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Infinera Reports Q2 Growth

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8/7/2018
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SUNNYVALE, Calif. -- Infinera Corporation, provider of Intelligent Transport Networks, today released financial results for its second quarter ended June 30, 2018.

GAAP revenue for the quarter was $208.2 million compared to $202.7 million in the first quarter of 2018 and $176.8 million in the second quarter of 2017.

GAAP gross margin for the quarter was 40.5% compared to 40.5% in the first quarter of 2018 and 36.7% in the second quarter of 2017. GAAP operating margin for the quarter was (10.4)% compared to (12.2)% in the first quarter of 2018 and (22.9)% in the second quarter of 2017. GAAP net loss for the quarter was $(21.9) million, or $(0.14) per share, compared to a net loss of $(26.3) million, or $(0.17) per share, in the first quarter of 2018, and net loss of $(42.8) million, or $(0.29) per share, in the second quarter of 2017.

Non-GAAP gross margin for the quarter was 43.9% compared to 43.7% in the first quarter of 2018 and 40.7% in the second quarter of 2017. Non-GAAP operating margin for the quarter was (0.7)% compared to (3.4)% in the first quarter of 2018 and (12.2)% in the second quarter of 2017.

Non-GAAP net loss for the quarter was $(1.3) million, or $(0.01) per share, compared to a net loss of $(7.2) million, or $(0.05) per share, in the first quarter of 2018, and net loss of $(22.8) million, or $(0.15) per share, in the second quarter of 2017.

A further explanation of the use of non-GAAP financial information and a reconciliation of the non-GAAP financial measures to the GAAP equivalents can be found at the end of this release.

“In Q2, we delivered strong margins and our fifth consecutive quarter of revenue growth, as customers continued to adopt our next-generation products,” said Tom Fallon, Infinera CEO. “In the second half, we expect to deploy several new opportunities that will drive multi-year growth. We believe adding Coriant’s capabilities and extensive customer base to our vertically integrated operating model and refreshed product portfolio, will allow us to enter 2019 in a position of strength. I really like our opportunity and am very excited for what the future holds.”

Financial Outlook
Infinera reaffirms the following expectations from its first quarter 2018 conference call on May 9, 2018:

  • We continue to expect revenue in the second half of 2018 will be 2% to 4% higher than revenue in the first half of 2018. This expectation implies a revenue range in the second half of 2018 of approximately $420 million to $430 million and full fiscal year 2018 revenue growth of approximately 13% compared to the prior fiscal year.

  • We continue to expect to achieve non-GAAP profitability in the fourth quarter of 2018.

    For the quarter ending September 29, 2018:

    We expect several new customer footprint deployments in the third quarter of 2018. We expect these new deployments will drive multi-year revenue growth and strong margins moving forward. However, as is typical with new deployments of network infrastructure, these will have lower margins initially.

  • Revenue is expected to be $210 million +/- $10 million. This expectation implies 9% year-over-year growth at the midpoint.

  • GAAP gross margin is expected to be 35% +/- 200 bps. Non-GAAP gross margin is expected to be 38% +/- 200 bps.

  • GAAP operating expenses are expected to be $97 million +/- $2 million. Non-GAAP operating expenses are expected to be $86 million +/- $2 million.

  • GAAP operating margin is expected to be approximately (12)%. Non-GAAP operating margin is expected to be approximately (3)%.

  • GAAP EPS is expected to be $(0.16)+/- $0.02. Non-GAAP EPS is expected to be $(0.05) +/- $0.02.

    Infinera's Financial Outlook does not include the potential impact of the pending Coriant acquisition, including any associated prospective debt financing and other significant transactions that may be completed after August 7, 2018.

    Infinera Corp. (Nasdaq: INFN)

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