Infinera announces Q3 results with restructuring plan
"Taking action at this time will result in a more cost-efficient structure that enables us to focus on our strengths and return to profitability as we grow", says CEO
Network firm Infinera has released financial results for Q3 ended September 30, 2017 with a plan to restructure its worldwide operations. As part of this restructuring plan, Infinera will reduce headcount, rationalise certain products and programs, and close a remote R&D facility.
"In the third quarter we continued to bring new products to market and delivered financial results that exceeded our guidance," said Tom Fallon, Infinera's CEO. "Our ICE4 products are delivering the technology differentiation we expected and are gaining traction across multiple customer verticals. Despite a softening near-term market outlook, over time I am confident we will return to outgrowing the market and delivering strong financial results."
GAAP revenue for the quarter was $192.6 million compared to $176.8 million in Q2 2017 and $185.5 million in Q3 2016. GAAP gross margin for the quarter was 35.2 percent compared to 36.7 percent in 2017 and 45.6 percent in Q3 2016. GAAP operating margin for the quarter was (17.8) percent compared to (22.9) percent in Q2 2017 and (5.9) percent in Q3 2016. GAAP net loss for the quarter was $(37.2) million, or $(0.25) per share, compared to a net loss of $(42.8) million, or $(0.29) per share, in Q2 2017, and net loss of $(11.2) million, or $(0.08) per share, in Q3 2016.
Non-GAAP gross margin for the quarter was 39.1 percent compared to 40.7 percent in Q2 2017 and 49.2 percent in Q3 2016. Non-GAAP operating margin for the quarter was (7.8) percent compared to (12.2) percent in Q2 2017 and 3.6 percent in Q3 2016.
Non-GAAP net loss for the quarter was $(17.0) million, or $(0.11) per share, compared to a net loss of $(22.8) million, or $(0.15) per share, in Q2 2017, and net income of $7.4 million, or $0.05 per diluted share, in Q3 2016.
Restructuring Initiative
Infinera anticipates annual savings from the restructuring to be approximately $40.0 million, compared to what the projected run-rate of expenses for fiscal 2018 would have been prior to the restructuring. Infinera estimates total costs related to the restructuring will be in the range of $21.0 million to $27.0 million. The company anticipates a majority of the restructuring will be completed during the fourth quarter of 2017.
"In recent years we have made significant investments to become a multi-market company, deliver a fully refreshed product portfolio and establish a faster technology cadence. Reflecting on the internal expansion associated with these investments, we have identified areas where we can be more efficient going forward," stated Fallon. "While difficult, my expectation is taking action at this time will result in a more cost-efficient structure that enables us to focus on our strengths and return to profitability as we grow. I believe these are the right steps for our shareholders, our company and our customers."
