Infinera scores 10 DTN-X customers

Infinera Corp. (NASDAQ: INFN) revealed today in announcing its fiscal second quarter 2012 numbers that it has secured purchase orders for its new DTN-X platform from 10 customers, three of whom are new to the company. Some of the DTN-X successes have come at the expense of the company’s established DTN platform, which is one reason that revenues for the second quarter came in at the lower end of guidance.

The company recorded GAAP revenues for the quarter ended June 30, 2012 of $93.5 million, on the low end of its guidance of $92 million to $100 million. The figure represented a downturn both sequentially (1Q12 revenues came in at $104.7 million) and year-on year (the company garnered $96.0 million in the second quarter of 2011).

However, the second quarter did not include revenues from the DTN-X sales, which should begin to appear at significant levels in the third quarter, Tom Fallon, Infinera president and CEO, told participants in an earnings call today. CFO Ita Brennan said on the call that the company should see revenues based on non-GAAP parameters of $106 million to $115 million in the third quarter as a result.

Infinera introduced the DTN-X last September (see "Infinera debuts DTN-X packet-optical transport platform with 500G PIC, OTN/MPLS support") and announced Cable&Wireless Worldwide and the European research and education network operator DANTE as customers earlier this year (see "Cable&Wireless Worldwide chooses Infinera's DTN-X for Europe Persia Express Gateway" and "DANTE selects Infinera DTN-X platform for GEANT Research and Education Network"). Now, the platform has proven popular across several customer segments, from Tier 1 carriers to Internet content providers to bandwidth wholesalers, Fallon said. However, some Infinera customers have reduced their DTN purchases in favor of the DTN-X, he admitted. Nevertheless, Fallon stressed that demand for the lower-capacity DTN will continue, citing two new DTN customers during the second quarter as proof.

Nevertheless, macroeconomic pressures worldwide have led Infinera management to pull back on their revenue projections for the second half of the year. Brennan told call participants that Infinera now expects revenues in the second half of the year to range between $230 million and $245 million, versus a previously forecasted top end of $260 million.

Rounding out the second quarter numbers, GAAP gross margin was 35% versus 39% in the first quarter and 39% in the year-ago quarter. GAAP net loss for the 2012 second quarter was $29.5 million ($0.27 per share), greater than the $20.6 million ($0.19 per share) net loss in the previous quarter and $24.2 million ($0.23 per share) net loss in the same quarter of 2011.