Ciena’s CEO said telcos had underinvested in their networks

MOFN rising

Ciena’s Managed Optical Fiber Networks (MOFN) is a key driver in telco and overall service provider optical growth.

MOFN is a collaborative model where Ciena helps telecom providers build and manage dedicated, high-capacity fiber networks for cloud companies (hyperscalers) needing to connect their vast data centers, especially for AI/ML workloads, providing a middle ground between public networks and owning dark fiber.

“What is amplifying that growth, though, is the AI traffic for things like MOFN,” Smith said. “And you saw last year, hundreds of millions of dollars of our telco business were, in fact, MOFN, specifically for hyperscalers. We’ve seen it internationally, and we’re seeing it now in North America ramp up as well.”

Service providers' businesses are being fueled by AI-driven enterprise cloud demand, and, specifically, Ciena continues to add new cloud providers and telcos that need MOFN.

“AI is also fueling service providers' businesses through the enterprise cloud demand, and specifically, cloud providers' need for managed optical fiber networks or MOFN,” Smith said. “As a proof point, we recently won and are deploying a large MOFN project in India with two service providers for a major hyperscaler.”

In addition to India, Ciena secured multiple major MOFN wins across other regions, including several in new and emerging geographies. As a result of these growth drivers, service provider orders rose 70% for the year, with revenue from three service provider customers growing 16%.

“Due to the increasing momentum across both cloud and service providers, Ciena's optical market share has continued to grow and extend our overall leadership, adding two points year-to-date, and we expect further gains clearly in 2026,” Smith said. “To address this accelerating demand, we are committed to increasing investment and working with our supply chain partners to scale the business.”

Accelerating cloud demands

While the emerging spending from telcos and traditional service providers is a compelling sign of new growth, cloud providers remain the most aggressive.

Ciena is seeing particular growth from both large hyperscalers and the emerging neoscaler segment.

Led by Amazon, Microsoft, and Google, this group’s market share has been gradually rising, according to a recent Synergy Research report. At the same time, the “boom” in cloud usage has driven the worldwide market value to $107 billion in the third quarter, up from $68 billion eight quarters ago.

Neoscalers are focused on delivering high-performance, GPU-centric infrastructure (GPUaaS) for demanding AI/ML workloads. The neocloud sector, focusing on GPU-as-a-Service for AI/ML workloads, is rapidly growing, led by CoreWeave and other specialized providers.

“Cloud providers today are as focused on scaling their network as they are on their access to power,” Smith said. “Orders from cloud providers are strong and ramping across our portfolio, and they constitute a substantial portion of our growing backlog.”

During the quarter, two of its 10% revenue customers included two global cloud providers. Smith said he expects “us to take revenue for all three of these hyperscalers in 2026 or begin to take revenue in 2026.”

Optical and routing make revenue gains

With substantial gains in optical and routing/switching, Ciena’s fiscal fourth quarter 2025 revenue was $1.35 billion, up 20% year-over-year and $70 million above the midpoint of the vendor’s guide. Ciena’s annual revenue was up 19% to $4.77 billion, a new record.

Marc Graff, CFO of Ciena, said, “Q4 was strong across all lines of business.”

Driven by strength in its RLS (Reconfigurable Line System) solution, which was up 72% year-over-year, Ciena’s optical business was up 19% year-over-year.

Likewise, Ciena’s routing and switching business grew 49% year over year, with revenue from the 3,000- and 5,000-series products doubling on a combined basis, driven by the Data Center Out-of-Band Management (DCOM) opportunity.

Global Services was another bright spot, growing 25% year-over-year, primarily driven by advisory and enablement, and installation and implementation, which grew 53% and 45% year-over-year, respectively. Blue Planet also reported $34 million in revenue for the quarter.

In the fourth quarter, Ciena had three 10% revenue customers, including two global cloud providers and AT&T.

As it looks ahead to 2026, Ciena has a significant pipeline of opportunities. “We are exiting the year with about $5 billion of backlog, of which approximately $3.8 billion is hardware and software, with the remaining being software services,” Graff said. “This backlog supports a large share of our fiscal '26 revenue expectations, and we see indications of strong demand continuing into '27 and beyond, giving us exceptional visibility and confidence in our outlook and medium-term expectations.”

Looking ahead to the first quarter, Graff said, “We expect to deliver revenue in the range of $1.35 billion to $1.43 billion.”

For related articles, visit the Business Topic Center.
For more information on high-speed transmission systems and suppliers, visit the Lightwave Buyer’s Guide.
To stay abreast of fiber network deployments, subscribe to Lightwave’s Service Providers and Datacom/Data Center newsletters.