Infinera Beats Sector Blues With Revenue Jump, Bright Outlook

Infinera's third-quarter earnings managed to clear the carrier capex hurdles that have recently entangled other vendors, as this afternoon the vendor posted revenue numbers that met guidance and consensus estimates.

Infinera Corp. (Nasdaq: INFN) reported revenue of $173.6 million, up 22% year-over-year and about 5% from the second quarter of this year. That figure is near the top of previous guidance of $160 million to $175 million, and it beat the consensus analyst estimate of about $170 million.

Furthermore, things are looking up for Infinera in the current quarter, as the packet-optical vendor presented a fourth-quarter outlook for revenue to increase into the range of $175 million to $185 million. Some of that revenue could come from Infinera's new metro cloud product as it attacks a burgeoning market segment.

Traditionally a long-haul optical supplier, Infinera last month formally announced the Cloud Xpress, its product for the metro cloud market, and CEO Tom Fallon confirmed on the earnings call that Infinera will begin revenue shipments of the Cloud Xpress in December. CFO Brad Feller added that the Cloud Xpress could produce revenue in the "low to mid single-digit millions" by the end of the fourth quarter.

Infinera also said it won three new customers during the third quarter for its DTN-X platform, including its first "industrial-type" enterprise customer, according to Fallon. The company's progress in winning deals from non-incumbent telcos, namely web content giants and data center operators, has been a mark of Infinera's recent success with the DTN-X. (See Infinera Targets Data Center Connectivity Market With Metro Platform and Optical Vendors Optimistic Despite Shrinking Market.)

Want to know more about packet-optical? Check out our dedicated packet-optical content channel here on Light Reading.

The results seemed to validate the observation in recent days from MKM Partners Managing Director Michael Genovese that Infinera's lack of supplier deals with AT&T or Verizon could help it avoid the capex dip that other vendors are seeing.

Fallon was quick to make that point, as well: "We're seeing good growth, as opposed to some of our peers, who are seeing slowdown," in part having to do with a heavy concentration of their revenue coming from large Tier 1 customers. (See Infinera Looks to Rise Above Capex Concerns.)

— Dan O'Shea, Managing Editor, Light Reading

R Clark 10/24/2014 | 7:35:34 AM
Re: Very Impressive Yes, it's definitely in a good spot right now - a small-medium company with some fresh technology and not wedded to the budgets of the big carriers. Interesting to see if Cloud Xpress can get traction.
sam masud 10/23/2014 | 2:21:55 PM
Re: Very Impressive It will be very interesting when Infinera begins revenue shipments of Cloud Xpress in December since Internap Network Services is waiting to get its hands on it. Okay, so VZ and ATT might not be customers now, but with former VZ man Stu Elby at Infinera, it's probably only a matter of time.
rgrutza600 10/22/2014 | 7:37:23 PM
Very Impressive Both the results and particularly the forecast for Q4 is impressive considering what the rest of the sector has predicted.  They really do seem to be in the sweet spot with their broad customer demand and strong Internet Content Provider presence.
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