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Infinera Corporation Reports Third Quarter 2024 Financial Results

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Infinera (NASDAQ: INFN) reported Q3 2024 financial results with revenue of $354.4 million, up from $342.7 million in Q2 2024 but down from $392.4 million in Q3 2023. The company posted a GAAP net loss of $14.3 million ($0.06 per share) and a non-GAAP net income of $0.3 million. GAAP gross margin was 39.8%, while operating margin was -3.1%. The company generated positive cash flow from operations of $44.5 million and ended the quarter with $115.6 million in cash. Infinera secured design wins for ICE-X coherent pluggables and signed a preliminary memorandum with the U.S. Department of Commerce for potential CHIPS Act funding exceeding $200 million. The pending merger with Nokia remains on track for closure in H1 2025.

Infinera (NASDAQ: INFN) ha riportato i risultati finanziari del Q3 2024 con un fatturato di 354,4 milioni di dollari, in aumento rispetto ai 342,7 milioni di dollari del Q2 2024 ma in calo rispetto ai 392,4 milioni di dollari del Q3 2023. L'azienda ha registrato una perdita netta GAAP di 14,3 milioni di dollari (0,06 dollari per azione) e un reddito netto non-GAAP di 0,3 milioni di dollari. Il margine lordo GAAP è stato del 39,8%, mentre il margine operativo è stato del -3,1%. L'azienda ha generato un flusso di cassa positivo dalle operazioni di 44,5 milioni di dollari e ha chiuso il trimestre con 115,6 milioni di dollari in contante. Infinera ha ottenuto successi nel design per i pluggabili coerenti ICE-X e ha firmato un memorandum preliminare con il Dipartimento del Commercio degli Stati Uniti per un potenziale finanziamento ai sensi del CHIPS Act superiore ai 200 milioni di dollari. La fusione in attesa con Nokia è in programma di chiudersi nella prima metà del 2025.

Infinera (NASDAQ: INFN) informó sobre los resultados financieros del Q3 2024 con ingresos de 354,4 millones de dólares, un aumento desde los 342,7 millones de dólares en Q2 2024, pero a la baja desde los 392,4 millones de dólares en Q3 2023. La compañía reportó una pérdida neta GAAP de 14,3 millones de dólares (0,06 dólares por acción) y un ingreso neto no-GAAP de 0,3 millones de dólares. El margen bruto GAAP fue del 39,8%, mientras que el margen operativo fue del -3,1%. La empresa generó un flujo de caja positivo de operaciones de 44,5 millones de dólares y terminó el trimestre con 115,6 millones de dólares en efectivo. Infinera obtuvo triunfos de diseño para los conectores coherentes ICE-X y firmó un memorando preliminar con el Departamento de Comercio de EE. UU. para un potencial financiamiento del CHIPS Act por más de 200 millones de dólares. La fusión pendiente con Nokia sigue en camino para cerrarse en la primera mitad de 2025.

인피네라 (NASDAQ: INFN)는 2024년 3분기 재무 결과를 보고하며 매출이 3억 5천4백만 달러를 기록했으며, 이는 2024년 2분기 3억 4천2백7십만 달러에서 증가한 수치지만, 2023년 3분기 3억 9천2백4십만 달러에서 감소한 것입니다. 이 회사는 GAAP 기준으로 1천4백3십만 달러의 순손실 (주당 0.06달러)과 비GAAP 기준으로 30만 달러의 순이익을 기록했습니다. GAAP 총 이익률은 39.8%, 운영 이익률은 -3.1%였습니다. 인피네라는 운영으로부터 4천4백5십만 달러의 긍정적인 현금 흐름을 창출하였으며, 1억 1천5백6십만 달러의 현금을 보유한 채 분기를 마감했습니다. 인피네라는 ICE-X Coherent Plugables에 대한 디자인 승리를 확보했으며, 2억 달러 이상의 잠재적인 CHIPS 법안 자금 지원을 위해 미국 상무부와 임시 메모를 체결했습니다. 노키아와의 합병은 2025년 상반기 완료를 목표로 하고 있습니다.

Infinera (NASDAQ: INFN) a rapporté les résultats financiers du troisième trimestre 2024 avec des revenus de 354,4 millions de dollars, en hausse par rapport à 342,7 millions de dollars au deuxième trimestre 2024, mais en baisse par rapport à 392,4 millions de dollars au troisième trimestre 2023. L'entreprise a enregistré une perte nette GAAP de 14,3 millions de dollars (0,06 dollar par action) et un revenu net non-GAAP de 0,3 million de dollars. La marge brute GAAP était de 39,8%, tandis que la marge opérationnelle était de -3,1%. L'entreprise a généré un flux de trésorerie positif provenant des opérations de 44,5 millions de dollars et a terminé le trimestre avec 115,6 millions de dollars en espèces. Infinera a obtenu des succès de conception pour les pluggables cohérents ICE-X et a signé un mémorandum préliminaire avec le ministère du Commerce des États-Unis pour un financement potentiel dans le cadre de la loi CHIPS dépassant 200 millions de dollars. La fusion en attente avec Nokia est sur la bonne voie pour être finalisée au premier semestre 2025.

Infinera (NASDAQ: INFN) hat die Finanzergebnisse für das 3. Quartal 2024 veröffentlicht mit Umsätzen von 354,4 Millionen Dollar, ein Anstieg von 342,7 Millionen Dollar im 2. Quartal 2024, jedoch ein Rückgang von 392,4 Millionen Dollar im 3. Quartal 2023. Das Unternehmen verzeichnete einen GAAP-netto Verlust von 14,3 Millionen Dollar (0,06 Dollar pro Aktie) und ein nicht-GAAP nettes Einkommen von 0,3 Millionen Dollar. Der GAAP-Bruttomarge betrug 39,8%, während die Betriebsgewinne bei -3,1% lagen. Das Unternehmen generierte einen positiven Cashflow aus der Betriebstätigkeit von 44,5 Millionen Dollar und schloss das Quartal mit 115,6 Millionen Dollar in Bar ab. Infinera sicherte sich Designgewinne für ICE-X kohärente Stecker und unterzeichnete ein vorläufiges Memorandum mit dem US-Handelsministerium für potenzielle CHIPS Act-Finanzierungen von über 200 Millionen Dollar. Die anstehende Fusion mit Nokia ist auf Kurs zur Schließung im ersten Halbjahr 2025.

Positive
  • Sequential revenue growth from $342.7M to $354.4M QoQ
  • Improved GAAP operating margin from -8.7% to -3.1% QoQ
  • Generated positive operating cash flow of $44.5M
  • Potential CHIPS Act funding exceeding $200M
  • Non-GAAP profitability achieved with $0.3M net income vs. previous quarter loss
Negative
  • Year-over-year revenue decline from $392.4M to $354.4M
  • GAAP net loss of $14.3M
  • Year-over-year decline in GAAP gross margin from 40.3% to 39.8%
  • Non-GAAP operating margin decreased from 7.7% to 3.5% YoY

Insights

Infinera's Q3 2024 results show mixed performance with sequential improvements but year-over-year declines. Revenue increased 3.4% quarter-over-quarter to $354.4 million, but decreased 9.7% from Q3 2023. The GAAP operating margin improved to -3.1% from -8.7% in Q2, though still below last year's positive margin.

Notable highlights include positive cash flow from operations of $44.5 million and potential $200+ million in CHIPS Act funding. The pending Nokia acquisition, expected to close in H1 2025, has received key approvals including U.S. antitrust and CFIUS. The company's transition to profitability shows progress with non-GAAP operating margin turning positive at 3.5%, though below last year's 7.7%.

SAN JOSE, Calif., Nov. 05, 2024 (GLOBE NEWSWIRE) -- Infinera Corporation (NASDAQ: INFN) today released financial results for its third quarter ended September 28, 2024.

GAAP revenue for the quarter was $354.4 million compared to $342.7 million in the second quarter of 2024 and $392.4 million in the third quarter of 2023.

GAAP gross margin for the quarter was 39.8% compared to 39.6% in the second quarter of 2024 and 40.3% in the third quarter of 2023. GAAP operating margin for the quarter was (3.1)% compared to (8.7)% in the second quarter of 2024 and 2.0% in the third quarter of 2023.

GAAP net loss for the quarter was $(14.3) million, or $(0.06) per diluted share, compared to net loss of $(48.3) million, or $(0.21) per diluted share, in the second quarter of 2024, and net loss of $(9.4) million, or $(0.04) per diluted share, in the third quarter of 2023.

Non-GAAP gross margin for the quarter was 40.4% compared to 40.3% in the second quarter of 2024 and 41.9% in the third quarter of 2023. Non-GAAP operating margin for the quarter was 3.5% compared to (1.3)% in the second quarter of 2024 and 7.7% in the third quarter of 2023.

Non-GAAP net income for the quarter was $0.3 million, or $0.00 per diluted share, compared to non-GAAP net loss of $(14.0) million, or $(0.06) per diluted share, in the second quarter of 2024, and non-GAAP net income of $19.9 million, or $0.08 per diluted share, in the third quarter of 2023.

During the three-months ended September 28, 2024, the Company generated positive cash flow from operations of $44.5 million and ended the quarter with cash, cash equivalents and restricted cash of $115.6 million.

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 team delivered another quarter with continued sequential improvements in our financial metrics and critical service provider and webscaler design wins across our ICE-X coherent pluggables, next-generation line systems, software, and ICE7 solutions. In addition, in October we signed a non-binding preliminary memorandum of terms with the U.S. Department of Commerce for an award under the CHIPS and Science Act that, together with other federal and state incentives, could result in more than $200 million in funds for Infinera.”

“Looking ahead, our customers remain excited about our pending acquisition by Nokia as they look forward to the combined company accelerating the pace of innovation in the industry. We are making good progress on the steps required to close the transaction, including receiving stockholder approval and attaining U.S. antitrust and CFIUS approval. There are still other regulatory approvals pending, but we believe we remain on track to close the deal in the first half of 2025,” continued Mr. Heard.

Pending Merger with Nokia

On June 27, 2024, Infinera, Nokia Corporation, a company incorporated under the laws of the Republic of Finland (“Nokia”) (NYSE: NOK) and Neptune of America Corporation, a Delaware corporation and wholly owned subsidiary of Nokia (“Merger Sub”) entered into an Agreement and Plan of Merger (as it may be amended, modified or waived from time to time, the “Merger Agreement”) that provides for Merger Sub to merge with and into Infinera (the “Merger”), with Infinera surviving the Merger as a wholly owned subsidiary of Nokia. The transaction is expected to close in the first half of 2025.

In light of the proposed transaction with Nokia, and as is customary during the pendency of an acquisition, Infinera will not be providing financial guidance during the pendency of the acquisition.

Third Quarter 2024 Investor Slides to be Made Available Online

Investor slides reviewing Infinera's third quarter of 2024 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 at investors.infinera.com.

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.

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. Forward-looking statements in this press release include, but are not limited to, statements regarding the amount Infinera could receive in government funding; and statements related to the Merger, including the timing of completion of the Merger and the future performance and benefits of the combined business.

These forward-looking statements are based on estimates and information available to Infinera as of the date hereof and are not guarantees of actual or 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 statements related to the Merger, including whether the Merger may not be completed or completion may be delayed, and if the Merger Agreement is terminated, there may be a required payment of a significant termination fee by either party; the receipt of necessary approvals to complete the Merger; the possibility that due to the Merger, and uncertainty regarding the Merger, Infinera’s customers, suppliers or strategic partners may delay or defer entering into contracts or making other decisions concerning Infinera; the significance and timing of costs related to the Merger; the impact on us of litigation or other stockholder action related to the Merger; the effects on us and our stockholders if the Merger is not completed; demand growth for additional network capacity and the level and timing of customer capital spending and excess inventory held by customers beyond normalized levels; delays in the development, introduction or acceptance of new products or in releasing enhancements to existing products; aggressive business tactics by Infinera’s competitors and new entrants and Infinera's ability to compete in a highly competitive market; supply chain and logistics issues and their impact on our business, and Infinera's dependency on sole source, limited source or high-cost suppliers; dependence on a small number of key customers; product performance problems; the complexity of Infinera's manufacturing process; Infinera's ability to identify, attract, upskill and retain qualified personnel; challenges with our contract manufacturers and other third-party partners; the effects of customer and supplier consolidation; dependence on third-party service partners; Infinera’s ability to respond to rapid technological changes; failure to accurately forecast Infinera's manufacturing requirements or customer demand; failure to secure the funding contemplated by grants Infinera may receive from governments, agencies or research organizations, or failure to comply with the terms of those grants; 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; the adverse impact inflation and higher interest rates may have on Infinera by increasing costs beyond what it can recover through price increases; restrictions to our operations resulting from loan or other credit agreements; the impacts of any restructuring plans or other strategic efforts on our business; Infinera’s international sales and operations; the impacts of foreign currency fluctuations; the effective tax rate of Infinera, which may increase or fluctuate; 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, acts of war or terrorism, or other catastrophic events that could harm Infinera's operations; Infinera’s ability to remediate its recently disclosed material weaknesses in internal control over financial reporting in a timely and effective manner, and other risks and uncertainties detailed in Infinera’s SEC filings from time to time; and statements of assumptions underlying any of the foregoing. 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 30, 2023, filed with the SEC on May 17, 2024, and its Quarterly Report on Form 10-Q for the quarter ended June 29, 2024, as filed with the SEC on August 2, 2024, as well as subsequent reports filed with or furnished to the SEC from time to time. These SEC filings 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 stock-based compensation expense, amortization of acquired intangible assets, restructuring and other related costs, warehouse fire recovery, merger-related charges, 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 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 ended Nine months ended
 September
28, 2024
 September
30, 2023
 September
28, 2024
 September
30, 2023
Revenue:       
Product$276,214  $316,613  $778,008  $931,057 
Services 78,184   75,756   226,051   229,615 
Total revenue 354,398   392,369   1,004,059   1,160,672 
Cost of revenue:       
Cost of product 170,693   190,312   494,248   577,152 
Cost of services 42,515   40,209   121,910   124,889 
Amortization of intangible assets    3,528      10,621 
Restructuring and other related costs (24)     652    
Total cost of revenue 213,184   234,049   616,810   712,662 
Gross profit 141,214   158,320   387,249   448,010 
Operating expenses:       
Research and development 73,283   76,846   225,223   237,234 
Sales and marketing 35,715   41,075   118,357   124,406 
General and administrative 34,160   29,368   101,114   89,762 
Amortization of intangible assets 2,257   2,976   6,769   10,088 
Merger-related charges 6,954      15,471    
Restructuring and other related costs (157)  400   4,105   2,621 
Total operating expenses 152,212   150,665   471,039   464,111 
Income (loss) from operations (10,998)  7,655   (83,790)  (16,101)
Other income (expense), net:       
Interest income 874   546   2,789   1,734 
Interest expense (8,764)  (7,608)  (25,556)  (21,795)
Other gain (loss), net 8,485   (7,540)  (8,910)  10,586 
Total other income (expense), net 595   (14,602)  (31,677)  (9,475)
Loss before income taxes (10,403)  (6,947)  (115,467)  (25,576)
Provision for income taxes 3,910   2,466   8,528   12,510 
Net loss$(14,313) $(9,413) $(123,995) $(38,086)
Net loss per common share:       
Basic$(0.06) $(0.04) $(0.53) $(0.17)
Diluted$(0.06) $(0.04) $(0.53) $(0.17)
Weighted average shares used in computing net loss per common share:       
Basic 235,832   228,077   233,905   225,465 
Diluted 235,832   228,077   233,905   225,465 
 

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

 Three months ended Nine months ended
 September
28, 2024
  
 June 29,
2024
  
 September
30, 2023

 September 
28, 2024

 September 
30, 2023

Reconciliation of Gross Profit and Gross Margin:                   
GAAP as reported$141,214  39.8% $135,594  39.6% $158,320 40.3% $387,249  38.6% $448,010  38.6%
Stock-based compensation expense(1) 2,084  0.6%  1,777  0.5%  2,515 0.7%  5,754  0.5%  7,672  0.7%
Amortization of acquired intangible assets(2)   %    %  3,528 0.9%    %  10,621  0.9%
Restructuring and other related costs(3) (24) (0.0)%  703  0.2%      652  0.1%    %
Warehouse fire recovery(4)   %    %   %    %  (1,985) (0.2)%
Non-GAAP as adjusted$143,274  40.4% $138,074  40.3% $164,363 41.9% $393,655  39.2% $464,318  40.0%
                    
Reconciliation of Operating Expenses:                   
GAAP as reported$152,212    $165,403    $150,665   $471,039    $464,111   
Stock-based compensation expense(1) 12,305     8,024     13,230    32,967     41,721   
Amortization of acquired intangible assets(2) 2,257     2,256     2,976    6,769     10,088   
Restructuring and other related costs(3) (157)    3,948     400    4,105     2,621   
Merger-related charges(5) 6,954     8,517         15,471        
Non-GAAP as adjusted$130,853    $142,658    $134,059   $411,727    $409,681   
                    
Reconciliation of Income (Loss) from Operations and Operating Margin:                   
GAAP as reported$(10,998) (3.1)% $(29,809) (8.7)% $7,655 2.0% $(83,790) (8.3)% $(16,101) (1.4)%
Stock-based compensation expense(1) 14,389  4.1%  9,801  2.8%  15,745 3.9%  38,721  3.8%  49,393  4.3%
Amortization of acquired intangible assets(2) 2,257  0.6%  2,256  0.7%  6,504 1.7%  6,769  0.7%  20,709  1.8%
Restructuring and other related costs(3) (181) (0.1)%  4,651  1.4%  400 0.1%  4,757  0.5%  2,621  0.2%
Warehouse fire recovery(4)   %    %   %    %  (1,985) (0.2)%
Merger-related charges(5) 6,954  2.0%  8,517  2.5%   %  15,471  1.5%    %
Non-GAAP as adjusted$12,421  3.5% $(4,584) (1.3)% $30,304 7.7% $(18,072) (1.8)% $54,637  4.7%
 


  Three months ended Nine months ended
  September
28, 2024
   June
29, 2024
   September
30, 2023
   September
28, 2024
   September
30, 2023
Reconciliation of Net Income (Loss):                  
GAAP as reported $(14,313)   $(48,287)   $(9,413)   $(123,995)   $(38,086)
Stock-based compensation expense(1)  14,389     9,801     15,745     38,721     49,393 
Amortization of acquired intangible assets(2)  2,257     2,256     6,504     6,769     20,709 
Restructuring and other related costs(3)  (181)    4,651     400     4,757     2,621 
Warehouse fire recovery(4)                      (1,985)
Merger-related charges(5)  6,954     8,517          15,471      
Foreign exchange (gains) losses, net(6)  (8,039)    11,690     7,527     10,099     (9,903)
Income tax effects(7)  (788)    (2,604)    (894)    (3,775)    2,072 
Non-GAAP as adjusted $279    $(13,976)   $19,869    $(51,953)   $24,821 
                   
Weighted Average Shares Used in Computing GAAP Net Income (Loss) per Common Share:                  
Basic  235,832     234,349     228,077     233,905     225,465 
Diluted(8)  235,832     234,349     228,077     233,905     225,465 
                   
Weighted Average Shares Used in Computing Non-GAAP Net Income (Loss) per Common Share:                  
Basic  235,832     234,349     228,077     233,905     225,465 
Diluted(9)  240,502     234,349     257,219     233,905     228,735 
                   
Reconciliation of Adjusted EBITDA (10):                  
Non-GAAP net income (loss) $279    $(13,976)   $19,869    $(51,953)   $24,821 
Add: Interest expense, net  7,890     7,370     7,062     22,767     20,061 
Less: Other gain (loss), net  446     507     (13)    1,189     683 
Add: Income tax effects  4,698     2,529     3,360     12,303     10,438 
Add: Depreciation  13,501     13,285     13,498     39,975     38,694 
Non-GAAP as adjusted $25,922    $8,701    $43,802    $21,903    $93,331 
                   
Net Income (Loss) per Common Share: GAAP                  
Basic $(0.06)   $(0.21)   $(0.04)   $(0.53)   $(0.17)
Diluted(8) $(0.06)   $(0.21)   $(0.04)   $(0.53)   $(0.17)
                   
Net Income (Loss) per Common Share: Non-GAAP                  
Basic $0.00    $(0.06)   $0.09    $(0.22)   $0.11 
Diluted(9) $0.00    $(0.06)   $0.08    $(0.22)   $0.11 
 


(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 ended Nine months ended
   September 28,
2024
 June 29,
2024
 September 30,
2023
 September 28,
2024
 September 30,
2023
Cost of revenue $2,084 $1,777 $2,515 $5,754 $7,672 
Research and development  4,623  4,497  5,734  14,232  17,557 
Sales and marketing  3,241  2,611  3,706  9,139  11,371 
General and administration  4,441  916  3,790  9,596  12,793 
Total operating expenses  12,305  8,024  13,230  32,967  41,721 
 Total stock-based compensation expense $14,389 $9,801 $15,745 $38,721 $49,393 
 
(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 the reduction of headcount and the reduction of operating costs. 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)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.
(5)Merger-related charges represent costs incurred directly in connection with the pending merger with Nokia. Management has excluded the impact of these charges in arriving at Infinera's non-GAAP results as they are non-recurring in nature and the exclusion of these charges provides a better indication of Infinera's underlying business performance.
(6)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.
(7)The difference between the GAAP and non-GAAP tax provision is due to the net tax effects of above non-GAAP adjustments. Management believes the exclusion of these tax effects provides a better indication of Infinera's underlying business performance.
(8)The GAAP diluted shares include potentially dilutive securities from Infinera's stock-based benefit plans and convertible senior notes. These potentially dilutive securities are added for the computation of diluted net income per share on a GAAP basis in periods when Infinera has net income on a GAAP basis, as its inclusion provides a better indication of Infinera's underlying business performance.
 

For purposes of calculating GAAP diluted earnings per share, we used the following net loss and weighted average common shares outstanding (in thousands, except per share data):

  Three months ended Nine months ended
  September
28, 2024
 June 29,
2024
 September
30, 2023
 September
28, 2024
 September
30, 2023
GAAP net loss for basic earnings per share $(14,313) $(48,287) $(9,413) $(123,995) $(38,086)
Interest expense related to the convertible senior notes, net of tax               
GAAP net loss for diluted earnings per share $(14,313) $(48,287) $(9,413) $(123,995) $(38,086)
           
Weighted average basic common shares outstanding  235,832   234,349   228,077   233,905   225,465 
Dilutive effect of restricted and performance share units               
Dilutive effect of 2024 convertible senior notes(a)               
Dilutive effect of 2027 convertible senior notes(b)               
Dilutive effect of 2028 convertible senior notes(c)               
Weighted average dilutive common shares outstanding  235,832   234,349   228,077   233,905   225,465 
           
GAAP net loss per common share:          
Basic $(0.06) $(0.21) $(0.04) $(0.53) $(0.17)
Diluted $(0.06) $(0.21) $(0.04) $(0.53) $(0.17)
                       
 (a)   For the three-months ended September 28, 2024, June 29, 2024, and September 30, 2023, there were 1.4 million, 1.9 million and 1.9 million shares, respectively, excluded from the calculation of diluted net loss per share, due to their anti-dilutive effect. For the nine-months ended September 28, 2024, and September 30, 2023, there were 1.7 million, and 7.1 million shares, respectively, excluded from the calculation of diluted net loss per share, due to their anti-dilutive effect.
 (b)   For each of the three-months ended September 28, 2024, June 29, 2024, and September 30, 2023, there were 26.1 million shares excluded from the calculation of diluted net loss per share, due to their anti-dilutive effect. For each of the nine-months ended September 28, 2024, and September 30, 2023, there were 26.1 million shares excluded from the calculation of diluted net loss per share, due to their anti-dilutive effect.
 (c)   For each of the three-months ended September 28, 2024, June 29, 2024, and September 30, 2023, there were no shares excluded from the calculation of diluted net loss per share. For the nine-months ended September 28, 2024, there were no shares excluded from the calculation of diluted net loss per share. For the nine-months ended September 30, 2023, there were 1.2 million shares excluded from the calculation of diluted net loss per share, due to their anti-dilutive effect.
(9)The non-GAAP diluted shares include the potentially dilutive securities from Infinera's stock-based benefit plans and convertible senior notes. 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, except per share data):

    Three months ended Nine months ended
    September 28, 2024 June 29, 2024 September 30, 2023 September 28, 2024 September 30, 2023
Non-GAAP net income (loss) for basic earnings per share $279 $(13,976) $19,869 $(51,953) $24,821 
Interest expense related to the convertible senior notes, net of tax       1,359      
Non-GAAP net income (loss) for diluted earnings per share $279 $(13,976) $21,228 $(51,953) $24,821 
             
Weighted average basic common shares outstanding  235,832  234,349   228,077  233,905   225,465 
Dilutive effect of restricted and performance share units  4,670     1,123     2,005 
Dilutive effect of employee stock purchase plan            70 
Dilutive effect of 2024 convertible senior notes(a)       1,899      
Dilutive effect of 2027 convertible senior notes(b)       26,120      
Dilutive effect of 2028 convertible senior notes(c)            1,195 
Weighted average dilutive common shares outstanding  240,502  234,349   257,219  233,905   228,735 
             
Non-GAAP net income (loss) per common share:          
Basic $0.00 $(0.06) $0.09 $(0.22) $0.11 
Diluted $0.00 $(0.06) $0.08 $(0.22) $0.11 
                     
 (a)   For the three-months ended September 28, 2024, and June 29, 2024, there were 1.4 million, and 1.9 million shares, respectively, excluded from the calculation of diluted net income (loss) per share, due to their anti-dilutive effect. For the three-months ended September 30, 2023, there were no shares excluded from the calculation of diluted net income per share. For the nine-months ended September 28, 2024, and September 30, 2023, there were 1.7 million, and 7.1 million shares, respectively, excluded from the calculation of diluted net income (loss) per share, due to their anti-dilutive effect.
 (b)   For each of the three-months ended September 28, 2024, and June 29, 2024, there were 26.1 million shares excluded from the calculation of diluted net income (loss) per share, due to their anti-dilutive effect. For the three-months ended September 30, 2023, there were no shares excluded from the calculation of diluted net income per share. For each of the nine-months ended September 28, 2024, and September 30, 2023, there were 26.1 million shares excluded from the calculation of diluted net income (loss) per share, due to their anti-dilutive effect.
 (c)   For each of the three-months ended September 28, 2024, June 29, 2024, and September 30, 2023, there were no shares excluded from the calculation of diluted net income (loss) per share. For each of the nine-months ended September 28, 2024, and September 30, 2023, there were no shares excluded from the calculation of diluted net income (loss) per share.
(10)Adjusted EBITDA is a non-GAAP supplemental measure of operating performance that does not represent and should not be considered an alternative to operating loss or cash flow from operations, as determined by GAAP. Infinera's adjusted EBITDA is calculated by excluding the above non-GAAP adjustments, interest expense, net, other gain (loss), 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.
   

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 ended Nine months ended
  September
28, 2024
 June 29,
2024
 September
30, 2023
 September
28, 2024
 September
30, 2023
Net cash provided by (used in) operating activities $44,563  $(59,954) $(29,793) $8,635  $(30,142)
Purchase of property and equipment  (24,090)  (14,582)  (13,318)  (46,748)  (40,900)
Free cash flow $20,473  $(74,536) $(43,111) $(38,113) $(71,042)
 

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

 September 28,
2024
 December 30,
2023
ASSETS   
Current assets:   
Cash and cash equivalents$115,089  $172,505 
Short-term restricted cash 42   517 
Accounts receivable, net 288,265   381,981 
Inventory 356,119   431,163 
Prepaid expenses and other current assets 162,560   129,218 
Total current assets 922,075   1,115,384 
Property, plant and equipment, net 231,190   206,997 
Operating lease right-of-use assets 39,359   39,973 
Intangible assets, net 18,050   24,819 
Goodwill 237,509   240,566 
Long-term restricted cash 446   837 
Other long-term assets 57,128   50,662 
Total assets$1,505,757  $1,679,238 
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current liabilities:   
Accounts payable$259,225  $299,005 
Accrued expenses and other current liabilities 137,078   110,758 
Accrued compensation and related benefits 48,683   85,203 
Short-term debt, net 10,473   25,512 
Accrued warranty 12,635   17,266 
Deferred revenue 116,332   136,248 
Total current liabilities 584,426   673,992 
Long-term debt, net 667,205   658,756 
Long-term accrued warranty 12,554   15,934 
Long-term deferred revenue 21,626   21,332 
Long-term deferred tax liability 1,770   1,805 
Long-term operating lease liabilities 44,563   47,464 
Other long-term liabilities 39,767   43,364 
Commitments and contingencies   
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 28, 2024 and December 30, 2023   
Issued and outstanding shares - 236,296 as of September 28, 2024 and 230,994 as of December 30, 2023
 236   231 
Additional paid-in capital 2,012,820   1,976,014 
Accumulated other comprehensive loss (30,409)  (34,848)
Accumulated deficit (1,848,801)  (1,724,806)
Total stockholders' equity 133,846   216,591 
Total liabilities and stockholders’ equity$1,505,757  $1,679,238 
 

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

 Nine months ended
 September 28,
2024
 September 30,
2023
Cash Flows from Operating Activities:   
Net loss$(123,995) $(38,086)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:   
Depreciation and amortization 46,744   59,403 
Non-cash restructuring charges and other related costs 32   1,183 
Amortization of debt issuance costs and discount 2,750   2,970 
Operating lease expense 6,905   6,402 
Stock-based compensation expense 38,721   49,393 
Other, net 139   (683)
Changes in assets and liabilities:   
Accounts receivable 92,364   89,248 
Inventory 74,527   (82,983)
Prepaid expenses and other current assets (48,141)  16,811 
Accounts payable (57,127)  (27,798)
Accrued expenses and other current liabilities (5,386)  (46,163)
Deferred revenue (18,898)  (59,839)
Net cash provided by (used in) operating activities 8,635   (30,142)
Cash Flows from Investing Activities:   
Purchase of property and equipment (46,748)  (40,900)
Net cash used in investing activities (46,748)  (40,900)
Cash Flows from Financing Activities:   
Proceeds from issuance of 2028 Notes, net of discount    98,751 
Repayment of 2024 Notes (18,747)  (83,446)
Payment of debt issuance cost    (2,108)
Proceeds from asset-based revolving credit facility 50,000    
Repayment of asset-based revolving credit facility (40,000)   
Repayment of mortgage payable (354)  (381)
Principal payments on finance lease obligations (469)  (784)
Payment of term license obligation (7,882)  (7,720)
Proceeds from issuance of common stock 5   14,931 
Tax withholding paid on behalf of employees for net share settlement (1,860)  (2,217)
Net cash (used in) provided by financing activities (19,307)  17,026 
Effect of exchange rate changes on cash (862)  (8,551)
Net change in cash, cash equivalents and restricted cash (58,282)  (62,567)
Cash, cash equivalents and restricted cash at beginning of period 173,859   189,203 
Cash, cash equivalents and restricted cash at end of period(1)$115,577  $126,636 
 

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

 Nine months ended
 September 28,
2024
 September 30,
2023
Supplemental disclosures of cash flow information:   
Cash paid for income taxes, net$18,205 $9,955 
Cash paid for interest$25,967 $21,579 
Supplemental schedule of non-cash investing and financing activities:   
Property and equipment included in accounts payable and accrued liabilities$26,779 $18,529 
Transfer of inventory to fixed assets$ $1,207 
Unpaid term licenses (included in accounts payable, accrued liabilities and other long-term liabilities)$16,380 $16,510 
       
       

(1) Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets (in thousands):

 September 28,
2024
 September 30,
2023
Cash and cash equivalents$115,089 $123,927 
Short-term restricted cash 42  1,725 
Long-term restricted cash 446  984 
Total cash, cash equivalents and restricted cash$115,577 $126,636 
 

Infinera Corporation
Supplemental Financial Information
(Unaudited)

   Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24
GAAP Revenue $(Mil) $485.9  $392.1  $376.2  $392.4  $453.5  $306.9  $342.7  $354.4 
GAAP Gross Margin %  37.1%  37.5%  38.0%  40.3%  38.6%  36.0%  39.6%  39.8%
 Non-GAAP Gross Margin %(1)  38.7%  38.8%  39.3%  41.9%  39.6%  36.6%  40.3%  40.4%
GAAP Revenue Composition:                
Domestic %  61%  60%  58%  59%  68%  54%  58%  60%
International %  39%  40%  42%  41%  32%  46%  42%  40%
Customers >10% of Revenue  1      1   1   1         2 
Cash Related Information:                
Cash from Operations $(Mil) $(0.6) $(1.8) $1.4  $(29.7) $79.6  $24.0  $(59.9) $44.5 
Capital Expenditures $(Mil) $8.3  $16.8  $10.8  $13.3  $21.4  $8.1  $14.6  $24.0 
Depreciation & Amortization $(Mil) $19.8  $19.6  $19.8  $20.0  $19.4  $15.4  $15.6  $15.7 
DSOs(2)  79   78   79   76   77   79   76   74 
Inventory Metrics:                
Raw Materials $(Mil) $48.7  $67.6  $85.4  $110.4  $133.6  $132.5  $119.4  $105.2 
Work in Process $(Mil) $66.6  $71.8  $71.9  $69.9  $68.4  $68.6  $68.7  $67.6 
Finished Goods $(Mil) $259.6  $273.6  $270.1  $276.6  $229.2  $219.6  $196.1  $183.3 
Total Inventory $(Mil) $374.9  $413.0  $427.4  $456.9  $431.2  $420.7  $384.2  $356.1 
Inventory Turns(3)  3.4   2.4   2.2   2.1   2.5   1.8   2.0   2.3 
Worldwide Headcount  3,267   3,351   3,365   3,369   3,389   3,323   3,334   3,340 
Weighted Average Shares Outstanding (in thousands):                
Basic  219,921   222,393   225,922   228,077   230,509   231,533   234,349   235,832 
Diluted  258,030   265,921   262,712   257,219   259,210   260,980   265,591   267,999 
  
(1)Non-GAAP adjustments include stock-based compensation expense, amortization of acquired intangible assets, restructuring and other related costs and warehouse fire recovery. 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 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 and warehouse fire recovery, as illustrated in the reconciliation of gross profit above, divided by the average inventory for the quarter.
  

FAQ

What was Infinera's (INFN) revenue in Q3 2024?

Infinera reported revenue of $354.4 million in Q3 2024, up from $342.7 million in Q2 2024 but down from $392.4 million in Q3 2023.

What is the status of Infinera's (INFN) merger with Nokia?

The merger with Nokia is progressing with stockholder approval and U.S. antitrust and CFIUS approval obtained. The transaction is expected to close in the first half of 2025.

How much CHIPS Act funding could Infinera (INFN) receive?

Infinera signed a preliminary memorandum with the U.S. Department of Commerce that, combined with other federal and state incentives, could result in more than $200 million in funding.

What was Infinera's (INFN) cash flow from operations in Q3 2024?

Infinera generated positive cash flow from operations of $44.5 million in Q3 2024.

Infinera Corporation

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