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4 February 2008


Infinera’s customer diversification drives growth

Infinera Corp of Sunnyvale, CA, USA, a vertically integrated manufacturer of digital optical network systems incorporating its in-house made InP-based photonic integrated circuits, has reported fourth-quarter 2007 revenue of $76.1m, up 22% on Q3’s $62.2m and up 74% on $43.8m a year ago.

The firm has continued to grow gross margin, from just 6% a year ago and 34% in Q3 to 36%, and to cut net loss, from $25m a year ago and $5.5m in Q3 to $3.9m.

For full-year 2007, revenue was $245.9m (more than quadrupling 2006’s $58.2m). Gross margin was 31% (compared to negative 23%). Net loss was cut from $89.9m to $55.3m.

Infinera’s strong performance reflects solid execution against its business strategy, increased customer momentum in favor of its unique approach to optical networks, and continued growth in bandwidth demand, reckons president and CEO Jagdeep Singh.

“Customers tell us they are choosing Infinera because of the system’s flexibility, rapid service provisioning and ability to deliver differentiated services without having to re-engineer their optical plants,” Singh adds.

“We have a growing and increasingly diversified global customer set of service providers, cable MSOs (multi-system operators) and internet content providers who are utilizing Infinera’s unique combination of large-scale photonic integration and bandwidth virtualization technology,” says Singh.

In Q4, four customers (including Cox Communications and Level 3 Communications) accounted for 10% or more of invoiced shipments, with no single customer more than 18% (one year ago, there were just two 10% or more customers, with the largest comprising as much as 47%). The customer base grew by three (Equinix Inc, XO Communications Inc and 360networks Inc) to 41 (versus 23 a year ago), including additions from fast-growing internet content providers, and now includes four of the top five cable MSOs in North America.

However, North America comprises 81% of invoiced shipments (compared to 72% a year ago), so a target is to grow custom in Europe and Asia.

See related items:

Infinera heads into underlying profit as it diversifies customer base

Infinera moves into underlying profit

Infinera’s $182m IPO exceeds expectations

Infinera prices IPO to raise $139m

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