infn-20220503
0001138639false00011386392022-05-032022-05-03

 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 3, 2022
 
INFINERA CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 001-33486 77-0560433
(State or other jurisdiction of
incorporation)
 (Commission
File Number)
 (IRS Employer
Identification No.)
6373 San Ignacio Ave
San Jose,California95119
(Address of principal executive offices, including Zip Code)
(408) 572-5200
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareINFNThe Nasdaq Global Select Market





Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 2.02
Results of Operations and Financial Condition.
On May 3, 2022, Infinera Corporation (the “Company”) issued a press release announcing financial results for its first quarter ended March 26, 2022. The Company also posted on the Investor Relations section of its website (www.infinera.com) investor slides for its first quarter ended March 26, 2022 and outlook for its second quarter ending June 25, 2022. A copy of the press release and investor slides are furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K. Information on the Company’s website is not, and will not be deemed, a part of this report or incorporated into this or any other filings that the Company makes with the Securities and Exchange Commission.
In accordance with General Instruction B.2 of Form 8-K, the information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 and Exhibit 99.2, is being furnished under Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of the general incorporation language of such filing, except as shall be expressly set forth by specific reference in such a filing.
The press release and investor slides furnished herewith as Exhibit 99.1 and Exhibit 99.2 refer to certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is contained in the exhibit in which each such non-GAAP measure appears.
Item 9.01Financial Statements and Exhibits.
(d)Exhibits.





Exhibit No.  Description
  
104
Cover Page Interactive Data File (formatted as Inline XBRL)





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
  INFINERA CORPORATION
Date: May 3, 2022
 By: /s/ NANCY ERBA
  Nancy Erba
Chief Financial Officer




Document

Exhibit 99.1
http://api.rkd.refinitiv.com/api/FilingsRetrieval3/.67585716.0001138639-22-000070image1.jpg.ashx

Infinera Corporation Reports First Quarter 2022 Financial Results

San Jose, Calif., May 3, 2022 - Infinera Corporation (NASDAQ: INFN) today released financial results for its first quarter ended March 26, 2022.
GAAP revenue for the quarter was $338.9 million compared to $400.3 million in the fourth quarter of 2021 and $330.9 million in the first quarter of 2021.
GAAP gross margin for the quarter was 32.9% compared to 35.6% in the fourth quarter of 2021 and 35.4% in the first quarter of 2021. GAAP operating margin for the quarter was (10.8)% compared to (2.5)% in the fourth quarter of 2021 and (7.0)% in the first quarter of 2021.
GAAP net loss for the quarter was $(41.9) million, or $(0.20) per share, compared to $(33.1) million, or $(0.16) per share, in the fourth quarter of 2021, and $(48.3) million, or $(0.24) per share, in the first quarter of 2021.
Non-GAAP revenue for the quarter was $338.9 million compared to $401.2 million in the fourth quarter of 2021 and $331.9 million in the first quarter of 2021.
Non-GAAP gross margin for the quarter was 36.2% compared to 37.2% in the fourth quarter of 2021 and 37.6% in the first quarter of 2021. Non-GAAP operating margin for the quarter was (1.0)% compared to 4.3% in the fourth quarter of 2021 and 0.4% in the first quarter of 2021.
Non-GAAP net loss for the quarter was $(14.0) million, or $(0.07) per share, compared to net income of $5.7 million, or $0.03 per share, in the fourth quarter of 2021, and $(5.5) million, or $(0.03) per share, in the first quarter of 2021.
A further explanation of the use of non-GAAP financial information and a reconciliation of each of the non-GAAP financial measures to the most directly comparable GAAP financial measure can be found at the end of this press release.
Infinera CEO David Heard said, “Demand in our fiscal first quarter was quite strong, with double digit year-over-year growth in bookings and record backlog. We won multiple new customer deals at a faster pace and of a larger magnitude than originally expected. However, the suspension of our operations in Russia late in the quarter and the supply chain impact from delayed customer project completions and elevated costs each muted our revenue and margin."
"In the quarter, we achieved additional success milestones in our 8x4x1 strategy as we ramped ICE6 and began producing key elements of our pluggables ahead of schedule, which is critical to the future expansion of our addressable market and margins. We feel confident that our recent wins, record backlog and focused execution set us up for achieving improved revenue growth and margins in the second half of the year.”
Financial Outlook
Infinera's outlook for the quarter ending June 25, 2022 is as follows:
Revenue is expected to be $350 million +/- $20 million.
GAAP gross margin is expected to be 34.0% +/- 150 bps. Non-GAAP gross margin is expected to be 36.5% +/- 150 bps.
GAAP operating expenses are expected to be $152 million +/- $2 million. Non-GAAP operating expenses are expected to be $134 million +/- $2 million.
GAAP operating margin is expected to be (10.0)% +/- 300 bps. Non-GAAP operating margin is expected to be (2.0)% +/- 300 bps.
First Quarter 2022 Investor Slides Available Online
Investor slides reviewing Infinera's first quarter of 2022 financial results will be furnished to the Securities and Exchange Commission (SEC) on a Current Report on Form 8-K and published on Infinera's Investor Relations website at investors.infinera.com prior to the first quarter of 2022 earnings conference call. Analysts and investors are encouraged to review these slides prior to participating in the conference call webcast. A copy of this press release can be found at investors.infinera.com.



Conference Call Information
Infinera will host a conference call for analysts and investors to discuss its results for the first quarter of 2022 and its outlook for the second quarter of 2022 today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Interested parties may register for the conference call at https://conferencingportals.com/event/PUIteabr. A live webcast of the conference call will also be accessible from the Events section of Infinera’s website at investors.infinera.com. Replay of the audio webcast will be available at investors.infinera.com approximately two hours after the end of the live call.
Contacts:  
Media:
Anna Vue
Tel. +1 (916) 595-8157
avue@infinera.com
Investors:
Amitabh Passi, Head of Investor Relations
Tel. +1 (669) 295-1489
apassi@infinera.com
About Infinera
Infinera is a global supplier of innovative open optical networking solutions that enable carriers, cloud operators, governments, and enterprises to scale network bandwidth, accelerate service innovation, and automate network operations. Infinera solutions deliver industry-leading economics and performance in long-haul, submarine, data center interconnect, and metro transport applications. To learn more about Infinera, visit www.infinera.com, follow us on Twitter and LinkedIn, and subscribe for updates. Infinera and the Infinera logo are registered trademarks of Infinera Corporation.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or Infinera's future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or the negative of these words or similar terms or expressions that concern Infinera's expectations, strategy, priorities, plans or intentions. Such forward-looking statements in this press release include, without limitation, Infinera’s future business plans, Infinera's ability to expand its addressable market and margins in the future, Infinera's ability to achieve improved revenue growth and margins in the second half of 2022, and Infinera's financial outlook for the second quarter of 2022. These forward-looking statements are based on estimates and information available to Infinera as of the date hereof and are not guarantees of future performance; actual results could differ materially from those stated or implied due to risks and uncertainties. The risks and uncertainties that could cause Infinera’s results to differ materially from those expressed or implied by such forward-looking statements include supply chain issues, including delays, shortages and increased costs, and Infinera's dependency on sole source, limited source or high-cost suppliers; delays in the development, introduction or acceptance of new products or updates to existing products; fluctuations in demand, sales cycles and prices for products and services, including discounts given in response to competitive pricing pressures, as well as the timing of purchases by Infinera's key customers; aggressive business tactics by Infinera’s competitors; the effect of the COVID-19 pandemic on Infinera’s business, results of operations, financial condition, stock price and personnel; Infinera's ability to identify, attract and retain qualified personnel; the effects of customer and supplier consolidation; Infinera’s ability to respond to rapid technological changes; Infinera’s future capital needs and its ability to generate the cash flow or otherwise secure the capital necessary to meet such capital needs; the effect of global and regional economic conditions on Infinera’s business, including effects on purchasing decisions by customers; risks and compliance obligations relating to Infinera's international operations as well as actions by the U.S. or foreign governments, including with respect to Russia's military operations in the Ukraine; the impacts of foreign currency fluctuations; Infinera's ability to service its debt obligations and pursue its strategic plan; Infinera’s ability to protect its intellectual property; claims by others that Infinera infringes on their intellectual property rights; events that are outside of Infinera's control, such as natural disasters, terrorist attacks or other catastrophic events that could harm Infinera's operations; and other risks and uncertainties detailed in Infinera’s SEC filings from time to time. More information on potential factors that may impact Infinera’s business are set forth in Infinera's periodic reports filed with the SEC, including its Annual Report on Form 10-K for the year ended on December 25, 2021 as filed with the SEC on February 23, 2022, as well as subsequent reports filed with or furnished to the SEC from time to time. These reports are available on Infinera’s website at www.infinera.com and the SEC’s website at www.sec.gov. Infinera assumes no obligation to, and does not currently intend to, update any such forward-looking statements.



Use of Non-GAAP Financial Information
In addition to disclosing financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures that exclude in certain cases acquisition-related deferred revenue adjustment, stock-based compensation expenses, amortization of acquired intangible assets, acquisition and integration costs, restructuring and other related costs, inventory related charges, amortization of debt discount on Infinera’s convertible senior notes, foreign exchange (gains) losses, net, and income tax effects. For a description of these non-GAAP financial measures and a reconciliation to the most directly comparable GAAP financial measures, please see the table titled “GAAP to Non-GAAP Reconciliations” and related footnotes.
Infinera has included forward-looking non-GAAP information in this press release, including an estimate of certain non-GAAP financial measures for the second quarter of 2022 that exclude stock-based compensation expense, amortization of acquired intangible assets, and restructuring and other related costs. Please see the section titled “GAAP to Non-GAAP Reconciliation of Financial Outlook” below for specific adjustments.
Infinera believes these adjustments are appropriate to enhance an overall understanding of its underlying financial performance and also its prospects for the future and are considered by management for the purpose of making operational decisions. In addition, these results are the primary indicators management uses as a basis for its planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for revenue, gross margin, operating expenses, operating margin, and net income (loss) prepared in accordance with GAAP. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and are subject to limitations.





Infinera Corporation
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited) 

 Three Months Ended
 March 26,
2022
March 27,
2021
Revenue:
Product$267,453 $254,161 
Services71,421 76,746 
Total revenue338,874 330,907 
Cost of revenue:
Cost of product182,887 165,485 
Cost of services37,959 43,260 
Amortization of intangible assets6,231 4,616 
Restructuring and other related costs150 514 
Total cost of revenue227,227 213,875 
Gross profit111,647 117,032 
Operating expenses:
Research and development73,411 73,529 
Sales and marketing35,824 32,772 
General and administrative27,890 26,506 
Amortization of intangible assets3,746 4,405 
Acquisition and integration costs— 614 
Restructuring and other related costs7,270 2,319 
Total operating expenses148,141 140,145 
Loss from operations(36,494)(23,113)
Other income (expense), net:
Interest income53 40 
Interest expense(4,992)(11,843)
Other gain (loss), net6,020 (12,395)
Total other income (expense), net1,081 (24,198)
Loss before income taxes(35,413)(47,311)
Provision for income taxes6,437 1,011 
Net loss$(41,850)$(48,322)
Net loss per common share:
Basic$(0.20)$(0.24)
Diluted$(0.20)$(0.24)
Weighted average shares used in computing net loss per common share:
Basic212,182 202,638 
Diluted212,182 202,638 

 



Infinera Corporation
GAAP to Non-GAAP Reconciliations
(In thousands, except percentages)
(Unaudited)
 Three Months Ended
March 26, 2022December 25, 2021March 27, 2021
Reconciliation of Revenue:
GAAP as reported$338,874 $400,257 $330,907 
Acquisition-related deferred revenue adjustment(1)
— 979 978 
Non-GAAP as adjusted$338,874 $401,236 $331,885 
Reconciliation of Gross Profit and Gross Margin:
GAAP as reported$111,647 32.9 %$142,466 35.6 %$117,032 35.4 %
Acquisition-related deferred revenue adjustment(1)
— 979 978 
Stock-based compensation expense(2)
1,889 2,034 1,796 
Amortization of acquired intangible assets(3)
6,231 5,782 4,616 
Restructuring and other related costs(5)
150 (148)514 
Inventory related charges(6)
2,667 (2,041)— 
Non-GAAP as adjusted$122,584 36.2 %$149,072 37.2 %$124,936 37.6 %
Reconciliation of Operating Expenses:
GAAP as reported$148,141 $152,608 $140,145 
Stock-based compensation expense(2)
11,050 11,233 9,178 
Amortization of acquired intangible assets(3)
3,746 4,307 4,405 
Acquisition and integration costs(4)
— — 614 
Restructuring and other related costs(5)
7,270 5,055 2,319 
Non-GAAP as adjusted$126,075 $132,013 $123,629 
Reconciliation of Income/(Loss) from Operations and Operating Margin:
GAAP as reported$(36,494)(10.8)%$(10,142)(2.5)%$(23,113)(7.0)%
Acquisition-related deferred revenue adjustment(1)
— 979 978 
Stock-based compensation expense(2)
12,939 13,267 10,974 
Amortization of acquired intangible assets(3)
9,977 10,089 9,021 
Acquisition and integration costs(4)
— — 614 
Restructuring and other related costs(5)
7,420 4,907 2,833 
Inventory related charges(6)
2,667 (2,041)— 
Non-GAAP as adjusted$(3,491)(1.0)%$17,059 4.3 %$1,307 0.4 %



 Three Months Ended
March 26, 2022December 25, 2021March 27, 2021
Reconciliation of Net Income/(Loss):
GAAP as reported$(41,850)$(33,068)$(48,322)
Acquisition-related deferred revenue adjustment(1)
— 979 978 
Stock-based compensation expense(2)
12,939 13,267 10,974 
Amortization of acquired intangible assets(3)
9,977 10,089 9,021 
Acquisition and integration costs(4)
— — 614 
Restructuring and other related costs(5)
7,420 4,907 2,833 
Inventory related charges(6)
2,667 (2,041)— 
Amortization of debt discount on convertible senior notes(7)
— 7,627 7,083 
Foreign exchange (gains) losses, net(8)
(5,589)4,622 11,706 
Income tax effects(9)
416 (709)(353)
Non-GAAP as adjusted$(14,020)$5,673 $(5,466)
Reconciliation of Adjusted EBITDA (10):
Non-GAAP Net Income (Loss)$(14,020)$5,673 $(5,466)
Non-GAAP Interest expense4,992 4,989 4,760 
Non-GAAP Income tax effects6,021 3,156 1,364 
Non-GAAP Depreciation and Amortization11,595 13,261 11,525 
Non-GAAP as adjusted$8,588 $27,079 $12,183 
Net Income/(Loss) per Common Share - Basic:
GAAP as reported$(0.20)$(0.16)$(0.24)
Non-GAAP as adjusted$(0.07)$0.03 $(0.03)
Net Loss per Common Share - Diluted:
U.S. GAAP as reported$(0.20)$(0.16)$(0.24)
Non-GAAP as adjusted$(0.07)$0.03 $(0.03)
Weighted Average Shares Used in Computing Net Income/(Loss) per Common Share:
Basic212,182 210,908 202,638 
Diluted(11)
212,182 218,009 202,638 

(1)The non-GAAP adjustments were related to maintenance support contracts assumed in the acquisition of Coriant, and the revenue was recognized through fiscal year 2021 to eliminate the effect of the deferred revenue fair value adjustment.



(2)Stock-based compensation expense is calculated in accordance with the fair value recognition provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation – Stock Compensation effective January 1, 2006. The following table summarizes the effects of stock-based compensation related to employees and non-employees (in thousands):
 Three Months Ended
March 26, 2022December 25, 2021March 27, 2021
Cost of revenue$1,889 $2,034 $1,796 
   Total cost of revenue1,889 2,034 1,796 
Research and development4,841 4,472 4,297 
Sales and marketing2,767 3,276 3,199 
General and administration3,442 3,485 1,682 
   Total operating expenses11,050 11,233 9,178 
  Total stock-based compensation expense$12,939 $13,267 $10,974 
(3)Amortization of acquired intangible assets consists of developed technology, trade names, customer relationships and backlog acquired in connection with the acquisition of Coriant. Amortization of acquired intangible assets also consists of amortization of developed technology, trade names and customer relationships acquired in connection with the acquisition of Transmode AB. GAAP accounting requires that acquired intangible assets are recorded at fair value and amortized over their useful lives. As this amortization is non-cash, Infinera has excluded it from its non-GAAP gross profit, operating expenses and net income measures. Management believes the amortization of acquired intangible assets is not indicative of ongoing operating performance and its exclusion provides a better indication of Infinera's underlying business performance.
(4)Acquisition and integration costs consisted of legal, financial, IT, manufacturing-related costs, employee-related costs and professional fees incurred in connection with the acquisition of Coriant.
(5)Restructuring and other related costs are primarily associated with Infinera's plan to restructure certain international research and development operations, the reduction of operating costs, the reduction of headcount at Infinera's Munich, Germany and Espoo, Finland sites, and other international sites, and Coriant's historical restructuring plan associated with its early retirement plan. In addition, this includes certain contractual liabilities and accelerated amortization on operating lease right-of-use assets due to the cessation of use of certain facilities. Management has excluded the impact of these charges in arriving at Infinera's non-GAAP results as they are non-recurring in nature and its exclusion provides a better indication of Infinera's underlying business performance.
(6)Inventory related charges were incurred as a result of the exit from certain product lines in connection with restructuring initiatives. Management has excluded the impact of these charges in arriving at Infinera's non-GAAP results as they are non-recurring in nature and its exclusion provides a better indication of Infinera's underlying business performance.
(7)Effective first quarter of 2022, the company no longer recognizes interest expense for amortization of debt discount as a result of the adoption of new debt guidance.



(8)Foreign exchange (gains) and losses have been excluded from Infinera's non-GAAP results because management believes that this expense is not indicative of ongoing operating performance and its exclusion provides a better indication of Infinera's underlying business performance.
(9)The difference between the GAAP and non-GAAP tax provision is due to the net tax effects of the purchase accounting adjustments, acquisition-related costs and amortization of acquired intangible assets. Management believes the exclusion of these tax effects provides a better indication of Infinera's underlying business performance.
(10)Adjusted EBITDA is a non-GAAP supplemental measure of operating performance that does not represent and should not be considered an alternative to operating loss or cash flow from operations, as determined by GAAP. Infinera's adjusted EBITDA is calculated by excluding the above non-GAAP adjustments, interest expenses, income tax effects and depreciation and amortization expenses. Management believes that adjusted EBITDA is an important financial measure for use in evaluating the Company's financial performance, as it measures the ability of our business operations to generate cash.
(11)The non-GAAP diluted shares include the potentially dilutive securities from Infinera's stock-based benefit plans and convertible senior notes excluded from the computation of dilutive net loss per share attributable to common stockholders on a GAAP basis because the effect would have been anti-dilutive. These potentially dilutive securities are added for the computation of diluted net income per share on a non-GAAP basis in periods when Infinera has net income on a non-GAAP basis as its inclusion provides a better indication of Infinera's underlying business performance.







Infinera Corporation
GAAP to Non-GAAP Reconciliations
(In thousands)
(Unaudited) 


Free Cash Flow
We define free cash flow as net cash provided by (used in) operating activities in the period minus the purchase of property and equipment, net made in the period.
Free cash flow is considered a non-GAAP financial measure under the SEC’s rules. Management believes that free cash flow is an important financial measure for use in evaluating the Company’s financial performance, as it measures our ability to generate additional cash from our business operations. Free cash flow should be considered in addition to, rather than as a substitute for, net loss as a measure of our performance or net cash provided by (used in) operating activities as a measure of our liquidity. Additionally, our definition of free cash flow is limited and does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other obligations. Therefore, we believe it is important to view free cash flow as supplemental to our entire statement of cash flows.

Three Months Ended
March 26, 2022December 25, 2021March 27, 2021
Net cash provided by operating activities$15,788 $1,369 $18,630 
Purchase of property and equipment, net(16,059)(9,065)(11,721)
      Free cash flow$(271)$(7,696)$6,909 










































Infinera Corporation
Consolidated Balance Sheets
(In thousands, except par values)
(Unaudited)
March 26,
2022
December 25,
2021
ASSETS
Current assets:
Cash$191,937 $190,611 
Short-term restricted cash6,528 2,840 
Accounts receivable, net276,056 358,954 
Inventory291,690 291,367 
Prepaid expenses and other current assets161,188 147,989 
Total current assets927,399 991,761 
Property, plant and equipment, net158,397 160,218 
Operating lease right-of-use assets38,469 45,338 
Intangible assets76,266 86,574 
Goodwill249,534 255,788 
Long-term restricted cash5,563 9,070 
Other long-term assets39,910 38,475 
Total assets$1,495,538 $1,587,224 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$188,460 $216,404 
Accrued expenses and other current liabilities142,903 147,029 
Accrued compensation and related benefits79,850 88,021 
Short-term debt, net495 533 
Accrued warranty21,000 23,204 
Deferred revenue129,796 137,297 
Total current liabilities562,504 612,488 
Long-term debt, net599,474 476,789 
Long-term accrued warranty18,585 21,106 
Long-term deferred revenue29,907 31,612 
Long-term deferred tax liability2,280 2,364 
Long-term operating lease liabilities50,404 54,326 
Other long-term liabilities62,179 64,768 
Stockholders’ equity:
Preferred stock, $0.001 par value
Authorized shares – 25,000 and no shares issued and outstanding
— — 
Common stock, $0.001 par value
Authorized shares – 500,000 as of March 26, 2022 and December 25, 2021
Issued and outstanding shares – 213,231 as of March 26, 2022 and 211,381 as of December 25, 2021
213 211 
Additional paid-in capital1,851,002 2,026,098 
Accumulated other comprehensive loss(15,610)(4,496)
Accumulated deficit(1,665,400)(1,698,042)
Total stockholders' equity170,205 323,771 
Total liabilities and stockholders’ equity$1,495,538 $1,587,224 





Infinera Corporation
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 Three Months Ended
 March 26, 2022March 27, 2021
Cash Flows from Operating Activities:
Net loss$(41,850)$(48,322)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization21,572 20,546 
Non-cash restructuring charges and other related costs5,390 1,410 
Amortization of debt discount and issuance costs1,060 7,822 
Operating lease expense2,702 5,228 
Stock-based compensation expense12,939 10,974 
Other, net789 2,065 
Changes in assets and liabilities:
Accounts receivable81,816 38,671 
Inventory(1,979)4,059 
Prepaid expenses and other current assets(23,481)20,669 
Accounts payable(19,829)(23,584)
Accrued expenses and other current liabilities(14,351)(11,964)
Deferred revenue(8,990)(8,944)
Net cash provided by operating activities15,788 18,630 
Cash Flows from Investing Activities:
Purchase of property and equipment, net(16,059)(11,721)
Net cash used in investing activities(16,059)(11,721)
Cash Flows from Financing Activities:
Repayment of revolving line of credit— (77,000)
Repayment of mortgage payable(121)(22)
Principal payments on finance lease obligations(400)(309)
Payment of term license obligation(1,418)(2,544)
Proceeds from issuance of common stock8,875 9,344 
Tax withholding paid on behalf of employees for net share settlement(524)(1,938)
Net cash provided by (used in) financing activities6,412 (72,469)
Effect of exchange rate changes on cash and restricted cash(4,634)(278)
Net change in cash and restricted cash1,507 (65,838)
Cash and restricted cash at beginning of period202,521 315,383 
Cash and restricted cash at end of period(1)
$204,028 $249,545 















Infinera Corporation
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

Three Months Ended
March 26, 2022March 27, 2021
Supplemental disclosures of cash flow information:
Cash paid for income taxes$1,967 $4,355 
Cash paid for interest$7,137 $7,654 
Supplemental schedule of non-cash investing and financing activities:
Property and equipment included in accounts payable and accrued liabilities$1,477 $255 
Transfer of inventory to fixed assets$2,037 $1,041 
Unpaid term licenses (included in accounts payable, accrued liabilities and other long-term liabilities)$9,290 $10,533 

(1)     Reconciliation of cash and restricted cash to the consolidated balance sheets:
March 26, 2022March 27, 2021
Cash$191,937 $234,029 
Short-term restricted cash6,528 3,288 
Long-term restricted cash5,563 12,228 
Total cash and restricted cash$204,028 $249,545 




Infinera Corporation
Supplemental Financial Information
(Unaudited)

 Q2'20Q3'20Q4'20Q1'21Q2'21Q3'21Q4'21Q1'22
GAAP Revenue $(Mil)$331.6$340.2$353.5$330.9$338.2$355.8$400.3$338.9
GAAP Gross Margin %29.4%31.8%35.7%35.4%35.6%33.2%35.6%32.9%
Non-GAAP Gross Margin %(1)
33.8%35.2%37.6%37.6%37.7%38.0%37.2%36.2%
GAAP Revenue Composition:
Domestic %50%49%36%48%52%46%42%50%
International %50%51%64%52%48%54%58%50%
Customers >10% of Revenue111
Cash Related Information:
Cash from Operations $(Mil)$(36.6)$(36.4)$52.2$18.6$21.3$(13.2)$1.4$15.8
Capital Expenditures $(Mil)$10.5$8.1$11.9$11.7$14.1$6.5$9.1$16.1
Depreciation & Amortization $(Mil)$25.9$22.9$25.9$20.5$18.8$20.9$23.4$21.6
DSOs7978827676708274
Inventory Metrics:
Raw Materials $(Mil)$43.4$39.3$34.7$31.8$33.3$37.4$39.4$41.2
Work in Process $(Mil)$50.9$51.6$55.8$55.5$55.1$54.4$53.9$55.4
Finished Goods $(Mil)$193.9$185.0$178.8$175.5$185.6$197.8$198.1$195.1
Total Inventory $(Mil)$288.2$275.9$269.3$262.8$274.0$289.6$291.4$291.7
Inventory Turns(2)
3.13.23.33.13.13.13.53.0
Worldwide Headcount3,2093,0743,0503,0413,1083,2053,2253,206
Weighted Average Shares Outstanding (in thousands):
Basic185,596189,589195,655202,638206,780209,183210,908212,182
Diluted190,127195,868203,259217,970219,459219,262218,009287,588
(1)Non-GAAP adjustments include acquisition-related deferred revenue and inventory adjustments, stock-based compensation expenses, amortization of acquired intangible assets, acquisition and integration costs, restructuring and other related costs, inventory related charges, and COVID-19 related costs. For a description of this non-GAAP financial measure, please see the section titled, “GAAP to Non-GAAP Reconciliations” of this press release for a reconciliation to the most directly comparable GAAP financial measures.
(2)Infinera calculates non-GAAP inventory turns as annualized non-GAAP cost of revenue, which is calculated as GAAP cost of revenue less the adjustments for restructuring and other related costs, inventory related charges, COVID-19 related costs, non-cash stock-based compensation expense, and certain purchase accounting adjustments, as illustrated in the reconciliation of gross profit above, divided by the average inventory for the quarter.




Infinera Corporation
GAAP to Non-GAAP Reconciliation of Financial Outlook
(In millions, except percentages)
(Unaudited) 

The following amounts represent the midpoint of the expected range:
 Q2'22
Outlook
Reconciliation of Gross Margin:
GAAP34.0 %
Stock-based compensation expense0.7 %
Amortization of acquired intangible assets1.8 %
Non-GAAP36.5 %
Reconciliation of Operating Expenses:
GAAP$152.0
Stock-based compensation expense(11.6)
Amortization of acquired intangible assets(3.9)
Restructuring and other related costs(2.5)
Non-GAAP$134.0
Reconciliation of Operating Margin:
GAAP(10.0)%
Stock-based compensation expense4.1 %
Amortization of acquired intangible assets2.9 %
Restructuring and other related costs1.0 %
Non-GAAP(2.0)%

q122earningspresentation
FIRST QUARTER 2022 FINANCIAL RESULTS May 3rd, 2022


 
2 Safe Harbor Forward-Looking Statements This presentation contains forward-looking statements, including those related to Infinera’s expectations regarding its business model and strategy, market opportunities and trends, competition, and customers; expectations regarding industry-wide supply chain challenges and ongoing COVID-19 pandemic impacts; and Infinera's financial outlook for the second quarter of 2022. All statements other than statements of historical fact could be deemed forward looking, including, but not limited to, statements made about future market, financial and operating performance; statements regarding future products or technology, as well as the timing to market of any such products or technology; any statements about historical results that may suggest trends for Infinera’s business; and any statements of assumptions underlying any of the items mentioned. These forward-looking statements are based on estimates and information available to Infinera at the time of this presentation and are not guarantees of future performance; actual results could differ materially from those stated or implied due to risks and uncertainties. The risks and uncertainties that could cause Infinera’s results to differ materially from those expressed or implied by such forward-looking statements include supply chain issues, including delays, shortages and increased costs, and Infinera's dependency on sole source, limited source or high-cost suppliers; delays in the development, introduction or acceptance of new products or updates to existing products; fluctuations in demand, sales cycles and prices for products and services, including discounts given in response to competitive pricing pressures, as well as the timing of purchases by Infinera's key customers; aggressive business tactics by Infinera’s competitors; the effect of the COVID-19 pandemic on Infinera’s business, results of operations, financial condition, stock price and personnel; Infinera’s ability to identify, attract and retain qualified personnel; the effects of customer and supplier consolidation; Infinera’s ability to respond to rapid technological changes; Infinera’s future capital needs and its ability to generate the cash flow or otherwise secure the capital necessary to meet such capital needs; the effect of global and regional economic conditions on Infinera’s business, including effects on purchasing decisions by customers; risks and compliance obligations relating to Infinera’s international operations as well as actions by the U.S. or foreign governments, including related to Russia’s military operations in the Ukraine; the impacts of foreign currency fluctuations; Infinera's ability to service its debt obligations and pursue its strategic plan; Infinera’s ability to protect its intellectual property; claims by others that Infinera infringes on their intellectual property rights; events that are outside of Infinera’s control, such as natural disasters, terrorist attacks or other catastrophic events that could harm Infinera’s operations; and other risks and uncertainties detailed in Infinera’s SEC filings from time to time. More information on potential factors that may impact Infinera’s business are set forth in its Annual Report on Form 10-K for the year ended December 25, 2021 as filed with the SEC on February 23, 2022, as well as subsequent reports filed with or furnished to the SEC from time to time. These reports are available on Infinera’s website at www.infinera.com and the SEC’s website at www.sec.gov. Infinera assumes no obligation to, and does not currently intend to, update any such forward-looking statements. This presentation includes certain non-GAAP financial measures such as non-GAAP revenue, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, non- GAAP diluted EPS, adjusted EBITDA and free cash flow. We present non-GAAP financial measures in addition to, and not as a substitute for, financial measures calculated in accordance with generally accepted accounting principles (“GAAP”). Non-GAAP measures should not be considered in isolation or as alternatives to GAAP measures. In addition, the non-GAAP measures we use, as presented, may not be comparable to similar measures used by other companies. Infinera believes these adjustments are appropriate to enhance an overall understanding of its underlying financial performance and also its prospects for the future and are considered by management for the purpose of making operational decisions. See the last two slides in this presentation for reconciliations to the most comparable GAAP financial measures. © 2022 Infinera. All rights reserved.


 
3 Q1’22 HIGHLIGHTS WON LARGE DEALS WITH HOUSEHOLD BRAND NAMES STRENGTH IN AMERICAS, ICPs, OTHER SERVICE PROVIDERS EXPANDED MEMBERSHIP OF OPEN XR FORUM INCL. EQUIPMENT MFRs C U S T O M E R S U C C E S S RECORD BACKLOG DOUBLE-DIGIT YoY BOOKINGS GROWTH TIGHT EXPENSE CONTROL F I N A N C I A L S PROGRESS ON 8 X 4 X 1 STRATEGY FOCUS ON COMPELLING TARGET BUSINESS MODEL BUSINESS STRUCTURE ALIGNED WITH STRATEGY V A L U E D R I V E R S RAMPED ICE6 TO HIGH-TEENS AS % OF PRODUCT REVENUE ~200% YoY GROWTH IN GX METRO BOOKINGS SUBSYSTEMS GROUP ACHIEVED KEY PLUGGABLES MILESTONES S O L U T I O N S © 2022 Infinera. All rights reserved.


 
4 * See reconciliation of GAAP to non-GAAP on the last two pages of this slide deck. B O O K I N G S : ST R E N G T H I N A M E R I C A S , I C P s A N D G X M E T R O ; R EC O R D B A C K L O G1 R E V E N U E : G R O W T H D R I V E N F R O M I C E 6 , M E T R O , I C P s , O T H E R S E R V I C E P R O V I D E R S2 O P E X : H I G H E R S & M S P E N D , F O C U S E D I N V E ST M E N T S I N R & D4 O P E R AT I N G M A R G I N : I M PA C T E D BY L O W E R G R O S S M A R G I N , S L I G H T LY H I G H E R O P E X5 G R O S S M A R G I N : I M PA C T E D BY S U P P LY C H A I N , P R O D U C T M I X ; O F F S E T BY I C E 63 Y E A R - O V E R - Y E A R T R E N D S F I N A N C I A L S Q1’22 FINANCIALS & COMPARISON TO PRIOR PERIODS © 2022 Infinera. All rights reserved. FINANCIAL METRICS QoQ YoY (Non-GAAP*) CHANGE CHANGE Revenue ($M) $332 $401 $339 -16% 2% Gross Margin % 37.6% 37.2% 36.2% -100bps -140bps Opex ($M) $124 $132 $126 -4% 2% Operating Margin % 0.4% 4.3% -1.0% -530bps -140bps Diluted EPS ($0.03) $0.03 ($0.07) ($0.10) ($0.04) Q1’21 Q4’21 Q1’22


 
5 QoQ YoY CHANGE CHANGE Region United States $ 157.6 $ 167.4 $ 170.2 2% 8% Other Americas $ 19.5 $ 30.0 $ 20.9 -30% 7% Europe, Middle East and Africa $ 114.9 $ 153.8 $ 108.6 -29% -6% Asia Pacific $ 38.9 $ 49.1 $ 39.2 -20% 1% Total $ 330.9 $ 400.3 $ 338.9 -15% 2% Channel Direct $ 271.3 $ 304.0 $ 260.9 -14% -4% Indirect $ 59.6 $ 96.3 $ 78.0 -19% 31% Total $ 330.9 $ 400.3 $ 338.9 -15% 2% Vertical Tier 1 $ 133.1 $ 123.6 $ 87.4 -29% -34% Other Service Provider $ 124.1 $ 180.4 $ 159.3 -12% 28% ICP $ 43.8 $ 71.4 $ 71.6 0% 64% Cable $ 30.0 $ 24.9 $ 20.6 -17% -31% Total $ 330.9 $ 400.3 $ 338.9 -15% 2% Q1’21 Q4’21 Q1’22 F I N A N C I A L S REVENUE BY REGION & BY VERTICAL © 2022 Infinera. All rights reserved. GAAP revenue in $ millions; totals may not add up exactly due to rounding. A M E R I C A S : D E S I G N W I N S , G R O W T H AT I C P s , O T H E R S E R V I C E P R O V I D E R S1 E M E A : T I M I N G O F L A R G E D E A L S , I N C L . S U B S E A , S U S P E N S I O N O F O P S . I N R U S S I A2 T I E R 1 : S E A S O N A L I T Y, T I M I N G O F D E A L S ; B O O K I N G S ST R O N G , E S P E C I A L LY I N U SA 4 O T H E R S E R V I C E P R O V I D E R S : N E W W I N S , F O O T P R I N T E X PA N S I O N , P R O J E C T R A M P S3 Y E A R - O V E R - Y E A R T R E N D S


 
6 2 0 2 2 O P T I C A L N E T W O R K I N G I N D U S T R Y 4 KEY DEMAND DRIVERS C O H E R E N T O P T I C A L E N G I N E S COREEDGE COHERENT 5G 80-90% Of the Optical Market will Use Coherent Optical Engines by 2025 S H I F T T O O P E N OPEN LINE SYSTEMS XPONDERS R E L E N T L E S S C A P A C I T Y G R O W T H 30% 35% 40% 45% 50% 5 YEAR BANDWIDTH CAGR 35%+ CAGR Source: Cisco VNI E C O S Y S T E M D I S R U P T I O N CAGR = Compound Annual Growth Rate © 2022 Infinera. All rights reserved. Source: Cignal AI, Dell’Oro, Omdia, LightCounting and Infinera


 
7 I N F I N E R A ’ S 8 x 4 x 1 S T R A T E G Y STRATEGY ALIGNED WITH KEY GROWTH AREAS INCREASED PERFORMANCE LEAD WITH TURBO Market Size & Growth ex. China Through 2025 ICP $2.7B ↑ 6% 800G EMBEDDED $3.8B ↑ 46% PLUGGABLES (in optical systems) $5.0B ↑ 9% PLUGGABLES (outside of optical systems) NEW $1.0B+ P2MP NEW >$1.0B OPEN SOLUTIONS ↑ 17% $3.4B HUAWEI NEW $1.0B+ + 8 4 1 VERTICALLY INTEGRATED MODULAR SOLUTIONS DISRUPT W/ POINT-TO-MULTIPOINT PLUGGABLES VERTICALLY INTEGRATED MONOLITHIC INDIUM PHOSPHIDE BASED PHOTONIC INTEGRATED CIRCUIT UNIQUE CAPABILITIES LEADING PERFORMANCE & OPERATIONS, GREATEST MANUFACTURABILITY, UNRIVALED CUSTOMER VALUE MAXIMUM VALUE © 2022 Infinera. All rights reserved. Source: Cignal AI, Dell’Oro, Omdia, Infinera C O R E M E T R O A C C E S S 00G00G+ 00G GX Bookings Up 200% YoY Several Significant Design Wins Key New Ecosystem Open XR Forum Members Early Production of TROSA, XR DSP Testing Well Ramped ICE6 To High-teens As % Of Product Revenue Strong Bookings Momentum


 
8© 2022 Infinera. All rights reserved. OUR PRIORITIES INVEST IN GROWTH & MARGIN- ACCRETIVE TECHNOLOGIES CONTINUE TO DRIVE OPERATIONAL EFFICIENCIES ENHANCE SHAREHOLDER VALUE THROUGH GROWTH & PROFITABILITY POSITION TO EXPAND MARKET SHARE YoY comparisons reference the midpoint of Q2’22 outlook compared to Q2’21 actuals. See reconciliation of GAAP to non-GAAP on the last two pages of this slide deck. $350 Million +/- $20M +3% YoY (PRODUCT REV. ~ 7% YoY) OPERATING MARGIN % (2%) +/- 300bps -280bps GROSS MARGIN % 36.5% +/- 150bps -120bps OPEX $134 Million +/- $2M +7% YoY YoY YoY F I N A N C I A L S Q2’22 NON-GAAP OUTLOOK REVENUE


 
9 1. TOTALS MAY NOT ADD UP DUE TO ROUNDING. 2. Q2’22 OUTLOOK REPRESENTS THE MIDPOINT OF THE EXPECTED RANGES. 3. NON-GAAP METRICS ARE RECONCILED TO THE MOST DIRECTLY COMPARABLE GAAP FINANCIAL METRIC. 4. FOR A COMPLETE RECONCILIATION OF OTHER PERIOD RESULTS, SEE PRIOR QUARTERLY EARNINGS RELEASES. © 2022 Infinera. All rights reserved. Company Confidential. © 2022 Infinera. All rights reserved. GAAP TO NON-GAAP RECONCILIATION N O T E S Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Press Release Actual Actual Actual Actual Actual Outlook Guidance Reconciliation of Revenue: U.S. GAAP as reported 330.9$ 338.2$ 355.8$ 400.3$ 338.9$ 350.0$ $350M +/- $20M Acquisition-related deferred revenue adjustment 1.0$ 1.0$ 1.0$ 1.0$ -$ -$ Non-GAAP as adjusted 331.9$ 339.2$ 356.8$ 401.2$ 338.9$ 350.0$ $350M +/- $20M Reconciliation of Gross Margin: U.S. GAAP as reported 35.4% 35.6% 33.2% 35.6% 32.9% 34.0% 34% +/- 1.5% Acquisition-related deferred revenue adjustment 0.3% 0.3% 0.3% 0.2% - - Stock-based compensation expense 0.5% 0.6% 0.4% 0.5% 0.7% 0.7% Amortization of acquired intangible assets 1.3% 1.3% 1.3% 1.4% 1.8% 1.8% Acquisition and integration costs 0.0% 0.0% 0.0% 0.0% - - Restructuring and other related costs 0.1% -0.1% 0.4% 0.0% 0.0% - Inventory related charges 0.0% 0.0% 2.3% -0.5% 0.8% - Non-GAAP as adjusted 37.6% 37.7% 38.0% 37.2% 36.2% 36.5% 36.5% +/- 1.5% Reconciliation of Operating Expenses: U.S. GAAP as reported 140.1$ 143.6$ 149.1$ 152.6$ 148.1$ 152.0$ $152M +/-$2M Stock-based compensation expense (9.2)$ (11.8)$ (11.7)$ (11.2)$ (11.0)$ (11.6)$ Amortization of acquired intangible assets (4.4)$ (4.4)$ (4.4)$ (4.3)$ (3.7)$ (3.9)$ Acquisition and integration costs (0.6)$ -$ -$ -$ -$ -$ Restructuring and other related costs (2.3)$ 0.7$ (6.5)$ (5.1)$ (7.3)$ (2.5)$ Litigation charges -$ (2.9)$ 0.6$ -$ -$ -$ Non-GAAP as adjusted 123.6$ 125.2$ 127.1$ 132.0$ 126.1$ 134.0$ $134M +/- $2M Reconciliation of Income/(Loss) from Operations U.S. GAAP as reported -7.0% -6.9% -8.7% -2.5% -10.8% -10.0% -10.0% +/- 3% Acquisition-related deferred revenue adjustment 0.3% 0.3% 0.3% 0.2% - - Stock-based compensation expense 3.3% 4.1% 3.9% 3.4% 3.9% 4.1% Amortization of acquired intangible assets 2.7% 2.7% 2.5% 2.5% 2.9% 2.9% Acquisition and integration costs 0.2% 0.0% 0.0% 0.0% - - Restructuring and other related costs 0.9% -0.3% 2.3% 1.2% 2.2% 1.0% Inventory related charges 0.0% 0.0% 2.3% -0.5% 0.8% - Litigation charges 0.0% 0.9% -0.2% 0.0% - - Non-GAAP as adjusted 0.4% 0.8% 2.4% 4.3% -1.0% -2.0% -2.0% +/- 3% Reconciliation of Net Income/(Loss) per Common Share U.S. GAAP as reported (0.24)$ (0.17)$ (0.26)$ (0.16)$ (0.20)$ Acquisition-related deferred revenue adjustment 0.00$ 0.00$ 0.00$ -$ -$ Stock-based compensation expense 0.05$ 0.07$ 0.07$ 0.06$ 0.07$ Amortization of acquired intangible assets 0.04$ 0.04$ 0.04$ 0.05$ 0.05$ Acquisition and integration costs 0.00$ -$ -$ -$ -$ Restructuring and other related costs 0.01$ (0.00)$ 0.04$ 0.02$ 0.03$ Inventory related charges -$ -$ 0.04$ (0.01)$ 0.01$ Amortization of debt discount on Infinera's convertible senior notes 0.03$ 0.04$ 0.04$ 0.05$ -$ Litigation charges -$ 0.01$ (0.00)$ -$ -$ Foreign exchange (gains) losses, net 0.06$ (0.02)$ 0.02$ 0.02$ (0.03)$ Income tax effects (0.00)$ (0.00)$ (0.00)$ -$ -$ Non-GAAP as adjusted (0.03)$ (0.03)$ (0.01)$ 0.03$ (0.07)$


 
10 1. TOTALS MAY NOT ADD UP DUE TO ROUNDING. 2. NON-GAAP METRICS ARE RECONCILED TO THE MOST DIRECTLY COMPARABLE GAAP FINANCIAL METRIC. 3. WE DEFINE FREE CASH FLOW AS NET CASH PROVIDED BY OPERATING ACTIVITIES IN THE PERIOD MINUS THE PURCHASE OF PROPERTY AND EQUIPMENT, NET MADE IN THE PERIOD. 4. FOR A COMPLETE RECONCILIATION OF OTHER PERIOD RESULTS, SEE PRIOR QUARTERLY EARNINGS RELEASES. © 2022 Infinera. All rights reserved. Company Confidential. © 2022 Infinera. All rights reserved. GAAP TO NON-GAAP and FREE CASH FLOW RECONCILIATION N O T E S Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Actual Actual Actual Actual Actual Reconciliation of Adjusted EBITDA: Non-GAAP Net Income (Loss) (5.5)$ (6.0)$ (3.0)$ 5.7$ (14.0)$ Non-GAAP Interest expense 4.8$ 4.8$ 5.2$ 5.0$ 5.0$ Non-GAAP Income tax effects 1.4$ 3.2$ 5.9$ 3.2$ 6.0$ Non-GAAP Depreciation and Amortization 11.5$ 9.8$ 12.0$ 13.3$ 11.6$ Non-GAAP as adjusted 12.2$ 11.7$ 20.0$ 27.1$ 8.6$ Reconciliation of Free Cash Flow U.S. GAAP: Net cash provided by (used in) operating activities 18.6$ 21.3$ (13.2)$ 1.4$ 15.8$ Purchase of property and equipment, net (11.7)$ (14.1)$ (6.5)$ (9.1)$ (16.1)$ Free Cash Flow 6.9$ 7.2$ (19.7)$ (7.7)$ (0.3)$


 
Thank You