Optical networking vendor Ciena shrugged off another round of pandemic challenges in the third quarter of 2020. The company banked $142.3 million in net income on $976.7 million in revenue, which was up 1.7% year over year.

“Today, we delivered outstanding third-quarter results across the board, and similar to last quarter, performance in Q3 demonstrates that our strategy, focused on innovation, leadership, diversification, and global scale, has enabled us to manage well through the challenges of the current environment,” said CEO Gary Smith on Thursday's earnings call.

Smith lauded the continued success of Ciena's WaveLogic 5 Extreme coherent optics, which were among the first 800 Gb/s capable optics to hit the market.

“Networks today are more ready than before for a step function in capacity to support demand,” Smith said, adding that the company has already shipped more than 1,000 modules to nearly 40 customers.

Ciena continued to see strong revenue growth in the North American, European, Middle Eastern, and African markets during Q3. “So far this year, we believe we've taken an additional one-plus percent of global market share,” said Smith.

Helping to maintain Ciena's financial stability during the uncertain quarter, CFO Jim Moylan said the company continued to diversify its customer base “with non-telco customers generating 43% of total revenue.”

Meanwhile, Ciena continued to experience significantly lower opex compared to the same period last year. This, Moylan said, was due in large part to ongoing COVID-19-related travel restrictions.

Ciena's continued growth and success of its fifth-generation optics were overshadowed by softening orders due to the ongoing pandemic.

“In the fiscal third quarter, we began to see some of the effects of COVID-19 in our business to a greater degree than anticipated, as well as increased economic uncertainty,” Smith said.

Smith, blamed poor economic visibility in the near term and assured investors that these headwinds were industry-wide and not unique to Ciena.

“I would say customers are running their networks hotter, and they are carefully prioritizing where and when to add network capacity,” he said. “They've proven their ability to do this for extended periods of time, as we've seen with previous economic conditions.”

However, Smith believes this will be a short-lived phenomenon and that growing bandwidth demand will force service providers to begin adding capacity to their network within the next three quarters.

“The length and breadth of the COVID-19 pandemic and its effect on the global economy remains uncertain,” said Moylan. “It is leading to more cautious customer behaviors and ongoing difficulties with operationalizing projects.”

In light of these headwinds, Moylan expects the overall optical market to be flat or down during the fourth quarter and Ciena's revenues to range from $800 million to $840 million.

Despite this, he remains optimistic that post COVID-19, Ciena will be able to realize rapidly expanding bandwidth demands.