Sunnyvale, Calif., February 9, 2017 – Infinera Corporation, provider of Intelligent Transport Networks, today released financial results for its fourth quarter and fiscal year ended December 31, 2016.
GAAP revenue for the quarter was $181.0 million compared to $185.5 million in the third quarter of 2016 and $260.0 million in the fourth quarter of 2015.
GAAP gross margin for the quarter was 38.1% compared to 45.6% in the third quarter of 2016 and 44.5% in the fourth quarter of 2015. GAAP operating margin for the quarter was (25.3)% compared to (5.9)% in the third quarter of 2016 and 5.3% in the fourth quarter of 2015.
GAAP net loss for the quarter was $(36.3) million, or $(0.25) per share, compared to $(11.2) million, or $(0.08) per share, in the third quarter of 2016 and net income of $12.6 million, or $0.08 per diluted share, in the fourth quarter of 2015.
Non-GAAP gross margin for the quarter was 41.8% compared to 49.2% in the third quarter of 2016 and 48.3% in the fourth quarter of 2015. Non-GAAP operating margin for the quarter was (9.2)% compared to 3.6% in the third quarter of 2016 and 12.7% in the fourth quarter of 2015.
Non-GAAP net loss for the quarter was $(17.0) million, or $(0.12) per share, compared to net income of $7.4 million, or $0.05 per diluted share, in the third quarter of 2016, and net income of $32.0 million, or $0.21 per diluted share, in the fourth quarter of 2015.
GAAP revenue for the year was $870.1 million compared to $886.7 million in 2015.
GAAP gross margin for the year was 45.2% compared to 45.5% in 2015. GAAP operating margin for the year was (3.0)% compared to 6.7% in 2015. GAAP net loss for the year was $(23.9) million, or $(0.17) per share, compared to net income of $51.4 million, or $0.36 per diluted share, in 2015.
Non-GAAP gross margin for the year was 48.3% compared to 47.8% in 2015. Non-GAAP operating margin for the year was 6.2% compared to 13.1% in 2015. Non-GAAP net income for the year was $49.4 million, or $0.34 per diluted share, compared to net income of $112.0 million, or $0.78 per diluted share, in 2015.
A further explanation of the use of non-GAAP financial information and a reconciliation of the non-GAAP financial measures to the GAAP equivalents can be found at the end of this release.
“We executed well in the fourth quarter and delivered results at the high-end of our guidance,” said Tom Fallon, Infinera’s Chief Executive Officer. “As network infrastructures rapidly evolve, our objective remains to help our customers win by delivering the highest performing solutions at the Transport Layer. Though our product transition is currently holding back revenue growth and profitability, by introducing next generation ICE4 products, my belief is that we are well positioned to begin improving our business results over the course of 2017 and for significant opportunities in the future.”
Conference Call Information
Infinera will host a conference call for analysts and investors to discuss its fourth quarter and fiscal year 2016 results and its outlook for the first quarter of 2017 today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Interested parties may join the conference call by dialing 1-866-373-6878 (toll free) or 1-412-317-5101 (international). A live webcast of the conference call will also be accessible from the Events & Webcasts section of Infinera’s website at investors.infinera.com. Replay of the audio webcast will be available at investors.infinera.com approximately two hours after the end of the live call.
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Infinera provides Intelligent Transport Networks, enabling carriers, cloud operators, governments and enterprises to scale network bandwidth, accelerate service innovation and simplify optical network operations. Infinera’s end-to-end packet-optical portfolio is designed for long-haul, subsea, data center interconnect and metro applications. Infinera’s unique large scale photonic integrated circuits enable innovative optical networking solutions for the most demanding networks. To learn more about Infinera visit www.infinera.com, follow us on Twitter @Infinera and read our latest blog posts at blog.infinera.com.
This press release contains certain forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties. Such forward-looking statements include, without limitation, Infinera’s ability to deliver the highest performing solutions at the Transport Layer; Infinera’s expectations regarding revenue growth and profitability with the introduction of its next generation products powered by Infinera’s Infinite Capacity Engine (ICE); and Infinera’s expectations that Infinera is well positioned to begin improving its business results over the course of 2017 and for significant opportunities in the future. Forward-looking statements can also be identified by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “will,” and “would” or similar words. These statements are based on information available to Infinera as of the date hereof and 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 delays in the development and introduction of new products or updates to existing products and market acceptance of these products; fluctuations in demand, sales cycles and prices for products and services, including discounts given in response to competitive pricing pressures, as well as the timing of purchases by our key customers; the effect that changes in product pricing or mix, and/or increases in component costs could have on Infinera’s gross margin; the effects of increased customer consolidation; Infinera’s ability to respond to rapid technological changes; aggressive business tactics by Infinera’s competitors; Infinera’s reliance on single-source suppliers; Infinera’s ability to protect Infinera’s intellectual property; claims by others that Infinera infringes their intellectual property; the effect of global macroeconomic conditions on Infinera’s business; war, terrorism, public health issues, natural disasters and other circumstances that could disrupt the supply, delivery or demand of Infinera’s products; 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 its Quarterly Report on Form 10-Q for the quarter ended on September 24, 2016 as filed with the SEC on November 1, 2016, as well as subsequent reports filed with or furnished to the SEC from time to time. These reports are available on Infinera’s website at www.infinera.com and the SEC’s website at www.sec.gov. Infinera assumes no obligation to, and does not currently intend to, update any such forward-looking statements.
Use of Non-GAAP Financial Information
In addition to disclosing financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain certain non-GAAP measures that exclude non-cash stock-based compensation expenses, amortization of debt discount on Infinera’s convertible senior notes, the gain on the sale of a cost-method investment, amortization and impairment of acquired intangible assets, acquisition-related costs, and certain purchase accounting adjustments related to Infinera’s acquisition of Transmode AB, which closed during the third quarter of 2015, along with related 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, these results are the primary indicators management uses as a basis for its planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income (loss), basic and diluted net income (loss) per share, gross margin or operating margin 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 section titled, “GAAP to Non-GAAP Reconciliations.” Infinera anticipates disclosing forward-looking non-GAAP information in its conference call to discuss its fourth quarter and fiscal year 2016 results, including an estimate of certain non-GAAP financial measures for the first quarter of 2017 that excludes non-cash stock-based compensation expenses, amortization of acquired intangible assets and amortization of debt discount on Infinera’s convertible senior notes.
A copy of this press release can be found on the Investor Relations page of Infinera’s website at www.infinera.com.
Infinera and the Infinera logo are trademarks or registered trademarks of Infinera Corporation. All other trademarks used or mentioned herein belong to their respective owners. _