Infinera Corporation Reports First Quarter 2010 Financial Results

Grows Revenues for Fourth Straight Quarter to $95.8 Million; Achieves Positive Cash Flow; Adds Five New Customers

Sunnyvale, CA on 23 April 2010

Infinera Corporation (Nasdaq: INFN), a leading provider of digital optical communications systems, today released financial results for the first quarter ended March 27, 2010.

· GAAP revenues for the first quarter of 2010 were $95.8 million compared to $90.2 million in the fourth quarter of 2009 and $66.6 million in the first quarter of 2009.

· GAAP gross margins for the quarter were 39% compared to 38% in the fourth quarter of 2009 and 30% in the first quarter of 2009. GAAP net loss for the quarter was $20.0 million, or $(0.21) per share, compared to $18.7 million, or $(0.19) per share, in the fourth quarter of 2009 and $24.3 million, or $(0.26) per share, in the first quarter of 2009.

· Non-GAAP gross margins for the first quarter of 2010 were 41% compared to 40% in the fourth quarter of 2009 and 31% in the first quarter of 2009, excluding restructuring and other related costs and non-cash stock-based compensation. Non-GAAP net loss for the first quarter of 2010 was $7.0 million, or $(0.07) per share, compared to net loss of $6.5 million, or $(0.07) per share in the fourth quarter of 2009 and net loss of $17.6 million, or $(0.19) per share, in the first quarter of 2009.

Management Commentary

“Our solid first quarter results demonstrate that market demand remains strong for Infinera’s PIC-based networks, which provide the optical industry’s most cost-effective solution and most advanced intelligent bandwidth management capabilities,” said Tom Fallon, president and chief executive officer. “In the first quarter of 2010, we grew revenue for the fourth consecutive quarter, improved gross margins for the third consecutive quarter and had record bookings for the second quarter in a row.

“Against the backdrop of an improving technology spending environment, business activity is healthy across all our major markets and customer segments,” said Fallon. “During the first quarter we added five new customers to our roster including one of Japan’s top three service providers, and we continued to grow our footprint across an expanded set of market opportunities.”

The company also noted the following developments:

· With the addition of the five new customers this quarter, the company’s total customer count is 74. Among the new customers, three were from North America, one from Europe and one from Asia. The new Asia-based customer has begun Infinera deployments in both Asia and North America.

· One new ATN win this quarter which brings the company’s total ATN customer count to seven, six of which are existing DTN customers.

· The company won expanded footprint with existing customers including a new significant opportunity with an existing Tier One account for a Latin American deployment, as well as an expanded relationship with another customer that will include participating in a series of large overbuilds in a global capacity expansion.

· The Company generated $2.3 million of cash from operations for the quarter.

· The top 5 customers for the quarter included Level 3, two additional established carriers, and two of the world’s largest internet content providers. Level 3 and one of the leading internet content providers were 10% or greater customers at 22% and 16% of revenue, respectively.

About Infinera

Infinera provides Digital Optical Networking systems to telecommunications carriers worldwide. Infinera’s systems are unique in their use of a breakthrough semiconductor technology: the Photonic Integrated Circuit (PIC). Infinera’s systems and PIC technology are designed to provide optical networks with simpler and more flexible engineering and operations, faster time-to-service, and the ability to rapidly deliver differentiated services without reengineering their optical infrastructure. For more information, please visit www.infinera.com.

Forward-Looking Statements

This press release contains forward-looking statements, including statements about our belief that the market demand for our solutions and systems remain strong, our belief that our PIC-based network provides the optical industry’s most cost-effective solution and most advanced intelligent bandwidth management capabilities, our belief that we are seeing an improvement in the technology spending environment, our belief that business activity is healthy across all our major markets and customer segments, and our belief that we are continuing to grow our footprint across an expanded set of market opportunities. These forward-looking statements involve risks and uncertainties, as well as assumptions that if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include our ability to react to trends and challenges in our business and the markets in which we operate; our ability to anticipate market needs and develop new or enhanced products to meet those needs; the adoption rate of our products; our ability to establish and maintain successful relationships with our customers; our ability to reduce customer concentration; our ability to compete in our industry; fluctuations in demand, sales cycles and prices for our products and services; shortages or price fluctuations in our supply chain; our ability to protect our intellectual property rights; general political, economic and market conditions and events; and other risks and uncertainties described more fully in our documents filed with or furnished to the U.S. Securities and Exchange Commission (SEC). More information about these and other risks that may impact Infinera’s business are set forth in our annual report on Form 10-K, which was filed with the SEC on March 1, 2010, as well as subsequent reports filed with the SEC. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.

Use of Non-GAAP financial information

In addition to disclosing financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain certain non-GAAP measures that exclude non-cash stock-based compensation expenses and non-recurring restructuring and other related costs. We believe these adjustments are appropriate to enhance an overall understanding of our underlying financial performance and also our prospects for the future and are considered by management for the purpose of making operational decisions. In addition, these results are the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or basic and diluted net income per share prepared in accordance with GAAP. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and are subject to limitations. For a description of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section titled, “GAAP to Non-GAAP Reconciliations.” We anticipate disclosing forward-looking non-GAAP information in our conference call to discuss our first quarter 2010 results, including an estimate of non-GAAP earnings for the second quarter of 2010 that excludes non-cash stock-based compensation expenses.