Ciena Corporation (CIEN) is having a moment. The networking equipment maker's stock surged over 10% in premarket trading Thursday after reporting fiscal fourth-quarter results that demolished expectations, hitting a new 52-week high at $245.79.

The headline numbers tell the story: revenue climbed 20.3% year-over-year to $1.35 billion, comfortably ahead of the $1.29 billion analysts were expecting. Adjusted earnings per share came in at 91 cents, crushing the 77-cent consensus estimate. When you beat on both lines by that margin, you're doing something right.

AI Infrastructure Drives the Bus

So what's behind the surge? Ciena makes the networking hardware, software, and services that keep data moving at high speeds. Think of them as the plumbers of the internet, but for the really fast pipes. Their customers are mostly large cloud providers and telecom companies who are racing to build out infrastructure for AI workloads that require massive amounts of high-speed connectivity.

The company's Networking Platforms revenue rose 22% year-over-year to $1.05 billion, while Global Services jumped 24.9% to $177.3 million. Three major customers representing over 10% of sales each accounted for 43.6% of quarterly revenue, showing just how concentrated this business is among the biggest players.

What really stands out is the margin expansion. Adjusted gross margin widened by 180 basis points to 43.4%, while adjusted operating margin jumped 320 basis points to 13.2%. That's not just growing faster—that's pricing power. When you can expand margins while growing revenue at 20%, you've got something customers really need.

Cash Flow and Capital Allocation

Ciena generated $371 million in operating cash flow during the quarter and ended with $1.31 billion in cash and equivalents. The company bought back roughly 0.7 million shares for $84.5 million, returning capital while still maintaining a healthy balance sheet.

Management Sees More Runway

CEO Gary Smith said the record quarter strengthens Ciena's position as a global leader in high-speed connectivity and expands its role in the AI ecosystem. He expects solid growth ahead, driven by steady demand from cloud and service provider customers plus new opportunities emerging around data centers.

The guidance backs up that confidence. For the current first quarter, Ciena expects revenue between $1.350 billion and $1.430 billion, well above the $1.252 billion analyst consensus. The adjusted gross margin should hold at 43-44%.

But the real kicker is the full fiscal 2026 outlook: revenue of $5.70 billion to $6.10 billion. Analysts were only expecting $4.71 billion. That's not a beat—that's a complete reset of expectations, suggesting management sees demand accelerating rather than plateauing.

For investors betting on the AI infrastructure buildout, Ciena's results offer another data point that the spending wave is real and still building momentum.