Infinera Corporation Fourth Quarter and Fiscal 2024 Financial Results

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Therefore, we believe it is important to view free cash flow as supplemental to our entire statement of cash flows.   Three months ended Twelve months ended  December 28, 2024 September 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023Net cash provided by operating activities $72,045  $44,563  $79,652  $80,680  $49,510 Purchase of property and equipment  (28,265)  (24,090)  (21,414)  (75,013)  (62,314)Free cash flow $43,780  $20,473  $58,238  $5,667  $(12,804)  Infinera CorporationConsolidated Balance Sheets(In thousands, except par values)  December 28, 2024 December 30, 2023ASSETS   Current assets:   Cash and cash equivalents$145,808  $172,505 Short-term restricted cash —   517 Accounts receivable, net 336,552   381,981 Inventory 308,213   431,163 Prepaid expenses and other current assets 155,249   129,218 Total current assets 945,822   1,115,384 Property, plant and equipment, net 249,496   206,997 Operating lease right-of-use assets 36,348   39,973 Intangible assets, net 15,794   24,819 Goodwill 224,233   240,566 Long-term restricted cash 420   837 Other long-term assets 61,645   50,662 Total assets$1,533,758  $1,679,238 LIABILITIES AND STOCKHOLDERS’ EQUITY   Current liabilities:   Accounts payable$284,992  $299,005 Accrued expenses and other current liabilities 143,385   110,758 Accrued compensation and related benefits 49,942   85,203 Short-term debt, net 482   25,512 Accrued warranty 13,243   17,266 Deferred revenue 134,727   136,248 Total current liabilities 626,771   673,992 Long-term debt, net 667,930   658,756 Long-term accrued warranty 12,264   15,934 Long-term deferred revenue 29,290   21,332 Long-term deferred tax liability 3,035   1,805 Long-term operating lease liabilities 41,601   47,464 Other long-term liabilities 36,352   43,364 Commitments and contingencies   Stockholders’ equity:   Preferred stock, $0.001 par valueAuthorized shares – 25,000 and no shares issued and outstanding —   — Common stock, $0.001 par valueAuthorized shares - 500,000 in 2024 and 500,000 in 2023    Issued and outstanding shares - 237,396 in 2024 and 230,994 in 2023 237   231 Additional paid-in capital 2,024,810   1,976,014 Accumulated other comprehensive loss (33,388)  (34,848)Accumulated deficit (1,875,144)  (1,724,806)Total stockholders' equity 116,515   216,591 Total liabilities and stockholders’ equity$1,533,758  $1,679,238   Infinera CorporationConsolidated Statements of Cash Flows(In thousands)  Twelve months ended December 28, 2024 December 30, 2023Cash Flows from Operating Activities:   Net loss$(150,338) $(25,213)Adjustments to reconcile net loss to net cash provided by operating activities:   Depreciation and amortization 62,333   78,784 Non-cash restructuring charges and other related costs 40   1,200 Amortization of debt issuance costs and discount 3,680   3,862 Operating lease expense 9,252   7,464 Stock-based compensation expense 50,921   62,150 Other, net (76)  (823)Changes in assets and liabilities:   Accounts receivable 40,218   38,511 Inventory 121,772   (57,864)Prepaid expenses and other current assets (49,159)  9,683 Accounts payable (28,258)  (2,921)Accrued expenses and other current liabilities 11,568   (40,063)Deferred revenue 8,727   (25,260)Net cash provided by operating activities 80,680   49,510 Cash Flows from Investing Activities:   Purchase of property and equipment (75,013)  (62,314)Net cash used in investing activities (75,013)  (62,314)Cash Flows from Financing Activities:   Proceeds from issuance of 2028 Notes —   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   50,000 Repayment of asset-based revolving credit facility (50,000)  (50,000)Repayment of mortgage payable (470)  (510)Principal payments on finance lease obligations (562)  (1,023)Payment of term license obligation (10,318)  (10,417)Proceeds from issuance of common stock 6   14,931 Tax withholding paid on behalf of employees for net share settlement (2,129)  (2,465)Net cash (used in) provided by financing activities (32,220)  13,713 Effect of exchange rate changes on cash, cash equivalents and restricted cash (1,078)  (16,253)Net change in cash, cash equivalents and restricted cash (27,631)  (15,344)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)$146,228  $173,859   Infinera CorporationConsolidated Statements of Cash Flows(In thousands)  Twelve months ended December 28, 2024 December 30, 2023Supplemental disclosures of cash flow information:   Cash paid for income taxes, net$21,790  $14,109 Cash paid for interest, net$27,359  $22,394 Supplemental schedule of non-cash investing and financing activities:     Transfer of inventory to fixed assets$—  $1,847 Property and equipment included in accounts payable and accrued liabilities$34,385  $10,104 Unpaid term licenses (included in accounts payable, accrued liabilities and other long-term liabilities)$14,196  $23,326           (1)         Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets (in thousands):     December 28, 2024 December 30, 2023    Cash and cash equivalents$145,808  $172,505 Short-term restricted cash —   517 Long-term restricted cash 420   837 Total cash, cash equivalents and restricted cash$146,228  $173,859   Infinera CorporationSupplemental Financial Information(Unaudited)   Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24GAAP Revenue $(Mil) $392.1  $376.2  $392.4  $453.5  $306.9  $342.7  $354.4  $414.4 GAAP Gross Margin %  37.5%  38.0%  40.3%  38.6%  36.0%  39.6%  39.8%  38.0%Non-GAAP Gross Margin %(1)  38.8%  39.3%  41.9%  39.6%  36.6%  40.3%  40.4%  38.4%GAAP Revenue Composition:                Domestic %  60%  58%  59%  67%  54%  58%  60%  62%International %  40%  42%  41%  33%  46%  42%  40%  38%Customers >10% of Revenue  —   1   1   1   —   —   2   2 Cash Related Information:                Cash from Operations $(Mil) $(1.8) $1.4  $(29.7) $79.6  $24.0  $(59.9) $44.5  $72.1 Capital Expenditures $(Mil) $16.8  $10.8  $13.3  $21.4  $8.1  $14.6  $24.0  $28.3 Depreciation & Amortization $(Mil) $19.6  $19.8  $20.0  $19.4  $15.4  $15.6  $15.7  $15.6 DSOs(2)  78   79   76   77   79   76   74   74 Inventory Metrics:                Raw Materials $(Mil) $67.6  $85.4  $110.4  $133.6  $132.5  $119.4  $105.2  $69.7 Work in Process $(Mil) $71.8  $71.9  $69.9  $68.4  $68.6  $68.7  $67.6  $67.9 Finished Goods $(Mil) $273.6  $270.1  $276.6  $229.2  $219.6  $196.1  $183.3  $170.6 Total Inventory $(Mil) $413.0  $427.4  $456.9  $431.2  $420.7  $384.2  $356.1  $308.2 Inventory Turns(3)  2.4   2.2   2.1   2.5   1.8   2.0   2.3   3.1 Worldwide Headcount  3,351   3,365   3,369   3,389   3,323   3,334   3,340   3,418 Weighted Average Shares Outstanding (in thousands):                Basic  222,393   225,922   228,077   230,509   231,533   234,349   235,832   236,974 Diluted  265,921   262,712   257,219   259,210   260,980   265,591   267,999   269,422   (1)    Non-GAAP adjustments include stock-based compensation expense, amortization of acquired intangible assets, restructuring and other related costs and warehouse fire recovery.

Infinera CorporationCondensed Consolidated Statements of Operations(In thousands, except per share data)(Unaudited)  Three months ended Twelve months ended December 28, 2024 December 30,2023 December 28, 2024 December 30,2023Revenue:       Product$325,123  $373,172  $1,103,131  $1,304,229 Services 89,264   80,284   315,315   309,899 Total revenue 414,387   453,456   1,418,446   1,614,128 Cost of revenue:       Cost of product 212,250   233,693   706,498   810,845 Cost of services 44,882   42,643   166,792   167,532 Amortization of intangible assets —   —   —   10,621 Restructuring and other related costs (56)  2,218   596   2,218 Total cost of revenue 257,076   278,554   873,886   991,216 Gross profit 157,311   174,902   544,560   622,912 Operating expenses:       Research and development 75,214   79,645   300,437   316,879 Sales and marketing 40,504   42,532   158,861   166,938 General and administrative 31,566   35,112   132,680   124,874 Amortization of intangible assets 2,256   2,256   9,025   12,344 Merger-related charges 7,550   —   23,021   — Restructuring and other related costs 81   4,096   4,186   6,717 Total operating expenses 157,171   163,641   628,210   627,752 Income (loss) from operations 140   11,261   (83,650)  (4,840)Other income (expense), net:       Interest income 594   982   3,383   2,716 Interest expense (6,746)  (8,814)  (32,302)  (30,609)Other gain (loss), net (11,547)  4,739   (20,457)  15,325 Total other income (expense), net (17,699)  (3,093)  (49,376)  (12,568)Income (loss) before income taxes (17,559)  8,168   (133,026)  (17,408)Provision for (benefit from) income taxes 8,784   (4,705)  17,312   7,805 Net income (loss)$(26,343) $12,873  $(150,338) $(25,213)Net income (loss) per common share:       Basic$(0.11) $0.06  $(0.64) $(0.11)Diluted$(0.11) $0.06  $(0.64) $(0.11)Weighted average shares used in computing net income (loss) per common share:       Basic 236,974   230,509   234,672   226,726 Diluted 236,974   233,090   234,672   226,726   Infinera CorporationGAAP to Non-GAAP Reconciliations(In thousands, except percentages)(Unaudited)   Three months ended Twelve months ended  December 28, 2024   September 28,2024   December 30, 2023   December 28, 2024   December 30, 2023  Reconciliation of Gross Profit and Gross Margin:                    GAAP as reported $157,311   38.0% $141,214   39.8% $174,902   38.6% $544,560   38.4% $622,912   38.6%Stock-based compensation expense(1)  1,867   0.4%  2,084   0.6%  2,328   0.5%  7,621   0.6%  10,000   0.6%Amortization of acquired intangible assets(2)  —   —%  —   —%  —   —%  —   —%  10,621   0.7%Restructuring and other related costs(3)  (56)  (0.0)%  (24)  —%  2,218   0.5%  596   0.0%  2,218   0.1%Warehouse fire recovery(4)  —   —%  —   —%  —   —%  —   —%  (1,985)  (0.1)%Non-GAAP as adjusted $159,122   38.4% $143,274   40.4% $179,448   39.6% $552,777   39.0% $643,766   39.9%                     Reconciliation of Operating Expenses:                    GAAP as reported $157,171    $152,212    $163,641    $628,210    $627,752   Stock-based compensation expense(1)  10,333     12,305     10,429     43,300     52,150   Amortization of acquired intangible assets(2)  2,256     2,257     2,256     9,025     12,344   Restructuring and other related costs(3)  81     (157)    4,096     4,186     6,717   Merger-related charges(5)  7,550     6,954     —     23,021     —   Non-GAAP as adjusted $136,951    $130,853    $146,860    $548,678    $556,541                        Reconciliation of Income (Loss) from Operations and Operating Margin:                    GAAP as reported $140   0.0% $(10,998)  (3.1)% $11,261   2.5% $(83,650)  (5.9)% $(4,840)  (0.3)%Stock-based compensation expense(1)  12,200   3.0%  14,389   4.1%  12,757   2.8%  50,921   3.7%  62,150   3.8%Amortization of acquired intangible assets(2)  2,256   0.5%  2,257   0.6%  2,256   0.5%  9,025   0.6%  22,965   1.4%Restructuring and other related costs(3)  25   0.0%  (181)  (0.1)%  6,314   1.4%  4,782   0.3%  8,935   0.6%Warehouse fire recovery(4)  —   —%  —   —%  —   —%  —   —%  (1,985)  (0.1)%Merger-related charges(5)  7,550   1.9%  6,954   2.0%  —   —%  23,021   1.6%  —   —%Non-GAAP as adjusted $22,171   5.4% $12,421   3.5% $32,588   7.2% $4,099   0.3% $87,225   5.4%     Three months endedTwelve months ended  December 28, 2024 September 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023Reconciliation of Net Income (Loss):          GAAP as reported $(26,343) $(14,313) $12,873  $(150,338) $(25,213)Stock-based compensation expense(1)  12,200   14,389   12,757   50,921   62,150 Amortization of acquired intangible assets(2)  2,256   2,257   2,256   9,025   22,965 Restructuring and other related costs(3)  25   (181)  6,314   4,782   8,935 Warehouse fire recovery(4)  —   —   —   —   (1,985)Merger-related charges(5)  7,550   6,954   —   23,021   — Foreign exchange (gains) losses, net(6)  11,855   (8,039)  (4,852)  21,954   (14,755)Income tax effects(7)  655   (788)  (780)  (3,120)  1,292 Non-GAAP as adjusted  8,198  $279  $28,568  $(43,755) $53,389            Weighted Average Shares Used in Computing GAAP Net Income (Loss) per Common Share:          Basic  236,974   235,832   230,509   234,672   226,726 Diluted(8)  236,974   235,832   233,090   234,672   226,726            Weighted Average Shares Used in Computing Non-GAAP Net Income (Loss) per Common Share:          Basic  236,974   235,832   230,509   234,672   226,726 Diluted(9)  269,422   240,502   259,210   234,672   255,468            Reconciliation of Adjusted EBITDA (10):          Non-GAAP net income (loss) $8,198  $279  $28,568  $(43,755) $53,389 Add: Interest expense, net  6,152   7,890   7,832   28,919   27,893 Less: Other gain (loss), net  308   446   (113)  1,497   570 Add: Income tax effects  8,129   4,698   (3,925)  20,432   6,513 Add: Depreciation  13,333   13,501   17,125   53,308   55,819 Non-GAAP as adjusted $35,504  $25,922  $49,713  $57,407  $143,044            Net Income (Loss) per Common Share: GAAP          Basic $(0.11) $(0.06) $0.06  $(0.64) $(0.11)Diluted(8) $(0.11) $(0.06) $0.06  $(0.64) $(0.11)           Net Income (Loss) per Common Share: Non-GAAP          Basic $0.03  $0.00  $0.12  $(0.19) $0.24 Diluted(9) $0.03  $0.00  $0.12  $(0.19) $0.23   (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 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 has or 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; the effects of tariffs; 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 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.

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Author / Journalist: Infinera Corporation

Category: Technology

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Published On: 2025-02-28 @ 00:30:00 (15 hours ago)

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