of our interconnects portfolio primarily represents revenue opportunities beyond fiscal 26.

Also we're engaged in advanced technical discussions with additional hyperscalers to deploy this decom solution in their data centers.

Gary Smith: As we previously noted, as technology advances and data rates increase, the components portion of our interconnects portfolio primarily represents revenue opportunities beyond fiscal '26. In addition to our interconnects portfolio, as market needs continue to evolve driven by AI, we're seeing new architectural applications arise in and around the data center, with two recent cloud provider use cases, I think, of particular note. First use case is the scale-across architecture, linking geographically dispersed AI training clusters using our market-leading RLS photonic line system, WaveServers, and interconnects portfolio. This is an opportunity we discussed over the past couple of quarters, where a large hyperscaler is linking to two regional data centers to build an AI backbone. I'm pleased to report that this hyperscaler is now extending this architecture to more locations.

Speaker #3: In addition to our interconnects portfolio, as market needs continue to evolve driven by AI, we're seeing new architectural applications arise in and around the data center.

In addition to our interconnects portfolio, as market needs continue to evolve driven by AI, we're seeing new architectural applications arise in and around the data center, with two recent cloud provider use cases, I think, of particular note. First use case is the scale-across architecture, linking geographically dispersed AI training clusters using our market-leading RLS photonic line system, WaveServers, and interconnects portfolio. This is an opportunity we discussed over the past couple of quarters, where a large hyperscaler is linking to two regional data centers to build an AI backbone.

I'd like to briefly acknowledge here that the scale across and decom wins are just the most recent AI related. Use cases to materialize for us in recent months. They are great examples of how we co-create and productize with Market leading solutions to address critical customer scaling requirements.

Speaker #3: With two recent cloud provider use cases, I think, of particular note. First use case is the scale across architecture, linking geographically dispersed AI training clusters using our market-leading RLS photonic line system.

And we fully anticipate continuing to develop additional innovative solutions with our customers as they monetize, I AI across the various architectures.

Before I turn it over to Mark, I really want to reiterate. But as we leave Q4 and indeed the entirety of 2025.

Speaker #3: Wave servers and interconnects portfolio. This is an opportunity we discussed over the past couple of quarters, where a large hyperscale is linking to two regional data centers to build an AI backbone.

We have absolute conviction that the positive market dynamics, and our technology leadership provides us with increasing confidence that the durability of demand and our business and financial trajectory of very strong.

I'm pleased to report that this hyperscaler is now extending this architecture to more locations. Additionally, I am pleased to announce that two more major hyperscalers have chosen our optical solutions for their scale-across training applications as well. The second use case is out-of-band network management. Ciena's unique DECOM solution leverages our XGS-PON and other routing and switching products and was initially designed with Meta to meet hyperscale requirements. Today, I'm pleased to announce that our DECOM business with Meta has expanded as they plan to deploy in multiple new data centers.

Speaker #3: I'm pleased to report that this hyperscaler is now extending this architecture to more locations. Additionally, I am pleased to announce that two more major hyperscalers have chosen our optical solutions for their scale-across training applications as well.

I'll now hand it over to mark for a closer look at our Q4 and fiscal 25 performance and Outlook mark.

Gary Smith: Additionally, I am pleased to announce that two more major hyperscalers have chosen our optical solutions for their scale-across training applications as well. The second use case is out-of-band network management. Ciena's unique DECOM solution leverages our XGS-PON and other routing and switching products and was initially designed with Meta to meet hyperscale requirements. Today, I'm pleased to announce that our DECOM business with Meta has expanded as they plan to deploy in multiple new data centers. Also, we're engaged in advanced technical discussions with additional hyperscalers to deploy this DECOM solution in their data centers. I'd like to briefly acknowledge here that the scale-across and DECOM wins are just the most recent AI-related use cases to materialize for us in recent months. They are great examples of how we co-create and productize with market-leading solutions to address critical customer scaling requirements.

Thank you, Gary. And thank you to everyone for joining the call this morning.

Speaker #3: The second use case is out-of-band network management. CIENA's unique DCOM solution leverages our XGS PAN and other routing and switching products and was initially designed with Meta to meet hyperscale requirements.

Choir review, the specific results for Q4 and the full year, I'd like to provide an update on the priorities. I outlined in the last earnings call, specifically gross margin performance, working Capital Management and capital allocation.

First gross margin performance.

Speaker #3: Today, I’m pleased to announce that our DCOM business with Meta has expanded as they plan to deploy in multiple new data centers. Also, we’re engaged in advanced technical discussions with additional hyperscalers to deploy this DCOM solution in their data centers.

You've seen that our Q4 gross margin sequentially improved and exceeded the name of our guide by 90 basis points.

This was largely due to higher revenue and software mix.

Also, we're engaged in advanced technical discussions with additional hyperscalers to deploy this DECOM solution in their data centers. I'd like to briefly acknowledge here that the scale-across and DECOM wins are just the most recent AI-related use cases to materialize for us in recent months. They are great examples of how we co-create and productize with market-leading solutions to address critical customer scaling requirements.

Speaker #3: I'd like to briefly acknowledge here that the scale across and AI-related use cases to DCOM wins are just the most recent materialize for us in recent months.

We have had constructive discussions with our customers to improve fair value. Exchange with those improvements appearing in late 26th given the large backlog entering the year.

Speaker #3: They are great examples of how we co-create and productize with market-leading solutions to address critical customer scaling requirements. And we fully anticipate continuing to develop additional innovative solutions with our customers as they monetize AI across the various architectures.

Additionally, we are navigating through particular headwinds from ramping, NPI products and Rising input costs as Supply becomes further constrained due to fast growing demand.

Gary Smith: We fully anticipate continuing to develop additional innovative solutions with our customers as they monetize AI across the various architectures. Before I turn it over to Marc, I really want to reiterate that as we leave Q4 and indeed the entirety of 2025, we have absolute conviction that the positive market dynamics and our technology leadership provides us with increasing confidence that the durability of demand and our business and financial trajectory are very strong. I'll now hand it over to Marc for a closer look at our Q4 and fiscal 2025 performance and outlook. Marc. Thank you, Gary, and thank you to everyone for joining the call this morning. Before I review the specific results for Q4 and the full year, I'd like to provide an update on the priorities I outlined in the last earnings call, specifically gross margin performance, working capital management, and capital allocation.

We fully anticipate continuing to develop additional innovative solutions with our customers as they monetize AI across the various architectures. Before I turn it over to Marc, I really want to reiterate that as we leave Q4 and indeed the entirety of 2025, we have absolute conviction that the positive market dynamics and our technology leadership provides us with increasing confidence that the durability of demand and our business and financial trajectory are very strong. I'll now hand it over to Marc for a closer look at our Q4 and fiscal 2025 performance and outlook. Marc.

All told I expect year-over-year gross margin improvements with second half margins being higher than first half margins.

Second working Capital Management.

Speaker #3: Before I turn it over to Mark, I really want to reiterate that as we leave Q4 and indeed the entirety of 2025, we have absolute conviction that the positive market dynamics and our technology leadership provide us with increasing confidence that the durability of demand and our business and financial trajectory are very strong.

We have improved our cash conversion cycle by 34 days sequentially largely on faster Collections and improved inventory days. In fact, our inventory turns improved by 4/10 of a turn.

We left the year with 1.4 billion in cash.

after generating 371 million, in cash from operations, in Q4 and free cash flow of 326 million,

Speaker #3: I'll now hand it over to Mark for a closer look at our Q4 and fiscal 25 performance and outlook.

Speaker #3: Mark.

Marc Graff: Thank you, Gary, and thank you to everyone for joining the call this morning. Before I review the specific results for Q4 and the full year, I'd like to provide an update on the priorities I outlined in the last earnings call, specifically gross margin performance, working capital management, and capital allocation.

Speaker #2: Thank you, Gary. And thank you

Speaker #2: to everyone for joining the call this morning. Before I review the specific results for Q4 and the full year, I'd like to provide an update on the priorities I outlined in the last earnings call.

with respect to Capital allocation, we completed the first year of our Mo most recent 1 billion stock repurchase authorization, repurchasing, approximately 330 million for the year at an average price of 83.34.

Speaker #2: Specifically, gross margin performance, working capital management, and capital allocation. First, gross margin performance. You've seen that our Q4 gross margin sequentially improved and exceeded any of our guide by 90 basis points.

Gary Smith: First, gross margin performance. You've seen that our Q4 gross margin sequentially improved and exceeded the mean of our guide by 90 basis points. This was largely due to higher revenue and software mix. We have had constructive discussions with our customers to improve fair value exchange, with those improvements appearing in late 2026 given the large backlog entering the year. Additionally, we are navigating through particular headwinds from ramping NPI products and rising input costs as supply becomes further constrained due to fast-growing demand. All told, I expect year-over-year gross margin improvements, with second-half margins being higher than first-half margins. Second, working capital management. We have improved our cash conversion cycle by 34 days sequentially, largely on faster collections and improved inventory days. In fact, our inventory turns improved by four-tenths of a turn.

First, gross margin performance. You've seen that our Q4 gross margin sequentially improved and exceeded the mean of our guide by 90 basis points. This was largely due to higher revenue and software mix. We have had constructive discussions with our customers to improve fair value exchange, with those improvements appearing in late 2026 given the large backlog entering the year. Additionally, we are navigating through particular headwinds from ramping NPI products and rising input costs as supply becomes further constrained due to fast-growing demand.

We invested 140 million dollars in capital expenditures in the business focused on developing the next generation of leading products and enabling capacity to nearly double our 2025 growth rate.

Speaker #2: This was largely due to higher revenue and software mix. We have had constructive discussions with our customers to improve fair value exchange, with those improvements appearing in late 2026, given the large backlog entering the year.

We also completed the cash purchase of nubes supplementing. Our interconnect portfolio to service the in portion of in and around the data center opportunity.

We have also reallocated resources that will allow the company to meet the growth challenges ahead with new business, processes and Technology. Rationalization.

Speaker #2: Additionally, we are navigating through particular headwinds from ramping NPI products and rising input costs, as supply becomes further constrained due to fast-growing demand. All told, I expect year-over-year gross margin improvements, with second-half margins being higher than first-half margins.

Finally, let me turn to operating Leverage.

We will hold to our commitment of flat Opex in 2026 while investing in new opportunities for our interconnect portfolio.

All told, I expect year-over-year gross margin improvements, with second-half margins being higher than first-half margins. Second, working capital management. We have improved our cash conversion cycle by 34 days sequentially, largely on faster collections and improved inventory days. In fact, our inventory turns improved by four-tenths of a turn.

Now, let me turn to the specifics of our Q4 and full year performance.

Speaker #2: Second, working capital management. We have improved our cash conversion cycle by 34 days sequentially, largely due to faster collections and improved inventory days. In fact, our inventory turns improved by four-tenths of a turn.

As Gary noted Q4 Revenue reached 1.35 billion up 20% year-over-year and 70 million above the midpoint of our guide.

For the year annual revenue was up 19% to 4.77 billion dollars, a new record.

Speaker #2: We left the year with 1.4 billion in cash after generating 371 million in cash from operations in Q4 and free cash flow of 326 million dollars.

Q4 with strong across all lines of business.

Gary Smith: We left the year with $1.4 billion in cash after generating $371 million in cash from operations in Q4 and free cash flow of $326 million. With respect to capital allocation, we completed the first year of our most recent $1 billion stock repurchase authorization, repurchasing approximately $330 million for the year at an average price of $83.34. We invested $140 million in capital expenditures in the business, focused on developing the next generation of leading products and enabling capacity to nearly double our 2025 growth rate. We also completed the cash purchase of Nubis, supplementing our interconnects portfolio to service the in portion of in and around the data center opportunity. We have also reallocated resources that will allow the company to meet the growth challenges ahead with new business processes and technology rationalization. Finally, let me turn to operating leverage.

We left the year with $1.4 billion in cash after generating $371 million in cash from operations in Q4 and free cash flow of $326 million. With respect to capital allocation, we completed the first year of our most recent $1 billion stock repurchase authorization, repurchasing approximately $330 million for the year at an average price of $83.34. We invested $140 million in capital expenditures in the business, focused on developing the next generation of leading products and enabling capacity to nearly double our 2025 growth rate.

Specifically our Optical business was up, 19% year-over-year driven by strength and RLS which was up 72% year-over-year.

And switching business, grew, 49% year-over-year.

Speaker #2: allocation, we completed the With respect to capital first year of our most recent 1 billion dollar stock repurchase authorization repurchasing approximately 330 million dollars for the year at an average price of 83 dollars and 34 cents.

with the 3,000 and 5,000 series product, Revenue doubling on a combined basis with the decomp opportunity driving much of this growth

Speaker #2: We invested 140 million dollars in capital expenditures in the business focused on developing the next generation of leading products and enabling capacity to nearly double our 2025 growth rate.

Global Services had a strong quarter growing 25% year-over-year driven largely by advisory and enablement and installation implementation Services which grew 53% and 45% year-over-year respectively.

We also completed the cash purchase of Nubis, supplementing our interconnects portfolio to service the in portion of in and around the data center opportunity. We have also reallocated resources that will allow the company to meet the growth challenges ahead with new business processes and technology rationalization. Finally, let me turn to operating leverage.

Speaker #2: We also completed the cash purchase of Nubis supplementing our interconnects portfolio to service the in portion of in and around the data center also reallocated resources that will opportunity.

I'd also like to note that blue planet had a very successful year, achieving 34 million of Revenue in the quarter. A record 115 million in fiscal 25 and achieving full year profitability.

Speaker #2: Challenges ahead with new business processes and technology rationalization. Finally, let me turn to operating leverage. We will hold to our commitment of flat opex in 2026 while investing in new opportunities for our interconnect specifics of our Q4 and full year portfolio performance.

Speaker #2: challenges ahead with new business processes and technology rationalization. Finally, let me turn to operating leverage. We will We have hold to our commitment of flat opex in 2026 while investing in new opportunities for our interconnect specifics of our Q4 and full year portfolio.

We had 3 10% Revenue customers in Q4 including 2. Global Cloud providers and 1 Tier 1. North American service provider.

Gary Smith: We will hold to our commitment of flat OpEx in 2026 while investing in new opportunities for our interconnect portfolio. Now, let me turn to the specifics of our Q4 and full-year performance. As Gary noted, Q4 revenue reached $1.35 billion, up 20% year-over-year and $70 million above the midpoint of our guide. For the year, annual revenue was up 19% to $4.77 billion, a new record. Q4 was strong across all lines of business. Specifically, our optical business was up 19% year-over-year, driven by strength in RLS, which was up 72% year-over-year. Our routing and switching business grew 49% year-over-year, with the 3000 and 5000 Series product revenue doubling on a combined basis, with the DECOM opportunity driving much of this growth. Global services had a strong quarter, growing 25% year-over-year, driven largely by advisory, enablement, and installation implementation services, which grew 53% and 45% year-over-year, respectively.

We will hold to our commitment of flat OpEx in 2026 while investing in new opportunities for our interconnect portfolio. Now, let me turn to the specifics of our Q4 and full-year performance. As Gary noted, Q4 revenue reached $1.35 billion, up 20% year-over-year and $70 million above the midpoint of our guide. For the year, annual revenue was up 19% to $4.77 billion, a new record. Q4 was strong across all lines of business. Specifically, our optical business was up 19% year-over-year, driven by strength in RLS, which was up 72% year-over-year.

We are exiting the year with about 5 billion dollars of backlog of which a approximately 3.8 billion is hardware and software with the remaining remaining, being soft being services.

Speaker #2: noted, Q4 revenue reached 1.35 billion dollars up 20% year-over-year and 70 million dollars above the midpoint of our guide. For the year annual revenue was up 19% to 4.77 billion dollars a new record.

This backlog supports a large share of our fiscal 26 Revenue expectations. And we see indications of strong demand continuing into 27 and Beyond

Giving us exceptional visibility and confidence in our Outlook and medium-term expectations.

Speaker #2: Q4 was strong across all lines of Now. Let me turn to the business. Specifically, our optical business was up 19% year-over-year, driven by strength in RLS, which was up 72% year-over-year.

Adjusted gross margin in Q4 was 43.4%. 90 basis points above the midpoint of our guide driven by higher revenue and software mix.

For the year, adjusted gross margin was 42.7%.

Speaker #2: Our routing and switching business grew 49% year-over-year, with a combined revenue for the 3,000 and 5,000 series products doubling. With the DCOM growth, global services had a strong quarter, driving much of this growth at 25% year-over-year. This was largely driven by advisory and enablement services, which grew 53%, and installation and implementation services, which grew 45% year-over-year.

We continue to mitigate most of the impacts of tariffs as we currently constructed.

Our routing and switching business grew 49% year-over-year, with the 3000 and 5000 Series product revenue doubling on a combined basis, with the DECOM opportunity driving much of this growth. Global services had a strong quarter, growing 25% year-over-year, driven largely by advisory, enablement, and installation implementation services, which grew 53% and 45% year-over-year, respectively.

And the net impact of tariffs are immaterial to our bottom line.

We continue to monitor the situation and work closely with both our supply chain and customers as necessary.

Q4 adjusted operating expense was approximately 409 million and 1.51 billion for the year.

Speaker #2: I'd also like to note that Blue Planet had a very successful year, achieving $34 million in revenue in the quarter, a record $115 million in fiscal 2025, and achieving full-year profitability.

Gary Smith: I'd also like to note that Blue Planet had a very successful year, achieving $34 million of revenue in the quarter, a record $115 million in fiscal 2025, and achieving full-year profitability. We had three 10% revenue customers in Q4, including two global cloud providers and one tier-one North American service provider. We are exiting the year with about $5 billion of backlog, of which approximately $3.8 billion is hardware and software, with the remaining being services. This backlog supports a large share of our fiscal 2026 revenue expectations, and we see indications of strong demand continuing into 2027 and beyond, giving us exceptional visibility and confidence in our outlook and medium-term expectations. Adjusted gross margin in Q4 was 43.4%, 90 basis points above the midpoint of our guide, driven by higher revenue and software mix. For the year, adjusted gross margin was 42.7%.

I'd also like to note that Blue Planet had a very successful year, achieving $34 million of revenue in the quarter, a record $115 million in fiscal 2025, and achieving full-year profitability. We had three 10% revenue customers in Q4, including two global cloud providers and one tier-one North American service provider. We are exiting the year with about $5 billion of backlog, of which approximately $3.8 billion is hardware and software, with the remaining being services.

Excluding the higher incentive compensation. We achieved inline Opex for the quarter and under spent slightly for the year, reflecting our ongoing disciplined approach and operational efficiency.

This led to Q4 adjusted operating margin of 13.2% of 250 basis, points sequentially and 320 basis points year-over-year.

Speaker #2: We had three 10% revenue customers in Q4 including two global cloud providers and one tier one North American service provider. We are exiting the year with about 5 billion dollars of backlog of which approximately 3.8 billion is hardware and software with the remaining being services.

In margin for the year reached 11.2%. 150 basis points from fiscal 24.

we achieved EPS of 91 cents up, 69% year-over-year with annual adjusted EPS of 264 up a healthy, 45%,

Speaker #2: This backlog supports a large share of our fiscal 26 revenue expectations and we see indications of strong demand continuing into 27 and beyond. Giving us exceptional visibility and confidence in our outlook and medium-term expectations.

This backlog supports a large share of our fiscal 2026 revenue expectations, and we see indications of strong demand continuing into 2027 and beyond, giving us exceptional visibility and confidence in our outlook and medium-term expectations. Adjusted gross margin in Q4 was 43.4%, 90 basis points above the midpoint of our guide, driven by higher revenue and software mix. For the year, adjusted gross margin was 42.7%.

Finally cash from operations with 371 million in the quarter for the year. Free cash flow, reached 665 million after 140 million in capital expenditures,

Now turning to guidance.

Speaker #2: Adjusted gross margin in Q4 was 43.4%, 90 basis points above the midpoint of our guide, driven by higher revenue and software mix. For the year, adjusted gross margin was 42.7%.

Last quarter, our confidence and visibility due to AI driven. Dynamics enabled us to atypically provide an early outlook for 2026.

as we move into the new fiscal year for all the reasons Gary and I have discussed,

Those Dynamics and the customer demand environment. Not only remain robust. They have accelerated.

Speaker #2: We continue to mitigate most of the impacts of tariffs as we are currently constructed. The net impact of tariffs is immaterial to our bottom line.

Gary Smith: We continue to mitigate most of the impacts of tariffs as we currently constructed, and the net impact of tariffs is immaterial to our bottom line. We continue to monitor the situation and work closely with both our supply chain and customers as necessary. Q4 adjusted operating expense was approximately $409 million and $1.51 billion for the year. Excluding the higher incentive compensation, we achieved inline OpEx for the quarter and underspent slightly for the year, reflecting our ongoing disciplined approach and operational efficiency. This led to Q4 adjusted operating margin of 13.2%, up 250 basis points sequentially and 320 basis points year-over-year. Operating margin for the year reached 11.2%, up 150 basis points from fiscal 2024. We achieved EPS of $0.91, up 69% year-over-year, with annual adjusted EPS of $2.64, up a healthy 45%. Finally, cash from operations was $371 million in the quarter.

We continue to mitigate most of the impacts of tariffs as we currently constructed, and the net impact of tariffs is immaterial to our bottom line. We continue to monitor the situation and work closely with both our supply chain and customers as necessary. Q4 adjusted operating expense was approximately $409 million and $1.51 billion for the year. Excluding the higher incentive compensation, we achieved inline OpEx for the quarter and underspent slightly for the year, reflecting our ongoing disciplined approach and operational efficiency.

As a result today, I'd like to update that guidance from September, as our Outlook Outlook has improved, even from just a few months ago.

Speaker #2: We continue to monitor the situation and work closely with both our supply chain and customers as necessary. Q4 adjusted operating expense was approximately 409 million dollars and 1.51 billion for the year.

we now expect Revenue in fiscal 26 to be approximately 5.7 to 6.1 billion dollars or nearly 24%, annual growth at the midpoint

Versus the 17% growth rate, discussed in September.

Speaker #2: Excluding the higher incentive compensation, we achieved inline Opex for the quarter and underspent slightly for the year, reflecting our ongoing disciplined approach and operational efficiency.

We continue to expect gross margins for fiscal, 26, to be in the range of 43% plus or minus a point.

and as I mentioned earlier, we continue to work to mitigate input cost pressures through Supply rebalancing

This led to Q4 adjusted operating margin of 13.2%, up 250 basis points sequentially and 320 basis points year-over-year. Operating margin for the year reached 11.2%, up 150 basis points from fiscal 2024. We achieved EPS of $0.91, up 69% year-over-year, with annual adjusted EPS of $2.64, up a healthy 45%. Finally, cash from operations was $371 million in the quarter.

Speaker #2: This led to Q4 adjusted operating margin of 13.2% of 250 basis points sequentially and 320 basis points year-over-year. Operating margin for the year reached 11.2%, 150 basis points from fiscal 24.

Designing costs out and additional pricing actions over time.

We expect the impact of these mitigation efforts will be realized and late fiscal 26.

With these Dynamics, we expect the margins to improve. First, half to second half as cost reductions and pricing actions. Take hold

Speaker #2: We achieved EPS of 91 cents, up 69% year-over-year, with annual adjusted EPS of $2.64, up a healthy 45%. Finally, cash from operations was $371 million in the quarter, and for the year, free cash flow reached $665 million after $140 million in capital expenditures.

We expect adjusted operating expenses in fiscal. 26 to be flat at approximately 1.52 billion after accounting for the nubes operating expenses post-acquisition.

Gary Smith: For the year, free cash flow reached $665 million after $140 million in capital expenditures. Now turning to guidance. Last quarter, our confidence and visibility due to AI-driven dynamics enabled us to atypically provide an early outlook for 2026. As we move into the new fiscal year, for all the reasons Gary and I have discussed, those dynamics and the customer demand environment not only remain robust, they have accelerated. As a result, today, I'd like to update that guidance from September, as our outlook has improved even from just a few months ago. We now expect revenue in fiscal 2026 to be approximately $5.7 to $6.1 billion, or nearly 24% annual growth at the midpoint, versus the 17% growth rate discussed in September. We continue to expect gross margins for fiscal 2026 to be in the range of 43% ± a point.

For the year, free cash flow reached $665 million after $140 million in capital expenditures. Now turning to guidance. Last quarter, our confidence and visibility due to AI-driven dynamics enabled us to atypically provide an early outlook for 2026. As we move into the new fiscal year, for all the reasons Gary and I have discussed, those dynamics and the customer demand environment not only remain robust, they have accelerated.

With respect to operating margin. We previously advised and acceleration of our longer term goal of 15, to 16% operating margin from 27 into 2026.

Speaker #2: guidance. Last quarter, our Now turning to confidence and visibility due to AI-driven dynamics enabled us to atypically provide an early outlook for 2026. As we move into the new fiscal year, for all the reasons Gary and I have discussed, those dynamics and the customer demand environment not only remain robust, they have accelerated.

We now expect fiscal 26, operating margins to improve further to 17% plus or minus a point.

6 are expected to be between 250 and 275 million.

As a result, today, I'd like to update that guidance from September, as our outlook has improved even from just a few months ago. We now expect revenue in fiscal 2026 to be approximately $5.7 to $6.1 billion, or nearly 24% annual growth at the midpoint, versus the 17% growth rate discussed in September. We continue to expect gross margins for fiscal 2026 to be in the range of 43% ± a point.

Speaker #2: today I'd like to update that guidance from As a result, September as our outlook has improved even from just a few months ago. We now expect revenue in fiscal 26 to be approximately 5.7 to 6.1 billion dollars or nearly 24% annual growth at the midpoint.

This is higher than our typical Capital intensity. In order to invest in supporting expected, robust demand, in late 2026 and into 2027.

as well as incremental costs for 3, nanometer mask sets,

in fiscal 26, we expect to repurchase approximately 330 million in shares under our 2024 stock repurchase authorization plan.

Speaker #2: growth rate discussed in Versus the 17% September. We continue to expect gross margins for fiscal 26 to be in the range of 43% plus or minus a point.

Finally, with respect to q1 guidance, we expect to deliver Revenue in the range of 1.35 to 1.43 billion dollars. Adjusted gross margin between 43 and 44%.

Speaker #2: And as I mentioned earlier, we continue to work to mitigate input cost pressures through supply rebalancing designing costs out and additional pricing actions over time.

Gary Smith: As I mentioned earlier, we continue to work to mitigate input cost pressures through supply rebalancing, designing costs out, and additional pricing actions over time. We expect the impact of these mitigation efforts will be realized in late fiscal '26. With these dynamics, we expect the margins to improve first half to second half as cost reductions and pricing actions take hold. We expect adjusted operating expenses in fiscal '26 to be flat at approximately $1.52 billion after accounting for the Nubis operating expenses post-acquisition. With respect to operating margin, we previously advised an acceleration of our longer-term goal of 15% to 16% operating margin from '27 into 2026. We now expect fiscal '26 operating margins to improve further to 17% ± a point. Our capital expenditures for fiscal '26 are expected to be between $250 and $275 million.

As I mentioned earlier, we continue to work to mitigate input cost pressures through supply rebalancing, designing costs out, and additional pricing actions over time. We expect the impact of these mitigation efforts will be realized in late fiscal '26. With these dynamics, we expect the margins to improve first half to second half as cost reductions and pricing actions take hold. We expect adjusted operating expenses in fiscal '26 to be flat at approximately $1.52 billion after accounting for the Nubis operating expenses post-acquisition.

And adjusted operating expenses of approximately 380 million yielding and operating margin of 15 and 1.5 to 16 and 1.5%.

Speaker #2: We expect the impact of these mitigation efforts will be realized in late fiscal 2026. With these dynamics, we expect the margins to improve from the first half to the second half as cost reductions and pricing actions take hold.

To conclude.

Santa had a strong 2025 and we are looking to an even stronger 2026. We are thoughtfully allocating, our owner's Capital to deliver, but value both to our customers and for our owners.

Speaker #2: We expect adjusted operating expense in fiscal 26 to be flat at approximately 1.52 billion after accounting for the newest operating expenses post-acquisition. With respect to operating margin, we previously advised an acceleration of our longer-term goal of 15 to 16% operating margin from 27 into 2026.

We are singularly focused on executing our strategy and winning in the market.

And with that, let me turn it back to Gary.

With respect to operating margin, we previously advised an acceleration of our longer-term goal of 15% to 16% operating margin from '27 into 2026. We now expect fiscal '26 operating margins to improve further to 17% ± a point. Our capital expenditures for fiscal '26 are expected to be between $250 and $275 million. This is higher than our typical capital intensity in order to invest in supporting expected robust demand in late 2026 and into 2027, as well as incremental costs for three-nanometer mask sets. In fiscal 2026, we expect to repurchase approximately $330 million in shares under our 2024 stock repurchase authorization plan.

Thank you, Mark, and let me reiterate those comments, you know, we had an incredibly strong quarter and fiscal 2025, which we believe is a seminal 1 for Sienna.

And 1 that provides a remarkable springboard for continued growth.

Speaker #2: We now expect fiscal 2026 operating margins to improve further to 17% plus or minus a point. Our capital expenditures for fiscal 2026 are expected to be between $250 million and $275 million.

Momentum continues to build our balance sheet has never been stronger and Industry. Dynamics have never been more positive for Sienna.

We are executing well and have high confidence. We will continue to do so.

Speaker #2: This is higher than our typical capital intensity in order to invest in supporting expected robust demand in late 2026 and into 2027, as well as incremental costs for three-nanometer mask sets.

Gary Smith: This is higher than our typical capital intensity in order to invest in supporting expected robust demand in late 2026 and into 2027, as well as incremental costs for three-nanometer mask sets. In fiscal 2026, we expect to repurchase approximately $330 million in shares under our 2024 stock repurchase authorization plan. Finally, with respect to Q1 guidance, we expect to deliver revenue in the range of $1.35 to 1.43 billion, adjusted gross margin between 43% and 44%, and adjusted operating expenses of approximately $380 million, yielding an operating margin of 15.5% to 16.5%. To conclude, Ciena had a strong 2025, and we are looking to an even stronger 2026. We are thoughtfully allocating our owner's capital to deliver value both to our customers and for our owners. We are singularly focused on executing our strategy and winning in the market. And with that, let me turn it back to Gary.

We remain very focused on our strategy and continue to deliver the world's best high-speed connectivity. That really underpins today's AI driven environment.

With that. We'll now take questions from the sell side analysts. Thank you.

Speaker #2: In fiscal 26, we expect to repurchase approximately 330 million in shares under our 2024 stock repurchase authorization plan. Finally, with respect to Q1 guidance, we expect to deliver revenue in the range of 1.35 to 1.43 billion dollars adjusted gross margin between 43 and 44% and adjusted operating expenses of approximately 380 million dollars yielding an operating margin of 15 and a half to 16 and a half percent.

Finally, with respect to Q1 guidance, we expect to deliver revenue in the range of $1.35 to 1.43 billion, adjusted gross margin between 43% and 44%, and adjusted operating expenses of approximately $380 million, yielding an operating margin of 15.5% to 16.5%. To conclude, Ciena had a strong 2025, and we are looking to an even stronger 2026. We are thoughtfully allocating our owner's capital to deliver value both to our customers and for our owners. We are singularly focused on executing our strategy and winning in the market. And with that, let me turn it back to Gary.

We will now begin the question and answer session to ask a question. You may press star then 1 on your telephone keypad. If you're using a speaker-phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question please. Press star. Then 2 again, please limit yourself to 1 question and 1 follow-up.

At this time, we will pause momentarily to assemble our roster.

The first question comes from Reuben. Roy with stifel, please go ahead.

Speaker #2: To conclude, Ciena had a strong 2025, and we are looking to an even stronger 2026. We are thoughtfully allocating our owners' capital to deliver value both to our customers and for our owners.

Speaker #2: We are singularly focused on executing our strategy and winning in the market. And with that, let me turn it back to Gary. Thank you, Marc.

Thank you, and congratulations. Uh, Gary and Mark, uh, just great to see the progress here. Um, so the first question, um, Mark, um, when we think about the guidance, uh, and the raise Gary talked about, some of the new use cases and, um, more hyperscalers looking at either scale across or also discussions around decom with other hyperscalers, how much of that is in the new guidance versus

Speaker #2: And let me reiterate those comments. You know, we had an incredibly strong quarter in fiscal 2025, which we believe is a seminal one for Ciena.

Gary Smith: Thank you, Marc. And let me reiterate those comments. We had an incredibly strong quarter in fiscal 2025, which we believe is a seminal one for Ciena, and one that provides a remarkable springboard for continued growth. Our momentum continues to build. Our balance sheet has never been stronger, and industry dynamics have never been more positive for Ciena. We are executing well and have high confidence we will continue to do so. We remain very focused on our strategy and continue to deliver the world's best high-speed connectivity that really underpins today's AI-driven environment. With that, we'll now take questions from the sell-side analyst. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys.

just continued, you know, sort of growth across, um, you know, the existing relationships that you have and then the second question for Gary is just

Speaker #2: And one that provides a remarkable springboard for continued growth. Our momentum continues to build, our balance sheet has never been stronger, and industry dynamics have never been more positive for Ciena.

thinking about the new scale across opportunities, Gary you gave us some um,

We are executing well and have high confidence we will continue to do so. We remain very focused on our strategy and continue to deliver the world's best high-speed connectivity that really underpins today's AI-driven environment. With that, we'll now take questions from the sell-side analyst. Thank you.

Speaker #2: We are executing well and have high confidence we will continue to do so. We remain very focused on our strategy and continue to deliver the world's best high-speed connectivity.

Metrics around the first wins in terms of um either revenue or bandwidth and bandwidth measured in. Ted a bit, are the discussions that you're having in the winds with the new hyperscalers similar or, um, you know, if you could, maybe give us a little more detail on, on, on those. That would be great. Thank you.

Speaker #2: That really underpins today's AI-driven environment. With that, we'll now take questions from the sell-side analysts.

Speaker #2: Thank you. We will

Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Again, please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster. The first question comes from Ruben Roy with Stifel. Please go ahead.

Speaker #3: Now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys.

Yeah. Hi Ruben. Uh, this is Mark, uh, thank thanks for joining and in terms of how much of the new opportunities that Gary talked about her. And the guide, um, they they are, they are all in the guide, you know, if you think about the, uh, the in and around data center, which many of the wins that Gary talked about include,

Speaker #3: If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Again, please limit yourself to one question and one follow-up.

Gary Smith: If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Again, please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster. The first question comes from Ruben Roy with Stifel. Please go ahead. 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 DECOM 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.

You know, we're we're seeing, uh, nearly a tripling of the percent of revenue, from what we saw in 2025 of low single digits.

Speaker #3: At this time, we will pause momentarily to assemble our roster. The first question comes from Ruben Roy with Stifel. Please go

Speaker #3: ahead. Thank you.

To uh, you know, to the percent of Revenue that we have in 2026 is Guy of low double digits. And so, you know, I I think we've we've captured a lot of that, obviously, we're continuing to work to to satisfy all that demand. Um, but but you've seen it, it's, it's all included in their sure answer.

Speaker #4: And congratulations, Gary and Marc. It's 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 discussions around DECOM.

[Analyst 1]: 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 DECOM 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?

Speaker #4: With other either scale across or also hyperscalers, how much of that is in the new guidance versus just continued sort of growth across the existing relationships that you have?

Speaker #4: 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 petabits.

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 hyperscalers similar, or if you could maybe give us a little more detail on those, that'd be great. Thank you.

Gary Smith: 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 hyperscalers similar, or if you could maybe give us a little more detail on those, that'd be great. Thank you. Yeah. Hi, Ruben. This is Marc. Thanks for joining. In terms of how much of the new opportunities that Gary talked about are in the guide, they are all in the guide. If you think about the in and around data center, which many of the wins that Gary talked about include, we're seeing nearly a tripling of the percent of revenue from what we saw in 2025 of low single digits to the percent of revenue that we have in 2026's guide of low double digits.

Speaker #4: Are the discussions that you're having in the wins with the new hyperscalers similar? If you could maybe give us a little more detail on those, that'd be great.

Speaker #4: Thank you.

Marc Graff: Yeah. Hi, Ruben. This is Marc. Thanks for joining. In terms of how much of the new opportunities that Gary talked about are in the guide, they are all in the guide. If you think about the in and around data center, which many of the wins that Gary talked about include, we're seeing nearly a tripling of the percent of revenue from what we saw in 2025 of low single digits to the percent of revenue that we have in 2026's guide of low double digits. And so I think we've captured a lot of that. Obviously, we're continuing to work to satisfy all that demand, but it's all included in there. Short answer.

Speaker #5: Yeah, hi Ruben. This is Marc. Thanks for joining. In terms of how much of the new opportunities that Gary talked about are in the guide, they are all in the guide.

So, what we're seeing with the, the initial hyperscaler is, obviously just expanding the amount of of sites and that will happen, you know, over multiple years, you know, we've had 2 other hyperscalers, now adopt our architecture. So we've got 3 out of the, the 4 hyperscalers of selected us for their, uh, scalar cross. Um, training models in terms of, you know, how quantifying, how much they are, they're clearly, you know, hundreds of millions each, um, but they are different in terms of their uh, scale uh, at this stage but really, that's just, you know, we're just beginning to see.

Speaker #5: You know, if you think about the in and around data center, which many of the wins that Gary talked about seeing include, you know, we're nearly a tripling of the percent of revenue from what we saw in 2025 of low single digits to the percent of revenue that we have in 2026's guide of low double digits.

The traffic come out of the data center for training around these Regional backbones or clusters. We're just beginning to see that and I don't think that, you know, there's going to be a, a cookie style sort of, you know, quantification of the of of, of the, of the traffic at this point.

Makes sense. Thanks Gary.

Thank you, connect the next question comes from Simon Leupold with Raymond James, please go ahead.

Speaker #5: And so, you know, I think we've captured a lot of that. Obviously, we're continuing to work to satisfy all that demand. But you've seen it's all included in there. Short answer.

Gary Smith: And so I think we've captured a lot of that. Obviously, we're continuing to work to satisfy all that demand, but it's all included in there. Short answer. Ruben, to the second question around the sort of models around the across piece, first of all, I'd say there are obviously all of these hyperscalers are not sort of homogeneous around their business models, and therefore their network requirements reflect that. So they are different, notwithstanding they all need to train. So what we're seeing with the initial hyperscaler is obviously just expanding the amount of sites, and that will happen over multiple years. We've had two other hyperscalers now adopt our architecture. So we've got three out of the four hyperscalers have selected us for their scale-across training models.

Gary Smith: Ruben, to the second question around the sort of models around the across piece, first of all, I'd say there are obviously all of these hyperscalers are not sort of homogeneous around their business models, and therefore their network requirements reflect that. So they are different, notwithstanding they all need to train. So what we're seeing with the initial hyperscaler is obviously just expanding the amount of sites, and that will happen over multiple years. We've had two other hyperscalers now adopt our architecture. So we've got three out of the four hyperscalers have selected us for their scale-across training models.

Speaker #2: Ruben, to the second question around the sort of models around the across piece, you know, first of all, I'd say, you know, there obviously all of these hyperscalers are not sort of homogeneous around their business models, and therefore their network requirements reflect that.

Great, thanks. Thanks for taking the question. Yeah, I I wanted to to maybe expand a bit on, on the scale, across Outlook. Um, in particular so you you've gotten these 2 additionals. That's, um, certainly earlier than we were expecting. Uh, I want to see if you can give us maybe a timeline of when you would expect those, uh, 2

other hyperscalers to really kick into the to the numbers, how imminent that is and then

Speaker #2: So, they are different. Notwithstanding, they all need to train. So, what we're seeing with the initial hyperscaler is obviously just expanding the number of sites.

Speaker #2: And that will be years. You know, we've had two other hyperscalers now happen, you know, over multiple adopt our architecture. So we've got three out of the four there at scale across training models.

Speaker #2: In terms of, you know, how quantifying how much they hyperscalers of selected us for are, they're clearly, you know, hundreds of millions each. But they are different in terms of their scale at this stage.

Gary Smith: In terms of quantifying how much they are, they're clearly hundreds of millions each, but they are different in terms of their scale at this stage. But really, we're just beginning to see the traffic come out of the data center for training around these regional backbones or clusters. We're just beginning to see that. And I don't think there's going to be a cookie-style sort of quantification of the traffic at this point. Yep. Makes sense. Thanks, Gary. Thank you. The next question comes from Simon Leopold with Raymond James. Please go ahead. Great. Thanks for taking the question. Yeah. I wanted to maybe expand a bit on the scale-across outlook in particular. So you've gotten these two additionals that's certainly earlier than we were expecting.

In terms of quantifying how much they are, they're clearly hundreds of millions each, but they are different in terms of their scale at this stage. But really, we're just beginning to see the traffic come out of the data center for training around these regional backbones or clusters. We're just beginning to see that. And I don't think there's going to be a cookie-style sort of quantification of the traffic at this point.

Maybe you could talk about sort of a longer term, Cadence of, of scale across activity, because I think when you first disclosed it, you talked about the initial customer, perhaps, having opportunities of, you know, 80 or 9, kind of projects. So now that we see additional hyperscalers, uh, entering the frey. How, how would you look at it more? Broadly over the the multi-year number of projects. That's customer. That's question number. 1, question, number 2 is hopefully, the, the easiest 1 you'll get today. But uh, if you could just um break up the, the 10% uh disclosures you said, 2 2 cloud and and an operator, if you can give us the details that'll uh ultimately be in your SEC filings. But if we could break that down, I'd appreciate it. Thank you.

Speaker #2: But really, that's just, you know, we're just beginning to see the traffic come out of the data center for training around these regional backbones or clusters.

Speaker #2: We're just beginning to see that. And I don't think, you know, there's going to be a cookie-cutter sort of, you know, quantification of the traffic at this point.

So I'm going to, let me, let me take the first part of that, um, you know, in summary, I would expect us to take revenue for all 3 of these hyperscalers, in, in 26, or begin to take. Take take Revenue in 26. I think the large part of this, you know, is going to be scaling up in, in 27 and, and, and through 28

[Analyst 1]: Yep. Makes sense. Thanks, Gary.

Speaker #4: Yeah, makes sense. Thanks,

Speaker #4: Gary. Thank

Gary Smith: Thank you.

Operator: The next question comes from Simon Leopold with Raymond James. Please go ahead.

Speaker #3: The next question comes

Speaker #3: Raymond James. Please go ahead.

Speaker #6: Great, thanks. you. Thanks for taking the question. Yeah, 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, then maybe you could talk about sort of a longer-term cadence of scale across activity.

[Analyst 2]: Great. Thanks for taking the question. Yeah. I wanted to maybe expand a bit on the scale-across outlook in particular. So you've gotten these two additionals that's 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.

Gary Smith: 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 multi-year 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'll ultimately be in your SEC filings. But if we could break that down, I'd appreciate it.

I mean these are, you know, enormous amounts of scale um and commitments around massive amounts of fiber uh between these between these data centers, which takes time from an infrastructure point of view. I believe we'll take revenue on all 3 during the course of of this year. But I mean, I really see the ramp on this as we get to 27 and, and through 28, I mean, this is going to be the backbone for these training models. I would also say at this stage,

It is all uh uh us Centric around uh the the training models as well.

Speaker #6: How imminent that is. And because I think when you first disclosed it, you talked about the initial customer and perhaps having opportunities in eight or nine kind of projects.

Yeah so Simon let me let me hit your uh second second question. Um yeah. The the the 3 plus 10% customers that we had in Q4

Speaker #6: So now that we see additional hyperscalers, entering the fray, how would you look at it more broadly over the multi-year number of projects? That's customer, that's question number one.

So now that we see additional hyperscalers entering the fray, how would you look at it more broadly over the multi-year 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'll ultimately be in your SEC filings. But if we could break that down, I'd appreciate it. Thank you.

What 1 was AT&T you? You'll see that in the cave. The other 2 were not being specific on on who they were but collectively for Q4 those 3.

Speaker #6: Question number two is hopefully the easiest one you'll get today. If you could just break up the 10% disclosures you said to cloud and an operator, if you can give us the detail, that'll ultimately be in your SEC filings.

Coverage just under 44% of q4's Revenue. And then for the full year, uh it was 1 cloud provider, and a 1, uh, service provider that collectively. And and it was the AT&T is the service provider collectively for the year they covered about 28% of our Revenue.

Speaker #6: But if we could break that down, I’d appreciate it. Thank you.

Yeah, can you give us that split? So, um, what each 1 was within that 44% in the quarter?

Speaker #6: You, Simon, let me take the...

Gary Smith: Thank you. Simon, let me take the first part of that. In summary, I would expect us to take revenue for all three of these hyperscalers in 2026 or begin to take revenue in 2026. I think the large part of this is going to be scaling up in 2027 and through 2028. I mean, these are enormous amounts of scale and commitments around massive amounts of fiber between these data centers, which takes time from an infrastructure point of view. I believe we'll take revenue on all three during the course of this year. But Simon, I really see the ramp on this as we get to 2027 and through 2028. I mean, this is going to be the backbone for these training models. I would also say at this stage, it is all US-centric around the training models as well. Yeah.

Gary Smith: Simon, let me take the first part of that. In summary, I would expect us to take revenue for all three of these hyperscalers in 2026 or begin to take revenue in 2026. I think the large part of this is going to be scaling up in 2027 and through 2028. I mean, these are enormous amounts of scale and commitments around massive amounts of fiber between these data centers, which takes time from an infrastructure point of view.

Speaker #2: first part of that. You know, in summary, I would expect us to take revenue for all three of these hyperscalers in 26 or begin to take revenue in 26.

Uh yeah, I'll have to get back to you Simon. Um,

I I I don't have that specific in front of me.

Thank you.

Speaker #2: I think the large part of this is going to be scaling up in 27 and through 28. I mean, these are enormous amounts of scale and commitments around massive amounts of fiber between these data centers.

The next question comes from octiv. Malik with City, please go ahead.

Hi. Thank you for taking my questions and great job by the team. Uh, first 1 for Gary Gary, a newbie uh in September, you talked about in the second half of 26 and early. 27 adoption for CPO NPO type routers, are you seeing an acceleration over there?

Speaker #2: Of view. I believe we'll take revenue on all three during the course of this year, which takes time from an infrastructure point. But Simon, I really see the ramp on this as we get to '27 and through '28.

I believe we'll take revenue on all three during the course of this year. But Simon, I really see the ramp on this as we get to 2027 and through 2028. I mean, this is going to be the backbone for these training models. I would also say at this stage, it is all US-centric around the training models as well.

Speaker #2: I mean, this is going to be the backbone for these training models. I would also say at this stage, it is all US-centric around the training models as

Waiting for first GA product. Uh, but we have a lot of Market engagement, uh, you know, even prior to our acquisition with them. I would say, you know, the teeth that what we've seen since

Speaker #2: well.

Marc Graff: Yeah. So Simon, let me hit your second question. The three plus 10% customers that we had in Q4, one was AT&T. You'll see that in the K. The other two were not being specific on who they were. But collectively for Q4, those three covered just under 44% of Q4's revenue. And then for the full year, it was one cloud provider and one service provider that collectively—and it was AT&T as the service provider—collectively for the year, they covered about 28% of our revenue.

Speaker #3: Yeah, so

Speaker #3: Simon, let me hit your second question. You know, the three plus 10% customers that we had in Q4, one was AT&T. You'll see that in the K.

Gary Smith: So Simon, let me hit your second question. The three plus 10% customers that we had in Q4, one was AT&T. You'll see that in the K. The other two were not being specific on who they were. But collectively for Q4, those three covered just under 44% of Q4's revenue. And then for the full year, it was one cloud provider and one service provider that collectively—and it was AT&T as the service provider—collectively for the year, they covered about 28% of our revenue. Yeah. Can you give us that split? So what each one was within that 44% in the quarter? Yeah. I'll have to get back to you, Simon. I don't have that specific in front of me. Thank you. The next question comes from Atif Malik with Citi. Please go ahead. Hi. Thank you for taking my questions and great job by the team.

Speaker #3: The other two were not being specific on who they were, but collectively for Q4, those three covered just under 44% of Q4's revenue. And then for was one cloud provider and one service provider that collectively and it was AT&T as the service provider, collectively for the year, they covered about 28% of our the full year, it

You know, and this is early days, we only did the acquisition last quarter, but, you know, I think we've seen sort of accelerated interest now that, you know, they're part of, you know, a broader uh a broader company Scott. Do you want to? Yeah, just um, just to remind you there there sort of at a high level, 2 product families within within nubes uh portfolio 1 is uh a linear retimer. That is a very effective in terms of extending the life of active copper cable.

And we see that as a, you know, a an opportunity that will start in 26.

Speaker #3: revenue. Yeah, can you give us that split?

[Analyst 2]: Yeah. Can you give us that split? So what each one was within that 44% in the quarter?

Speaker #6: So what each one was within that 44% in the quarter?

Um, the the optical part of the portfolio, the second part of the portfolio, we see more as a 27 and Beyond opportunity. But as Gary said, we're we're getting great feedback from customers, uh, on a bunch of different dimensions. First of all, the sort of open, open ecosystem approach to CPO.

Marc Graff: Yeah. I'll have to get back to you, Simon. I don't have that specific in front of me.

Secondly, just the caliber of the team.

Speaker #3: You know, Simon, I don't have that specific information in front of me. Yeah, I'll have to get back to you.

[Analyst 2]: Thank you.

Speaker #6: Thank me. you.

Operator: The next question comes from Atif Malik with Citi. Please go ahead.

Speaker #3: The next question comes from Atif Malik with CITI. Please go ahead.

Uh, and then I'd say the more more, an internal reaction and we, you know, 1 of the big things, uh, 1 of the big filters. As we looked at this company was, did we think they were a good cultural fit? And I'd say, 90 days in, we're absolutely thrilled with that.

Speaker #3: Ahead. Hi, thank you for taking my questions.

[Analyst 3]: Hi. Thank you for taking my questions and great job by the team. First one for Gary. Gary and Nubis, in September, you talked about in the second half of 2026 and early 2027 adoption for CPO and PO-type products. Are you seeing an acceleration over there?

Speaker #7: great job. By the team first one for Gary. Gary on newbies. In September, you talked about in the second half of 26 and early 27 adoption for CPO, NPO type products.

Gary Smith: First one for Gary. Gary and Nubis, in September, you talked about in the second half of 2026 and early 2027 adoption for CPO and PO-type products. Are you seeing an acceleration over there? I would say that, yeah, we're engaged with multiple opportunities with them. Obviously, we're waiting for first GA product, but we have a lot of market engagement even prior to our acquisition with them. I would say, Atif, that what we've seen since, and this is early days, we only did the acquisition last quarter. But I think we've seen sort of accelerated interest now that they're part of a broader company. Scott, do you want to? Yeah. Just to remind you, they're sort of at a high level two product families within Nubis' portfolio. One is a linear retimer that is very effective in terms of extending the life of active copper cable.

Great, uh, and that's my follow-up. Mark, and nice debut on Gross margins and keeping Opex discipline. You have talked about advantages from bringing lasers in house. Wondering, what else is driving sustainable outlook for operating margins of 17%

Speaker #7: Are you seeing an acceleration over?

Speaker #7: there?

Gary Smith: I would say that, yeah, we're engaged with multiple opportunities with them. Obviously, we're waiting for first GA product, but we have a lot of market engagement even prior to our acquisition with them. I would say, Atif, that what we've seen since, and this is early days, we only did the acquisition last quarter. But I think we've seen sort of accelerated interest now that they're part of a broader company. Scott, do you want to?

Speaker #2: I would say that, yeah,

yeah, so there's there's a couple of things that I, that I would say, you know, the first is

Speaker #2: we're engaged with multiple opportunities with them. Obviously, we're waiting for first GA product but we have a lot of market engagement. You know, even prior to our acquisition with them, I would say, you know, Atif, that what we've seen since you know, and this is early days, we only did the acquisition last quarter.

1, 1 of the big things that we're working on in the first half of the year is ramping, our 800 gig pluggables

Speaker #2: But you know, I think we've seen sort of accelerated interest now that, you know, they're part of a broader

Speaker #2: company. Scott, do you want to?

Speaker #8: Yeah,

Scott McFeely: Yeah. Just to remind you, they're sort of at a high level two product families within Nubis' portfolio. One is a linear retimer that is very effective in terms of extending the life of active copper cable. We see that as an opportunity that will start in 2026. The optical part of the portfolio, the second part of the portfolio, we see more as a 2027 and beyond opportunity. But as Gary said, we're getting great feedback from customers on a bunch of different dimensions.

Speaker #8: within the newbies of at a high level, two product families linear retimer that is portfolio. One is a very effective in terms of extending the life of active copper cable.

Speaker #8: And we see that as an opportunity that will start in 2026. The optical part of the portfolio, the second part of the portfolio, we see more as a 2027 and beyond opportunity.

Gary Smith: We see that as an opportunity that will start in 2026. The optical part of the portfolio, the second part of the portfolio, we see more as a 2027 and beyond opportunity. But as Gary said, we're getting great feedback from customers on a bunch of different dimensions. First of all, the sort of open ecosystem approach to CPO. Secondly, just the caliber of the team. And then I'd say more an internal reaction. And one of the big things, one of the big filters as we looked at this company was, did we think they were a good cultural fit? And I'd say 90 days in, we're absolutely thrilled with that. Great. And as my follow-up, Marc, a nice debut on gross margins and keeping OpEx discipline. You have talked about advantages from bringing lasers in-house. Wondering what else is driving sustainable outlook for operating margins of 17%?

And so as we ramp that, you know, you basically get yield economics, which will lower the unit costs over time and we expect that, you know, as we go through Q2 Q3 Q4, we'll see significantly lower cost than we're seeing at the beginning of year. So, that, that would be the, the first aspect that I would say. The second aspect is, you know, the conversations that we've had with a lot of our customers have yielded, you know, good results. And so, um, once we get through the backlog, that we're entering, entering the year with a lot of those new orders. We'll start to see the benefits of those pricing discussions. And so, we would exit, you know, the the year at a, at a higher entry rate, higher exit rate than we feel that we'll see in in first half of the year,

Thank you.

Speaker #8: But as Gary said, we're getting great feedback from customers on a bunch of different dimensions. First of all, the sort of open ecosystem approach to CPO, secondly, just the caliber of the team.

The next question comes from George daughter. With wolf research. Please go ahead.

First of all, the sort of open ecosystem approach to CPO. Secondly, just the caliber of the team. And then I'd say more an internal reaction. And one of the big things, one of the big filters as we looked at this company was, did we think they were a good cultural fit? And I'd say 90 days in, we're absolutely thrilled with that.

Speaker #8: And then I'd say more an internal reaction and one of the big things one of the big filters as we looked at this company was did we think they were a good cultural fit?

Speaker #8: And I'd say 90 days in, we're absolutely thrilled with.

[Analyst 3]: Great. And as my follow-up, Marc, a nice debut on gross margins and keeping OpEx discipline. You have talked about advantages from bringing lasers in-house. Wondering what else is driving sustainable outlook for operating margins of 17%?

Speaker #7: Great. And as a

Hey guys, thanks very much. Um, it it seems like, uh, 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? Um, just curious. Like what do you see as the supply constraints and the business is it? Um, you know, is it uh, is it fabbing chips? Is it, uh, contract, manufacturing like anything. You can tell us on, you know what, those bottlenecks are and what you're doing to open those up. Would be great. Thanks a lot.

Speaker #7: Follow-up, Mark. A nice debut on that. Gross margins and keeping OPEX discipline. You have talked about in-house. Wondering what else are the advantages from bringing lasers driving a sustainable outlook for operating margins of 17%?

Speaker #3: Yeah, so there's a couple of things that I would say. You know, the first is one of the big things that we're working on in the first half of the year is ramping our 800G pluggables.

Gary Smith: Yeah. So there's a couple of things that I would say. The first is one of the big things that we're working on in the first half of the year is ramping our 800-gig pluggables. And so as we ramp that, you basically get yield economics, which will lower the unit costs over time. And we expect that as we go through Q2, Q3, Q4, we'll see significantly lower costs than we're seeing at the beginning of the year. So that would be the first aspect that I would say. The second aspect is the conversations that we've had with a lot of our customers have yielded good results. And so once we get through the backlog that we're entering the year with, a lot of those new orders will start to see the benefits of those pricing discussions.

Marc Graff: Yeah. So there's a couple of things that I would say. The first is one of the big things that we're working on in the first half of the year is ramping our 800-gig pluggables. And so as we ramp that, you basically get yield economics, which will lower the unit costs over time. And we expect that as we go through Q2, Q3, Q4, we'll see significantly lower costs than we're seeing at the beginning of the year. So that would be the first aspect that I would say.

Speaker #3: And so as we ramp that, you know, you basically get yield economics, which will lower the unit costs over time. And we expect that, you know, as we go through Q2, Q3, Q4, we'll see significantly lower costs than we're seeing at the beginning of the year.

Speaker #3: So that would be the first aspect that I would say. The second aspect is, you know, the conversations that we've had with a lot of our customers have yielded good results.

The second aspect is the conversations that we've had with a lot of our customers have yielded good results. And so once we get through the backlog that we're entering the year with, a lot of those new orders will start to see the benefits of those pricing discussions. And so we would exit the year at a higher exit rate than we feel that we'll see in the first half of the year.

Yeah, hey George, it's Mark. I'll, I'll start and then hand it over to to Gary and Scott for more color. Um, so a couple of things you you heard me talk about, you know, a a, a pretty nice increase in our capex gear on the year and within that there's about a 50% increase in what we're doing to ensure that we could have, um, more capacity to support what will really be end of year and into 2027 demand. Um, but what, but what we're seeing is, uh, really a constraint on the photonics parts. Right? And and and and I would say Optical Parts in general. Um, and we've, we've worked really closely with our key suppliers and I know, you know who those are, um, to make sure that we can secure our supply and, and the Investments that we've made in 2025 actually yielded

Speaker #3: And so, once we get through the backlog that we're entering the year with, a lot of those new orders will start to see the benefits of those pricing discussions.

Speaker #3: And so we would exit, you know, the year at a higher entry exit rate than we feel that we'll see in the first half of the

Gary Smith: And so we would exit the year at a higher exit rate than we feel that we'll see in the first half of the year. Thank you. The next question comes from George Notter with Wolfe Research. Please go ahead. Hey, guys. 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, what do you see as the supply constraints in the business? Is it fabbing chips? Is it contract manufacturing? Anything you can tell us on what those bottlenecks are and what you're doing to open those up would be great. Next slide. Yeah. Hey, George. It's Marc. I'll start and then hand it over to Gary and Scott for more color. So a couple of things.

Speaker #3: year. Thank

[Analyst 3]: Thank you.

Speaker #7: you.

Operator: The next question comes from George Notter with Wolfe Research. Please go ahead.

Speaker #3: The next question comes from George Nutter with Wolf Research. Please go

A doubling of the growth rate from what we expected a year ago, right? And so between that the level of vertical, integration that we've got um, in just what we control as well as the Investments that we're making in 2027. We're trying to support as much of that Revenue as as we possibly can through, you know, 26 and into 27 and Mark. I, I, I'd add to that in terms of the constraints you talked about in terms of the industry Optical component.

Speaker #3: ahead. Hey guys,

[Analyst 4]: Hey, guys. 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, what do you see as the supply constraints in the business? Is it fabbing chips? Is it contract manufacturing? Anything you can tell us on what those bottlenecks are and what you're doing to open those up would be great. Next slide.

Speaker #7: 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?

Speaker #7: Just curious, what do you see as the supply constraints in the business? Is it, you know, is it fabbing chips? Is it contract manufacturing?

Sub-segment. If you like um, an advantage that we have is a couple of advantages that we have. I think relative to other peers, number 1 is we have a very tight relationship with the cloud providers. You know, we have, um, you know, the market share leadership there and you know, a great set of relationships. So,

Speaker #7: Like anything you can tell us on, you know, what those bottlenecks are and what you're doing to open those up would be great.

Speaker #7: Like anything you can tell us on, you know, what those bottlenecks are and what you're doing to open those up would be great. Thanks a lot.

Marc Graff: Yeah. Hey, George. It's Marc. I'll start and then hand it over to Gary and Scott for more color. So a couple of things. You heard me talk about a pretty nice increase in our CapEx year on year. Within that, there's about a 50% increase in what we're doing to ensure that we could have more capacity to support what will really be end-of-year and into 2027 demand. But what we're seeing is really a constraint on the photonics parts, right? I would say optical parts in general.

Speaker #6: things. You heard me talk about, you know, a pretty nice increase in our CAPEX year on year. And within that, there's about a 50% increase in what we're doing to ensure that we could have more capacity to support what will really be end of year and into 2027 demand.

Gary Smith: You heard me talk about a pretty nice increase in our CapEx year on year. Within that, there's about a 50% increase in what we're doing to ensure that we could have more capacity to support what will really be end-of-year and into 2027 demand. But what we're seeing is really a constraint on the photonics parts, right? I would say optical parts in general. We've worked really closely with our key suppliers, and I know you know who those are, to make sure that we can secure supply. The investments that we've made in 2025 actually yielded a doubling of the growth rate from what we expected a year ago, right?

What everybody expected. I think we had the earliest view of that in the industry and therefore, you know, our our conversations with those industry, components, suppliers started earlier than everybody else. So that gave us that gave us a benefit. The other thing is, is we've talked about in the past and we're more vertically integrated than anybody else. So, to some degree, we we do have a little bit more control over our own destiny and, and

Speaker #6: But what we're seeing is really a constraint on the photonics parts, right? And I would say optical parts in general. And we've worked really closely with our key suppliers, and I know you know who those are, to make sure that we can secure supply.

You know, part of the reason why in the last 90 days, we've been able to take 2026 out. Is the, is the activity that we did in 25. That allowed us to double our growth perspective in 25 to 26. So, we're getting more confident in our ability to deliver to that demand as well.

We've worked really closely with our key suppliers, and I know you know who those are, to make sure that we can secure supply. The investments that we've made in 2025 actually yielded a doubling of the growth rate from what we expected a year ago, right? And so between that, the level of vertical integration that we've got in just what we control, as well as the investments that we're making in 2027, we're trying to support as much of that revenue as we possibly can through 2026 and into 2027.

1. Last 1, uh, what our lead times right now? Um, any any sense for kind of what Blended or average lead times would look like for you guys. Thanks.

Speaker #6: And the investments that we've made in 2025 actually yielded a doubling of the growth rate from what we expected a year ago. Right? And so, between that, the level of vertical integration that we've got in just what we're making in 2027, we're in control, as well as the investments that we're trying to support as much of that revenue as we possibly can through, you know, 2026 and into 2027.

Gary Smith: And so between that, the level of vertical integration that we've got in just what we control, as well as the investments that we're making in 2027, we're trying to support as much of that revenue as we possibly can through 2026 and into 2027. And Marc, I'd add to that in terms of the constraints you talked about in terms of the industry optical component subsegment, if you like. An advantage that we have. There's a couple of advantages that we have, I think, relative to other peers. Number one is we have a very tight relationship with the cloud providers. We have the market share leadership there and a great set of relationships. So even though the demand outstripped what everybody expected, I think we had the earliest view of that in the industry. And therefore, our conversations with those industry component suppliers started earlier than everybody else.

This is Gary. It it really varies by specific product product, product areas, I mean, it's they're all generally, you know, in the, in the optical infrastructure base. So sort of think scale across RLS, they, they have extended out but it depends on the, uh, the product grouping. Um, you know what we're working on within with as as as Mark and Scott said, you know, we're confident you look at the midpoint of that guide.

Speaker #8: And And Mark, I'd add to that in terms of the constraints you talked about in terms of the industry optical component subsegment, I feel like.

Scott McFeely: And Marc, I'd add to that in terms of the constraints you talked about in terms of the industry optical component subsegment, if you like. An advantage that we have. There's a couple of advantages that we have, I think, relative to other peers. Number one is we have a very tight relationship with the cloud providers. We have the market share leadership there and a great set of relationships. So even though the demand outstripped what everybody expected, I think we had the earliest view of that in the industry. And therefore, our conversations with those industry component suppliers started earlier than everybody else.

Speaker #8: An advantage that we have is a couple of advantages that we have, I think, relative to other peers. Number one is we have a very tight relationship with the cloud providers.

Speaker #8: You know, we have the market share leadership there. And you know, a great set of relationships. So even though the demand outstripped what everybody expected, I think we had the earliest view of that in the industry and therefore, you know, our conversations with those industry component suppliers started earlier than everybody else.

Um, you know, which is what 24% growth for this year. So, that's the work of Scott said we did. We did kind of last year to increase capacity and component Supply. Uh, we're now working on towards the end of 26 and 27 and making sure that we're you know we're in a we're in a good position from that point of view. So hopefully by the time we get to, you know, the end of the year and we get to 27, um, you know, lead times can come down a little but, you know, we're we're seeing increased in demand including order flows in q1 uh being strong as well.

Thank you.

The next question comes from tall leani with Bank of America. Please go ahead.

Speaker #8: So that gave us a benefit. The other thing is, as we've talked about in the past, you know, we're more vertically we do have a little bit more control over our own destiny.

Gary Smith: So that gave us a benefit. The other thing is, as we've talked about in the past, we're more vertically integrated than anybody else. So to some degree, we do have a little bit more control over our own destiny. And part of the reason why, in the last 90 days, we've been able to take 2026 out is the activity that we did in 2025 that allowed us to double our growth perspective in 2025 is carrying over into 2026. So we're getting more confident in our ability to deliver to that demand as well. 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? Thanks. This is Gary. It really varies by specific product areas. I mean, they're all generally in the optical infrastructure base.

So that gave us a benefit. The other thing is, as we've talked about in the past, we're more vertically integrated than anybody else. So to some degree, we do have a little bit more control over our own destiny. And part of the reason why, in the last 90 days, we've been able to take 2026 out is the activity that we did in 2025 that allowed us to double our growth perspective in 2025 is carrying over into 2026. So we're getting more confident in our ability to deliver to that demand as well.

Hi.

Um,

Speaker #8: And you know, part of the reason why in the last 90 days we've been able to take 2026 out is the activity that we did in '25 that integrated than anybody else.

I have 3 questions. Um, the first 1 is historical perspective, you guided before to 8% growth. And that's you, you increase it multiple times and now you're guiding for 30% growth for next quarter. That's a massive change.

[Analyst 4]: 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? Thanks.

Speaker #7: one. What are lead times right

Gary Smith: This is Gary. It really varies by specific product areas. I mean, they're all generally in the optical infrastructure base. So sort of think Scale-across or RLS. They have extended out, but it depends on the product grouping. What we're working on within, as Marc and Scott said, we're confident. You look at the midpoint of our guide, which is what? 24% growth for this year.

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 4, or 5, quarters that drove up the growth, so much better than expectations.

Speaker #1: know what we're working on within as as as Mark and Scott said , you know , we're confident . You look at the midpoint of our guide

Gary Smith: So sort of think Scale-across or RLS. They have extended out, but it depends on the product grouping. What we're working on within, as Marc and Scott said, we're confident. You look at the midpoint of our guide, which is what? 24% growth for this year. So that's the work, as Scott said, we did kind of last year to increase capacity and component supply. We're now working on towards the end of 2026 and 2027 and making sure that we're in a good position from that point of view. So hopefully, by the time we get to the end of the year and we get to 2027, lead times can come down a little. But we're seeing increase in demand, including order flows in Q1 being strong as well. Thank you. Thanks, George. The next question comes from Tal Liani with Bank of America. Please go ahead. Hi.

And you spoke a little bit about customer concentration, but what kind what happened? That enabled, this kind of growth. Um, maybe I'll stop here and then I'll ask my other questions after because they're more on the margin side.

So that's the work, as Scott said, we did kind of last year to increase capacity and component supply. We're now working on towards the end of 2026 and 2027 and making sure that we're in a good position from that point of view. So hopefully, by the time we get to the end of the year and we get to 2027, lead times can come down a little. But we're seeing increase in demand, including order flows in Q1 being strong as well.

Yeah. Hey Todd. It's Mark. Um, I I'll start and and Gary can add in here. Um I I I think there's really a couple of Dynamics that's going on 1 1 s.

And they followed that demand up with.

Pretty significant orders. Right? So, I mean, you heard Gary talked about, you know, we we achieved 7.8 billion dollars of orders, uh, you know, over 2025 as we look at what we're seeing in uh in q1.

[Analyst 4]: Thank you.

Gary Smith: Thanks, George.

Operator: The next question comes from Tal Liani with Bank of America. Please go ahead. Hi.

We're we're we're essentially sold out right. If we had more Supply, we we'd be able to sell more. Um and and so we've got really good visibility of of what you know, the next several quarters look like just because we've we've got those those orders in place.

Gary Smith: I have three questions. The first one is historical perspective. You guided before to 8% growth. 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. 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 or five quarters that drove up the growth so much better than expectations? You spoke a little bit about customer concentration, but 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. Yeah. Hey, Tal. It's Marc. I'll start, and Gary can add in here.

[Analyst 5]: I have three questions. The first one is historical perspective. You guided before to 8% growth. 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. The question I'm asking myself is, do you have now good visibility going forward?

Speaker #2: can you take us through So to some degree, historical the perspective , meaning what happened over the last 4 or 5 quarters that drove up the growth so much than expectations well.

So can you take us through the historical perspective, meaning what happened over the last four or five quarters that drove up the growth so much better than expectations? You spoke a little bit about customer concentration, but 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.

Speaker #2: ? And you spoke a little bit about customer concentration , but what kind ? What enabled this happened that kind of ? Maybe I'll stop here and then I'll ask growth my other questions after , because there are side margin more on the .

Speaker #4: Hey , it's Mark Yeah . , I'll start Gary . can add in And here . I think there's really a couple of dynamics that's going on .

Marc Graff: Yeah. Hey, Tal. It's Marc. I'll start, and Gary can add in here. I think there's really a couple of dynamics that's going on. One is the close proximity that we have with our hyperscaler customers has really allowed us to get insight into what their demands are and how we plan for those demands. And they followed that demand up with pretty significant orders, right?

Speaker #4: One is the close proximity that we have with our customers Hyperscaler has really allowed us to get insight into what demands are and their how we for those plan demands .

Gary Smith: I think there's really a couple of dynamics that's going on. One is the close proximity that we have with our hyperscaler customers has really allowed us to get insight into what their demands are and how we plan for those demands. And they followed that demand up with pretty significant orders, right? So I mean, you heard Gary talk about we achieved $7.8 billion of orders over 2025. As we look at what we're seeing in Q1, we're essentially sold out, right? If we had more supply, we'd be able to sell more. And so we've got really good visibility of what the next several quarters look like just because we've got those orders in place.

Speaker #4: And they followed that up demand with pretty significant orders . Right ? So , I mean , you heard Gary talk about , you know , we achieved $7.8 billion of orders , you know , over 20 , 25 , as we look at what we're seeing in in Q1 , we're essentially out , sold right ?

So I mean, you heard Gary talk about we achieved $7.8 billion of orders over 2025. As we look at what we're seeing in Q1, we're essentially sold out, right? If we had more supply, we'd be able to sell more. And so we've got really good visibility of what the next several quarters look like just because we've got those orders in place.

Speaker #4: If we had more supply , we'd be able to sell more . And so we've got really good visibility of of what the next several quarters look like , just because we've we've got those those orders in place .

Beginning of of 25 as we're going to get through. It was a realization that their networks needed to be scaled massively and and now, if you think about the sort of hierarchy of flow around, Long poles in the tent and focus areas, obviously, there's been tremendous focus in in the context of AI infrastructure around. You know, uh gpus tpus and and getting access and scaling those up power within the data centers, Etc. I think you began to then see, you know, oh, the network,

Speaker #4: And then , you know , the last thing I'll say before Gary can chime in is through 2025 , I think our supply chain team has done quite a good job of squeezing every drop of blood from the stone can to that they drive that , to drive that revenue .

Gary Smith: And then the last thing I'll say before Gary can chime in is through 2025, I think our supply chain team has done quite a good job of squeezing every drop of blood from the stone that they can to drive that revenue. We invested in 2025. We're increasing that investment by about 50% through 2026. And we're seeing those annualization layers kind of help us drive higher revenue. That for the year, we expect a midpoint growth of 24%. I don't know, Gary, if you had something to add. Yeah. Tal, I would say sort of zooming out from this is sort of big picture. I think everything Marc said there, I think we've done a good job operationally of scaling it up quickly.

And then the last thing I'll say before Gary can chime in is through 2025, I think our supply chain team has done quite a good job of squeezing every drop of blood from the stone that they can to drive that revenue. We invested in 2025. We're increasing that investment by about 50% through 2026. And we're seeing those annualization layers kind of help us drive higher revenue. That for the year, we expect a midpoint growth of 24%. I don't know, Gary, if you had something to add.

And that coincided with, you know, the need for uh, backbone networks to train across multiple, uh, data centers and the increase, they were seeing in inference traffic. Um, you know, obviously this is Uncharted Territory for a, you know, a a forecasting of a of a, of a network perspective.

Speaker #4: Or invested , you know , investing . We 2025 , we're in increasing that investment by about 50% through 2026 . we're seeing those annualization layers And kind of help us drive higher revenue that , you expect year .

But I think they're now coming up to speed very quickly, that you know, it's now about the network as the gating item. And I think there was a real realization of that in the first part of of 25 and you're seeing that play through now. So that's the sort of context that I would offer on that. Yeah, until within that if you go back

Speaker #4: midpoint growth of 24% . We Gary , you .

Speaker #1: Yeah , I would say sort of zooming out from this , a sort of big picture . I , you know , everything , think Mark said .

Speaker #1: know , You we've I think we've done a good job of operationally scaling it up , scaling it up quickly . I would say that , you know , what's behind that , really , with the cloud guys just in general is that I think early in the year there , you know , at the beginning of of 25 , as we began to get through , it was a realization that their networks needed to be scaled massively .

You know, a year or 18 months, we we talked quite a bit about our belief system of, you know, Optics and particularly coherent Optics. Having a bigger and bigger role to play in the network in inside and around the data center.

Gary Smith: Yeah. Tal, I would say sort of zooming out from this is sort of big picture. I think everything Marc said there, I think we've done a good job operationally of scaling it up quickly. I would say that what's behind that really with the cloud guys, just in general, is that I think early in the year there, at the beginning of 2025, as we're going to get through it, was a realization that their networks needed to be scaled massively.

And what we weren't. Sure of though and we were overt about this, but we weren't sure if I was is the timing of when you see that inflection point,

what's happened in that period is with the scale across, network is you're seeing that inflection point.

Gary Smith: I would say that what's behind that really with the cloud guys, just in general, is that I think early in the year there, at the beginning of 2025, as we're going to get through it, was a realization that their networks needed to be scaled massively. If you think about the sort of hierarchy of flow around long poles in the tent and focus areas, obviously, there's been tremendous focus in the context of AI infrastructure around GPUs, TPUs, and getting access and scaling those up, power within the data centers, etc. I think you began to then see, oh, the network. That coincided with the need for backbone networks to train across multiple data centers and the increase they were seeing in inference traffic. Obviously, this is uncharted territory from a forecasting of a network perspective.

You know, new new use cases for coherent Optical uh, high-speed connectivity.

Got it.

Speaker #1: And if you think about the sort of hierarchy of flow around long poles in the tent and focus areas , obviously there's been tremendous focus the context in of AI infrastructure around , you know , GPUs , TPUs and getting access and scaling those up power within the data centers , etc.

Um, my second question is on margins in previous Cycles.

If you think about the sort of hierarchy of flow around long poles in the tent and focus areas, obviously, there's been tremendous focus in the context of AI infrastructure around GPUs, TPUs, and getting access and scaling those up, power within the data centers, etc. I think you began to then see, oh, the network. That coincided with the need for backbone networks to train across multiple data centers and the increase they were seeing in inference traffic. Obviously, this is uncharted territory from a forecasting of a network perspective.

Speaker #1: . I think you began to then see , you know , oh , network and that coincided with , you know , the need for backbone networks to train across multiple data centers .

Speaker #1: the And increase they were in seeing inference traffic . You know , obviously , this is uncharted territory from a , you know , a a of a of forecasting of network perspective .

Uh, your margins shot up all the way to even 49%, even over 50. If we go back a few years and Cycles, always uh, uh, headed direct impact on gross margin, like you always had a succulent margin as well this time because it's coming in pluggables because it's coming in Cloud, your margins are 43, your guiding to 43, 43 and a half. And the question is, is there a chance that the 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.

Speaker #1: But I think they're now coming up to speed very quickly that , you know , it's now about the network as the gating item .

Speaker #1: And I think there was a real realization of that in the first part of 25 . And you're seeing that play through now .

Gary Smith: But I think they're now coming up to speed very quickly that it's now about the network as the gating item. And I think there was a real realization of that in the first part of 2025, and you're seeing that play through now. So that's the sort of context that I would offer on that. Yeah. And Tal, within that, if you go back a year or 18 months, we talked quite a bit about our belief system of optics and particularly coherent optics having a bigger and bigger role to play in the network inside and around the data center. And what we weren't sure of, though, and we were overt about this, what we weren't sure of is the timing of when you see that inflection point.

But I think they're now coming up to speed very quickly that it's now about the network as the gating item. And I think there was a real realization of that in the first part of 2025, and you're seeing that play through now. So that's the sort of context that I would offer on that.

Speaker #1: So that's the sort of context that I would that offer on .

Speaker #5: And Tal , within that , if you back go , you know , a year or 18 months , we talked quite a bit about our belief system of , you know , optics and particularly coherent optics having a bigger and bigger role to play in the network in inside and around the data center .

Yeah, I I think how I would how I would respond to is you know, there's a couple of headwinds that we're seeing at least in the near term and and I've talked about the 800 gigs. So we're we're we're in an NPI phase of that product. So that's creating some headwinds that we expect to kind of normalize out through the end of the year.

Scott McFeely: Yeah. And Tal, within that, if you go back a year or 18 months, we talked quite a bit about our belief system of optics and particularly coherent optics having a bigger and bigger role to play in the network inside and around the data center. And what we weren't sure of, though, and we were overt about this, what we weren't sure of is the timing of when you see that inflection point. What's happened in that period is with the scale-across network is you're seeing that inflection point, new use cases for coherent optical high-speed connectivity.

The other piece is I think the customers are starting to see the value in what we're providing. Both in space savings, and power savings. And, and we're getting some, you know, some some benefit from that relative to, uh,

Speaker #5: And what we weren't sure of , and we though , were worried about this , but we weren't sure the timing of when you see that inflection point of is , what's happened in that period is with the scale across network seeing is you're that inflection point , you know , new use cases for coherent optical high speed connectivity .

The value that we're delivering. So, I think between those 2 things, we're, we're, we're seeing that. And, and my sense is that that's going to be

Gary Smith: What's happened in that period is with the scale-across network is you're seeing that inflection point, new use cases for coherent optical high-speed connectivity. 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. Cycles always had a direct impact on gross margin. 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 40%. You're guiding to 43%, 43 and a half. 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? Yeah.

Speaker #5: Got it .

Speaker #2: My second question is on margins in previous cycles , your margins shot up all the even way to 49% , even over 50 .

[Analyst 5]: 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. Cycles always had a direct impact on gross margin. 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 40%. You're guiding to 43%, 43 and a half. 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?

Speaker #2: If we go back a few years, cycles always had a direct impact on gross margin, like you always had a cycle on margin as well.

More sustainable than the cyclicality that we've seen in the past. Because we're really starting to talk about a foundation level of benefit that our customers are seeing. And you know, as Gary said they're realizing that they've underinvested in the network both on the cloud provider side, and and the service providers are catching up as well. And so I I I think we're going to see steady Improvement to what we've described previously, as our aspiration to get back to the mid-40s.

Speaker #2: This time , because it's coming in pluggable because it's coming in cloud . Your margins are 43 . Your guiding to 43 , 43.5 .

um, which at this point, we kind of view as a waypoint, not not the endgame,

Speaker #2: And the question is is there a chance that the margin will also have a margin will also have a cycle with revenues or what needs to happen for the gross margin to have a similar cycle to gross revenues

So I I think we're on a we're on a steady track you'll see sequential Improvement. We'll exit the year better than we will perform in the first half of the year but I'm pretty confident that we're going to see uh ongoing multi-year gross margin expansion.

Thanks, thank you.

Speaker #4: Yeah , think how

Speaker #4: I I would how I ? would Tal is respond , there's a couple of we're seeing , at least in the term , near and I've talked about gigs .

The next question comes from Sonic cheddy with JP Morgan. Please go ahead.

Marc Graff: Yeah. I think how I would respond, Tal, is there's a couple of headwinds that we're seeing, at least in the near term. I've talked about the 800 gigs. So we're in an NPI phase of that product. So that's creating some headwinds that we expect to kind of normalize out through the end of the year. The other piece is I think the customers are starting to see the value in what we're providing, both in space savings and power savings. And we're getting some benefit from that relative to the value that we're delivering.

Speaker #4: The $800 we're, we're. So, we're in an NPI phase of that product. That's creating some headwinds that we expect to kind of normalize out through the end of the year.

Gary Smith: I think how I would respond, Tal, is there's a couple of headwinds that we're seeing, at least in the near term. I've talked about the 800 gigs. So we're in an NPI phase of that product. So that's creating some headwinds that we expect to kind of normalize out through the end of the year. The other piece is I think the customers are starting to see the value in what we're providing, both in space savings and power savings. And we're getting some benefit from that relative to the value that we're delivering. So I think between those two things, we're seeing that. And my sense is that that's going to be more sustainable than the cyclicality that we've seen in the past because we're really starting to talk about a foundation level of benefit that our customers are seeing.

Speaker #4: piece is The other I think the customers see starting to the are we're providing . Both in space in what and power savings savings .

Speaker #4: And we're getting some , you know , some some benefit from that relative to the value that we're delivering . So I think between those two things , we're seeing that my and is that that's going to be more sustainable than the cyclicality that we've seen in the past , because we're really starting to talk about a foundation level of benefit that our customers are seeing .

So I think between those two things, we're seeing that. And my sense is that that's going to be more sustainable than the cyclicality that we've seen in the past because we're really starting to talk about a foundation level of benefit that our customers are seeing. As Gary said, they're realizing that they've underinvested in the network, both on the cloud provider side, and the service providers are catching up as well.

Speaker #4: And as Gary said , they're realizing that they've underinvested in the network both on the cloud side provider and the providers are catching up as well .

Speaker #4: And as Gary said , they're realizing that they've underinvested in the network both on the cloud side provider and the providers are service what we've described previously as our aspiration to get back to the mid 40s , which at this point , we kind of view as a waypoint , not not the end game .

Gary Smith: As Gary said, they're realizing that they've underinvested in the network, both on the cloud provider side, and the service providers are catching up as well. So I think we're going to see steady improvement to what we've described previously as our aspiration to get back to the mid-40s, which at this point, we kind of view as a waypoint, not the end game. I think we're on a steady track. You'll see sequential improvement. We'll exit the year better than we will perform in the first half of the year. But I'm pretty confident that we're going to see ongoing multi-year gross margin expansion. Thanks, all. Thank you. The next question comes from Samik Chatterjee with JPMorgan. Please go ahead. Hi. Thanks for taking my questions. Maybe for the first one, I had a question on Scale-across. And Gary, you mentioned the additional engagements with hyperscalers.

So I think we're going to see steady improvement to what we've described previously as our aspiration to get back to the mid-40s, which at this point, we kind of view as a waypoint, not the end game. I think we're on a steady track. You'll see sequential improvement. We'll exit the year better than we will perform in the first half of the year. But I'm pretty confident that we're going to see ongoing multi-year gross margin expansion.

Yeah, I I think largely at this stage the the training at scale across AI backbones is largely a purview of the lodge hyperscalers and I think the Neo scalars you know there's a couple of them that are using the back, you know, they're on the back of that from 1 of the better description. So I think it's this is largely right now. Given the given the frankly, the scale of it with the hyperscalers. Um, and you know, I I, I don't see that, you know, I think it's going to take a while for for, for that to bleed through into the in into into the into the new scalars, in terms of the deployment there, you know, as Mark said you know, it's it's going to be this combination of Next Generation line systems you know RLS.

Speaker #4: So I think a we're we're on on a steady sequential improvement . track . We'll exit the year than You'll see we will perform in the first half of the year .

Speaker #4: But I'm pretty confident that we're going to see ongoing multi-year gross margin expansion . Thanks .

Speaker #2: Thank .

Speaker #6: You .

Speaker #3: The question next comes from Summit Chatterjee with JP Morgan. Please go ahead.

[Analyst 5]: Thanks, all.

Marc Graff: Thank you.

Speaker #7: Hi . my Thanks for questions taking . Maybe for the first one , I had a question on scale across and Gary , you mentioned the additional engagements with hyperscalers .

Operator: The next question comes from Samik Chatterjee with JPMorgan. Please go ahead.

[Analyst 6]: Hi. Thanks for taking my questions. Maybe for the first one, I had a question on Scale-across. And Gary, you mentioned the additional engagements with hyperscalers. Are you seeing any engagements yet from the Neoscalers on that front, or would you expect most of that Neoscaler demand for scale-across to come through the hyperscalers itself? And can you help us think about margin implications for scale-across relative to there's a heavy mix of RLS systems as well as capacity? So how should we think about margin implications of scale-across ramping here relative to your corporate average? And I have a quick follow-up. Thank you.

Which is also, you know, fairly recent into market and also with the 800 gig plugs as well. So yes, in the early stages that sort of headwind from a margin point of view, which is why we're kind of guiding as we are. But as that get, you know, as those platforms, get more into volume, the yields improve, you know, the and and we get through that MPI, uh, phrase on both of those, then, you know, we'd have better margins as we, as we exit as we exit the year. And, of course you've also got, you know, the benefits of of just scale and and volume as well.

Speaker #7: Are you engagements seeing any yet from the neo clouds on that front , or would you expect most of that Cloud neo demand for scale across to come through the hyperscalers itself ?

Gary Smith: Are you seeing any engagements yet from the Neoscalers on that front, or would you expect most of that Neoscaler demand for scale-across to come through the hyperscalers itself? And can you help us think about margin implications for scale-across relative to there's a heavy mix of RLS systems as well as capacity? So how should we think about margin implications of scale-across ramping here relative to your corporate average? And I have a quick follow-up. Thank you. Yeah. I think largely at this stage, the training at scale across AI backbones is largely a purview of the large hyperscalers. And I think the Neoscalers, there's a couple of them that are using the bandwagon, they're on the bandwagon of that, for want of a better description. So I think this is largely right now, given the, frankly, the scale of it, with the hyperscalers. And I don't see that.

Speaker #7: And can you help us think about margin implications for scale across relative to, like, there's a heavy mix of fine systems as well as capacity.

Speaker #7: So how should we think about margin implications of scale across ramping here relative to your corporate average ? And I have a quick follow up .

Speaker #6: Thank you .

Speaker #1: Yeah , I think largely at this stage , the the at scale across backbones is largely a purview of the large hyperscalers . And I think the neo scalers , you know , there's a couple of are using the back .

Gary Smith: Yeah. I think largely at this stage, the training at scale across AI backbones is largely a purview of the large hyperscalers. And I think the Neoscalers, there's a couple of them that are using the bandwagon, they're on the bandwagon of that, for want of a better description. So I think this is largely right now, given the, frankly, the scale of it, with the hyperscalers. And I don't see that.

And just put my follow-up. Um, I mean, clearly fee 26, is your guide is largely covered by the backlog. Um, when you look at, now sort of the long-term guide that you provided of 8 to 11% growth, um, 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 here, just so that you can plan out capacity. And does that sort of imply that your growth rate, sort of stays Above This A2, 111 level percent level in some of the out here as well.

Speaker #1: You know , they're on the back of that for want of a better description . So I think it's this is largely right now given the given the frankly , the scale of with the hyperscalers it and you know , I see don't that , you know , I think it's going to take a for while for , that to through bleed into the in into the , into the neo in terms of the deployment there , you know , as scalers Mark said , you know , this combination to be of next generation line systems .

Yeah. Hey Sonic, it's Mark. Um, a couple of things 1 1 is, you know, when we talked about the the longer term guides last quarter, we kind of took those off the table just because, you know, in in the medium term,

We're we're we're not very good at calling, you know?

Calling the the growth rates on the upside, right? So that 11 to 8 to 11 percentage.

Gary Smith: I think it's going to take a while for that to bleed through into the neoscalers. In terms of the deployment there, as Marc said, it's going to be this combination of next-generation line systems, RLS, which is also fairly recent to market, and also with the 800 gig pluggables as well. So yes, in the early stages, that's a sort of headwind from a margin point of view, which is why we're kind of guiding as we are. But as those platforms get more into volume, the yields improve, and we get through that NPI phase on both of those, then we'd have better margins as we exit the year. And of course, you've also got the benefits of just scale and volume as well. Okay. Got it. And just for my follow-up, I mean, clearly, FY26 is your guide, is largely covered by the backlog.

I think it's going to take a while for that to bleed through into the neoscalers. In terms of the deployment there, as Marc said, it's going to be this combination of next-generation line systems, RLS, which is also fairly recent to market, and also with the 800 gig pluggables as well. So yes, in the early stages, that's a sort of headwind from a margin point of view, which is why we're kind of guiding as we are. But as those platforms get more into volume, the yields improve, and we get through that NPI phase on both of those, then we'd have better margins as we exit the year. And of course, you've also got the benefits of just scale and volume as well.

Speaker #1: know You also , you know , fairly recent into , which is market and also with the it's going 800 gig plugs as well .

Speaker #1: So yes , in the early stages , that's a sort of headwind from a point of view , which margin is why we're kind of guiding as we are , but as that gets , you know , as those platforms get more into volume , the yields improve , you get through that know , and we .

I, I think is off the table. Um, we're, we're not really talking to 2027 at this point, um, but but I would say, overall, maybe qualitatively, uh, we, we feel very strong going into uh, 26.

Speaker #1: MPI phrase on both of those . Then , you know , we'd have better margins as we as we exit , as we exit the year .

We think a lot of that momentum continues into 2027 and the proof point, there is really the implement, the increase that we've seen in our capex for capacity, which is up 50% year on year.

Speaker #1: course , you've also got , you know , the benefits of , of just scale and volume as well .

Speaker #6: Okay .

Speaker #7: And just from a follow up , I mean , clearly , if FY 26 is your guide is largely covered by the backlog when you look at now , sort of the long term guide that you're provided of 8 to 11% growth , like how what level of visibility are you getting from your customers about fiscal 27 ?

Okay. Got it. And just for my follow-up, I mean, clearly, FY26 is your guide, is largely covered by the backlog. When you look at now sort of the long-term guide that you had provided of 8% to 11% growth, 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 this 8% to 11% level in sort of the out year as well?

Gary Smith: When you look at now sort of the long-term guide that you had provided of 8% to 11% growth, 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 this 8% to 11% level in sort of the out year as well? Yeah. Hey, Samik. It's Marc. A couple of things. One is when we talked about the longer-term guides last quarter, we kind of took those off the table just because in the medium term, we're not very good at calling the growth rates on the upside, right? So that 8% to 11%, I think, is off the table. We're not really talking to 2027 at this point.

Speaker #7: Are they sort of giving you more detailed plans for the out years so that you can plan out capacity ? And does that sort of imply that your growth rate sort of stays above this 8 to 11% level in sort of the out year as .

Speaker #6: Well ?

Speaker #4: Yeah . Hey , Mark it's , a couple of things . One is , you know , when we talked about the the longer term guides last quarter , we took those kind of off the table just because , you know , in the medium term we're we're not very good calling , you know , calling growth rates the the on the upside .

Marc Graff: Yeah. Hey, Samik. It's Marc. A couple of things. One is when we talked about the longer-term guides last quarter, we kind of took those off the table just because in the medium term, we're not very good at calling the growth rates on the upside, right? So that 8% to 11%, I think, is off the table. We're not really talking to 2027 at this point. But I would say overall, maybe qualitatively, we feel very strong going into 2026. We think a lot of that momentum continues into 2027. And the proof point there is really the increase that we've seen in our CapEx for capacity, which is up 50% year on year.

You know, I I, I think the other thing you could, you could, uh, obviously extrapolate out. We're not sort of guiding into 27 right now we're just starting 26, but you know, clearly the Dynamics of of changed here. Uh, and that's why I said, this is a sort of was 25, was a seminal year for us, in, in, in this regard, I mean, I think you're seeing multiple scale across winds. That will, they are mocked by their very nature. They're going to be multi-year, so that gives us confidence in 27 and 28. The other thing I would say is that's really all the context of uh, you know, our Optical uh Juan type business in and around the data center to it all. We're making tremendous amounts of Investments and progress on the other dimensions there, you know, sort of inside and around the data center which are completely new markets for Sienna and the revenues to those are largely. You know, we're taking some now we're making good progress, largely 27 and 28.

Speaker #4: Right. So that 11% to 8% to 11% range I think is off the table. We're not really talking about 2027 at this point.

Plays and specifically coherent Insight, the data center, you know, that's all additional Revenue to us. In addition, to all the things we've talked about right now, so that gives us confidence in in the multi-year dimension to this.

Speaker #4: But but I would say overall maybe qualitatively , we feel very strong going into 26 . We think a lot of that momentum continues into 2027 .

Got it. Great. Thank you. Thanks for taking my question. Thank you.

The next question comes from, Tim long with Barkley's. Please go ahead.

Gary Smith: But I would say overall, maybe qualitatively, we feel very strong going into 2026. We think a lot of that momentum continues into 2027. And the proof point there is really the increase that we've seen in our CapEx for capacity, which is up 50% year on year. I think the other thing you could obviously extrapolate out. We're not sort of guiding into 2027 right now. We're just starting 2026. But clearly, the dynamics have changed here. And that's why I said this is a sort of 2025 was a seminal year for us in this regard. I mean, I think you're seeing multiple Scale-across wins they are by their very nature, they're going to be multi-year. So that gives us confidence in 2027 and 2028. The other thing I would say is that's really all.

Speaker #4: And the point to prove there is really the increase that we've seen in our CapEx for capacity, which is up 50% year-on-year.

Speaker #4: .

Speaker #1: I think the other thing you could obviously extrapolate out— we're not sort of guiding into 2027 right now. We're just starting 2026.

Speaker #1: But , clearly you know , the dynamics of of changed here . And that's why I said this is a sort of 25 was a seminal year for us in this regard .

Gary Smith: I think the other thing you could obviously extrapolate out. We're not sort of guiding into 2027 right now. We're just starting 2026. But clearly, the dynamics have changed here. And that's why I said this is a sort of 2025 was a seminal year for us in this regard. I mean, I think you're seeing multiple Scale-across wins they are by their very nature, they're going to be multi-year. So that gives us confidence in 2027 and 2028. The other thing I would say is that's really all.

Speaker #1: I mean, I think you're seeing multiple wins across scale. They are varied by their wins, and they're going to be multi-year.

Speaker #1: So that gives us confidence in 27 and 28 . The other thing say is that's really all the context of , you know , our optical Wan type business in and center to data it all , we're making tremendous amounts of investments and progress .

Probably what you're going to see from hyperscalers. How do you, how do you look about sustainability of that business? Um, you know, over the next few years, uh, on the, on the Telco specifically side, thank you.

Gary Smith: The context of our optical WAN-type business in and around the data center to it. We're making tremendous amounts of investments and progress on the other dimensions there, sort of inside and around the data center, which are completely new markets for Ciena. The revenues to those are largely we're taking some now. We're making good progress, largely 2027 and 2028 plays, and specifically coherent inside the data center. That's all additional revenue to us in addition to all the things we've talked about right now. So that gives us confidence in the multi-year dimension to this. Got it. Great. Thank you. Thanks for taking my question. Thanks, Samik. The next question comes from Tim Long with Barclays. Please go ahead. Thank you. Two questions for me as well.

The context of our optical WAN-type business in and around the data center to it. We're making tremendous amounts of investments and progress on the other dimensions there, sort of inside and around the data center, which are completely new markets for Ciena. The revenues to those are largely we're taking some now. We're making good progress, largely 2027 and 2028 plays, and specifically coherent inside the data center. That's all additional revenue to us in addition to all the things we've talked about right now. So that gives us confidence in the multi-year dimension to this.

Speaker #1: On the other dimensions . There . You know , sort of inside and around the data center , which are completely new markets for Sienna .

Speaker #1: revenues to And the those are largely , you know , we're taking some now . We're making good progress , largely 27 and 28 plays .

Uh, yeah, on on the, on the decom part of that. Um, you know, obviously that was, was co-created, uh, specifically with with Mesa over over a period of time. And I think what we're seeing with that is the the the expansion of the opportunity within within their data center piece to that it saves power and space for them which is you know,

Speaker #1: And specifically coherent inside the data center . You know , that's additional revenue to us . In addition to things we've all the talked all about now .

Absolutely critical. Um, and you know, we've seen an expansion even in in 26 and you you're talking hundreds of millions of dollars of of this

Speaker #1: So that gives us confidence in the multi-year dimension to this.

Speaker #7: Great .

Speaker #6: you . Thank Thanks . Thanks , Mick .

And as they uh refresh and build out new data centers, that's become part of their adopted architecture.

Speaker #3: The question next Tim from Long with comes Barclays . go ahead Please .

[Analyst 6]: Got it. Great. Thank you. Thanks for taking my question.

Gary Smith: Thanks, Samik.

Speaker #8: Thank you . Two questions for me as well . First , , following on what you were just Gary talking about , could you maybe talk a little bit about Dicom and see if you can somewhat scale that for us ?

Operator: The next question comes from Tim Long with Barclays. Please go ahead.

[Analyst 7]: Thank you. Two questions for me as well. First, Gary, following on what you were just talking about, could you maybe talk a little bit about DECOM 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 inside the data center as it gives you kind of a beachhead?

Gary Smith: First, Gary, following on what you were just talking about, could you maybe talk a little bit about DECOM 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 inside the data center as it gives you kind of a beachhead? And then second, on the telco side, I get the MOFEN 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 specifically side? Thank you. Yeah. On the DECOM part of that, obviously, that was co-created specifically with Meta over a period of time.

Speaker #8: know , that good news it's And expanded with meta and being tested at others . Could this a be type of technology that would really , you know , accelerate that into move inside the data as it gives you center kind of a beach front ?

So you know, I think this again is going to be a multi-year opportunity within uh within meta, you know. And I I also think about, you know, these large hyperscalers really? When you think now about the diversity of portfolio that we dealing with them, they're really markets in their own right, given their size and scale. Um, we're also, as you, as you said, uh, engage deeply with 2 to 3, other hyperscalers around this kind of, uh, architecture and I would expect to see winds during the course of the year and adoptions.

Speaker #8: second on the telco And then side , I motion get the part and 5G currently , but be a tends to cyclical little bit probably what you're than going to see from hyperscalers .

And then second, on the telco side, I get the MOFEN 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 specifically side? Thank you.

Speaker #8: How do you how do you think about sustainability of that business over the next few years ? On the the telco , on specifically side ?

For uh additional Cloud players for for for Deon. So and it gives us, you know, a entree Point into the data center together with nubes together with the scale across because that is actually even the scale across

Speaker #6: Thank you .

Speaker #1: Yeah , on the on . The part of that , you know , obviously that was was co-created specifically with with meta over over a period of time .

Gary Smith: Yeah. On the DECOM part of that, obviously, that was co-created specifically with Meta over a period of time. I think what we're seeing with that is the expansion of the opportunity within their data center piece to that. It saves power and space for them, which is absolutely critical. We've seen an expansion even in 2026. You're talking hundreds of millions of dollars of this. As they refresh and build out new data centers, that's become part of their adopted architecture.

Is actually installed inside the data center. Um, so you put all those things together and we're definitely Under the Tent here and that's before, you know, the nubes which will start to deliver product, you know, in in 26, and before the opportunity with coherent inside the data center,

um,

Speaker #1: And I think what we're seeing with that is the the the expansion of the opportunity within , within their data center piece to that , it saves power and space for them , which is , you know , absolutely critical .

Gary Smith: I think what we're seeing with that is the expansion of the opportunity within their data center piece to that. It saves power and space for them, which is absolutely critical. We've seen an expansion even in 2026. You're talking hundreds of millions of dollars of this. As they refresh and build out new data centers, that's become part of their adopted architecture. So I think this, again, is going to be a multi-year opportunity within Meta. I also think about these large hyperscalers, really. When you think now about the diversity of portfolio that we're dealing with them, they're really markets in their own right, given their size and scale. We're also, as you said, engaged deeply with two to three other hyperscalers around this kind of architecture.

Speaker #1: you And , know , we've seen an expansion even in 26 . And you're talking hundreds of millions of dollars of of this .

Speaker #1: And as they and build out refresh new data centers , that's become part of their adopted architecture . So , you know , I think this , again , is going to be a multi-year opportunity within within meta .

Speaker #1: You know , and I also think about , you know , these large hyperscalers , really when you think the now about diversity of portfolio that we're dealing with they're them , really markets in right , their own given their size and scale .

So I think this, again, is going to be a multi-year opportunity within Meta. I also think about these large hyperscalers, really. When you think now about the diversity of portfolio that we're dealing with them, they're really markets in their own right, given their size and scale. We're also, as you said, engaged deeply with two to three other hyperscalers around this kind of architecture.

to your point on the, on the Telco piece. I I think they've kind of been underinvested in transport, frankly, for The Last 5 Years, ever since Co began, they didn't want to mess with their networks during co. Uh, then you had the supply chain Whiplash. And then you had this massive investment, they all had to make in 5G, which largely is not yielded, the financial returns that they had anticipated. Um, now you're seeing I think a multi-year investment back into transport, they are largely underinvested in their networks and I think, whilst that's not a, the rapid scale, uh, and growth rate of the clouds. I think it's nice steady, you know, mid digit, kind of, uh, single digit growth, uh, within the, uh, Telco space and I think that's quite sustainable.

Speaker #1: We're also as you as you said , engaged deeply with 2 to 3 other hyperscalers around this kind of architecture . And I would expect to see wins during the course of the year .

What is, what is amplifying that though, is the AI traffic for things like muffin. And, you know, you saw last year, hundreds of millions of dollars of our Telco business was, in fact, muffin, uh, specifically for, uh, hyperscalers

Speaker #1: And adoptions for cloud Dicom . So , and it gives us , you know , a entry point into the data center , together with new business , together with the scale across , because that is actually even the scale across is actually installed inside the data center .

Gary Smith: I would expect to see wins during the course of the year and adoptions for additional cloud players for DECOM. It gives us an entrée point into the data center together with Nubis, together with the scale-across, because that is actually even the scale-across is actually installed inside the data center. So you put all those things together, and we're definitely under the tent here. That's before the Nubis, which will start to deliver product in 2026, and before the opportunity with coherent inside the data center. To your point on the telco piece, I think they've kind of been underinvested in transport, frankly, for the last five years, ever since COVID began. They didn't want to mess with their networks during COVID. Then you had the supply chain whiplash.

I would expect to see wins during the course of the year and adoptions for additional cloud players for DECOM. It gives us an entrée point into the data center together with Nubis, together with the scale-across, because that is actually even the scale-across is actually installed inside the data center. So you put all those things together, and we're definitely under the tent here. That's before the Nubis, which will start to deliver product in 2026, and before the opportunity with coherent inside the data center.

And you saw it you know typically we'd seen it internationally. We're also seeing it now in North America ramp up as well. Um,

Speaker #1: So you put all those things together and we're definitely under the tent here . And that's before , you know , base , which will the new start to deliver product , you know , in 26 and before the opportunity with coherent inside the data center , to your point , on the on the telco I think they've piece , kind of been underinvested in transport , frankly , for the last five years , ever since Covid didn't want to began , they mess with their networks during Covid .

So, you know, you put those 2 things together. And I think that gives us confidence around that Telco which is half of our business currently, um, you know, having nice sustained growth rates albeit lower than the, the cloud players.

Thank you very much.

Thank you.

We'll take 1 more question, please.

Thank you, sir. And that question will come from Ryan Kunz with nem. Please go ahead.

To your point on the telco piece, I think they've kind of been underinvested in transport, frankly, for the last five years, ever since COVID began. They didn't want to mess with their networks during COVID. Then you had the supply chain whiplash. Then you had this massive investment they all had to make in 5G, which largely has not yielded the financial returns that they'd anticipated. Now you're seeing, I think, a multi-year investment back into transport. They are largely underinvested in their networks.

Speaker #1: Then you had the supply chain whiplash and then you had this massive investment . They all had to make in 5G , which largely has not yielded the financial returns that they anticipated .

Gary Smith: Then you had this massive investment they all had to make in 5G, which largely has not yielded the financial returns that they'd anticipated. Now you're seeing, I think, a multi-year investment back into transport. They are largely underinvested in their networks. And I think while that's not at the rapid scale and growth rate of the clouds, I think it's nice, steady, mid-digit kind of single-digit growth within the telco space. And I think that's quite sustainable. What is amplifying that, though, is the AI traffic for things like MOFEN. And you saw last year, hundreds of millions of dollars of our telco business was, in fact, MOFEN, specifically for hyperscalers. And you saw it. Typically, we'd seen it internationally. We're also seeing it now in North America ramp up as well.

Speaker #1: Now you're seeing , I think , a multi-year investment back into transport . They are largely underinvested in their networks . And I think whilst that's not at the rapid scale growth rate of the clouds , I think it's nice , steady , you know , mid digit kind of single growth digit within the telco space .

Super, thanks for the question. Um, you know, Gary, maybe you can take a step back and regarding your great growth. You, you're seeing here in in the clouds segment. Um, you know how has your product mix changed over, say the last 12 months, obviously a lot around scale across and RLS and DCI where your historically more of a, a long haul and subk player, can you give us any kind of perspective there on the, on the product mix?

And I think while that's not at the rapid scale and growth rate of the clouds, I think it's nice, steady, mid-digit kind of single-digit growth within the telco space. And I think that's quite sustainable. What is amplifying that, though, is the AI traffic for things like MOFEN. And you saw last year, hundreds of millions of dollars of our telco business was, in fact, MOFEN, specifically for hyperscalers.

Speaker #1: And I think thats quite sustainable . What amplifying is is what though that is the AI traffic for things like morphine . And you know you saw last year hundreds of millions of dollars of our telco business was in fact morphine specifically for hyperscalers .

Speaker #1: saw know , And you typically You we'd seen it internationally . We're seeing it also North now in America . Ramp up as well .

And you saw it. Typically, we'd seen it internationally. We're also seeing it now in North America ramp up as well. So you put those two things together, and I think that gives us confidence around that telco, which is half of our business currently, having nice sustained growth rates, albeit lower than the cloud players.

Speaker #1: So , you know , you put those two things together . And I think that gives us confidence around that . Telco , which is half of our business currently .

hyperscalers and that that is a different mix than we've uh you know than we've seen uh traditionally and you know more intelligence on the uh

Gary Smith: So you put those two things together, and I think that gives us confidence around that telco, which is half of our business currently, having nice sustained growth rates, albeit lower than the cloud players. Thank you very much. Thank you. We'll take one more question, please. Thank you, sir. That question will come from Ryan Koontz with Needham. Please go ahead. Super. Thanks for the question. Gary, maybe we can take a step back 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? Yeah.

Speaker #1: You know, nice sustained growth rates, albeit lower than the cloud players.

Speaker #8: Thank

Speaker #8: you very .

Speaker #6: Much appreciated. Thank you. We'll take one more question, please.

Speaker #3: Thank you sir . And that question will come Ryan from with Needham . Please go ahead .

[Analyst 7]: Thank you very much.

Line systems. Um, then also you've seen um, traditionally because given the massive scale that they're going to need to put in with, with multiple fibers across it, then, you know, you're going to need to, uh, increase the intelligence and the scalability of the line systems.

Gary Smith: Thank you. We'll take one more question, please.

Speaker #9: Super . Thanks for the question . You know , Gary , maybe you can 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 ?

Operator: Thank you, sir. That question will come from Ryan Koontz with Needham. Please go ahead.

[Analyst 8]: Super. Thanks for the question. Gary, maybe we can take a step back 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?

Speaker #9: Obviously, a lot around scale across different roles and where you DCI historically has been more of a long-haul and subsea player. Can you give us any kind of perspective there on the product mix?

With decom which, you know, frankly you know, was a a fat very quickly emerged as a uh, portfolio offering, you know, that was not projected into the uh 26 plan. You know, when, when we did that in a, in a 3 year, planning piece. So the mix has changed uh quite a lot around that that architecture.

Speaker #1: Yeah , I would say sort of , you know , we're laying more tracks at , at massive scale because it's , you know , than we would normally see .

Gary Smith: Yeah. I would say sort of we're laying more tracks at massive scale because that's more than we would normally see. You're specifically seeing that with scale-across because they're laying the tracks down first. So much higher proportion of line systems would be the initial take on that. Now, that will then move to plugs. We're seeing, obviously, a very large ramp up in our 800 gig plugs, which we think will be largely adopted among most of the hyperscalers.

Gary Smith: I would say sort of we're laying more tracks at massive scale because that's more than we would normally see. You're specifically seeing that with scale-across because they're laying the tracks down first. So much higher proportion of line systems would be the initial take on that. Now, that will then move to plugs. We're seeing, obviously, a very large ramp up in our 800 gig plugs, which we think will be largely adopted among most of the hyperscalers. And that is a different mix than we've seen traditionally. And more intelligence on the line systems than also you've seen traditionally. Because given the massive scale that they're going to need to put in with multiple fibers across it, then you're going to need to increase the intelligence and the scalability of the line systems. Couple that with DECOM, which, frankly, has very quickly emerged as a portfolio offering.

Really helpful and just a quick follow up. If I could just around, you know growth limiters outside of your control, as it relates to fiber, Supply permitting labor and you know, really putting the these Lanes in the ground. You know what, what kind of Supply constraints are you seeing for the industry for your Cloud customers?

Speaker #1: You're specifically seeing with scale that across , you know , laying the tracks because they're down first . So you , much know higher systems line proportion of would be , you know , the initial take on that .

Speaker #1: Now that will then to move plugs . We're seeing , you know , obviously a large ramp up in our very 800 gig plugs , which we think will be , you know , largely adopted amongst most of the of the hyperscalers .

Speaker #1: And that that is a different mix than we've , you know , than we've seen traditionally . And you know , more intelligence on the line systems then also you've seen traditionally because given the massive scale that they're going to need to put with , in with multiple fibers across it , then , you know , you're going to need to increase the intelligence and the scalability of the line systems .

And that is a different mix than we've seen traditionally. And more intelligence on the line systems than also you've seen traditionally. Because given the massive scale that they're going to need to put in with multiple fibers across it, then you're going to need to increase the intelligence and the scalability of the line systems. Couple that with DECOM, which, frankly, has very quickly emerged as a portfolio offering. That was not projected into the 2026 plan when we did that in our three-year planning piece. So the mix has changed quite a lot around that architecture.

You know, I think a large, uh, you know, the relationship with the fiber, uh, providers people at Corning Etc, is very tight, amongst the cloud players. And, and the service provider, you know, the particularly the wholesalers people like Lumen, you know, who publicly talked about that? So I think, you know, there's a lot of commitment to scale capacity, so, you know, we're seeing that uh, you, you know, we are seeing that happen. Um, the other thing I would say is it's a it's it's a real opportunity for us because we have the, the largest Optical uh support and services organization in the world.

Speaker #1: Couple that with Dicom , which , you know , frankly , you know , was a as fat very quickly emerged as a portfolio offering , you know , that was not projected into the 26 plan .

And we are increasingly engaged with the deployment of these. In fact, our largest uh, service customer last year was a cloud provider for the first time and we're now providing multiple Services across across the hyperscalers. And we see that as an area of tremendous growth to help you know to your point facilitate the uh delivery of this infrastructure.

Thank you. Thanks Ron.

Speaker #1: know , when we did that You in in our three year planning piece . So the mix has changed quite a lot around that .

For joining us today. We look forward to catching up with folks today and over the next week or so happy holidays and happy New Year as well.

Gary Smith: That was not projected into the 2026 plan when we did that in our three-year planning piece. So the mix has changed quite a lot around that architecture. 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 lines in the ground. What kind of supply constraints are you seeing for the industry for your cloud customers? I think overall the relationship with the fiber providers, people like Corning, etc., is very tight among the cloud players and the service providers, particularly the wholesalers, people like Lumen, who publicly talked about that. So I think there's a lot of commitment to scale capacity. So we're seeing that. We are seeing that happen.

Speaker #1: That architecture .

Speaker #9: Really Just a helpful . up . If I quick follow could just around growth outside of limiters your control , you know , as it relates to supply fiber permitting , labor and , you know , really the these putting lanes in the ground , you know what what kind of supply constraints are you seeing for the industry , for your cloud customers ?

The conference has now concluded, thank you for attending today's presentation. You may now disconnect

[Analyst 8]: 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 lines in the ground. What kind of supply constraints are you seeing for the industry for your cloud customers?

Speaker #1: I You know , think a large , you know , the relationship with the fiber providers , people like Corning , etc. , is very tight amongst the cloud players .

Gary Smith: I think overall the relationship with the fiber providers, people like Corning, etc., is very tight among the cloud players and the service providers, particularly the wholesalers, people like Lumen, who publicly talked about that. So I think there's a lot of commitment to scale capacity. So we're seeing that. We are seeing that happen.

Speaker #1: And and the providers , you service particularly the wholesalers , know , people like lumen , you know , publicly about talked that .

Speaker #1: So I think , you know , there's a lot of commitment to scale capacity . So , you know , we're seeing that , you know , we are seeing that happen .

Speaker #1: The other thing I would say is it's a it's a real opportunity for us because we have the the largest optical support and services organization in the world .

Gary Smith: The other thing I would say is it's a real opportunity for us because we have the largest optical support and services organization in the world. We are increasingly engaged with the deployment of these. In fact, our largest service customer last year was a cloud provider for the first time. We're now providing multiple services across the hyperscalers. We see that as an area of tremendous growth to help, to your point, facilitate the delivery of this infrastructure. Super helpful. Thanks, Gary. Thank you. Thanks, Ryan. And thanks, everyone, for joining us today. We look forward to catching up with folks today and over the next week or so. Happy holidays and happy New Year to all. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

The other thing I would say is it's a real opportunity for us because we have the largest optical support and services organization in the world. We are increasingly engaged with the deployment of these. In fact, our largest service customer last year was a cloud provider for the first time. We're now providing multiple services across the hyperscalers. We see that as an area of tremendous growth to help, to your point, facilitate the delivery of this infrastructure.

Speaker #1: And we are increasingly engaged with the deployment of these . In fact , our largest service customer last year was a cloud provider for the first time .

Speaker #1: And we're now providing multiple services across across hyperscalers . And we see that as an area of tremendous growth to help , you know , to your point , facilitate the delivery of this infrastructure .

Speaker #9: helpful . Super Thanks .

Speaker #6: Gary . Thank you . Thanks , Ryan . And thanks , everyone for joining us today . We look forward to catching up with folks today and over the next week or so .

[Analyst 8]: Super helpful. Thanks, Gary.

Gary Smith: Thank you.

Speaker #6: Happy holidays and Happy New Year to all.

Marc Graff: Thanks, Ryan. And thanks, everyone, for joining us today. We look forward to catching up with folks today and over the next week or so. Happy holidays and happy New Year to all.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker #3: Good morning, and welcome to Ciena's fiscal fourth quarter and year-end 2025 financial results conference call. All participants will be in listen-only mode.

Gary Smith: Good morning and welcome to Ciena's Fiscal Fourth Quarter and Year-End 2025 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Gregg Lampf, Vice President of Investor Relations. Please go ahead. Thank you, Drew. Good morning and welcome to Ciena's 2025 Fiscal Fourth Quarter and Year-End Results Conference Call. On the call today is Gary Smith, President and CEO, and Marc Graff, CFO. Scott McFeely, Executive Advisor, is also with us for Q&A.

Operator: Good morning and welcome to Ciena's Fiscal Fourth Quarter and Year-End 2025 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Gregg Lampf, Vice President of Investor Relations. Please go ahead.

Speaker #3: Should you need assistance , please signal a conference specialist by pressing Star . Then zero on your telephone keypad . After today's presentation , there will be an opportunity to ask questions , to ask a question .

Speaker #3: You may press star , then one on your telephone keypad . To your withdraw question , please press star . Then two . Please note this event is being recorded .

Speaker #3: I would now like to turn the conference over to Gregg Lampf Vice President of Investor Relations . Please go ahead .

Speaker #6: Thank you . Drew . Good morning and welcome to Siena's 2025 fiscal fourth quarter and year end results conference call . On the call , today is Gary Smith , president and CEO .

Gregg Lampf: Thank you, Drew. Good morning and welcome to Ciena's 2025 Fiscal Fourth Quarter and Year-End Results Conference Call. On the call today is Gary Smith, President and CEO, and Marc Graff, CFO. Scott McFeely, Executive Advisor, is also with us for Q&A In addition to this call and the press release, we have posted to the investor section of our website an accompanying investor presentation that reflects this discussion, as well as certain highlighted items for the fiscal quarter and year-end.

Speaker #6: And Marc Graff CFO McFeely Scott , executive advisor , is also with us for Q&A . In addition to this call and the press release , we have posted to the investor section of our website and accompanying investor presentation that reflects the discussion as well as certain highlighted items for the fiscal quarter and year end .

Gary Smith: In addition to this call and the press release, we have posted to the investor section of our website an accompanying investor presentation that reflects this discussion, as well as certain highlighted items for the fiscal quarter and year-end. Our comments today speak to our recent performance, our view on current market dynamics, and drivers of our business, as well as a discussion of our financial outlook. Today's discussion includes certain adjusted or non-GAAP measures of Ciena's results of operations. A reconciliation of these non-GAAP measures to our GAAP results is included in today's press release. Before turning the call over to Gary, I'll remind you that during this call, we'll be making certain forward-looking statements.

Speaker #6: Our comments today speak to our recent performance . Our view on current market dynamics and drivers of our business , as well as discussion of the financial outlook .

Our comments today speak to our recent performance, our view on current market dynamics, and drivers of our business, as well as a discussion of our financial outlook. Today's discussion includes certain adjusted or non-GAAP measures of Ciena's results of operations. A reconciliation of these non-GAAP measures to our GAAP results is included in today's press release. Before turning the call over to Gary, I'll remind you that during this call, we'll be making certain forward-looking statements.

Speaker #6: Today's discussion includes certain adjusted non-GAAP measures of CNA's results of operations. A reconciliation of these non-GAAP measures to our GAAP results is included in today's press release.

Speaker #6: Before turning the call over to Gary , I'll remind you that during this call , we'll be making certain forward looking statements . Such statements , including our quarterly and annual guidance , commentary on market dynamics , and discussion of our opportunities and strategy , are based on current expectations , forecasts and assumptions regarding the company and its markets , which include risks and uncertainties that could cause actual results to differ materially from the statements discussed today .

Gary Smith: Such statements, including our quarterly and annual guidance, commentary on market dynamics, and discussion of our opportunities and strategy, are based on current expectations, forecasts, and assumptions regarding the company and its markets, which include risks and uncertainties that could cause actual results to differ materially from the statements discussed today. Assumptions relating to our outlook, whether mentioned on this call or included in the investor presentation that we posted earlier today, are an important part of such forward-looking statements, and we encourage you to consider them. Our forward-looking statements should also be viewed in the context of the risk factors detailed in our most recent 10-Q and in our upcoming 10-K filing. Ciena assumes no obligation to update the information discussed in this conference call, whether as a result of new information, future events, or otherwise.

Such statements, including our quarterly and annual guidance, commentary on market dynamics, and discussion of our opportunities and strategy, are based on current expectations, forecasts, and assumptions regarding the company and its markets, which include risks and uncertainties that could cause actual results to differ materially from the statements discussed today.

Speaker #6: Assumptions relating to our outlook , whether this included in the Investor presentation that we posted earlier today , are an important part of such forward looking statements , and we encourage you consider to .

Speaker #6: Our forward-looking statements should also be viewed in the context of the risk factors detailed in our most recent 10-Q and in our upcoming 10-K filing.

Speaker #6: Assumes obligation to update the information discussed in this conference call , as a result of new information , future events or otherwise , as always , we'll allow for as much Q&A as today .

Speaker #6: Possible, though I ask that you limit yourself to one question and one follow-up. With that, I'll turn the call over to Gary.

Gary Smith: As always, we'll allow for as much Q&A as possible today, though we ask that you limit yourselves to one question, one follow-up. With that, I'll turn the call over to Gary. Thanks, Gregg. Good morning, everyone. Today, we reported record fiscal fourth quarter and full year revenue of $1.35 billion and $4.77 billion, respectively. These records are a direct result of our sustained purposeful investment and focus on leading high-speed connectivity technologies, together with disciplined execution and deep collaboration with our customers. Combined, these advantages have positioned and will continue to position Ciena to deliver value in the AI ecosystem, serving both cloud and service provider customers for many years to come. Our progress in driving value from our operating model is also reflected in Q4 earnings per share of $0.91, up 69% year-over-year, and full year EPS of $2.64, up 45% from fiscal 2024.

As always, we'll allow for as much Q&A as possible today, though we ask that you limit yourselves to one question, one follow-up. With that, I'll turn the call over to Gary.

Speaker #1: Thanks , Craig , and good morning , everyone . Today we reported record fiscal fourth quarter and full year revenue of 1.3 5,000,000,004.77 billion , respectively .

Gary Smith: Thanks, Gregg. Good morning, everyone. Today, we reported record fiscal fourth quarter and full year revenue of $1.35 billion and $4.77 billion, respectively. These records are a direct result of our sustained purposeful investment and focus on leading high-speed connectivity technologies, together with disciplined execution and deep collaboration with our customers.

Speaker #1: These records are a direct result of our sustained , purposeful investment and focus on leading high speed connectivity technologies , together with disciplined execution and deep collaboration with our customers .

Speaker #1: advantages have will positioned and continue to position Sienna to deliver value in the AI ecosystem , serving both cloud and service provider customers .

Combined, these advantages have positioned and will continue to position Ciena to deliver value in the AI ecosystem, serving both cloud and service provider customers for many years to come. Our progress in driving value from our operating model is also reflected in Q4 earnings per share of $0.91, up 69% year-over-year, and full year EPS of $2.64, up 45% from fiscal 2024.

Speaker #1: For many years to come . progress And our in driving value from our operating model is reflected in earnings per Q4 share of $0.91 , up 69% year over year , and full year EPs of $2.64 , up 45% from fiscal 2020 .

Speaker #1: For lastly , we generated record orders for the year of 7.8 billion , which resulted in our entering this year again with record backlog .

Gary Smith: Lastly, we generated record orders for the year of $7.8 billion, which resulted in our entering this year again with record backlog. These strong results really underscore our overall market leadership position, as well as the ramping broad-based demand across our business. And to this point, I'd like to provide some insights into what we believe to be robust and durable demand over the next several years. Firstly, we continue to see accelerating demand from our cloud customer providers. And that includes the large hyperscalers and the emerging neoscaler segment that we talked with you about last quarter. In fact, cloud providers today are as focused on scaling their network as they are on their access to power. Orders from cloud providers are very strong and ramping across our portfolio, and they constitute a substantial portion of our growing backlog.

Lastly, we generated record orders for the year of $7.8 billion, which resulted in our entering this year again with record backlog. These strong results really underscore our overall market leadership position, as well as the ramping broad-based demand across our business. And to this point, I'd like to provide some insights into what we believe to be robust and durable demand over the next several years. Firstly, we continue to see accelerating demand from our cloud customer providers.

Speaker #1: These strong really results underscore our overall market leadership position , as well as the ramping broad based demand across our business . And to this point , I'd like to provide some insights into what we believe to be robust and durable .

Speaker #1: Demand over the next several years . Firstly , we continue to see accelerating demand from our cloud customer providers , and that includes the large hyperscalers and the emerging neo scalar segment that we talked with you about last quarter .

Speaker #1: In fact , cloud providers today are as focused on scaling their network as they are on their access to power . Orders from cloud providers are very strong and ramping across our portfolio .

And that includes the large hyperscalers and the emerging neoscaler segment that we talked with you about last quarter. In fact, cloud providers today are as focused on scaling their network as they are on their access to power. Orders from cloud providers are very strong and ramping across our portfolio, and they constitute a substantial portion of our growing backlog.

Speaker #1: And they constitute a substantial portion of our growing backlog . It's important to note that this accelerating demand is being driven by several dynamics , and as counterintuitive as it may seem , the cloud providers have largely actually underinvested in their networks to date , particularly relative to other areas of AI infrastructure .

Gary Smith: It's important to note that this accelerating demand is being driven by several dynamics. As counterintuitive as it may seem, the cloud providers have largely actually underinvested in their networks to date, particularly relative to other areas of AI infrastructure. The major hyperscalers who are seeing rapid traffic growth not only have the capital to invest, but also have real sustainable business models that are currently constrained by the need to dramatically scale their global networks. These cloud providers cannot and do not intend to strand their significant investments in AI-related data center infrastructure. I would stress that that traffic needs to leave the data center to be monetized and operationalized. We are their strategic technology partner for those network requirements.

It's important to note that this accelerating demand is being driven by several dynamics. As counterintuitive as it may seem, the cloud providers have largely actually underinvested in their networks to date, particularly relative to other areas of AI infrastructure. The major hyperscalers who are seeing rapid traffic growth not only have the capital to invest, but also have real sustainable business models that are currently constrained by the need to dramatically scale their global networks.

Speaker #1: The major hyperscalers who are seeing rapid traffic growth not only have the capital to invest , but also have real sustainable business models that are currently constrained by the need to dramatically scale their global networks .

Speaker #1: These cloud providers cannot and do not intend to strand their significant investments in AI-related data center infrastructure. I would stress that that traffic needs to leave the data center to be monetized.

These cloud providers cannot and do not intend to strand their significant investments in AI-related data center infrastructure. I would stress that that traffic needs to leave the data center to be monetized and operationalized. We are their strategic technology partner for those network requirements.

Speaker #1: And operationalized . And we are there strategic technology partner for those network requirements . Secondly , demand from our service provider customers continues to grow steadily as they to reinvest in transport infrastructure .

Speaker #1: their After years of digesting accumulated inventory and also having focused on other areas of their most networks , notably and specifically 5G addition , service .

Gary Smith: Secondly, demand from our service provider customers continues to grow steadily as they, too, reinvest in their transport infrastructure after years of digesting accumulated inventory and also having focused on other areas of their networks, most notably and specifically 5G. In addition, service providers' businesses are also being fueled by AI through the enterprise cloud demand and specifically cloud providers' need for managed optical fiber networks, or MOFEN. And as a proof point here, we have recently won and are working to deploy a large MOFEN project in India with two service providers for a major hyperscaler. Additionally, in the quarter, we have secured multiple major MOFEN wins in other regions, including several in new and emerging geographies for our business. And as a result of these dynamics, service provider orders were up nearly 70% for the year.

Secondly, demand from our service provider customers continues to grow steadily as they, too, reinvest in their transport infrastructure after years of digesting accumulated inventory and also having focused on other areas of their networks, most notably and specifically 5G. In addition, service providers' businesses are also being fueled by AI through the enterprise cloud demand and specifically cloud providers' need for managed optical fiber networks, or MOFEN. And as a proof point here, we have recently won and are working to deploy a large MOFEN project in India with two service providers for a major hyperscaler.

Speaker #1: In providers, businesses are also being fueled by the AI enterprise cloud demand and, specifically, cloud providers' need for managed optical fiber networks or MDO.

Speaker #1: as a And proof point here , we have recently won and are working to deploy a large mafham project in India with two service providers for a major hyperscaler .

Speaker #1: Additionally , in the quarter , we have secured multiple major morphine wins in other regions , including several in new and emerging geographies for our business .

Additionally, in the quarter, we have secured multiple major MOFEN wins in other regions, including several in new and emerging geographies for our business. And as a result of these dynamics, service provider orders were up nearly 70% for the year.

Speaker #1: result of these dynamics , service And as a provider orders were up nearly 70% for the And in . year our top fact , three service providers revenue from 24 to 25 grew 16% .

Gary Smith: In fact, our top three service providers' revenue from 2024 to 2025 grew 16%. Due to the increasing momentum across both cloud and service providers, Ciena's optical market share has continued to grow and extend our overall leadership, adding two points year-to-date, and we expect further gains clearly in 2026. In order to address this accelerating demand, we are committed to increasing investments and working with our supply chain partners to scale the business. With product delivery lead times extending in the face of this unprecedented demand, we are proactively expanding our capacity to ensure our ability to timely meet our customers' demands. Indeed, this has already yielded results for fiscal 2025, as we delivered double our initial revenue growth expectations for the year. Marc will discuss how we are stepping up investments to support demand and the expanding opportunities we expect over the coming years.

In fact, our top three service providers' revenue from 2024 to 2025 grew 16%. Due to the increasing momentum across both cloud and service providers, Ciena's optical market share has continued to grow and extend our overall leadership, adding two points year-to-date, and we expect further gains clearly in 2026. In order to address this accelerating demand, we are committed to increasing investments and working with our supply chain partners to scale the business.

Speaker #1: Due to the increasing momentum across both cloud and service providers . Sienna's optical market share has continued to grow and extend our overall leadership , adding two points year to date , and we expect further gains .

Speaker #1: in 2026 . In order to address this Clearly accelerating we are committed to demand , working with our supply investments and increasing partners to chain scale the with product business delivery , lead times , extending in the face of this unprecedented demand .

Speaker #1: We are proactively expanding our capacity to ensure our ability to timely meet our customers demands . Indeed , this has already yielded results for fiscal revenue growth expectations for the year .

With product delivery lead times extending in the face of this unprecedented demand, we are proactively expanding our capacity to ensure our ability to timely meet our customers' demands. Indeed, this has already yielded results for fiscal 2025, as we delivered double our initial revenue growth expectations for the year. Marc will discuss how we are stepping up investments to support demand and the expanding opportunities we expect over the coming years.

Speaker #1: Marc will discuss how stepping up we are investments to support demand and the expanding opportunities we expect over the coming years . You know , the simple truth is that AI continues to drive network expansion across all our customer segments .

Speaker #1: And the scale of investment currently underway is and massive accelerating faster than anything we , or indeed the industry have seen to date .

Gary Smith: The simple truth is that AI continues to drive network expansion across all our customer segments, and the scale of investment currently underway is massive and accelerating faster than anything we, or indeed the industry, have seen to date. I would also mention that unlike the COVID-inspired supply-demand imbalance, we are seeing this demand be installed and leveraged for real near-term revenue opportunities at our customers, as evidenced by accelerated implementation services that increased in revenue by 34% in fiscal 2025. With that, I'd like to take a moment to share our sort of broader perspectives on the AI opportunity as it relates to high-speed connectivity. As bandwidth continues to grow inside the data center and as this traffic flows out of the data center, AI inference models are moving closer to the network edge.

The simple truth is that AI continues to drive network expansion across all our customer segments, and the scale of investment currently underway is massive and accelerating faster than anything we, or indeed the industry, have seen to date. I would also mention that unlike the COVID-inspired supply-demand imbalance, we are seeing this demand be installed and leveraged for real near-term revenue opportunities at our customers, as evidenced by accelerated implementation services that increased in revenue by 34% in fiscal 2025.

Speaker #1: it And also mentioned that Covid unlike the inspired supply demand imbalance , we are seeing this demand be installed and leveraged for real near-term revenue opportunities at our customers .

Speaker #1: As by evidenced accelerated implementation services that increased in revenue by 34% in fiscal 25 . With that , I'd like to take a moment to of broader share our sort perspectives on the AI opportunity as it relates to high speed connectivity , as bandwidth continues to grow .

Speaker #1: Data inside the center, and as this traffic flows out of the data center, AI inference models are moving closer to the network edge.

Speaker #1: the reasons that I And for mentioned earlier , we will continue to expand our existing leadership and addressable market in high speed connectivity in the Wan .

For the reasons that I mentioned earlier, we will continue to expand our existing leadership and addressable market in high-speed connectivity in the WAN. In addition to the wide area network, we're also seeing a significant addressable market opportunity in and around the data center. It is, I think, well understood that cloud providers are investing heavily in data centers to deliver on the current and future promises of AI.

Speaker #1: In addition wide area to the network , we're a significant addressable market opportunity in the in and around the data center . It is , I think , well understood providers cloud that are investing heavily in data centers to deliver on the current and future promises of AI .

Speaker #1: Many estimating third parties are spending of capital more than $7 trillion through the end of the decade . In all AI related infrastructure , and this is necessitating the obviously need for both training and inference workloads at massive scale .

Many third parties are estimating capital spending of more than $7 trillion through the end of the decade in all AI-related infrastructure. This is obviously necessitating the need for both training and inference workloads at massive scale.

Speaker #1: As a result of the massive growth in AI workloads and to address growing power and speed, as well as space constraints, cloud providers are planning and building distributed AI data center training clusters, or AI factories, which require multiple clusters to act as one.

Gary Smith: As a result of the massive growth in AI workloads and to address growing power and space constraints, cloud providers are planning and building distributed AI data center training clusters, or AI factories, which require multiple clusters to act as one. In fact, along with those power and space constraints, the ability of the cloud providers, and specifically the major hyperscalers, to scale their global networks is becoming the critical long pole in the tent for them to operationalize AI for both training and inference purposes. Within these data center environments, there are three key connectivity requirements: to scale-up within a data center rack, to scale-out between racks in a data center, and finally, to scale-across between geographically distributed data centers, which must operate at the highest levels of performance with super high capacity and the lowest latency possible.

Speaker #1: In fact, those power and space constraints, along with the ability of the cloud providers, and specifically the major hyperscalers and their global networks, are becoming the critical long pole in the tent for them to operationalize AI for both training and inference purposes.

Speaker #1: Within these data center environments , there are three key connectivity requirements to scale up within a data center rack . To scale out between racks in a data center , and finally to scale across between geographically distributed data centers , which must operate at the levels of performance with super high capacity and the lowest latency possible .

Within these data center environments, there are three key connectivity requirements: to scale-up within a data center rack, to scale-out between racks in a data center, and finally, to scale-across between geographically distributed data centers, which must operate at the highest levels of performance with super high capacity and the lowest latency possible.

Speaker #1: With our innovation and time to market leadership in high speed connectivity solutions , our position could not be better . To fulfill this critical demand .

Gary Smith: With our innovation and time-to-market leadership in high-speed connectivity solutions, our position could not be better to fulfill this critical demand. This growing AI-driven opportunity for Ciena is what we refer to as in and around the data center. In fact, our in and around the data center opportunities grew threefold from 2024 to 2025 and are a major contributor to our 2026 expected growth rate. We have proactively invested in our portfolio to intersect this growing market segment, and with a few notable examples. First is our interconnects portfolio, comprising both our power- and space-saving ZR and ZR Plus pluggables and our optical components. We expect interconnects to play a meaningful role in scale-up, scale-out, and in fact, scale-across workloads. In fiscal year 2025, we surpassed our target of more than doubling FY 2024 pluggable revenue, reaching revenue of more than $168 million.

Speaker #1: This growing , AI driven opportunity for Sienna is what we refer to as in and around the data center . In fact , our in and around the data center opportunities grew threefold from major contributor to our 24 to 25 and are a expected growth rate .

Speaker #1: We have proactively invested in our portfolio to intersect with this growing market segment, and we have a few notable examples. First is our interconnects portfolio, comprising both our power and space-saving XR and XR Plus pluggable.

First is our interconnects portfolio, comprising both our power- and space-saving ZR and ZR Plus pluggables and our optical components. We expect interconnects to play a meaningful role in scale-up, scale-out, and in fact, scale-across workloads. In fiscal year 2025, we surpassed our target of more than doubling FY 2024 pluggable revenue, reaching revenue of more than $168 million.

Speaker #1: And our optical components . We expect interconnects to play a meaningful role in scale up , , and in scale out fact , scale workloads .

Speaker #1: In fiscal year 2025, we surpassed our target of more than doubling FY 2024, with pluggable revenue reaching more than $168 million in the quarter.

Speaker #1: Our wave logic six . Nano 800 gig pluggable has shipped for initial revenue . And since the end of the quarter , we have shipped 800 XR plugs to three additional cloud providers for testing .

Gary Smith: In the quarter, our WaveLogic 6 Nano 800 gig pluggables have shipped for initial revenue. Since the end of the quarter, we have shipped 800 ZR plugs to three additional cloud providers for testing and certification. With regard to components, we address the cloud providers' preferred disaggregated consumption model with our high-speed coherent and other industry-leading WaveLogic technologies, including our DSP, CERTES, and other high-speed analog and electro-optical components. In addition, our components business now includes the electrical and optical interconnect solutions from our acquisition of Nubis Communications. The Nubis technologies and expertise will help us address the scale-up and scale-out opportunities inside the data center. We're excited to have the Nubis team as part of Ciena and are on track to GA the first products in fiscal 2026.

In the quarter, our WaveLogic 6 Nano 800 gig pluggables have shipped for initial revenue. Since the end of the quarter, we have shipped 800 ZR plugs to three additional cloud providers for testing and certification. With regard to components, we address the cloud providers' preferred disaggregated consumption model with our high-speed coherent and other industry-leading WaveLogic technologies, including our DSP, CERTES, and other high-speed analog and electro-optical components.

Speaker #1: certification And . And with regard to components , we address the cloud providers preferred disaggregated consumption model with our high speed coherent and other industry leading wave logic technologies , including a DSP , Surtees and other high speed analog and electro optical components .

Speaker #1: In addition , our components business now includes the electrical and optical interconnect solutions from our acquisition of Nobis Communications , the new BIS technologies and expertise will help us address the scale up and scale out opportunities inside the data center .

In addition, our components business now includes the electrical and optical interconnect solutions from our acquisition of Nubis Communications. The Nubis technologies and expertise will help us address the scale-up and scale-out opportunities inside the data center. We're excited to have the Nubis team as part of Ciena and are on track to GA the first products in fiscal 2026.

Speaker #1: We're have the excited to nobis team as part of Sienna , and are on track to GA . The first products in fiscal 26 .

Speaker #1: And as we previously noted , as technology advances and data rates increase , the components portion of our interconnects portfolio primarily represents revenue opportunities beyond fiscal 26 .

Gary Smith: And as we previously noted, as technology advances and data rates increase, the components portion of our interconnects portfolio primarily represents revenue opportunities beyond fiscal 2026. In addition to our interconnects portfolio, as market needs continue to evolve driven by AI, we're seeing new architectural applications arise in and around the data center, with two recent cloud provider use cases, I think, of particular note. First use case is the scale-across architecture, linking geographically dispersed AI training clusters using our market-leading RLS photonic line system, WaveServers, and interconnects portfolio. This is an opportunity we discussed over the past couple of quarters, where a large hyperscaler is linking to two regional data centers to build an AI backbone. I'm pleased to report that this hyperscaler is now extending this architecture to more locations.

And as we previously noted, as technology advances and data rates increase, the components portion of our interconnects portfolio primarily represents revenue opportunities beyond fiscal 2026. In addition to our interconnects portfolio, as market needs continue to evolve driven by AI, we're seeing new architectural applications arise in and around the data center, with two recent cloud provider use cases, I think, of particular note.

Speaker #1: In addition to our interconnects portfolio, as the market continues to evolve, driven by AI, we're now seeing architectural applications arise in and around the center of data with two recent cloud provider use cases.

Speaker #1: I think of note, in particular, first, case is the use scale across architecture linking geographically dispersed AI training clusters using our leading market RL's photonic line system, wave servers, and interconnects portfolio. This is an.

First use case is the scale-across architecture, linking geographically dispersed AI training clusters using our market-leading RLS photonic line system, WaveServers, and interconnects portfolio. This is an opportunity we discussed over the past couple of quarters, where a large hyperscaler is linking to two regional data centers to build an AI backbone. I'm pleased to report that this hyperscaler is now extending this architecture to more locations.

Speaker #1: Opportunity we discussed over the past couple of quarters, where a large hyperscale is linking to two regional data centers to build an AI backbone.

Speaker #1: I'm pleased to report that this Hyperscaler is now extending this architecture more to locations . Additionally , I am pleased to announce that two more major hyperscalers have chosen our optical solutions for their scale across training applications as well .

Additionally, I am pleased to announce that two more major hyperscalers have chosen our optical solutions for their scale-across training applications as well. The second use case is out-of-band network management. Ciena's unique DECOM solution leverages our XGS-PON and other routing and switching products and was initially designed with Meta to meet hyperscale requirements. Today, I'm pleased to announce that our DECOM business with Meta has expanded as they plan to deploy in multiple new data centers.

Speaker #1: The second use case is out-of-band network management. Ciena's unique solution leverages our XGS-PON and other routing and switching products and was initially designed with Meta to meet hyperscale requirements.

Speaker #1: Today , I'm pleased to announce that our Dicom business with meta has expanded as they plan to deploy in multiple new data centers .

Speaker #1: Also , we're engaged in advanced technical discussions with additional hyperscalers to deploy this solution in their data centers . I'd like to briefly here that the acknowledge scale across and Dicom wins are just the most recent AI related use cases to materialize for us in recent months .

Speaker #1: They are great examples of how we co-create and productize with market-leading solutions to address critical customer scaling requirements. We fully anticipate continuing to develop additional innovative solutions with our customers as they monetize it across the various architectures.

We fully anticipate continuing to develop additional innovative solutions with our customers as they monetize AI across the various architectures. Before I turn it over to Marc, I really want to.

Q4 2025 Ciena Corp Earnings Call

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