• Infinera Corporation Reports Second Quarter 2022 Financial Results

    المصدر: Nasdaq GlobeNewswire / 28 يوليو 2022 15:03:01   America/Chicago

    SAN JOSE, Calif., July 28, 2022 (GLOBE NEWSWIRE) -- Infinera Corporation (NASDAQ: INFN) today released financial results for its second quarter ended June 25, 2022.

    GAAP revenue for the quarter was $358.0 million compared to $338.9 million in the first quarter of 2022 and $338.2 million in the second quarter of 2021.

    GAAP gross margin for the quarter was 30.5% compared to 32.9% in the first quarter of 2022 and 35.6% in the second quarter of 2021. GAAP operating margin for the quarter was (11.1)% compared to (10.8)% in the first quarter of 2022 and (6.9)% in the second quarter of 2021.

    GAAP net loss for the quarter was $(55.7) million, or $(0.26) per share, compared to $(41.9) million, or $(0.20) per share, in the first quarter of 2022, and $(35.6) million, or $(0.17) per share, in the second quarter of 2021.

    Non-GAAP gross margin for the quarter was 36.1% compared to 36.2% in the first quarter of 2022 and 37.7% in the second quarter of 2021. Non-GAAP operating margin for the quarter was 0.4% compared to (1.0)% in the first quarter of 2022 and 0.8% in the second quarter of 2021.

    Non-GAAP net loss for the quarter was $(10.1) million, or $(0.05) per share, compared to net loss of $(14.0) million, or $(0.07) per share, in the first quarter of 2022, and $(6.0) million, or $(0.03) per share, in the second 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, “Our second quarter results were encouraging in a challenging environment, with revenue beating the midpoint of our outlook range, non-GAAP operating margin at the upper end of the range, and non-GAAP gross margin near the midpoint of the range due to higher supply chain costs. Strong demand resulted in greater than 80% year-over-year growth in total backlog, which includes product backlog growth exceeding 100%, and a quarterly book-to-bill ratio above 1."

    “We are executing well against our 8x4x1 strategy as we scale ICE6 globally, expand our metro footprint, and prepare to bring our pluggables business online, all while planning to deliver continued growth and margin expansion in the second half of 2022. The timing of our refreshed portfolio allows us to take advantage of the accelerated shift to open architectures and our customers’ growing requirement to bring on new vendors to improve their supply chain resilience.”

    Financial Outlook

    Infinera's outlook for the quarter ending September 24, 2022 is as follows:

    • Revenue is expected to be $380 million +/- $20 million.
    • GAAP gross margin is expected to be 36.0% +/- 150 bps. Non-GAAP gross margin is expected to be 38.0% +/- 150 bps.
    • GAAP operating expenses are expected to be $151 million +/- $2 million. Non-GAAP operating expenses are expected to be $133 million +/- $2 million.
    • GAAP operating margin is expected to be (4.0)% +/- 300 bps. Non-GAAP operating margin is expected to be 3.0% +/- 300 bps.

    Second Quarter 2022 Investor Slides Available Online

    Investor slides reviewing Infinera's second 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 second 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 second quarter of 2022 and its outlook for the third 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 future growth opportunities, and margin expansion, Infinera's ability to leverage market and customer trends for its business objectives, and Infinera's financial outlook for the third 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; the adverse impact inflation may have on Infinera by increasing costs beyond what it can recover through price increases; 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 and Infinera's ability to compete in a highly competitive market; the effect of the COVID-19 pandemic on Infinera’s business, results of operations, financial condition, stock price and personnel; produce performance problems; Infinera's ability to identify, attract and retain qualified personnel; the partial or complete loss of Infinera's manufacturing facilities, a reduction in yield of PICs or an inability to scale to meet customer demands; the effects of customer and supplier consolidation; Infinera’s ability to respond to rapid technological changes; failure to accurately forecast Infinera's manufacturing requirements or customer demand; 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 Ukraine; the effective tax rate of Infinera, which may increase or fluctuate; the impacts of foreign currency fluctuations; Infinera's ability to service its debt obligations and pursue its strategic plan; potential dilution from the issuance of additional shares of common stock in connection with the conversion of Infinera's convertible senior notes; Infinera’s ability to protect its intellectual property; claims by others that Infinera infringes on their intellectual property rights; security incidents, such as data breaches or cyber-attacks; Infinera's ability to comply with various rules and regulations, including with respect to export control and trade compliance, environmental, privacy and data protection matters; events that are outside of Infinera's control, such as natural disasters, human violence 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 December 25, 2021, as filed with the SEC on February 23, 2022, and its Quarterly Report on Form 10-Q for the quarter ended March 26, 2022, as filed with the SEC on May 3, 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, litigation 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 third 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, the non-GAAP financial measures presented in this press release 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
    Condensed Consolidated Statements of Operations
    (In thousands, except per share data)
    (Unaudited) 

      Three Months Ended Six Months Ended
      June 25,
    2022    		 June 26,
    2021    		 June 25,
    2022    		 June 26,
    2021
    Revenue:        
    Product $284,852  $257,441  $552,305  $511,602 
    Services  73,133   80,786   144,554   157,532 
         Total revenue  357,985   338,227   696,859   669,134 
    Cost of revenue:        
    Cost of product  204,122   172,053   387,009   337,538 
    Cost of services  38,421   41,446   76,380   84,706 
    Amortization of intangible assets  6,229   4,614   12,460   9,230 
    Restructuring and other related costs  13   (269)  163   245 
         Total cost of revenue  248,785   217,844   476,012   431,719 
    Gross profit  109,200   120,383   220,847   237,415 
    Operating expenses:        
    Research and development  78,635   73,934   152,046   147,463 
    Sales and marketing  35,329   33,782   71,153   66,554 
    General and administrative  30,150   32,197   58,040   58,703 
    Amortization of intangible assets  3,667   4,392   7,413   8,797 
    Acquisition and integration costs  —   —   —   614 
    Restructuring and other related costs  1,133   (674)  8,403   1,645 
         Total operating expenses  148,914   143,631   297,055   283,776 
    Loss from operations  (39,714)  (23,248)  (76,208)  (46,361)
    Other income (expense), net:        
    Interest income  104   27   157   67 
    Interest expense  (7,252)  (12,017)  (12,244)  (23,860)
    Other gain (loss), net  (3,520)  2,719   2,500   (9,676)
         Total other income (expense), net  (10,668)  (9,271)  (9,587)  (33,469)
    Loss before income taxes  (50,382)  (32,519)  (85,795)  (79,830)
    Provision for income taxes  5,339   3,075   11,776   4,086 
    Net loss $(55,721) $(35,594) $(97,571) $(83,916)
    Net loss per common share:        
    Basic $(0.26) $(0.17) $(0.46) $(0.41)
    Diluted $(0.26) $(0.17) $(0.46) $(0.41)
    Weighted average shares used in computing net loss per common share:        
    Basic  215,509   206,780   213,846   204,709 
    Diluted  215,509   206,780   213,846   204,709 
     
     

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

      Three Months Ended Six Months Ended
      June 25,
    2022    		   March 26,
    2022    		   June 26,
    2021    		   June 25,
    2022    		   June 26,
    2021    		  
    Reconciliation of Revenue:                    
    GAAP as reported $357,985    $338,874    $338,227    $696,859    $669,134   
    Acquisition-related deferred revenue adjustment(1)  —     —     978     —     1,956   
    Non-GAAP as adjusted $357,985    $338,874    $339,205    $696,859    $671,090   
                         
    Reconciliation of Gross Profit and Gross Margin:                    
    GAAP as reported $109,200  30.5% $111,647  32.9% $120,383  35.6% $220,847  31.7% $237,415  35.5%
    Acquisition-related deferred revenue adjustment(1)  —     —     978     —     1,956   
    Stock-based compensation expense(2)  2,594     1,889     2,130     4,483     3,926   
    Amortization of acquired intangible assets(3)  6,229     6,231     4,614     12,460     9,230   
    Restructuring and other related costs(5)  13     150     (269)    163     245   
    Inventory related charges(6)  11,045     2,667     —     13,712     —   
    Non-GAAP as adjusted $129,081  36.1% $122,584  36.2% $127,836  37.7% $251,665  36.1% $252,772  37.7%
                         
    Reconciliation of Operating Expenses:                    
    GAAP as reported $148,914    $148,141    $143,631    $297,055    $283,776   
    Stock-based compensation expense(2)  15,189     11,050     11,809     26,239     20,987   
    Amortization of acquired intangible assets(3)  3,667     3,746     4,392     7,413     8,797   
    Acquisition and integration costs(4)  —     —     —     —     614   
    Restructuring and other related costs(5)  1,133     7,270     (674)    8,403     1,645   
    Litigation charges (7)  1,350     —     2,885     1,350     2,885   
    Non-GAAP as adjusted $127,575    $126,075    $125,219    $253,650    $248,848   
                         
    Reconciliation of Income/(Loss) from Operations and Operating Margin:                    
    GAAP as reported $(39,714) (11.1)% $(36,494) (10.8)% $(23,248) (6.9)% $(76,208) (10.9)% $(46,361) (6.9)%
    Acquisition-related deferred revenue adjustment(1)  —     —     978     —     1,956   
    Stock-based compensation expense(2)  17,783     12,939     13,939     30,722     24,913   
    Amortization of acquired intangible assets(3)  9,896     9,977     9,006     19,873     18,027   
    Acquisition and integration costs(4)  —     —     —     —     614   
    Restructuring and other related costs(5)  1,146     7,420     (943)    8,566     1,890   
    Inventory related charges(6)  11,045     2,667     —     13,712     —   
    Litigation charges (7)  1,350     —     2,885     1,350     2,885   
    Non-GAAP as adjusted $1,506  0.4% $(3,491) (1.0)% $2,617  0.8% $(1,985) (0.3)% $3,924  0.6%


      Three Months Ended Six Months Ended
      June 25,
    2022    		   March 26,
    2022    		   June 26,
    2021    		   June 25,
    2022    		   June 26,
    2021    		  
    Reconciliation of Net Income/(Loss):                    
    GAAP as reported $(55,721)   $(41,850)   $(35,594)   $(97,571)   $(83,916)  
    Acquisition-related deferred revenue adjustment(1)  —     —     978     —     1,956   
    Stock-based compensation expense(2)  17,783     12,939     13,939     30,722     24,913   
    Amortization of acquired intangible assets(3)  9,896     9,977     9,006     19,873     18,027   
    Acquisition and integration costs(4)  —     —     —     —     614   
    Restructuring and other related costs(5)  1,146     7,420     (943)    8,566     1,890   
    Inventory related charges(6)  11,045     2,667     —     13,712     —   
    Litigation charges (7)  1,350     —     2,885     1,350     2,885   
    Amortization of debt discount on convertible senior notes(8)  —     —     7,259     —     14,342   
    Foreign exchange (gains) losses, net(9)  3,778     (5,589)    (3,382)    (1,811)    8,324   
    Income tax effects(10)  650     416     (152)    1,066     (505)  
    Non-GAAP as adjusted $(10,073)   $(14,020)   $(6,004)   $(24,093)   $(11,470)  
                         
    Reconciliation of Adjusted EBITDA (11):                    
    Non-GAAP Net Income (Loss) $(10,073)   $(14,020)   $(6,004)   $(24,093)   $(11,470)  
    Non-GAAP Interest expense  7,252     4,992     4,758     12,244     9,518   
    Non-GAAP Income tax effects  4,689     6,021     3,227     10,710     4,591   
    Non-GAAP Depreciation and Amortization  11,238     11,595     9,756     22,833     21,281   
    Non-GAAP as adjusted $13,106    $8,588    $11,737    $21,694    $23,920   
                         
    Net Income/(Loss) per Common Share - Basic and Diluted:                    
    GAAP as reported $(0.26)   $(0.20)   $(0.17)   $(0.46)   $(0.41)  
    Non-GAAP as adjusted $(0.05)   $(0.07)   $(0.03)   $(0.11)   $(0.06)  
                         
    Weighted Average Shares Used in Computing Net Income/(Loss) per Common Share:

    		                    
    Basic  215,509     212,182     206,780     213,846     204,709   
    Diluted(12)  215,509     212,182     206,780     213,846     204,709   

    (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 Six Months Ended
      June 25,
    2022    		 March 26,
    2022    		 June 26,
    2021    		 June 25,
    2022    		 June 26,
    2021
    Cost of revenue $2,594 $1,889 $2,130 $4,483 $3,926
    Total cost of revenue  2,594  1,889  2,130  4,483  3,926
    Research and development  6,652  4,841  5,071  11,493  9,368
    Sales and marketing  4,047  2,767  2,811  6,814  6,010
    General and administration  4,490  3,442  3,927  7,932  5,609
    Total operating expenses  15,189  11,050  11,809  26,239  20,987
    Total stock-based compensation expense $17,783 $12,939 $13,939 $30,722 $24,913

    (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 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 and the reduction of headcount. In addition, this includes 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 their exclusion provides a better indication of Infinera's underlying business performance.

    (7) Litigation charges are associated with the settlement of litigation matters. Management has excluded the impact of this charge in arriving at Infinera's non-GAAP results because it is non-recurring, and management believes that this expense is not indicative of ongoing operating performance.

    (8) Effective the first quarter of 2022, Infinera no longer recognizes interest expense for amortization of debt discount as a result of the adoption of new debt guidance.

    (9) 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.

    (10) 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.

    (11) 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 Infinera's financial performance, as it measures the ability of our business operations to generate cash.

    (12) 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 Infinera'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 Six Months Ended
      June 25,
    2022    		 March 26,
    2022    		 June 26,
    2021    		 June 25,
    2022    		 June 26,
    2021
    Net cash (used in) provided by operating activities $(72,419) $15,788  $21,304  $(56,631) $39,934 
    Purchase of property and equipment, net  (10,667)  (16,059)  (14,068)  (26,726)  (25,789)
    Free cash flow $(83,086) $(271) $7,236  $(83,357) $14,145 
     
     

    Infinera Corporation
    Condensed Consolidated Balance Sheets
    (In thousands, except par values)
    (Unaudited)

      June 25,
    2022    		 December 25,
    2021
    ASSETS    
    Current assets:    
    Cash $130,856  $190,611 
    Short-term restricted cash  21,142   2,840 
    Accounts receivable, net  302,928   358,954 
    Inventory  309,602   291,367 
    Prepaid expenses and other current assets  161,480   147,989 
         Total current assets  926,008   991,761 
    Property, plant and equipment, net  157,665   160,218 
    Operating lease right-of-use assets  39,055   45,338 
    Intangible assets  65,832   86,574 
    Goodwill  237,246   255,788 
    Long-term restricted cash  3,184   9,070 
    Other long-term assets  39,810   38,475 
         Total assets $1,468,800  $1,587,224 
    LIABILITIES AND STOCKHOLDERS’ EQUITY    
    Current liabilities:    
    Accounts payable $208,882  $216,404 
    Accrued expenses and other current liabilities  141,965   147,029 
    Accrued compensation and related benefits  68,549   88,021 
    Short-term debt, net  540   533 
    Accrued warranty  19,203   23,204 
    Deferred revenue  116,043   137,297 
         Total current liabilities  555,182   612,488 
    Long-term debt, net  640,076   476,789 
    Long-term accrued warranty  17,566   21,106 
    Long-term deferred revenue  29,130   31,612 
    Long-term deferred tax liability  2,115   2,364 
    Long-term operating lease liabilities  50,839   54,326 
    Other long-term liabilities  57,334   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 June 25, 2022 and December 25, 2021
    Issued and outstanding shares - 216,431 as of June 25, 2022 and 211,381 as of December 25, 2021    		  216   211 
    Additional paid-in capital  1,867,000   2,026,098 
    Accumulated other comprehensive loss  (29,537)  (4,496)
    Accumulated deficit  (1,721,121)  (1,698,042)
    Total stockholders' equity  116,558   323,771 
         Total liabilities and stockholders’ equity $1,468,800  $1,587,224 
     
     

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

      Six Months Ended
      June 25,
    2022    		 June 26,
    2021
    Cash Flows from Operating Activities:    
    Net loss $(97,571) $(83,916)
    Adjustments to reconcile net loss to net cash (used in) provided by operating activities:    
    Depreciation and amortization  42,706   39,308 
    Non-cash restructuring charges and other related costs  5,657   824 
    Amortization of debt discount and issuance costs  4,124   15,834 
    Operating lease expense  4,987   8,526 
    Stock-based compensation expense  30,722   24,913 
    Other, net  868   3,090 
    Changes in assets and liabilities:    
    Accounts receivable  50,396   36,293 
    Inventory  (22,225)  (6,120)
    Prepaid expenses and other current assets  (31,934)  21,332 
    Accounts payable  2,120   (2,085)
    Accrued expenses and other current liabilities  (24,335)  (3,754)
    Deferred revenue  (22,146)  (14,311)
    Net cash (used in) provided by operating activities  (56,631)  39,934 
    Cash Flows from Investing Activities:    
    Purchase of property and equipment, net  (26,726)  (25,789)
    Net cash used in investing activities  (26,726)  (25,789)
    Cash Flows from Financing Activities:    
    Proceeds from asset-based revolving line of credit  80,000   — 
    Repayment of asset-based revolving line of credit  (40,000)  (77,000)
    Repayment of third-party manufacturing funding  —   (24,610)
    Repayment of mortgage payable  (245)  (130)
    Payment of debt issuance cost  (783)  — 
    Payment of term license obligation  (3,643)  (3,930)
    Principal payments on finance lease obligations  (577)  (819)
    Proceeds from issuance of common stock  8,875   9,344 
    Tax withholding paid on behalf of employees for net share settlement  (2,384)  (3,398)
    Net cash provided by (used in) financing activities  41,243   (100,543)
    Effect of exchange rate changes on cash and restricted cash  (5,225)  4,245 
    Net change in cash and restricted cash  (47,339)  (82,153)
    Cash and restricted cash at beginning of period  202,521   315,383 
    Cash and restricted cash at end of period(1) $155,182  $233,230 
     
     

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

      Six Months Ended
      June 25, 2022 June 26, 2021
    Supplemental disclosures of cash flow information:    
    Cash paid for income taxes $4,435 $13,162
    Cash paid for interest $7,995 $9,862
    Supplemental schedule of non-cash investing and financing activities:    
    Unpaid debt issuance cost $365 $—
    Transfer of inventory to fixed assets $3,705 $1,735
    Unpaid term licenses (included in accounts payable, accrued liabilities and other long-term liabilities) $7,343 $9,807

    (1) Reconciliation of cash and restricted cash to the condensed consolidated balance sheets:

     
      June 25, 2022 June 26, 2021
         
    Cash $130,856 $219,735
    Short-term restricted cash  21,142  2,840
    Long-term restricted cash  3,184  10,655
    Total cash and restricted cash $155,182 $233,230
     
     

    Infinera Corporation
    Supplemental Financial Information
    (Unaudited)

      Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22
    GAAP Revenue $(Mil) $340.2  $353.5  $330.9  $338.2  $355.8  $400.3  $338.9  $358.0 
    GAAP Gross Margin %  31.8%  35.7%  35.4%  35.6%  33.2%  35.6%  32.9%  30.5%
    Non-GAAP Gross Margin %(1)  35.2%  37.6%  37.6%  37.7%  38.0%  37.2%  36.2%  36.1%
    GAAP Revenue Composition:                
    Domestic %  49%  36%  48%  52%  46%  42%  50%  51%
    International %  51%  64%  52%  48%  54%  58%  50%  49%
    Customers >10% of Revenue  1   —   1   —   —   —   —   1 
    Cash Related Information:                
    Cash from Operations $(Mil) $(36.4) $52.2  $18.6  $21.3  $(13.2) $1.4  $15.8  $(72.4)
    Capital Expenditures $(Mil) $8.1  $11.9  $11.7  $14.1  $6.5  $9.1  $16.1  $10.6 
    Depreciation & Amortization $(Mil) $22.9  $25.9  $20.5  $18.8  $20.9  $23.4  $21.6  $21.1 
    DSOs  78   82   76   76   70   82   74   77 
    Inventory Metrics:                
    Raw Materials $(Mil) $39.3  $34.7  $31.8  $33.3  $37.4  $39.4  $41.2  $50.4 
    Work in Process $(Mil) $51.6  $55.8  $55.5  $55.1  $54.4  $53.9  $55.4  $58.9 
    Finished Goods $(Mil) $185.0  $178.8  $175.5  $185.6  $197.8  $198.1  $195.1  $200.3 
    Total Inventory $(Mil) $275.9  $269.3  $262.8  $274.0  $289.6  $291.4  $291.7  $309.6 
    Inventory Turns(2)  3.2   3.3   3.1   3.1   3.1   3.5   3.0   3.0 
    Worldwide Headcount  3,074   3,050   3,041   3,108   3,205   3,225   3,206   3,186 
    Weighted Average Shares Outstanding (in thousands):                
    Basic  189,589   195,655   202,638   206,780   209,183   210,908   212,182   215,509 
    Diluted  195,868   203,259   217,970   219,459   219,262   218,009   287,588   285,968 

    (1) Non-GAAP adjustments include acquisition-related deferred revenue, stock-based compensation expenses, amortization of acquired intangible assets, restructuring and other related costs and inventory related charges. 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. For reconciliations of prior periods that are not otherwise provided herein, see the prior period earnings releases available on our Investor Relations webpage.

    (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 acquisition-related deferred revenue, stock-based compensation expense, amortization of acquired intangible assets, restructuring and other related costs and inventory related charges, 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:

      Q3'22
      Outlook
    Reconciliation of Gross Margin:  
    GAAP  36.0%
    Stock-based compensation expense  0.5%
    Amortization of acquired intangible assets  1.5%
    Non-GAAP  38.0%
       
    Reconciliation of Operating Expenses:  
    GAAP $151.0 
    Stock-based compensation expense  (14.0)
    Amortization of acquired intangible assets  (3.9)
    Restructuring and other related costs  (0.1)
    Non-GAAP $133.0 
       
    Reconciliation of Operating Margin:  
    GAAP  (4.0)%
    Stock-based compensation expense  4.3%
    Amortization of acquired intangible assets  2.6%
    Restructuring and other related costs  0.1%
    Non-GAAP  3.0%

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