0001138639false00011386392024-02-292024-02-29

 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): February 29, 2024
 
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 February 29, 2024, Infinera Corporation (the “Company”) posted on the Investor Relations section of its website (www.infinera.com) a summary of key financial results for its third quarter ended September 30, 2023. The Company also posted on the Investor Relations section of its website (www.infinera.com) investor slides for its third quarter ended September 30, 2023. A copy of the summary of key financial results 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.

Item 9.01Financial Statements and Exhibits.
(d)Exhibits.




Exhibit No.  Description
99.1  
99.2
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: February 29, 2024
 By: /s/ NANCY ERBA
  Nancy Erba
Chief Financial Officer





Exhibit 99.1
image1.jpg

Infinera Corporation Third Quarter 2023 Summary of Key Financial Results

San Jose, Calif., February 29, 2024 - A summary of key financial results for the third quarter ended September 30, 2023 of Infinera Corporation (NASDAQ: INFN) has been published on Infinera's Investor Relations website.
GAAP revenue for the quarter was $392.4 million compared to $376.2 million in the second quarter of 2023 and $390.4 million in the third quarter of 2022.
GAAP gross margin for the quarter was 40.3% compared to 38.0% in the second quarter of 2023 and 34.4% in the third quarter of 2022. GAAP operating margin for the quarter was 2.0% compared to (3.8)% in the second quarter of 2023 and (2.4)% in the third quarter of 2022.
GAAP net loss for the quarter was $(9.4) million, or $(0.04) per diluted share, compared to net loss of $(20.3) million, or $(0.09) per diluted share, in the second quarter of 2023, and net loss of $(11.9) million, or $(0.05) per diluted share, in the third quarter of 2022.
Non-GAAP gross margin for the quarter was 41.9% compared to 39.3% in the second quarter of 2023 and 37.8% in the third quarter of 2022. Non-GAAP operating margin for the quarter was 7.7% compared to 2.8% in the second quarter of 2023 and 5.2% in the third quarter of 2022.
Non-GAAP net income for the quarter was $19.9 million, or $0.08 per diluted share, compared to non-GAAP net loss of $(0.7) million, or $(0.00) per diluted share, in the second quarter of 2023, and non-GAAP net income of $9.9 million, or $0.05 per diluted share, in the third quarter of 2022.
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 summary of key financial results.
Third Quarter 2023 Investor Slides Available Online
Investor slides reviewing Infinera's third quarter of 2023 financial results will be furnished to the U.S. Securities and Exchange Commission (SEC) on a Current Report on Form 8-K and published on Infinera's Investor Relations website.
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 and advanced optical semiconductors 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 X and LinkedIn, and subscribe for updates.
Infinera and the Infinera logo are registered trademarks of Infinera Corporation.



Use of Non-GAAP Financial Information
In addition to disclosing financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP), this summary of key financial results and the accompanying tables contain certain non-GAAP financial measures that exclude in certain cases stock-based compensation expenses, amortization of acquired intangible assets, restructuring and other related costs, inventory related charges, global distribution center transition costs, warehouse fire loss (recovery), litigation charges, 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 summary of key financial 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, 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 Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)

 Three Months EndedNine Months Ended
 September 30, 2023September 24,
2022		September 30, 2023September 24,
2022
Revenue:
Product$316,613 $317,439 $931,057 $869,744 
Services75,756 73,008 229,615 217,562 
Total revenue392,369 390,447 1,160,672 1,087,306 
Cost of revenue:
Cost of product190,312 210,018 577,152 597,027 
Cost of services40,209 39,765 124,889 116,145 
Amortization of intangible assets3,528 6,227 10,621 18,687 
Restructuring and other related costs— 22 — 185 
Total cost of revenue234,049 256,032 712,662 732,044 
Gross profit158,320 134,415 448,010 355,262 
Operating expenses:
Research and development76,846 76,156 237,234 228,202 
Sales and marketing41,075 33,919 124,406 105,072 
General and administrative29,368 28,923 89,762 86,963 
Amortization of intangible assets2,976 3,582 10,088 10,995 
Restructuring and other related costs400 1,142 2,621 9,545 
Total operating expenses150,665 143,722 464,111 440,777 
Income (loss) from operations
7,655 (9,307)(16,101)(85,515)
Other (expense) income, net:
Interest income546 269 1,734 426 
Interest expense(7,608)(6,516)(21,795)(18,760)
Gain on extinguishment of debt— 15,521 — 15,521 
Other (loss) gain, net
(7,540)(7,105)10,586 (4,605)
Total other (expense) income, net
(14,602)2,169 (9,475)(7,418)
Loss before income taxes(6,947)(7,138)(25,576)(92,933)
Provision for income taxes2,466 4,792 12,510 16,568 
Net loss$(9,413)$(11,930)$(38,086)$(109,501)
Net loss per common share:
Basic$(0.04)$(0.05)$(0.17)$(0.51)
Diluted$(0.04)$(0.05)$(0.17)$(0.51)
Weighted average shares used in computing net loss per common share:
Basic228,077 217,620 225,465 215,104 
Diluted228,077 217,620 225,465 215,104 

 


Infinera Corporation
GAAP to Non-GAAP Reconciliations
(In thousands, except percentages)
(Unaudited)
 Three Months EndedNine Months Ended
September 30, 2023July 1, 2023September 24, 2022September 30, 2023September 24, 2022
Reconciliation of Gross Profit and Gross Margin:
GAAP as reported$158,320 40.3 %$142,792 38.0 %$134,415 34.4 %$448,010 38.6 %$355,262 32.7 %
Stock-based compensation expense(1)
2,515 2,881 2,239 7,672 6,722 
Amortization of acquired intangible assets(2)
3,528 3,537 6,227 10,621 18,687 
Restructuring and other related costs(3)
— — 22 — 185 
Inventory related charges(4)
— — 938 — 14,650 
Global distribution center transition costs(5)
— — 1,600 — 1,600 
Warehouse fire loss (recovery)(6)
— (1,475)2,232 (1,985)2,232 
Non-GAAP as adjusted$164,363 41.9 %$147,735 39.3 %$147,673 37.8 %$464,318 40.0 %$399,338 36.7 %
Reconciliation of Operating Expenses:
GAAP as reported$150,665 $157,083 $143,722 $464,111 $440,777 
Stock-based compensation expense(1)
13,230 15,116 11,457 41,721 37,696 
Amortization of acquired intangible assets(2)
2,976 3,523 3,582 10,088 10,995 
Restructuring and other related costs(3)
400 1,431 1,142 2,621 9,545 
Litigation charges (7)
— — — — 1,350 
Non-GAAP as adjusted$134,059 $137,013 $127,541 $409,681 $381,191 
Reconciliation of Income (Loss) from Operations and Operating Margin:
GAAP as reported$7,655 2.0 %$(14,291)(3.8)%$(9,307)(2.4)%$(16,101)(1.4)%$(85,515)(7.9)%
Stock-based compensation expense(1)
15,745 17,997 13,696 49,393 44,418 
Amortization of acquired intangible assets(2)
6,504 7,060 9,809 20,709 29,682 
Restructuring and other related costs(3)
400 1,431 1,164 2,621 9,730 
Inventory related charges(4)
— — 938 — 14,650 
Global distribution center transition costs(5)
— — 1,600 — 1,600 
Warehouse fire loss (recovery)(6)
— (1,475)2,232 (1,985)2,232 
Litigation charges(7)
— — — — 1,350 
Non-GAAP as adjusted$30,304 7.7 %$10,722 2.8 %$20,132 5.2 %$54,637 4.7 %$18,147 1.7 %


 Three Months EndedNine Months Ended
September 30, 2023July 1, 2023September 24, 2022September 30, 2023September 24, 2022
Reconciliation of Net Income (Loss):
GAAP as reported$(9,413)$(20,263)$(11,930)$(38,086)$(109,501)
Stock-based compensation expense(1)
15,745 17,997 13,696 49,393 44,418 
Amortization of acquired intangible assets(2)
6,504 7,060 9,809 20,709 29,682 
Restructuring and other related costs(3)
400 1,431 1,164 2,621 9,730 
Inventory related charges(4)
— — 938 — 14,650 
Global distribution center transition costs(5)
— — 1,600 — 1,600 
Warehouse fire loss (recovery)(6)
— (1,475)2,232 (1,985)2,232 
Litigation charges(7)
— — — — 1,350 
Gain on extinguishment of debt(8)
— — (15,521)— (15,521)
Foreign exchange (gains) losses, net(9)
7,527 (8,047)7,372 (9,903)5,561 
Income tax effects(10)
(894)2,567 561 2,072 1,627 
Non-GAAP as adjusted$19,869 $(730)$9,921 $24,821 $(14,172)
Reconciliation of Adjusted EBITDA (11):
Non-GAAP net income (loss)$19,869 $(730)$9,921 $24,821 $(14,172)
Add: Interest expense, net7,062 6,670 6,247 20,061 18,334 
Less: Other (loss) gain, net
(13)(877)267 683 956 
Add: Income tax effects3,360 3,904 4,231 10,438 14,941 
Add: Depreciation13,498 12,739 11,496 38,694 34,329 
Non-GAAP as adjusted$43,802 $23,460 $31,628 $93,331 $52,476 
Net Income (Loss) per Common Share - Basic:
U.S. GAAP as reported$(0.04)$(0.09)$(0.05)$(0.17)$(0.51)
Non-GAAP as adjusted$0.09 $0.00 $0.05 $0.11 $(0.07)
Net Income (Loss) per Common Share - Diluted:
U.S. GAAP as reported$(0.04)$(0.09)$(0.05)$(0.17)$(0.51)
Non-GAAP as adjusted$0.08 $(0.00)$0.05 $0.11 $(0.07)
Weighted Average Shares Used in Computing Net Income/(Loss) per Common Share:
Basic228,077 225,922 217,620 225,465 215,104 
Diluted(12)
257,219 225,922 268,927 228,735 215,104 



(1)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 EndedNine Months Ended
September 30, 2023July 1, 2023September 24, 2022September 30, 2023September 24, 2022
Cost of revenue$2,515 $2,881 $2,239 $7,672 $6,722 
   Total cost of revenue2,515 2,881 2,239 7,672 6,722 
Research and development5,734 6,200 5,768 17,557 17,261 
Sales and marketing3,706 4,071 3,201 11,371 10,015 
General and administration3,790 4,845 2,488 12,793 10,420 
   Total operating expenses13,230 15,116 11,457 41,721 37,696 
  Total stock-based compensation expense$15,745 $17,997 $13,696 $49,393 $44,418 
(2)Amortization of acquired intangible assets consists of developed technology and customer relationships acquired in connection with the acquisitions of Coriant and 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.
(3)Restructuring and other related costs are primarily associated with Infinera's restructuring of 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.
(4)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.
(5)Global distribution center transition costs were primarily freight and handling costs incurred to transfer and consolidate our inventory from existing warehouses to our global distribution center in southeastern Asia. Management has excluded the impact of these costs 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.
(6)Warehouse fire losses were incurred due to inventory destroyed in a warehouse fire in the third quarter of fiscal year 2022. Recoveries are recorded when they are probable of receipt. Management has excluded the impact of this loss and subsequent recoveries in arriving at Infinera's non-GAAP results as it is non-recurring in nature and its 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)Gain on extinguishment of debt was recognized from the accounting for the partial repurchase of the 2024 convertible senior notes. Management has excluded the impact of this gain in arriving at Infinera's non-GAAP results as it is not indicative of ongoing operating performance and its exclusion provides a better indication of Infinera's underlying business performance.
(9)Foreign exchange (gains) losses, net, 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 expense, net, other (loss) gain, net, income tax effects and depreciation 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. Refer to the Diluted earnings per share reconciliation presented below.
For purposes of calculating non-GAAP diluted earnings per share, we used the following net income (loss) and weighted average common shares outstanding (in thousands):
 Three Months EndedNine Months Ended
September 30, 2023July 1, 2023September 24, 2022September 30, 2023September 24, 2022
Non-GAAP net income (loss) for basic earnings per share$19,869 $(730)$9,921 $24,821 $(14,172)
Interest expense related to the convertible senior notes, net of tax1,359 — 2,246 — — 
Non-GAAP net income (loss) for diluted earnings per share$21,228 $(730)$12,167 $24,821 $(14,172)
Weighted average basic common shares outstanding228,077 225,922 217,620 225,465 215,104 
Dilutive effect of restricted and performance share units1,123 — 1,422 2,005 — 
Dilutive effect of employee stock purchase plan— — 19 70 — 
Dilutive effect of 2024 convertible senior notes(1)
1,899 — 23,746 — — 
Dilutive effect of 2027 convertible senior notes(2)
26,120 — 26,120 — — 
Dilutive effect of 2028 convertible senior notes(3)
— — — 1,195 — 
Weighted average dilutive common shares outstanding257,219 225,922 268,927 228,735 215,104 
Non-GAAP net income (loss) per common share:
Basic$0.09 $(0.00)$0.05 $0.11 $(0.07)
Diluted$0.08 $(0.00)$0.05 $0.11 $(0.07)

(1)For the three-months ended September 30, 2023, and September 24, 2022, there were no shares excluded from the calculation of diluted net income (loss) per share. For the nine-months ended September 30, 2023, and September 24, 2022, there were 7.1 million and 35.1 million shares, respectively, excluded from the calculation of diluted net income (loss) per share, due to their anti-dilutive effect.
(2)For the three-months ended September 30, 2023, and September 24, 2022, there were no shares excluded from the calculation of diluted net income (loss) per share. For the nine-month periods ended September 30, 2023, and September 24, 2022, there were 26.1 million and 27.1 million shares, respectively, excluded from the calculation of diluted net income (loss) per share, due to their anti-dilutive effect.
(3)For the three-months ended September 30, 2023 and September 24, 2022, there were no shares excluded from the calculation of diluted net income (loss) per share.


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 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 EndedNine Months Ended
September 30, 2023July 1, 2023September 24, 2022September 30, 2023September 24, 2022
Net cash (used in) provided by operating activities$(29,793)$1,420 $19,635 $(30,142)$(36,996)
Purchase of property and equipment(13,318)(10,773)(11,024)(40,900)(37,750)
 Free cash flow$(43,111)$(9,353)$8,611 $(71,042)$(74,746)



Infinera Corporation
Condensed Consolidated Balance Sheets
(In thousands, except par values)
(Unaudited)
September 30,
2023		December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents$123,927 $178,657 
Short-term restricted cash1,725 7,274 
Accounts receivable, net328,863 419,735 
Inventory456,880 374,855 
Prepaid expenses and other current assets127,145 152,451 
Total current assets1,038,540 1,132,972 
Property, plant and equipment, net200,718 172,929 
Operating lease right-of-use assets29,877 34,543 
Intangible assets27,075 47,787 
Goodwill225,219 232,663 
Long-term restricted cash984 3,272 
Other long-term assets45,912 44,972 
Total assets$1,568,325 $1,669,138 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$282,122 $304,880 
Accrued expenses and other current liabilities110,288 141,450 
Accrued compensation and related benefits77,160 78,849 
Short-term debt, net25,641 510 
Accrued warranty18,845 19,747 
Deferred revenue100,777 158,501 
Total current liabilities614,833 703,937 
Long-term debt, net657,936 667,719 
Long-term accrued warranty17,013 16,874 
Long-term deferred revenue21,173 23,178 
Long-term deferred tax liability2,234 2,348 
Long-term operating lease liabilities39,158 45,862 
Other long-term liabilities34,749 29,573 
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 September 30, 2023 and December 31, 2022
Issued and outstanding shares - 229,442 as of September 30, 2023 and 220,408 as of December 31, 2022
229 220 
Additional paid-in capital1,963,838 1,901,491 
Accumulated other comprehensive loss(45,159)(22,471)
Accumulated deficit(1,737,679)(1,699,593)
Total stockholders' equity181,229 179,647 
Total liabilities and stockholders’ equity$1,568,325 $1,669,138 




Infinera Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 Nine Months Ended
 September 30, 2023September 24, 2022
Cash Flows from Operating Activities:
Net loss$(38,086)$(109,501)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization59,403 64,011 
Non-cash restructuring charges and other related costs1,183 6,098 
Amortization of debt issuance costs and discount2,970 5,270 
Operating lease expense6,402 7,203 
Stock-based compensation expense49,393 44,418 
Gain on extinguishment of debt— (15,521)
Other, net(683)892 
Changes in assets and liabilities:
Accounts receivable89,248 64,833 
Inventory(82,983)(45,514)
Prepaid expenses and other current assets16,811 (36,971)
Accounts payable(27,798)37,327 
Accrued expenses and other current liabilities(46,163)(23,083)
Deferred revenue(59,839)(36,458)
Net cash used in operating activities(30,142)(36,996)
Cash Flows from Investing Activities:
Purchase of property and equipment(40,900)(37,750)
Net cash used in investing activities(40,900)(37,750)
Cash Flows from Financing Activities:
Proceeds from issuance of 2028 Notes, net of discount98,751 373,750 
Repayment of 2024 Notes(83,446)(280,842)
Proceeds from asset-based revolving credit facility— 80,000 
Repayment of asset-based revolving credit facility— (80,000)
Repayment of mortgage payable(381)(366)
Payment of debt issuance cost(2,108)(11,246)
Payment of term license obligation(7,720)(5,413)
Principal payments on finance lease obligations(784)(1,054)
Proceeds from issuance of common stock14,931 15,189 
Tax withholding paid on behalf of employees for net share settlement(2,217)(3,346)
Net cash provided by financing activities17,026 86,672 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(8,551)(4,430)
Net change in cash, cash equivalents and restricted cash(62,567)7,496 
Cash, cash equivalents and restricted cash at beginning of period189,203 202,521 
Cash, cash equivalents and restricted cash at end of period(1)
$126,636 $210,017 


















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

Nine Months Ended
September 30, 2023September 24, 2022
Supplemental disclosures of cash flow information:
Cash paid for income taxes, net$9,955 $9,330 
Cash paid for interest$21,579 $14,694 
Supplemental schedule of non-cash investing and financing activities:
Unpaid debt issuance cost$— $1,313 
Property and equipment included in accounts payable and accrued liabilities$18,529 $2,698 
Transfer of inventory to fixed assets$1,207 $4,805 
Unpaid term licenses (included in accounts payable, accrued liabilities and other long-term liabilities)$16,510 $8,591 
(1)     Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets:
September 30, 2023September 24, 2022
Cash and cash equivalents$123,927 $198,044 
Short-term restricted cash1,725 8,946 
Long-term restricted cash984 3,027 
Total cash, cash equivalents and restricted cash$126,636 $210,017 



Infinera Corporation
Supplemental Financial Information
(Unaudited)

 Q4'21Q1'22Q2'22Q3'22Q4'22Q1'23Q2'23Q3'23
GAAP Revenue $(Mil)$400.3$338.9$358.0$390.4$485.9$392.1$376.2$392.4
GAAP Gross Margin %35.6%32.9%30.5%34.4%37.1%37.5%38.0%40.3%
Non-GAAP Gross Margin %(1)
37.2%36.2%36.1%37.8%38.7%38.8%39.3%41.9%
GAAP Revenue Composition:
Domestic %42%50%51%57%61%60%58%59%
International %58%50%49%43%39%40%42%41%
Customers >10% of Revenue——111—11
Cash Related Information:
Cash from Operations $(Mil)$1.4$15.8$(72.4)$19.6$(0.6)$(1.8)$1.4$(29.7)
Capital Expenditures $(Mil)$9.1$16.1$10.6$11.0$8.3$16.8$10.8$13.3
Depreciation & Amortization $(Mil)$23.4$21.6$21.1$21.3$19.8$19.6$19.8$20.0
DSOs(2)
8274776679787976
Inventory Metrics:
Raw Materials $(Mil)$39.4$41.2$50.4$43.5$48.7$67.6$85.4$110.4
Work in Process $(Mil)$53.9$55.4$58.9$62.6$66.6$71.8$71.9$69.9
Finished Goods $(Mil)$198.1$195.1$200.3$224.9$259.6$273.6$270.1$276.6
Total Inventory $(Mil)$291.4$291.7$309.6$331.0$374.9$413.0$427.4$456.9
Inventory Turns(3)
3.53.03.03.03.42.42.22.1
Worldwide Headcount3,2253,2063,1863,1993,2673,3513,3653,369
Weighted Average Shares Outstanding (in thousands):
Basic210,908212,182215,509217,620219,921222,393225,922228,077
Diluted218,009287,588285,968268,927258,030229,404262,712257,219
(1)Non-GAAP adjustments include stock-based compensation expenses, amortization of acquired intangible assets, restructuring and other related costs, inventory related charges, global distribution center transition costs and warehouse fire loss (recovery). For a description of this non-GAAP financial measure, please see the section titled, “GAAP to Non-GAAP Reconciliations” of this summary of key financial results 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 DSO based on 91 days. Fiscal year 2022 was 53 weeks and the fourth quarter of fiscal year 2022 was 98 days. When calculation is based on 98 days, DSO was 85 days for the fourth quarter of fiscal year 2022.
(3)Infinera calculates non-GAAP inventory turns as annualized non-GAAP cost of revenue, which is calculated as GAAP cost of revenue less stock-based compensation expense, amortization of acquired intangible assets, restructuring and other related costs, inventory related charges, global distribution center transition costs and warehouse fire loss (recovery), as illustrated in the reconciliation of gross profit above, divided by the average inventory for the quarter.


THIRD QUARTER 2023 FINANCIAL RESULTS February 29, 2024

 
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; capacity growth; market adoption of coherent optical engines; the potential for Infinera’s pluggables to drive market expansion, increase Infinera’s profitability and improve Infinera’s competitiveness in the future; Infinera’s business and growth strategy and related expectations and debt maturity schedule. 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, among other things, continued demand growth for network capacity; the level and timing of customer capital spending and the impact on customer demand from customers holding excess inventory beyond normalized levels; delays in the development, introduction or acceptance of new products or updates to existing products; supply chain issues, including delays, shortages and increased costs; Infinera's dependency on sole source, limited source or high-cost suppliers; aggressive business tactics by competitors and new entrants; Infinera's ability to compete in a highly competitive market; product performance problems; the effects of the macroeconomic environment on Infinera’s business, stock price and personnel; Infinera's ability to identify, attract, upskill and retain qualified personnel; the extent to which public health emergencies could materially and adversely affect our business operations, financial performance, results of operations, financial position, stock price and personnel; Infinera's relationships with contract manufacturers and third-party partners; Infinera’s reliance on key customers; the effects of customer and supplier consolidation; the complexity of Infinera’s manufacturing processes for its optical engine and other products; Infinera’s ability to respond to rapid technological changes; failure to accurately forecast Infinera's manufacturing requirements or customer demand; fluctuations in demand, sales cycles and prices for products and services, including discounts given in response to competitive pricing pressures; 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; 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 adverse impact of inflation and high interest rates; Infinera's ability to service its debt obligations and pursue its strategic plan; the impacts of any restructuring plans or other strategic efforts on our business; the outcome of research and development investments; risks and compliance obligations relating to Infinera's international operations as well as actions by the U.S. or foreign governments; Infinera’s effective tax rate, which may increase or fluctuate; foreign currency fluctuations; 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, violence or other catastrophic events that could harm Infinera's operations; Infinera’s ability to remediate its material weaknesses and to maintain an effective system of internal controls; Infinera's ability to maintain effective disclosure controls and procedures; 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 31, 2022, as filed with the SEC on February 27, 2023, as amended, and its Quarterly Reports on Forms 10-Q, as amended, 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 non-GAAP financial measures such as 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 Appendix to this presentation for reconciliations to the most comparable GAAP financial measures. © 2024 Infinera. All rights reserved.

 
3 Q3’23 HIGHLIGHTS NEW TIER 1 WINS IN EMEA, SUBSEA CONTINUED MOMENTUM WITH ICP’S & GROWTH OF ICE6 CUSTOMER BASE EXPANSION OF OPEN XR FORUM C U S T O M E R S U C C E S S QoQ REVENUE GROWTH +4%; YEAR-TO-DATE REVENUE GROWTH +7% BOOKINGS UP QoQ and YoY; BtB >1 Q3’23 GROSS MARGIN +590BPS YoY (+410BPS ON A NON -GAAP BASIS*) Q3’23 OPERATING MARGIN +440BPS YoY (+250BPS ON A NON -GAAP BASIS*) F I N A N C I A L S WINNING 8 X 4 X 1 STRATEGY COMPELLING TARGET BUSINESS MODEL BUSINESS STRUCTURE ALIGNED WITH STRATEGY V A L U E D R I V E R S STRONG YoY BOOKINGS GROWTH FOR GX-SERIES & LINE SYSTEMS 400G CFP2 & QSFP-DD ICE-X PLUGGABLES COMMERCIALLY AVAILABLE ADDITIONAL ORDERS RECEIVED FOR PLUGGABLES & COMPONENTS S O L U T I O N S © 2024 Infinera. All rights reserved. * See reconciliation of GAAP to non-GAAP financial measures in the appendix of this presentation.

 
4 FINANCIAL METRICS QoQ YoY CHANGE CHANGE Revenue ($M) $390 $376 $392 4% 0% Gross Margin % * 37.8% 39.3% 41.9% 260bps 410bps Opex ($M) * $128 $137 $134 -2% 5% Operating Margin % * 5.2% 2.8% 7.7% 490bps 250bps Diluted EPS * $0.05 ($0.00) $0.08 $0.08 $0.03 Q3'22 Q2’23 Q3'23 * See reconciliation of GAAP to non-GAAP financial measures in the appendix of this presentation. R E V E N U E : STA B L E Yo Y. G R O W T H I N A M E R I C A S & E M E A O F F S E T BY D E C L I N E S I N A PA C1 G R O S S M A R G I N : P O S I T I V E I M PA C T O F V I & PA R T I A L R E L I E F F R O M E L E VAT E D S U P P LY C O ST S2 O P E R AT I N G M A R G I N : P O S I T I V E I M PA C T O F H I G H E R R E V E N U E & G R O S S M A R G I N4 O P E X : F O C U S E D I N V E ST M E N T S I N S G & A , R & D , A N D S U B SY ST E M S P O R T F O L I O3 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 FINANCIALS & COMPARISON TO PRIOR PERIODS © 2024 Infinera. All rights reserved. VI = Vertical Integration SG&A = Selling, General & Administrative R&D = Research & Development YoY = Year-over-Year EMEA = Europe, Middle East & Africa APAC = Asia-Pacific

 
5 QoQ YoY CHANGE CHANGE Region United States $222.1 $217.1 $229.6 6% 3% Other Americas $ 21.5 $ 23.2 $ 25.4 10% 18% Europe, Middle East and Africa $ 94.2 $ 85.6 $ 99.3 16% 5% Asia Pacific $ 52.7 $ 50.3 $ 38.1 -24% -28% Total $390.5 $376.2 $392.4 4% 0% Channel Direct $287.1 $237.6 $264.1 11% -8% Indirect $103.4 $138.6 $128.3 -7% 24% Total $390.5 $376.2 $392.4 4% 0% Vertical Tier 1 $123.9 $ 90.8 $110.7 22% -11% Other Service Provider $148.9 $155.8 $157.2 1% 6% ICP $ 99.0 $108.8 $108.6 0% 10% Cable $ 18.7 $ 20.8 $ 15.9 -24% -15% Total $390.5 $376.2 $392.4 4% 0% Q3'22 Q2’23 Q3'23 F I N A N C I A L S REVENUE BY REGION & BY VERTICAL © 2024 Infinera. All rights reserved. Revenue in $ millions; totals may not add up exactly due to rounding. Prior periods have been slightly adjusted primarily due to the reclassification of a few customers. A M E R I C A S : ST R E N G T H AT I C P s & C S P s , PA R T I A L LY O F F S E T BY T I M I N G O F P R O J EC T S1 E M E A : Yo Y G R O W T H P R I M A R I LY D R I V E N BY T I E R 1 C S P s A N D S E C O N D A R I LY I C P s2 T I E R 1 : U P Q o Q B U T Yo Y ST I L L I M PA C T E D BY O N G O I N G C U STO M E R I N V E N TO R Y C O R R E C T I O N4 A PA C : I M PA C T E D P R I M A R I LY BY T I M I N G O F C S P P R O J E C T S3 Y E A R - O V E R - Y E A R T R E N D S ICP = Internet Content Provider (also referred to as hyperscalers) CSP = Communications Service Provider QoQ = Quarter-over-Quarter

 
6 F I N A N C I A L S CONVERTIBLE DEBT MATURITY SCHEDULE © 2024 Infinera. All rights reserved. Convertible 2.125% Senior Notes Due 2024 Convertible 2.50% Senior Notes Due 2027 Convertible 3.75% Senior Notes Due 2028 $’s in millions

 
7 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 © 2024 Infinera. All rights reserved. Source: Cignal AI, Dell’Oro, Omdia, LightCounting and Infinera

 
8 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 © 2024 Infinera. All rights reserved. INDUSTRY-LEADING PERFORMANCE 8 4 1 VERTICALLY INTEGRATED MODULAR SOLUTIONS DISRUPT W/ POINT-TO-POINT AND POINT-TO- MULTIPOINT PLUGGABLES VERTICALLY INTEGRATED MONOLITHIC INDIUM PHOSPHIDE BASED PHOTONIC INTEGRATED CIRCUIT UNIQUE CAPABILITIES LEADING PERFORMANCE & OPERATIONS, SUPERIOR MANUFACTURABILITY, OUTSTANDING CUSTOMER VALUE MAXIMUM VALUE C O R E M E T R O A C C E S S 00G00G+ 00G ICE6 ICE7 ICE8 GX PORTFOLIO ICE-X PLUGGABLES EMBEDDED ENGINES POINT-TO-POINT PLUGGABLES POINT-TO-MULTIPOINT PLUGGABLES OPEN SOLUTIONS T R A N S C E N D SOFTWARE & AUTOMATION P O R T F O LI O M A R K E T S E G M E N T S

 
APPENDIX

 
10 © 2024 Infinera. All rights reserved. Company Confidential. © 2024 Infinera. All rights reserved. DILUTED EARNINGS PER SHARE RECONCILIATION (1) For the three-months ended September 30, 2023, and September 24, 2022, there were no shares excluded from the calculation of diluted net income (loss) per share. For the nine-months ended September 30, 2023, and September 24, 2022, there were 7.1 million and 35.1 million shares, respectively, excluded from the calculation of diluted net income (loss) per share, due to their anti-dilutive effect. (2) For the three-months ended September 30, 2023, and September 24, 2022, there were no shares excluded from the calculation of diluted net income (loss) per share. For the nine-month periods ended September 30, 2023, and September 24, 2022, there were 26.1 million and 27.1 million shares, respectively, excluded from the calculation of diluted net income (loss) per share, due to their anti-dilutive effect. (3) For the three-months ended September 30, 2023, and September 24, 2022, there were no shares excluded from the calculation of diluted net income (loss) per share. September 30, 2023 July 1, 2023 September 24, 2022 September 30, 2023 September 24, 2022 Non-GAAP net income (loss) for basic earnings per share $ 19,869 $ (730) $ 9,921 $ 24,821 $ (14,172) Interest expense related to the convertible senior notes, net of tax 1,359 - 2,246 - - Non-GAAP net income (loss) for diluted earnings per share $ 21,228 $ (730) $ 12,167 $ 24,821 $ (14,172) Weighted average basic common shares outstanding 228,077 225,922 217,620 225,465 215,104 Dilutive effect of restricted and performance share units 1,123 - 1,422 2,005 - Dilutive effect of employee stock purchase plan - - 19 70 - Dilutive effect of the 2024 convertible senior notes (1) 1,899 - 23,746 - - Dilutive effect of the 2027 convertible senior notes (2) 26,120 - 26,120 - - Dilutive effect of the 2028 convertible senior notes (3) - - - 1,195 - Weighted average dilutive common shares outstanding 257,219 225,922 268,927 228,735 215,104 Non-GAAP net income (loss) per common share: Basic $ 0.09 $ (0.00) $ 0.05 $ 0.11 $ (0.07) Diluted $ 0.08 $ (0.00) $ 0.05 $ 0.11 $ (0.07) Three months ended Nine months ended

 
11 1. TOTALS MAY NOT ADD UP DUE TO ROUNDING. 2. NON-GAAP METRICS ARE RECONCILED TO THE MOST DIRECTLY COMPARABLE GAAP FINANCIAL METRIC. 3. FOR A COMPLETE RECONCILIATION OF OTHER PERIOD RESULTS, SEE PRIOR QUARTERLY EARNINGS RELEASES. © 2024 Infinera. All rights reserved. Company Confidential. © 2024 Infinera. All rights reserved. GAAP TO NON-GAAP RECONCILIATION N O T E S

 
12 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 (USED IN) OPERATING ACTIVITIES IN THE PERIOD MINUS THE PURCHASE OF PROPERTY AND EQUIPMENT MADE IN THE PERIOD. 4. FOR A COMPLETE RECONCILIATION OF OTHER PERIOD RESULTS, SEE PRIOR QUARTERLY EARNINGS RELEASES. © 2024 Infinera. All rights reserved. Company Confidential. © 2024 Infinera. All rights reserved. GAAP TO NON-GAAP and FREE CASH FLOW RECONCILIATION N O T E S

 
Thank You

 
v3.24.0.1
Cover
Feb. 29, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 29, 2024
Entity Registrant Name INFINERA CORPORATION
Entity Incorporation, State or Country Code DE
Entity File Number 001-33486
Entity Tax Identification Number 77-0560433
Entity Address, Address Line One 6373 San Ignacio Ave
Entity Address, City or Town San Jose,
Entity Address, State or Province CA
Entity Address, Postal Zip Code 95119
City Area Code 408
Local Phone Number 572-5200
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Entity Central Index Key 0001138639
Amendment Flag false
Title of 12(b) Security Common Stock, par value $0.001 per share
Trading Symbol INFN
Security Exchange Name NASDAQ
Infinera (NASDAQ:INFN)
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