re: IPO Alert: Infinera Files Its S-1Craig, I am no expert but I looked at that S1 for a few minutes and I think they are cash flow positive as of Q4 - 06. Or I could be all wet.
re: IPO Alert: Infinera Files Its S-1These are very tricky financials and will take a lot of time to understand.
There are considerable deferred revenues and deferred expenses, and net income becomes very much a function of the assumptions used. The large incremental revenue growth in Q4 was due at least partly to a shortening of the assumed contract life or something like that.
re: IPO Alert: Infinera Files Its S-1Complex for sure. It does seem like they have a viable product and the sales appear very strong. Now if thay can make some margins...
re: IPO Alert: Infinera Files Its S-1Craig, I am no expert but I looked at that S1 for a few minutes and I think they are cash flow positive as of Q4 - 06. Or I could be all wet.
Let me offer you a towel. :)
It's only positive on a gross basis. Once you include operating expenses, they lost $24M in Q4-06. (I'm looking at the table on pg 45.) But the good news is that they cut the loss down from $28M in the previous quarter. What a business!
Is wall street really taking massively unprofitable companies to IPO again?
The question investors might like answered is why they have 2 outstanding gagging contracts. But of course, no one would answer that without violating them. :)
re: IPO Alert: Infinera Files Its S-1The cash burn rate is indeed high at Infinera, but so is the growth rate. It may be the IPO is required to pay for growth. Also, it may be the case that revenue deferred may be due to the SEC disallowing those sales to be posted as revenue because of warrenty requirements in force. (I am aware of that happening elsewhere.) This I know, they have grown larger in terms of people and space then anyone not in that neighborhood is aware of. (also, expensive and not what you would do if you were struggling)
re: IPO Alert: Infinera Files Its S-1That may be correct, what is the business on page 36 about? (deferred revenue 110M)
They have contracts with time components to them. Rather than recognize the revenue (and stick a whopping big entry under accounts receivable) they recognize the revenue gradually.
Given that their DWDM contract is probably not that different than any other, why the obfuscatory detail on ratable revenue? (Do other DWDM companies do this?) Also, how renegotiable is that revenue?
It looks like an attempt to say: We're not profitable, but look what we have in the pipeline! Buy our stock!
These are very tricky financials and will take a lot of time to understand.
I disagree. The financials are very straightforward. They're losing money hand over fist.
They had 67M in cash at the end of 05 and have about 30M now. They have another 20M in a credit line. So at the current rate of burn, they have 6 months to do the deal.
Again I wonder: Are unprofitable companies really going out to IPO?
There are considerable deferred revenues and deferred expenses, and net income becomes very much a function of the assumptions used. The large incremental revenue growth in Q4 was due at least partly to a shortening of the assumed contract life or something like that.
Let me offer you a towel. :)
It's only positive on a gross basis. Once you include operating expenses, they lost $24M in Q4-06. (I'm looking at the table on pg 45.) But the good news is that they cut the loss down from $28M in the previous quarter. What a business!
Is wall street really taking massively unprofitable companies to IPO again?
The question investors might like answered is why they have 2 outstanding gagging contracts. But of course, no one would answer that without violating them. :)
This I know, they have grown larger in terms of people and space then anyone not in that neighborhood is aware of. (also, expensive and not what you would do if you were struggling)
Its the only choice. They will run out of money in a few months otherwise, and no one will by them with those financials.
They have contracts with time components to them. Rather than recognize the revenue (and stick a whopping big entry under accounts receivable) they recognize the revenue gradually.
Given that their DWDM contract is probably not that different than any other, why the obfuscatory detail on ratable revenue? (Do other DWDM companies do this?) Also, how renegotiable is that revenue?
It looks like an attempt to say: We're not profitable, but look what we have in the pipeline! Buy our stock!
These are very tricky financials and will take a lot of time to understand.
I disagree. The financials are very straightforward. They're losing money hand over fist.
They had 67M in cash at the end of 05 and have about 30M now. They have another 20M in a credit line. So at the current rate of burn, they have 6 months to do the deal.
Again I wonder: Are unprofitable companies really going out to IPO?
KPCB might be able to reach out and strong arm / guilt their Kieretsu aka pawn it off, but I for one will cease doing business with same.
Infinera = Avanex, lack of net-wise
JMHO
-Why