Networking company Ciena announced that its revenue increased by 20 percent year-on-year (YoY) during the final quarter of 2025.

For the fourth quarter, Ciena posted revenue of $1.35 billion, while full-year revenue came in at $4.77 billion, up 19 percent YoY.

The company's CEO Gary Smith attributed this to the growth of the AI ecosystem.

As such, Ciena said it expects to better this year's results next year, revealing that it forecasts revenue in the range of $5.7 billion to $6.1 billion in 2026.

"We're also seeing a significant addressable market opportunity in and around the data center. It is, I think, well understood that the cloud providers are investing heavily in data centers to deliver on the current and future promises of AI," said Smith on the company's earnings call yesterday (December 11).

Smith noted that Ciena has identified three connectivity requirements within data centers that the company is keen to tap into. He explains that these are to scale up within a data center rack, to scale out between racks in a data center, and to scale across the data centers.

"With our innovation and time to market leadership in high-speed connectivity solutions, our position could not be better to fulfill this critical demand. This growing AI-driven opportunity for Ciena is what we refer to as in and around the data center," he added.

Ciena reported that revenue growth for data center opportunities was up threefold from 2024. The company's revenue forecasts for next year are based on an expectation that it will deliver further growth with its data center offering, Smith told DCD.

He noted that underinvestment in data center networks is where Ciena can support cloud companies and hyperscalers.

"But the investment [of networks], relative to the rest of the AI infrastructure, has been pretty underinvested in, given what they've got to do. I think this realization that nothing really happens with AI in terms of operational monetization until it leaves the data center, and you need a network for that," said Smith.

Smith added that three out of the four big hyperscalers have adopted Ciena's for scaling across the data center.

He explained that this is where inference training is being carried out in these data centers, underpinned by an AI backbone.

Growth despite supply chain constraints

Although Smith and Ciena's earnings call was bullish and largely positive, he did acknowledge that supply chain issues have been something that Ciena has had to contend with.

It comes amid an increase in demand from service providers during the year. "Service provider orders were actually up 70 percent relative to 2024," Smith told DCD, noting that he doesn't expect the same pace of growth next year, but does expect steady growth.

He explains that the growth would be higher if not for supply chain constraints, but Ciena will provide more capital to ramp up its supply next year and beyond.

"I think, in the foreseeable future, it's really just the ecosystem of supply to be able to meet these demands from an optical point of view. And we're working closely with our optical component partners to ramp and scale that up. But you know, for the foreseeable future, we're still constrained basically by supply. This is not about demand. This is about supply," he adds.

Smith added that Ciena is also seeing more demand from service provider customers for managed optical fiber networks (MOFN), and although this has been more prominent outside of the US thus far, it has emerged in North America through Lumen and Zayo.