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CST: 21/03/2019 11:13:25   

Infinera Corporation Reports Fourth Quarter and Fiscal Year 2018 Financial Results

27 Days ago

SUNNYVALE, Calif., Feb. 21, 2019 (GLOBE NEWSWIRE) -- Infinera Corporation, provider of Intelligent Transport Networks, today released financial results for its fourth quarter and fiscal year ended December 29, 2018.

GAAP revenue for the quarter was $332.1 million compared to $200.4 million in the third quarter of 2018 and $195.8 million in the fourth quarter of 2017.

GAAP gross margin for the quarter was 25.5% compared to 35.0% in the third quarter of 2018 and 24.1% in the fourth quarter of 2017. GAAP operating margin for the quarter was (33.3)% compared to (12.6)% in the third quarter of 2018 and (36.0)% in the fourth quarter of 2017.

GAAP net loss for the quarter was $(130.5) million, or $(0.75) per share, compared to $(32.6) million, or $(0.21) per share, in the third quarter of 2018 and $(74.0) million, or $(0.50) per share, in the fourth quarter of 2017.

Non-GAAP revenue for the quarter was $336.6 million compared to $200.4 million in the third quarter of 2018 and $195.8 million in the fourth quarter of 2017.

Non-GAAP gross margin for the quarter was 31.9% compared to 38.4% in the third quarter of 2018 and 37.5% in the fourth quarter of 2017. Non-GAAP operating margin for the quarter was (10.2)% compared to (2.6)% in the third quarter of 2018 and (9.3)% in the fourth quarter of 2017.

Non-GAAP net loss for the quarter was $(43.8) million, or $(0.25) per share, compared to $(6.7) million, or $(0.04) per share, in the third quarter of 2018, and $(18.6) million, or $(0.12) per share, in the fourth quarter of 2017.

GAAP revenue for the year was $943.4 million compared to $740.7 million in 2017. GAAP gross margin for the year was 34.1% compared to 32.9% in 2017. GAAP operating margin for the year was (19.3)% compared to (24.7)% in 2017. GAAP net loss for the year was $(211.4) million, or $(1.34) per share, compared to $(194.5) million, or $(1.32) per share, in 2017.

Non-GAAP revenue for the year was $948.0 million compared to $740.7 million in 2017. Non-GAAP gross margin for the year was 38.4% compared to 39.3% in 2017. Non-GAAP operating margin for the year was (5.0)% compared to (10.1)% in 2017. Non-GAAP net loss for the year was $(59.1) million, or $(0.37) per share, compared to net loss of $(80.0) million, or $(0.54) per share, in 2017.

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.

“In the fourth quarter we got off to a fast start on the integration of the combined company and delivered financial results that exceeded our guidance,” said Tom Fallon, Infinera CEO. “We have already taken substantial costs out of the business, are seeing a significant uptick in opportunities from Tier-1 and ICP customers, have announced our Infinite Network Architecture, and are on track to begin driving vertical integration across the combined company portfolio in 2020. As we progress on our acquisition integration plan, we remain committed to returning to non-GAAP profitability in Q4 of this year.”

Financial Outlook

Infinera's outlook for the quarter ending March 30, 2019 is as follows:

  • GAAP revenue is expected to be $308 million +/- $10 million. Non-GAAP revenue is expected to be $310 million +/- $10 million.
  • GAAP gross margin is expected to be 27% +/- 200 bps. Non-GAAP gross margin is expected to be 31% +/- 200 bps.
  • GAAP operating expenses are expected to be $163 million +/- $3 million. Non-GAAP operating expenses are expected to be $138 million +/- $3 million.
  • GAAP operating margin is expected to be approximately (26)%. Non-GAAP operating margin is expected to be approximately (14)%.
  • GAAP EPS is expected to be $(0.51) +/- $0.02. Non-GAAP EPS is expected to be $(0.27) +/- $0.02.  

Fourth Quarter 2018 Financial Commentary Available Online

A CFO Commentary reviewing Infinera's fourth quarter of 2018 financial results will be furnished to the SEC on Form 8-K and published on Infinera's Investor Relations website at investors.infinera.com. Analysts and investors are encouraged to review this commentary prior to participating in the conference call webcast.

Conference Call Information

Infinera will host a conference call for analysts and investors to discuss its fourth quarter and fiscal year 2018 results and its outlook for the first quarter of 2019 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 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.

Contacts:
Media:
Anna Vue
Tel. +1 (916) 595-8157
avue@infinera.com

Investors:
Jeff Hustis
Tel. +1 (408) 213-7150
jhustis@infinera.com

About Infinera

Infinera is a global supplier of innovative networking solutions that enable carriers, cloud operators, governments and enterprises to scale network bandwidth, accelerate service innovation and automate optical network operations. The Infinera end-to-end packet-optical portfolio delivers industry-leading economics and performance for long-haul, subsea, data center interconnect and metro transport 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 www.infinera.com/blog.

Forward-Looking Statements

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 expectations regarding Infinera’s ability to execute on its integration plan; Infinera's ability to achieve substantial cost synergies, Infinera's ability to scale its business and drive vertical integration of its optical engine across the combined company portfolio; Infinera's ability to grow over the course of 2019 and to drive profitability by the end of the year; Infinera’s expectations regarding the potential impact of restructuring-related activities and purchase price allocation adjustments related to the Coriant acquisition; and Infinera's expectations regarding its financial outlook for the first quarter of 2019.

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, the combined company's ability to promptly and effectively integrate the businesses; Infinera's ability to realize synergies in a timely manner; market acceptance of the combined company's end-to-end portfolio; the diversion of management time on issues related to the acquisition and integration; 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 Infinera's 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 customer consolidation; Infinera’s ability to respond to rapid technological changes; aggressive business tactics by Infinera’s competitors; Infinera's reliance on single and limited 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 29, 2018 as filed with the SEC on November 8, 2018, 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. When Infinera files its Form 10-K for the year ended December 29, 2018, the financial statements may differ from the results disclosed in this press release because judgments and estimates that management used in preparing the financial results reported in this press release may need to be updated to the date of the filing. 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 restructuring and related costs (credits), non-cash stock-based compensation expenses, amortization of debt discount on Infinera’s convertible senior notes, impairment charge and gain on the sale related to non-marketable equity investments, accretion of financing lease obligation, amortization and impairment of acquired intangible assets, acquisition and integration costs, and certain purchase accounting adjustments related to Infinera's acquisitions of Coriant and Transmode AB, along with related tax effects. 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 has included forward-looking non-GAAP information in this press release, including an estimate of certain non-GAAP financial measures for the first quarter of 2019 that exclude non-cash stock-based compensation expenses, acquisition and integration costs related to Infinera's acquisition of Coriant, and amortization of acquired intangible assets and related tax effects. Please see the section titled, “GAAP to Non-GAAP Reconciliations of Financial Outlook” below on specific adjustments.

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 gross margin, operating margin, net loss, or basic and diluted net loss per 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.

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.

Infinera Corporation
GAAP Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited) 

    Three Months Ended   Twelve Months Ended
    December 29,
2018
  December 30,
2017
  December 29,
2018
  December 30,
2017
Revenue:                
Product   $ 249,608     $ 160,543     $ 763,555     $ 610,535  
Services   82,450     35,273     179,824     130,204  
Total revenue   332,058     195,816     943,379     740,739  
Cost of revenue:                
Cost of product   197,189     110,512     517,703     406,644  
Cost of services   39,162     13,708     78,107     50,480  
Amortization of intangible assets   8,315     5,169     23,475     20,474  
Restructuring and related   2,580     19,141     2,630     19,141  
Total cost of revenue   247,246     148,530     621,915     496,739  
Gross profit   84,812     47,286     321,464     244,000  
Operating expenses:                
Research and development   78,805     55,223     244,302     224,368  
Sales and marketing   42,681     27,840     124,238     109,511  
General and administrative   27,591     17,069     80,308     70,620  
Amortization of intangible assets   22,207     1,555     26,767     6,160  
Acquisition and integration costs   13,462         15,530     322  
Restructuring and related   10,804     16,106     12,512     16,106  
Total operating expenses   195,550     117,793     503,657     427,087  
Loss from operations   (110,738 )   (70,507 )   (182,193 )   (183,087 )
Other income (expense), net:                
Interest income   610     858     2,428     3,328  
Interest expense   (13,705 )   (3,609 )   (22,049 )   (14,017 )
Other gain (loss), net:   (6,136 )   (1,698 )   (9,650 )   (2,160 )
Total other income (expense), net   (19,231 )   (4,449 )   (29,271 )   (12,849 )
Loss before income taxes   (129,969 )   (74,956 )   (211,464 )   (195,936 )
Provision for (benefit from) income taxes   558     (971 )   (109 )   (1,430 )
Net loss   (130,527 )   (73,985 )   (211,355 )   (194,506 )
Net loss per common share:                
Basic   $ (0.75 )   $ (0.50 )   $ (1.34 )   $ (1.32 )
Diluted   $ (0.75 )   $ (0.50 )   $ (1.34 )   $ (1.32 )
Weighted average shares used in computing net loss per common share:                
Basic   174,908     149,412     157,748     147,878  
Diluted   174,908     149,412     157,748     147,878  
                         


Infinera Corporation

GAAP to Non-GAAP Reconciliations
(In thousands, except percentages and per share data)
(Unaudited) 

  Three Months Ended   Twelve Months Ended
  December
29, 2018
      September
29, 2018
      December
30, 2017
      December
29, 2018
      December
30, 2017
   
Reconciliation of Revenue:                                      
U.S. GAAP as reported $ 332,058         $ 200,413         $ 195,816         $ 943,379         $ 740,739      
Acquisition-related deferred revenue adjustment(1) 4,582                         4,582              
Non-GAAP as adjusted $ 336,640         $ 200,413         $ 195,816         $ 947,961         $ 740,739      
                                       
Reconciliation of Gross Profit:                                      
U.S. GAAP as reported $ 84,812     25.5 %   $ 70,179     35.0 %   $ 47,286     24.1 %   $ 321,464     34.1 %   $ 244,000     32.9 %
Acquisition-related deferred revenue adjustment(1) 4,582                         4,582              
Stock-based compensation(2) 1,620         1,968         1,846         6,621         7,811      
Amortization of acquired intangible assets(3) 8,315         4,876         5,169         23,475         20,474      
Acquisition and integration costs(4) 132                         132         46      
Acquisition-related inventory adjustments(5) 5,337                         5,337              
Restructuring and related(6) 2,580         7         19,141         2,630         19,141      
Non-GAAP as adjusted $ 107,378     31.9 %   $ 77,030     38.4 %   $ 73,442     37.5 %   $ 364,241     38.4 %   $ 291,472     39.3 %
                                       
Reconciliation of Operating Expenses:                                      
U.S. GAAP as reported $ 195,550         $ 95,337         $ 117,793         $ 503,657         $ 427,087      
Stock-based compensation(2) 7,395         9,399         8,450         36,788         37,909      
Amortization of acquired intangible assets(3) 22,207         1,467         1,555         26,767         6,160      
Acquisition and integration costs(4) 13,462         2,067                 15,530         322      
Restructuring and related(6) 10,804         191         16,106         12,512         16,106      
Intangible asset impairment(7)                                 252      
Non-GAAP as adjusted $ 141,682         $ 82,213         $ 91,682         $ 412,060         $ 366,338      
                                       
Reconciliation of Loss from Operations:                                      
U.S. GAAP as reported $ (110,738 )   (33.3 )%   $ (25,158 )   (12.6 )%   $ (70,507 )   (36.0 )%   $ (182,193 )   (19.3 )%   $ (183,087 )   (24.7 )%
Acquisition-related deferred revenue adjustment(1) 4,582                         4,582              
Stock-based compensation(2) 9,015         11,367         10,296         43,409         45,720      
Amortization of acquired intangible assets(3) 30,522         6,343         6,724         50,242         26,634      
Acquisition and integration costs(4) 13,594         2,067                 15,662         368      
Acquisition-related inventory adjustments(5) 5,337                         5,337              
Restructuring and related(6) 13,384         198         35,247         15,142         35,247      
Intangible asset impairment(7)                                 252      
Non-GAAP as adjusted $ (34,304 )   (10.2 )%   $ (5,183 )   (2.6 )%   $ (18,240 )   (9.3 )%   $ (47,819 )   (5.0 )%   $ (74,866 )   (10.1 )%
                                       
Reconciliation of Net Loss:                                      
U.S. GAAP as reported $ (130,527 )       $ (32,610 )       $ (73,985 )       $ (211,355 )       $ (194,506 )    
Acquisition-related deferred revenue adjustment(1) 4,582                         4,582              
Stock-based compensation(2) 9,015         11,367         10,296         43,409         45,720      
Amortization of acquired intangible assets(3) 30,522         6,343         6,724         50,242         26,634      
Acquisition and integration costs(4) 13,594         4,567                 18,160         257      
Acquisition-related inventory adjustments(5) 5,337                         5,337              
Restructuring and related(6) 13,384         198         35,247         15,142         35,247      
Accretion of financing lease obligation(8) 6,538                         6,538              
Intangible asset impairment(7)                                 252      
Amortization of debt discount(9) 4,137         1,578         2,710         10,386         10,444      
Gain on non-marketable equity investment(10)         (1,050 )               (1,050 )            
Impairment of non-marketable equity investment(10) 850         4,260         1,890         5,110         1,890      
Income tax effects(11) (1,237 )       (1,395 )       (1,479 )       (5,576 )       (5,946 )    
Non-GAAP as adjusted $ (43,805 )       $ (6,742 )       $ (18,597 )       $ (59,075 )       $ (80,008 )    
                                       
Net Loss per Common Share - Basic and diluted:                                      
U.S. GAAP as reported $ (0.75 )       $ (0.21 )       $ (0.50 )       $ (1.34 )       $ (1.32 )    
Non-GAAP as adjusted $ (0.25 )       $ (0.04 )       $ (0.12 )       $ (0.37 )       $ (0.54 )    
                                       
Weighted Average Shares Used in Computing Net Loss per Common Share - Basic and Diluted: 174,908         153,492         149,412         157,748         147,878      
                                                 

_____________________________

(1) Business combination accounting principles require Infinera to write down to fair value its maintenance support contracts assumed in the Coriant acquisition. The revenue for these support contracts is deferred and typically recognized over a one-year period, so Infinera's GAAP revenue for the one year period after the acquisition will not reflect the full amount of revenue that would have been reported if the acquired deferred revenue was not written down to fair value. The non-GAAP adjustment eliminates the effect of the deferred revenue write-down. Management believes these adjustments to the revenue from these support contracts are useful to investors as an additional means to reflect revenue trends of Infinera's business.

(2) 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   Twelve Months Ended
    December 29,
2018
  September 29,
2018
  December 30,
2017
  December 29,
2018
  December 30,
2017
Cost of revenue   $ 543     $ 590     $ 728     $ 1,635     $ 3,065  
Research and development   3,677     4,077     3,841     16,270     15,845  
Sales and marketing   2,181     2,744     2,264     10,869     11,288  
General and administration   1,537     2,578     2,345     9,649     10,776  
    7,938     9,989     9,178     38,423     40,974  
Cost of revenue - amortization from balance sheet*   1,077     1,378     1,118     4,986     4,746  
Total stock-based compensation expense   $ 9,015     $ 11,367     $ 10,296     $ 43,409     $ 45,720  
                                         

 _____________________________
* Stock-based compensation expense deferred to inventory and deferred inventory costs in prior periods recognized in the current period.

(3) Amortization of acquired intangible assets consists of developed technology, trade names, customer relationships and backlog acquired in connection with the Coriant acquisition, which closed during the fourth quarter of 2018. Amortization of acquired intangible assets also consists of amortization of developed technology, trade names and customer relationships acquired in connection with the Transmode AB acquisition, which closed during the third quarter of 2015. U.S. 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 operating expenses, gross margin 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.

(4) Acquisition and integration costs consist of legal, financial, employee-related costs and other professional fees incurred in connection with Infinera's acquisitions of Coriant and Transmode AB. These amounts have been adjusted in arriving at Infinera's non-GAAP results because management believes that these expenses are non-recurring, not indicative of ongoing operating performance and their exclusion provides a better indication of Infinera's underlying business performance.

(5) Business combination accounting principles require Infinera to measure acquired inventory at fair value. The fair value of inventory reflects the acquired company’s cost of manufacturing plus a portion of the expected profit margin. The non-GAAP adjustment to Infinera's cost of sales excludes the amortization of the acquisition-related step-up in carrying value for units sold in the quarter. Additionally, in connection with the Coriant acquisition, cost of sales excludes a one-time adjustment in inventory as a result of renegotiated supplier agreements that contained unusually higher than market pricing. Management believes these adjustments are useful to investors as an additional means to reflect ongoing cost of sales and gross margin trends of Infinera's business.

(6) Restructuring and related costs are associated with Infinera's two restructuring initiatives implemented during the fourth quarter of 2018 and during the fourth quarter of 2017, as well as Coriant's historical restructuring plan associated with their early retirement plan. 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.

(7) Intangible asset impairment is associated with previously acquired intangibles, which Infinera has determined the carrying value will not be recoverable. 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 these expenses are not indicative of ongoing operating performance.

(8) Accretion of financing lease obligation included in interest expense relates to a failed sale-leaseback transaction executed by Coriant in the past and assumed by Infinera in the acquisition. Management believes that this adjustment is not indicative of ongoing operating performance and its exclusion provides a better indication of Infinera's underlying business performance.

(9) Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be separately accounted for as liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer's non-convertible debt borrowing rate. Accordingly, for GAAP purposes, Infinera is required to amortize as debt discount an amount equal to the fair value of the conversion option that was recorded in equity as interest expense on the $402.5 million in aggregate principal amount of its 2.125% convertible debt issuance in September 2018 due September 2024, and the $150 million in aggregate principal amount of its 1.75% convertible debt issuance in May 2013 due June 2018, over the term of the respective notes. Interest expense has been excluded from Infinera's non-GAAP results because management believes that this non-cash expense is not indicative of ongoing operating performance and provides a better indication of Infinera's underlying business performance.

(10) Management has excluded the impairment charge and the gain on the sale related to non-marketable equity investments in arriving at Infinera's non-GAAP results because they are non-recurring, and management believes that these expenses are not indicative of ongoing operating performance.

(11) 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.

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

    December 29, 2018   December 30, 2017
ASSETS        
Current assets:        
Cash and cash equivalents   $ 202,954     $ 116,345  
Short-term investments   26,511     147,596  
Short-term restricted cash   13,229     544  
Accounts receivable, net of allowance for doubtful accounts of $1,219 in 2018 and $892 in 2017   329,682     126,152  
Inventory   312,196     214,704  
Prepaid expenses and other current assets   71,138     42,596  
Total current assets   955,710     647,937  
Property, plant and equipment, net   342,820     135,942  
Intangible assets   235,647     92,188  
Goodwill   228,571     195,615  
Long-term investments       36,129  
Long-term restricted cash   26,069     4,597  
Other non-current assets   14,437     5,262  
Total assets   $ 1,803,254     $ 1,117,670  
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current liabilities:        
Accounts payable   $ 190,159     $ 58,124  
Accrued expenses   124,740     39,782  
Accrued compensation and related benefits   71,146     45,751  
Short-term debt, net   4,718     144,928  
Accrued warranty   20,103     13,670  
Deferred revenue   93,660     72,421  
Total current liabilities   504,526     374,676  
Long-term debt, net   266,929      
Long-term financing lease obligation   195,045      
Accrued warranty, non-current   20,918     17,239  
Deferred revenue, non-current   29,153     22,502  
Deferred tax liability   13,347     21,609  
Other long-term liabilities   66,566     16,279  
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 December 29, 2018 and December 30, 2017        
Issued and outstanding shares - 175,451 as of December 29, 2018 and 149,471 as of December 30, 2017   175     149  
Additional paid-in capital   1,685,925     1,417,043  
Accumulated other comprehensive income (loss)   (25,299 )   6,254  
Accumulated deficit   (954,031 )   (758,081 )
Total stockholders’ equity   706,770     665,365  
Total liabilities and stockholders’ equity   $ 1,803,254     $ 1,117,670  
                 


Infinera Corporation

GAAP to Non-GAAP Reconciliation of Financial Outlook
(In millions, except percentages and per share data)
(Unaudited)

The following amounts represent the midpoint of the expected range:

    Q1'19
    Outlook
Reconciliation of Revenue:    
U.S. GAAP   $ 308  
Acquisition-related deferred revenue adjustment   2  
Non-GAAP   $ 310  
     
Reconciliation of Gross Margin:    
U.S. GAAP   27 %
Acquisition-related deferred revenue adjustment   1 %
Amortization of acquired intangible assets   3 %
Non-GAAP   31 %
     
Reconciliation of Operating Expenses:    
U.S. GAAP   $ 163  
Stock-based compensation   (9 )
Acquisition and integration costs   (8 )
Restructuring and related   (1 )
Amortization of acquired intangible assets   (7 )
Non-GAAP   $ 138  
     
Reconciliation of Operating Margin:    
U.S. GAAP   (26 )%
Acquisition-related deferred revenue adjustment   1 %
Stock-based compensation   3 %
Acquisition and integration costs   3 %
Amortization of acquired intangible assets   5 %
Non-GAAP   (14 )%
     
Reconciliation of Net Loss per Common Share:    
U.S. GAAP   $ (0.51 )
Acquisition-related deferred revenue adjustment   0.01  
Stock-based compensation   0.06  
Acquisition and integration costs   0.05  
Restructuring and related   0.01  
Amortization of acquired intangible assets   0.09  
Amortization of debt discount   0.02  
Non-GAAP   $ (0.27 )
     

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