Ciena closed 2025 with strong results that saw $4.77 billion in full-year revenue, up 19% year-over-year as it continues to ride the right side of the AI wave.

The Maryland-based firm reported that fourth-quarter (Q4) revenues were up 20% year-over-year to $1.35 billion, with $665 million in free cash flow for the year.

But the company's growth comes with notable customer concentration risk. Three customers represented 43.6% of Q4 revenue: two unspecified customers, along with AT&T, a dramatic dependency for a company with more than 1,700 customers worldwide. For the entire fiscal year, just two customers accounted for 28.4% of total revenue.

While the vendor failed to specify who those customers were, CFO Mark Graff revealed one was a cloud provider, the other a service provider.

Ciena’s efforts have seen a rise in customers outside its traditional telecom base. The vendor reported that 55% of Q4 revenue came from non-telco customers, with direct cloud providers growing 49% year-over-year to represent 42% of total revenue.

The vendor, which supplies high-speed optical, packet networking systems, and related software, realized 100% year-over-year revenue and shipment growth for its coherent pluggables.

Ciena's latest earnings revealed it has again expanded its WL6e customer base by 68 customers as digital infrastructure operators look to adopt 1.6 Tb/s (1.6T) coherent solutions.

Ciena has also sought to take advantage of the rise of neoclouds, smaller-scale cloud vendors offering AI training and GPU-as-a-service (GPUaaS). The vendor, which refers to them as “neoscalers,” reported 12 customer wins during 2025, with one unspecified provider finding itself in the top three for WL6e customers in Q4.

It also saw growth outside North America, with EMEA revenue growing 30% year-over-year in Q4.

CEO Gary Smith said the results emphasized its position as “the global leader in high-speed connectivity with an expanding role in the AI ecosystem."

AI and ‘neoscalers’ to drive Ciena's next wave

Looking ahead to fiscal 2026, Ciena’s outlook suggests continued momentum, with projected full fiscal-year revenues of between $5.7 billion and $6.1 billion.

The vendor cited its long-term growth visibility as supported by multi-year project cycles with hyperscalers, increasing capital expenditures for photonics and component supply, and new architectural wins, with one eye firmly on those emerging neoscalers.

“We continue to see accelerating demand from our cloud customer providers, including the large hyperscalers and the emerging neoscaler segment,” Smith said. “In fact, cloud providers today are as focused on scaling their network as they are on their access to power.”

The CEO suggested that orders from cloud providers were “very strong” and ramping across its portfolio, in what constitutes a “substantial portion of our growing backlog.”

“As counterintuitive as it may seem, the cloud providers have largely actually underinvested in their networks to date, particularly relative to other areas of AI infrastructure,” Smith said. “The major hyperscalers who are seeing rapid traffic growth not only have the capital to invest but also have real sustainable business models that are currently constrained by the need to dramatically scale their global networks.”

Smith told investors that Ciena expects to “take revenue” from the major hyperscalers in 2026, with a “large part” set to be scaled up in 2027 and through 2028.

“These are enormous amounts of scale and commitments around massive amounts of fiber between data centers, which takes time from an infrastructure point of view,” Smith added. “I believe we'll take revenue on all three during the course of this year. So, I mean, I really see the ramp on this as we get to ‘27 and through ‘28.”