In its fiscal third quarter 2016 earnings announced today, Ciena reported revenue of $670.6 million as compared to $602.9 million for the same quarter of 2015. It reported non-GAAP quarterly net income of $67.6 million, or $0.42 per share, which compares to non-GAAP net income of $50.7 million, or $0.37 per share, for the fiscal third quarter 2015.
Ciena gave guidance for its fourth quarter in the range of $700 million to $730 million.
Analyst Catharine Trebnick with Dougherty & Co. said this was comparable to investor estimates. “This compares to our prior estimates of $720 million,” she wrote.
The company’s guidance may account for its stock price increasing about 8.6 percent today after its earnings report.
Ciena’s president and CEO Gary Smith, said: “Q3 was a record quarter for non-telco infrastructure at 37 percent of total sales. Sales to Web scale providers made up a sizable portion of that revenue. We had our best-ever quarter with this key growth vertical.”
Direct sales to Web scale providers were over 12 percent of total revenue for the quarter, where typically that has been less than 10 percent.
Ciena also reported increased interest in Blue Planet and noted trends toward openness in the optical domain.
Ciena’s acquisition of Cyan — with its Blue Planet software-defined networking (SDN) technology — recently passed its first anniversary. “Interest in vendor agnostic orchestration and Blue Planet, specifically, is very high,” said Smith. Ciena is conducting multiple BluePlanet pilots with MSOs, Tier 1 providers, and data center operators.
Ciena’s CFO James Moylan said, “Converged packet-optical continues to be strong, led by a record quarter for 100-gig core shipments.” He said the company’s top two 100-Gig customers were both Web scale providers, and the majority of 200-Gig shipments were with Web scale providers. “In almost all cases 200-Gig shipments were for metro applications,” he added.
He also said the company saw “particularly strong” gross margins during the quarter, and gross margins will continue to trend up as the company gets increasing revenues from software and packet switching.
Finally, Smith noted two trends in Ciena’s business: one trend is for open line systems. “We embraced openness because we want our customers to have choice,” he said. “The other trend is to de-cost servers. In intra-data-center connectivity, we are seeing a trend toward bare-metal optical. Waveserver is the equivalent of a white box in the optical domain.”