News

2 February 2009

 

Infinera makes quarterly loss but adds seven new customers

Infinera Corp of Sunnyvale, CA, USA, a vertically integrated manufacturer of digital optical network systems incorporating its own indium phosphide-based photonic integrated circuits (PICs), has reported adjusted revenue of $353.4m for full-year 2008, up 14% on $309.3m of invoiced shipments in 2007.

On an adjusted GAAP basis (excluding non-cash stock-based compensation and warrant revaluation expenses), gross margin was 43%, up from 41% on an invoiced shipment basis. However, net income fell from $24.1m to $14.3m.

For fourth-quarter 2008, adjusted revenue was $86.2m, up 7% on $80.9m last quarter but down 8% on $93.4m of invoiced shipments a year ago. On an adjusted GAAP basis (excluding non-cash stock-based compensation), gross margin has fallen from 47% a year ago and 42% last quarter to 36%. Net loss was $9m, compared to break-even last quarter and net income of $15.9m a year ago.

Nevertheless, Infinera has been selected by OTEGLOBE of Athens Greece (the international division of Greek incumbent national carrier OTE) as the DWDM supplier for its 7000km Transbalkan Network (TBN), which was launched last year to connect Greece and the Balkans with central Europe and western Europe. This represents Infinera’s fourth win with Tier 1 incumbent carriers, joining Deutsche Telecom and two others.

“In the fourth quarter we saw continued customer win momentum, with seven new customers added in the quarter [three European-based customers including OTE, three from the Americas, and one from Asia Pacific],” says president & CEO Jagdeep Singh. Of total revenue, 24% came from customers in the EMEA region. Total customer count is now at 56. The top 10 customers accounted for 72% of total revenue (the lowest concentration in the firm’s history). Also, for the first time in a single quarter, the company had an internet content provider, a wholesale carrier, a cable MSO, and a tier-one incumbent all ranked among its top 5 customers. In particular, the largest customer (at 23%) was an internet content provider.

The new customer wins resulted in strong top-line performance. “We believe our ongoing success at winning new customers reflects our increasingly strong position as a strategic supplier of optical transport equipment to a diverse set of customers,” says Singh. “However, the common equipment associated with these deployments and additional expected new customer shipments in Q1 put downward pressure on our gross margins in the quarter,” he adds.

“While 2009 is shaping up as a challenging one for the optical industry, we believe it will also be a year of significant long-term business opportunities for Infinera as carriers grapple with the strategic challenge of scaling their optical networks,” Singh reckons. “With a strong balance sheet and established technology lead, we intend to continue our R&D investments to advance our DWDM leadership position for years to come.”

See related item:

Infinera’s invoiced revenue falls 11%

Search: Infinera InP PICs

Visit: www.infinera.com