Infinera's Numbers

10:20 AM -- LAS VEGAS -- NXTcomm 2008 -- Infinera had already scheduled a press and analyst briefing on Wednesday, mainly to discuss technology. But of course, the topic turned to Infinera's DT win and the lowered revenue forecast that sent the stock plunging on Tuesday. (See Infinera Wins DT, Loses the Day.)

The latter wasn't a Level 3 problem. Revenue from them "bumps around a little bit," but "they were not a significant cause at all of our change in guidance," CFO Duston Williams said.

Level 3 was an obvious first guess because it represented 34 percent of Infinera's revenues in the March quarter.

Officials also tried to explain why the DT deal costs Infinera $4 million at first. The details aren't being disclosed, but the amount "represents discounts that we have offered to DT in anticipation of potential future deployments in outer years," Williams said.

It sounds like the discounts are a one-time, specified dollar amount, rather than a percentage, if I'm interpreting things right. That would mean Infinera isn't due for more "gotchas" out of this deal; DT becomes a regular paying customer after this.

The negative amount comes from the fact that Infinera has to record the entire discount with the first dollar of shipments. That, plus the cost of shipping, creates a negative number.

— Craig Matsumoto, West Coast Editor, Light Reading

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