Infinera Corporation Reports Second Quarter Financial Results
Adjusted GAAP Revenue of $90.8 Million Compared With $69.0 Million in the Year Ago Quarter; Adjusted GAAP Net Income of $10.7 Million, or $0.11 per Diluted Share, Compared With $2.7 Million and $0.04 per Share in the Year Ago Quarter

SUNNYVALE, CA, Jul 22, 2008 (MARKET WIRE via COMTEX News Network) -- Infinera Corporation (NASDAQ: INFN), a leading provider of digital optical communications systems, today released financial results for the second quarter ended June 28, 2008.
GAAP Results:


GAAP revenues for the second quarter of 2008 were $161.1 million compared to $138.3 million in the first quarter of 2008 and $58.4 million in the second quarter of 2007.
GAAP gross margins were 50% in the second quarter of 2008 compared to 45% in the first quarter of 2008 and 28% in the second quarter of 2007.
Including non-cash stock-based compensation and warrant valuation expenses, GAAP net income was $42.9 million, or $0.44 per diluted share, in the second quarter of 2008 compared to $27.6 million, or $0.29 per share, in the first quarter of 2008 and a GAAP net loss of $26.1 million, or $1.10 per share, in the second quarter of 2007.

Adjusted GAAP / Invoiced Shipment Results:


Adjusted GAAP revenue for the second quarter of 2008 was $90.8 million compared to $95.5 million of invoiced shipments in the first quarter of 2008 and $69.0 million of invoiced shipments in the second quarter of 2007.
Gross margins on an adjusted GAAP basis, excluding non-cash stock-based compensation, were 47% in the second quarter of 2008 compared to 45% in the first quarter of 2008 and 37% in the second quarter of 2007.
Excluding non-cash stock-based compensation and warrant valuation expenses, the net income on an adjusted GAAP basis was $10.7 million, or $0.11 per diluted share, for the second quarter of 2008 compared to net income on an invoiced shipments basis of $12.6 million, or $0.13 per diluted share, in the first quarter of 2008 and $2.7 million, or $0.04 per share, in the second quarter of 2007. Footnote: For an explanation of our use of Adjusted GAAP and Invoiced Shipments measures and a full reconciliation of these measures to our GAAP results, please see the section of the accompanying tables titled "GAAP to Non-GAAP Invoiced Shipment and Adjusted GAAP Reconciliation"

Management Commentary

"Our second quarter results reflect strong shipments of both our chassis and tributary adapter modules," said Jagdeep Singh, president and chief executive officer of Infinera. "We grew revenues from international customers to 22 percent and added two new customers in the quarter to bring our total roster to 44. We generated operating profits and cash from operations while maintaining our investments to expand our technology lead as the world's leading optical network based on photonic integration.

"We are committed to growing our business within markets where we have established a beach-head and to continue expanding our customer base in both existing and new markets. We have identified our highest growth opportunities -- international markets, global tier 1 carriers, new adjacent markets including metro access and ultra long haul, and under-penetrated North American markets. We are implementing strategic initiatives to expand share in each of these market segments."

Singh noted several second quarter performance highlights:


Deutsche Telekom selected Infinera for its long haul DWDM Pan European network, representing a major Tier one incumbent win for Infinera.
Three customers -- Level 3, Cox Communications and Global Crossing -- were each 10 percent or greater of revenue, versus four such customers in Q1.
Infinera announced several important technology advances, including:
The new next-generation Infinera ILS2 line system with up to 160 DWDM channels in the C-band and future scalability of 8 Terabits/second of total capacity.
Two new passive photonic integrated circuits (PICs) that integrate passive devices such as multiplexers, interleavers, variable optical attenuators and waveguides, and play key roles in routing and filtering DWDM wavelengths in the ILS2 system.
A 100 Gigabit Ethernet (100 GbE) demonstration, in collaboration with XO Communications, Avago Technologies and Ixia, that sent 100 GbE traffic over a long-haul network and demonstrated progress towards making 100 GbE products and services a commercial reality in the future.

Conference Call Information:

Infinera will host a conference call for analysts and investors to discuss its second quarter results today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). A live webcast of the conference call will also be accessible from the "Investor Relations" section of the company's website at www.infinera.com. Following the webcast, an archived version will be available on the website for 30 days. To hear the replay, parties in the United States and Canada should call 1-866-503-3213. International parties can access the replay at +1-203-369-1862.