Ciena’s revenue dropped in the third fiscal quarter of 2022 due to late delivery and supply chain issues from a few of its suppliers, yet the company attests to a strong outlook for its next fiscal year. 

“Our fiscal third quarter financial results were negatively impacted by late delivery and substantially lower-than-committed volume from a small number of suppliers," Ciena president and CEO Gary Smith stated.

The company reported $868 million in revenue for the latest quarter, which was more than $120 million lower than the same quarter last year.  

“Other than a handful of our vendors, the supply chain is delivering at 90% reliability. Lack of performance by that handful of vendors is preventing delivery to customers,” Ciena CFO Jim Moylan explained during the earnings call. “Therefore, we are accumulating components while we wait for delivery of those specific remaining items that are necessary to produce finished goods. We expect our inventory levels to reduce over time as the delivery performance for these key components stabilizes."

Supply chain issues are expected to linger into the fourth quarter, though CEO Gary Smith remains confident in the vendor's 2023 outlook based on visibility and order backlog.

“Orders were about 30% above revenue in Q3,” up from the last quarter. “We expect – as well – the orders to be above revenue in Q4. So we're going to create more backlog. The backlog as we turn out right now is approximately $4.4 billion,” he explained during the earnings call. “We’ve got very close relationships with all of our customers, some of which go back decades, so I think we have strong degrees of trust and transparency with them.”

Moylan added that looking into next year, Ciena expects to deliver revenue growth “significantly above” the annual long-term target of 6% to 8%. “The strong demand environment and our backlog reinforced our confidence in these expectations for fiscal year '23,” he explained.