CIEN Stock Tanks 13% on Q2 Earnings Miss, AI Demand Drives Sales Y/Y

Core Insights - Ciena Corporation reported adjusted earnings per share (EPS) of 42 cents for Q2 fiscal 2025, missing the Zacks Consensus Estimate by 19.2%, but up from 27 cents in the prior year [1][8] - Quarterly revenues increased by 23.6% year over year to $1.13 billion, exceeding the Zacks Consensus Estimate by 2.8$400 million, representing 38% of total revenues and an 85% year-over-year increase, driven by strong demand in AI infrastructure investments [3] Financial Performance - Adjusted gross margin fell to 40.2% due to tariffs and product mix affecting profitability [8] - Non-GAAP adjusted EBITDA expanded by 36% to $116.7 million [11] - Net cash flow from operating activities was$156.9 million, significantly up from $58.5 million in the prior year [12] Segment Performance - Networking Platforms revenues rose 28.1$866.3 million, while Platform Software and Services revenues remained flat at $85.4 million [5] - Global Services revenues increased by 8.5$146.2 million [6] - Non-telco customer revenues accounted for 54% of total revenues, with two customers contributing 23.9% of the top line [9] Regional Performance - Revenues in the Americas totaled $833.8 million, up 25.8$191.6 million, up 23% [6] Guidance and Outlook - For Q3 fiscal 2025, Ciena expects revenues between $1.13 billion and$1.21 billion, with adjusted gross margin in the low-40% range [13] - The company updated its full-year revenue growth outlook to approximately 14%, up from the previous estimate of 8-11% [14] - Adjusted operating expenses are projected to average $360-$370 million per quarter for the year [15]