World s Largest Supplier of Optical Solutions for the Communications Industry. Investor Relations Presentation November 30, 2011

Transcription

1 World s Largest Supplier of Optical Solutions for the Communications Industry Investor Relations Presentation November 30, 2011

2 Financial Presentation and Forward Looking Statements Forward Looking Statements This presentation contains forward-looking statements as defined under the Private Securities Litigation Act of Except for historical information, the matters discussed in this presentation contain forward-looking statements regarding future trends or events that involve risks and uncertainties. Please be aware that these statements are only predictions and that actual events or results may differ materially. Please refer to the Company s Form 10-K and other interim reports as filed with the Securities and Exchange Commission for a discussion of those risk factors. The Company assumes no obligation to update the information in this presentation. GAAP Reconciliation References to financial measures in this presentation will include references to non- GAAP financial measures. In addition to reporting financial results in accordance with U.S. GAAP, Finisar provides supplemental information regarding its operating performance on a non-gaap basis. Finisar believes this supplemental information provides investors and management with additional insight into its underlying core operating performance by excluding a number of non-cash and cash charges, as well as infrequently occurring gains or losses. Finisar provides a complete reconciliation between GAAP and non-gaap financial information in its earnings release which is posted in the investor relations section of the company s web site Financial guidance for fiscal Q3FY12 is per earnings call on November 30, 2011 and is not being updated or confirmed as of any other date. 2

3 World s Largest Supplier of Fiber Optic Components Company Facts Annual Revenue Growth $1,000.0 $948.8 Founded in 1988, IPO in 1999 $900.0 Headquarters: Sunnyvale, CA (USA) $800.0 Global locations with employees $700.0 $629.9 Industry s broadest product line Market leader with growing share Vertically integrated Low cost, in-house manufacturing US patents issued Revenue ($M) $600.0 $500.0 $400.0 $300.0 $200.0 $100.0 $381.3 $401.6 $497.1 Financially profitable $- FY2007 FY2008 FY2009 FY2010 FY2011 3

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5 Broad Product Portfolio and Customer Base PRODUCTS DATACOM CUSTOMERS DATACOM SFP SFP+ XFP X2/XENPAK CFP Optical Engine CXP QSFP Quadwire C.wire Active Cable TELECOM TELECOM SFP XFP 300-pin WSS ROADM line card Tunable laser CML Laser WDM passives Interleaver AWG Splitters CATV PON 5

6 Optical Transceivers for Datacom & Telecom Emulex HBA Brocade MLXe Router Alcatel/Lucent 1830 PSS System Huawei OSN 8800 Cisco Nexus 7000 Switches Infinera DTN System 6

7 Industry s Broadest Product Portfolio DATACOM TELECOM FINISAR JDSU OpNext Emcore Oclaro OpLink Sumitomo/ Excelight Avago NeoPhotonics Source Photonics 7

8 Optics Growth Drivers EB/Month Mobile Backbone Internet Global IP Traffic E 2012E 2013E 2014E 2015E EB/Month Source: Cisco VNI 2011 Source: Cisco VNI Mobile 2011 Mobile Bandwidth E 2012E 2013E 2014E 2015E EB/Month Video Traffic E 2012E 2013E 2014E 2015E Servers Optical:Copper Port Ratio Virtualization BEFORE 10 1:5 AFTER 1 2:1 Virtualization increases the use of optics in data centers Source: Cisco VNI Mobile

9 Optics Markets Projected Strong Growth ($MM) Finisar Addressable Market 7,000 6,000 5,000 4,000 3,378 3,718 4,262 4,799 5,322 5,849 3,000 2,000 1, E 2012E 2013E 2014E 2015E Source: Lightcounting September 2011 (transceivers); Infonetics September 2011(ROADMs); and Internal Estimates 8

10 Optics Market Leader with Growing Share Total Market Share (Q1 2011) Market Share Growth Finisar 28.3% Other 15.8% 10.5% 11.9% 11.9% 12.3% 13.2% 14.2% 14.8% 15.4% 15.9% 15.8% JDSU Oplink Neophotonics 3.2% 3.3% Fujitsu 3.4% 4.3% Source Photonics 6.0% Opnext 7.0% Oclaro 8.5% Source: Ovum 9.7% Sumitomo Avago Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Source: Ovum 9

11 WSS/ROADM Line Cards WSS modules and ROADM line cards are designed for Long-Haul DWDM Equipment and Metro Optical Systems WSS module Addressable Market ROADM line card with WSS module 0 ($MM) E 2013E 2015E Source: Infonetics 2011 WSS Wavelength Selective Switch ROADM Reconfigurable Optical Add/Drop Multiplexer ROADM functionality benefits Allows point and click dynamic provisioning Reduced carrier OPEX spending Remote traffic management Seamless all-optical transport layer Flexible wavelength, bandwidth and data allocation 10

12 LCoS: Key WSS Differentiator Metro/Edge WSS Liquid Crystal on Silicon (LCoS) Instrumentation EWP Platform Software programmable optics Common Optical Switching Platform Rapid development of new optical functionality Mass customization enabled through software WaveShaper Core WSS Next Gen WSS Flexgrid DWP Platform High Port Count Increased Bandwidth for 100Gb/s over 50GHz channel spacing DWPf 11

13 Industry Technology Leadership First to Demonstrate WSS Flexgrid Technology (2010) Features: Select channel widths for initial deployment Adjust channel widths on-the-fly to accommodate future transmission speeds First to Market 100Gb/s Ethernet CFP Modules (2010) Finisar 100GBASE-LR4 CFP Module First to Market 16GFC SAN Interconnection (2010) First to Demonstrate 150Gb/s Active Optical Cable (2009) Applications: Storage Networking HPC Finisar 16G Fibre Channel Transceiver 12

14 Differentiation Through Vertical Integration Integrated Circuit Design World-class analog and digital IC design team World-class foundries Highest volume shipping ICs in the industry Lasers and Photodetectors Majority of optics revenue contains internallydesigned optical chips Optical Package Design High-Volume, Low-Cost Manufacturing Majority of optical components used in our modules are designed and manufactured in-house Ipoh, Malaysia Shanghai, China Advantages: Cost, Quality, Responsiveness, IP Protection 13

15 Strategic Acquisitions in a Consolidating Industry PRODUCTS Big Bear Networks 10Gbps Technology 40Gbps Technology ROADM, CATV, 10-40Gbps System on a Transceiver for PON January 2005 November 2005 August 2008 September 2010 VERTICAL INTEGRATION /TECHNOLOGY New Focus Passive components May 2002 Long wavelength FP and DFB lasers April 2003 Short wavelength VCSEL lasers March 2004 CML Technology for 10-40Gbps March 2007 Syntune tunable lasers, Splitters, AWGs May

16 Financial Overview 2010 Finisar Corporation 16

17 Q2 FY12 Highlights Q2FY12 Revenues of $ million Up 5.8% Q-Q Q2 FY12 non-gaap profitability Gross margin of 32.1% Operating income $23.6M up 12.5% from Q1FY12 Operating margin 9.8% - up from 9.2% in Q1FY12 Earnings per share of $0.23 up from $.21 in Q1FY12 Strong Balance Sheet Cash - $228.0M on October 30, 2011 Convertible debt - $40.0M as of October 30, 2011 Repaid $5.6 million of Ignis s $9.9M debt during Q2FY12 16

18 Annual Revenue Growth ($MM) 1, Annual Revenue FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Fiscal year ends April 30th. Figures are non-gaap and exclude Network Tools Division, which was divested. 17

19 Quarterly Revenue Growth ($MM) Fiscal year ends April 30th. Figures are non-gaap and exclude Network Tools Division, which was divested. 18

20 Strong Annual Growth Revenue Gross Margin $1,000.0 $900.0 $800.0 $700.0 $600.0 $500.0 $400.0 $300.0 $200.0 $100.0 $- $948.8 $629.9 $497.1 FY09 FY10 FY % 35.0% 34.0% 33.0% 32.0% 31.0% 30.0% 29.0% 34.9% 31.4% 31.0% FY09 FY10 FY11 Operating Margin Diluted EPS 18.0% 16.0% 15.6% $1.80 $1.60 $ % $ % $ % 8.0% 6.0% 4.0% 4.7% 7.1% $1.00 $0.80 $0.60 $0.40 $0.30 $ % $ % FY09 FY10 FY11 $- FY09 FY10 FY11 Fiscal year ends April 30th. Figures are non-gaap and exclude Network Tools Division, which was divested. 19

21 Q3 FY12 Quarterly Guidance (non-gaap) $ Millions (except EPS) Q2-12 Actual Q3-12 Estimate Revenue $241.5 $235- $250 Gross margin 32.1% ~31.5% Operating expense $53.8 ~$54 Operating profit $23.6 Operating margin 9.8% 8.5% % EPS $0.23 $ $0.24 Financial guidance for fiscal Q3FY12 is per earnings call on November 30, 2011 and is not being updated or confirmed as of any other date. 21

22 World s Largest Supplier of Fiber Optic Components Investment Considerations Annual Revenue Growth Broadest product portfolio Global customer base $1,000.0 $900.0 $800.0 $948.8 Strong growth drivers Market share leader with increasing share Technology innovator Differentiation through vertical integration Revenue ($M) $700.0 $600.0 $500.0 $400.0 $300.0 $381.3 $401.6 $497.1 $629.9 Skilled at consolidating acquisitions $200.0 Record profits with consistent annual growth $100.0 $- FY2007 FY2008 FY2009 FY2010 FY

23 World s Largest Supplier of Optical Solutions for the Communications Industry