GAAP revenue for the quarter was $355.8 million compared to $338.2 million in the second quarter of 2021 and $340.2 million in the third quarter of 2020.
GAAP gross margin for the quarter was 33.2% compared to 35.6% in the second quarter of 2021 and 31.8% in the third quarter of 2020. GAAP operating margin for the quarter was (8.7)% compared to (6.9)% in the second quarter of 2021 and (7.9)% in the third quarter of 2020.
GAAP net loss for the quarter was $(53.8) million, or $(0.26) per share, compared to $(35.6) million, or $(0.17) per share, in the second quarter of 2021, and $(35.9) million, or $(0.19) per share, in the third quarter of 2020.
Non-GAAP revenue for the quarter was $356.8 million compared to $339.2 million in the second quarter of 2021 and $341.2 million in the third quarter of 2020.
Non-GAAP gross margin for the quarter was 38.0% compared to 37.7% in the second quarter of 2021 and 35.2% in the third quarter of 2020. Non-GAAP operating margin for the quarter was 2.4% compared to 0.8% in the second quarter of 2021 and 2.2% in the third quarter of 2020.
Non-GAAP net loss for the quarter was $(3.0) million, or $(0.01) per share, compared to net loss of $(6.0) million, or $(0.03) per share, in the second quarter of 2021, and a net loss of $(0.8) million, or $(0.01) per share, in the third quarter of 2020.
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, “Q3 was a strong quarter for us, with revenue coming in ahead of the mid-point of our outlook range and both non-GAAP gross margin and operating margin exceeding the high-end of our outlook range. We delivered these results against a challenging supply chain environment and ended the quarter with record backlog.”
“The demand drivers fueling our business are robust and we remain focused on executing our strategy with an enhanced leadership team. Having refreshed our portfolio, we are ramping our ICE6 products and achieving greater market traction. Based on this foundation, I remain confident in our ability to deliver on our financial goals for 2021 and our longer-term target business model.”
Infinera’s outlook for the fourth quarter ending December 25, 2021 is as follows:
- GAAP revenue is expected to be $384 million +/- $15 million. Non-GAAP revenue is expected to be $385 million +/- $15 million.
- GAAP gross margin is expected to be 35.0% +/- 150 bps. Non-GAAP gross margin is expected to be 37.0% +/- 150 bps.
- GAAP operating expenses are expected to be $154 million +/- $2 million. Non-GAAP operating expenses are expected to be $131 million +/- $2 million.
- GAAP operating margin is expected to be (5.1)% +/- 200 bps. Non-GAAP operating margin is expected to be 3.0% +/- 200 bps.
Third Quarter 2021 Investor Slides Available Online
Investor slides reviewing Infinera’s third quarter of 2021 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 third quarter of 2021 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 third quarter of 2021 and its outlook for the fourth quarter of 2021 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.
The full press release, including the Condensed Consolidated Statements of Operations, GAAP to Non-GAAP Reconciliations, Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Cash Flows, Supplemental Financial Information, and GAAP to Non-GAAP Reconciliation of Financial Outlook, is also available.
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Head of Investor Relations
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Infinera is a global supplier of innovative networking solutions that enable carriers, cloud operators, governments, and enterprises to scale network bandwidth, accelerate service innovation, and automate network operations. The Infinera end-to-end packet-optical portfolio delivers 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 @Infinera, and read Infinera’s latest blog posts at www.infinera.com/blog.
Infinera and the Infinera logo are trademarks or registered trademarks of Infinera Corporation.
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, the demand drivers fueling Infinera’s business, Infinera’s ICE6 product ramp and market traction, Infinera’s ability to deliver on its financial goals for 2021 and its longer-term target business model, and Infinera’s financial outlook for the fourth quarter of 2021. 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; the effects of customer and supplier consolidation; Infinera’s ability to identify, attract and retain qualified personnel; the effectiveness of actions that Infinera is taking to restructure its business; 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; 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 26, 2020 as filed with the SEC on March 3, 2021, and its Quarterly Report on Form 10-Q for the quarter ended June 26, 2021 as filed with the SEC on August 3, 2021, 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 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, COVID-19 related costs, amortization of debt discount on Infinera’s convertible senior notes, litigation charges, 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 fourth quarter of 2021 that exclude acquisition-related deferred revenue adjustment, 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.