Technology Leader For 100G And Beyond

Transcription

1 Technology Leader For 100G And Beyond Greg Dougherty Pete Mangan Needham Annual Growth Conference January 12,

2 Safe Harbor Statement Forward-Looking Statements This presentation contains statements about management s future expectations, plans or prospects of Oclaro and its business, and together with the assumptions underlying these statements, constitute forward-looking statements for the purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of These forwardlooking statements include statements concerning the anticipated growth of Oclaro s 100G product revenues, the size of the markets in which we operate, our strategies and Oclaro s future financial performance and operating prospects. There are a number of risks and uncertainties that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including those related to Oclaro s business and growth opportunities. For a discussion of those risk factors, please refer to Oclaro s most recent annual report on Form 10-K, quarterly report on Form 10-Q and other interim documents it periodically files with the Securities and Exchange Commission. Oclaro assumes no obligation to update the information in this presentation, except as required by applicable law. 2

3 Oclaro: Well Positioned For Sustained Growth Driving Growth Through Traction In 100G+ Approximately 50% Of Sales Industry Leading Broad Portfolio Of Optical Components And Modules Strengthening Financials And Balance Sheet Increasing Gross Margin Improved By 12 Points In The Past Year Opportunities For Continued Improvement By Leveraging Growth, Product Mix And Ongoing Operational Efficiencies Continuing To Innovate Market Leader In 100G Client Side And CFP2-ACO Leverage World Class InP And LiNbO3 Chip Technology Over 1200 Patents 3

4 Oclaro At A Glance North America Headquarters In San Jose, CA High Bit Rate Module Design And Manufacturing Expertise For Core Optical Network Sales And Marketing U.K. Asia Client Side Expertise For Data Center And Enterprise Networks Advanced Packaging And Transceiver Design Leading DFB And EML Laser Technology InP Materials High End Volume Manufacturing San Jose, CA Italy Europe Line Side Expertise For Coherent Networks InP And LiNbO 3 Materials InP Photonic Integrated Circuits Tunable Lasers, Modulators And Integrated Receivers CFP2-ACO Pilot Production China Japan 4

5 Differentiation And Competitiveness Through Vertical Integration Module Integration Advanced Module Design Electronic Integration Firmware System Level Expertise Miniaturization And Advanced Packaging Optical, Mechanical And Thermal Design Expertise High Speed RF Design Capability Advanced Packaging For Optical Sub Components Wafer Fabrication And Chip Design Lasers (DFB/DML/EML/Tunable) Modulators Photodetectors Indium Phosphide And Lithium Niobate Oclaro Focus: Higher Bandwidth (100G And Beyond) - Higher Density Through Integration: Photonic Integrated Circuits (PIC s) - Pluggability - Reduced Power Consumption 5

6 Product Overview Serving Both Telecom (Line Side) And Data Center/Enterprise (Client Side) Applications Telecom Optical Networks 100G Coherent Components, Micro-ITLA And Lithium Niobate Modulators Data Center And Enterprise Networks Complete Portfolio Of Short-Reach And Long-Reach Form Factors For 10G, 40G And 100G ITLAs Modulators Subsystems CFP CFP2 CFP4 QSFP28 Receivers Coherent DWDM MSA CFP2-ACO XFP SFP+ Lasers Photodetectors Targeted Customers Streamlined and Simplified 6

7 Growth Driven By 100G And Beyond Target Markets Network Application SAM (CY16-CY20) 100/200/400G Products Data Center And Enterprise Networks Inter Data Center Cloud Networking Enterprise Routing Enterprise Switching $1B $575M Source : Lightcounting CFP LR4 CFP4 LR4 CFP2 LR4 QSFP28 (CWDM, LR4) Telecom Optical Networks Data Center Interconnect Ultra Long Haul Networks Long Haul Networks Metro Networks Packet Optical Networks $1.8B $1B mitla Dual mitla CFP2 -ACO Source : Ovum 100/400G LiNbO3 Modulators Broad Portfolio Of Components And Modules To Drive Growth At 100G+ 7

8 Data Centers And Enterprises Embracing High-Speed Networking Technologies Hyperscale Data Centers More Complex Meshed Network Architecture Horizontal Network Traffic Increasing (E-W) Data Center Network Switching Spending 40G/100G ($Billions) Rapid Adoption Of 100G Web 2.0 Providers Building Their Own Data Centers 100G 40G $0.2 $2.6 $0.4 $2.9 $1.0 $2.8 $2.0 $2.7 $3.0 $2.2 Higher Number Of High Speed Optical Connections Required CY15 CY16 CY17 CY18 CY19 Source: Infonetics Data Center Network Equipment, Sept

9 Strong DWDM Growth Driven By 100G Coherent Rapid Emergence Of 100G In Long Haul And Metro Networks Components Initially Integrated 100G Coherent Modules And Pluggable Transceivers Quickly Following Pluggable Modules Significantly Reduce Service Providers Network Operating Expenses Data Center Interconnect Emerging As A Robust And Fast Growing Sub-Segment Increased Operational Efficiencies For Web 2.0/Content Providers Demand for 100G components and modules is a big driver for growth in WAN. We expect strong demand for pluggable coherent transceivers in 2015 and beyond. Daryl Inniss, Practice Leader for Telecoms Components at Ovum DWDM Telecom Optics Market Forecast ($ Millions) 100G 40G 10G $479 $269 $548 $385 $42 $24 $169 $140 $692 $562 $13 $116 $775 $676 $837 $769 $91 $68 CY15 CY16 CY17 CY18 CY19 Source: Infonetics 10G/40G/100G Telecom Optics, October

10 Strong Competitive Market Position 100G Client Side Transceivers #1 100G Lithium Niobate Coherent Modulator Top 3 100G Coherent mitla Lasers Top 3 100G-200G Coherent CFP2-ACO #1 400G Single Wavelength Lithium Niobate Modulator 1 st to Sample Sources: Company estimates, and Lightcounting. 10

11 Improved Financial Performance * Q1 FY14 Q1 FY15 Q1 FY16 * $95 $75 $89.4M $81.7M $87.5M $108M in Cash Positive Operating Income 100G 47% of Sales $55 $35 $15 $16M $8.2M 9% $21M $11.0M 14% $41M $23.2M 26% $4.2M Total Revenue 100G Revenue Gross Margin AEBITDA # ($5) -$10.8M ($25) -$21.1M * Excludes results from I&C business that was sold in October 2014 # Non-GAAP Gross Margin 11

12 Optical Market Poised For Growth In G+ Being Deployed In The Metro CFP2-ACO 100G Deployed In Hyper Scale Data Centers QSFP28 Market Transition From 10G Muxponders To 100G Transponders CFP, CFP2, CFP4 Transceivers China Backbone And Metro Networks 2nd Wave 100G Contracts Awarded CFP2 ACO Pluggable Modules Enables Higher Densities And Increased Bandwidths Aggregate Capacities On New System Linecards Supporting Up To 2TB 12

13 Oclaro: Well Positioned For Sustained Growth Driving Growth Through Traction In 100G And Above Broad 100G+ Product Portfolio Serving $1B+ Addressable Market In 2016 Strengthening Financials And Balance Sheet Increasing Gross Margin Revenue, 100G Mix, Operational Improvements Continuing To Innovate Leveraging InP And LiNbO3 Chip Expertise 13

14 Thank You For more information, visit us at Follow us and LinkedIn. 14