Ciena continues to ride the AI wave as revenue for the second quarter (Q2) of its fiscal 2026 rose 40% year over year (YoY) to $1.57 billion.

The optical giant revealed a gross profit margin at 44% for the quarter, up from 40.2% the previous year, while non-generally accepted accounting practice (GAAP) operating margin jumped from 8.2% to 19.5%.

The company’s performance sees it leaning hard into AI-driven demand as a tailwind, with the ongoing data center build pulling through Ciena's optical networking kit at pace.

Ciena’s optical networking lines continue to drive its impressive growth, with revenues rising from $773.6 million in Q2 2025 to $1.10 billion in 2026 – accounting for 70% of the company’s total revenue.

To put in perspective the sheer importance of its optics portfolio, Ciena’s routing and switching unit nearly doubled its revenues from $92.7 million to $174.2 million, while its platform software and services rose 6% to $93.9 million. CIena’s global services unit mustered an 11.4% YoY rise to $179.4 million.

“Our long-term strategy to be the global leader in high-speed connectivity – both across the WAN and in and around the data center – is tightly aligned to the structural, multi-year opportunities created by AI-driven demand, positioning us to capitalize on market dynamics and drive sustained, profitable growth,” Ciena CEO Gary Smith noted.

Ciena is one of a host of firms down the supply chain taking advantage of the AI buildout, with its products key to powering high-speed connectivity for intense workloads.

The intense demand, though, is exceeding supply, with Ciena cradling what CFO Marc Graff previously described as a “meaningfully higher backlog” worth around $7 billion – with nearly all new orders now queued for 2027 delivery.

In conversation with SDxCentral last month, Smith projected that a supply-demand equilibrium likely won't be reached until 2028, a forecast mirroring the anticipated recovery timeline for the ongoing memory shortage.

Smith said Ciena’s latest results reflect “disciplined execution in a dynamic supply environment” along with the strength of its portfolio.

“We delivered strong fiscal second quarter results, marked by significant year-over-year revenue growth, adjusted gross margin expansion, and nearly fourfold growth in adjusted earnings per share," Graff added. “Our demonstrated ability to drive operating leverage gives us confidence in continued earnings expansion and long-term value creation for customers and shareholders.”

Ciena doesn't have plans on slowing, with Smith telling SDxCentral that it plans to double down by making a play inside the data center.

While all communications inside facilities today are largely electrical, Smith argued that Ciena’s optics were “really the only technology” capable of enabling distances and volumes needed to take digital infrastructure to the next level.

“You saw it on the outside of the data center over the last 20, 30 years. It's moved from electrical to optical," Smith said in May. "Ciena's been a massive beneficiary of that. We see the same dynamic happening inside the data center over time now. And so these investments that people like Nvidia have made in the optical ecosystem, frankly, validate that hypothesis.”