San Jose, Calif. – February 23, 2023, 4:03 p.m. ET – Infinera Corporation (NASDAQ:INFN, news, filings) today released financial results for its fourth quarter and fiscal year ended December 31, 2022.
GAAP revenue for the quarter was $485.9 million compared to $390.4 million in the third quarter of 2022 and $400.3 million in the fourth quarter of 2021.
GAAP gross margin for the quarter was 37.1% compared to 34.4% in the third quarter of 2022 and 35.6% in the fourth quarter of 2021. GAAP operating margin for the quarter was 5.2% compared to (2.4)% in the third quarter of 2022 and (2.5)% in the fourth quarter of 2021.
GAAP net income for the quarter was $33.5 million, or $0.14 per diluted share, compared to net loss of $(11.9) million, or $(0.05) per diluted share, in the third quarter of 2022, and net loss of $(33.1) million, or $(0.16) per diluted share, in the fourth quarter of 2021.
Non-GAAP gross margin for the quarter was 38.7% compared to 37.8% in the third quarter of 2022 and 37.2% in the fourth quarter of 2021. Non-GAAP operating margin for the quarter was 10.5% compared to 5.2% in the third quarter of 2022 and 4.3% in the fourth quarter of 2021.
Non-GAAP net income for the quarter was $40.3 million, or $0.16 per diluted share, compared to net income of $9.9 million, or $0.05 per diluted share, in the third quarter of 2022, and $5.7 million, or $0.03 per diluted share, in the fourth quarter of 2021.
GAAP revenue for the year was $1,573.2 million compared to $1,425.2 million in 2021. GAAP gross margin for the year was 34.1% compared to 34.9% in 2021. GAAP operating margin for the year was (3.8)% compared to (6.1)% in 2021. GAAP net loss for the year was $(76.0) million, or $(0.35) per share, compared to $(170.8) million, or $(0.82) per share, in 2021. Non-GAAP gross margin for the year was 37.3% compared to 37.6% in 2021.
Non-GAAP operating margin for the year was 4.4% compared to 2.1% in 2021. Non-GAAP net income for the year was $26.1 million, or $0.12 per share, compared to net loss of $(8.8) million, or $(0.04) per share, in 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 fourth quarter revenue and operating profit beat consensus expectations and contributed to record performance for Infinera on many fronts. In the fourth quarter we grew product revenue by 26% and overall revenue by 21% compared to the same quarter a year ago, while operating profit improved approximately three-fold compared to the same quarter a year ago. We delivered these results despite the significant impact of elevated supply chain costs on our financial results. We expanded ICE6 revenue in the quarter, continued to win in the metro, deployed new line systems and advanced the qualification of our 400G ZR+ softwaredefined pluggables.”
“For the full year of 2022, we ramped ICE6 to exceed our 25% of product revenue annual goal, grew total revenue by 10%, and improved operating margin by 230 basis points. Furthermore, we introduced our first subsystems products, which positions us well to access a new multibillion-dollar market that we believe can drive incremental growth, profitability and earnings per share as we focus on achieving our target business model.”
Financial Outlook
Infinera’s outlook for the quarter ending April 1, 2023, is as follows:
- Revenue is expected to be $380 million +/- $15 million.
- GAAP gross margin is expected to be 37.0% +/- 150 bps. Non-GAAP gross margin is expected to be 38.5% +/- 150 bps.
- GAAP operating expenses are expected to be $158 million +/- $2 million. Non-GAAP operating expenses are expected to be $141 million +/- $2 million.
- GAAP operating margin is expected to be (4.5)% +/- 250 bps. Non-GAAP operating margin is expected to be 1.5% +/- 250 bps.
- GAAP net loss per share is expected to be $(0.10) +/- $0.04. Non-GAAP net loss per share is expected to be $(0.02) +/- $0.04.
Fourth Quarter 2022 Investor Slides Available Online
Investor slides reviewing Infinera’s fourth 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 fourth 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 fourth quarter of 2022 and its outlook for the first quarter of 2023 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.
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 and growth opportunities, including the potential for Infinera’s new subsystems products to drive market expansion, increase Infinera’s growth and profitability, and improve Infinera’s competitiveness in the future; and Infinera’s financial outlook for the first quarter of 2023. 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 and logistics issues, including delays, shortages, components that have been discontinued 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 new entrants and Infinera’s ability to compete in a highly competitive market; product 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; restrictions to our operations resulting from loan or other credit agreements; 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, social, governance, 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 September 24, 2022 as filed with the SEC on November 2, 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, global distribution center transition costs, warehouse fire loss, litigation charges, amortization of debt discount on Infinera’s convertible senior notes, gain on extinguishment of debt, foreign exchange (gains) losses, net, and income tax effects. 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, net income (loss) and net income (loss) per common share 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. 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 first quarter of 2023 that excludes stock-based compensation expense and amortization of acquired intangible assets. Please see the section titled “GAAP to Non-GAAP Reconciliation of Financial Outlook” below for specific adjustments.
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