Winning Through Disruption in the

Transport Market
Investor Overview
May 2016

1 | 2016 Infinera

Safe Harbor
This presentation contains "forward-looking" statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever
materialize or the assumptions prove incorrect, our results may differ materially from those expressed or implied by such forward-looking
statements. All statements other than statements of historical fact could be deemed forward-looking, including, but not limited to, any
statements about future market performance and similar statements; any statements about historical results that may suggest trends for our
business; any statements of the plans, strategies, and objectives of management for future operations; any statements of expectation or belief
regarding future events, potential markets or market size, technology and product developments, or enforceability of our intellectual property
rights; and any statements of assumptions underlying any of the items mentioned.

These statements are based on estimates and information available to us at the time of this presentation and are not guarantees of future
performance. These risks and uncertainties include, but are not limited to, the risks of competitive responses and shifts in the market; delays in
the release of new products or updates to existing products; fluctuations in customer demand, changes in industry trends, and changes in the
macro economic market; the risk that Transmodes and Infineras businesses will not be integrated successfully and/or the risk that synergies will
not be realized or realized to the extent anticipated; the effect that changes in product pricing or mix, and/or increases in component costs could
have on our gross margin; our ability to respond to rapid technological changes; our reliance on single-source suppliers; aggressive business
tactics by our competitors; our ability to protect our intellectual property; claims by others that we infringe their intellectual property; war,
terrorism, public health issues, natural disasters and other circumstances that could disrupt the supply, delivery or demand of Infineras products;
and other risks and uncertainties detailed in our SEC filings from time to time. More information on potential factors that may impact our
business are set forth in Infineras Annual Report on Form 10-K for the fiscal year ended on December 26, 2015 as filed with the SEC on February
23, 2016, as well as subsequent reports filed with or furnished to the SEC from time to time. Our SEC filings are available on our website at
www.infinera.com and the SECs website at www.sec.gov. Forward-looking statements are subject to change, and we may not inform you when
changes occur. We assume no obligation to, and do not currently intend to, update any such forward-looking statements.
2 | 2016 Infinera

Infinera: A Differentiated Technology Company

Redefining what the network will be

Unique technology innovation with PIC

Best-in class systems with Automation,

Convergence and Scalability

Photonic Integrated Circuit

(PIC)

TM/TG-Series

Industry leading global service & support

Unmatched reliability
Right tools for right job
Focused on customer success
Cloud
Xpress

DTN

DTN-X
XT

Enabling An Infinite Pool of Intelligent Bandwidth

3 | 2016 Infinera

DTN-X
XTC

Infinera A Global Business

A leader in Intelligent Transport Network solutions
Revenue growth for past 3 years of greater than 20% YoY, more than double DWDM market growth*
Diversified customer base across multiple verticals
- Several Tier 1s globally
- 3 of top 4 Internet Content Providers
- Several major global Cable/MSOs
- Multiple top Wholesale and Enterprise Carriers

4 | 2016 Infinera

* Based on average of data from Ovum, IHS, DellOro and ACG

Infinera Differentiators
Infinera differentiates due to its technology,
market expansion opportunities and vertically
integrated business model

Cloud Xpress

PIC-enabled Technology
PIC enables scalable, intelligent
functions: SDN, integrated
switching, sliceable bandwidth
High capacity applications: LongHaul, Metro Cloud, Metro Core
5 | 2016 Infinera

XT-500

XTC-2

TM-Series

Infinera PIC Fab

New Purpose-Built Products
Cloud Xpress for DC Interconnect
Transmode Metro portfolio
Infinera Metro Aggregation
~3x TAM expansion to >$15B in 2019*
* Based on average of latest forecasts from Ovum, IHS, DellOro and ACG

Vertical Integration
Lower cost structure
than competition
Supply chain control

Outpacing Other SP Networking Players

140%
120%
100%
80%

Revenue Growth:
Trailing 12-month revenue

DTN-X for
100G Long-Haul

New Metro Portfolio

introduced

128%

Cloud Xpress
for 100G DCI

3x Revenue
Growth
INFN

CIEN

60%

JNPR

40%

CSCO

20%

ADV

0%
-20%
Jun '12

6 | 2016 Infinera

Dec '12

Jun '13

Dec '13

Jun '14

Dec '14

Based on latest publicly-available financials

Jun '15

Dec '15 Mar 16

Disruptive Technology Innovation:

The Infinera Way

7 | 2016 Infinera

Uniquely Delivers Massive Optical Bandwidth with PICs

Competition
Moores Law-like
for Optical

500G WDM on a chip

Integrates over 600 optical functions

500G PIC

3rd Party Discrete Optics

8 | 2016 Infinera

Industrys only 500G large scale Photonic Integrated Circuit

PIC Leveraged for Disruptive Systems

Own Key Technologies & Processes
500+ patents filed/granted

Intelligent Transport Network

Scalability, Convergence, Automation

Photonic Integrated Circuits

500G Super-Channels

Purpose-Built Systems
Intelligent
Software

Vertically
Integrated

Switching
ASICs

Cloud Xpress XTC-10/4 XTC-2/2E XT

DTN-X
9 | 2016 Infinera

DTN

Introducing: The Infinite Capacity Engine

Industrys first 2.4 Tb/s transport technology
The next step
function in optical
with Infinite
Capacity Engine

Advanced electronics (DSP/ASIC):

Next-gen FlexCoherent processor
Cutting-edge photonics: Fourth-gen
Photonic Integrated Circuit (PIC)

Infinera Infinite Capacity Engine

DSP
10 | 2016 Infinera

PIC

A Quantum Leap in Optical Transport to Terabits

Multi-terabit super-channels,
Bigger

up to 12x bigger
Multi-terabit wire-rate L1 encryption

One of worlds smallest multi-terabit

Smaller
Infinera
Infinite Capacity
Engine

11 | 2016 Infinera

Better

subsystems
Lower power: 82% vs. competition

Sliceable photonics, 53% lower TCO

Advanced coherent, 40-60% improved
capacity-reach performance

Market Expansion Strategy

12 | 2016 Infinera

Transport becoming is Strategic

Market Inflections

Networks Simplifying to New

Model of Cloud Services and
Intelligent Transport

Scalable Optics and Integrated

Packet-Optical Key for
Simplification

100G
100G
Long Haul Metro Cloud

Accelerated 100G
uptake & 40G decline

2012

1st to market
with purposebuilt solution

2014

100G Metro
Aggregation

Infinera Core +
Transmode
portfolio

2016

Vision: Enable An Infinite Pool of Intelligent Bandwidth

13 | 2016 Infinera

Poised to Benefit from ICP-driven Bandwidth Demand

Top 7 Cloud & Content Providers:
> 67% of delivered Internet traffic

Private backbones replacing Internet transit

(i.e., massive server-to-server traffic growth)

Cumulative % of North American Internet Traffic

Trans-Atlantic Bandwidth

70
60
50

Private

40
30
20

Internet

10
0
Netflix

Google

Apple

Facebook Microsoft
1H11

14 | 2016 Infinera

Hulu

Amazon Gnutella

2H14

Source: Sandvine Global Internet Traffic Reports Spring 2014 and 2H2014, TeleGeography

Data Center Interconnect

Capturing emerging cloud infrastructures

15 | 2016 Infinera

Cloud Architecture Drives Network Demands

Search Query

1500 Miles

HTTP request

930x Network Traffic

Cloud Data Center Network

16 | 2016 Infinera

sources: google.com, facebook.com

Cloud Xpress Optimized for DCI

Cloud Xpress Platform

500Gb/s input and output in 2 RU

500G PIC based super-channel line side
500G client w/mix of 10/40/100 GbE
Instant Bandwidth

Hyper-Scale Density

Minimal Power

Simple Operation

2RU, smaller than most servers

3X to 10X density improvement

~100W per 100G: ALL INCLUSIVE

50% better than industry leaders

Simple 1-2-3 step provisioning

Server-like operational experience

17 | 2016 Infinera

The Metro Market

A new market for Infinera as technology upgrades

18 | 2016 Infinera

TM Portfolio Ready for 100G Coherent Metro Ramp

400
350

100G starting
to ramp, rapid
acceleration

Ports (Thousands)

300
350

68 %

200

CAGR

150
100
50

CY12

19 | 2016 Infinera

CY13

CY14

CY15

CY16

CY17

Source: 2015 IHS 100G Coherent Optical Equip Ports Mkt Fcst

CY18

CY19

Expanding into Metro

Lowest
Power
& Space

xDSL
Triple Play

CATV/MSO
Triple Play
FTTx/PON
Triple Play

Metro
Access
Metro
Access

Storage
Networks

Rich Eth.
Biz Service
Mobile Back/
Fronthaul
20 | 2016 Infinera

Metro
Edge &
Core
Network

50,000+
Systems

650+
Customers

#1
Packet
Optical
EMEA

TM-Series

10G/100G Packet-Optical
Ethernet, Wireless backhaul / fronthaul

TG-Series

Biz. Service
Wireless backhaul

CPE / PON

Biz. Service
Wireless backhaul
WDM access

Metro: Mobile Fronthaul Opportunity

Mobile operators are increasingly evaluating and adopting Mobile Fronthaul
Significant cost savings - Lower power and less equipment than traditional Backhaul
More space efficient Fewer Central Offices, less equipment at cell site

Fronthaul spending expected to exceed $1B by 2020 (~$350m today)*

Infinera: Won 3 Fronthaul deals to date and in trials with multiple Tier 1s
Fiber all the way from
antenna to Central Office

RRH
RRH

Stacking of BBUs
in Central Office

RRH

RRH

CO

RRH

CO
Cell site
cabinet

Cell site
cabinet

Fronthaul

RRH
RRH

D-RoF

Load balancing

RRH

Backhaul
BBU

RRH

CO
CO

Central Office

Cell site
cabinet

21 | 2016 Infinera

*Source: Ovum Mobile Backhaul and Fronthaul Forecast Report: 2015-20 (September 2015

IP MPLS
Network

XTC-2 Extends DTN-X to Lower Capacity Sites

E.g. Right-sized DTN-X XTC for Smaller Cities
Seattle

Spokane

100G

XTC-10

Boise

XTC-2
100G
100G
100G 100G

Salt Lake City

XTC-4

500G Super-channels
Common Hardware, E2E Network Management & Automation

22 | 2016 Infinera

Las Vegas

Long Haul
Adding new tools to solve customer needs

23 | 2016 Infinera

Introducing the DTN-X XT Series

Scalable

Super-channel; ILS integration

Efficient

~1W/Gig, 1Tb/s IO 2RU

Programmable

Instant Bandwidth, SDN enabled

DTN-X XT-500

Long-Haul Interconnect
Optically Switched (ROADM)
24 | 2016 Infinera

End-to-End Solutions

25 | 2016 Infinera

The Infinera Unified End-to-End Portfolio

$15B* (2019) Transport Market

26 | 2016 Infinera

* Based on average of latest forecasts from Ovum, IHS, DellOro and ACG

Value of End-to-End
Packet-Optical Switching
Access & Aggregation

Converged Packet Aggregation

Triple &
Play
OTN Switched Metro Core

Converged Packet Aggregation &

Pan-European Network
500G
Pan-European
Network
OTN Switched Metro Core
Super-channels

500G
Super-channels

Broadband

XTC-2

Cable
Broadband

XTC-2

Business
Ethernet

XTC-10

Large
LH Core

100G

100G

XTC-10

Frankfurt Metro Area, Germany

TM-Series

XTC-10

XTC-10

Large
LH Core

Frankfurt Metro Area, Germany

27 | 2016 Infinera

Infinera DNA

Point-to-Point
XT-500
Interconnect

XTC-4

Point-to-Point
Interconnect
DTN-X Family

XTC-4
Mobile Front/
Backhaul

XT-500

Optical Market exceeds $15 billion by 2019

$18,000

Long Haul*

Metro*

Incremental DCI**

$16,000
$14,000

$8,000

CAGR 37.4%

$7,885

$8,253

CAGR 7.5%

CAGR 5.4%

$1,093

$12,000
$10,000

$1,843

$1,442
$786
$517

$5,858

$6,583

$7,192

$6,000
$4,000

$2,000

$4,855

$5,195

$5,513

$5,814

$6,020

CY15

CY16

CY17

CY18

CY19

$0

28 | 2016 Infinera

* Long Haul and Metro forecasts based on average of latest forecasts from Ovum, IHS, DellOro and ACG
** We estimate 50% of DCI market to be incremental to Long Haul and Metro DWDM; underlying market estimate
from March 2016 ACG WW Optical Forecast

Infineras Ascending Global Market Position

Global Metro + LH WDM (2014)
$2,500.0

29 | 2016 Infinera

Cross-selling and revenue synergies

create opportunity to go higher

$1,500.0

$1,000.0
$500.0

Source: DellOro Optical Report Jan 2015

OTHERS

MRV

BTI

ECI TELECOM

ERICSSON

TRANSMODE

NEC

ADVA

CISCO

INFINERA

CORIANT

INFN + TRMO
FUJITSU

ALCATEL-LUCENT

ZTE

CIENA

$0.0
HUAWEI

Revenues ($M)

$2,000.0

Differentiated Financial Results

30 | 2016 Infinera

Infinera A Growth Story

Industry leading profitable revenue growth

Revenue (in $m)

$888

3 years of >20%
revenue growth

Solid Balance Sheet*

$668
$544

$211M net cash

8 consecutive quarters of positive Cash Flow from Ops
Last 4 quarters Cash Flow from Ops = $123 million
Last 4 quarters Free Cash Flow/Revenue = 8.2%

47.8%

$438

44.0%
13.1%

41.6%

GM%:

8.3%

37.9%
1.4%

OM%:

-9.4%

FY12

$245 million revenue (31% y/y growth)

50.2% gross margin
12.3% operating margin

Q2 16 Guidance
FY13

FY14

FY15

All figures are Non-GAAP (reconciliation to GAAP numbers may be found at www.Infinera.com)
* All figures as of end of Q1-FY2016
31 | 2016 Infinera

Q1 16 Performance

$250 - $260 million revenue

47% - 49% gross margin
10% - 12% operating margin
$0.15 - $0.19 EPS

Purpose-Built Products: Good for Customers & Infinera

Innovating to address
entire $15B* opportunity

New XT-Series:
High Capacity LH Data
Center Interconnect

New XTC-2/2E:
Packet-OTN Switching
for Regional / Metro Core

TM-Series:
Packet-Optical for Metro
Core, Aggregation, Access

32 | 2016 Infinera

* Based on average of latest forecasts from Ovum, IHS, DellOro and ACG

Margin Growth Opportunity

Margin Drivers
Vertical Integration

Footprint vs Fill

Instant Bandwidth

$
$
$ $

Long-Haul

$$$$

Cloud
Xpress

Metro

Purpose-Built Products

Infinera PIC Fab

Expanding Markets Drive Margin Growth

33 | 2016 Infinera

$
$

Great Time To Be In Optical For Infinera

End-to-end
packet-optical
portfolio

Consolidating
market

TAM > $15B*

Vertical IP
ownership
34 | 2016 Infinera

* Based on average of latest forecasts from Ovum, IHS, DellOro and ACG

Thank You
www.infinera.com

35 | 2016 Infinera