But the filing itself is a landmark for the Silicon Valley superstartup that intends to change the way DWDM networks are built.
Infinera's IPO has been anticipated for about a year, and strong signs of an S-1 filing were cropping up in January. (See Is Infinera Ready for an IPO?)
The company, now with 605 employees, has raised $315 million since its inception in 2000 as Zepton Networks. Its most recent round, a whopping $110 million, came in July. (See Infinera Raises Another $110M.)
But Infinera has only started to get meaningful revenues. Its true sales have rocketed -- to $58.7 million in 2006, according to the S-1 -- but $44.3 million of that came in the quarter ended Dec. 31. Revenues for 2005 totaled just $4.1 million.
As for the losses, they're hard to ignore: $89.1 million, or $14.55 per share, for calendar 2006, and another $215 million during the four previous years, according to the S-1.
Table 1: Infinera in the Red
|Net loss ($M)||(34.1)||(50.2)||(66.5)||(64.6)||(89.1)|
|Net loss per share||($17.05)||($16.10)||($15.30)||($13.76)||($14.55)|
|Cash & equivalents ($M)||50||54.2||40||37.1||29.6|
|Source: Infinera Corp.; figures as of Dec. 31 of each year|
Despite a burst of customer wins recently, Infinera got 60 percent of its 2006 revenues from Level 3 Communications Inc. (NYSE: LVLT), a deal announced in May 2005. That situation should pass eventually; Infinera's S-1 says the company has scored 25 customer wins as of Feb. 15. (See Infinera Reaches Level 3, XO Selects Infinera, and Infinera Muscles Into Interoute.)
Details such as the number of shares to be offered, or the price, haven't been penciled in yet. For the purposes of calculating a registration fee, the company's paperwork lists its "maximum proposed aggregate offering price" of $150 million.
Goldman Sachs & Co. is Infinera's lead underwriter, joined by Citigroup , JPMorgan Partners , Lehman Brothers , and Thomas Weisel Partners .
Aside from the numbers, the S-1 reveals a bit of Sarbanes-Oxley trouble, in the form of a "material weakness" in the way Infinera valued its inventory. The S-1 says the weakness has been corrected. Separately, and perhaps unrelated, Infinera swapped out its CFO in June, around the time it was presumed to be planning an IPO. (See Infinera's CFO Quits.)
Another interesting tidbit: The S-1 says Infinera got sued last year by Cheetah Omni LLC of Ann Arbor, Mich., over two patents -- Nos. 6,795,605 ("Micromechanical Optical Switch") and 7,142,347 ("Method and system for processing photonic systems using semiconductor devices").
Both patents are credited to Mohammed Islam, a professor at the University of Michigan whose research group has spun out startups including Xtera Communications Inc. (Nasdaq: XCOM)
Infinera's largest shareholders are Advanced Equities Inc. and Kleiner Perkins Caufield & Byers , the S-1 says. Each holds roughly 6.4 million shares, for a 9.3 percent stake. Mobius Venture Capital and RWI Ventures , respectively holding 7.8 and 5 percent, are the next largest shareholders.
The largest employee/director shareholder is chairman and CEO Jagdeep Singh, with 3.2 million shares, or 4.5 percent.
— Craig Matsumoto, West Coast Editor, Light Reading