Research Reports

Q4 revenue $1.35B, up 20% YoY; full-year revenue $4.77B, up 19% YoY, a new record (CEO/CFO/prepared)
Q4 adjusted EPS $0.91, up 69% YoY; full-year adjusted EPS $2.64, up 45% from fiscal 2024 (CEO/CFO)
Full-year orders record $7.8B; entered fiscal 2026 with record backlog (CEO)
Optical business Q4 up 19% YoY; RLS (photonic line system) up 72% YoY (CFO)
Routing & switching Q4 up 49% YoY; 3,005 series product revenue doubled combined; DCOM drove much of growth (CFO)
Global Services Q4 up 25% YoY; advisory & enablement up 53%, installation & implementation up 45% (CFO)
Blue Planet Q4 revenue $34M record, full-year $115M record, achieved full-year profitability (CFO)
Interconnects (ZR/ZR+ pluggables) FY25 revenue >$168M, more than doubled FY24; WaveLogic 6 nano 800G pluggables shipped initial revenue (CEO)
In & around data center opportunity grew 3x from FY24 to FY25 (CEO)
Backlog exiting FY25 ~$5B, of which ~$3.8B hardware/software, remainder services (CFO)
Q4 adjusted gross margin 43.4%, 90 bps above guide midpoint; full-year 42.7% (CFO)
Q4 adjusted operating margin 13.2%, up 250 bps QoQ and 320 bps YoY; full-year 11.2%, up 150 bps (CFO)
Q4 cash from ops $371M; FY25 free cash flow $665M after $140M CapEx (CFO)
Ended FY25 with $1.4B cash (CFO)
FY25 share repurchases ~$330M at avg price $83.34 (CFO)

Official guidance (CFO):

FY2026: revenue approx $5.7B–$6.1B (nearly 24% annual growth at midpoint vs prior ~17% outlook); adjusted gross margin 43% ±1 pt; adjusted operating expense flat ~$1.52B; operating margin 17% ±1 pt; CapEx $250M–$275M; share repurchases ~$330M
Q1 FY2026: revenue $1.35B–$1.43B; adjusted gross margin 43%–44%; adjusted OpEx ~$380M; operating margin 15.5%–16.5%

Mgmt quotes:

Gary Smith (CEO): “We reported record fiscal fourth quarter and full-year revenue of $1.35 billion and $4.77 billion, respectively.”
Gary Smith (CEO): “Orders from cloud providers are very strong and ramping across our portfolio, and they constitute a substantial portion of our growing backlog.”
Gary Smith (CEO): “The scale of investment currently underway is massive and accelerating faster than anything we or indeed the industry have seen to date.”
Mark Graff (CFO): “We now expect revenue in fiscal 2026 to be approximately $5.7 billion to $6.1 billion, or nearly 24% annual growth at the midpoint, versus the 17% growth rate discussed in September.”
Mark Graff (CFO): “We expect fiscal 2026 operating margins to improve further to 17% plus or minus a point.”

Metric	Value	Speaker/Context
Q4 revenue	$1.35B	CEO/prepared
Full-year revenue	$4.77B	CEO/prepared
Full-year orders	$7.8B	CEO/prepared
Q4 adjusted EPS	$0.91	CEO/prepared
Full-year adjusted EPS	$2.64	CEO/prepared
Q4 adjusted gross margin	43.4%	CFO/prepared
Full-year adjusted gross margin	42.7%	CFO/prepared
Q4 adjusted operating margin	13.2%	CFO/prepared
Full-year adjusted operating margin	11.2%	CFO/prepared
Q4 cash from operations	$371M	CFO/prepared
Full-year free cash flow	$665M	CFO/prepared
Year-end cash	$1.4B	CFO/prepared
FY25 share repurchases	~$330M at avg $83.34	CFO/prepared
Backlog exiting FY25	~$5B ($3.8B hardware/software)	CFO/prepared
FY26 revenue guidance midpoint	~$5.9B (24% growth)	CFO/prepared
FY26 adjusted gross margin guidance	43% ±1 pt	CFO/prepared
FY26 operating margin guidance	17% ±1 pt	CFO/prepared
FY26 CapEx guidance	$250M–$275M	CFO/prepared
Q1 FY26 revenue guidance	$1.35B–$1.43B	CFO/prepared
Q1 FY26 adjusted gross margin guidance	43%–44%	CFO/prepared
Q1 FY26 operating margin guidance	15.5%–16.5%	CFO/prepared

Topic: Revenue growth visibility and gross margin trajectory
Key points:
- FY2025 orders reached $7.8 billion; Q1 is "essentially sold out" — more supply would yield more sales.
- FY2026 midpoint growth guided at 24%; capacity investment increasing ~50% year-over-year.
- Gross margin guided to 43%–43.5% near term; 800G NPI phase creates headwinds expected to normalize by year-end.
- Mgmt sees gross margin as "sustainable" vs. past cyclicality, with aspiration to reach mid-40s as a "waypoint, not the endgame."
Mgmt stance: Bullish — cites strong hyperscaler demand, sold-out position, and multiyear gross margin expansion path.

Topic: Scale across engagements, Neo Cloud demand, and FY2027 visibility
Key points:
- Scale across AI backbones currently dominated by large hyperscalers; Neo Cloud adoption expected to take time.
- Early-stage scale across mix (new line systems + 800G plugs) creates margin headwind, but yields improve with volume.
- Long-term 8%–11% growth guide "off the table"; mgmt not guiding FY2027 but sees momentum continuing into FY2027–2028.
- Coherent inside data center is a new market, revenues largely a "27/28 play."
Mgmt stance: Bullish — multiple multiyear scale across wins and new data center markets provide confidence beyond FY2026.

Topic: DCOM opportunity, telco sustainability, and product mix shift
Key points:
- DCOM co-created with Meta; opportunity expanding to "hundreds of millions of dollars" in FY2026; engaged with 2–3 other hyperscalers for similar architecture.
- Telco business (half of revenue) expected to see "mid-digit, single-digit growth" — sustainable due to underinvestment in transport since COVID.
- AI traffic (e.g., MOFN) contributed "hundreds of millions" to telco revenue last year; North America ramp-up underway.
- Product mix shifting: higher proportion of line systems (scale across initial build), large ramp in 800G plugs, and DCOM emerging as a portfolio offering.
Mgmt stance: Bullish — DCOM provides data center entry point; telco growth steady, amplified by AI traffic.