Telecom equipment upstart Infinera (NASDAQ:INFN, news, filings) announced earnings after the bell, and things look pretty good. Revenues of $83.4M were up sequentially from both $68.9M in the prior quarter and $80.9M on an adjusted GAAP basis in the third quarter of last year. That’s a bit higher than I expected, and hopefully is a good sign for the telecom equipment sector. But does it mean that carrier spending is back to normal? One step at a time I guess. Not including restructuring and stock compensation, loss per share was $0.03, which was better than expected and an improvement from a loss per share of $0.19 in the prior quarter.
One interesting point was this item:
The company achieved greater customer diversification as three customers accounted for 10% or more of revenue this quarter and the largest customer for the quarter was an existing, but unannounced, cable MSO customer. Level 3 was slightly less than 10 percent of revenue.
In other words, Level 3 is now apparently only the fourth largest buyer of gear from Infinera, quite a turnaround from the company’s first few years. And 37% of the company’s revenue now came from outside the USA, which strongly implies that DT, NTT, and Telefonica are doing more than sampling the company’s gear. Of course, it also implies that perhaps it is in the USA that carriers aren’t buying as much yet.
The company also mentioned an “eight-figure opportunity with another major internet content provider”. That’s interesting given that not all that many major internet content providers are thought to have longhaul dark fiber in such quantity, and one would only need Infinera’s gear if one were lighting dark fiber. Are we talking Google here or are there other possibilities?
Update: In their conference call, Infinera said that their new ATN product has been the driver behind at least two new customers, and that the product does have differentiation else they would just have done it through a partnership. The key unique capability: bandwidth management. Of course, they could hardly be expected to say the ATN didn’t have differentiation, but it is interesting nonetheless. I’d be interested to hear from anyone who has tried out one of these boxes.
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