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hyperunner 12/5/2012 | 3:42:43 PM
re: Infinera Profits, But Gives Lower Forecast A quick prediction before I hit the sack. At least one reporter/analyst will misinterpret these numbers because they make his/her brain ache.

Infinera is now establishing VSOE for its revenues.

So in the first 4 quarters of its public life, the non-GAAP revenues were a better indicator of the real business. This fact was widely misunderstood by reporters and non-business analysts (Ryan, you didn't fall into this trap - kudos).

These results are a snapshop of the company in transition. A ton of non-GAAP revenue now moves into the GAAP column, and the non-GAAP revenues this quarter are actually lower than GAAP.

In future quarters we'll see that GAAP revenues will be a better, and more conventional indicator of the health of the business.

But for this quarter, and maybe a couple more, you need to look at both GAAP and non-GAAP, and understand the movement of revenue between these columns, or you won't get an accurate picture.

And "Ed." - remember that these are not "software accounting rules". They're just "accounting rules". It's just that software companies tend to be more affected by them than hardware companies. As I recall, a lot of the reason that Nortel had to restate and restate their results a few years back is that they failed to correctly implement these rules.

Just wondering who'll be the first reporter/analyst to compare the last two INFN non-GAAP numbers and say they missed the quarter :-)

Sweet dreams.

hR.
Ryan Lawler 12/5/2012 | 3:42:40 PM
re: Infinera Profits, But Gives Lower Forecast To make things even more complicated, Infinera has now established VSOE for all components of its business and will be shifting to all-GAAP financials by Q109, according to its CFO on the conference call.

I'm looking to do a followup on how the shift will affect the company's GAAP and non-GAAP numbers in the next three quarters as it shifts from invoiced shipments to GAAP financials next year. Stay tuned.
Ryan Lawler 12/5/2012 | 3:42:40 PM
re: Infinera Profits, But Gives Lower Forecast To make things even more complicated, Infinera has now established VSOE for all components of its business and will be shifting to all-GAAP financials by Q109, according to its CFO on the conference call.

I'm looking to do a followup on how the shift will affect the company's GAAP and non-GAAP numbers in the next three quarters as it shifts from invoiced shipments to GAAP financials next year. Stay tuned.
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